When Rajiv Nath joined Hindustan Syringes and Medical Devices (HMD) in 1984, the company had a near monopoly in the glass syringe segment, with over 80 percent market share. As it looked to expand its portfolio and branch out of its comfort zone, the importance of having an internal structure became apparent.
Until this point, it had been the strong personality of Nath’s father, Narindra Nath, who had driven the company forward. But when Rajiv Nath took on the role of Managing Director, he saw the need for a shift in direction.
“I wanted to change how the company functioned – from a company driven by one person to a system-managed organization that grows on its own,” he tells The CEO Magazine.
Creating systems
Nath started by taking stock of the shop floor, where he learned to manage production and personnel, and then moved to create and delegate tasks between the sales, marketing, finance, IT and HR departments. By creating new management teams, HMD could absorb the technology and collaboration needed for backward integration while launching new product lines such as disposable syringes, needles and intravenous cannulas.
“This is how systems and structures came into play. Functional heads and the plant heads make sure that the organization’s objectives are met and the top management is focused more on providing the strategic direction and not so much on micromanagement,” Nath explains.
“We focus on very few product lines, but within those, we first aim to be in the global top 10, then in the top five and then in the top three.”
The internal restructuring elevated HMD’s capacity to operate on a global scale. Today the company exports to 120 countries, has offices in the United States and United Kingdom, and oversees nine factories in Faridabad, India, where it employs over 3,500 workers. HMD pushes the medical devices through 5,000 dealers within India and 200 distributors globally.
Even though Nath has everything planned out, he doesn’t want to run too fast and lose steam.
“We’ve never had an outlook to be like a Walmart,” he says. “So we don’t aim to have a thick catalog of 500 pages and 1,000 products. We focus on very few product lines, but within those, we first aim to be in the global top 10, then in the top five and then in the top three.”
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This reserved, manageable growth philosophy is just the key for companies like HMD that are looking for steady, long-term success.
After temporarily losing CE certification (a European regulatory product standard certification) due to European Union regulatory changes, HMD now aims to regain international market share and release new products.
Recently, it launched the Dispojekt SIP Safety Syringe with a safety needle to prevent needlestick injuries, as well as the Kojak Smart Syringe that additionally comes with an auto-disable feature. The company also works with UNICEF to deliver its products to new and underserved markets.
Slow and steady
Despite running a medical device manufacturing company, Nath is not someone who gets swayed by patents. For him, perfecting a product through proprietary inputs is more important than filing patents.
Consequently, HMD monitors how the market reacts to new technological innovations and weighs its options before localizing in India. Once it knows the kind of direction it needs to take, the company works with developers and designers to come up with new innovations. The developers patent the technology or the product, and HMD pays them royalties, making it a two-way mutually beneficial relationship.
“We prefer winning the market share in the long-term – we don’t have to win every battle.”
In terms of suppliers, the company has five-to-10 key partners it works with for product development and cost optimization; for example, Print Pack (India), a Haryana-based carton manufacturing company that supplies packages to HMD.
“I feel we are best suited as a company to focus on mass production and to subcontract the task of product development of our ideas to the technical experts globally,” Nath acknowledges.
“So we use ‘OPT’, or ‘other people’s technology’, as a basis. We use the expertise they have and complement it with our manufacturing experience and expertise.
“The Dispojekt Safety Syringe had experts from the United Kingdom, Germany, Italy, Japan and Switzerland working together to optimize the design and manufacturing process and technologies.”
This approach to fair business is what sets HMD apart, according to Nath.
“We keep things simple, but we are committed in our relationships and goals,” he insists. “We focus on the long-term benefits and not the short-term advantages.
“We prefer winning the market share in the long-term; we don’t have to win every battle.”
