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Skill India will make furniture industry roar

Photo Caption: Live-skilling in partnership with Caple and Furniture and Fittings Skill Council (FFSC)

The problem of unskilled labours in the Indian furniture industry needs to be addressed with a firm action. Caple Industrial Solutions delivering the best solutions sine 1974 has become torchbearer for the skill development across the Indian furniture industry

“Education is the most powerful weapon which you can use to change the world. ” – Nelson Mandela

Satyan Thukral, CEO, Caple Industrial Solutions

Labour in India is cheap but not skilled labour. Due to short supply and high demand, the price of skilled labour will rise year on year. Someone starting up a factory can poach labour from the job market at 10-20% higher cost. Higher cost does not result in higher value and China is happy to take orders at low value. India thus loses business to China. To keep the labour costs down it is important to build a pipeline of the skilled labour force. Ministry of Skill Developement and Entrepreneurship (MSDE) and Skill India initiative is once such a positive move by Government of India. You can create instantly physical infrastructure by investment but to create social infrastructure it takes generations. Skill India initiative is not a magic wand that it can churn out highly skilled labour overnight. It is the duty of all the industry to educate and create the next generation of the skilled labour force. Government is just a facilitator. On one hand, we have the demand for skill labourers while on the other hand, we have an unemployed young country. If skilled, we can be the biggest supplier of the skilled labour force to the entire world.

The then President of India Shri Pranab Mukherjee visited FFSC stall at Skill India Exhibition and Rojgar Mela held at Deoghar, Jharkhand in April 2017.

What should be the strategy of India?
China is a volume player. To become a volume player, your designs need to be standard and your machines and processes need to be efficient. Efficient is low cycle time. Europe is a value player. If you are a value player, your designs need to be innovative and your machines and processes need to be effective. Effective is the low set up time.
When you have achieved volume, you move towards value. When you have achieved value you, move towards volume. The best scenario is mass customization, where you have both value and volume. The risk of failure is the highest where you do not have both volume and value. Don’t be in this quadrant.

Where does the furniture industry stand in India?
India’s furniture industry contributes 0.5 % of the GDP as compared to the 2 % contribution by the industry in developed countries. The majority of the contribution to India’s furniture industry is from the unorganized sector. Most of the labourers are working on minimal skill sets or sometimes, without any specific skills. According to a World Bank study, the organized furniture industry is expected to grow at 15-20% every year. A large part of this growth is expected to come from the rapidly growing consumer markets across Asian countries, implying potential growth in the Indian furniture sector. According to the Government of India, the Indian furniture market anticipated a CAGR of 13.38 % from 2018 through 2023. The report by the Hong Kong Trade Development Council (HKTDC) expected the Indian furniture market to grow over USD 27 billion by 2022, representing a tremendous opportunity for furniture exporters across Asia. With the Indian population almost exceeding China, India is one of the fastest trillion-dollar economies. Hence, the middle-class furniture market is booming in India.

The demand for branded and quality furniture is increasing in India as the middle and upper-middle class is emerging in an urban area. Though the demand for locally manufactured furniture still exists, the import data suggests that middle and upper-middle urban class seeks contemporary design more. Global exposure and ease of imports has also given rise to the demand for imported furniture. The Government of India is encouraging foreign direct investment, especially in areas which create jobs and provide technological advancement. We have to equip our workshops to tap this opportunity by upgrading on machines and processes and be careful to lose business to multinationals.

State of labourers
As per a report by the Ministry of Skill Development and Entrepreneurship, out of total employment in the furniture sector in India, almost 50 % of employment is concentrated in five states. These states are West Bengal (16.58%), Uttar Pradesh (11.14%), Maharashtra (9.49%), Bihar (7.05%) and Gujarat (6.45%). West Bengal, UP, and Maharashtra counts for almost 38% of the total workforce in the furniture industry in India. According to this report, 97% of the workforce involved in the furniture sector are school dropouts. Out of these, almost 88% have an educational qualification of secondary schooling or less. Labour is easily available in UP, Madhya Pradesh, Bihar, West Bengal, Odisha, Rajasthan and Maharashtra. As the labourers in these states are minimally skilled, they find the furniture and furnishing sector attractive. Labor seasonally migrates for work in the off-season.

“Our approach should be value-based; and not volume-based. If China is selling at 100, we should be selling at 105. Why would someone buy at 105? They will buy at 105 if we give a value of 110”.
– Satyan Thukral, CEO, Caple Industrial Solutions

The steep challenge
Though there is enough demand, there are a few crucial aspects that are halting the progress in the furniture segment. Training is the most essential part of this. Most of the time, the unskilled labourers are not given training of required skill sets at all. Even when given by the institutions and companies they work with, labourers are given a maximum of one-week basic training, that too based on the immediate need. On the other hand, the tradition of parents passing on skill sets to their children is slowly dying out. The youth is preferring other sectors of employment which are characterized by the relative ease of work and better pay scales. Secondly, automation is leading to the deskilling of floor employees. Employers are no longer worried about the skills of foot soldiers in the industry. There are virtually no prerequisites to becoming a floor employee as automation is taking away the primary requirement of having traditional knowledge.

