Micro Small Medium Enterprises National Manufacturing Competitiveness Programme

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Micro, Small & Medium Enterprises National Manufacturing Competitiveness Programme (NMCP) for MSME sector Implemented

Micro, Small & Medium Enterprises National Manufacturing Competitiveness Programme (NMCP) for MSME sector Implemented by Ministry of Micro, Small and Medium Enterprises Government of India New Delhi 1

Schemes for Exports All most all the schemes of DC (MSME) are meant to

Schemes for Exports All most all the schemes of DC (MSME) are meant to encourage MSME including export, However ; • National Manufacturing Competitiveness Programme (NMCP) for MSME Sector (To Enhance competitiveness of MSME sector to take-up global challenges and • Export Promotion are dedicated schemes

National Manufacturing Competitiveness Programme (NMCP) for MSME Sector Challenges faced by Indian MSMEs ¨

National Manufacturing Competitiveness Programme (NMCP) for MSME Sector Challenges faced by Indian MSMEs ¨ Access to Technology ¨ I. P. R. related issues, ¨ Design as market driver ¨ Wasteful usage of resources / manpower ¨ Energy in-efficiency and associated high cost ¨ Low ICT usage ¨ Low Market penetration ¨ Quality Assurance / certification.

National Manufacturing Competitiveness Programme (NMCP) for MSME Sector Objectives ¨ Focus on increasing competitiveness

National Manufacturing Competitiveness Programme (NMCP) for MSME Sector Objectives ¨ Focus on increasing competitiveness of MSME sector ¨ Key initiative for survival of MSMEs in domestic / international markets ¨ A catalyst approach / create role models ¨ Implementation with Public Private Partnership Challenges for implementation ¨ Basically a Supply side initiative ¨ Fear of MSMEs in disclosing data. ¨ MSMEs are hesitant in investing their contribution.

NMCP - Plan Outlay for 2012 -13 (Rs. crore) S. No. Name of the

NMCP - Plan Outlay for 2012 -13 (Rs. crore) S. No. Name of the Scheme Proposed Outlay (2012 -13) 1. Enabling Implementation of Quality Management Standards and Quality Technology Tools (QMS/QTT) for SMEs 10. 00 2. Entrepreneurial & Management development of SMEs through Incubators 12. 00 3. National Campaign for awareness in Intellectual Property Rights 4. Setting up Mini-Tool Rooms on PPP Mode 26. 00 5. Application of Lean Manufacturing 15. 00 6. Design Clinic Scheme 5. 00 14. 00 7. Technology & Quality Up gradation support for MSMEs 8. Marketing Assistance & Technology Up gradation for MSMEs 9. Promotion of ICT in Manufacturing sector Total 26. 00 8. 00 20. 00 136. 00 6

1. Lean Manufacturing Scheme ¨ Objective: To minimize wastages in manufacturing ¨ Lean Manufacturing

1. Lean Manufacturing Scheme ¨ Objective: To minimize wastages in manufacturing ¨ Lean Manufacturing (LM) is Better Production of Goods by Ø Eliminating Non-value Added Activities / Wastes Ø Helping to Produce More with Same Resources ¨ Scheme is under operation on pilot basis for 100 mini clusters ¨ NPC is working as Monitoring & Implementing Agency ¨ Evaluation completed for current scheme and further up- scaling EFC note being processed. 7

Lean Manufacturing Scheme Implementation approach Ø Initially cluster units to be made aware regarding

Lean Manufacturing Scheme Implementation approach Ø Initially cluster units to be made aware regarding lean techniques Ø ‘Mini Clusters’ of 10 units (appx. ) to be created Ø SPV to be formed by ‘Mini Cluster’. Ø GOI : Private Share – 80: 20 Ø Max. cost of LMC to be Rs. 23. 5 lakh Ø Monitoring of milestones by NMIU. 8

Lean Manufacturing Scheme …. contd. ¨ Total Scheme Budget : : Rs. 30. 57

Lean Manufacturing Scheme …. contd. ¨ Total Scheme Budget : : Rs. 30. 57 cr. Rs. 25. 87 cr. Financial Progress – Till March 2012 : Rs. 12. 51 cr Physical Progress Ø Awareness Programme Ø SPVs formed Ø Lean Consultants finalized Ø Lean implementation underway Mini clusters MSME units : : : 120 (target 100) 100 (target 100) 85 (target 100) – Go. I contribution 85 (target 100) 840 (target 1000) 9

