lmcs presentation - about scheme

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Salient Features of New Salient Features of New Scheme of Lean Scheme of Lean Manufacturing for MSME Manufacturing for MSME Quality Council of India

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Page 1: LMCS presentation - about scheme

Salient Features of New Salient Features of New Scheme of Lean Scheme of Lean

Manufacturing for MSMEManufacturing for MSME

Quality Council of India

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Relevance of Lean in MSME sector

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Quality Council of IndiaQuality Council of India

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Purpose : To establish & operate national accreditation structure and to promote Quality through nation wide quality campaign

Mission : Quality for the National Well Being

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Current ChairmanMr. Adil Zainulbhai

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Governance

Past Chairmen:Mr. Ratan N. Tata (1997-99)Mr. Venu Srinivasan (1999-01)Dr. R. A. Mashelkar (2001-07)Mr. Ajay Shankar (2007-10)Mr. Arun Maira (2010 -13)Mr. Saurabh Chandra (2014)Mr. Amitabh Kant (2014)

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5* Currently an independent autonomous organization under Department of Science & Technology 5

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Working With MSME

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ROLE of MSME

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Status of MSME’sThe Micro, Small and Medium Enterprises (MSMEs) are a vital part of the Indian economy contributing to over 45% of industrial production and around 40% of the total exports. There are more than 13 million MSMEs in India employing about 31 million people, easily the single largest contributor in terms employment generation in the manufacturing sector

Manufacturing Sector has been recognized as

the main engine for growth of the economy

The share of the manufacturing sector in Indian National GDP over the years has stagnated

to 14-15% only

The National Manufacturing Policy of Government of India envisages share of manufacturing to reach target of 25% of the National GDP by 2022

To achieve a sustained rate of growth, the manufacturing sector needs to build and maintain competitiveness needed to face the challenges posed by globalization

Under the LM Scheme, MSMEs will be assisted in reducing their manufacturing costs, through proper personnel management, better space utilization, scientific inventory management, improved process flows, reduced engineering time and so on with application of LM techniques

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Problems being faced by MSME

Despite constituting more than 80 % of the total number of industrial enterprises and supporting industrial development, many MSMEs in India have problems such as •sub-optimal scale of operation•technological obsolescence•supply chain inefficiencies•increasing domestic and global competition•fund shortage•change in manufacturing strategies• turbulent and uncertain market scenario.

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Lean Manufacturing

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Lean Manufacturing goals

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4 Goals of Lean

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Lean The term “lean” is used because lean manufacturing uses “less”…

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Definition of Lean

A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.”

Non-value added is an activity that takes time, resources or space, but does not add to the value of the product or service itself.

Value-added is an activity that transforms or shapes raw material or information to meet customer requirements.

Waste: Anything that adds Cost to the product without adding Value

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OrderProcessing, Transport, Storage, Waiting, Rework, Machine Setup, Inspection, Machine Breakdowns, etc...

The Basics of Lean The Basics of Lean ManufacturingManufacturing

It means :

- Eliminating work processes that add no value to the product

- Simplify those processes that add value

RUNTIME

Total Lead Time

Typically >95% of Total Lead Time is Non-Value Added!!

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5 Principles of Lean

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8 Wastes of Lean

“OMIT What U DO”

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Lean Vs Traditional

LeanSimple and visual signalsDemand drivenInventory as neededReduce non-value addedSmall lot sizeMinimal lead timeQuality builtValue stream managers

TraditionalComplexForecast drivenExcessive inventorySpeed up value-added workBatch productionLong lead timeInspected-inFunctional departments

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Real Results0 50 100

Lead TimeReduction

ProductivityIncrease

WIPReduction

QualityImprovement

SpaceUtilization

Benefits of Lean ManufacturingHelps in – Cost reductionCycle time reduction“Waste” minimizationElimination of non-value-added activitiesResulting in a more “lean,” competitive, agile, and market-responsive company

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Lean Tools

5S Visual ControlStandard Operating

procedures (SOP’s)

Just in Time (JIT)

Kanban System

Cellular LayoutValue

Stream Mapping

Poka Yoke or Mistake Proofing

Single Minute

Exchange of Dies or

Quick Changeover

TPM ( Total Productive Maintenance)

Kaizen Blitz of Rapid

Improvement Process

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Introduction Introduction

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Need for Lean Need for Lean ManufacturingManufacturing

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Objective of SchemeObjective of Scheme

