Titan - The Outsourcing Journey

BACKGROUND NOTE

Titan was promoted as Titan Watches Ltd. jointly by Questar Investments Limited (a Tata group company), Tata Sons, Tata Press and the Tamilnadu Industrial Development Corporation Limited (TIDCO). The company was incorporated in July 1984 in Chennai, India, in technical collaboration with one of the world's largest manufacturers of watch movements, France Ebauches, a French company.

During the same period, it began manufacturing electronic circuit blocks, used in its watch movements. The Rs 2.7 billion watch and clock manufacturing facilities were spread over a built-up area of 42,000 square metres. The company also set up a watch assembly unit with a capacity of 5 lakh watches in Dehradun, Uttaranchal.

In 1992, Titan Watches entered into a joint venture with Timex Corporation of USA to market Timex watches in India. The same year the company set up a joint venture with the Economic Development Board of Goa to manufacture electronic circuit boards in Goa in an effort towards indigenization. Titan set up its fully integrated, Rs 400 million jewellery plant in 1994 over a built-up area of 13,500 square metres in Hosur.

The plant had a capacity of manufacturing four tonnes of gold a year. Due to poor market response the company discontinued the manufacture of jewelry watches. The company also set up a separate manufacturing facility for solid link, sheet metal bracelets, alarm timepieces and premium table clocks in 1995. In 1995, Titan Watches overtook the market leader HMT by selling 3.2 million watches against the latter's 3 million.

The same year, the company changed its name Titan Industries Ltd. in order to change its image from that of a watch manufacturer to that of a fashion accessories manufacturer. Titan also introduced the Tanishq range of 18-carat gold jewelry. Over the years, the Hosur facility went on to become one of the largest integrated watch-manufacturing units in the world, employing around 3500 people.

The facilities in Hosur included a computer aided design (CAD^[5]) and prototyping unit, a comprehensive tool room with capacity for manufacture of precision tools and die-sets. Besides, Titan had a wide range of computerized numeric control (CNC^[6] ) machines. Gold was refined and alloyed in-house at the Hosur plant, but the design center for jewelry was located in Bangalore.

^[4] The stepping motor controls the gears in a watch, which in turn rotates the hands of the watch.

^[5] CAD systems enable engineers and architects to carry out design activities on the computer. They allow engineers to view a design from any angle on the computer and make it possible to zoom in or out for close-ups and long-distance views. It also keeps track of design dependencies so that when the engineer changes one value, all other values that depend on it are automatically changed accordingly.

^[6] CNC machines are machines that are controlled by computer programs and run as dictated by the program, independent of the operator.

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