Lean Manufacturing Competitiveness Scheme for MSME's

1. Salient Features of New Scheme ofSalient Features of New Scheme of
Lean Manufacturing for MSMELean Manufacturing for MSME
Quality Council of India

2. Relevance of Lean in MSME
sector

3. Quality Council of IndiaQuality Council of India
3
Purpose :
To establish & operate national accreditation
structure and to promote Quality through
nation wide quality campaign
Mission :
Quality for the National Well Being

4. Current Chairman
Mr. Adil Zainulbhai
4
Governance
Past Chairmen:
Mr. Ratan N. Tata (1997-99)
Mr. Venu Srinivasan (1999-01)
Dr. R. A. Mashelkar (2001-07)
Mr. Ajay Shankar (2007-10)
Mr. Arun Maira (2010 -13)
Mr. Saurabh Chandra (2014)
Mr. Amitabh Kant (2014)

5. 5
* Currently an independent autonomous organization under
Department of Science & Technology
5

6. Working With MSME

7. ROLE of MSME

8. Status of MSME’s
The Micro, Small and Medium Enterprises (MSMEs) are a vital part of the Indian economy
contributing to over 45% of industrial production and around 40% of the total exports. There
are more than 13 million MSMEs in India employing about 31 million people, easily
the single largest contributor in terms employment generation in the
manufacturing sector
Manufacturing Sector has been
recognized as the main engine
for growth of the economy
The share of the manufacturing
sector in Indian National GDP
over the years has stagnated to
14-15% only
The National Manufacturing Policy of Government of
India envisages share of manufacturing to reach target of
25% of the National GDP by 2022
To achieve a sustained rate of growth, the
manufacturing sector needs to build and maintain
competitiveness needed to face the challenges
posed by globalization
Under the LM Scheme, MSMEs will be assisted in reducing their
manufacturing costs, through proper personnel management, better space
utilization, scientific inventory management, improved process flows,
reduced engineering time and so on with application of LM techniques

9. Problems being faced by MSME
Despite constituting more than 80 % of the total
number of industrial enterprises and supporting
industrial development, many MSMEs in India have
problems such as
•sub-optimal scale of operation
•technological obsolescence
•supply chain inefficiencies
•increasing domestic and global competition
•fund shortage
•change in manufacturing strategies
• turbulent and uncertain market scenario.

10. Lean Manufacturing

11. Lean Manufacturing goals

12. 4 Goals of Lean

13. Lean
The term “lean” is used because lean manufacturing uses
“less”…

14. Definition of Lean
A systematic approach to identifying and eliminating waste (non-
value-added activities) through continuous improvement by
flowing the product at the pull of the customer in pursuit of
perfection.”
Non-value added is an
activity that takes time,
resources or space, but
does not add to the value
of the product or service
itself.
Value-added is an activity that
transforms or shapes raw
material or information to meet
customer requirements.
Waste: Anything that adds Cost to the product without adding
Value

15. OrderProcessing, Transport, Storage, Waiting,
Rework, Machine Setup, Inspection, Machine
Breakdowns, etc...
The Basics of Lean ManufacturingThe Basics of Lean Manufacturing
It means :
- Eliminating work processes that add no value
to the product
- Simplify those processes that add value
RUN
TIME
Total Lead Time
Typically >95% of Total Lead Time is Non-Value Added!!

16. 5 Principles of Lean

17. 8 Wastes of Lean
“OMIT What U DO”

18. Lean Vs Traditional
Lean
Simple and visual signals
Demand driven
Inventory as needed
Reduce non-value added
Small lot size
Minimal lead time
Quality built
Value stream managers
Traditional
Complex
Forecast driven
Excessive inventory
Speed up value-added
work
Batch production
Long lead time
Inspected-in
Functional departments

19. Real Results
0 50 100
Lead Time
Reduction
Productivity
Increase
WIP
Reduction
Quality
Improvement
Space
Utilization
Benefits of Lean Manufacturing
Helps in –
Cost reduction
Cycle time reduction
“Waste” minimization
Elimination of non-value-
added activities
Resulting in a more
“lean,” competitive, agile,
and market-responsive
company

20. Lean
Tools
5S
Visual
Control
Standard
Operating
procedures
(SOP’s)
Just in Time
(JIT)
Kanban
System
Cellular
Layout
Value Stream
Mapping
Poka Yoke or
Mistake Proofing
SingleMinute
ExchangeofDiesor
QuickChangeover
TPM ( Total Productive
Maintenance)
KaizenBlitzof
RapidImprovement
Process

