Never one to shy away from a challenge, Bharat Fritz Werner Managing Director and CEO Ravi Raghavan hopes to see the company continue to contribute to India’s development while pursuing its own growth.
Since its establishment in 1961, Bharat Fritz Werner (BFW) has been known for its commitment to progress. A manufacturing company that produces machine tools used in the manufacturing industry, BFW has grown alongside the burgeoning Indian economy, and is nicely positioned to contribute to the country’s continued economic and social development.
Managing Director and CEO Ravi Raghavan joined BFW in September 2013, equipped with a mentality that “you don’t challenge yourself if you don’t go through the process of unlearning and relearning something in life”. Having gained experience across a wide swathe of industries, including consumer durables, capital goods and electrics, Ravi initially found BFW an attractive option because “it was an iconic brand within its space”. He had previously enjoyed working for companies whose brands were “iconic, and respected within their own industries”, and took the opportunity to continue doing so.
“As I came to learn more about the company,” Ravi tells The CEO Magazine, “what intrigued me was how a strong brand had such inherent strength, but its potential had not been exploited.” He quickly developed a desire to turn BFW into a much bigger company. “I don’t believe in maintaining a company; if something is doing well, there’s no challenge in trying to maintain that success. I like the challenge of finding something that has potential and making it bloom.”
Ravi Raghavan, Managing Director & CEO of Bharat Fritz Werner
When it comes to making sure BFW retains its competitive market position, Ravi has a secret weapon. “When I was young,” he says, “my boss made me read Sur|Petition, by Edward de Bono, many times.” The book encourages readers to move beyond the idea of competition, and past the notion of merely surviving, urging them to create value in line with their own expectations rather than in line with their competition.
“When you become too focused on your competition,” Ravi explains, “you try to compete in a way that sees you aiming to meet their specifications. You try to overtake their specs, and then they come up and overtake your specs the next year. This continues, unless you create some differentiator, which takes them longer to catch up and gives you extra time.” A true believer in De Bono’s philosophy, Ravi notes that “creating a differentiator has been our focus and, as a result, we have been able to develop products that would usually take about 18 months, from drawing board to customer, in less than eight months.”
To achieve this reduction in lead time, the company has drawn inspiration from the automobile industry’s use of platform thinking, or platform engineering, a concept that sees multiple products constructed from the same basic components. This means that their construction is easily replicable across different facilities; ultimately, this allows companies to shorten the time a product spends in development and ramp up the speed of its production, all the while cutting costs and achieving economies of scale.
Another way in which BFW is staying ahead of the curve is through strategic investments in both capital and labour. “Our levels of investment in engineering and people are now the highest in the industry. This is a strong foundation anticipating the moment when the need for a high-value product arrives. 50% of machine tools in India are still imported, and all of them are in the high-value segment. Our focus is to introduce import-substitution products alongside next-generation products.”
While BFW is in possession of many strengths, Ravi acknowledges that there is still room for improvement in the company’s operations. “First is our internal efficiencies; there are many things we need to do to improve productivity,” he says. To this end, the company has recently opened a new, ‘smart’ factory in Hosur, Tamil Nadu, incorporating digitisation into its operations to ensure higher productivity than a conventional factory.
The factory, which will eventually cover 5,500 square metres, will double BFW’s machine-building capacity. “In 2018, our entire strategy has included the word ‘digitisation’. The amount of digitisation, both in India and in our industry, is very low. To cater to the speed of development, in product development or production improvements, for example, is not possible unless we incorporate digitisation technology into our operations.”
“In 2018, our entire strategy has included the word ‘digitisation’.”
The second area identified for improvement targets excellence across the entire supply chain. “Much of what we do, we do in-house, but many of our operations also involve working with partners.” Improvement in this region will hopefully be easy to achieve, given that BFW has “a great supply base, and partners who work with us to develop solutions”.
Aware of what it takes to achieve sturdy relationships with the company’s suppliers, Ravi is adamant that “no-one will be ready to share their resources with us unless we are committed to them”. As a result, “we are transparent, and we respect our supply partners for the knowledge they have”. “They learn from us, and we learn from them. This is an area that we must keep strengthening: if we lose any of them, what we do will not result in a good outcome.”
There is always an implicit agreement between BFW and its supply partners on the principles underlining the project. This is integral to future success for the company’s products, since “our product is only as good as our supplier”. “Many of the products we sell go through a process of value-addition by the supply partner as well. These are tough systems; if they don’t function, the blame is on the machine. Our brand is as good as our supply partners have helped us to make it.”
