The Small and Medium Industries form the backbone of manufacturing sector not only in this country but even in the developed countries. In India, the small scale sector contributes to 40% of manufacturing. The small industries sector also contributes substantially to the exports. In the past, the Small Scale Sector existed in a relatively sheltered environment. The levels of protection were high, several goods were reserved for production in the Small Scale Sector, special fiscal incentives were extended to the units in the sector and a number of support programmes were also drawn up to ensure the Small Industries survived.
In the post-reform era, starting from 1991, the situation for the Manufacturing Sector as a whole as well as for the Small Industries has undergone a dramatic change. The tariffs on imports have been reduced very substantially. India is gradually integrating with the world economy; new trade blocs are forming and many countries, including India, are entering into Preferential Trade Agreements, Free Trade Agreements or Comprehensive Economic Agreements to improve trade in areas of their comparative advantage. In this process the Indian economy is becoming more open and there is an urgent need for the Industry to adjust to the new situation. The Indian Industry will have to become competitive by cutting down overall costs to that extent to survive and grow. The situation confronting the Small Industries in particular provides both opportunities as well as challenges. An opportunity to grow in a global market place is available to access entry into the global value chain by virtue of their being internationally competitive. The others would need to reposition themselves and become competitive to meet the challenges if they have to survive.
The Government announced formulation of National Competitiveness Programme in 2005 with an objective to support the Small and Medium Enterprises (SMEs) in their endeavor to become competitive and adjust the competitive pressure caused by liberalization and moderation of tariff rates.
The National Manufacturing Competitiveness Council (NMCC) has finalized a five-year National Manufacturing Programme. Ten schemes have been drawn up including schemes for promotion of ICT, mini tool room, design clinics and marketing support for SMEs.
Lean Manufacturing Competitiveness Scheme
Under the Scheme, MSMEs will be assisted in reducing their manufacturing costs, through proper personnel management, better space utilization, scientific inventory management, improved processed flows, reduced engineering time, etc. Lean Manufacturing Competitiveness Scheme brings improvement in the quality of products and lowers costs, which are essential for competing in national and international markets.
Lean Manufacturing involves applying Lean Techniques to identify and eliminate waste and streamline a system:
To identify potential clusters;
Conduct awareness programme and encourage them to participate in the scheme;
MSMEs interested will form a group of 10 units (mini cluster) and apply for registration to form SPV (Trust or society);
SPV will select a LMC from the empanelled list and negotiate for the fee;
Tripartite agreement will be signed between SPV, LMC & NMIU and work commences for lean implementation in the SPV members;
Lean Manufacturing Consultants (LMCs) to assess the existing manufacturing system of member units of the Mini Cluster(s) and stipulate detailed step by step procedures and schedules for implementing and achieving of lean techniques;
1st milestone will be in the form of DSR and Action Plan, subsequent milestones will be as per the approved DSR;
Milestone progress to be monitored by the NPC field offices;
Technical Advisory Committee (TAC) of experts to oversee the monitoring process;
1st milestone to be paid by SPV to LMC, Subsequent milestones to be paid by GoI to LMC through SPV;
Screening and Steering Committee (SSC) under DC (MSME) will review the progress and give approvals as per the scheme requirement, after one year implementation, evaluation to be done by DC (MSME) office for the impact and recommend up scaling or otherwise.