Industrial Goods Practice Area

Overview

For many industrial companies, traditional competitive models are producing rapidly diminishing returns. Their managers must go beyond the obvious in order to find new sources of profitable growth.

In capital-intensive industries like paper, aluminum, steel and cement, companies are searching for alternatives to the unending fight for global market share and the downward pressure on prices and margins.

In the automotive industry, companies are striving to combine traditional strengths in design and manufacturing with more rigorous brand management and a deeper understanding of the end consumer.

… and in nearly every industrial segment, companies are deploying strategies to capture global advantage.

Our Practice

BCG has a strong established presence in the Industrial Goods area, both globally and in India. In India, 7 out of the top 15 IG companies in India are BCG India clients. We help companies in the Industrial Goods sector think beyond the limits of their traditional business models, choose where and how they should add value, and reorganize to exploit new opportunities and defend themselves against new threats.

Industries within the practice

BCG’s Industrial Goods practice serves seven broad industrial segments:

• Aerospace/transport equipment and defense
  We support companies in these segments not only with BCG's solutions for different business functions but also with a deep aerospace industry-specific understanding.
  
  
• Automotive
  The Automotive Interest Group serves both automotive manufacturers (OEMs) and their suppliers at a global level. We are committed to the development of leading-edge thinking on all automotive related issues currently faced by our clients and target clients. Our goal is to become the preferred thought leader and sparring partner to automotive executives worldwide.
  
  
• Construction and real estate
  Industrial Goods' Construction/Building Materials subtopic covers four areas: construction industry, construction suppliers, builder's merchants, and real estate.
  
  
• Industrial services/transport and logistics
  Industrial Goods' Industrial and Technical Services subtopic covers four key areas: facilities management, industrial after-sales and maintenance, industrial wholesale/distributors/agents, and safety testing.
  
  
• Machinery and components
  Industrial Goods' Machinery/Industrial Components subtopic covers three areas: engineered components, industrial machinery/systems, and instrumentation/controls.
  
  
• Plant engineering and construction
  
  
• Process industries
  Industrial Goods' Process Industries subtopic covers four areas: building materials, metals and specialty materials, pulp and paper, and textiles.

Projects’ snapshot

A brief overview of selected projects done recently in this area is provided below:

• Design & implementation of a new organization structure for a major IG company
  The project consisted of designing a new organization in line with future strategic goals, fully implementing the designed organization within a short span of 3 months and providing on-the-ground support to the new leadership teams. The transition was smooth, without any sales or manpower losses, and the new structure has ensured decentralized decision making, focus on key areas of growth and appropriate accountabilities and controls.
  
  
• End to end supply chain optimization for cement major
  The project encompassed all areas of supply chain: sales footprint, asset footprint, material sourcing, inbound operations, plant operations, plant dispatch, outbound operations and distribution operations. Project led to addressing of all key strategic issues across value chain, significant improvement in customer & transporter service levels, more than 10% cost take out, and stronger collaboration across functions.
  
  
• India market entry strategy for a global industrial goods company
  BCG supported a worldwide leading primary metals company in developing a market-driven entry strategy for India. As part of this project, the case team researched and evaluated the revenue and profit opportunity for the client within various market segments (e.g., commercial transportation). In addition to this, we developed a target organizational structure for the client’s operation in India. The resulting recommendations were well received and are currently being implemented.
  
  
• Vendor rationalization for a major tractor player
  The project required developing a comprehensive vendor engagement framework to address key questions for a material category – desired profile of vendors, optimal number and location of vendors, nature of relationship with vendor and position in the tierisation hierarchy. Application of model to key categories led to significant reduction in vendor base, 6-7% reduction in material cost and an increased collaboration with key vendors.
  
  
• Developing strategic options for a domestic passenger car player for a play in the global small car market
  The project adopted a scenario thinking approach to understand key forces that could shape the small car landscape going forward, distilling implications for different types of players and developing strategic options for the client. Project led to development of possible scenarios of the automotive market by 2015 with potential plays for the client in this space.

People

Dr. Arindam Bhattacharya is the leader for the Industrial Goods Practice Area in India.