“Our brand is as good as our supply partners have helped us to make it.”
Collaboration between BFW and its suppliers takes place via the conduit of cross-functional teams. “When working with another company, we send an individual showing high potential to their company, and they send one to us, for six months, the idea being to form a bridge, or an understanding, between the two companies,” Ravi says.
“The senior management of both companies meet every month, and this brings us closer, and fosters a deeper level of understanding.” The model clearly works, and it is perhaps for this reason that the company follows a similar principle with its customers. “They throw us a challenge, and we try to meet it. During the project we have discussions, and sometimes confrontations; we have tough times and we have good times, but the whole idea is to make the venture successful for both of us.”
The supplier is not forgotten in the company–customer relationship; indeed, BFW, its customers, and its suppliers remain in constant dialogue with each other. This conversation is best encapsulated by BFW’s supplier meets, which routinely involve more than 200 suppliers. “To make sure that we are being absolutely transparent, we call one or two of our main customers to join the meet.
In doing so, we build confidence among both our suppliers and our customers.” This comes from both parties being privy to the same information and, in addition to building confidence, Ravi notes, “this builds a great amount of trust”.
In considering future growth, management at BFW makes sure to “always focus on the four Ps: purpose, people, passion and perseverance”. “We’re not only looking at top-line growth, but striving to be a respected company, adding value that allows our customers to win. Having said that, we believe we should be doubling our top line every three years.”
The company has achieved this goal in the past, and Ravi believes that, barring unforeseen circumstances, BFW will be able to record a growth of 40%–45% for the past year. It has tripled its capacity since January 2017, and Ravi is beginning to consider 2018 as an ‘inflection point’ for BFW.
“We focus on the four Ps: purpose, people, passion & perseverance.”
“If you consider a hockey-stick shape of growth,” he explains, “we believe that we are in the corner this year, and will see our volumes grow in bigger percentages than in previous years. We should be at double the growth of the market: if market growth is 15%, we should be seeing close to 25%–30% growth.”
In terms of social responsibility, BFW is making a sincere contribution to realising the vision of a skilled India. In June 2018, the company hosted a regional milling machine contest, in partnership with the National Skill Development Corporation and the Indian Machine Tool Manufacturers’ Association, as part of the inaugural WorldSkills India competition.
The competition, held throughout India, is designed to encourage the country’s youth develop skills that will be vital to India’s sustained growth. The company has also entered into an agreement with the solar energy company Enerparc India, involving a solar rooftop project that will allow BFW to reduce its reliance on fossil fuels and source power through green energy.
Ravi is committed to ensuring a strong future for BFW, but he is also proud of its past. “To be in business for close to 58 years and be continuously performing and upholding the good reputation of a brand, is not easy.” The workers’ passion for achieving a ‘larger purpose’ is crucial, and their ability to do so is aided by the resources and facilities the company offers them.
One such facility, the Dr Kalam Centre for Innovation, honours the memory of scientist and former Indian president Dr. APJ Abdul Kalam while providing BFW with the means to carry out cutting-edge research. “We have a young team at the Centre, carrying out fantastic work in applied R&D. We are investing a significant amount of money and resources in our R&D: a small product development will keep us ahead for today and tomorrow, but to keep us in the business with the brand image we want, we are investing based on a longer-term perspective.”
Ravi knows the importance of allocating resources to R&D, and is aware of the kind of mentality the company ought to be cultivating in the people who carry it out. “We believe that when we encourage people to leave their comfort zones, they discover their potential. We want them not to be afraid of failing.”
BFW enjoys the strength that comes from longevity, and Ravi appreciates the accomplishment that this represents. “It’s been very difficult for any Indian engineering company to sustain operations unless the core values are strong.” Indian industry, during BFW’s early years, was not ready for high-end machines of the kind BFW wanted to make, but the company continued to grow, and Ravi is convinced this comes down to “the strength of our people”.
“Our core values revolve around people, and BFW contributes to our customers’ progress. Over the years, we have met challenges head-on, and demonstrated our potential.” When Ravi arrived at BFW in 2013, the average employee age was 50. Now, it is closer to 36, and the company makes a point of investing in and supporting young talent.
“We tell our people to discover the potential within themselves, and put our young workers in charge of teams incorporating individuals across many functions and from all levels of the company hierarchy. While the young leader may not see success from their first project, they gain the confidence to move forward.” Its people is one of BFW’s biggest assets, and this initiative forms part of a much larger project to “continuously inspire our employees so they remain motivated and engaged, and able to take the company forward”.
