In an era when Aatmanirbhar Bharat, or self-reliant India, is gaining currency, it is time to take a closer look at how manufacturers in the Micro, Small and Medium Enterprises (MSME) sector are achieving operational efficiency on the factory shopfloor. The MSME sector is the backbone of the Indian economy, and is the second largest employer after agriculture. Given its vital contribution to the country’s GDP (30% in 2020), it is all the more essential to improve the capabilities of MSME manufacturers—across industries—to sustain their competitiveness and enhance their long-term productivity. One thing is clear—only if the manufacturers improve their quality processes and make innovation a priority would they be able to effectively contribute to India’s phenomenal growth story.
MSME manufacturers at large face distinct challenges that hinder their competitiveness. Issues such as poor infrastructure, technological obsolescence, and lack of funding and skilled manpower are some of the roadblocks manufacturers across industries need to overcome to scale to their full potential. Besides the issues that have been there for years, MSMEs also face multiple on-ground challenges on a daily basis. The most pressing ones include delayed payments that make it difficult to pay the rent and utility bills on time, labour problems, the lack of a healthy balance sheet and the high cost of raw materials, among others.
During execution, one of the biggest challenges MSMEs grapple with is the delivery of defect-free products to customers within promised scheduled timelines. Since the MSME sector still uses traditional processes to execute large orders, manufacturers don’t have the benefit of using digital solutions to help manage and implement strict quality control on the shopfloor. Adding to the gamut of existing challenges, the lack of digital infrastructure further leads to unexpected penalties and suspensions which the manufacturer needs to bear to survive.
Crucially, be it automotive, defence, or biotechnology, Industry 4.0 has accelerated the need for MSME manufacturing units to harness the power of digital technologies to achieve growth. Decisions controlling the manufacturing process should be led by data and usable insights to ensure product quality for customers. It is possible for MSME manufacturers too to empower their employees by digitising the shopfloor.