Lean manufacturing competitiveness scheme offers 80% subsidy to MSMEs


The scheme will be implemented in 500 mini clusters across the country during the 12th Plan period

By Srabani Sen

Tuesday, July 15, 2014: To give an impetus to the ambitious Lean Manufacturing Competitiveness Scheme that was designed to promote the competitiveness of micro, small and medium enterprises (MSMEs) in the electronics sector, the government recently appointed the Quality Council of India (QCI) and the National Accreditation Board for Education and Training (NABET) as the national monitoring and implementing units (NMIU).

Launched in 2009 by the Ministry of Micro, Small and Medium Enterprises, the scheme seems to have lost its sheen over the past five years. But the government cannot succeed in boosting manufacturing unless the competitiveness of the MSMEs is also enhanced, as they form the backbone of the electronics manufacturing sector in India, contributing 40 per cent of domestic manufacturing, besides a substantial contribution to exports.


After it was launched in 100 pilot clusters, the scheme will now be implemented in 500 other mini clusters across the country during the 12th Plan period (2012-17). A group of six to ten MSMEs can participate in the scheme and form a mini cluster.

Lean manufacturing concept

The systems in lean manufacturing aim to identify and remove waste from the manufacturing process, continuously. “Across all segments of the electronics industry, MSMEs have begun to appreciate the benefits of lean manufacturing and are transforming themselves. Many have already embarked on a lean programme or are seriously considering one,” says an official of the National Productivity Council (NPC).

Subsidy on consultant fees

The Lean Manufacturing Competitiveness Scheme aims to help MSMEs improve the quality of their products and systems and at the same time lower costs, all of which are essential in order to compete in national and international markets. “While big enterprises have been adopting lean programmes to remain competitive, MSMEs have generally stayed away from such programmes due to the cost factor. Besides, experienced and effective lean manufacturing counsellors or consultants are not easily available and are expensive to engage,” says an official in the office of the development commissioner, Ministry of MSME.

However, many MSMEs remain unaware that the Lean Manufacturing Competitiveness Scheme offers a subsidy of up to 80 per cent of the consultant fees for each mini cluster. The remaining 20 per cent can be shared by the participating units of the cluster.

Structure of scheme

A three-tiered structure has been envisaged in the scheme. Each mini cluster will work along with the lean manufacturing consultant to implement specific lean techniques in the cluster. The National Monitoring and Implementation Unit (NMIU) forms the second tier, which will be responsible for facilitation, implementation and monitoring of the scheme. At the highest level is the screening and steering committee to provide overall direction to the scheme.

Lean manufacturing consultants will assess the existing manufacturing system of the member units of the mini cluster(s), and formulate detailed procedures and schedules for implementing and achieving lean techniques. A special purpose vehicle (SPV) will be formed in each cluster.

Under the scheme, initially, awareness programmes will be organised in different industry clusters to explain the benefits of lean manufacturing. Thereafter, competent consultants will be deployed to identify cluster-specific needs and suggest appropriate lean techniques to resolve them. The broad techniques envisaged under the scheme include total productive maintenance (TPM), 5S, visual control, standard operation procedures, just in time (JIT), kanban system, cellular layout, etc.

Who can apply

Interested industry associations, as well as groups of about 10 MSME units that qualify under MSME-Development Act, 2006, can submit applications to the National Productivity Council (NPC).

For the guidelines of the scheme, visit www.dcmsme.gov.in

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine