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GOVERNMENT OF INDIA - DCMSME

GOVERNMENT OF INDIAGUIDELINESFor the Implementation ofLean Manufacturing Competitiveness SchemeDevelopment CommissionerMicro, Small & Medium EnterprisesGovernment of IndiaNirman Bhavan, New Delhi-110 Component ofNational Manufacturing Competitiveness ProgrammeMay, 2010 Published by The Development Commissioner, Micro, Small & Medium Enterprises, Nirman Bhavan, New Delhi-110108 Printed at Tara Art Printers Pvt. Ltd., B-4, Hans Bhavan, Zafar Marg, New Delhi-110002 National Manufacturing Competitiveness Programme4 Lean Manufacturing Competitiveness Scheme5 CONTENTSSl. Scheme of Lean Manufacturing Commissioner (MSME) and Framework1010.

GOVERNMENT OF INDIA GUIDELINES For the Implementation of Lean Manufacturing Competitiveness Scheme Development Commissioner Micro, Small & Medium Enterprises

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1 GOVERNMENT OF INDIAGUIDELINESFor the Implementation ofLean Manufacturing Competitiveness SchemeDevelopment CommissionerMicro, Small & Medium EnterprisesGovernment of IndiaNirman Bhavan, New Delhi-110 Component ofNational Manufacturing Competitiveness ProgrammeMay, 2010 Published by The Development Commissioner, Micro, Small & Medium Enterprises, Nirman Bhavan, New Delhi-110108 Printed at Tara Art Printers Pvt. Ltd., B-4, Hans Bhavan, Zafar Marg, New Delhi-110002 National Manufacturing Competitiveness Programme4 Lean Manufacturing Competitiveness Scheme5 CONTENTSSl. Scheme of Lean Manufacturing Commissioner (MSME) and Framework1010.

2 Implementation Time Line1411. Approval Process1412. Modalities of Fund Transfer1413. Format for Application by MCs/SPV Annexure - 11614. Power of Attorney Annexure - 218 National Manufacturing Competitiveness Programme6 ABBREVIATIONSCMTI Central Manufacturing Technology InstituteCPs Condition PrecedentsDC (MSME) Development Commissioner (MSME)DGFASLI Director General Factory Advice Service & Labour InstitutesGDP Gross Domestic ProductGOI GOVERNMENT of IndiaIA Implementing AgencyIFW Integrated Finance WingILO International Labour OrganizationLMC Lean Manufacturing ConsultantLMS Lean Manufacturing SchemeMC Mini-ClusterMSME Micro.

3 Small & Medium EnterprisesMSME - DI MSME-Development InstituteNMCC National Manufacturing Competitiveness CouncilNMCP National Manufacturing Competitiveness ProgrammeNMIU National Monitoring and Implementing UnitSPV Special Purpose VehicleSSC Screening and Steering CommitteeT & C Terms and ConditionsTAC Technical Advisory CommitteeLean Manufacturing Competitiveness Scheme7 INTRODUCTIONThe Development Commissioner, Ministry of Micro, Small & Medium Enterprises (DevelopmentCommissioner - MSME), GOVERNMENT of INDIA will implement the Lean Manufacturing Scheme(the Scheme), for the benefit of Micro, Small & Medium Enterprises(MSMEs) during the 11thPlan Period.

4 The objective of the Scheme is to enhance the manufacturing competitiveness ofMSMEs through the application of various Lean Manufacturing (LM) techniques. The generalapproach involves engagement of Lean Manufacturing Consultants (LMC) to work with selectedMSME s in the chosen clusters with financial support by the GOVERNMENT . A maximum of 80%of the project cost for each cluster will be borne by the GOVERNMENT . The assistance would belimited to the first year, of the Scheme, which would cover 100 Mini Clusters (approximately10 MSMEs per cluster), spread all over the Manufacturing has been recognized as the main engine for growth of the economy.

