SKF and the business of movement9 min read . Updated: 12 Nov 2014, 08:23 AM IST
Starting out with two forwarding agents in India, SKF today employs 3,000 people across six factories
Starting out with two forwarding agents in India, SKF today employs 3,000 people across six factories
Imagine you’re at a party, eavesdropping into a conversation. Point of discussion: Companies which have changed the world.
All Dudes: Yeah…
Enter, slightly middle aged man: SKF
All Dudes: SKF, who? (Suppressing various degrees of a chuckle)
Man: That Swedish company headquartered out of a small town called Gothenburg. You know the one which makes bearings, seals, lubrication systems and mechatronic systems.
Dude 1: Dude, what are you talking about? Dude 2: Take it easy man.
All Dudes: Huh…
Everybody, meet Shishir Joshipura, 52.
Now, it would be fair to say that a bearing is boring. After all, what’s the big deal about it? The typical picture you might have in mind is of a set of balls moving around inside a shiny round object. But if you indulge Joshipura, managing director of SKF in India, for a moment, he’ll argue passionately why you have got it all wrong.
Why without SKF, your life would, as you know it, come to a halt. “Think about any movement," he says. “Any movement except the rotation of the earth or a man walking or running, any other movement is not possible without a bearing." Let’s understand this.
Movement is critical. But with it comes a big challenge. Any movement needs energy. The heavier an object, the more force required to move it. Of course, movement can’t happen without friction. Too much of it and you need too much energy. Too little; then you start slipping. Remember climbing on rocks which had a funny green thing on it?
Efficiency in relative motion
It might sound a bit nerdy but all of this is actually a science. It is called tribology, the science and engineering of interacting surfaces in relative motion. And it is this science which drives SKF. “Everything that we do is with only one thing in mind," says Joshipura. “Making movement possible with the least amount of energy consumed and lowest amount of friction."
In India, SKF has been at it since 1923; a time when few multinational companies had the country on their radar. To put this in perspective, that’s about 91 years before Prime Minister Narendra Modi started his Come, Make In India campaign.
Back then, the company started out as a small trading outpost in Calcutta (now Kolkata) and was mostly about imports of automotive bearings. After independence, SKF India Ltd was incorporated in 1961 following a collaboration between AB SKF, Associated Bearing Co. Ltd and Investment Corp. of India Ltd. In 1963, SKF set up its first bearing factory in Pune, Maharashtra.
All of this begs the question, what caught SKF’s fancy? “See it is a small country (Sweden) but the perspective of companies which came out of there has been very global," says Joshipura. “For a company which started in 1907, we were already present in almost 30 countries in the first 10 years of our operation. That’s because the idea was so universal that you can’t think of a developed society where movement isn’t there."
For instance, a bicycle needs bearings. So does a motorcycle, 14 of them to be exact. So does a car, a truck or a train. Then again, mining would be impossible without bearings. Or the simple task of pumping water in your home. Or running your grinder and mixer.
It would be fair to say then that as society developed, SKF grew. In India, in 2012-13 the company had a turnover of ₹ 2,275 crore. What started out as two forwarding agents in the country, SKF today employs 3,000 people, across six factories and its products are stocked by almost 20,000 retailers. A zero debt company, SKF has a market share of 27% overall, industrial and automotive business put together.
S. Raghunath, who teaches corporate strategy and policy at Indian Institute of Management, Bangalore, has looked at SKF closely. He says that what makes SKF stand out among its peers is the company’s focus on R&D and quality. “You don’t create a company like that by chance," he says. “Here we are talking a strong product portfolio backed by R&D in a market where you are constantly threatened by fakes. To be able to build that across geographies, it is remarkable."
It is another matter altogether that you can never really see a SKF bearing in daily life. But few engineering companies can claim to have a brand recall like SKF.
Joshipura, who had no background in bearings before joining SKF, recalls his own experience from 2009. This was just around the time he had joined and he was on a quick trip to meet a few of his distributors in the crowded bylanes of Nagdevi in Mumbai. Now, if you want any bearing under the sun in Mumbai, Nagdevi is the place to go. “I saw that every fellow had SKF written on his board," says Joshipura. “So I asked my manger why we are not going there. And he said no he is not our dealer. So we went to our dealers."
