MSME Competitive Lean Scheme (LEAN) 2024: Hello, everyone, welcome to my blog. In this blog post, I will provide you with information about the MSME Competitive Lean Scheme. On March 10, 2024, the Indian central government introduced an updated version of the MSME Competitive (LEAN) Scheme aimed at encouraging micro, small, and medium-sized companies (MSMEs) to adopt specific manufacturing techniques. On Friday, the Union Minister for Small and Medium Businesses, Narayan Rane, unveiled the revised MSME Competitive (LEAN) program, which has been revised to offer greater advantages for businesses and stakeholders. Under the new system, the government's share for handholding and consulting fees will be 90% of the implementation cost, an increase from 80% in the previous scheme. Additionally, the government has removed the requirement for a special-purpose vehicle in each cluster. For more detailed information about the MSME Competitive (LEAN) Scheme, including its key features, objectives, benefits, assistance, and application process, please read below.
MSME Competitive Lean Scheme 2024
MSMEs will receive assistance in lowering their production costs through various strategies like efficient staff management, optimized space utilization, scientific inventory management, improved process flows, reduced engineering lead times, and similar initiatives outlined in the plan. The Lean Manufacturing Competitiveness Scheme (LMCS) not only boosts product quality but also decreases prices, becoming crucial for MSMEs to compete effectively in both local and global markets. Despite its benefits, MSMEs have traditionally underutilized such programs due to a lack of awareness regarding their advantages and the difficulty and cost associated with hiring skilled Lean Manufacturing Counselors or Consultants. Consequently, a large portion of MSMEs cannot afford to implement LMCS. The scheme has been sanctioned as a pilot project to introduce lean techniques in 100 mini-clusters.
The objective of the MSME Competitive Lean Scheme
The primary goal of the Lean Manufacturing Competitiveness Scheme (LMCS) is to boost the manufacturing competitiveness within the MSME sector. It achieves this by implementing lean techniques like Total Productive Maintenance (TPM), 5S, Visual Control, Standard Operating Procedures, Just in Time, Kanban System, Cellular Layout, Poka Yoke, and others. These techniques help identify and eliminate waste, streamline operations, and ensure the efficient functioning of the entire process rather than focusing solely on individual processes. Additionally, the scheme places importance on empowering workers to enhance productivity levels.
Features and Benefits of the MSME Competitive (LEAN) Scheme
Some of the key features and benefits of the MSME Competitive (LEAN) Scheme are as follows:
In addition to enhancing quality, productivity, and performance, the initiative aims to transform manufacturers' mindsets. This initiative represents a concerted effort to elevate MSMEs' knowledge of LEAN manufacturing techniques, incentivize and recognize their adoption, and inspire them to become LEAN champions within the MSME sector. MSMEs have the potential to significantly reduce waste, increase productivity, improve quality, ensure safety at work, expand their market reach, and ultimately become competitive and profitable.
To progress through LEAN levels, which include basic, intermediate, and advanced stages, MSMEs will integrate LEAN manufacturing technologies such as 5S, Kaizen, KANBAN, visual workplace, and Poka Yoke under the guidance of trained and competent LEAN consultants. The government will cover 90% of the implementation costs for coaching and consulting fees to assist MSMEs.
The government also noted that MSMEs belonging to SFURTI clusters, owned by women, SC, or ST, and located in NER (North Eastern Region), will receive an additional 5% contribution. Moreover, MSMEs registering through Industry Associations or Overall Equipment Manufacturing (OEM) groups after successfully completing all levels will receive an extra contribution of 5%.
MSME Competitive Lean Scheme Approach
The approach to implementing the Lean Manufacturing Competitiveness Scheme (LMCS) involves engaging Lean Manufacturing Consultants (LMCs) to evaluate the current manufacturing systems of member units within the Mini Clusters. These consultants then provide detailed step-by-step plans and processes for implementing lean methodologies. Each cluster will have a Special Purpose Vehicle (SPV) established, with MSMEs expected to sustain the Scheme independently starting from the second year, once they have experienced the benefits and cost savings from implementing lean practices.
The implementation structure is structured into three tiers:
Local level: a group of around ten MSMEs forming the SPV.
Top level: a Lean Manufacturing Screening and Steering Committee (SSC) under DC(MSME).
Intermediate level: the National Monitoring and Implementing Unit (NMIU) responsible for facilitating and overseeing the Scheme's implementation.
The National Productivity Council (NPC) is slated to function as the NMIU during the Pilot phase for 100 Micro Clusters, aiding in the efficient execution and supervision of the Scheme.
Eligibility criteria for MSMEs to participate in the LEAN Scheme
All MSMEs registered with the UDYAM registration portal of the Ministry of MSME are eligible to participate in the MSME Competitive (LEAN) Program and avail any associated incentives. The benefits under this scheme are also available to Common Facilities Centers (CFCs) under the Micro and Small Businesses-Cluster Development Program (MSE-CDP) and SFURTI (Scheme of Financing for Regeneration of Traditional Industries) schemes.
Financial assistance under the scheme
MSMEs are eligible for a 90 percent subsidy on implementation costs and consultant fees. MSMEs located in the Northeast region, owned by women or people from minority communities – scheduled tribe (ST) and scheduled caste (SC), and a part of SFURTI clusters, will receive an additional 5 percent contribution.
In addition, MSMEs that register through industry associations or overall equipment manufacturing (OEM) groups after completing all levels will receive an extra 5 percent assistance. To encourage OEMs and industry organizations to promote participation in this initiative by their supply chain vendors, a special feature has been included. After completing all stages of lean intervention, OEMs or associations will receive US$6088 per MSME.
MSME Competitive (LEAN) Scheme Assistance
For each Mini Cluster, the Indian government will contribute money equal to up to 80% of the consultant expenses. The recipients’ MSME units are responsible for generating the remaining 20%.
MSME Competitive (LEAN) Scheme Application Process
The National Productivity Council (NPC), Utpadakta Bhawan, Lodhi Road, New Delhi-110003 accepts applications in the prescribed format from interested industry associations or groups of approximately 10 MSME units that meet the requirements of the MSME-Development Act, 2006 and wish to form SPVs (Mini Clusters
FAQs Related To MSME Competitive Lean Scheme
The Scheme is basically a business initiative to reduce “waste” in manufacturing. Description. The Pilot Phase of Lean Manufacturing Competitiveness Scheme (LMCS) as a component of NMCP was approved on 08.07. 2009 for 100 Mini Clusters. Nature of assistance.
The story of Lean really begins with Henry Ford who set up a very productive organization around the “Flow” that started with raw materials and ended when the customer left with his car. Ford was the first to actually implement some of the following Lean concepts (before the word Lean was invented).
What are the 5 steps of lean manufacturing?
The five principles are considered a recipe for improving workplace efficiency and include: 1) defining value, 2) mapping the value stream, 3) creating flow, 4) using a pull system, and 5) pursuing perfection. The next sections provides a detailed overview of each principle.
Micro, Small and Medium Enterprises (MSMEs) form the cornerstone of the Indian economy. The MSME sector in India has exhibited a strong performance and protected the economy from global adversities and shocks. It is estimated that there are 633.9 lakh MSMEs in India.
The total number of MSMEs in India was more than 63 million in financial year 2016. About nine million enterprises were from the state of Uttar Pradesh, accounting for 14 percent of the total MSMEs in the south Asian country.
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