1 S implementation - scrap yard Before After Removed the scrap in scrap yard.

1 S implementation - scrap yard Before After Removed the scrap in scrap yard. & create the space for die storage

2 S implementation - Packing & dispatch area Before After Packing & dispatch area

2 S implementation - Packing & dispatch area Before After Packing & dispatch area – unwanted material removed

Shining Example for Shadow Board Before After

Shining Example for Shadow Board Before After

Die Set up Graph- (Before/After) 3500 3000 Tine in second 2500 2000 Before 1500

Die Set up Graph- (Before/After) 3500 3000 Tine in second 2500 2000 Before 1500 After 1000 500 0 Total set up time Total preparation Total Adjustment Total Mounting time Dismounting time

SPVs formed (Zone wise) 24% Sr. No. Zone SPVs formed 1 North 37 2

SPVs formed (Zone wise) 24% Sr. No. Zone SPVs formed 1 North 37 2 East 16 3 West 25 4 South 26 Total 104 36% 16% North East West South

SPVs formed (State wise) S. No. State No. SPVs formed 1 Andhra Pradesh 3

SPVs formed (State wise) S. No. State No. SPVs formed 1 Andhra Pradesh 3 11 Madhya Pradesh 2 2 3 4 5 6 Assam Bihar Delhi Gujarat Haryana 12 13 14 15 16 Maharashtra Orissa Punjab Puducherry Rajasthan 7 Himachal Pradesh 2 1 11 8 3 2 17 Tamil Nadu 15 5 11 1 2 13 8 Jharkhand 3 18 Uttar Pradesh 7 9 Karnataka 5 19 West Bengal 5 10 Kerala 4 20 Uttarakhand Total 1 104

SPVs formed (Sector wise) No. of SPVs formed Auto & Engg. Components 18 S.

SPVs formed (Sector wise) No. of SPVs formed Auto & Engg. Components 18 S. No. Sector/Sub Sector 14 Light Engineering No. of SPVs formed 7 2 Ball Bearing 3 15 Machine Tools 3 3 Diamond Processing 1 16 Metal Work 1 Diesel Engines/Motor&Pump sets Electrical/Electric Fans 2 Oil expellers 1 Packaging 2 Engg. & Fabrication 19 1 7 Food Processing 6 20 Chemical & Die Units. Pharma 8 Foundry 4 21 Plastic 4 Granite 1 1 Hand Tool 4 IT Hardware & Electronics Rice Milling Handicrafts 2 24 Scientific Instruments 2 Apparels and Garments 8 25 White Goods 3 Leather 3 4 5 6 9 10 11 12 13 3 17 18 19 22 23 Total 2 3 104

Lean Manufacturing Scheme (Constraints) ¨ Lean Manufacturing is a comparatively new initiative (on such

Lean Manufacturing Scheme (Constraints) ¨ Lean Manufacturing is a comparatively new initiative (on such a large scale) hence MSMEs are initially hesitant ¨ Reluctance in data sharing ¨ SPV formation is time consuming ¨ NPC has limited resources for monitoring on large scale, hence some more agencies are required ¨ Good LMCs not inclined to work with MSMEs ¨ Pvt. Share is not being contributed as per schedule ¨ Difficulty in co-ordination among 10 units 17

2. Design Clinics Scheme Ø Objective: Ø To Bring the industrial design fraternity closure

2. Design Clinics Scheme Ø Objective: Ø To Bring the industrial design fraternity closure to the MSME sector Ø Increase the competitiveness of local products / services through design Ø Develop an institutional base for the industry’s design requirement Ø Major activities : ü Setting up of design clinic centre - HQ ü Regional Centres – 4 Nos. ü Awareness seminars and workshops – 200 Clusters. ü Design projects for individual MSME or a group of MSMEs ü Students Projects ü Orientation Programme for Designers NID & IISc. Are the nodal agency 18

Design Clinics Scheme – New Products developed by MSMEs (1) Visitor Management System, (2)

