Cummins Chugs to India for Global Sourcing

I still can't get over how many people only think of China as the singular, dominant player when it comes to low cost country sourcing for industrial parts and products. India, in fact, is better suited than China for a number of categories, especially in the metals arena, when it comes to lower production runs and greater precision. For those that need proof that India is winning investment over its rival to the East, consider how Cummins will nearly triple its sourcing from the region in the next four years -- and in many cases, this additional spend will be for complex categories and systems. According to an article in Business Standard Cummins "expects to source close to $500 million worth of engines and auto components from India by 2010 ... The company presently buys components worth $150 million from India ... Cummins currently sources engines and components from over 30 Indian companies. It would look at sourcing complex fuel systems, advanced electronics, censors, among others from India." Ironically, while India can produce high precision parts and components at competitive prices, the parts and engines which Cummins ships for global export to North American and Europe would probably cause India's roads to crumble, given the heft of the average 18 wheeler and the abysmal condition of India's infrastructure.

Jason Busch

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