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Implementation ArrangementImplementation Arrangement A three tier arrangement has been proposed in the Scheme. A Mini Cluster (MC) would be formed at the lowest tier. The units of MC would work with assigned Lean Manufacturing Consultant to implement the specific Lean Manufacturing techniques. The next higher level tier, National Monitoring and Implementing Units (NMIUs) will be responsible for facilitating, implementation and monitoring of the scheme. At the highest level, Screening and Steering Committee will provide overall direction to the scheme and will be headed by the Development Commissioner (MSME)

Mini Cluster/ DPG/ Sub Group/ Special Purpose Vehicle (SPV)

Implementing Agency (IA)

National Monitoring and Implementing Unit (NMIU)

Screening and Steering Committee (SSC)

Technical Advisory

Committee (TAC)

MSME - DI

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Lean Manufacturing Cluster (LMC)

Special Purpose Vehicle (SPV)

MSME -1

MSME -10

MSME -2

Minimum 6 Units per cluster

Association

Or Existing SPV

MSME -1

MSME -10

MSME -2

Minimum 6 Units per cluster

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Mini Cluster is a group of preferably 10 MSME’s located within an identifiable and as far as practicable, contiguous area and manufacturing same/ similar products.

Mini Cluster

A mini cluster may be formed by a new SPV or as Sub Group / Distinct Product Group of an Association or Existing SPV. In case SPV is not available in the cluster, the scheme may be availed through another legal entity i.e. concerned association by grouping the MSMEs in the form of Distinct Product or Sub GroupsDPG and SG will be small groups within Association or existing SPVs, formed with the approval of Management of SPV or Associations as the case may be.

A mini cluster will consist of ideally 10 MSMEs (minimum 6

units)

All the units of MC would work with Assigned Lean Manufacturing Consultant to implement specific Lean Techniques. In case the scheme is being availed by SPV ( existing or new), a separate joint Bank Account will be opened in a National Bank for receiving the funds from NMIU. In case DPG/ SG is formed for taking benefit of the scheme, the project specific account will be operated jointly by Head of SPV or Association and the Nodal officer of DPG/ SG.

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Lean Manufacturing Consultants (LMCs)

An Individual or a Consultancy Firm ( National or International) duly registered with or certified by a reputed certification agency in the field of manufacturing technology, quality control etc. , would be an eligible entity to participate in the scheme as a LMC. NMIU will obtain the approval of the SSC for empanelment of LM Consultants

Roles and Responsibility of LMC Consultants Assess the existing system at each member unit of the concerned MCDiagnostic Study Report for each cluster shall be prepared by assigned LM Consultant. The report includes measurable targets with respect to baseline data. The baseline data and monitor able increment may be different for each unitStipulated detailed step by step procedures and schedules for implementation of the LM Techniques ( pre- defined milestones)Identify the end targets in quantified parameters to be achieved by each unit at the end of the schemeWork in close cooperation with each of the units to assess and then achieve the LM techniques implementation and Respond to specific queries raised by SPV or NMIU on its performanceTo attend orientation / meet / re- orientation programme organized by NMIU/ Office of DC (MSME) so as to clarify scheme implementation related doubts, if any and to share their experiences with peers and also to update LMCs with the developments in the field. LMC’s would be required to attend these workshops at their own cost. The cost of conducting workshops would be borne under the scheme.

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Special Purpose Vehicle

“Trust” as per Indian Trust Act, 1882 or any similar Trust Act or

A Private Limited company incorporated as per Indian Companies Act , 1956 or

A “ society” under The Societies Registration Act, 1860 ( including any of state equivalent) or

Any similar entity as approved by SSC from time to time

The MSMEs would be required to sign a MoU among themselves. MoU should, inter alia, cover the following points –1.Collective and joint responsibility of units2.Details of SPV or any other legal entity for receiving Government of India funds/ grants from the NMIU3.Undertaking to adhere to Terms and Conditions of the Scheme4.Undertaking to cooperate and work in collaboration with LMC5.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 authorized signatory and single point of contact

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National Monitoring and Implementation Unit (NMIU)

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National Monitoring and Implementation Unit (NMIU)

1. Act as Implementation Unit on behalf of DC – MSME2. Receiving applications for the scheme, examine

through TAC and put up for consideration of SSC.3. Maintaining an panel of LM Consultants. Approval of

List of LM Consultants with SSC.4. Maintenance of separate account of funds of the

scheme5. Release of fund to the beneficiaries against the

reports on the bases of progress of implementation and on satisfactory performance of LMCs.