Design Clinics Scheme – New Products developed by MSMEs (1) Visitor Management System, (2) Improved light weight pump (3) Bottle vision equipment 19

Design Clinics Scheme – New Products (1) Portable Hydraulic (2) ENT multi scope (3)

Design Clinics Scheme – New Products (1) Portable Hydraulic (2) ENT multi scope (3) Syringe (precision type) 20 20

Design Clinics Scheme ……contd. ¨ Total Scheme Budget – Go. I contribution Financial Progress

Design Clinics Scheme ……contd. ¨ Total Scheme Budget – Go. I contribution Financial Progress : : Rs. 73. 58 cr. Rs. 49. 08 cr. – Fund Released (upto 16. 07. 2012) : Rs. 15. 30 cr Physical Progress Ø Setting up Design centres Ø Design Seminars Ø Design Workshops Ø Design projects MSMEs § Students 5 (target 5 ) 197 (target 200) 49 (target 200) 66 (target 300) 23 ( target 100) : : : 21

Design Clinics Scheme (Constraints) § Lack of inclination of Industrial Design professionals towards MSMEs

Design Clinics Scheme (Constraints) § Lack of inclination of Industrial Design professionals towards MSMEs § MSMEs hesitant to contribute their share § Sector specific design institutes not yet actively involved § MSMEs still believe in copy – paste rather then innovation 22

 3. Technology and Quality Upgradation Support (TEQUP) Objective: ¨ Focuses on Energy Conservation,

3. Technology and Quality Upgradation Support (TEQUP) Objective: ¨ Focuses on Energy Conservation, CDM & Product Certification ¨ Activities Proposed: 1) Awareness Generation for Energy Efficient Technology 2) Credit Linked subsidy for EET Projects (25 %) 3) Encourage MSMEs through subsidy to acquire National as well as International Certification of Products 23

ENERGY EFFICIENT TECHNOLOGY FOR MSME SECTOR Roller kiln - Morbi ceramic cluster Boiler -

ENERGY EFFICIENT TECHNOLOGY FOR MSME SECTOR Roller kiln - Morbi ceramic cluster Boiler - Plywood unit, Ernakulum Re-cupeater – pot furnace Firozabad

 Technology and Quality Upgradation Support (TEQUP) Total Scheme Budget ◦ Go. I contribution

Technology and Quality Upgradation Support (TEQUP) Total Scheme Budget ◦ Go. I contribution Financial Progress ◦ Till end of 2011 -12 (XI Plan) ◦ Expenditure (till 31. 3. 2012) : Rs. 140. 98 cr. : Rs. 65. 73 cr. : : Rs. 5. 97 cr Rs. 6. 04 cr. Physical Progress Ø MSMEs asstd for EETs (XI Plan): Ø MSMEs asstd for product certi. : Ø Awareness programme : 113 (target 390) 448 (target 4000) 50 (target 60) 25

 TEQUP – Constraints ¨ Fund release for EETs too complex – SIDBIs procedure

TEQUP – Constraints ¨ Fund release for EETs too complex – SIDBIs procedure may be streamlined ¨ EET DPRs for MSMEs (1050 nos ) received from BEE recently, – These need to be capitalized with the assistance of MSME-Dis ¨ Product Marking reimbursement taking time at MSME-DI end 26

4. Promotion of ICT in MSME sector ¨ The modified ICT Scheme with cloud

4. Promotion of ICT in MSME sector ¨ The modified ICT Scheme with cloud computing approach has been concurred by Planning Commission meeting will be held. and Shortly SFC

Advantage of Cloud Computing • Capital Expenditure(CAPEX) is getting • • converted into operational

Advantage of Cloud Computing • Capital Expenditure(CAPEX) is getting • • converted into operational expenditure (OPEX). Device and Local independent Centralized meeting system. Pay as you use model facility MSMEs does not have to invest in IT personnel for maintenance purpose. 28

Components of Cloud Computing • Software as Service • Portal as Service • Infrastructure

Components of Cloud Computing • Software as Service • Portal as Service • Infrastructure as Service 29

