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  • 1. JIGYASA Volume 1 Issue 1 NITIEIndustry Institute Partnership Cell
  • 2. 2About Industry Institute Partnership Cell In the changing scenario of globalization and emerging new technologies, relationship between Industry and Institute has become indispensable to improve industrial competitiveness in the emerging economic landscape. In this endeavor Industry Institute Partnership Cell (lIPC), NITIE proposes to provide cost effective solutions to the techno-managerial problems faced by the Small Scale Industry through participation of NITIE Faculty and students in solving industrial problems. Started in 1995 under the aegis of AICTE, IIPC, NITIE has come a long way in providing support to the SSIs in and around Mumbai. It aims to strengthen the Industry Institute linkage with the small scale enterprises, IIPC, NITIE seeks to extend the training & consultancy services to Small-scale enterprises. IIPC, NITIE has an objective to strengthen the relationship of institute with Industries through various activities  Organizing Seminars, Conferences and Workshops for SSIs  Training and Consulting Services for SSIs  Undertaking Business Improvement projects IIPC, NITIE can offer assistance in the areas of Operations, Materials, Accounting & Finance, Marketing, Information Technology. It can offer general as well customized programs (both training & consultancy services) for the Small Scale organizations located in Mumbai and its near vicinity.  Productivity and Quality  Value Engineering  Materials Management  Financial Management  Marketing and Sales Management  Specific Topics for SSIs NITIE – IIPC has also organized seminars at the following Industrial Associations  Bombay Industries Association   Ghatkopar Industries Estate  Vasai Industrial Association  Taloja Industrial Association For more information visit http://nitie.net/iipc/ Coming together is a beginning… Keeping together is progress… Working together is success. (Henry Ford) NITIE is one of the premier business schools in India. Established in 1963 by the Government of India, through the International Labor Organization (ILO) with the assistance of United Nations Development Program (UNDP), it has consistently been ranked as one of top 10 business school over the years. NITIE is an autonomous body under the Ministry of HRD, Government of India and is governed by a Board of Governors comprising eminent personalities from government, academia and industry. It is recognized as a center of excellence along with the IITs, IIMs and IISc by the Ministry of HRD, Government of India. It has been ranked as 7th best B school in India by Wall Street Dctor Journal in 2009. For more information visit www.nitie.edu Jigyasa IIPC, NITIE Mumbai
  • 3. 3 Message from the DirectorIt gives me immense pleasure to know that the Industry InstitutePartnership Cell have initiated publication of a magazine “Jigyasa.” Thishas the promise of taking the mission of NITIE – “To nourish a learningenvironment conducive to foster innovations in productivity andbusiness development” forward. The application of classroom learningto the real life problems faced by the corporate world would be thegreatest test of the mettle of budding managers of NITIE. Under theable guidance of faculty members, students have been active inproviding cost effective solutions to the techno-managerial problemsfaced by MSMEs for a long time. Jigyasa has the promise of reachingout to even more numbers of MSMEs. I am confident that MSMEswould benefit from their endeavor as much as they would get a chanceto implement their classroom learning to the real life problems.These continued efforts to bring innovative methods to bridge real lifeissues faced by industry, go on to reinforce the continuous ranking ofNITIE among top business schools in the country. No wonder NITIEcontinues to be the preferred destination for leading businessestablishments seeking the finest managers.I applaud the zealous efforts of the students of IIPC and Prof. V. B.Khanapuri who have taken the lead in this initiative. It is heartening tobe a part of the process that takes all the enterprising individuals andcompanies along the learning curve of the institute. I wish the team allthe success ahead.Dr. Subhash D. AwaleDirectorNITIE, Mumbai Jigyasa IIPC, NITIE Mumbai
