3. CONTENTS
Introduction
Need of the study
Objective of the study
Review Of Literature
Research
Methodology
Analysis And
Interpretation Of Data
Findings
Suggestions/Remedial
Measures
5. Introduction
Small industrial units are the seedbed for industrial development in developing
economy because of its less capital involvement and more employment
generation capability.
A socio-economic model of government emphasizes on job creation at all levels
and discouraging monopolistic practices of production, operations and marketing;
and in all prospects contributing to growth of economy.
What is
SME’s
Service
Enterprises
above Rs. 25 Lakhs & upto Rs. 5 Crores
Manufacturing
Enterprises above Rs. 10 Lakhs & upto Rs. 2 Crores
6. Such Industrial units fail to generate surplus on a
continuous basis and depends on frequent infusion of
external fund for its survival.
Some SMEs are incurring heavy cash losses for one year as
well as for the next year, they face an imbalance in the
financial structure such as current ratio, working debt-
equity ratio or we can say that in some of the SMEs
accumulative losses exceed capital and reserve.
Why aren’t
SME’s
growing?
7. Need of the study
Sickness among SMEs is the key issue of modern industrial
age; and incidence of sickness has been growing in
such large proportions.
It also effects in terms of unemployment, non-availability
of goods and services and the prices soaring up.
To give explanation of the sickness.
8. Objective of the study
To analyse the various symptoms and factors
affecting the growth of SMEs.
To suggest remedies that may help to
overcome these factors.
10. Sr. No.
Research Paper/
Journal
Authors Year Key Findings
1.
Pacific Business Review
International, Vol. 5, Issue 5,
29-35.
Dr. K.A (et.al) 2012
Even if the industry is on favorable run various
factors may affects its growth.
2.
“Striving and Thriving in the
Era of
Globalization”
Dr. Shivani July 2012
The study depicts 9 causes affecting the growth of
industry in India. The major causes were “lack of
demand 71.6%, shortage of working capital 48.0%,
marketing problems 44.5%, and power shortage
21.4%.”
3.
A Case Study of Larkana
Estate Area.
Australian Journal of Basic
and Applied Sciences, Vol. 1,
Issue 4, 860-865.
Mumtaz Ali
(et.al)
2007
In-depth study of Larkana estate area of India
showed that 23.25% lack of good management,
16.74% lack of working capital, 13.95% marketing
problems, 1.86% load shedding problem.
11. 4.
Small Scale Industries
Common Causes of Sickness
and Probable Remedies.
International Journal of Current
Research,
Vol. 4, Issue, 01, 146-148.
P. Sunilkumar
(et.al)
2012
Found that lack of finance: bad production
policies, wrong demand & forecasting, selection
of in appropriate product mix, absence of
product planning, wrong market research
methods and bad sales promotions, ineffective
corporate management, inappropriate
personnel management, personnel problem,
marketing constraints, production constraints,
and finance limitations are the major causes of
sickness to small scale industries.
5.
A Study on the Position of Small
and Medium
Enterprises in Kerala Vis A Vis
the National Scenario.
International Journal of
Research in
Commerce, Economics &
Management, Vol. 2, Issue 3,57-
60.
Rajeevan N. 2012
The study depicted that among the registered
SSI in India: lack of demand 58%, working capital
shortage 57%, non availability of raw materials 12
%, power supply 17 %, and equipment problems
9 %, are responsible for sickness to small scale
industries.
12. 6.
Proposed Research Direction for
Sustainable SMEs in
Bangladesh. Bangladesh
Research Publications Journal,
Vol. 6, Issue 3, 317-329.
Rashid, Md.
Mamunur
2012
Identified some causes in Bangladeshi Small
Scale Industries. The causes he identified include
Marketing problem (31%), Management
inefficiency and lack of entrepreneurial skills
(22%), Faulty project planning and appraisal
(14%), Imbalance of machinery and
inappropriate technology (12%), Implementation
delay (12%) etc.
7.
A case study of Tripura.AFBE
Journal, Special Issue of
Selected Papers from
AFBEUNITEN Conference - 2012,
Vol. 5, No. 3, 240-251.
Bhushan
Chandra
(et.al)
2012
Observed the causes in micro and small
manufacturing enterprises in Tripura. It was found
that demand, management issues, obsolete
technology, inadequate working capital, etc.
were the main factors in micro and small sector
of Tripura.
8.
Proceedings of the International
Conference on Mechanical
Engineering, held at Dhaka,
Bangladesh, ICME07-AM-22.
Biswas S.K. 2007
“Besides identifying the various key reasons liable
to industrial sickness, they emphasizes on
Government policy level for the well being of
national economy and development. Besides
they showed some ways to utilize the application
of the theories and principles of Production and
Operations Management in preventing the
industries becoming sick.”
14. Type/Nature of the Research
Descriptive as well as exploratory in nature
Emphasized on describing the present status of the
industrial units of Agra
Objectives of the Research
To explore the main cause/causes for the sick industrial
units
Find out ways by which these sick industrial units can
be revived
????