SCALING OF SUBSIDY* Sl. Turn over No. Category Of MSME 1 st year subsidy

SCALING OF SUBSIDY* Sl. Turn over No. Category Of MSME 1 st year subsidy 2 nd year subsidy 3 rd year subsidy 1. Below Rs. 1. 0 cr. OTNER 85 % 70 % 2. Rs. 1. 0 cr < up to Rs. 5. 0 cr. OTNER 75 % 70 % 65 % 3. Rs. 5. 0 cr. And Above OTNER 60 % 55 % 50 % 4. All 85 % 75 % 70 % 5. All * Tentative NER, Special states Women owned units

FUNDING PATTERN OF MODIFIED ICT SCHEME* (Rs. In Lacs) Sl. No. Activity Quantity Rate

FUNDING PATTERN OF MODIFIED ICT SCHEME* (Rs. In Lacs) Sl. No. Activity Quantity Rate Done by 1. Awareness Programme and workshops, etc. 100 NOS. 2. 0 MSME-DI Service Provider, with local partners, etc. 2. Subsidy for availing Cloud computing services 1500 units 3. 0 On service usage model 3. National Portal for MSMEs LS 100 4. Impact Assessment LS 50 TOTAL * Tentative GOI contr. Pvt Contr. Total 200 - 200 3375 1125 4500 By Outsource Agency 200 - 200 By Outsource Agency 50 - 50 3825 1125 4950

5. Quality Mgt. Systems/Tools (QMS/QTT) Objectives: ¨ Scheme to support awareness generation as well

5. Quality Mgt. Systems/Tools (QMS/QTT) Objectives: ¨ Scheme to support awareness generation as well as implementation of Quality System Tools in MSME sector Ø Conforming to International Standards, 5 S, Six-sigma, TQM, TPM Ø ISO 9000, ISO 14000, ISO 18000, ISO 22000 etc. ¨ Major activities to propagate Quality Management in MSMEs are: 1) Compulsory Courses in Govt. ITIs / Polytechnics 2) Awareness Programmes in Clusters on QMS / QTT topics 3) Implement Quality Mgt Techniques among MSMEs 4) Special Studies for Threatened Products 5) Assist International Study Missions for SME groups 6) Organize National level workshop on QMS/QTT 32

Quality Mgt. Systems/Tools (QMS/QTT) …. Contd. Progress: 1) Course materials for 1800 ITIs prepared

Quality Mgt. Systems/Tools (QMS/QTT) …. Contd. Progress: 1) Course materials for 1800 ITIs prepared and 1745 teachers trained, 2) Course details for Polytechnics is taken up this year. 3) More than 364 awareness programmes in MSME clusters completed on QMS / QTT topics by expert agencies, 4) Implementation of Quality Mgt . Techniques among MSMEs – 10 clusters has been initiated. 5) Assist International Study Missions for SME groups – 1 mission to Japan (with 20 SMEs) completed last year. 33

Quality Mgt. Systems/Tools (QMS/QTT) ¨ Total Scheme Budget : Rs. 50. 00 cr. –

Quality Mgt. Systems/Tools (QMS/QTT) ¨ Total Scheme Budget : Rs. 50. 00 cr. – Go. I contribution : Rs. 41. 10 cr. : Rs. 5. 31 cr Financial Progress – Till date Physical Progress Ø Awareness Programme Ø ITI teachers trained Ø Study mission Ø QMS/QTT implementation : : : ; 364 (target 400) 1745(target 1800) 01 100 nos. MSME initiated (10 Cluster) 34

QMS/QTT (Constraints) ¨ QMS/QTT implementation not yet sanctioned due to IFW insisting on competitive

QMS/QTT (Constraints) ¨ QMS/QTT implementation not yet sanctioned due to IFW insisting on competitive bidding for engaging expert agency ¨ Limitation to use only clusters from Threatened product catagory ¨ QMS/QTT courses yet to be prepared for Polytechnics ¨ State Govt not sparing ITI teachers for training ¨ MSMEs / Associations Hesitant to give contribution ¨ Medium units not included 35

6. I P R Campaign ¨ Objectives: ¨ IPR Tools : – Patents Trademark

6. I P R Campaign ¨ Objectives: ¨ IPR Tools : – Patents Trademark Indl. Design – Copyrights G. I. Trade Secret ¨ Most MSMEs are unaware of IPR Benefits / Norms ¨ Focused Activities 1) Awareness & Sensitization Programmes 2) Pilot Study 3) Interactive Seminars / Workshops 4) Short / Long Term Training 5) IP Facilitation Centre 6) Assistance for Grant on Patent / GI Registration 36

