Lean manufacturing techniques – Implementation in Indian MSMEs and benefits realized thereof

Abstract

The purpose of this paper is to highlight the importance of implementing Lean manufacturing techniques for enhancing market competitiveness and productivity in the Indian MSMEs. The methodology adopted is a multi-case study approach based on the primary implementation of Lean manufacturing techniques in the MSMEs under the Lean manufacturing competitive Scheme (LMCS) Scheme of the Ministry of Micro, Small, Medium and Medium Enterprises (MSME),Govt. of India since 2014. Out of the 243 clusters formed under LMCS; 43 clusters have completed the 18 months lean journey for enhancing the productivity and competitiveness till the study period. A sample size of 6 clusters each representing a specific sector has been selected for the study. The sectors covered were brass, pump and machinery, packaging, auto, textile and garments. The validation study carried out by the national monitoring committee on randomly selected 23 MSME units has also been explored for understanding the quality of benefits achieved by the MSMEs post implementation of Lean. The study period has been since July 2014 to July 2018. Investment in the form of fees paid to Lean consultants has led to 8.32 times returns on consultant fee over an 18 months period. Moreover, the completed cluster has realized an average of ₹28.35 lacs per unit after completing lean interventions in the units. There has been a reduction in cost, reduction in waste, improvement in quality and increase in lead time. Additionally, a number of non-tangible benefits have been realized such as improved worker performance, worker health and safety besides increased customer satisfaction etc. by the MSME units across the sectors. This study establishes that up-scaling of Lean manufacturing technique practices‘ is required en-masse across the entire MSME sector quickly so that they can realize the benefits of Lean and invest in sustainable Industry 4.0 techniques leading to Advanced Digital Production (ADP) techniques. The data driven smart manufacturing would enable the MSMEs to maintain competitiveness in the global markets through innovation and internationalization, resource optimization and flexible manufacturing.