In 2006, Kaba Group, a global player in the security industry, with its subsidiary Silca entered into a 50:50 JV with Ashok Minda-promoted auto component group Minda for making keys and key-duplicating machines in India.
Both the joint venture partners invested about Rs 50 crore in the new company, Minda Silca Engineering, for the next three years. This venture has borne fruit with key-making and key-duplicating machines being made both for the automotive and domestic segments — for the first time ever in Silca’s history — not at the headquarters in Italy, but in Noida, India.
Silca DUO: an Italian-Indian Collaboration
According to Pramode Parasramka, managing director Minda Silca, “It all began with two teams of developers, two locations, two different cultures – one project. The Silca DUO project saw developers from Kaba’s Italian subsidiary Silca and from Minda Silca in India working together for the first time. The resulting product line My First Silca is a very attractive one.”
The purpose of this collaborative venture, which represents a new operational base for Silca in the Indian growth market is the manufacture of key cutting machines and keys for the replacement key market and the OEM sector, said Parasramka.
Today – about two years since the venture was set up – Minda Silca with its distribution partners already covers a large part of the Indian subcontinent. An efficient production line turns out high-quality keys with over 300 different profiles as well as plastic heads. Further advances are set to follow.
This successful venture should be expanded, said the people at Silca, and they sought out new opportunities. How can better use be made of synergies? Where are the gaps in the huge Indian market? The answer soon became clear: through the Silca DUO project, a new type of key cutting machine was to be developed, specifically suited to the low-price segment of the growth markets in Asia, South America and Eastern Europe. The project was launched at the beginning of April 2008.
Under the leadership of Corrado Fischer from Italy, eight developers – four from Minda Silca and four from Silca in Italy – began working on the new product line. The members of the project team had to have serious organizational and communications skills.
Parasramka said that developing a product together when the members of the team are thousands of kilometers and several time zones apart is no easy undertaking. At the end of the day, the constant exchange of ideas is what makes any development process work.
Differences in background brought some challenges for the project team, too, with two different corporate cultures and philosophies to grapple with. However, from the start the differences in working methods and cultural background were regarded as an opportunity.
Complementary expertise
The team members from Italy were the driving force when it came to project management and expertise. As a technology leader, Silca is accustomed to updating its product portfolio on an ongoing basis, keeping abreast of a market, which constantly requires new key profiles and quicker and more user-friendly machines for key manufacture. Thus, over the years, Silca’s R&D department has acquired a great deal of in-depth knowledge and experience.
“The knowledge transfer was a big challenge. We were developing a key cutting machine for the first time. That also meant building and testing prototypes,” explained Anup Kumar Gupta, unit head, Minda Silca. Giovanni Pupo, quality manager, Silca Italy, observed a high level of motivation and great skill in his Indian colleagues: “They did perfect work from the start.”
The Indians set up contact with suppliers that produce the sought-for quality at low cost. The highly qualified Indian team also added valuable experience from developing products for the car industry, which brought new approaches to improving the design. “In product engineering we benefited from the perspective of our Indian partner from the outset,” said Corrado Fischer.
“As the project progressed, they showed us ways in which we could easily produce other parts for other machines at Minda Silca. A welcome synergy effect, which Silca will obviously make use of. The strengths of our two operations complement each other ideally,” observed Fischer.
Production location challenge
Silca DUO is in many respects an ambitious project. This extends also to the choice of production location. For the first time ever in Silca’s history, key cutting machines will not be made at the headquarters in Italy. In order to enable production to take place in Noida, adjustments had to be made to existing production methods.
The complex mix of components needed to make the key cutting machines required an improvement in process setup. Silca equipment also had to be integrated into the manufacturing process. In order to ensure high Silca standards were maintained in the new product line, the project team developed quality assurance processes along with a failure mode and effects analysis. It was on this basis that production for the new product line was set up: every tool and every step in the process were put precisely in place.
Successful collaboration
Anup Kumar Gupta regarded the experience of the last year as a very positive one. His team has developed extraordinary skills and a great deal of technical expertise in key cutting machines. The collaboration, he believed, was an excellent thing at all levels. In addition: “Communication was affected less by cultural differences than by differing local realities.” Giovanni Pupo agrees
with him. Everyone expanded their horizon. He felt the contact with another culture and the exchange of knowledge was enriching. His summing up of the partnership: “Successful at all levels!”
According to Roberto Gaspari, COO Key + Ident Systems Europe/Asia Pacific, at Kaba Group, “We have doubled our operations and now produce key blanks for Europe as well. In the local replacement key market, our team has already established a significant customer base; our business covers now most of the Indian subcontinent through our twelve distribution partners. It goes without saying that there is still much to do.”
“For example, in the coming months we will be negotiating with other prospective distribution partners, and we will also develop a product catalog in Hindi and make point-of-sale material available. We will be staging some events, too, with a view to enhancing familiarity with our brand and our business model,” he said. The joint venture was a new experience for them. Unlike acquiring a company, entering into a joint venture requires a partnership between the two companies based on mutual understanding, shared goals and trust. Happily, Kaba established a good relationship with its partner even at the negotiation stage.
Gaspari expressed great confidence in the India Indian partner. He stated that Parasramka, their managing director, is an experienced manager with great technical competence.