25. IntroductionIntroduction

26. Need for Lean ManufacturingNeed for Lean Manufacturing

27. Objective of SchemeObjective of Scheme

28. Implementation ArrangementImplementation Arrangement
A three tier arrangement has been proposed in the Scheme. A Mini Cluster (MC)
would be formed at the lowest tier. The units of MC would work with assigned Lean
Manufacturing Consultant to implement the specific Lean Manufacturing techniques.
The next higher level tier, National Monitoring and Implementing Units
(NMIUs) will be responsible for facilitating, implementation and monitoring of the
scheme. At the highest level, Screening and Steering Committee will provide
overall direction to the scheme and will be headed by the Development
Commissioner (MSME)
Mini Cluster/ DPG/ Sub Group/ Special Purpose
Vehicle (SPV)
Implementing Agency (IA)
National Monitoring and
Implementing Unit (NMIU)
Screening and Steering Committee (SSC)
Technical Advisory
Committee (TAC)MSME - DI

29. Lean Manufacturing Cluster (LMC)
Special Purpose Vehicle (SPV)
MSME -1 MSME -10MSME -2
Minimum 6 Units per
cluster
Association Or Existing SPV
MSME -1 MSME -10MSME -2
Minimum 6 Units per
cluster

30. Mini Cluster is a group of preferably 10 MSME’s
located within an identifiable and as far as practicable,
contiguous area and manufacturing same/ similar
products.
Mini Cluster
A mini cluster may be formed by a new SPV or as Sub
Group / Distinct Product Group of an Association or
Existing SPV.
In case SPV is not available in the cluster, the scheme
may be availed through another legal entity i.e.
concerned association by grouping the MSMEs in the
form of Distinct Product or Sub Groups
DPG and SG will be small groups within Association or
existing SPVs, formed with the approval of
Management of SPV or Associations as the case may
be.
A mini cluster will consist of
ideally 10 MSMEs (minimum
6 units)
All the units of MC would work with Assigned Lean
Manufacturing Consultant to implement specific Lean
Techniques.
In case the scheme is being availed by SPV ( existing or
new), a separate joint Bank Account will be opened in
a National Bank for receiving the funds from NMIU.
In case DPG/ SG is formed for taking benefit of the
scheme, the project specific account will be operated
jointly by Head of SPV or Association and the Nodal
officer of DPG/ SG.

31. Lean Manufacturing Consultants (LMCs)
An Individual or a Consultancy Firm ( National or International) duly registered with or
certified by a reputed certification agency in the field of manufacturing technology, quality
control etc. , would be an eligible entity to participate in the scheme as a LMC. NMIU will
obtain the approval of the SSC for empanelment of LM Consultants
Roles and Responsibility of LMC Consultants
Assess the existing system at each member unit of the concerned MC
Diagnostic Study Report for each cluster shall be prepared by assigned LM Consultant. The report
includes measurable targets with respect to baseline data. The baseline data and monitor able increment
may be different for each unit
Stipulated detailed step by step procedures and schedules for implementation of the LM Techniques ( pre-
defined milestones)
Identify the end targets in quantified parameters to be achieved by each unit at the end of the scheme
Work in close cooperation with each of the units to assess and then achieve the LM techniques
implementation and
Respond to specific queries raised by SPV or NMIU on its performance
To attend orientation / meet / re- orientation programme organized by NMIU/ Office of DC (MSME) so
as to clarify scheme implementation related doubts, if any and to share their experiences with peers and
also to update LMCs with the developments in the field. LMC’s would be required to attend these workshops
at their own cost. The cost of conducting workshops would be borne under the scheme.

32. Special Purpose
Vehicle
 “Trust” as per Indian Trust Act, 1882 or any similar Trust Act or
 A Private Limited company incorporated as per Indian Companies
Act , 1956 or
 A “ society” under The Societies Registration Act, 1860 ( including
any of state equivalent) or
 Any similar entity as approved by SSC from time to time
The MSMEs would be required to sign a MoU among
themselves. MoU should, inter alia, cover the following points
–
1.Collective and joint responsibility of units
2.Details of SPV or any other legal entity for receiving
Government of India funds/ grants from the NMIU
3.Undertaking to adhere to Terms and Conditions of the
Scheme
4.Undertaking to cooperate and work in collaboration with
LMC
5.Undertaking to continue to implement LM techniques after
the completion of project under the scheme.
6.Undertaking for periodic reporting on progress to NMIU
and
7.Appointment of a nodal officer to be authorized signatory
and single point of contact

