The Hindu Business Line : CII move to tone up efficiency in small units

THE Confederation of Indian Industry - Southern Region (CII-SR) is assisting small industries enhance their competitiveness by teaching them to bring down costs through efficiency.

According to CII-SR's Chairman, Mr R. ParasuRaman, CII is using its huge expert base to teach the small players ways to improve efficiency and conserve cost through energy management, material management and supply chain management.

It has adopted a cluster approach to enable small players afford the programme.

While large industries have the resources to bring in the experts, individual small players cannot always afford to go about the process by themselves. Therefore, CII has stepped in to group such small units into a cluster and teach them the best practices. A cluster of units can afford the costs that an individual member within it cannot, he said.

When practices that improve efficiency and quality in a small player are institutionalised it is not just the small industry that benefits but also the larger unit that depends on them for various inputs. Therefore, large units have evinced interest in such programmes, he said.

For instance, at Ambattur, the programme launched by CII-AIEMA Small and Medium Enterprises Cluster, a little over a year ago, involving 10 units in different lines of business such as foundry, valves, plating, cutting tools, dies and furnaces has demonstrated positive results.

Normally such programmes run for about a year-and-a-half but the benefits of the approach are apparent even a few months ahead of the programme's conclusion, he said.

Each unit, depending on its scale of operations has reported savings of about Rs 1 lakh to Rs 1 crore, according to Mr ParasuRaman.

CII now plans to extend the cluster approach to other production centres such as Coimbatore and to those in other southern States.

In Tamil Nadu large units such as LMW, Elgi, Roots and Evolvics, the electronics division of Premier Mills, have shown interest in participating in the cluster approach to upgrade efficiency and quality of smaller units. The benefit the large units see is consistency in quality of supply from their vendors, he said.

CII itself is looking at increasing its infrastructure to deliver this service to a larger section of its members. Closely involved in this programme are the centres of excellence that CII has set up.

Each of these has its own field of expertise that it will share. Some of these are the Centre of Excellence in Manufacturing in Mumbai, for quality in Bangalore, energy management in Hyderabad and logistics and supply chain management in Chennai.

These centres have faculty that are qualified experts in their field and will spend 12 - 18 months in working with the clusters, Mr ParasuRaman said.

While the benefits to the clusters are obvious, CII has observed that there are certain features that contribute to the success.

These are: the direct involvement of the small unit's chief executives, institutionalising the changes even after the programme ends, receptiveness to change, cooperating with the faculty to draw a roadmap for the programme, which will focus on theory and shop floor practice, he said.

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