The demand and growth in labour is normally one-third of the growing GDP. According to an estimate, nearly 20 million labour demand will be there in this sector in a decade. Caple believes, 12 years of education and 12 weeks of skilling or upskilling with skilled courses will make the youth industry-ready. At a high GDP growth rate, it is assumed that consumption patterns and demands in both furniture and demand in labour would change drastically.

Opportunities!

  • The rising trend for modular and state of the art furniture marking a growth of India’s furniture market growth.
  • With most of the population is shifting to urban cities and growing urbanization is resulting in rising demand for durable and hybrid furniture.

What Caple is doing?
Caple’s core purpose is to deliver the best solutions, with Consultancy in Application and Process, Leading to Excellence.
Kindly note we don’t provide but we deliver. We believe providing is one-way advisory but delivery is two ways where we ensure we get things implemented.

Our business model is sales through education with ZED.

ZED ‘Zero Effect – Zero Defect’ is mantra! Zero Effect means the safety of labour, the safety of the environment, optimization of all resources including time, money, labour, energy, raw material leading to scalability, and sustainability. Zero Defect is the best quality output in a given resource. For best quality, we need the best machines tools, the best raw material process knowledge and attitude.

The Government of India have set up Furniture and fittings skill council (FFSC), which focuses on skill gap analysis and training. The main aim of FFSC is to train the underprivileged, unemployed, unskilled, semi-skilled and upgrade the skilled with the latest technology and making them industry ready skilled and employable. Skill development, skill enhancement, encourage entrepreneurship and soft skill development is also one of the motives of the FFSC initiative. The furniture industry is infrastructure-related and follows post-civil. Furniture clusters can have training centres as common facilitation centres need an upgrade in terms of training and processes. If ticked all the boxes rightfully, India can become an export hub for customized furniture in the world. This sector can employ young people including women. Increasing demand for Indian carpenters from overseas can bring in foreign revenue. Furniture fittings are a labour-oriented industry and it will create lots of job roles.

To cater to this, Caple is giving training to various institutions. One of the major parts is ‘Train the trainers’! Growth of the industry can not be achieved without good Vocational Training Partners and upgrading the Industrial Training Institutes (ITIs)Trainees need to learn the ‘Zero Defect – Zero Effect’ mantra with quality machine tools, quality raw material, and process knowledge.

Efforts by Caple

  • Set up 1500+ woodworking workshops in the last 12 years.
  • Close association with the suppliers, trainers, and consultants of the industry
  • Contributed machines and process training to Dupont knowledge centre in Hyderabad, ISDI in Mumbai, Godrej Innovation Centre in Mumbai, Hyderabad Jail, ISDI, CEPT University, BNCA Pune, BSDU Jaipur, ITI Guwahati etc.
  • Providing training to trainers and trainees at the Caple Skill Labs and demo centres.
  • Optimised and set up skill labs at Delhi, Mumbai, Bengaluru, Ahmedabad, Pune, Chennai and Kolkata.
  • Conducted India Skills competition and contributed machines and training to the participants of Worldskills India trainees.
  • We understand the cash flow challenge and help our customers arrange finance.

The then CM of Uttar Pradesh Akhilesh Yadav visited Furniture Skill Council in July, 2016.

The Model Skill lab by Caple
FFSC’s iconic Skill Lab supports solutions for site jobs and workshops with classic machines and tools covering 85 % of the industry. The lab is spread over 2000 – 3000 sq ft and is equipped with the world’s best machine tools, conference room, training, and video presentation rooms. Also, these iconic skill labs have European-trained trainers and experienced assistants. As the company has very good relations and understanding of the furniture industry, the placement cell is also in place to bridge the gap between employee and employer.
For training institutes, buying and maintaining machine tools is capital expenditure and is an investment. For Caple, it is stock in trade and we chose to optimise this investment with education, consultancy, supplies and service.

The way forward..!

  • Create 25 Centre of Excellence under FFSC by 2025.
  • Prepare participants for IndiaSkills and Worldskills competition and assist in conducting competition.
  • Optimise and equip and do training of trainers to the ITIs and IITs in the country as they already have systems, infrastructure, and budget in place.
  • Changing all the prisons in rehabilitation centres and inmates into skilled labourers.

How can industry participate in the Skill India initiative?
The Government of India is right when they want to cover maximum numbers whereas the Industry wants quality. The industry can optimize by adopting ITIs, IITs, NITs, NIDs, IDCs, VTPs, etc with CSR, Machine Tools, Consumables, Process Training, Promoting RPL and apprenticeship.

Our approach should be value-based; not volume-based. If China is selling at 100, we should be selling at 105. Why would someone buy at 105? They will buy at 105 if we give a value of 110. We should be giving European quality furniture at Indian prices. This should be our approach to the world market.

Be in any industry, challenges of ‘Make in India’ are more or less common. For ‘Make in India’ to succeed, the Government needs to provide land, roads, power, water, skilled labour and loans at a subsidized price. We can have a look at what subsidized loans have done to the infrastructure industry, automobile industry and make similar arrangements for SMEs, factory owners to make ‘Make in India’ a success story.

Data Sources : www.investindia.gov.in,
www.msde.gov.in, nsdcindia.org, www.hktdc.com, www.ibef.org, www.statista.com, www.caple.in

Satyan Thukral
CEO, Caple Industrial Solutions
ceo@caple.in