human resources challenges for startup organisations

HUMAN RESOURCE CHALLENGES AND
OPPERTUNITIES FOR STARTUP
ORGANISATIONS

Dream > Believe > Pursue
AICH

Friday, January 10, 2014

INDRANIL

1

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MODULES OF THE PRESENTATION

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Entrepreneurs – Definition , types, classification,triggers and traits
Entrepreneurship – Human resource the key to success
Key challenges and possible measures of mitigation
Startups - The initial human resource team crucible for growth an overview
– Team formation ,co founding ,advisors and retention
Recruitment - innovation,route to reach ,social media ,employee branding
Training and development in start ups .
Retention and attrition in start ups
Concluding remarks

DREAM>BELIEVE>PURSUE


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ENTREPRENUERSHIP IN
VERNACULAR
Entreprenuership in Hindi उ योग
उप म (pr. udyog upakram)[Noun]



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ENTREPRENUERSHIP
Entrepreneurship is like raising children; it starts with a
moment of enthusiasm, followed by decades of hard
work” -Howard Stevenson
•



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ENTREPRENUER- DEFINED
Entrepreneur Webster’s - someone who runs a business his or her own
financial risk
An entrepreneur is a person who undertakes the creation of an enterprise or
business that has the chance of profit (or success).
Some qualities of an entrepreneur
-Partnerships
-Robust network
-Realistic view
-Passion!
-Clear strategy
-Technology
-Ethical Behavior
-Flexibility


5

ENTREPRENEURSHIP –TRIGGERING EVENTS

Career Change
Downsizing
M&A
Relocation
Semiretired / retired
Passion for an Idea
Environment
Deregulation / regulation
Disruptive Events



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MY TRIGGERS

Atmano mokshartham jagad hitaya cha,
"For one's own salvation, and for the
welfare of the world".

JOY OF GIVING !



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MY TRIGGERS

BYOB - BE YOUR OWN BOSS !
EMPLOYMENT GENERATION !
CHALLENGES -PERSONAL ,PROFESSIONAL ,SOCIETAL
TO BE REMEMBERED AS A FOUNDER OF AN INSTITUTION
ENTREPRENUER GENERATION
LEARNING LIFE, LIFE LONG LEARNING !

BECTEL MODEL

-PUBLICATION ON

THE WAY!


8

ENTREPRENEURSHIP

Business is not a dirty word!



9

WHAT SOLUTIONS DO WE HAVE TODAY IN INDIA ?
•

Government jobs - minimal
,reservations!

•

Private sector - Economy driven, Revenue driven ,Recession driven

•

Academic profession - Water , water every where not a drop to drink!

•

Political will to create jobs - Policy paralysis!

•

Skill development- Negligible !

Only •9% of Chartered accountants passouts were placed this year!

ENTREPRENUERSHIP IS THE
ANSWER !



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MY INFERENCES
•

Know more be more !

• Knowledge is power !
• Net work!
• Go kiss the world !



11

CLASSIFICATION OF ENTREPRENEURS
Innovative Entrepreneur - He is the one who introduces a
new product or a new method of production or opens a new
market or explore new source of supply of raw material or carry
out a new type of
organization.- STEVE JOBS
Initiative / Adoptive Entrepreneur - are those who
initiate the successful entrepreneur in technique innovated by
others. - NIRMA
Drone Entrepreneur - are those who will never allow any
change in their production or style of functioning-.HINDUSTAN
MOTORS



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CLASSIFICATION OF ENTREPRENEURS

FABIAN Entrepreneur - are always on caution. They neither introduce nor
changes nor adopt new methods invented by others. They are lazy and
follow old customs, old method of production - Typewriter industry
,pagers .