IPR Campaign ¨ Total Scheme Budget : Rs. 55. 00 cr. – Go. I

IPR Campaign ¨ Total Scheme Budget : Rs. 55. 00 cr. – Go. I contribution : Rs. 50. 00 cr. Financial Progress – Till end of 2011 -12 : – Budget Outlay (2012 -13) : – Expenditure (till 12 July, 12) : Physical Progress Ø Assistance for setting up IPFC : Ø Awareness Programme : Ø Workshops : Ø Pilot Study : Ø Short term training : Rs. 7. 64 cr Rs. 5. 00 (Go. I) Rs. 8. 42 cr. 24 (target 40) 128 (target 150) 42 (target 50) 02 ( target 30) 07(target 50) 37

IPR Campaign (Constraints) 1) Lack of Awareness, Knowledge & Expertise 2) Lack of confidence

IPR Campaign (Constraints) 1) Lack of Awareness, Knowledge & Expertise 2) Lack of confidence in Enforcement mechanism and perception of higher cost of Monitoring & litigation. 3) Majority of MSMEs do not have IP Strategy in place. 4) Shortage of Trained Human Resources 38

7. Incubators Objectives: Ø Assist Incubation of Innovative Ideas Ø Promote Emerging Technological Innovative

7. Incubators Objectives: Ø Assist Incubation of Innovative Ideas Ø Promote Emerging Technological Innovative Ventures Ø Encourage Ideas to Become MSMEs & Knowledge-based ¨ 100 BIs to be Located in engineering colleges, management institutions and R&D Institutes @ 25 p. a in 4 yrs. ¨ Govt. Grant (Max. 85%) = Rs. 4 - 8 lakh per Idea ¨ Each BI to Assist 10 Ideas / Units – Max. Rs. 62. 5 lakh + Rs. 3. 78 for Infrastructure & Training. ¨ BIs to support and Nurture ideas for commercialization in a year 39

Incubators ¨ Total Scheme Budget : Rs. 79. 45 cr. – Go. I contribution

Incubators ¨ Total Scheme Budget : Rs. 79. 45 cr. – Go. I contribution : Rs. 66. 50 cr. : : Rs. 9. 00 cr Rs. 12. 00 cr (Go. I) Financial Progress – Till end of 2011 -12 – Budget Outlay (2012 -13) – 40

Constraints (Incubators) ¨ Lack of proposals with new ideas ¨ Payment terms not attractive

Constraints (Incubators) ¨ Lack of proposals with new ideas ¨ Payment terms not attractive ( 30 %, 70 %) ¨ Delay in Up-front contribution from Beneficiary ¨ Delays in signing agreement Incubator / Incubatee 41

8. Marketing Assistance and Technology Upgradation Scheme for MSMEs ¨ Objectives: ¨ To enhance

8. Marketing Assistance and Technology Upgradation Scheme for MSMEs ¨ Objectives: ¨ To enhance MSMEs competitiveness in the National as well as International market through following activities; ¨ Major activities: Ø Technology up gradation in packaging Ø Skill up gradation /development for Modern marketing techniques Ø Special component for NER clusters Ø State/District level local exhibitions Ø Corporate governance practices Ø Marketing hubs Ø Reimbursement to ISO 18000/22000/27000 certification 42

Marketing Assistance and Technology Upgradation Scheme for MSMEs ¨ Total Scheme Budget : :

Marketing Assistance and Technology Upgradation Scheme for MSMEs ¨ Total Scheme Budget : : Rs. 23. 00 cr. Rs. 18. 61 cr. – Till 16. 07. 2012 – Budget Outlay (2012 -13) – Expenditure (till March, 12) : : : Rs. 0. 95 cr. Rs. 8. 00 cr. Rs. 0. 99 cr. Physical Progress Ø MSMEs (NER) benefitted Ø MSMEs (OTNER) benefitted Ø ISO 18000/22000/27000 Ø Corporate Governance : : 18 847 7 20 – Go. I contribution Financial Progress 43

