Why in news?

Recently, Union Minister for MSME Shri Narayan Rane launched the MSME Competitive (LEAN) Scheme today. Speaking on the occasion Shri Rane said that LEAN has the potential to become a national movement and that it aims to provide a roadmap to global competitiveness for the MSMEs of India.

More on news:

• Under the Scheme, MSMEs will be assisted in reducing their manufacturing costs, through proper personnel management, better space utilization, scientific inventory management, improved processed flows, reduced engineering time and so on.
• LMCS (Lean Manufacturing Competitiveness Scheme) also 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.
• Beside these issues, 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.

Scheme Benefits & Highlights

• Financial assistance is provided for implementation of lean manufacturing techniques, primarily the cost of lean manufacturing consultant (80% by GoI and 20% by beneficiaries).
• Lean manufacturing consultants (LMCs) will raise bills for services provided to Special Purpose Vehicle (SPV). SPV will, in turn, pay the first installment of 20% to the LMC and will obtain reimbursement from the NMIU. Thereafter, Ministry of MSME will transfer funds to the NMIU. SPV payments to LMC will be on a milestone basis in 5 tranches, each of 20% of the amount fixed.

Challenges

• The larger enterprises in India have been adopting LMCS to remain competitive, but MSMEs have generally stayed away from such programs as they are not fully aware of the benefits.
• Besides these issues, 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.

What is Lean Manufacturing?

• Lean manufacturing is a production process based on an ideology of maximising productivity while simultaneously minimising waste within a manufacturing operation. The lean principle sees waste is anything that doesn’t add value that the customers are willing to pay for.
• The benefits of lean manufacturing include reduced lead times and operating costs and improved product quality.
• Also known as lean production, the methodology is based on a specific manufacturing principles that have influenced production systems across the world as well as those of other industries including healthcare, software and various service industries.

What are the 5 Principles?

The five core principles of lean manufacturing are defined as value, the value stream, flow, pull and perfection. These are now used as the basis to implement lean.

1. Value: Value is determined from the perspective of the customer and relates to how much they are willing to pay for products or services. This value is then created by the manufacturer or service provider who should seek to eliminate waste and costs to meet the optimal price for the customer while also maximising profits.

2. Map the Value Stream: This principle involves analysing the materials and other resources required to produce a product or service with the aim of identifying waste and improvements. The value stream covers the entire lifecycle of a product, from raw materials to disposal. Each stage of the production cycle needs to be examined for waste and anything that doesn’t add value should be removed. Chain alignment is often recommended as a means to achieve this step.

3. Create Flow: Creating flow is about removing functional barriers to improve lead times. This ensures that processes flow smoothly and can be undertaken with minimal delay or other waste. Interrupted and disharmonious production processes incur costs and creating flow means ensuring a constant stream for the production or service delivery.

4. Establish a Pull System: A pull system works by only commencing work when there is demand. This is the opposite of push systems, which are used in manufacturing resource planning (MRP) systems. Push systems determine inventories in advance with production set to meet these sales or production forecasts. However, due to the inaccuracy of many forecasts, this can result in either too much or not enough of a product being produced to meet demand. This can lead to additional warehousing costs, disrupted schedules or poor customer satisfaction. A pull system only acts when there is demand and relies on flexibility, communication and efficient processes to be successfully achieved.

5. Perfection: The pursuit of perfection via continued process improvements is also known as ‘Kaizen’ as created by Toyota Motor Corporation founder Kiichiro Toyoda (see ‘When and Who Invented Lean Manufacturing?’ above). Lean manufacturing requires ongoing assessment and improvement of processes and procedures to continually eliminate waste in an effort to find the perfect system for the value stream. To make a meaningful and lasting difference, the notion of continuous improvement should be integrated through the culture of an organisation and requires the measurement of metrics such as lead-times, production cycles, throughput and cumulative flow.

 

 

 

 

 

 

Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1905561