A conversation with Dinesh Musalkar, CEO of Lumel SA, on how the company recovered form a crisis and how it has started to implement Industry 4.0.
You joined Lumel in 2014. What made you decide to move to Poland?
Before 2014, for 10 years I was associated with Halma group’s (FTSY 100 company) Infrastructure division, Avire as Resident Director for India and General Manager for IMEA (Pan India, Middle East and Africa) and was doing good. I was not actively looking for a change in my career then. I was approached by Rishabh Instrument’s recruitment agents for a role of CEO at Rishabh Instrument. However, the Rishabh group chairman and his advisors found me more suitable to lead their recently acquired company in Poland, Lumel SA, based on my experience of working around the world with many different cultures from American to Japanese and everything in between
I wasn’t mentally prepared to shift my center of life from India to Poland then and it was an uphill challenge for me to shift from a city with 27 million population to 200 thousand and temperatures of + 35 degrees to – 15 degrees (I still remember the feeling of that day – very fresh in my head!) Add to that, the change in language, food, and culture.
Even though I had extensively travelled for shorter periods of a week to three weeks’ time, living in a new place was a different challenge altogether, due to too many changes at once.
Yes, that’s how I landed in Poland. Looking back, I have no regrets and feel that one of the very good decisions I have made, as I loved living here every single day!
It all started with the core management team which had to be redeployed, reorganized. I spent a great deal of time with such core team to get a high level of professionalism, managing by objectives (MBO), culture of escalating the problems and addressing them upfront than putting them under the carpet, appropriate reward systems for good results and good efforts.
It was a difficult time for the company. What were the main problems and how you and your team decided to approach them?
Yes, it was a very difficult time for the company with multiple challenges. More than 60 years’ state-owned company was privatized in 2011, about 3 years before I took charge in January 2014.
I still remember my first weeks in office very fresh. Our biggest customer putting Lumel’s financials results on the table (which had losses) and asking me “You are one of our largest suppliers of castings and in a financial mess, why should we continue doing business with you?”. There was a letter from the two unions jointly signed indicating how dissatisfied they were due to endless list of complaints. The suppliers wanted to stop supplies with credit and were pushing for pre-payments. The bankers had covenants in place and increased interest rates on our borrowings. Operations director said the newly implemented SAP has enormous problems. The CFO said she isn’t having enough funds to make the payments for the salaries on time… It was really overwhelming!
I had to analyze the whole situation to define the core of the problems, prioritize and put an immediate action plan to contain the situation (short term) and simultaneously build a long-term strategy, so that’s how Strategy 2020 was created.
It all started with the core management team which had to be redeployed, reorganized. I spent a great deal of time with such core team to get a high level of professionalism, managing by objectives (MBO), culture of escalating the problems and addressing them upfront than putting them under the carpet, appropriate reward systems for good results and good efforts.
Financial discipline was another area which the organization had to make a huge progress on: analyzing projects that are profitable from the ones which are not (portfolio management), spreading out risk across the companies and industries.
It’s the people at the core of everything we do in business and generally in life and if we get that right, everything else will fall in place nicely in a matter of time. Having the right people at the right positions with good motivation and empowerment creates magic and fun at work.
This strategy was a great success. What in your opinion were the main factors in this success?
The Strategy 2020 was built on three fundamentals: people development, innovation and growth.
It’s the people at the core of everything we do in business and generally in life and if we get that right, everything else will fall in place nicely in a matter of time. Having the right people at the right positions with good motivation and empowerment creates magic and fun at work.
I can say that I have a brilliant team now, ever evolving and boozing with great new ideas. In 2014 I had to get my acts together quickly and build a strategy with whatever information I had then, but the next 5-year strategy 2025 which we are currently working on is predominantly developed by my team and has a bottom-up approach.
We focused on defining and investing in our core areas, outsourced some non-core activities, demerged the company into Lumel SA for electronics business and Lumel Alucast for the die casting business with separate and focused core management teams at both the companies. Lot of investments were made in modernization of plant and machineries. Approximately 2 million euros annual investments are made since 2015 every year.
