Emergic: Rajesh Jain's Blog

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Making India a Manufacturing Hub

June 6th, 2004 · No Comments

Indra Sharma (who has an excellent blog) writes:

Everyone thinks alike on some critical national issues. For a country of a size of India and with the resources available, the manufacturing sector must go in a big way. Why should we take pride in exporting mineral ores, we must export value added products. If India lags behind, it shows its technical and commercial incompetence or loosing on competitiveness. Small scale industries which are already well developed can play a major role. Some data of small scale industries (SSIs) are revealing.

– There are some 35, 00,000 units in India.
– SSIs produce about 8000 items.
– Value addition in manufacturing sector is about 39%.
– SSIs contribute nearly 34% of the national export
– Direct employment in SSIs goes over 20 million persons.
– Contribution is about 7% to GDP

What is this world class manufacturing that I am talking of? I am talking of the ability of a company to effectively compete with the best performing companies around the world. I am talking for empowering of all the employees to continually improve their products, processes, operations and systems to achieve significant improvements in customer service, quality and profitability. I am talking of a condition where every employee does things he is assigned to do right the first time. I am expecting the owners to emphasise on quality at the source giving workers responsibility for quality. I am talking for involving everyone in eliminating of waste of all types (counting, moving, storing, expediting, searching, transferring, accumulating, and inspecting). I am talking of proving the best on-the-job training. He must know what he is doing. He must know his machine and equipment. There are thousands and thousands of stories of innovations of common men and women which changed the face of this good earth. Let the managers and the owners of the companies take care of these basic requirements. Let them first appreciate the universal use of statistical quality control as a principle to survive as Japanese did and became the world leaders in manufacturing. Is it some thing very difficult that the worker can not understand?

Government and other institutes should provide free training in the world class manufacturing practices, but no other concession to make easy profit. After all manufacturing is not only a trading business with ensured good margins. In manufacturing, a lot of professional technical inputs are required. It is hard but very satisfying enterprise.

SSIs are to be categorized on the basis of their potential to go world class in scale too in steps. Many have potentials. Every 2 -4 years they may get promoted to next higher level. And I am dreaming an India of 1000 or more world class global manufacturing companies growing from these SSIs providing employment and opportunity for the whole of the country. India has all the strength to become a global manufacturing hub. SSIs require mature nursing of these SMEs and not bottle feeding.

IT has to play a critical role in the modernisation of SMEs. This is the next big opportunity in India.

Tags: Emerging Markets

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