On his way back, Joshipura was tempted to find out why so many people were claiming to be SKF dealers when actually they were not. So, he ventured into a shop and asked for a SKF bearing by quoting a particular number. A number? Well, as things are, that’s how you buy a bearing. The shopkeeper didn’t have it. But he asked Joshipura to wait saying that it would only take him a few minutes to get it. “Then I asked him, you are not an SKF dealer? He says don’t worry I will get it. But I am like if you are not the dealer, why do you put SKF on the board?" says Joshipura. “He says sir if I do not put the SKF name then people will not walk into my shop. For an industrial brand which is not visible in any product, I think this is a big achievement."
That SKF is well-known is not by accident. It is thanks to a lot of hard work. In designing products that can suit the needs of the local market. Research and development work for local and global products. And innovative thinking. Let’s understand them a little better.
Now, this is a fairly common sight on a highway in India. A truck stalled on the side of the road, with its rear wheels up. Or a cleaner belting buckets of water on the truck to keep it clean. Of course for aesthetic reasons. But little does he know that the biggest enemy for an engineering product is water. It was here that one of India’s largest commercial vehicles manufacturers had a problem. Its bearing in the truck had a warranty of only 30,000km. That’s the distance a truck can cover in three months.
Three to thirty six
SKF had a product, which it was supplying to European truck manufacturers, which had a warranty of a million miles. But it was too expensive for both auto makers and the trucker. So the company designed a product with a warranty of 400,000km. “That’s a jump from 3 months to 36 months," says Joshipura. “At one-third the price if we were to use the product we use globally. We can’t go around teaching all the cleaners in the country that don’t put bucketful of water on the rear wheels. He will put. So we’ve designed a completely sealed unit, they can’t do anything."
That SKF was able to do that is thanks to its R&D unit. But seriously, how difficult would it be to do R&D in bearings. Apparently, a lot. For instance, bearing becomes an important load carrying element of any rolling stock. Like a car or a train. Or when an aircraft touches down. That it does and does so safely is because the bearing held up. It survived temperature ranging from minus 40 degrees Celsius to 40 degrees. Or let’s say a bearing in mining equipment where the job can get real dusty and slushy. It has to keep rotating without getting stuck.
This is where R&D comes in. A bearing has to be designed based on various parameters—geometry, materials, performance, safety and operating conditions. Joshipura says that SKF’s global technology centre in Bangalore has the capability to do full lifecycle design and testing.
“We didn’t have it till 2011," he says. “But this is the first time that SKF ventured out of Europe with its R&D division. Since then, SKF has built one in China and is in the process of building another one in United States of America."
The unit in Bangalore also works on global products. For instance, only last year it designed a housing for a bearing for a mining company in Australia. Size of the housing: 3.5 metres in diameter. Three times the height of an average man.
Then again, it would be unfair to say that all SKF does is make bearings. The company also makes seals, lubrication and mechatronic systems.
Keeping it oiled
On the face of it, they might sound simple. After all, what is there to lubrication? The typical picture you might have is of a bottle containing oil or grease. One which you can pick up anytime and lubricate any part you want. Sure.
Now imagine millions of points which need to be lubricated. For instance, in a steel plant which can have as many as 14,000 points. To have someone go around and do that manually would be cost inefficient, unsafe, unreliable and a bit stupid. Then again, grease and oil are expensive products. You want to make sure that you only use as much as you have too. Add to that the fact that machines which again are expensive, you wouldn’t want to under lubricate them.
All of this needs a system. To get back to our steel plant example, it needs a central system which can pump the grease and oil and then bring it back, in a calibrated sort of way. SKF does that. And a little more.
It would be fair to say that Delhi Metro is the most celebrated transportation project in India. A few years back, it had a problem. It was a simple issue, the fact that Delhi was built before the Metro meant that at various points tracks would curve, in residential areas. Now imagine a train travelling at 80km per hour, taking a turn on a steel track. As it turns, it creates excessive friction. Result: noise. “And nobody likes noise," says Joshipura. “This was a problem that they were not able to solve because you can’t say that you will slow down the train. You do that, and then your efficiency goes down. So what do you do?"
SKF had a solution. The company designed a lubrication system which actually senses when the train is about to take a turn and each time it does, a little lubricant is sprinkled on the track. “It is like how you spray deodorant," says Joshipura.
That’s simple enough.