Another classification
1) Natural Entrepreneur
2) Motivated Entreprenuer
3) Created Entrepreneur
4) Forced Entrepreneur



13

ENTEPRENUERSHIP
CHARACTERISTICS AND TRAITS
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Ability to deal with a series of tough issues

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Ability to create solutions and work to perfect them

•

Can handle many tasks simultaneously

•

Resiliency in the face of set-backs

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Willingness to work hard and not expect easy

solutions
•

Possess well-developed problem solving skills

•

Ability to learn and acquire the necessary skills for

the tasks at hand



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ENTEPRENUERSHIP
CHARACTERISTICS AND TRAITS
Being an entrepreneur requires specific characteristi
often achieved through education, hard work, and planning.

Risk Taker
Businesses face risk. Entrepreneurs minimize risk through research,
planning, and skill development.
Perceptive
Entrepreneurs view problems as opportunities and challenges.
Curious
Entrepreneurs like to know how things work. They take the time and
initiative to pursue the unknown.



15

ENTEPRENUERSHIP CHARACTERISTICS
AND TRAITS
Self-confident
Entrepreneurs believe in themselves. Their self-confidence takes care of
any doubts they may have.
Flexible
Entrepreneurs must be flexible in order to adapt to changing trends,
markets, technologies, rules, and economic environments.
Independent
An entrepreneur’s desire for control and the ability to make decisions
often makes it difficult for them to work in a controlled environment.

DEFERRED GRATIFICATION !



16

STARTUPS -

HUMAN RESOURCES - THE UMBILICAL CORD

Key challenges and opportunities
Core founding team - foundation, qualification as founders, building
pillars , cofounding advisory help, Retention
Recruitment - Innovation , Routes to reach, ROI of recruiters ,Employee
branding , Use of social media.
Training and development Retention and attrition -



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TEAM BULDING - A FOUR PRONGED PROCESS

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•
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Building a strong foundation
Creating the strong pillars to build the next floors
Building the first model floor
Then just replicating as long as you grow.



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KEY FACTOR /CHALLENGE – FOUNDING
TEAM



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INITIAL HUMAN RESOURCE - THE CRUCIBLE OF FORMATION
OF THE STARTUP ORGANISATION

Why a strong foundation?
For maintaining an effective team you have to concentrate on foundations
required for them. You must build or repair the foundation first if you are seeking
to build an effective team. Stronger the foundation, higher the building will go.
This stage needs lots of digging, too much patience and unbounded
perseverance.



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INITIAL HUMAN RESOURCE - THE CRUCIBLE OF FORMATION OF
THE STARTUP ORGANISATION

Who qualifies to be a founder member?
Identify the three core skills needed for your business and get them in the team as much
as possible. The members should have shared goals and similar values. Don’t mix
personal and professional relationships in your business because friends and relative don’t
always make a good team.
Key traits to look for - from our experience
Intellectual honesty
Emotional energy
Animal instinct - in the right sense of the word !



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Who builds the pillar and the first floor?
This is the next core team, may be next 5-6 key people. This may include more
functional experts (marketing, HR, technology, sales etc depending on your
business). Hire them for passion and skills. New businesses are much about
ownership, hardship and passion as much as about skills. Hire for attitude with
shared goals and values, and train for business.


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Who builds the floor?
This is the growth stage where your business is working. You know what
to sell, to whom you sell and where you want to go. Here skills are more
important as you know what you are looking for. Passion, common goals
and shared values are important too but to a lesser extent now



23

THE STARTUP ORGANISATION - COFOUNDING OF THE TEAM

How do I find co-founders?
The key to find a co-founder is networking: network, network and network
some more. Make an effective impression: talk about your business with
passion. Apply your checklist to all prospective co-founders: core skills,
shared values and common goals. Come clean on every discussion point
as you spend more time with your co-founders than your better half.
Be ready for divorce before marriage !
EX COLLEAGUES
CHAMPIONS WITH LOCATIONAL OBLIGATIONS
RETIRED BUT NOT TIRED



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How do I deal with stock options?
Ideally co-founders should own common stocks. It’s a good practice to have
vesting for founders too, it keeps you accountable. The options should be
decided based on your plans for next three years. You will always need more
senior people than your plan says. The core team should be given healthy
dose of options, nothing like ownership. 20% is always a good number to keep
as options pool. Give options but only once you have explained the value.