15. Target Population of the study
The total number of industrial units was 200 out of
which, 7 small industrial units were sick and 5
ultimately closed down. Hence the total population
comprised of 2 sick Industrial units.
The sample size was 2 Industrial units which is
about 28.5% of the total population
16. The sampling technique
Random sampling i.e. 2 sick industrial units were
selected on convenience basis out of 7 sick
industrial units
Tools for data analysis
The data was analysed through descriptive statistics
and exhibited in, graphs, charts, showing
percentages and other numerical results.
19. We have conducted the survey of two sick units
through questionnaire. Under that questionnaire
they have to rate the factors from 100 points.
We have analysed the data of the enterprises
individually and after that we compare that data
on the basis of central tendency.
Are U
Married
No !! Or
Bache
2 !!!
20. Factors Ratings
Shortage of Manpower 28
Shortage of Raw material 14
Tough Competition 12
Inadequate Working Capital 9
Increase in Cost due to late Implementation of Projects 8
Lack of trained and highly skilled labour or technically competent personnel 7
Delay in Implementation of Project 7
Shortage of Power Supply 5
Delay in Getting Financial Assistance 5
Changes in Technology 3
Changes in Customer Behaviour 2
100
For the company X
22. Factors Ratings
Mismanagement 25
Tough Competition 12
Shortage of Manpower 8
Shortage of raw material 7
High Cost of Production 7
Poor quality control 7
Lack of trained and highly skilled labour or technically competent personnel 6
Delay in Getting Financial Assistance 5
Delay in Implementation of Project 5
Increase in Cost due to late Implementation of Projects 5
Inadequate Working Capital 5
Changes in Technology 4
Bad Industrial Relations 3
Others 1
FOR COMPANY Y
25. 0 5 10 15 20 25 30
Tough Competition
Shortage of Manpower
Shortage of Rawmaterial
Delay in Getting Financial Assitance
Inadequate Working Capital
Increase in Cost due to late Implementation of Projects
Lack of trained and higly skilled labour or technically…
Delay in Implementation of Project
Changes in Technology
Poor quality control
Shortage of Power Supply
Mismanagement
High Cost of Production
Others
Changes in Customer Behaviour
Bad Industrial Relations
Ratings
Factors
Factors leading to sickness
COMPANY Y COMPNY X
27. 0 2 4 6 8 10 12 14 16 18 20
Tough Competition
Shortage of Manpower
Shortage of Rawmaterial
Delay in Getting Financial Assitance
Inadequate Working Capital
Increase in Cost due to late Implementation of Projects
Lack of trained and higly skilled labour or technically…
Delay in Implementation of Project
Changes in Technology
Poor quality control
Shortage of Power Supply
Mismanagement
High Cost of Production
Others
Changes in Customer Behaviour
Bad Industrial Relations
18.5
17.5
10.5
8.5
7.5
6.5
6
5.5
5
4
2.5
2.5
2.5
1.5
1
0.5
Average Score
Average Score
28. After the statistical analysis we got to know that
there were some factors common in both the
unit with were directly or indirectly affecting the
growth of both the enterprises. Thus, a survey
was done on a healthy unit to analyse that do
these factors affect a healthy unit also?
29. FOR COMPANY Z
Factors Ratings
Mismanagement 30
Tough Competition 40
Delay in Getting Financial Assistance 5
Changes in Technology 10
Others 15
100
31. After this, we compare both the sick
units with the healthy unit to analyse the
factors which are commonly affecting
each other positively or negatively.
32. 0% 20% 40% 60% 80% 100%
Tough Competition
Shortage of Manpower
Shortage of Raw material
Delay in Getting Financial Assistance
Inadequate Working Capital
Increase in Cost due to late Implementation of Projects
Lack of trained and highly skilled labour or technically competent…
Delay in Implementation of Project
Changes in Technology
Poor quality control
Shortage of Power Supply
Mismanagement
High Cost of Production
Others
Changes in Customer Behaviour
Bad Industrial Relations
Ratings
Factors
Company X
Company Y
Company Z
33. Difference is that healthy units cope up with these
factors significantly well as compared to sick units.
When asked for the ways by which they deal with
these factors we got to know that they believe in
finding the root cause instead of fining quick fix
solutions to the problems. This process helps them
to deal with long term problems
35. Inadequate
working
capital as
revenue
generation
was a
problem
Difference in
practices of
objectives like
production
procedure,
manpower
handling etc.
Both facing
the problems
like executive
inefficiency,
technological
lag, problems
relating to
export etc.
Shortage of
raw material is
also one the
main reason
36. Found that,
natures of
problems
faced by both
the enterprises
units were not
much different
Main reason
of sickness is
increasing
competition in
the market.
Lack of proper
management
and lack
awareness
about the
market
37. INTERNAL & External FACTOR AnalysisSTRENGTH
Markets:
Traders/Wholesalers are present in the local market.
No import is required as all items are indigenous.
Innovation capability:
Ability to develop duplicate and customized products.
