Ease of doing business for MSMEs: The revamped MSME Competitive (LEAN) scheme introduced by the government on Friday has made handholding and consulting more affordable for MSMEs who intend to adopt measures to reduce wastages in their manufacturing process. With an increased subsidy limit to 90 per cent from earlier 80 per cent on implementation cost of the consultant fees for MSMEs and stage-wise segregation of the implementation of lean manufacturing techniques, the scheme “has the potential to become a national movement and it aims to provide a roadmap to global competitiveness for the MSMEs of India,” said MSME Minister Narayan Rane during the launch of the scheme.
Moreover, the new scheme will provide an additional subsidy of 5 per cent to MSMEs which are part of the government’s SFURTI clusters, those owned by women or SC-ST entrepreneurs and the ones located in the northeast region. MSMEs registering through various industry associations or Overall Equipment Manufacturing (OEM) organizations will have another 5 per cent additional subsidy on the implementation cost of the consultant fees.
The scheme essentially aims at promoting the adoption of lean manufacturing techniques and methodologies by Udyam-registered MSMEs to reduce rejection rates and production cost along with optimisation of space utilisation and resources such as water, energy, natural resources etc., in order to enhance quality in product and processes, production and export capabilities, and overall profitability, according to the scheme’s revised guidelines.
Under the scheme, MSMEs will be provided handholding towards the implementation of lean tools at three levels – basic, intermediate, and advanced. Completion of each stage will be verified through an end-term assessment or assessment by the scheme’s implementation agencies like the National Productivity Council and Quality Council of India along with MSME –DFOs (Development and Facilitation Offices).
According to the guidelines, the basic level, which can be implemented in two months and will be free of cost, will largely be about knowing the principles and benefits of lean manufacturing among employees through the help of an online module hosted on the scheme’s portal. These principles include conceptual knowledge on the lead time, Takt Time (the rate at which one completes a product to meet customer demand), resource wastage, value-addition, non-value-added activities, concepts such as 5S, kaizen, visual management, value stream mapping, and introduction of other concepts related to industry 4.0 and lean six sigma.
MSMEs will have access to online technical support in case of doubts at the basic level. After successful completion of the online assessment examination, units will be eligible for the basic level certification.
The intermediate level will be of six months wherein MSMEs will have to form a Group of Enterprises (GoE) to achieve it. MSMEs will implement lean tools and techniques with onsite handholding available while the cost of implementation would be up to Rs 1.2 lakh per unit. The monitoring of the implementation of lean tools will be done by the implementing agencies online for the first four months followed by physical assessments during the last two months, the guidelines noted.
After completion of the intermediate level, MSMEs would be eligible for applying for the 12-month advanced level through the scheme’s portal. Similar to the intermediate level, for achieving the advanced level, MSMEs will have to form a GoE. The units will implement lean techniques including JIT – Kanban (Just in time inventory control system), cross-functional value stream mapping used to document, analyze and improve the flow of information, line balancing to optimize the assignment of operations to workstations in an assembly line to reduce idle time and the number of workstations needed. Other techniques to be implemented would be takt time, poka yoke (Japanese term for inadvertent error prevention), cellular layout, low-cost automation, etc.
The cost of implementation of the advanced level will be up to Rs 2.4 lakh per unit. The monitoring of the implementation of lean tools will be done by the implementing agencies online for the first seven months followed by physical assessments during the next five months.
Following the completion of the advanced level, MSMEs will be awarded Lean Certificate valid for three years subject to surveillance audit. MSMEs will have to apply afresh to continue availing of the scheme’s benefits. The scheme, however, is not mandatory for MSMEs and is currently available for manufacturing units in its first phase of launch. During the second phase, the scheme will be available for MSMEs in the service sector as well.