  • 4. 4Message from Prof. Vivekanand B. Khanapuri I congratulate the members of Industry Institute Partnership Cell for coming out with the magazine Jigyasa, focused primarily on issues/challenges faced by Micro Small and Medium Enterprises (MSME’s). The magazine aims to bridge the knowledge gap by dissemination of academic knowledge in terms of theoretical frameworks, case studies and also provide relevant news to the MSME’s. This I believe will go a long way in facilitating this sector in enhancing their competitiveness and in turn contribute towards the economic growth. The students of NITIE apply their classroom learning to the live industry problems in the MSME sector taken up under the guidance of faculty members. MSME’s would thus benefit from these varied experiences at these units along with the research done by faculty members of the institute. As the mouthpiece of the IIP Cell grows, I hope it quickly builds up a reputation for a good read and reliable delivery. There are some who can envision and even fewer who can bring that to reality. I am delighted to see their vision and common dream taking shape through toil in inception of this magazine. I hope this magazine brings in more corporate and expert involvement as it grows bigger and better, with wider distribution of its upcoming editions. I have all my best wishes for making it successful and sustainable. Prof. Vivekanand B. Khanapuri Professor-in-charge Industry Institute Partnership Cell Jigyasa IIPC, NITIE Mumbai
  • 5. 5 From the Editor’s DeskAs we left behind the whirling and gyrating creeks of machines in the factoryand reeled off towards NITIE, we started to ponder over the effect of downturn Volume 1 Issue 1on these small industries. More often than not, it is someone’s entrepreneurial February 2010quest. And they have to go through so much of beginners’ hardship. More than2.6 crore MSME’s contribute 9% to India’s GDP and 40% to exports. And yet Patronaccording to the 4th National census, the percentage of sick MSMEs have Dr. Subhash D. Awaleincreased to 14.7% from 13.98% in 2000-01. Prof in ChargeA study conducted by two business schools said that lack of funds contributed Prof. V. B. Khanapurito the sickness of 74% of the MSME’s followed by managerial incapability whichaccounted for 71% of the cases. Industry Institute partnership cell of NITIEtargets the second one by providing cost effective solutions to SME’s. Studentsuse their classroom learning and simulations to solve real life scenario underfaculty guidance.The MSME sector can only grow further. The government took a big step whenSEBI eased the listing norms for SME’s. As the upturn is now prominent in thehorizon, banks are ready to ease their financing norms. They are coming up withnew and innovative financial products especially for SME’s. The silver lining isdistinct.This magazine has come out with the toil of many people and our thanks goes to Disclaimer: The viewsall the professors and fellow students. This would not have been possible presented are author’swithout the guidance and support of Dr. S. D. Awale, Director NITIE and Prof. V. personal and IIPC, NITIE bears no responsibilityB. Khanapuri, Prof In charge, IIPC NITIE. My special thanks to Achyut Kaushik, whatsoever for any article.Lakxmikant Ramawat, Pulkit Kheria, Abhishek Dutta and whole IIPC team fortheir constant support. © 2010 IIPC NITIEIn this inaugural issue we bring to you prospective from various aspects of a Copyright License: Attribution Non-Commercial (CC-BY-NC)MSME i.e. working capital management, lean manufacturing, innovation andERP. We believe that this magazine would become the harbinger of knowledge Back cover photo by Rachit Anandfrom the humble start which it has made. Hope you enjoy reading this magazineas much as we enjoyed compiling it.Rohit KumarEditorJigyasaeditor.jigyasa@gmail.com Jigyasa IIPC, NITIE Mumbai
  • 6. 6 Contents About Industry Institute Partnership Cell 2 Message from the Director 3 Message from Prof in Charge 4 From the Editor’s Desk 5 Articles 7 Leaning SMEs Innovation and R&D for SMEs in India 8 Latest Trends in ERP and its intervention 10 for SMEs SMEs working capital management 12 News Feature World around SMEs 13 In Picture Previous workshops, seminars and conclave 15Jigyasa IIPC, NITIE Mumbai
