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

Transcription

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

2 Relevance of Lean in MSME sector

3 About QCI - Quality Council of India Cabinet decision to establish Quality Council of India, in 1996 formed in January Non-profit autonomous society Joint initiative of the Government of India, and the Indian Industry, namely ASSOCHAM, CII and FICCI. PPP 50% seed money by Govt; 50% by the industry bodies Purpose: To establish & operate national accreditation structure and to promote Quality through nation wide quality campaign Mission Quality for the National Well Being

4 Governance Council 38 members Governing Body 11 members out of the council Chairman - appointed by the Prime Minister on recommendation of the Government and Industry. Past Chairmen: Mr. Ratan N. Tata ( ) Mr. Venu Srinivasan ( ) Dr. R. A. Mashelkar ( ) Mr. Ajay Shankar ( ) s Mr. Arun Maira ( ) Mr. Saurabh Chandra ( 2014) Current Chairman Mr. Amitabh Kant Secretary, DIPP, Ministry of Commerce and Industry

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

6 Working With MSME Training of ITI Teachers 1800 Teachers trained on QMS/ QT Tools Awareness Programs on QMS/ QT Tools -198 programs, 7000 individuals trained on QMS/ QT tools Cluster project : Implementation of QMS/ QT Tools in 10 identified clusters Training of Polytechnic Teachers on QMS/ QT tools Evaluation Study report on Lean Manufacturing Competitiveness National Workshop on Enabling MSME to be Competitive through Quality Tools

7 ROLE of MSME Worldwide, micro, small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development. MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. MSMEs in India account for more than 80% of the total number of industrial enterprises and produce over 8000 value-added products. It is estimated that in terms of value, the sector accounts for 45% of the manufacturing output and 40% of the total export of the country and employs over 6 crore people. Further, in recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost (skill development).

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 National Manufacturing Policy of Government of India envisages share of manufacturing to reach target of 25% of the National GDP by 2022 The share of the manufacturing sector in Indian National GDP over the years has stagnated to 14-15% only 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 Lean manufacturing is aimed at the elimination of waste in every area of production including - customer relations, - product design, - supplier networks and - factory management The goal of Lean Manufacturing is to incorporate - less human effort, - less inventory, - less time to develop products, and - less space to become highly responsive to customer demand, while at the same time producing top quality products in the most efficient and economical manner.

11 Lean Manufacturing goals

12 4 Goals of Lean Improve Quality In order to stay competitive in today s marketplace, a company must understand its customers' wants and needs and design processes to meet their expectations and requirements. Eliminate Waste Waste is any activity that consumes time, resources, or space but does not add any value to the product or service. Reduce Time Reducing the time it takes to finish an activity from start to finish is one of the most effective ways to eliminate waste and lower costs.. Reduce Total Cost To minimize cost, a company must produce only to customer demand. Overproduction increases a company s inventory costs due to storage needs.

13 Lean The term lean is used because lean manufacturing uses less 1 Labor in factory 2 Manufacturing space 3 Capital Investment 4 5 Material Time between the customer order and the product shipment

14 Definition of Lean A systematic approach to identifying and eliminating waste (non-value-added activities) throughcontinuous 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 The Basics of Lean Manufacturing It means : - Eliminating work processes that add no value to the product - Simplify those processes that add value Typically >95% of Total Lead Time is Non-Value Added!! RUN TIME OrderProcessing, Transport, Storage, Waiting, Rework, Machine Setup, Inspection, Machine Breakdowns, etc... Total Lead Time

16 5 Principles of Lean Define Value from the Customer Perspective Specify value from the standpoint of the end customer by product family. Identify the value stream Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value. Make the process flow Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer Pull from the customer Make only what the customer has ordered Head toward Perfection As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

17 8 Wastes of Lean OMIT What U DO O Overproduction What Waiting M I T Motion Inventory Transportation U Do Underutilized People Defects Over-processing

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 Benefits of Lean Manufacturing Helps in Cost reduction Real Results Lead Time Reduction Productivity Increase WIP Reduction Quality Improvement Space Utilization Cycle time reduction Waste minimization Elimination of nonvalue-added activities Resulting in a more lean, competitive, agile, and marketresponsive company

20 5S TPM ( Total Productive Maintenance) Poka Yoke or Mistake Proofing Lean Tools Value Stream Mapping Cellular Layout Just in Time (JIT) Kanban System

21 The 5 S 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 & Sustain. Visual controls such as cartoons, charts, light signals, Lane marking on floor, Safety instructions, Warning signs, Poka-Yoke instructions etc. can be displayed all over the work place. All verbal instructions should be converted to SOPs to remove dependency on skilled personnel in achieving required product quality level, consistency, effectiveness and efficiency.

22 JIT is a Japanese manufacturing philosophy to make the right product in right quantity at the right time. This almost results in zero inventory and shortest possible cycle time. In Kanban System, components are pulled by assembly or subsequent work centers and the containers are replenished with the right quantities by the previous work center, which reduces the inventory of unwanted components. Cellular Layout is improved manufacturing system, family wise component completion is aimed at within the smaller self contained cell, which is a part of a big factory, as compared to operation wise completion in traditional functional layout

23 Value Stream Mapping covers all activities, both value added and non-value added, and helps in arriving at best layout of all resources required for making the product. Poka Yoke is again a Japanese technique used to prevent errors occurring at their source of origin, and it finally leads to a 'Zero Defect' situation. Applying ingenious methods, set up time is minimized and brought to less than ten minutes; there by smaller batches as required by the customer can be taken up for manufacturing.