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How does Board of Advisors add value?
It is an interesting approach to add skills to the team. Look for the key skills
missing in the team; it could be networking, bouncing of ideas, reality check
or anything else. Do good reference checks and look for relevant advisors.
-

Retired domain specialists
Freelancers
Professionals on sabbatical
Chartered accountants and company secretaries



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Some must do’s as you grow
You must personally meet and interview every person you want to hire
till your first floor is complete. Keep in mind that first set of team members
join because of you not for the business.
Communicate, communicate and communicate some more, it is never
enough. Try to answer all the tough questions yourself. Behave like a foundation
and support everyone. In reality, great people organizations are in inverted
pyramid style.
The inverted pyramid is a metaphor for a reversal of traditional management
practices. Employees who are closest to clients or production processes
are placed at the top and managers at the bottom. The employee is
empowered with greater decision-making authority and freedom of action. The
manager becomes a facilitator spearheading a team effort. In theory, overall
organizational performance becomes faster, more adaptable and more effective.


27


Some don’ts as you grow
Never ever strive to fake values, it just doesn’t work. Don’t try and hide behind
system and processes. Early stage companies need more personal touch than
process for people. Your core message can be same but words need not be for
different teams.



28

CHALLENGES AND PITFALLS OF START UP FOUNDING TEAMS
Getting Lost amongst the new talent acquired and their capability
Developing complacency
Missing out on skill development due to high commitment to growth
Deferred gratification - getting used to it!
Big fish in a small pond to a big fish in a big pond transition !
Transform them to intrapreneurs !
Give them opportunities to be a part of the industry through
representation on the in various forums
Role swapping and swapping of profile .



29

STARTUP HUMAN RESOURCE RECRUITMENT – A PARADIGM SHIFT

STARTUPS NOW ARE IN THING IN CAMPUSES !
Flipkart.com hires171 IIT grads in day zero 2013 DECEMBER !


KEY FACTORS /CHALLENGE RECRUITMENT



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STARTUP HUMAN RESOURCE RECRUITMENT- - STRATEGY

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Innovation in recruitment
Routes to reach the right resource
Employee branding
ROI of recruiters
Use of social media .



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STARTUP HUMAN RESOURCE RECRUITMENT- - ROUTES TO
REACH THE TALENT
Employee referrals Most prevalent in MSME’s in India
Internal job postings - Prevalent in slightly older startups
Social networking on websites such as LinkedIn
Job portals- domain specialists
Campus Recruitments- huge rush in India.
Hiring through Placement Consultants
Hiring teams instead of an individual
Targeting public-sector employees, ex-servicemen
Partnering with educational and training institutes
Participation in Job fairs
Pre-placement offers (PPOs)



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STARTUP HUMAN RESOURCE RECRUITMENT- -INNOVATION IN
RECRUITMENT

BRINGING IN EXTERNAL CONSULTANTS FOR HIRING
PHYSICALLY CHALLENGED SKILLED PEOPLE .
EX SERVICEMEN IN ENGINEERING AND ADMINISTRATION.
INCLUSION OF EXTERNAL HR MANAGERS IN INTERVIEWS .
More stress on - innovativeness
- conceptual understanding
- more stress on mobility ,outlook and innovative outlook
towards work
- matching of the core skills
- multiskilling and multi disciplinary skills (engineering
plus management )



34

STARTUP HUMAN RESOURCE RECRUITMENT- EMPLOYEE
BRANDING

The entrepreneur is normally the brand who people look up to and join
instead of the company
Employees working in the start up can be good referrals
Employees from campuses could be used to revisit the campus once
again to talk about the company .
Star performers can be showcased for culture and other growth stories
of the organization .
EVP - Employee value proposition and return on investment demarcated
is clearly worked out .



