The Nano Inspiration

Tuesday, January 15, 2008

The lessons of design innovation, scale efficiency, vendor networking can help in hundreds of challenges

By Ramesh Ramanathan

I am inspired by the story of the Tata Nano. Beyond its cute look or frugal engineering-driven price tag, I find it remarkable how team Tata pulled it off in just four years.

I?ve watched and read the rumblings ?on congestion, traffic, the environment. Confession: I own a car. This makes it hard for me to criticize the Tata Nano: people-in-glass-houses constraint. There is an Indian equivalent of this?the ?unreserved compartment syndrome.? All those inside the compartment do everything to keep outsiders at bay; but once someone gets in?bravely beating the odds?he becomes an insider, repeating the same behaviour, so nothing changes. We need to understand the sentiments of the outsiders?how many people who don?t own cars criticize the Tata Nano on the grounds of traffic congestion and environmental concerns.

But the larger point is the inspirational lamp that the Tata Nano story lights. There are hundreds of challenges in India where the lessons of the Tata Nano can be applied?design innovation, scale efficiency, vendor networking and so on. I want to talk about three illustrative examples.

The first is health care. Devi Shetty, one of the country?s leading heart surgeons, is also focused on bringing affordable health services to the poor. He talked of the need for innovation and scale in health care, based on our unique challenges in India.

Using the example of a CT scan, which costs Rs5,000-10,000 per patient, he said: ?We have a few hundred CT scan machines in India, each doing three-four scans a day, although the capacity is over 100/day. These machines are like planes that earn money only when they fly. We need to increase the flow of patients through these centres. But this is related to other issues like hospital bed capacity and inpatient/outpatient ratios. Today, most hospitals make their money from inpatients. We need to reverse this relationship where thousands of outpatients who each pay a few hundred rupees for tests can subsidize the operating costs of the hospital.?

Imagine if we could get a CT scan cost down to Rs500, offer a heart surgery for a few thousand rupees or a gall bladder surgery for under a thousand. This requires a fundamental redesign of all the parts of the health- care delivery system?from re-engineering individual components such as the CT scan, to embedding these into scaled health ?cities? that can get a critical mass of 10,000 outpatients a day.

The second example is in housing. In urban India alone, we need to build more than 26 million homes to meet projected demand until 2012, and more than 95% of this is for the poor. If we ignore government subsidized programmes, and focus on market-driven solutions, we need to build homes with an all-in cost of Rs2-2.5 lakh for land and building, so that the EMI is around Rs2,500. Given current land costs and FSI/FAR (floor space index/floor area ratio) ratios in urban India, this translates to a construction cost of about Rs300-400 per sq. ft for a 400 sq. ft dwelling. Imagine the kind of demand that can open up if we can change the engineering specifications, reduce the cost-per-unit by scale economies, improve the construction process, and deliver a product that might not have marble floors, but doesn?t compromise on quality.

The third example I want to mention is public transport. The Design Museum of London ( says this about the famous London double-decker bus: ?Developed over nine years from 1947 to 1956 by a team led by industrial designer Douglas Scott, the Routemaster was designed with mass production in mind. By constructing a bus from the maximum number of interchangeable parts, they cut the cost not only of the initial tooling and manufacturing, but of repairs and maintenance, too. They also equipped it with the latest automotive engineering innovations such as power steering, an automatic gearbox, hydraulic brakes, independent springs and heating controls.?

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Source: LiveMint (link opens in a new window)