How the Lean Manufacturing scheme will help MSME sector

Janifha Evangeline

India has sent off an overhauled form of the MSME Cutthroat (LEAN) Plan to help micro, small, and medium-sized organizations to work on their worldwide intensity by using LEAN manufacturing tools with the direction of prepared LEAN experts. The plan means to lessen squandering, upgrade assets, and improve different parts of MSME tasks. Financial assistance and graded incentives will be provided to eligible MSMEs, and a nationwide publicity campaign will be launched to raise awareness.

Supporting the scheme's implementation will be a digital platform with a single user interface.
The Indian central government unveiled a revised version of the MSME Competitive (LEAN) Scheme on March 10, 2023, with the intention of encouraging micro, small, and medium-sized businesses (MSMEs) to adopt particular manufacturing methods.

The initiative, which was first launched as part of the MSME Champions Program, will help Indian micro, small, and medium-sized enterprises (MSMEs) become more globally competitive by boosting their quality, productivity, and performance. MSMEs will be able to achieve the basic, intermediate, and advanced levels of the LEAN Scheme by utilizing LEAN manufacturing tools like 5S, Kaizen, KANBAN, visual workplace, and Poka Yoka under the direction of trained LEAN consultants.

Up from the previous subsidy rate of 80%, the central government will now contribute 90% of the costs associated with this program's implementation, including consulting and handholding costs.

The MSME Competitive (LEAN) Scheme was established as a result of:

MSMEs must adjust to a rapidly changing business environment as domestic and international competition rises and supply chains worldwide are disrupted. In every value chain, a collaboration between large corporations and small suppliers is essential, and MSMEs play a crucial role in this ecosystem.

India intends to implement the Competitive (LEAN) Scheme to improve the competitiveness, efficiency, and productivity of MSMEs. This plan aims to reduce waste from processes, energy use, inventory management, and space management. By implementing LEAN practices, MSMEs can adapt to the shifting business landscape and remain competitive.

Components of the Scheme

Industry awareness programs and workshops

With the help of a variety of stakeholders, such as industry associations, implementing agencies, MSME-DFOs, district industries centres (DICs), and large enterprises/OEMs, nationwide awareness programs will be held to make MSMEs more aware of the scheme.

Handholding

MSMEs will receive assistance with the application of lean tools and techniques at three distinct levels: intermediate, advanced, and fundamental Verification of completion at each stage will be carried out at the project's conclusion or, if necessary, during an evaluation by the implementation agency and MSME-DFOs.

Benefits and Incentives

Prior to implementing LEAN tools and procedures, every MSME adopting the methodology at the basic, intermediate, or advanced levels will be required to sign a "LEAN Pledge." By encouraging MSMEs to make a firm commitment to enforcing the LEAN principles and philosophy in their day-to-day operations, this pledge aims to foster a culture of continuous improvement.

MSME units can request assistance from implementing agencies based on their level of readiness, interest, and necessity after taking the LEAN Pledge.

Public relations, brand promotion, and advertising A nationwide public relations campaign will be launched to promote the LEAN program.

Digital Platform

A digital platform with a single user interface will enable and support the LEAN scheme process electronically.

Financial assistance provided by the program:

MSMEs can get a 90 percent discount on implementation and consultant fees. MSMEs in the Northeast that are owned by women or members of scheduled tribe (ST) or scheduled caste (SC) minority communities and are a part of SFURTI clusters will receive an additional contribution of 5%.

MSMEs that register through industry associations or overall equipment manufacturing (OEM) groups will also receive an additional 5% assistance once all levels have been completed. An extra feature has been added to make it easier for OEMs and other organizations in the industry to get their supply chain vendors to join this effort. After the lean intervention procedure has been successfully completed in its entirety, OEMs or associations will receive US$6088 per MSME.