35

STARTUP HUMAN RESOURCE RECRUITMENT- ROI OF
RECRUITERS

A very important indicator of the validity of the recruitment made .In
Msme’s the is directly proportional to the turnover since backend
and support services are important .
A Ratio of 1:10 - compensation to gross revenue generated normally MSME’S turnover is low . For manufacturing sector 1 : 20
ratio .
Service sector – 1:5 ratio and manufacturing 1:10 ratio minimum
benchmark .



36

STARTUP HUMAN RESOURCE RECRUITMENT- USE OF SOCIAL
MEDIA

6.1 billion people have access to Facebook .
Twitter ,linkedin and other social media .
Below 25 years of age social media is a powerful tool to associate
.Every startup should have a webpage and a page in Facebook.
Need to have a presence in social media .



37

KEY FACTORS /CHALLENGE –TRAINING
AND DEVELOPMENT



38

STARTUP HUMAN RESOURCE - TRAINING AND DEVELOPMENT

Training and development not a need a necessity .
Structured training ,unstructured training and on the job training.
Career development programs – From day one
Using government help in training and development .
Training and development as a retention tool for startups .



39

STARTUP HUMAN RESOURCE TRAINING AND DEVELOPMENT A NECESSITY

In startups there are huge skill gap including the entrepreneur.
Skills gaps in domain and non domain areas
Soft skills a huge area of improvement
Gaps affect the turnover of the company since team is small.
In house training by entrepreneur and his core team
Ten man days per six months time would be an ideal investment in training
Measurement of effectiveness to be measured on work and effectiveness
on training .



40

STARTUP HUMAN RESOURCE TRAINING AND DEVELOPMENT TRAINING PROGRAMMES

Structured training programmes are costly needs to be used alike
aftershave . A proper identification process of training needs
identification is required .
Unstructured training programs - impromptu training most
commonly practiced in MSME ‘s
On job training programme – most effective in MSME sector but
needs to be measured and mentored .



41

STARTUP HUMAN RESOURCE TRAINING AND DEVELOPMENT CAREER DEVELOPMENT PROGRAMS

Human resources career development plan – MBTI Tests ,EQ Test Brain
mapping , 360 Feedback uncommon but needed .
Career development plan at least for next three years a broad outlook
of career path .
Expectation to achievement measurement



42

STARTUP HUMAN RESOURCE TRAINING AND DEVELOPMENT GOVERNMENT HELP

ITI SUPPORT PROGRAMME
BOARD OF PRACTICAL TRAINING PROGRAM
CII INDUSTRY ACEDEMIA PARTNERSHIP INITIATIVES – SKILL GURUKUL
ESI HOLIDAY FOR EMPLOYERS FOR THREE YEARS
PAN IIT INITIATIVES



43

STARTUP HUMAN RESOURCE TRAINING AND DEVELOPMENT A RETENTION TOOL

Startups a great place for learning
Flipkart punchline - PPT – Come build the company !
Multi skilling an advantage to employees of startups – a natural offering of
MSME’s
High rate of learning in a short span of time !
High rate of growth with the growth of the organization !



44

KEY FACTORS /CHALLENGE-RETENTION
AND ATTRITION



45

STARTUP HUMAN RESOURCE - RETENTION AND ATTRITION

Average attrition rate in startups in India 8 –47 percent!- TMI
GROUP Survey in December 2013
Major causes - Lack of employment branding !
- Lack of career development
- Succession planning of employees!
- Lack of personal touch !



46

STARTUP HUMAN RESOURCE - RETENTION AND ATTRITIONEMPLOYMENT BRANDING

.
Startups organization branding
Startups employee branding



47

STARTUP HUMAN RESOURCE - RETENTION AND ATTRITION –
LACK OF CAREER DEVELOPMENT

Launch of career development programmes
MBTI ,360 degree , Leadership strengths assessment
Peer feedback
Career development programmes for each employee from day
one atleast three year growth plan .



48

STARTUP HUMAN RESOURCE - RETENTION AND ATTRITIONSUCCESSION PLANNING

Job rotation a very important aspect to derisk the business
If you want peace be ready for war
Three tier fall back plan in case of attrition
Ex employees club/informal get togethers’ a great help!