  • 7. 7 Leaning SMEs st Amit Gera, I year PGP NITIE amitgera85@gmail.comLean is about doing more with less: Less time, As an organization applies lean principles, it is able toinventory, space, people, and money. Lean is about realize a net decrease in inventory and thus a netspeed and getting it right the first time. increase in cash. . Lean principles will enable anyLean manufacturing is a systematic approach for organization to navigate the credit crunch by freeingidentifying and eliminating waste in operations up cash, improving product quality, and reducingthrough continuous improvement for doing costs while growing as a company.everything more efficiently, reducing the cost of Lean principles can help SMEs in increasingoperating the system and fulfilling the customer’s productivity by practicing the following 5S strategydesire for maximum value at the lowest price. step by step:Lean principles come from the Japanese  Sort: Organize the work area, leaving only themanufacturing industry. tools and materials necessary to perform dailyLean theory basically focuses on reducing the 3 activities.types of waste in an organization:  Set In Order: Orderly As an  Muda: Non value-adding work arrangement of needed items organization  Muri: Overburden so that they are easy to use  Mura: Unevenness and accessible for “everyone” applies lean (making the process smooth) to find. Orderliness eliminatesFor many, Lean is a set of "tools" waste in production and principles, it isthat assist in the identification clerical activities. able to realizeand steady elimination of these  Shine: Keeping everything wastes (As waste is eliminated clean and swept. This a net decreasequality improves while production maintains a in inventorytime and cost are reduced.) safer work area and problemExamples of such "tools" are Value areas are quickly and thus a netStream Mapping, Kanban (pull systems) and Poka- identified. An important partYoke (error-proofing). of “shining” is “Mess increase inIt is often understood that implementing lean Prevention.” cash.processes lead to more layoffs, but it depends on  Standardize: Creating a consistent approach forthe type of process used by the company. For the carrying out tasks and procedures.company using make to order, shop floor tasks tendto become more specialized, making substantial  Sustain: Discipline and commitment of all otherlayoffs more difficult to execute, whereas in the stages. Without “sustaining”, your workplace canmake-to-stock, there are more workers doing the easily revert back to being dirty and chaotic.same tasks. So, it is relatively easy to downsidesome portions of that workforce consistently with Once the enterprise has well established leanthe drop in demand. practices, it should extend the same to its suppliersIt has been often misunderstood that Lean can be to bring out a lean supply chain. Although this practice is business model dependent, the companiesapplied only to manufacturing setups. Lean as a which have most of their manufacturing workphilosophy is applicable across industries, what is Best Practice outsourced to other firms must begin the process ofrequired is the knowledge and application of core improving the extended value stream much earliervalues of lean principles. than vertically integrated companies. Jigyasa IIPC, NITIE Mumbai
  • 8. 8 Innovation and R&D for SMEs in India Kushagra Sagar, IInd year PGP NITIE kushagra.nitie@gmail.com In India, small and medium industries play a vital scenario of liberalization and globalization. Indian role in the growth of the economy. Small industries SMEs are finding it difficult to sell their products in have a 40% share in industrial output, producing the domestic and international markets because of over 8000 value-added products. They contribute increasing competition their conventional product nearly 35% in direct export and 45% in the overall range. It will, thus, encourage exports and global export from the country. They are one of the integration and propel SSI Although biggest employment-providing sectors after Financial issues agriculture, providing employment to 28.28 million Indian SMEs people. The non-availability of institutional finance on affordable and easy terms is hindering access to new realize the technologies. In India the situation is further Importance of Innovationimportance of Innovation has always been the hallmark of small complicated by the fact that the preferred mode of finance is either self or other sources. innovation, and medium enterprises. SMEs that integrate innovation can reap significant benefits. Studies Sources to overcome financial barrier most of them conducted by US Department of Commerce, Innovation in developing countries is promoted by revealed that since World War II, 50% of all still believe in innovations and 95% of radical innovations, have venture capital, to help in indigenous development of technologies. In India financial institutions, such as importing come from new and smaller firms. The innovation Industrial Development Bank of India (IDBI), process is seen as a cycle involving trial and error, Industrial Credit and Investment Corporation of India technology, where problems, at some stage of development (ICICI), Industrial Finance Corporation of India (IFCI), rather than