With the expertise and drive to excel, Kaynes Technology surges ahead

From being the market leader in its field in India, Kaynes now aims to be competitive in the global EMS business. Building up on its strengths of a pan India network of manufacturing facilities with robust processes, state of the art infrastructure and a workforce regularly trained abroad, has resulted in the satisfaction of its customers, suppliers and employees

By Srabani Sen

Monday, September 10, 2012: In the backdrop of a global recession, the performance of Kaynes Technology has been commendable. From a turnover of Rs 600 million in 2007-08, it touched Rs 1750 million in 2011-12. This Mysore based electronics manufacturing services (EMS) provider has positioned itself as a niche player in the high tech, high mix, low and medium volume space.

Over the years, Kaynes Technology India Pvt Ltd has grown with an annual compounded growth rate of about 40 per cent. Even during the recession of 2008, the company grew by about 30 per cent. Kaynes is currently poised to take a leap forward due to its unique reputation as an EMS provider for mission critical products.

Kaynes specialises in electronics system design and manufacturing services (ESDM) and has two decades of experience in design and manufacturing. “In the high mix and low volume small batch niche segment of the EMS industry, Kaynes Technology is a market leader as we have the capability to address high value segments like defence, aerospace, railways, urban transport, medical electronics, etc. In these high end electronics segments, currently Kaynes is the only company in India having certifications addressed to each of these verticals,” says Col Sharath Bhat, senior vice president, business development, Kaynes Technology.

What’s unique about it?

Established in 1988 in Mysore, Kaynes delivers total manufacturing solutions with integrated business verticals to cover the entire bandwidth of EMS, starting from design services to prototyping, sourcing, turnkey manufacturing and support services. It has moved up the value chain and delivers not only printed circuit board assembly (PCBA) but complete sub-systems and box build on a turnkey basis, as well as components like relays and switches. Kaynes’ ability to meet its customers’ expectations on quality, cost and delivery, distinguishes it from other domestic players. It has an integrated management system with ISO 9001, ISO 14001, OHSAS 18001and vertical specific certifications like TS 16949/2002, ISO 13485, AS/EN 9100 and IRIS. “We have over the years evolved as a company to deliver not only electronic PCBAs but build a complete product or a system comprising of electronics, mechanical enclosures, cable harness and magnetics, which then goes through rigorous tests including check for reliability before handing over to the customers,” informs Sharath Bhat.

The company has been providing end to end solutions to the organised sector in the field of defence and aerospace, medical, railways, IT peripherals, industrial controls, automation, power and energy and automotive electronics. Some of the leading companies it caters to are Invensys, Ansaldo STS, Cypress, in USA and Europe; apart from WeP, BEL, Kone, Alstom, Continental and Larsen & Toubro Ltd, among others, in the domestic market.

Kaynes claims to be unique in its customer satisfaction strategy. “We are a 100 per cent customer focused company with flexibility and speed to respond to customer needs. This helps us to grow with the customer as a long term partner.” says Bhat.

Other factors that make the company unique in the EMS space are its highly motivated and skilled workforce. In the EMS business, the competence of the workforce to understand the requirements of the customers and implement them

accordingly is very essential. “We have a deep understanding of our client requirement and this helps us to give them value added services which ultimately help a customer in reducing the overall cost of the product and make it more competitive.”

Kaynes has a long term vision which is driven by a committed top management team with a hands on approach. “This helps the key delivery managers to achieve their stated goals easily,” explains Bhat.

Another important factor that helps Kaynes on its way up is its constant endeavour to invest in training and quality. Every year, deserving candidates are sent to Japan under the AOTS programme to enhance their domain skill sets. All members of the management team, which have been drawn from Kaynes’ inhouse pool of professional talent, have their competency mapped and all gaps addressed through multiple training from external agencies. This is an exercise that

even pulls up the middle management to improve its competence.

The company has a clear long-term strategy, especially for technology transfer and developing infrastructure, to facilitate its vision. “We have already absorbed 25 types of different product technologies, as we have a highly sophisticated talent pool, capable of absorbing new technologies,” says Bhat.

The journey so far

Immediately after passing out as an engineer, Ramesh Kannan, now the chairman and managing director, established the company and started operations from a rented premise in Mysore. But within a very short span of time, in 1990, Kaynes acquired land in an industrial area and established its manufacturing facility.

Despite being a first generation entrepreneur, Kannan had what it takes to start a business, and since the very first year, the company made profits that have always been invested back in the company itself. Under Ramesh Kannan’s guidance, Kaynes has achieved considerable success over a short span of time.

When Kannan started the EMS business way back in 1988, it was not an easy task to get finance. But with determination and perseverance, he held on to the reins of the company and surged ahead, despite several teething problems. As he says, “My ambition of starting an EMS company was encouraged by Larsen & Toubro and Wipro who gave me the first opportunity”

The turning point came in 2001 when Kaynes entered the export business, and acquired the Export Oriented Unit (EOU) certification. The first client was from USA and the client still continues to be a customer of Kaynes. “Another major development we are proud of is Kaynes becoming a pan India company, branching out into north India with the opportunity given by our customers. This development gave us the confidence to manage facilities remotely,” recalls Kannan.

