SEW Eurodrive's A-team: (L to R) Subhasis Marik, Executive (Technical Support), P.K.C. Bose, Managing Director, Y.P. Raval, Assistant Manager (Plant) and Shrihari Vyas, Sales Engineer

It's nine 'O' clock on a recent Saturday morning, and slightly built Jeetendra R. Parekh has just driven his boss to work in a silver grey Hyundai Accent. But Parekh isn't about to settle down for a boring, waiting-in-the-shade day ahead. Instead, the 26-year-old quickly exchanges his white-shirt-and-navy-blue-trousers uniform for electric blue overalls and heads straight to the heart of the 13,000-sq-metre facility, where the transmission products company has its shopfloor. Here, Parekh, a native of Vadodara, will spend the next seven hours spray painting the assembled motors and gear boxes, and later in the day will pack them in deal-wood boxes and load them into a delivery truck. At a pinch, the bubbly Parekh will also take on the technician's job, which involves testing the finished products.

What's going on here? Where's the union? How come Parekh flits from one role to another without whining about it? More importantly, just how does a man who hasn't even finished high school, multitask and make a respectable Rs 6,000 a month? It's because at sew Eurodrive India, the Indian subsidiary of a German engineering company headquartered in Bruchsal, hierarchies and designations just don't matter. Instead, the company uses a unique set of hr rules to recruit, empower and reward its employees.

Ergo, sew runs a very tight ship with just 40 employees on its rolls of whom only 17 are employed at their South Asian regional headquarter-cum-assembling unit at Por Ramangamdi, 40 kilometres from Vadodara in Gujarat. And with those forty pairs of hands, the company will have a turnover of close to Rs 25 crore-that's Rs 72 lakh in sales per employee and a good 40 per cent growth from the Rs 15 crore it managed in 2000-01 with 32 employees. And by 2005, it wants to achieve Rs 50 crore in revenues with just 50 employees. Says SEW's dimunitive Managing Director, P. K. Chandra Bose: "As a relative late entrant into India, we knew that we had to operate very differently to survive."

PASSING THE LEGACY ON

The philosophy of flat hierarchies and short decision-making paths flows down from the parent company in Germany. SEW Eurodrive GMBH & Co. was founded in 1931 by Christian Pahr, and post World War II, his son-in-law Ernst Blickle took over the reins when the manufacturing business in the country was collapsing due to shortage of raw materials. SEW began its international expansion in 1960, and today it is a Euro 2-billion company with operations in more than 132 countries and nearly 8,500 employees. It is a market leader in electro-mechanical power transmission equipment with a worldwide market share of nearly 30 per cent. In 2001 Europe's premier INSEAD Business School rated the company as the best in its sector. Internationally too, the attrition rate at sew is minuscule, despite its bigger competitors like ABB and Siemens being traditionally strong in Germany and western Europe. The company invests nearly Euro 75 million every year on employee training and welfare initiatives. It believes that employees are its first customers and that they have to be kept happy and motivated to serve the external buyers. And the India Managing Director, P K Chandra Bose's job is to ensure that he replicates the teutonic management philosophy in India. "We never believe in our position. It's only the dispostion that matters," says Bose.

Success On A Shoestring

For sew, which started its operations in India in 1998 with just a sales office in Delhi and a plant in Vadodara a year later, multifunctional roles for the employees was the first step. Today, most of the 40 people working in the organisation are well equipped to attend sales calls and discuss technical details of SEW's products with customers. SEW's motors and drives cost 100-200 per cent more than its competitors like Greaves and ABB in India, yet the company has managed to ink deals with several major industrial houses like Reliance Industries and the Tata group. In the food and beverages industry, where its modular gearboxes and motors are used in bottling plants, sew has cornered a 60 per cent marketshare.

When the German parent was scouting for an assembly location in South Asia, it was not in favour of India. But Bose fought for it, convinced that manufacturing in the country would make sense. With a lean team, a tight handle on costs, and a smattering of innovative ideas, Bose opened shop. By the end of the first year, he had Bruchsal's attention. Not only did the Vadodara unit rake in profits in year one, but it also established itself as an export hub to neighbouring markets.

So how did Bose do it? For starters, he handpicked every employee. He looked not for hi-flying executives, but those who seemed to fit the organisational mindset that Bose wanted to create. Executives who did not have any formal education in management, were trained in the sew-way of doing things. High empowerment was accompanied with high accountability, and Bose, in turn, promised to take exceptional care of his people.

In doing so, he was only carrying out a directive from the German chairman. Bose recounts an incident in 1995 when he had gone for the final interview with sew honchos in Germany. On a blustery evening in Frankfurt, just a day before the all-important meeting, Bose slipped on a snow-covered sidewalk and broke his ankle. He not only missed the interview, but spent the next 30 days in a hospital. sew bore all the medical expenses, even though Bose was not an employee at that time. "When I was selected," recalls Bose, "the Chairman asked me pass on this ethic of employee care to my colleagues."

Not surprisingly, then, all vacancies are first advertised internally. Only when no suitable candidate is found from within, will sew hire from outside. Once on board, the executives enjoy a high degree of freedom and transparency. Financial and business details are open to everyone, and not just because it is often the employees who set the productivity and sales targets (so far, they haven't missed any big targets). Every employee is a profit centre, and has powers disproportionate to his or her title. The result: few leave the company. In the last three years, just four employees have left the organisation, and for personal reasons such as emigration to the US or relocation to another city. Not one joined the competition, boasts Bose.

Be Your Own Boss

A happy employee is her own boss. Take Shobha Nair, for example. The 32-year-old secretary to the managing director could pass off as the lady next door. Apart from her secretarial functions, Nair plays an important part in sales and customer service as well. In November last year, when Bose was away to Sri Lanka on a holiday, there was an order for which the parts had to be sourced from Germany. Under normal circumstances, it is Bose who communicates with the headquarters in Germany to procure the parts. This time though, without bothering too much about hierarchies, Nair called up the headquarters herself and the order had been processed before Bose came back from his vacation. "It costs more money and time to contact the bosses and ask for directions," says Nair with impeccable logic.

It's the same story on the shopfloor, where just four technicians manage the entire show. There are no orders or instructions that they have to take at the start of the day's work. There are colour-coded order forms kept pinned on two boards inside the workshop. The colour of the forms indicate the priority of the order. Orders printed on red paper mean that the client has had a breakdown and the motors are to be replaced immediately. When such a case comes up-usually four-to-five times a month-all other orders are put aside and the product is delivered within a matter of hours. Green indicates that the order is urgent and has to be processed within a week and white signifies that it can be processed at normal pace.

The ERP system at sew makes sure that the order processing time is cut down further. The sales administration engineer at the plant co-ordinates with the all the sales offices around the country and feeds the orders into the system. The system then breaks the product down to its parts and even lists out the racks where they are stored in. From there on, the task for the mechanics is fairly simple. "Today, the efficiency levels at our plant are comparable to sew units across the globe," claims P. Majumdar, the head of sales.

During the last fiscal year, sew produced 3,000 units, and by the end of December 2002, it managed to equal that figure and hopes to take it up to 5,000 in the remaining three months with no significant addition to the existing manpower. In January 2003, the company produced a record 707 units-200 more than the previous month. For Bose and his modest team, mission 50:50 is just a matter of time. But he's already thinking of another assembling plant in the next few years, and maybe 100:100.