lead to the need for reevaluation of the earlier and other banks are providing financial assistance, stage of the innovation process. for commercialization of indigenously developed developing technologies and adoption of imported technologies Although Indian SMEs realize the importance ofthem in-house technological innovation, most of the Indian SMEs for wider domestic applications through venture capital. still believe in importing technology, rather than or in developing them in-house or through/in Small Industry Development organization (SIDO) association association with, national Research and offers a number of financial services to SMEs. Some Development (R&D) centers. Indian SMEs, over thewith, national years, have largely ignored their R&D and have of its the popular schemes are Credit Linked Capital Subsidy Scheme for Technology Up-gradation, Credit R&D centers. mostly not embarked on new product development Guarantee Scheme, ISO 9000 / IS 14001 Certification and technological up-gradation. This is despite the Reimbursement Scheme, Integrated Infrastructure fact, that India has the third largest pool of Development Scheme, Cluster Development program technologically trained manpower. , Mini Tool Room Scheme etc. Barriers to innovation for Indian SMEs Steps taken by Government India has nearly 3 million SMEs, which produce a i) SED Bill: The Small Enterprises Development (SED) diverse range of products from very basic to highly Bill is on the anvil. Enactment of this Bill will removeInnovation sophisticated products. Despite their strength, the barrier to SSI growth, by inculcating a hassle free, SMEs are facing tough challenges in the present user-friendly environment enabling SMEs to diversify Jigyasa IIPC, NITIE Mumbai
  • 9. 9from their conventional product range. It will, thus, Mechanical Engineering Research andencourage exports and global integration and propel Development Organization (MERADO), NationalSSI towards the projected 12 % targeted rate of Small Industries Corporation’s (NSIC), and Asiagrowth. Pacific Center for transfer of Technologies (APCTT).ii) Credit Rating Scheme: The scheme has been Current scenario in Indiaintroduced to encourage the SSI Units to get their At present, there are 2900 R&D institutions incredit rating done, by reputed third party credit India, of which 1350 are in the private sector. Outrating agencies. The credit rating will facilitate hassle of these, over 1250 are in-house R&D units,free flow of credit to SMEs, while enhancing the employing over 45,000 personnel. However, thecomfort-level of the lending banks. Government of SME sector is largely aloof of such facilities. In theIndia will reimburse 75% of the fees charged by the majority of the cases, the R&D outputs do not getrating agency subject to a ceiling amount. commercialized for want of initial investment andiii) SME Fund: Small Industries Development Bank of the needed enabling environment andIndia (SIDBI) was set up in April, 1990 under an Act of networking.Parliament. SIDBI is the principal financial institution Managerial issuesfor promoting, financing and development of The Indian industrial environment wasindustries in the small-scale sector. To further traditionally identified by its regulative andimprove credit availability, a SME fund of $ 2 billion protective characteristics. Till, 1990, the Indian R&D outputs dohas been operational from the year 2004. economy was inward looking and protected from not get internal and external competition. In the absenceiv) Credit cards: Laghu Udyami Credit Card (LUCC) of competition, firms did not develop the commercializedScheme (Small Entrepreneur’s Credit Card) has been technological capability needed for penetratingliberalized. The credit limit has been enhanced from the global market. Decades of long protective for want of$4000 to $20,000 for borrowers who have asatisfactory track record. environment also reduced the risk taking capacity initial of the SME manager and made him complacentTechnological issues and averse to risk. SME manager chose to avoid investment andTechnology is the key to enhancing a companys risky situations and thus blocking the dawn of the neededcompetitive advantage in todays dynamic innovation.information age. SMEs need to develop and Conclusion enablingimplement a technology strategy in addition to SMEs are sometimes less aware of global environment.financial, marketing and operational strategies, and standards, they only think about localadopt the one that helps integrate their operations competition. It is imperative to have a shift in waywith their environment, customers and suppliers. of