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ToggleConsidering the role MSMEs plays in productivity, competitiveness and employment generation and also resource optimization of the country, Ministry of MSME, Government of India, has implemented the MSME Competitive (Lean) Scheme for manufacturing MSMEs which emphasises on reduction of wastages in processes, inventory management, space management, energy consumption etc.
Before getting into the details of the scheme, let us understand what Lean Manufacturing technology is all about and why the government is emphasizing on it.
Lean manufacturing is a methodology emphasising on reducing the waste within manufacturing systems as much as possible, while simultaneously maximising productivity.
Waste here can be referred to as anything that does not add to value to the customers and only adds to cost.
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In the context of lean manufacturing or Lean operations, waste refers to any activity or process that does not add value to the product or service being produced. The following are the seven types of waste commonly identified in lean manufacturing:
6.Defects:Production of defective products or services, resulting in additional work and cost to correct the errors.
Lean manufacturing is an important methodology for reducing waste, improving efficiency, and increasing customer satisfaction.
Here are a few reasons, why it is important:
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Overall, lean manufacturing is important because it helps companies operate more efficiently, effectively, and competitively in a rapidly changing business environment.
Lean manufacturing requires a relentless pursuit of reducing anything that does not add value to a product, meaning waste. This makes continuous improvement, which lies at the heart of lean manufacturing, a must.
Other important concepts and processes lean relies on include:
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Now, let us understand What Lean Manufacturing Competitiveness Scheme (LMCS) holds for MSMEs.
Ministry of Micro, Small & Medium Enterprises, Government of India, aims to implement the MSME Competitive (Lean) Scheme for MSMEs with an objective to enhance their productivity, efficiency, and competitiveness by reduction of wastages in processes, inventory management, space management, energy consumption, etc.
LMCS brings improvement in the quality of products and lowers costs, which are essential for competing in national and international markets.
The larger enterprises in India have been adopting LMCS to remain competitive, but MSMEs have generally stayed away from such Programmes as they are not fully aware of the benefits.
Besides, experienced and effective Lean Manufacturing Counsellors or Consultants are not easily available and are expensive to engage and hence most MSMEs are unable to afford LMCS. So, government has brought this scheme to make MSMEs aware of the benefits of it and provided some incentives.
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The main objective of the Lean Manufacturing Competitiveness Scheme (LMCS) is basically a business initiative to reduce “waste” in manufacturing and enhance the Domestic and Global Competitiveness of MSMEs through the application of various Lean Techniques.Waste reduction is the motive of this scheme
MSME Lean Manufacturing scheme involves applying Lean Techniques as discussed earlier (e.g., 5S,, Kanban System, Poka Yoke etc.) to identify and eliminate waste and streamline a system. The focus is on making the entire process flow, not improving only a few operations. Worker empowerment is also emphasized throughout the effort.
The approach involves engagement of Lean Manufacturing Consultants (LMCs) to assess the existing manufacturing system of member units of the Mini Cluster(s) and stipulate detailed step by step procedures and schedules for implementing and achieving of lean techniques.
Mini Cluster is a group of basically 10 MSMEs located within an as far as identifiable, practicable,ontigous area, manufacturing same or similar products.
All the units of Mini Cluster will assigned withLean Manufacturing Consultants (LMCs) to implement specific LEAN Techniques.
A Special Purpose Vehicle (SPV) will be formed in each cluster. It is expected that once MSMEs are introduced to the benefits and savings that accrue from LM techniques, they would themselves continue the Scheme from the second year onwards at their own expens
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MSMEs will be made aware of the Scheme through Nation-wide awareness programmes (online and/or face-to-face, as appropriate) with the assistance of stakeholders like Industry Associations, Implementing Agencies, MSME-DFOs, District Industries Centres (DICs), Large Enterprises/OEMs.
Stakeholders like the MSME Officers, Assessors and Consultants will be trained on the MSME Competitiveness (Lean) Scheme to enable an effective implementation by Implementing Agencies like QCI, NPC.
MSMEs will be provided handholding towards the implementation of Lean Tools and Techniques at three different levels – Basic, Intermediate, and Advanced. Completion of each stage is verifiable end term assessment or assessment by Implementation Agency along MSME -DFOs as the case may be.
Graded incentives will be announced by the Ministry of MSME for MSMEs for encouraging MSME units’ participation under the scheme. Implementation of Lean (Generation of Lean ID) Lean Pledge & Undertaking (Generation of Lean Pledge Level) Implementation of Lean (Basic, Intermediate, Advanced)
For popularising the Lean Scheme, a Nation-wide publicity will be done.
Lean Scheme process will be e-enabled through a single window digital platform which will be utilized for the implementation of the scheme.
MSME Competitive (Lean) Scheme can be attained in THREE Levels after registering and taking the Lean Pledge:
a) Every MSME that embarks on the journey of Lean (Basic, Intermediate, Advanced) will have to take a “Lean Pledge” before undertaking the journey of implementation of lean tools and techniques.
b) The intent of taking a Lean Pledge is to take a “pre-commitment” or a solemn promise by MSMEs to uphold the values of Lean Practices and Philosophy in their functioning and to urge them to move ahead on the journey of Lean.
c) After taking the Lean Pledge, the MSME can apply for handholding of its units depending on the need and level of preparedness and interest of MSME unit. Lean Scheme can be implemented by MSME units in the above three levels.
The scheme is open to all manufacturing MSEs. The units should be registered with the DIC (EM-II) or with any other agency (professional body, association, Government agency, department, etc.). The units are required to form a MC, ideally of 10 units (minimum 6), by signing among themselves a Memorandum of Understanding (MoU) to participate in the scheme.
Financial Assistance for MSME Units
| Basic Level | Intermediate level | Advanced Level Implementation Cost |
Implementation Cost (Max. per unit) | Free | ₹ 1,20,000 + Taxes | ₹ 2,40,000 + Taxes |
Beneficiary Contribution | – | 10% of Total Cost of implementation i.e., up to ₹12,000 + Taxes per unit (Max.) | 10% of Total Cost of Implementation i.e., up to ₹ 24,000 + Taxes per unit (Max.) |
GOI Contribution | – | 90% of Total Cost of Implementation-MSME unit will be entitled for up to ₹1,08,000 (max.) (Taxes Extra) | 90% of Total Cost of Implementation- MSME unit will be entitled for up to ₹2,16,000 (max.) towards the Implementation cost (Taxes Extra) |
Additional Benefit | – | a) Additional 5% GOI contribution for MSMEs which are part of SFURTI Clusters, Woman/SC/ ST owned, NER located MSMEs. | |
| – | b) OEM/ Industry Association route: | |
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| (i) Additional 5% GoI contribution shall be given to the MSMEs registering through Industry Association/ OEM after completion of all levels. | |
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| (ii) ₹ 5000/ per MSME shall be given to OEM/ Association after completing all stages of lean intervention. | |
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| (iii) For availing this benefit MSME unit need to mention on while applying – Applying under Original Equipment Manufacturer (OEM) or Applying under Industry Association (IA). |
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