24 TPM involves operators, maintenance staff and management working together to improve overall operation of any equipment. Operators, who first identify noisy or vibrating motors, oil or air leaks, can be trained to make simple repairs to prevent major and costly break downs. Kaizen Blitz or Improvement Process is an intense management programme, which results in immediate change and bottom line improvement. Both management staff and workers are involved in this.

25 Introduction The Government has announced formulation of National Manufacturing Competitiveness Programme in with an objective to support the Small and Medium Enterprises (SMEs) in their endeavor to become competitive and adjust the competitive pressure caused by liberalization and moderation of tariff rates Office of the Development Commissioner ( Micro, Small and Medium Enterprises), Ministry of MSME has launched the National Manufacturing Competitiveness Programme to improve the competitiveness of Micro, Small and Medium Enterprises (MSME ) Sector. The initiative under NMCP aims at increasing productivity, upgrading technology and conserving energy in manufacturing processes as well as expanding domestic and global market share of Indian MSME products. One of the components of NMCP is Lean Manufacturing Competitiveness Scheme and its upscale version ready to launch after successful completion of first phase. The scheme will be implemented in 500 mini clusters in 12 th Five Year Plan.

26 Need for Lean Manufacturing Ever changing globalized environment has been posing challenges of competitiveness and survival to all the constituents of the economy. It has been more so for MSMEs in the manufacturing sector. MSME units are so engaged in their day to day management issues that they don t have time and resources to dedicate a strategic understanding of the need and acquiring means of various techniques which would help them in enhancing their productivity and hence being competitive in the world market Lean Manufacturing is a set of techniques, which have evolved over a long period and are based on various minor to major breakthroughs that help in reducing cost and hence increase productivity and competitiveness,.

27 Objective of Scheme Reducing Waste Elimination of Waste is prime goal of lean Over Production, Waiting Time, Transportation within the units, Over Processing, Inventory ( Raw Material, Finished Goods, Finished Goods), Motions, Defects Increasing Productivity Introducing Innovative Practices for Improving overall Competitiveness Increasing productivity is another goal of Lean Cycle time of products, Cost of Product ( Labour Cost, Material Cost, Overhead Cost), Energy Conservation ( Electricity, Fuel ( Coal/ Oil), Productivity Space Utilization, Machine Utilization, No. of Accidents, Green Productivity ( Pollution Control, Pollution Prevention) New Process, New Technology, New product(s), New Management practices etc.) Inculcating Good Management Systems Company level governance, business management, functional management, quality management system, environment, occupational health & safety or any other parameter related to good management system Imbibing a Culture of Continuous Improvement culture of continuous improvement is the aim of implementation of lean tool in the organization. Culture of continuous improvement helps the organization in long term for sustained growth and development of the organization.

28 Implementation 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) Screening and Steering Committee (SSC) MSME - DI National Monitoring and Implementing Unit (NMIU) Technical Advisory Committee (TAC) Implementing Agency (IA) Mini Cluster/ DPG/ Sub Group/ Special Purpose Vehicle (SPV)

29 Minimum 6 Units per cluster MSME -1 MSME -2 MSME -10 Lean Manufacturing Cluster (LMC) Special Purpose Vehicle (SPV) Association Or Existing SPV Sub Group (SG) / Distinct Product Group (DPG) Minimum 6 Units per cluster MSME -1 MSME -2 MSME -10

30 A mini cluster will consist of ideally 10 MSMEs (minimum 6 units) Mini Cluster 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. AminiclustermaybeformedbyanewSPVorasSub 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. 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 parameterstobeachievedbyeachunitattheendofthe 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 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 Special Purpose Vehicle 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) National Monitoring and Implementing Unit (NMIU) will be a competent National Level organization, with experience and competence in Quality Management and / or Lean Manufacturing programmes and will function as MSMEs outsourced project Control Room National Monitoring and Implementing Unit (NMIU) will be responsible for facilitating, implementation and monitoring of the scheme NMIU will monitor every Stage of the program on behalf of the Development Commissioner (MSME) The field level office / project offices of the NMIU will function as Implementing Agency implementation of the projects (IA) for These IAs will discharge day to day activities for smooth and effective implementation of the projects. IAs will coordinate with LMC, cluster units, concerned associations, NMIU, MSME DI etc. LMCs and IAs will submit progress report to NMIU which in turn will send consolidated report to the office of DC MSME. The end of the project reports may be prepared to show the tangible results obtained during the implementation of the LM Interventions

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 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) At the highest level, SSC will guide, review, monitor and provide overall direction for implementation of the scheme and will be headed by DC (MSME). SSC will have Overall responsibility for policy formulation, scheme implementation and monitoring. It will be empowered to take all Key decisions related to the Scheme and approve minor modifications / procedural changes in the guidelines for operational expediency SSC would deliberate on the issues put up by NMIU. It would laid down detailed implementation Strategy for NMIU. 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 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 1 st 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 2 nd,3 rd,4 th and 5 th Milestones Incremental Improvements to next stage on the scale of 1-10

38 To organize program in coordination with NMIU, LMC, Associations, other stakeholders etc. To Participate in 1 st, 3 rd and 5 th audits of lean implementation jointly with NMIU Facilitate the beneficiary MSMEs to submit application for availing the scheme MSME -DI 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. 22 lakhs Rs. 36 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 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 Orientation Program for LMCs Defined deliverables in measurable / parameters for evaluating/ reporting Development of interactive dynamic website Benchmark action plans Publication of Newsletter, Book of Knowledge, Success stories, case studies

42 Kindly contact us: 1. Mr. Anurag Rastogi, Deputy Director Address: 2. Lianzalal Vaiphei, Assistant Director address: 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 Ph / 417 / 418 / 419 /420 Fax

43 Thank you NABET Quality Council of India