I believe outsourcing from India will grow as fast as China"

At 17, he was working for general motors. At 27, he was working with KPMG. At 28, he started his quality consultancy Omnex, which is today a $50-million (Rs 220-crore) organisation with operations in 18 countries. Now 46, Chad Kymal has helped draft some of the provisions of is TS 6949, a stringent quality standard, has published two books on quality and is working on the third, still does a lot of work for auto companies, and has codified his expertise in quality into a software product EWQMS (short for enterprise wide quality management systems) that was developed out of the company's development centre in Chennai, where Kymal spent the first 17 years of his life. The man was in Chennai last month, and spoke to BT's Nitya Varadarajan. Excerpts:

Let's talk auto-components sourcing. India or China?

China is expected to sell 5.89 million vehicles in 2005 against India's 1.18 million. Exports by the Chinese auto-component industry in 2004 were $5.5 billion (Rs 24,200 crore) against the Indian industry's $1.1 billion (Rs 4,840 crore). Still, I believe outsourcing from India will grow as fast as China.

Why?

India is cost competitive. It is also far ahead of China in software abilities. That will help it become a design centre. Most importantly, Indian enterprises are entrepreneurial, while the Chinese ventures are state-owned. The Chinese may be aggressive, but Indians are more nimble in adapting to the market and easier to deal with.

What about quality?

It (quality among Indian auto companies) is certainly very high and this is encouraging. Yet, I find that many companies are not focussing as much on the implementation as on the certification.

Are US auto companies aware of Indian auto companies at all?

The large companies (Tier-1) certainly know India. But there is tremendous outsourcing potential for the Tier-2 and Tier-3 companies. Exports to Tier-2 and Tier-3 companies are less risky and more profitable. For instance, expenses of recalls by Tier-1 companies are billed to the erring component supplier and if this happens to a mid-cap Indian company, it could be wiped out.

B-GOLD
Crude Future

Now, it is theoretically possible for retail investors to dabble in the oil trade. The Multi-Commodity Exchange has added crude oil to its trading list (starting February 9), with a minimum trading size of 100 barrels. That's a lot less than the minimum lot size of 1,000 barrels on New York Mercantile Exchange (NYMEX), but the discount could be just the thing to spur local interest. "Crude is the most traded commodity in the world with a volume of $14 billion (Rs 61,600 crore) a day," says Jignesh Shah, Managing Director, MCX. "In the first six months, we expect volumes to reach Rs 500-600 crore (a day)."

However (despite the first line of this piece), retail interest will be all but non-existent given that it is very difficult for investors to take (or make) deliveries in the true sense of the term. And petroleum majors are already big players on NYMEX (that's where they do their hedging) and may be reluctant to move. "We will wait and see," says B. Yeshwant Rao, Head, Risk Management Strategies, Reliance Industries. Volumes, then, will be a function of speculative interest but given the way the Indian mind works, that can only mean fireworks in the oil market.

-Narendra Nathan

OPPORTUNITY
A Cure For Cloning

Subex Systems' Menon: Your phone is safe with us

Subash Menon, the 37-year-old President and CEO of Subex Systems is thrilled at the coverage mobile phone cloning has been getting. That's because his company sells Ranger, a fraud prevention software (companies such as Agilent and Ushacomm do too, but Subex is a leader in the business). Indian telcos, claims Menon, lose between 8 per cent and 10 per cent of their revenues to fraud and his software can prevent that. How? By identifying whether multiple calls are emanating from the same phone at the same point in time (the technical term for this is call collision event). And by identifying whether the same phone has made one call from Delhi at 8.12 a.m. and another from Bangalore at 8.16 a.m. (geographically infeasible event). The solution still involves a new phone or a new SIM, or both. Still, that's better than knowing there's someone out there with your phone's twin.

-Venkatesha Babu

Cellphone Cloning
All you wanted to know about this.

Recent reports of people cloning both GSM and CDMA phones with the objective of getting legit subscribers to foot airtime bills for illegitimate clones should not surprise anyone. After all, if India is a power to reckon with in the cloning business, isn't it logical that it should have expertise in the cellphone cloning one too? For the benefit of the interested, here's a set of FAQs.

What is the objective of cloning mobile phones?

Getting someone else to pay for your usage or, even more insidious, cloaking activities such as extortion, even terrorism.

Can both GSM and CDMA phones be cloned?

Yes.

How are phones cloned?

With GSM phones that require a SIM (subscriber identity module) card, one can buy a SIM-card cloning device for as little as $100 (Rs 4,400). Pop in the genuine SIM card and a blank and out comes a perfect replica. In case the criminals do not wish to go through the process of acquiring a SIM card, they can literally scan the airwaves for signals. Every time one makes a call from a GSM phone, the phone transmits the phone number assigned to it, the SIM card mobile identification number (min) and its (the phone's) own electronic serial number (ESN); both numbers are also referred to as unique identification number (UIN). Older analogue phones do not encrypt this data and anyone with a $250 (Rs 11,000) scanner can pick it up and transfer the data to a blank SIM card.

With CDMA phones that do not use SIM cards, cloning requires stealing and plugging in the phone to a device that is available fairly freely (starts at $350, Rs 15,400) and copying its ESN and min to another phone, maybe 5,000 miles away. Scanning the airwaves works too.

-Kushan Mitra

PETRIDIS(H)TANCE
Blood Transfusion

Most days, at 3.00 a.m., a flight from London's Heathrow airport carrying unusual cargo lands in Mumbai. The cargo is then ferried by companies such as Federal Express and DHL to SRL Ranbaxy's central laboratory in Mumbai. There, pathologists test the blood, tissue and serum samples that make up the cargo (seriously!) and send the results back to the hospital, doctor or patient as the case may be. The company that carries out clinical tests for some 600 Indian hospitals has now tied up with a UK-based private hospital chain to do the same. It helps that SRL Ranbaxy's laboratories (it has 14 across six cities) are certified by College of American Pathologists, and it helps that they are audited by nine organisations every year. Tests carried out in India are around 70 per cent less expensive (at the retail level) and the company is looking at a market that is worth £2 billion (Rs 16,200 crore). "The huge pressure on quality, long queues and cost effectiveness are some reasons why the UK should outsource tests to India," says Harpal Singh, Chairman, SRL Ranbaxy. We buy that.

-Supriya Shrinate