Lean manufacturing technique as a philosophy has its roots ingrained in Japan. This is a method of production where customer value is taken care of while minimizing waste and using fewer resources. It is an effort to do “more with less” and hence increase productivity. SMEs in Northern region of the country are applying such lean manufacturing techniques for its various industries under a scheme of the union MSME.

It is a Business initiative to improve quality, delivery and reduce cost of production. The scheme is a curb on waste that includes inventory, over-production, over-processing, transportation and defects. The Union government is slated to spend 80 % of the project cost. The development commissioner, MSME, will be responsible for execution of projects through a special purpose vehicle (SPV) established by SME clusters.

Presently, clusters have been formed by SMEs in Mohali and Baddi (Himachal Pradesh). In Mohali, SMEs manufacture bathroom fittings and accessories, and in Baddi engineering goods are being produced. Manish Trehan, manufacturing consultant for the Mohali and Baddi clusters, says, “The participating units will be assisted in becoming ‘lean’ through better planning, better manpower allocation, better space utilisation, scientific inventory management, improved process flows and reduced processing time with the application of lean manufacturing techniques.”

The programme has been initiated with a tri-partite agreement between PGSTE, the SPV formed by the cluster and National Productivity Council. It has been agreed upon that to reduce “waste” (“non-value added” activities) when it comes to manufacturing, is essential for sustainable growth and competiveness building.

In the pilot stage of the Lean manufacturing scheme initiated by MSME ministry, forming 100 mini clusters averaging 10 MSMEs per cluster have been targeted. After achieving this, another 1,000 MSME clusters in the entire country will be formed.