Marketing Assistance and Technology Upgradation Scheme for MSMEs (Constraints) Ø Selection of agency is

Marketing Assistance and Technology Upgradation Scheme for MSMEs (Constraints) Ø Selection of agency is through Eo. I / Tender Ø ISO certification agencies not available Ø Duplicity of activity with other similar initiatives Ø State level local exhibitions not allowed outside states Ø Corporate governance practice not preferred by MSMEs Ø Marketing hubs only for limited scope of work 44

9. Bar Code Objectives: ¨ Bar Coding assist in popularizing MSME Products, especially for

9. Bar Code Objectives: ¨ Bar Coding assist in popularizing MSME Products, especially for Exports & Retail ¨ Bar Coding an effective Tool to improve marketability ¨ Reimbursement allowed : Ø 75% of Annual Fee for first 3 years (Bar Code Certificate ) 75% of Annual Fee for first 3 years (Bar Code 45

Bar Code contd……. . ¨ Bar Code Component (NMCP) has been merged in MDA

Bar Code contd……. . ¨ Bar Code Component (NMCP) has been merged in MDA scheme for the year 2012 -13 onwards. Further Funds for Bar Code is in process for allocation to MSME-DIs. 46

10. Mini Tool Rooms on PPP Mode ¨ Objectives: ¨ Scheme to Develop 15

10. Mini Tool Rooms on PPP Mode ¨ Objectives: ¨ Scheme to Develop 15 new Mini Tool Rooms Ø For Technological Support to MSMEs Ø By Creating Capacities in the Private Sector ‘Mini Tool Rooms’ can be set up, : Ø With GOI assistance restricted to Rs. 9. 00 cr. ¨ PPP is the Preferred Option (Model – I), - Private partner as promoter - VGF of 40% restricted to Rs. 9. 00 cr. - Remaining resources by promoters - O & M by promoter OR 47

Model- II (State PPP Model): - SPV (State Govt. with private partner) - 90%

Model- II (State PPP Model): - SPV (State Govt. with private partner) - 90% of cost of machinery, restricted to Rs. 9. 00 cr. - Remaining cost of M/c, L & B, recurring exp. by SPV. - State Govt. share > 26%. - O & M by SPV OR Model- III (Centre / State Model): - State Govt. / State Govt. agency to identify Implementing Agency (IA) - 90% of cost of machinery, restricted to Rs. 9. 00 cr. - Remaining cost of M/c, L & B, recurring exp. by IA - O & M by IA

Setting up Mini Tool Rooms on PPP Mode ¨ Total Scheme Budget : Rs.

Setting up Mini Tool Rooms on PPP Mode ¨ Total Scheme Budget : Rs. 210. 00 cr. – Go. I contribution : Rs. 135. 00 cr. : : Rs. 6. 84 cr Rs. 26. 00 cr (Go. I) Financial Progress – Till end of 2011 -12 – Budget Outlay (2012 -13) – 49

MTR under PPP Mode (Constraints) ¨ Model – I (PPP) not attractive due to

MTR under PPP Mode (Constraints) ¨ Model – I (PPP) not attractive due to low cost of project ¨ Land cost is a major issue for Private promoter ¨ Performance targets – especially for training activity makes project less attractive ¨ Stringent penalty clause in case of default 50

Export Promotion Scheme ¨ Training Programme on Packaging for Export – one of the

Export Promotion Scheme ¨ Training Programme on Packaging for Export – one of the essential ingredients for marketing and sales promotion Objective: - Training on Packaging and other Export-Import Issues – Disseminate information to MSME regarding provision of WTO – Coordinate with other Ministry and departments on issues pertaining to impact of WTO vis-à-vis MSMEs. 51

NMCP WEB APPLICATIONS - Bar Code - Marketing Assistance - Product Certification - Incubator

NMCP WEB APPLICATIONS - Bar Code - Marketing Assistance - Product Certification - Incubator - Design Clinic

Web Address ¨ http: //dcmsme. gov. im ¨ http: //nmcp. dcmsme. gov. in (To

Web Address ¨ http: //dcmsme. gov. im ¨ http: //nmcp. dcmsme. gov. in (To launch soon)

Thank You 54

Thank You 54