49

STARTUP HUMAN RESOURCE - RETENTION AND ATTRITION –
PERSONAL TOUCH



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STARTUP HUMAN RESOURCE - RETENTION AND ATTRITION - PERSONAL
TOUCH
Oskar Schindler: I could have got more out. I could have got more. I don't know. If I'd
just... I could have got more.
Itzhak Stern: Oskar, there are eleven hundred people who are alive because of you.
Look at them.
Oskar Schindler: If I'd made more money... I threw away so much money. You have no
idea. If I'd just...
Itzhak Stern: There will be generations because of what you did.
Oskar Schindler: I didn't do enough!
Itzhak Stern: You did so much.
[Schindler looks at his car]
Oskar Schindler: This car. Goeth would have bought this car. Why did I keep the car?
Ten people right there. Ten people. Ten more people.
[removing Nazi pin from lapel]
Oskar Schindler: This pin. Two people. This is gold. Two more people. He would have
given me two for it, at least one. One more person. A person, Stern. For this.
[sobbing]
Oskar Schindler: I could have gotten one more person... and I didn't! And I... I didn't!
Dialogues from Schindler’s list – Schindler dialogue before going into hiding at
the falls DREAM>BELIEVE>PURSUE
of Nazi’s
2

51

CONCLUDING REMARKS
Spent 25 % of your time on people
Accountability and delegation of power to core team
Change should be the only thing constant
Strong fall back and emergency manpower plan with strong vigil
Training and development
Personal touch .



52

DREAMS CAN NEVER BECOME A REALITY WITHOUT HARD
WORK.



53



54

AICH APPRAISERSAUCTIONERS AND VALUERS
We value every thing under the sun

EMPANELMENTS

WE VALUE EVERYTHING UNDER THE SUN

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•EMPANELMENTS


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56

•200% Year on year Growthboth

bottomline and topline
•Strong credit rating
•Qualtrics Rated top 3 in India in Valuation

Services
•Finalist forAIMA -Dr J.S Juneja Award for

Innovation and creativity for MSME
enterprises for 2012 -2013 and ICICI CNBC India Emerging India Awards 2013

LUE EVERYTHING UNDER THE SUN

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•

KATAICH INFRACORE ENGINEERING PVT. LTD.

•Started with Changling construction machinery distribution and Nawa

crushers
•Year on year growth 200%
•Revenue of ½ million USD in 2011-2012
•Shantui heavy machinery dealership
•Spare parts supplier company
•Started as the flagship company and diversified


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59

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AICH MINING RESOURCES PVT. LTD.
Opencast & Underground Mining of ferrous & non ferrous metal & non
metal mines concept to commisioning projects
•Opencast
•Concept

& Underground Equipment Selection, installation

to commissioning Technical Consulting & Mining Consulting
•Coal

•CHF

Washers Consulting

Concept to Concept to commissioning projects


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60

•

•Opencast
•Concept


•Coal

•CHF

Washers Consulting



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A BREIF PROFILE OF INDRANIL
AICH F ABOUT INDRANIL AICH
Chequered career of 18+ years in the industry out of which 14 years
in multinationals of repute
Worked in Titagarh Wagons Ltd GoIndustry - Dovebid (Formerly
Henry Butcher) ,UT Limited (JV between Usha Group and
Telehoist of U.K.) Ingersoll Rand India Ltd,TIL (Tractors India
Limited) -Jayashree Textiles, Indian Rayon Group -Rishra.
Award winning Production engineer with MBA from IIFT kolkata .
Publications and teaching assignments in several institutions of
repute .