33. National Monitoring and Implementation Unit (NMIU)

34. National Monitoring and Implementation Unit (NMIU)
1. Act as Implementation Unit on behalf of DC – MSME
2. Receiving applications for the scheme, examine through TAC
and put up for consideration of SSC.
3. Maintaining an panel of LM Consultants. Approval of List of LM
Consultants with SSC.
4. Maintenance of separate account of funds of the scheme
5. Release of fund to the beneficiaries against the reports on the
bases of progress of implementation and on satisfactory
performance of LMCs.
6. Undertake awareness generation programmes for the units and
encourage them to participate in the scheme.
7. Organize orientation program for LM Consultants
8. Industry expert for Apprising Team
9. Creating Benchmark Action Plans
10. Monthly Review and Trouble Shooting
11. Development of National Reports,
12. Submission of DSR, completion report etc. required under the
scheme
13. Publications, News letter etc.
14. Website

35. Technical Advisory CommitteeTechnical Advisory Committee
NMIU would be required to deal with a number of Mini Clusters and their
technical issues, take decisions on the matters of productivity, preparation
of reports, recommendations of clusters for approvals, progress etc. To
this end a Technical Advisor Committee ( TAC) would be constituted,
within NMIU, which would be empowered to take the decision on
productivity related issues .
Role and Responsibility of TAC –
Appraisal of the applications received from Mini Clusters and giving
recommendations on the same to Screening and Steering Committee ( SSC)
Cross Checking of implementation of the Lean Manufacturing milestones at the
unit level, against the LMC’s periodic report and accordingly approving acceptance
of Claims of units
Conducting field visits along with representatives of SPV’s at units participating in
the scheme
Conducting Orientation/ Meets for LMCs at periodic intervals
Maintaining a central data base and reference library for participating units and
LMCs;
Conducting periodic workshops and meets for participating units
Appraising the decisions of TAC to office of DC MSME through NMIU

36. Screening and Steering Committee (SSC)
1 AS & DC, MSME Chairman
2. AS & FA / Alternate EA ( IFW) Member
3. Representative of NMCC Member
4. Representative of expert Agencies like NPC and QCI Member
5 In Charge, NMIU Member
6 Representative of Associations Member
7 Director of MSME – DI Concerned / invitee Member
8 Nodal officer handling LMCs in DC, MSME Member- Secretary
9 Special Invitee / experts/consultants/ IAs/ SPVs

37. Implementation PeriodImplementation Period
The implementation Period will be maximum 18 months in each Mini Cluster to
complete Diagnostic Study Report , implement the action plan, , verify the incremental
stages, submission of final reports.
Performance of Implementation of LM Techniques will be divided in to 5 Milestones
 1st
Miles Stone – Completion of Cluster Specific Diagnostic Study Report (DSR). DSR
includes –
 Existing Status ( 5s, workspace management, Safety, health, energy conservation, Single
Minutes of Exchange of Dies, TPM, Reduction in inventory, Organization Structure,
Layout , process of Mnaufacture, visual base line survey, identifciation of 7 wastes,
inventory practices, top chronic problems etc.)
 Time Bound targets for achieving Incremental Improvements. Paramters are rated on a
scale of 1- 10
 Phase wise Action Plan
 Qualitative , Quantitative, monetary benefits likely to be achieved
2nd
, 3rd
, 4th
and 5th
Milestones – Incremental Improvements to next stage on
the scale of 1 -10

38. Participate in the
Screening and
Steering Committee
Meetings and
Meetings for
Selection of Lean
Consultants

39. Fund Flow Chart
Office of Development Commissioner (MSME)
National Manufacturing and Implementation Unit (NMIU)
SPV/
Association
For Awareness Program/
Orientation Program /
Workshops/ Training
Programs etc
Office of MSEM – DO
(For Awareness Program/
Training Programs ,
Workshops etc)
Lean
Consultants

40. Changes in Scheme
Particular Earlier Scheme
Requirement
New Scheme
Requirement
Implementation Period 12 months 18 months
LM Consultant Fees Rs. 23.8 lakhs Rs. 35 Lakhs ( Max.)
MSME –DI Not there Now will be involved in
Audit, Awareness
program, formation of
Cluster etc.
Payment Terms Fixed Pro Rata. Cluster size
limited to 6 units ( 8 +2 )
Contribution from
Industries
25% from Micro
50% from Small
Flat 20%
SPV formation SPV only Sub Groups/ Distinct
product Groups can also
form cluster

41. Knowledge Management

42. Kindly contact us:Kindly contact us:
1. Mr. CS Chauhan, M: 8800425599
Email Address: contact@qsbasics.com
2. Mr. Anurag Rastogi, Deputy Director
Email Address: anurag@qcin.org
3. Lianzalal Vaiphei, Assistant Director
Email address: lvaiphei.nabet@qcin.org
National Accreditation Board for Education and Training (NABET)
Quality Council of India, ITPI Building, 6th Floor, 4-A
Ring Road , I P Estate, New Delhi - 110 002
Ph. +91 11 23323416 / 417 / 418 / 419 /420
Fax. +91 11 23323415

43. Thank you
NABET
Quality Council of India