5 It hasbeen estimated that in order to achieve a GDP growth rate of 9% per annum, the manufacturingsector has to grow at 12% per annum. The MSME sector, comprising of 114 lakh units hasbeen a significant contributor to manufacturing by accounting for nearly 40% of the totalindustrial To achieve a sustained rate of growth, the manufacturing sector needs to build and maintaincompetitiveness needed to face the challenges posed by Under the Scheme, MSMEs will be assisted in reducing their manufacturing costs, throughproper personnel management, better space utilization, scientific inventory management,improved process flows, reduced engineering time and so on with the application of LMtechniques.

6 The Scheme is basically a business initiative to reduce waste in Scheme envisages improvement in the quality of products and lowering of cost, which isessential for competing in national and international The Scheme will be implemented under the overall superintendence, control and direction ofDC (MSME) by Special Purpose Vehicles (SPVs). A SPV will be formed in each cluster. It isexpected that once MSMEs are introduced to the benefits and savings that accrue from LMtechniques, they would themselves continue the Scheme from the second year onwards attheir own expense. A three tier implementing structure will be in place with a group of tenor so with MSMEs at the lowest local-tier and a Lean Manufacturing Screening and SteeringCommittee (SSC) under DC(MSME) at the highest THE SCHEME Need for Lean Manufacturing :Ever changing globalized environment has been posing challenges of competitiveness andsurvival to all the constituents of the economy.

7 It has been more so for MSME units in theGUIDELINES FOR THE IMPLEMENTATION OFLEAN MANUFACTURING COMPETITIVENESS SCHEMEN ational Manufacturing Competitiveness Programme8manufacturing sector. It has been noticed that units are so engaged in the day to daymanagement issues that they don t have time and resources to dedicate for a strategicunderstanding of the need and acquiring means of various techniques which would helpthem in enhancing their productivity and hence being competitive in the world. LeanManufacturing is a set of techniques, which have evolved over a long period and are basedon various minor to major breakthroughs that help in reducing cost and hence increaseproductivity.

8 A list of main LM techniques with brief description of each is given below:1. 5S System: The 5S systems is a workplace organization which helps in getting the junk out of the work area and set of procedures to keep it that way. 5S stands for Sort,Set in order, Shine, Standardize & Visual Control: Visual controls such as cartoons, charts, light signals, Lane markingon floor, Safety instructions, Warning signs, Poka-Yoke instructions etc., can be displayedall over the work Standard Operating Procedures (SOPs): All verbal instructions should be convertedto SOPs to remove dependency on skilled personnel in achieving required productquality level, consistency, effectiveness and Just in Time (JIT): It s a Japanese manufacturing philosophy to make the right productin right quantity at the right time.

9 This almost results in zero inventory and shortestpossible cycle KANBAN System: In this, components are pulled by assembly or subsequent workcenters and the containers are replenished with the right quantities by the previous workcenter, which reduces the inventory of unwanted Cellular Layout: In this improved manufacturing system, familywise componentcompletion is aimed at within the smaller self contained cell, which is a part of a bigfactory, as compared to operationwise completion in traditional functional Value Stream Mapping: It covers all activities, both value added and non-valueadded, and helps in arriving at best layout of all resources required for making Poka Yoke or Mistake Proofing: It is again a Japanese technique used to preventerrors occurring at their source of origin, and it finally leads to a Zero Defect Single Minutes Exchange of Dies or Quick Changeover (SMED): Applyingingenious methods, set up time is minimized and brought to less than tenminutes.

10 Thereby smaller batches as required by the customer can be taken up TPM (Total Productive Maintenance): TPM involves operators, maintenance staffand management working together to improve overall operation of any , who first identify noisy or vibrating motors, oil or air leaks, can be trained tomake simple repairs to prevent major and costly break Kaizen Blitz or Rapid Improvement Process: It is an intense management programme,which results in immediate change and bottom line improvement. Both managementstaff and workers are involved in Manufacturing Competitiveness OBJECTIVES OF LEAN MANUFACTURING SCHEMEThe objectives of Scheme are to increase the competitiveness of the MSME sector through theadoption of LM techniques with the objective of : Reducing waste; Increasing productivity; Introducing innovative practices for improving overall competitiveness; Inculcating good management systems.


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