SMEs are particularly well-suited to reap the rewards of lean because of the constraint of having access to limited resources to begin with. R Narayanan, Head of the CII-AVANTHA Centre for Competitiveness for SMEs, in India, explains why lean clusters provide an excellent learning environment for smaller organisations.

In 2002, the first ever Lean Summit was organised by the Confederation of Indian Industry (CII) and the Automotive Component Manufacturers Association (ACMA) to introduce lean manufacturing in India.

Following experimentation with large and medium-sized companies, CII-AVANTHA Centre for Competitiveness for SMEs was established in 2004 in Chandigarh, northern India, to introduce lean concepts in Indian SME. This goal was achieved through the Cluster Programmes, which helped them to maximise their capacity and improve several indicators.

The CII-AVANTHA Centre is one of the ten Centres of Excellence (CoE) of the Confederation of Indian Industries, dedicated to support the development of India’s smaller organisations to make them more competitive globally. Lean processes for manufacturing and services are integral to both our flagship programme of Cluster for Competitiveness and to the training programmes we organise for industry, SMEs in particular.

We are helping industries to implement lean while representing a “one stop shop for all SMEs” for their business improvement requirements. In fact, as much as 80% of the interventions and improvements that we carry out as part of our cluster programmes are driven by the philosophy and metrics of lean.

Shorn of all jargons, lean simply means for us that we have to create more value for our customers, with fewer resources. What we particularly focus on, inside and outside our clusters, is that the elimination of waste is done along the entire value stream, not at isolated points.

The basic approach to improvement in a cluster entails making companies aware of lean thinking and other improvement methodologies. Kaizen or continuous improvements at the shop floor is an ingrained feature for a cluster. Similarly we work with other tools and techniques like 5S, SMED, poka-yoke, JIT, kanban, value stream mapping, total employee involvement (TEI), integrated quality management, integrated material management & control.

In our interactions with SMEs we strive to drive home the point that lean is not a short term cost reduction programme but the way the company needs to operate. We advise and guide companies as to how they can transform themselves and move from an old way of thinking and working to the lean way. Once they get to see the return on investment and the plethora of benefits that manifest themselves from the clusters, they become increasingly keen to imbibe the virtues of lean processes.

Our clusters encourage companies to benchmark against each other to learn more about what others are doing with regards to lean. Further, the cluster companies offer each other support in implementing lean. This is done by visiting each other and helping the weak spots of a particular company using the expertise and know-how available to a stronger company within the cluster.

The CII-AVANTHA Centre is dedicated to enhance competitiveness of SMEs, through interventions in areas such as manufacturing excellence, energy efficiency, cost management, total employee involvement, etc.

Our counsellors are well versed with the theory and practices of lean management, and they encourage lean thinking and implementation in all aspects of the life of the businesses that make up the cluster.

Our flagship service, the Cluster Approach”, is built on the principle of ‘learning by sharing.’ We form a cluster of 10-12 SMEs and help them to grow together by learning through sharing their experiences. So far, 227 clusters of SMEs have been formed by CII and its strategic partners, impacting 2,361 companies. The Cluster approach aims at improving competitiveness in an associated group rather than in individual companies.

Thanks to the cluster approach, participating SMEs have been able to improve their inventory turnover ratio, reduce rejections and re-work, improve their delivery schedules and space utilisation, reduce energy consumption and mitigate various forms of customer complaints. All this results in huge financial savings for the SMEs concerned and enables them to be a strong player within supply chains.

The approach has received huge appreciation and encouragement from industry, especially from OEMs who have worked along with their vendors in clusters to make the entire supply chain more efficient and effective.

We also work with the Indian government, especially the Ministry of Small and Medium Enterprises, on improving the competitiveness of micro, small and medium enterprises in Indian industry by advocating the adoption of lean processes, which best describe what we want our SMEs to achieve: become swift, agile and fast-growing organisations which can keep up with a changing world.