Abstract

Cummins India Limited was one of the leading diesel power generation sets (gensets) manufacturers in India catering mainly to corporate customers. In the late 1990s, the company’s revenues and profits came down due to economic recession in the country. Cummins realized that relying solely on the quality and performance of its gensets and catering to corporates was no longer enough in the tough economic conditions. Hence, instead of providing regular gensets models to all the customers, it modified the engine features slightly to suit the special needs of each customer like farmers, hospitals and small retailers, to name a few. Through its ‘consumer driven modularization strategy,’ Cummins came to be known as the provider of customized power solutions and achieved better revenues and profits in spite of the industry performing badly. The case highlights the importance of customization for industrial goods.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the circumstances that prompted India adopt modularization strategy
• Analyze how modularization techniques can help an industrial products company serve the distinct needs of various kinds of customers and channel partners
• Appreciate the benefits of modularization including reduction of total cost of ownership and higher demand of industrial products
• Examine the recent trends in the Indian power gensets industry.

Keywords

Cummins India Modularization Customization of Industrial Products Power Rental Business Power Gensets Industry in India Disruptive Management Practices Innovation