SSA Group of Companies sees the slide in oil prices as a perfect opportunity for companies in Oman to implement transformation management strategies. In an interview with OER, NC Narayanan, Founder Chairman and Naveen Narayanan, Managing Director – International Business delve into the rationale for adopting Lean Management
Can you give us a brief background of SSA and its operations?
Naveen Narayanan: SSA is a global management consultancy founded in 1999 by NC Narayanan, following a long stint of nearly three decades of senior management positions in various industries like automobile, auto-ancillary and lighting technology. SSA was founded with a missionary zeal to help industries become world-class, and the company has grown its footprint, delivering work in more than 20 countries world-wide across Asia-Pacific, Middle East and Africa. Our team of talented consultants possess vast global experience and the know-how of cultural complexities and have delivered solutions worldwide. We are proud of the fact that in the last 18 years, we have made a difference to more than 500 industries in their ambitious business transformation endeavours. As a part of its global expansion strategy, SSA entered Oman three years ago.
SSA has set up an office in Oman recently, does this reflect your confidence in Oman’s economy and your commitment to this market?
NC Narayanan: SSA made a significant contribution to Indian enterprises in the last 18 years through transformation management which helped them negotiate the onslaught of globalisation. Oman is right now facing a similar crisis due to declining oil prices and a consequent dependency on the non-hydrocarbon sector. SSA has the right blend of competency to assist this process of taking Omani industries to world class levels. The need of the hour is our type of consultancy resources for improving profitability through waste elimination. We already have many success stories in this regard for our clients in Oman such as Voltamp and Al Hassan Switchgears, to mention a few. Our work in Oman is expanding, as many of our clients have extended our partnership for sustaining the benefits they have got due to our consulting for efficiency improvement.
Naveen Narayanan: In addition to it, the hospitality and warmth that this country extends is next to none and we always felt at home here! Also the current economic challenges facing the country and the region make it a business imperative to pursue measures that will safeguard competitiveness through quality and productivity for profitability in the long run. All these factors make Oman a very important market for SSA and hence we decided to foray into the country by setting up a local office here. We are very excited by the reception we have received so far and are eager to make a difference to the country and its economy in the coming years. We have come here with a missionary zeal to make a difference to this country with the aid of many tools and techniques for change management.
Given the low oil price environment, a number of companies in Oman are looking to rationalise costs and increase efficiencies. In what ways can SSA help them achieve these objectives?
NC Narayanan: No one ever expected that the oil prices will drop so dramatically and pose a challenge to the Oman’s economy, and hence the need for balancing the national income through manufacturing and service industries. Indeed, given the current economic climate, rationalising costs and improving efficiencies are no longer optional measures. They are at the heart of safeguarding business competitiveness and sustainability. Cost management was not the boardroom agenda when the economy was booming but when survival became a threat we need a lifesaving intervention such as Lean Management.
Naveen Narayanan: When SSA came to this market, oil prices were fairly robust; but we still found a few CEOs who were early adopters of Lean and they were willing to give our services a go. The results that they achieved even surprised us. For e.g. one of our clients in Oman that manufactures transformers experienced nearly a 50 per cent increase in capacity without adding any capital expenditure. Lean initiative saved them from the investment of another plant to augment the capacity. Such dramatic productivity improvements have helped them even more when difficult times set in, because they are able to churn out orders much quicker than their competitors and are able to do it at a significantly lower overall cost.
NC Narayanan: SSA has specialised in Lean in the manufacturing as well as service industries to improve their profitability through outstanding customer service. Many of the service sectors are suffering from high cost as well as poor customer service. The beauty of Lean is that it is equally effective for both manufacturing and service industries. Simply put, Lean looks at every single aspect of the value stream i.e. the set of activities from customer enquiry to order fulfilment, and questions the non-value added waste – things we do that add time/cost but no value for customers. The more the amount of non-value adds, the greater will be the cost of operations contributed by excessive complexity, inventory, defects and delays. It is a scientific approach that helps tackle complexities in a systematic and time-bound manner freeing up capacity and cost thus contributing to competitiveness of the industry. SSA is a domain-agnostic company which can make a difference to any business model in Oman.
SSA has already worked with many companies in the Sultanate; how was your experience in the Omani market?
Naveen Narayanan: SSA has been consulting in the Sultanate since early 2013. In our first venture with Voltamp, we achieved a significant success story in their transformer manufacturing business. We have been fortunate to work with a diversity of industries across service and manufacturing sectors, and are very proud of our work here that has brought about significant stakeholder value. For e.g. we are working with Al Hassan Group in their switchgear division where we are helping them transform their entire business value chain right from pre-sales to manufacturing. The results have been very encouraging and we have already been able to bring about momentous improvements across the value chain that will free up capacity and boost agility. We have also consulted groups such as Mustafa Sultan Enterprises in their business improvement pursuits. We have delivered Lean assessment studies for various groups such as the Zubair Group in their furnishing division, Khimji Paints and OIFC to name a few.
There are a number of companies offering consulting services in the market. What is going to be SSA’s differentiation in a me-too market?
Naveen Narayanan: SSA offers a 360 degree solution, starting form board room envisioning and strategy planning till the transformation is implemented to see financial results. The USP of SSA is partnering with our clients throughout the journey of Lean transformation. Unlike traditional consultancies that excel only in developing solutions but are not so involved in the implementation stage, SSA’s model is quite the opposite. We realise that clients struggle to derive true benefits due to poor implementation, and there is a real danger of the envisaged results not coming to fruition. In order to counter this, SSA has developed a three-stage approach to its consulting – diagnose, design, deploy. This approach ensures that organisational profit leakages are quantified and prioritised first. This is followed by a detailed solution design phase and, finally, the implementation phase during which we work closely with the client to ensure that solution implementation stays on track and roadblocks are dealt with in a timely manner. From our experience, clients derive anywhere from five times to 20 times return on investment from such initiatives and the payback period is typically under 12 months.
Is an adverse macro-economic environment a good opportunity for corporates to implement best practices and improve productivity and profitability?
NC Narayanan: There cannot be a better time to set the house in order than when the going gets tough. In fact, it is a golden opportunity now for industries to galvanise themselves for efficiency improvement. Also today’s global economies are so interconnected that the only way to survive in difficult times is to have a natural hedge by way of a global presence. One of the enabling factors to succeed internationally is to offer best-in-class products and services at a competitive price. Omani industries have a golden opportunity to look beyond the region; for instance, Africa is growing rapidly and may be a great destination to export products and services. The secret to success in such new markets lies in their willingness to adopt best practices pertaining to quality, productivity and cost management. This is the only way to stand out and prosper amidst intense global completion!