Lean Manufacturing Scheme for MSMEs

Under this scheme, the Government will support MSMEs to enhance their productivity and competitiveness by reducing their manufacturing costs, through proper personnel management, better space utilization, scientific inventory management, improved process flows, and reduced engineering time and so on.
The LM techniques also result in reduction in rejection, standardization of processes, better layout of machines resulting in reduced transportation of products during manufacturing, etc.
The implementation of LM techniques leads to cost reduction for MSMEs.
It also has lot of social benefits in terms of training of labour, creation of knowledge, increased labour productivity, lower input costs to other industries, and introduction of new production equipment / methods in manufacturing and development of work culture in society.

OBJECTIVES:

1. Increase Productivity;
2. Improved quality, cost and delivery time of product & services;
3. Outstanding customer service;
4. Movement towards zero waste;
5. Increased profits and growth to business; and
6. Building a culture of continual improvement.

MAIN LEAN MANUFACTURING TECHNIQUES:

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 & Sustain.

2. Visual Control: 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.

3. Standard Operating Procedures (SOPs): All verbal instructions should be converted to SOPs to remove dependency on skilled personnel in achieving required product quality level, consistency, effectiveness and efficiency.

4. Just in Time (JIT): It’s 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.

5. KANBAN System: In this, 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.

6. Cellular Layout: In this 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.

7. Value Stream Mapping: It 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.

8. Poka Yoke or Mistake Proofing: It is again a Japanese technique used to prevent errors occurring at their source of origin, and it finally leads to a ‘Zero Defect’ situation.

9. Single Minutes Exchange of Dies or Quick Changeover (SMED): Applying ingenious methods, set up time is minimized and brought to less than ten minutes; thereby smaller batches as required by the customer can be taken up for manufacturing.

10. TPM (Total Productive Maintenance): 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.

11. Kaizen Blitz or Rapid Improvement Process: It is an intense management programme, which results in immediate change and bottom line improvement. Both management staff and workers are involved in this.

ELIGIBILITY:

• The Scheme is open to all Micro, Small and Medium Manufacturing Enterprises throughout the country.
• The units should be registered with DIC (EM-II) or with any other agency (Professional body, association. Govt. agency, department, etc).
• The MSMEs are required to sign a MOU among themselves (Annexure 1) covering 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/ grant from the NMIU;
  3. Undertaking to adhere to Terms and Conditions of the Scheme;
  4. Undertaking to co-operate and work in collaboration with LMC(Lean Manufacturing Consultant);
  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 the authorized signatory and single point of contact.

FINANCIAL ASSISTANCE:

A financial support by the Government of India up to a maximum of 80% of the Consultant fees for each Mini Cluster will be provided. Remaining 20% is to be borne by the beneficiaries MSME units.

Lean Manufacturing Consultant (LMC) would raise the bill for the services rendered to the SPV. The payment to LMC by SPV would be on a milestone basis in 5 tranches of 20% each. After the achievement of first stage (preparation and acceptance of DSR), the SPV will pay its contribution to the LMC (first tranche of 20% fee). The subsequent four tranches will be paid out of scheme funds by the NMIU. NMIU will release funds in the account of Mini Cluster (MC) and MC will pay to the LMC.