Project Management Challenges in an Effluent Treatment Plant Construction
Global trends in the bearings industry
1. Global Trends In The
Bearings Industry
Prabhash Gokarn
Bearings M&S, Tata Steel
2. Global Bearings Market
Global Bearings Market Size :
US$27 billion
CAGR estimated 5-7% (2004-07)
Ball Bearings expected to remain at 45%,
Roller Bearings (TRB, SRB, CRB) 40%
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3. Geographical Shift
Industry shifting from developed economies
(Germany, Italy, UK, France) to the
Asia/Pacific (Asian Tigers, China & India),
Latin America (Brazil) and East Europe
(Poland & Czech republics).
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4. Industry Highly Consolidated
Others, $4.8, SKF, $4.5,
18% 18%
Industry highly SNR, $0.5,
2%
consolidated already, Minebea, NSK, $2.9,
still merging by $0.9, 4% 12%
buyouts & JVs. Torrington,
$1.7, 7% INA, $2.1,
Top 20 firms => 82% Timken, $1.8, 8%
7% FAG, $2.0,
of the market Koyo, $2.0, 8%
8%
NTN, $2.0,
8%
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5. Globalization best
characterized by SKF
Over 50 factories in 20 countries
o 50% in Europe
o 30% in America
o 20 % in Asia
New plants being set-up
o East Europe
o Expansion in China
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6. Industry Trends
1. Increased output per employee
Increase in output per employee as
plants become more automated :
….2.4 fold increase in last 30 years
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7. Industry Trends
2. Increased Globalization &
Geographical Shift
Increased globalization & shift to low
cost production facilities
- Bearing majors setting up plants in
newly industrialized countries
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8. Industry Trends
3. Structural Shift to Smaller Bearings
Structural shifts leading to sharp increase in use
of smaller bearings (upto 30 mm & upto 52 mm) due
to increase in :
light weight high performance automobiles,
transaxle planetary gear transmissions,
FHP motors in automation (eg automatic
windows),
computer peripherals (eg disc drives),
white goods.
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9. Industry Trends
4. Factory Size
In 1960 -70s – merging of small plants or
growth of these small plants to large ones
producing large number of bearings in 1980 –
1990s.
…..Nowadays
Emerging trend of specialized small plants-
produce fewer varieties of bearings located near
major consumers.
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10. Industry Trends
5. Increased Competition & Excess Capacity
Throughout 1980s – 2000s - over capacity and
increased competition characterize bearings industry.
Competition has matched on time/ just in time
delivery and quality aspects.
Breakup of former communist countries reduced
domestic demand for factories in East Europe &
effect of dumping by China lowering price further.
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11. Industry Trends
6. Increasing Capital Expenditure
Automation , high speed turning and CBN
grinding
High productivity with reduced operating costs.
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12. Industry Trends
7 a. Decline in
Operating Costs
Higher productivity
Move to developing countries like China
Higher throughput plants producing small
varieties.
Effect of high competition due to overcapacity,
plunging margins and inducing cost reduction.
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13. Industry Trends
7 b. Decline in Operating Costs -
Inventory
Reduced WIP inventory (avg 45 days in 90s – 20
days in 2000s)
Reduced FG inventory (16% in 90s to 11% today)
Increased raw material inventory( 10- 12 days to
over 50 – 100 days to advantage of bulk buying of
steel.)
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14. Industry Trends
8. Global Competition
Trend for Global Buying of bearings by Auto
manufacturers …. increased price/quality pressure
on local bearing companies
Reduced import tariffs in most countries
Porous borders of countries like India leading to rise
in smuggled bearings for after market
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15. Industry Trends
However, Japan remains closed to
competition
Japan remains closed to competition due to
exclusive arrangements with fellow Japanese
companies (Keiretsu) like case of Toyota and
Koyo
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16. Industry Trends
9. Steep Fall in Prices of Bearings…
Specially of miniature bearings (9mm – 30
mm used in computers, FHP motors,
automation and white goods) and small ball
bearings (30 mm to 52 mm) used in automobiles
(~ 60% fall in prices 1992-2004).
China and EU countries – major suppliers of
small bearings; now control up to 37% of world
market
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17. Industry Trends
10. Collaborative Research & Development
Global firms spend average 2% of sales on
research
Benefit of global firms from collaborative R&D
Faster product innovations and faster development
of new generation bearings.
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18. What Discussionit mean to Tata Bearings
Agenda for
does :
1.What are our core strengths ? How do we capitalize on them?
2.What are our principal weaknesses ? How do we overcome them ?
3.Discussion on Opportunities :
A) Small Car explosion :
1. Hub bearings (new)
2. Clutch assemblies (new)
3. Engine & transmission bearings (expansion)
B) Other Opportunities :
1. M&L Ball Bearings & TRBs for pump & motors, farm equipment,
industrial equipment
2. Assemblying of sourced components ? pros/cons?
4. Discussion on Threats :
1. Rising low cost imports,
2. Expansion thru sourcing by organized players,
3. Entry of KBC, NTN & Koyo ?
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