Apart from this in 2020 we built new state-of-the-art electronics manufacturing green field plant Lumel 4.0 – increasing our capacity and enhancing quality of our products.
Does being a part of an international corporate group help Lumel in an international expansion?
Very much indeed! And a lot of potential to explore further.
We have easy and quick access to new markets through our group companies like STI Inc in USA, STI in UK, Rishabh Instruments in India, V&A in China, our products reach these important markets through our sister companies.
Being part of an international group is just not limited to accessing the markets, but also a great deal in our R&D activities. We have very competent R&D teams in India, Poland and China who collaborate during product innovation and development activities.
We also try to optimize our costs by sharing purchase and production activities on few select products, while maintaining the same international standard of quality.
Both these manufacturing plants are equipped with many of Lumel produced IoT enabled devices (such as ND 30 IoT, HT22 IoT, KD6 IoT, SM61IoT etc.) used to measure energy, process parameters, efficiencies directly from the machines and push data on the Scada system that we use to analyze, optimize, and make decisions with or without human intervention.
How Lumel in incorporating principles of Industry 4.0 in its own manufacturing process?
We have two manufacturing plants, one for electronics and the second for Aluminum Die casting. Both these manufacturing plants are equipped with many of Lumel produced IoT enabled devices (such as ND 30 IoT, HT22 IoT, KD6 IoT, SM61IoT etc.) used to measure energy, process parameters, efficiencies directly from the machines and push data on the Scada system that we use to analyze, optimize, and make decisions with or without human intervention. In our Lumel SA electronics new plant, the online real time data are even visible in the Lobby on the big screens. It’s a very practical way to demonstrate how our products can help manufacturing companies.
Apart from this, both our plants have solar installations. Recently we are also certified with ISO 500001 for aluminum die-casting plant which demonstrates our commitment to reduce CO2 in our manufacturing processes.
And how your products help your clients to move to Industry 4.0?
As demonstrated in our manufacturing plant and in many of our repeat customers from various industries ranging from food processing to heavy engineering to infrastructure to energy industry our products have been helping to measure, collect and push accurate real time data on the cloud for making decisions by machines in a closed loop system or the professionals of the industry to make decisions to optimize energy, process parameters and efficiencies.
Lumel 4.0 is a new plant that in a large part will manufacture products for green energy. Please tell us more how Lumel is taking a part in the green transformation.
Green energy is one of the cornerstones of our strategy and we have series of products that we focus on, to achieve this. We are a manufacturer of solar string inverters ranging from 2,5KW to 100 KW capacity which covers the installations from micro to medium range solar projects. We also have whole basket of smart products for large solar farms such as our CZIP PV the smart medium voltage protection relay, ND45 a class A quality analyzer, P30 H, a DC power measurement etc.
How can your products help companies cut energy cost?
Our automation department can help customize the complete energy optimization solution with our hardware and the necessary Scada software to measure and optimize energy in each manufacturing plant to achieve energy efficiency.
We also work with system integrators and panel builders to achieve this indirectly, who use our products in building such systems for their customers.
Could you tell us more about Lumel Arena?
I am a sport enthusiast myself and strongly believe that a good balance of work and fun is essential for optimal performance. When we built the new plant, we spent about 30% of construction cost for building Lumel Arena which is a multi-sport facility and a gym for our employees and their families from both our plants. I am very glad to see many of our employees and families using them regularly during weekdays as well as weekends.
This facility gives us a possibility to play many sports like football, basketball, volleyball, tennis, badminton, handball, billiards, table tennis and many board games, apart from the gym. During the recent family picnic day, we had a lot of fun during friendly internal tournaments and competitions.
What aspects of CSR are the most important for Lumel?
Being a part of the local community, we try to do our bit in few areas such as sports, education, culture, animal shelters. We also support speedways, as it’s a religion in Zielona Gora.
We work with local universities and local schools on many projects such as Lumel School (where we supported nearly 200 students in the last 6 years for their technical school). Recently we are also supporting a batch of 10 students at Zielona Gora University Master’s program for the second year in succession.
We support and work with the Lubuskie Museum on some projects to support the cultural events.
It’s not just the organization, but also the employees take part enthusiastically in the charity events to support animals or some families etc.