thinking. In term of investment many foreign companies are at the door, so SMEs shouldOrganization supporting SME in technology concentrate on upgrading their product so thatdevelopment there will be longer relationship with those MNCs.As technology is an important element, along with Government also plays an important role, Indianprice and quality in determining competitiveness, government will have to act in same manner whatmany organizations are active in the area of offering China had done 30 years ago- implementing SMEtechnological assistance to SMEs, including the innovative idea at national level thus encouragingCouncil of Scientific Research (CSIR), Indian Institute SMEs for innovation.of Technology (IIT), Technology Information ReferencesForecasting and Assessment Council (TIFAC), 1. www.niscindia.com InnovationNational Research and Development Corporation(NRDC), National Institute of Design (NID) Product 2. www.ciionline.organd Process Development Centers (PPDCs), 3. www.laghu-udyog.com 4. www.innovation.com Jigyasa IIPC, NITIE Mumbai
  • 10. 10 Latest trends in ERP and its interventions for SMEs Amit Singhal, Ist year PGP NITIE amitmail85@gmail.com Enterprise Resource Planning (ERP) calls for ringing in the market was, Can everyone afford constant modifications and up gradations. ERP it.? The answer was a stubborn no initially but developers are facing tremendous pressure ERPs and ERP applications designed for SMEs both from vendors and companies. In this have successfully overcome the above context it becomes important to analyze the limitations. ERPs trends and modalities. Some relevant issues concerning ERP for SMEs: Need based applications Evolution of ERP in SMEs: Organizations had to implement ERP ERP was a term restricted purely to elite class. throughout their systems irrespective of the This scene was witnessed in the IT market for fact whether they help in all the functions or some long time ever since ERP was introduced.ERP was a very in one particular function. This became a big The large organizations went ahead with ERP hurdle to the firms and main disadvantage of process unmindful of the negative costly affair. ERP. They had to purchase the whole consequences of not non-inclusion of SMEs, not Thanks to the applications even if it meant that most of to forget mentioning the fact that they took them would be idle except for the core every proactive measure to curb the same. intrusion of function. Needless to say ERP firms were also interested internet and The latest ERP software programs have in serving such large players. So ERP for SMEs overcome this menace. They offer need based remained a mere dream. open source applications. The firms need not be worried applications, even if these software programs were not ERP Vendors and Corporate giants: available. They were given the liberty to It so happened that the number of larger SMEs could purchase and install software programs companies without ERP turned out to be nil, enter the pertaining to that particular function. This has thanks to the awareness created by vendors and helped to increase the scope of ERP not only IT researchers. No doubt companies were market of initially a hesitant lot and apprehensive on just among large firms but among SMEs as well. prospective ERPs intervention in SMEs hearing the word ERP. However the industry proved them otherwise. Then came a stage buyers. ERP was a very costly affair. Thanks to the where a company could not exist but without intrusion of internet and open source ERP. Even if their performance was satisfactory applications, SMEs could emerge as they were not able to gain any competitive prospective buyers. This has not only widened advantages. the horizon of SMEs but also increased ERPs The story of how goliaths adapted to ERP has lot usage among large firms. of significance in studying their interaction with These large firms were not able to invest huge SME. These bigger companies were not money in spite of adequate funds. ERP for providing the required business to ERP vendors. small business calls for voluminousTrends Even though there are many big companies the investments. But the question that kept number of vendors was always greater in Jigyasa IIPC, NITIE Mumbai
