Ayear after its first low-cost product hit the market, Dutch electronics maker Philips is now employing its Indian ‘jugaad’, or improvisation, to cater to newer markets where the cost of medical devices would have to be driven down even further.
The engineers at the Philips Innovation Campus (PIC) in Bangalore, the company’s largest research and development (R&D) centre outside Eindhoven, Holland, can dip into its enormous pool of technology available globally, but they have to come up with devices that are probably even more basic than an India-specific product which has been further stripped down.
?There are other emerging markets that trail India, and I’m thinking of Indonesia, Vietnam or some east African countries,? said Wido Menhardt, chief executive officer, PIC. ?We have started to talk to those countries and there is a good possibility that we might see India innovation over there.?
For instance, Philips has an emerging markets line of the patient monitor systems, which may be too expensive for the healthcare networks in some other regions, or they may not be able to afford the cost of servicing the machines, said Menhardt, recounting his observations from a recent visit to Africa. ?The comparison is not that it is cheaper than a value monitor, the comparison is nothing. So, that kind of approach, the better-than-nothing approach is the next level of value engineering that I want to introduce. Where you don’t start with existing products and try to strip them down, but start with a clean slate.?
India’s $2.5-billion market for medical devices and equipment has, over the years, triggered various innovative approaches from the likes of Philips and General Electric, which have been focussing on low-cost equipment particularly in areas such as diagnostics, oncology and maternal care.
Add to this, a slew of start-ups have also entered the fray, seeing opportunity in building novel devices that can help screen people for ailments in rural areas where the healthcare networks face a shortage of medical staff.
PIC, which began as a software support centre in 1996, has evolved over the years into a tech hub that focusses on building complete products for the local market in addition to participating in the company’s global programmes.
Last year, it launched a low-cost range of ultrasound machines branded ClearVue, the first product built end-to-end in the healthcare division. In the next few months, it expects to launch a locally developed range of incubators and baby warmers. Besides healthcare, PIC also has a keen focus on R&D in lighting solutions and consumer products, the two other large businesses for Philips.
While a lot of the work it does is software heavy, the centre has been increasingly moving into the electronics space and is winning a bigger share of work on global projects, says Menhardt. Currently, PIC works on several of the image-guided therapy projects such as brachytherapy placement under ultrasound guidance.
The technology for the consoles that control the scanner and the quality of images on Philips MRI machines is driven from Bangalore while teams in Holland and China focus on magnetic resonance imaging.
The centre has also developed an e-ICU solution at nearly half the cost of high-end systems. These machines, which have been installed in a few hospitals in the country, connect remote hospitals to critical care specialists in bigger hospitals through online data flow and real-time video images which also allow consultations over the link.
So how do the engineers manage to drive product costs lower? The formal ways include the use of established value engineering methodology and local suppliers. ?The third element I find fascinating is the cultural element. I’m very impressed by the jugaad that I see in everyday life. They are often unexpected, very clever solutions that are unperturbed by any sort of preconceived notion,? said Menhardt. In the bid to drive new ideas, he’s eyeing the strong process-driven tradition that’s been at the heart of Bangalore’s IT prowess. ?People, as they walk into the IT campus have to change their mindset from being pretty creative and innovative about running their lives and dealing with all sorts of things that come their way, like power failures and so on. Now, all of a sudden you have to be very structured. If you could combine that process culture with jugaad, channel it, I think we have a killer innovation engine here in India. We are promoting and driving that.?
Philips is not the only company whose India-based frugal engineering initiatives are showing promise. The healthcare arm of GE’s India operations already has locally designed baby warmers and other equipment in the market and expects to increase its pace of product innovation. It hopes to double the double the share of revenue from homegrown products in the oncology, cardiology and maternal care space over the next two to three years.
?The bigger players have realised that you have pretty much exhausted the high-end market,? said Charu Sehgal, senior director, consulting-strategy and operations, Deloitte Touche Tohmatsu India. ?There is a need to provide just what-is-needed, where-it-is-needed kind of solutions.?