WEAKNESS
Markets:
Development trust and relationship in the long run. (Bad Industrial Relations).
Presence in the domestic market.
Inputs availability:
Raw materials are not available in sufficient quantity.
Unavailability of other inputs like Adhesives, chemicals, Punch, mould, Grainderies and packing
materials (Boxes) etc.
Skills:
Workers are not very skilled and working like machines.
Workers are not specialized in specific field.
No skill up gradation training for the workers.
Technology:
Tradition method of production.
Low level of technological development.
Manufacturing defects and use of substandard materials.
Problem with quality and productivity.
Innovation capability:
Very frequently changes in design, technology, process and marketing due to foreign branded
footwear availability in the market.
Business Environment:
Business Environment is changing.
Competition is increasing.
OPPOURTUNITIES
Markets:
The domestic market has tremendous market potential and can be utilized at the maximum
Quality and productivity is the rule of the game.
Enterprises can join hands together for international marketing, brand buildings
participation in trade fairs.
Innovation capability:
Exposure visits, participating in exhibitions may make the entrepreneurs and technicians m
innovative and problem solving.
Skills:
Increased awareness is likely to improve the skill base of the workers.
Business Environment:
Changing business environment and marketing channel can provide opportunity
enterprising firms.
THREATS
Markets:
Tough competition because of setting up modern units elsewhere in the country.
Overseas importers are smart enough to change their sourcing country.
Technology:
Low level of technological development.
Technology can impose a major threat unless it is changed/ modernised.
Technology is an ever changing process.
Inputs availability:
Difficulty in encountering competition unless raw materials are made cheaper.
Quality of raw materials.
Quality of footwear components.
Innovation capability:
39. From this study, it has been found that ‘Tough Competition’ (18.5%)
and ‘Shortage of Manpower’ (17.5%) and ‘Shortage of Raw material’
(10.5%) are the major factors of sickness as perceived by the
respondents. The sick enterprises should be given priority in the supply
of raw materials. The government should grant soft loans to their units
at concessional rates of interest and reduce margins. Government
needs to support entrepreneurs with promotion schemes to cope up
with global competition with effective marketing strategies with
innovative ideas in their product and marketing programme to cope
up with tough competition, the only they can fight with industrial
sickness. “Prevention is better than cure”.
41. The identification and detection of
sickness at the incipient stage.
Banks and financial institutions
should periodically review.
The sick enterprises should be
given priority in the supply of raw
materials
42. The state and central governments
should take the required measures
to implement strictly their policies
Attitude of the management.
The government should grant soft
loans to their units at concessional
rates of interest and reduce margins
46. Hemantkumar.Bulsara (2010): “A Study of factors responsible for industrial
sickness as perceived by entrepreneurs”, SV National Institute of
Technology, Surat.
Chandel K.S. (2009): “Ethics in Commerce Education”, Paper presented
at the Annual International Conference for the all India Management
Association, New Delhi.
Rajeevan N., Sulphey, Dr. M. M. (2012). A Study on the Position of Small
and Medium Enterprises in Kerala Vis A Vis the National Scenario.
International Journal of Research in Commerce, Economics &
Management
Desai, Vasant. (2006). Small-scale Industries and Entrepreneurship.
Mumbai: Himalaya Publishing House.
Sandesara, J.C. (1988).Industrial Framework for Promoting Small-Scale
Industries in India. Asian Development Review, Vol.6, Issue 2, 10-40
47. Junejo, Mumtaz Ali; Rohra, Chandan Lal; and Maitlo, Dr. Ghulam
Murtaza. (2007). Sickness in Small-Scale Industries of Sindh: Causes &
Remedies.
A Case Study of Larkana Estate Area. Australian Journal of Basic and
Applied Sciences, Vol. 1, Issue 4, 860-865.
Sujatha, Y.; Reddy, P. Sunilkumar and Rao, Dr. K. Prahlada. (2012).
Small Scale Industries
Common Causes of Sickness and Probable Remedies. International
Journal of Current Research, Vol. 4, Issue, 01, 146-148.
S Anil Kumar, S.C. Poornima, M.K. Abraham, K. Jayashree (2003).
‘Entrepreneurship Development’, New Age Publishers.
49. Questionnaire
Name of Enterprise
Location (Urban/Semi-Urban/Rural)
Total Investment in Plant and Machinery
Inception Year
Nature of Business
(Service/Manufacturing)
What are the reasons of sickness of your
enterprise?
FACTORS
o Adverse Government Rules and Regulations
o Mismanagement
o Economic conditions
o Tough competition
o Shortage of manpower
o Shortage of raw material
o Inadequate technical know how
o High cost of production
o Poor quality control
o Excessive high wage structure
o Lack of trained high skilled labour or technically competent personnel
o Dependent on a single customer
o Transport bottlenecks
o Underutilization of resources
o Shortage of power supply
o Delay in getting financial assistance
o Inadequate maintenance and replacement
o Delay in the implementation of the project
o Increase in the cost due to late implementation of project
IMPORTANCE