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A BRIEF ABOUT INDRANIL AICH
PROFESSIONAL MEMBERSHIPS
International Memberships
Honorary Life member of Royal Institute of Chartered Surveyors (RICS),
London.
Life member American Society of Mechnical Engineers USA
Life member of the Mining ,geological and metallurgical Society of India .
Life Member of Operational Society of India, Quality Circle Forum of India,
Systems Dynamics Society of India
Life Member of Institution of Engineers (Membership No.M-132302-9) and
Chartered Engineer from Institution of Engineers (AM 092132-5).
Approved valuer (Registration No.18328) Category - Production & Industrial
Engineering and Fellow and Life Member of Institution of Valuers.
Member of Indian Council of Arbitration, New Delhi an organization of FICCI
and Ministry of Commerce.Member of Practicing Valuers Association of India


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INDUSTRY CHAMBER MEMBERSHIPS
Member of Confederation of India Industry Eastern Region
Member of MSME National council CII
Member of West bengal state council
Member of the economic affairs ,taxation and finance subcommittee
Member of the Safety subcommittee
Member of the MSME subcommittee


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•


• Partnership firm Started in August 2009
•Valuation Services for Movable And Immovable Assets Construction
and Mining ,Medical Equipments for asset based lenders banks and
financial institutions
•Consulting Partnership With American Appraisals Pvt. Ltd.
•Over 6000 assets valued in three years with a value of around
3000crores INR
•MEMBER COMPANY OF CII ,BNCCI AIMA &IGCC


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EMPANELMENTS


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46

67

•EMPANELMENTS


47

68

•200% Year on year Growthboth

bottomline and topline
•Strong credit rating
•Qualtrics Rated top 3 in India in Valuation

Services
•Finalist forAIMA -Dr J.S Juneja Award for

Innovation and creativity for MSME
enterprises for 2012 -2013 and ICICI CNBC India Emerging India Awards 2013

LUE EVERYTHING UNDER THE SUN

10/14/2013

48

69


10/14/2013

49

70

•

KATAICH INFRACORE ENGINEERING PVT. LTD.

•Started with Changling construction machinery distribution and Nawa

crushers
•Year on year growth 200%
•Revenue of ½ million USD in 2011-2012
•Shantui heavy machinery dealership
•Spare parts supplier company
•Started as the flagship company and diversified


10/14/2013

50

71

•

•Opencast
•Concept


•Coal

•CHF

Washers Consulting



10/14/2013

51

72

•

•Opencast
•Concept


•Coal

•CHF

Washers Consulting



10/14/2013

52

73

A BREIF PROFILE OF INDRANIL
AICH F ABOUT INDRANIL AICH
Chequered career of 18+ years in the industry out of which 14 years
in multinationals of repute
Worked in Titagarh Wagons Ltd GoIndustry - Dovebid (Formerly
Henry Butcher) ,UT Limited (JV between Usha Group and
Telehoist of U.K.) Ingersoll Rand India Ltd,TIL (Tractors India
Limited) -Jayashree Textiles, Indian Rayon Group -Rishra.
Award winning Production engineer with MBA from IIFT kolkata .
Publications and teaching assignments in several institutions of
repute .


10/14/2013

53

74

PROFESSIONAL MEMBERSHIPS
International Memberships
Honorary Life member of Royal Institute of Chartered Surveyors (RICS),
London.
Life member American Society of Mechnical Engineers USA
Life member of the Mining ,geological and metallurgical Society of India .
Life Member of Operational Society of India, Quality Circle Forum of India,
Systems Dynamics Society of India
Life Member of Institution of Engineers (Membership No.M-132302-9) and
Chartered Engineer from Institution of Engineers (AM 092132-5).
Approved valuer (Registration No.18328) Category - Production & Industrial
Engineering and Fellow and Life Member of Institution of Valuers.
Member of Indian Council of Arbitration, New Delhi an organization of FICCI
and Ministry of Commerce.Member of Practicing Valuers Association of India


10/14/2013

54

75

INDUSTRY CHAMBER MEMBERSHIPS
Member of Confederation of India Industry Eastern Region
Member of MSME National council CII
Member of West bengal state council
Member of the economic affairs ,taxation and finance subcommittee
Member of the Safety subcommittee
Member of the MSME subcommittee


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You can reach me @
indranilaich@gmail.com
indranilaich@outlook.com
Mobile +919831088204/+919038088204



77

QUESTIONS AND ANSWERS SESSION



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