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

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

3 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.

NMCP for MSME Sector Background  NMCC conceived this initiative during  Extensive discussions with industry / stakeholders  Compared actions of Large industries and suggested similar initiatives for MSMEs  10 Key concepts finalised for intervention  Professional bodies QCI, NID, NPC etc. involved for implementation  Aim was to create early adapters / champions  Received In-principle approval in Dec-2006

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.

6 NMCP - Plan Outlay for (Rs. crore) S. No. Name of the SchemeProposed Outlay ( ) 1.Enabling Implementation of Quality Management Standards and Quality Technology Tools (QMS/QTT) for SMEs Entrepreneurial & Management development of SMEs through Incubators National Campaign for awareness in Intellectual Property Rights Application of Lean Manufacturing Design Clinic Scheme Technology & Quality Up gradation support for MSMEs Marketing Assistance & Technology Up gradation for MSMEs Promotion of ICT in Manufacturing sector20.00 Total

7 7 Objective: To minimize wastages in manufacturing Lean Manufacturing (LM) is Better Production of Goods by  Eliminating Non-value Added Activities / Wastes  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. 1. Lean Manufacturing Scheme 7

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

9 9 Total Scheme Budget:Rs cr. –GoI contribution :Rs cr. Financial Progress –Till March 2012:Rs cr Physical Progress  Awareness Programme:120 (target 100)  SPVs formed :100 (target 100)  Lean Consultants finalized:85 (target 100)  Lean implementation underway : Mini clusters :85 (target 100) MSME units:840 (target 1000) Lean Manufacturing Scheme ….contd. 9

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

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

Shining Example for Shadow Board Before After

Die Set up Graph- (Before/After)

SPVs formed (Zone wise) Sr. No.Zone SPVs formed 1North 37 2East 16 3West 25 4South 26 Total104

SPVs formed (State wise) S.No.State No. SPVs formed 1Andhra Pradesh3 2Assam 2 3Bihar 1 4Delhi 11 5Gujarat 8 6Haryana 3 7Himachal Pradesh2 8Jharkhand 3 9Karnataka 5 10Kerala 4 S.No.StateNo. SPVs formed 11Madhya Pradesh2 12Maharashtra 15 13Orissa 5 14Punjab 11 15Puducherry 1 16Rajasthan 2 17Tamil Nadu13 18Uttar Pradesh 7 19West Bengal 5 20Uttarakhand 1 Total104

SPVs formed (Sector wise) S.No.Sector/Sub Sector No. of SPVs formed S.No.Sector/Sub Sector No. of SPVs formed 1 Auto & Engg. Components Light Engineering7 2 Ball Bearing3 15 Machine Tools3 3 Diamond Processing1 16 Metal Work1 4 Diesel Engines/Motor&Pump sets 2 17 Oil expellers1 5 Electrical/Electric Fans3 18 Packaging2 6 Engg. & Fabrication19 Chemical & Die Units. 1 7 Food Processing6 20 Pharma2 8 Foundry4 21 Plastic4 9 Granite1 22 IT Hardware & Electronics 1 10 Hand Tool4 23 Rice Milling3 11 Handicrafts2 24 Scientific Instruments2 12 Apparels and Garments8 25 White Goods3 13 Leather3 Total 104

17 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 Lean Manufacturing Scheme (Constraints) 17

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

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

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

21 Total Scheme Budget:Rs cr. –GoI contribution :Rs cr. Financial Progress –Fund Released (upto ):Rs cr Physical Progress  Setting up Design centres:5 (target 5 )  Design Seminars :197 (target 200)  Design Workshops :49 (target 200)  Design projects MSMEs:66 (target 300)  Students:23 ( target 100) Design Clinics Scheme ……contd. 21

22  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 Design Clinics Scheme (Constraints) 22

23 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 3. Technology and Quality Upgradation Support (TEQUP)

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

25  Total Scheme Budget:Rs cr. ◦ GoI contribution :Rs cr. Financial Progress ◦ Till end of (XI Plan):Rs cr ◦ Expenditure (till ) :Rs cr. Physical Progress  MSMEs asstd for EETs (XI Plan):113 (target 390)  MSMEs asstd for product certi. :448 (target 4000)  Awareness programme : 50 (target 60) 25 Technology and Quality Upgradation Support (TEQUP) 25

26 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 TEQUP – Constraints

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

28 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.