6. Undertake awareness generation programmes for the units and encourage them to participate in the scheme.

7. Organize orientation program for LM Consultants8. Industry expert for Apprising Team9. Creating Benchmark Action Plans10.Monthly Review and Trouble Shooting11.Development of National Reports,12.Submission of DSR, completion report etc. required

under the scheme13.Publications, News letter etc.14.Website

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Technical Advisory Committee Technical Advisory Committee NMIU would be required to deal with a number of Mini Clusters and their technical issues, take decisions on the matters of productivity, preparation of reports, recommendations of clusters for approvals, progress etc. To this end a Technical Advisor Committee ( TAC) would be constituted, within NMIU, which would be empowered to take the decision on productivity related issues . Role and Responsibility of TAC –Appraisal of the applications received from Mini Clusters and giving recommendations on the same to Screening and Steering Committee ( SSC)Cross Checking of implementation of the Lean Manufacturing milestones at the unit level, against the LMC’s periodic report and accordingly approving acceptance of Claims of unitsConducting field visits along with representatives of SPV’s at units participating in the schemeConducting Orientation/ Meets for LMCs at periodic intervalsMaintaining a central data base and reference library for participating units and LMCs;Conducting periodic workshops and meets for participating unitsAppraising the decisions of TAC to office of DC MSME through NMIU

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Screening and Steering Committee (SSC)

1 AS & DC, MSME Chairman2. AS & FA / Alternate EA ( IFW) Member3. Representative of NMCC Member4. Representative of expert Agencies like NPC and QCI Member

5 In Charge, NMIU Member6 Representative of Associations Member7 Director of MSME – DI Concerned / invitee Member8 Nodal officer handling LMCs in DC, MSME Member- Secretary

9 Special Invitee / experts/consultants/ IAs/ SPVs

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Implementation PeriodThe implementation Period will be maximum 18 months in each Mini Cluster to complete Diagnostic Study Report , implement the action plan, , verify the incremental stages, submission of final reports.

Performance of Implementation of LM Techniques will be divided in to 5 Milestones

1st Miles Stone – Completion of Cluster Specific Diagnostic Study Report (DSR). DSR includes –

Existing Status ( 5s, workspace management, Safety, health, energy conservation, Single Minutes of Exchange of Dies, TPM, Reduction in inventory, Organization Structure, Layout , process of Mnaufacture, visual base line survey, identifciation of 7 wastes, inventory practices, top chronic problems etc.)

Time Bound targets for achieving Incremental Improvements. Paramters are rated on a scale of 1- 10

Phase wise Action Plan

Qualitative , Quantitative, monetary benefits likely to be achieved2nd, 3rd, 4th and 5th Milestones – Incremental Improvements to next stage on the scale of 1 -10

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Participate in the Screening and Steering Committee Meetings and Meetings for Selection of Lean Consultants

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Fund Flow Chart

Office of Development Commissioner (MSME)

National Manufacturing and Implementation Unit (NMIU)

SPV/ Association

For Awareness Program/ Orientation

Program / Workshops/ Training

Programs etc

Office of MSEM – DO (For Awareness

Program/ Training Programs ,

Workshops etc)

Lean Consultants

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Changes in Scheme

Particular Earlier Scheme Requirement

New Scheme Requirement

Implementation Period

12 months 18 months

LM Consultant Fees Rs. 23.8 lakhs Rs. 35 Lakhs ( Max.)MSME –DI Not there Now will be involved

in Audit, Awareness program, formation of Cluster etc.

Payment Terms Fixed Pro Rata. Cluster size limited to 6 units ( 8 +2 )

Contribution from Industries

25% from Micro50% from Small

Flat 20%

SPV formation SPV only Sub Groups/ Distinct product Groups can also form cluster

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Knowledge Management

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Kindly contact us:Kindly contact us:1. Mr. CS Chauhan, M: 8800425599Email Address: [email protected]

2. Mr. Anurag Rastogi, Deputy DirectorEmail Address: [email protected]

3. Lianzalal Vaiphei, Assistant DirectorEmail address: [email protected]

National Accreditation Board for Education and Training (NABET)Quality Council of India, ITPI Building, 6th Floor, 4-A

Ring Road , I P Estate, New Delhi - 110 002 Ph. +91 11 23323416 / 417 / 418 / 419 /420

Fax. +91 11 23323415

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Thank you

NABETQuality Council of India