Strengths, weaknesses and achievements

Kaynes’ strength lies in its widespread customer base, due to which it has managed to sail through even the global recession. The company’s quality policy is in line with evolving international standards, while adhering to all Indian laws and regulations, thereby satisfying the expectations of all the stakeholders along the complete value chain. Leveraging its certifications and supported by state of the art manufacturing facilities, Kaynes’ manufacturing and quality philosophy is based on process orientation and improvements through best manufacturing practices such as 5S, SQC and SPC, Kaizen, TOC, 7 Tools and Six Sigma.

Kaynes has an exclusive line for RoHS manufacturing and this is not restricted to just lead free manufacturing of PCBs. It has built up far more comprehensive expertise in this domain—in the supply of mechanical parts, finishes, transformers, cable sets, card cages, bare boards, heat sink parts, consumables, ‘Green Dot’ packaging and even labelling of products that are RoHS compliant.

“Our strengths in infrastructure, systems, skill sets and TQM practices enable us to be focused on high mix, low and medium volume products along with value added services. Flexible models in manufacturing services allow our customers to focus on their core strengths with their intellectual property intact,” says Bhat.

Kaynes Technology has been awarded the gold medal for ‘Excellence in Exports’ by the Union government, and the award for the largest electronics hardware exporter for five consecutive years from the Government of Karnataka. It has also received the best suppliers’ award a number of times.

Seven certifications addresses all mission critical segments like railways, defence & aerospace, medical electronics, automotive electronics. It was the first company in India to be certified for International Railway Industry Standard.

Business strategy

Kaynes has balanced revenue mix from different segments which automatically mitigates risks in industrial cycles. “Also no client contributes to more than 15 per cent of its total revenue which assures customer that there is no overdependence on one customer,” explains Bhat.

Currently, 30 per cent of the revenue is coming from exports, which in the next five years should grow to 45 per cent. Opening of its own office in Europe for customer relation and marketing has been an excellent strategy to bring business from Europe to India.

Commenting on the sustainability of its business, Kannan says, “We always think of long term relationships with our customers. Our corporate culture, commitment, business ethics, social responsibility, cutting edge technologies, new infrastructure and our value additions help us to sustain our growth in the industry,” he says.

“Our business strategy is in line with electronics manufacturing ecosystem, thus ensuring stability and sustainability in the business lines we are in. We need to contribute to the efforts which the government has initiated through electronic system design and manufacturing policy aiming to boost the electronics industry. Our business strategy aligns with the government’s vision,” explains Kannan.

Commenting on the operating principles of Kaynes, Kannan says, “We are a manufacturing service company and believe in extending quality services to our customers. Delighting the customers with value for money, speed and flexibility is our operating principle. We adapt quickly to the changing needs of our clients by customising our solutions, thereby adhering to our motto, ‘customers first’.”

Infrastructure

The company has seven manufacturing plants—two in Mysore with an area of 6968 sq m (75,000 sq ft), catering to the automotive, medical, industrial and railway sectors; one each in Bengaluru with an area of 1394 sq m (15,000 sq ft), catering to defence sector, and in Chennai with an area of 465 sq m (5000 sq ft) catering to industrial sectors. There is another plant at Selaqui (Dehradun) with an area of 465 sq m (5000 sq ft), catering to IT peripherals and industrial sector. Its plant in Parwanoo with an area of 557 sq m (6000 sq ft) caters to IT and automotion sectors and at Manesar with an area of 1319 sq m (14,200 sq ft), caters to industrial and automotive sectors. It also has a embedded design centre in Bengaluru with an area of 465 sq m (5000 sq ft).

Kaynes uses new generation surface mount technology (SMT) lines from Siemens. It comprises of AOI, X-ray machines, temperature cycling, a humidity chamber, Teradyne & Agilent incircuit tester, selective soldering, automatic selective conformal coating machines, etc. The company plans to install die bonding and wire binding machines soon.

Expansion plans

Kaynes’ vision is to be a global EMS company delivering throughout the world with top MNCs as its customers. The company has drawn up a very clear business strategy, with a complete operational plan to ensure that by 2015-16 it can reach a turnover of Rs 5 billion. Kaynes also plans to have a global manufacturing footprint, and is exploring the inorganic route to complement and add value to its current market position in certain key verticals. It also plans to scale up with respect to technology as well. A campus of 4645 sq m (50,000 sq ft) will come up by last quarter of this financial year in Mysore, which will include a manufacturing facility and a customised training centre for excellence.

“We need to build more on our strengths to overcome our weaknesses. We have always been the leader in innovations and we will keep strengthening this position. Only then can we sustain our growth rate to become a leading player in the global EMS market.” concludes Kannan.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine