DRDO must take a page from Tata’s book
After decades of prototyping, India’s indigenously produced Arjun main battle tank (MBT) has started rolling out of factories and into the Army. It was long the subject of controversy, caught between DRDO which took up the project ‘before learning how to build tanks‘ and its customer, the Indian Army, which wanted a superior tank suited for designed for India’s unique combat conditions (amongst others both deserts of Rajasthan and the canal-rich plains of Punjab). While DRDO was tweaking its designs numerous times, Pakistan’s purchase of T-84s from Ukraine and Sino-Pakistani joint development of the Al-Khalid tank caused the Indian Army’s planners to look to purchase over 300 T-90s from Russia for its immediate needs.
That DRDO has shown itself capable of delivering Arjun to its customer’s general satisfaction is good news. Yet, the pursuit of total ‘self-sufficiency’ in defence production in today’s globalised environment is an anachronistic approach – a better way forward would be to harness globalised supply-chains to source state-of-the-art components from countries that produce them, while ensuring diversity of suppliers for ‘business continuity’ even during contingencies. India must have the indigenous production capability both for strategic reasons as well as because it has the potential to do so competitively. But that need not necessarily mean producing every single component indigenously.
A pertinent parallel is Tata’s success with the Indica passenger car
Then, in 1999, amid much skepticism, he invested $400 million in the Indica, a four-door hatchback that sells for just $5,100. Known as “Ratan’s folly,” the Indica would have to face off against Suzuki Motor Corp.’s (SZKMF) popular compacts. Initially, customers groused about a grinding gear shift, poor air-conditioning, and lousy tires. So Tata’s engineers swung into action, going to showrooms and talking to customers about their complaints. In six months, many of the problems were fixed, and a new version of the Indica, the V2, was launched. Now the car is the third-biggest seller in India. [Businessweek]
Behind this story is an astute strategy that produced not only a winning car, but also changed the face of Tata’s automobile businesses. Not only was the design perfected in its second iteration, a supply-chain strategy for auto-parts made it all possible.