  • 11. 11multiples. This means only the best could strike they took such a long time to get implementeddeals and there was no possibility for mediocre and set the whole process into action. Sinceor average vendors (in terms of this resource was spent excessively there wereperformance).The best players also found that chances for reduction in potential business andthey had none to serve after a point of time losing man-hours.because almost every company in the market The current day ERP applications are lesssuccessfully established ERP (whether on the complex to install and train. This has reducedfirst or further attempts). the amount of time.Stabilization of ERP in SMEs: Open Source, Web enabled and wirelessSo they had to naturally look for greener and technologiesfresher pastures. SMEs were the only answer. These are three important elements that haveThe next question was how to provide best rejuvenated the functioning of ERP. Openservices at an affordable cost and still make Source ERP has done away with the hassles ofprofit. In this case the vendors had to be paying license fees not only during installation but also whenever a modification is made. The With basic ERPworried only about the number of sales theycould make and not the quantum of profits companies are relieved of depending on ERP software,because the number of vendors was few and vendors even for minor modifications. tailor-madefar between when compared with the number Web enabled ERP helps in making theof SMEs choosing to go for ERP. enterprise operations go online. Any system isAs it goes "necessity is the mother of Invention" stakeholder or third party can access the being sold byvendors had to devise cost effective required information very easily and that too by sitting anywhere in the world. This proves ERPapplications to meet the demands of the SMEs.This was the origin of ERP for SMEs. This to be of great asset for distributed companies companies.benefited them in terms of business. On the and more so during emergencies when the details are to be sourced immediately. ERP vendorsother hand the SMEs enjoyed greater benefitsby making use of this application. Wireless ERP is sharing enterprise information are speeding-In fact, the latest trend is that with basic ERP through devices like internet and other devices up to integratesoftware, tailor-made system is being sold by making it possible for outsiders to access the same. It has helped organizations to make use most of theseERP companies. ERP vendors are speeding-up tointegrate most of these additional capabilities. of the communication channels effectively and additional efficiently. It has made it possible for manyThis type of customized or tailor-made capabilities.enterprise system is easy to install and elements to operate in ERP which wereimplement for SMEs. It also takes less time to otherwise not possible.implement and chances of implementation Conclusionfailure are lesser. ERP trends reflect positive signals for the ERPHence, SMEs are becoming the popular choice vendors and companies availing their service.of ERP vendors. There is an increasing It is important to remember the fact that bothawareness of ERP in SME market. It has the vendor and the company will be able topractically helped to unravel the myth that ERP make use of any advantage (including theis exclusively meant to business empires. modern facilities) only through proper coordination, teamwork and nurturing a TrendsReduction in implementation time cordial atmosphere. Mere IT ERP trends willERP was discouraged by companies because not help in this aspect. Jigyasa IIPC, NITIE Mumbai
  • 12. 12 SMEs working capital management Rohit Kumar, Ist year PGP NITIE rohitkumar836@gmail.com Working Capital (WC) is considered to be the Reducing the cash conversion cycle to a life blood of an organization. If properly reasonable extent increases firms’ profitability. managed and nurtured, the business prospers Firms can improve their profitability by and grows; else it tends towards financial reducing the number of days accounts distress. Maintaining high inventory levels receivable are outstanding and by reducing reduce the cost of possible interruptions in the inventories. This can be done by proactively production process. However it strains the WC reminding customers of upcoming payment in terms of holding costs. Next, granting trade deadlines. credit favors the firm’s sales. But, granting Management can use decreasing demand for excessive trade credits above a limit may again products to reduce inventories so as to offset be harsh on the Income Statement of firms. low demand. Companies whose performances Managing this fine balance, for the inventory remain strong can use WC strategies to solidify as well as for the ‘trade credit’ becomes even their financial positions.If the company more important when there is a liquidity According to a Harvard Business Review is pushed to a crunch in the economy as sharp decreases in research, companies that master the delicate sales can greatly limit