Techno-Med
A Special Feature on Medical Equipment Technology

“After L&T’s arrival, the MNCs were forced to slash their prices”

R N Mukhija, senior vice president (operations), L&T and a Director on Board is the driving force behind the company’s continuous success in the arena of medical equipment. An electrical engineer from IIT Kharagpur, Mukhija has been unanimously elected president of IEEMA council for the year 2002-2003. Associated with L&T since 1965, he has steered the company to expand its avenue, and stand tall in an industry ruled by MNCs.

The medical equipment division of L & T ventured a decade and half ago, with technical collaboration with three European manufacturers to make ultrasound machines, patient monitors and surgical diathermies. After five years of partnership, a period long enough to acquire technical know-how from the European companies, the medical equipment division of L&T started designing and manufacturing its own product range of 12 models of PMS and four models of diagnostic ultrasound.

The division has grown at a compounded annual growth rate (CAGR) of 47 per cent since its inception in 1989-90 growing at 30 per cent annually for the last 3 years. Today, L&T Medical with a turnover of Rs 70 crore is deemed as the giant in the domestic market, posing a serious threat to the MNCs. It commands market share ranging from 25-35 per cent in diagnostic ultrasound, patient monitoring and surgical diathermy for the product range addressed by it.

What is L&T’s contribution to medical equipment division in India?

L& T has many firsts to its credit. These include multiparameter monitors, diagnostic ultrasound transducers, surgical diathermy, complying with international safety and performance standards (IEC 601.1). It also manufactures ultrasound scanners with non- volatile image memory (NVIM) and facilities for taking hard copies of images and reports on relatively inexpensive inkjet printers. Equipment designed and manufactured by L&T is being branded by a reputed European manufacturer for sales worldwide.

How does medical equipment manufactured by L & T have an edge over other products in the market?

L & T products are designed after incorporating the needs of Indian doctors and hospitals. The medical products are particularly rugged because they incorporate power supplies, which could withstand wide fluctuations in voltages and frequencies, adverse tropical conditions such as high temperature, humidity, likelihood of fungus growth and entry of vermin. Unlike products designed in the developed countries, L& T’s products have appropriate intrinsic strength to withstand such onerous conditions for ensuring good performance. L & T was the first country in India to get the coveted CE mark for medical equipment after getting its manufacturing and services support systems audited by stringent ISO 9001/ EN 46001 standard authorities through an international accreditation agency (formerly Bureau Veritas - UK and now G Med- France). L & T has signed an alliance agreement with Johnson and Johnson- India, for selling its surgical diathermies in the country.

Recently, L&T has also signed an MoU with BARC for a research project. Can you elaborate?

We have 170 embedded software engineers working in Mysore, for our R&D. It is for non invasive measurement of cardiac output. We are providing embedded software to Japan, US and France.

Has the company sales of ultrasonography been affected after the arrest of 350 sonologists across the country, and the supreme court order that all ultrasonography machines should be registered?

The supreme court ruling on enforcement of the PNDT ACT had slowed down off take of ultrasound machines. The company did face a setback. Now, that the various implications are slowly getting understood and the specific dos and donts are getting known, there are signs of slow revival of business. Instead of losing faith, we went ahead more vigorously. We improved our old model in ultrasonography and introduced one new model.

Medical equipment are exorbitantly priced. Comment.

In fact, before we came in, one could have said that medical equipment are overly priced. After, we arrived, the MNCs were forced to slash their prices.

How do you meet customer satisfaction?

We have customer satisfaction survey, which sends survey forms of our equipment to our customers, every three months on an average. We even give them incentives in the form of gifts after they answer our queries. The inputs derived from the survey is useful in enhancing the product features and service to meet up their expectation.

L& T has recently focussed on aesthetics of medical equipment. Can you elaborate?

L& T has always focussed on aesthetics of medical equipment. All the products introduced by L&T with its own design during the late nineties have always been designed with tremendous attention to details from aesthetics point of view and have been a hit in the market. In order to take this process forward, L& T has gone a step further by employing the services of professionally qualified industrial form designers. Of these include the Industrial Design Centre (IDC) of the Indian Institute of Technology, Powai. L&T is also hopeful of making an impact in the international market with its enhanced aesthetic appeal.

Why does L&T want to make a foray in China?

L&T is currently focussing on the following developing markets in China, Middle east and South East Asia, beside our neighbouring countries. In addition, L&T has been exporting significant quantities of monitors and other equipment to Europe. China has a huge market for medical equipment. L&T monitors have been well accepted and L&T has been getting repeat orders from them. We are also trying to export surgical diathermies to China.

What about the US as a market?

L&T took a major step recently by appointing McKinsey as consultants for advising on the strategy for entering the US market. The US market forms a very major portion of the global market and therefore cannot be overlooked by any medical equipment company with global aspirations. On the other hand, it has strong entry barriers, like the FDA approval and business environment restraining factors like strong lobbies, formidable legal wrangles, product liability and insurance hassles etc.

What are the challenges ahead of L&T?

The challenges ahead of L&T are mainly to carve a niche in the global medical equipment market, take step jumps in technology upgradation and keep pace with the fast progressing trends and to continually enhance its products and services on the quality front. Having acquired leadership in the medical equipment field in the country, L & T will now endeavour to make inroads into selected countries of the world market. Whatever necessary quality certifications may be needed for this purpose would from the backbone of the challenges being accepted by L&T.

How is L&T managing to survive and carve a niche for itself in a market, hugely dominated by MNCs?

L& T has recently formulated a policy for identifying the cream layer of its skilled manpower. It has created Manpower Leadership Positions and Technology Positions cadres. We also lay emphasis on maintaining high new product intensity. Extensive investments in R& D and tooling for new products have been undertaken, which should be of benefit in the years to come. Currently 90 per cent of its sales is from domestic market, and 10 per cent from exports. Our major goal is to double our exports every year for the next few years till exports become nearly comparable to the domestic turnover.

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