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

SCALING OF SUBSIDY* Sl. No. Turn overCategory Of MSME 1 st year subsidy 2 nd year subsidy 3 rd year subsidy 1.Below Rs.1.0 cr. OTNER85 %75 %70 % 2.Rs. 1.0 cr < up to Rs. 5.0 cr. OTNER75 %70 %65 % 3. Rs. 5.0 cr. And Above OTNER60 %55 %50 % 4.AllNER, Special states 85 %75 %70 % 5.AllWomen owned units 85 %75 %70 % * Tentative

FUNDING PATTERN OF MODIFIED ICT SCHEME* (Rs. In Lacs) Sl. No. ActivityQuantityRateDone byGOI contr. Pvt Contr. Total 1. Awareness Programme and workshops, etc. 100 NOS. 2.0MSME-DI Service Provider, with local partners, etc Subsidy for availing Cloud computing services 1500 units 3.0On service usage model National Portal for MSMEs LS100By Outsource Agency Impact Assessment LS50By Outsource Agency 50- TOTAL * Tentative

32 Objectives: Scheme to support awareness generation as well as implementation of Quality System Tools in MSME sector  Conforming to International Standards, 5S, Six-sigma, TQM, TPM  ISO 9000, ISO 14000, ISO18000, ISO 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 5. Quality Mgt. Systems/Tools (QMS/QTT) 32

33 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. Quality Mgt. Systems/Tools (QMS/QTT) ….Contd. 33

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

35 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 QMS/QTT (Constraints) 35

36 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 6. I P R Campaign

37 Total Scheme Budget:Rs cr. –GoI contribution :Rs cr. Financial Progress –Till end of :Rs cr –Budget Outlay ( ):Rs (GoI) –Expenditure (till 12 July,12):Rs cr. Physical Progress  Assistance for setting up IPFC :24 (target 40)  Awareness Programme:128 (target 150)  Workshops:42 (target 50)  Pilot Study:02 ( target 30)  Short term training :07(target 50) IPR Campaign 37

38 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 IPR Campaign (Constraints)

39 Objectives:  Assist Incubation of Innovative Ideas  Promote Emerging Technological & Knowledge-based Innovative Ventures  Encourage Ideas to Become MSMEs 100 BIs to be Located in engineering colleges, management institutions and R&D 25 p.a in 4 yrs. Govt. Grant (Max. 85%) = Rs 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 7.Incubators 39

40 Total Scheme Budget:Rs cr. –GoI contribution :Rs cr. Financial Progress –Till end of :Rs cr –Budget Outlay ( ):Rs cr (GoI) –Expenditure (till June,12):Rs. 9.20cr. Physical Progress  Incubators set up :105 (target 100)  Incubatees approved :350 (target 1000)  Incubatees assisted:250 Incubators 40

41 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

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

43 Total Scheme Budget:Rs cr. –GoI contribution :Rs cr. Financial Progress –Till :Rs cr. –Budget Outlay ( ):Rs cr. –Expenditure (till March,12):Rs cr. Physical Progress  MSMEs (NER) benefitted:18  MSMEs (OTNER) benefitted:847  ISO 18000/22000/27000:7  Corporate Governance:20 Marketing Assistance and Technology Upgradation Scheme for MSMEs 43

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

45 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 :  75% of Annual Fee for first 3 years (Bar Code Certificate) 45

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

NMCP Web Applications - Bar Code - Marketing Assistance - Product Certification - Incubator - Design Clinic

NMCP Web Applications - Bar Code - Marketing Assistance - Product Certification - Incubator - Design Clinic

Web Address (To launch soon)

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