available cash. Even in cashless balance between cutting costs to survive today the post-slowdown recovery period, cash WC and investing to grow tomorrow do well after a bankruptcy- improvement should be more important than recession. These companies reduce costs companies concentrating on topline or bottom like situation, selectively by focusing more on operational line growth. If the company is pushed to a efficiency, even as they invest relatively what good cashless bankruptcy-like situation, what good comprehensively in the future by spending on would be huge topline or bottom line growth?would be huge marketing, R&D and new assets. WC management is particularly important in The pinnacle of WC management is achieved topline or the case of startups and SMEs. Most of these when companies work on negative WC. Costco bottom line companies’ assets are in the form of current USA, a membership only warehouse club retail assets. Also, short term debt is one of their chain perfected this model. You need to be a growth? main sources of external finance which is member to use their service by paying an initial reflected on the balance sheet as current sum. They accept only cash or debit card, liabilities. The management of WC involves which gives them instant cash. However they managing inventories, accounts receivable and get goods from suppliers on a credit for certain payable and cash. The goal of WC number of days. Thus they generate negative management is to ensure that a firm is able to working capital which gives them enough cash continue its operations and it has sufficient for business expansion. Thus they are able to ability to satisfy both maturing short-term sustain on wafer thin profit margins. No debt and upcoming operational expenses. wonder they say “Cash is King.”Think References 1. http://hbr.org/2010/03/roaring-out-of-recession/ar/1 2. BCG Report: Winning in a downturn Managing Working capital Jigyasa IIPC, NITIE Mumbai
  • 13. 13 World around SMEs News Desk, JigyasaSME Exchange: India debates, China begins Google puts SME plans on dashboardChina opened its SME stock exchange and in In a bid to tap a bigger pool of small and mediumcomparison, India’s plan for a similar exchange is just businesses on the Internet, online search giant Googlebeginning to sprout despite making early moves. has added a new feature to its existing local businessKnown as Growth Enterprises Market, the exchange center (LBC). The new dashboard feature will providewill be run by the Shenzhen Stock Exchange and on businesses with new visibility into the ways their localOctober 23rd, the first day of the new board it had an listings are found on Google, enabling them to makeinitial batch of 28 companies listed and available for smarter decisions about attracting customers.trading. "Businesses will now be empowered with informationThe market regulator SEBI has already floated the on how their listing is being searched and from whereconcept for setting up the exchange which will enable - trends that will enable businesses to make informedSMEs to raise capital from the primary market. “SEBI is decisions to reach out to potential customers," saidworking on it. The norms are being finalized and Manik Gupta, product manager, Google India. "Thiswould be released soon,” Finance Ministry sources feature is a boon for businesses that do not have asaid. The exchange will help small enterprises that website of their own but want to use the Internet forcould not fulfill the trading requirements of the BSE doing business," added Gupta.and the NSE, raise capital, sources said. The BSE, NSEand the new entrant MCX Stock Exchange (MCX—SX) Report says over 50 per cent of missing SME units inhave shown interest in setting up a SME exchange. AhmedabadBhushan Steel plans SME Steel Park at Orissa It is difficult to trace out the whereabouts of a large number of small and medium enterprises (SME)Bhushan Steel Ltd (BSL) has requested permission registered in Ahmedabad district if the official figuresfrom the Orissa government for establishing a ‘SME released by the State Industries Commissioner’s officeSteel Park’ around its 3mtpa steel plant being set up are to be believed. The figures of the nowhere-to-be-at Meramundali in Dhenkanal district at an investment seen units in Ahmedabad are half of such units in theof Rs5828 crore. According to informed sources, the state.company has sought 1,000 acres of land for theproposed SME steel park, of which 200 acres will be While the state has projected 12 to 14 per centearmarked for local downstream units. BSL will also growth in the SME sector during the Eleventh Planprovide the raw materials, infrastructure support, period (2008-13), skeptics say a large number of theassured power supply and marketing support to the 22,745 missing units in Gujarat (12,864 in Ahmedabadunits proposed to come up in the steel park. alone) existed only on paper to get official benefits .In response to the company’s request, the state The report on the registered micro, small and mediumindustries department has asked it to submit a enterprises (MSME) of Gujarat reveals that as per thecombined application form and detail project report provisional results of the Government of India’s(DPR) to the Industrial Promotion and Investment Fourth Census as on March 2007, out of 2.30 lakhCorporation of Orissa Ltd. units in the state, 34,945 units have been shut down and 2,29,756 were found functioning. Jigyasa IIPC, NITIE Mumbai
  • 14. 14U World around SMEs Banks enhance SME focus PE funding for SMEs IDBI Bank has taken an initiative to strengthen its base Whatever funding happens for MSMEs, it is late- in the mid-corporate, SME and retail sectors. stage funding, when risks for the investors are less "Pursuant to formation of a dedicated vertical for SME than at the time of founding of the company. “And customers, the bank has plans to set up 40 City SME whenever they have been realized, its the larger Centers (CMCs) out of which 15 have already been set players who have benefited," said Ramesh Kumar, up." MD and CEO, Zwirn Pragati Capfin. So what ails PE Axis bank has now realigned its business into four funding in MSMEs? strategic business units (SBU). The four new SBUs of "Lack of awareness is a primary issue," said the bank now are retail banking, SME and agriculture, Chandrakant Salunkhe, president, SME Chamber of corporate banking, non-banking retail subsidiaries and India. Moreover, any proposal from an MSME is corporate center. Retail banking, along with SME and looked at with skepticism because of a lack of agriculture, will be headed by Mr. S K Chakrabarti. Mr. business plan and transparency. Harsh Kaul, CEO, Chakrabarti was earlier the ED in-charge of mid- Sidbi VC, said given the stringent norms, only 10% of corporates and SME. Unlike other banks where retail the MSME units will qualify for funding. and SME are under a same person, this was not the case in Axis. The move for SBUs will help bring in more The trend of launching private equity (PE) funds to business focus into these units. invest in SMEs is catching on in India. IndiaCo Ventures Ltd, a Pune-based wealth advisory and POSCO opens SME promotion center investment firm, is planning to launch an offshore PE POSCO has opened a promotion center in one of its fund that will primarily focus on SMEs. The road overseas SCM offices in Thailand in order to support show for the fund is scheduled to start in the first small and medium enterprises overseas operations week of December. IndiaCo plans to raise nearly Mr. Hwang said in his congratulatory speech "I hope $500 million from Europe and West Asia. the new promotion center will be a foundation stone SMEs take to tele-conferencing upon which both major corporations and SMEs can build up trust in their relationships to help each other In today’s competitive environment, organizations of succeed in overseas markets." all sizes and across industries are trying to contain Another promotion center for SMEs opened at the costs without limiting their ability to execute and second plant of POSCO-IPPC in the Indian city of Pune. innovate. Unified communications (or UC, such as The goal of this center is to help Korean SMEs to play tele-conferencing and video-conferencing) is no a part in the now booming auto industry in the area. longer restricted to large enterprises. Meanwhile, POSCO plans to expand the facility to Anshul Dhingra, senior marketing manager, Polycom other countries if the two turn out to be a success not (India & SAARC), observes, “SMEs have been only at helping SMEs doing overseas business but also enjoying the benefits of UC solutions to collaborate at creating new demand for it by locating upcoming with various stakeholders. Voice conferencing has centers in industrial complexes that contain found application across the SME segment. With processing centers. increased awareness about the vast benefits of visual collaboration solutions, the SME market is fast adopting this technology as well.” Jigyasa IIPC, NITIE Mumbai
  • 15. 15Seminars, workshops, training sessions for SMEs and NGO Melas conducted by IIPC, NITIE over the period Jigyasa IIPC, NITIE Mumbai
  • 16. 16 NITIE, MumbaiPlease send your comments/feedbacks to nitie.iipc@gmail.com Jigyasa IIPC, NITIE Mumbai