Pramod Chaudhari on how Pune’s SMEs must adapt to sustainable manufacturing
Manufacturing companies are now readying to use artificial intelligence (AI), Internet of things (IoT), data analytics and so on. To keep growing, SMEs will have to adapt to these changes. The ones who understand this and invest in such technologies will be the ones who will continue to grow.pune Updated: Jul 08, 2018 15:40 IST
In Pune, small and medium enterprises (SMEs) came into being when Telco and Bajaj opened shop here in the mid-1900s. These giants needed a proper supply chain and it was expected that the employees with an entrepreneurial mindset would choose to start out on their own. That was then. Ever since, the SME sector has grown exponentially.
As per the latest economic survey of the government of Maharashtra, there are 69,702 Udyog Aadhar registered micro, small and medium enterprises (MSMEs) in the Pune region, including Pune, Solapur, Kolhapur, Sangli and Satara districts.
In Pune alone, there are about 48,000 Udyog Aadhar registered MSMEs. However, this figure does not correctly indicate the number of operational MSMEs as there are duplicate registrations, non-functional units and those that have not yet started operations. A correct estimate of operational MSMEs could be around 25,000, but that again includes all units who are into all types of businesses and trade.
As per our estimates, there are about 10,000 to 12,000 MSMEs who are operational and connected with the Pune industrial cluster. They are predominantly in the auto, auto component, auto ancillary and general engineering segments operating as tier 1, tier 2, tier 3 and tier 4 vendors for large OEMs (original equipment manufacturers). MSMEs are considered to be a major link in the entire manufacturing and services chain. Outsourcing to MSMEs by OEMs is increasing. These small companies are considered to be a major source for employment generation. Firstly, they can create additional jobs. Secondly, they are also considered to be a seat of entrepreneurship.
Many new first generation entrepreneurs start their business journey in this segment and grow from micro to large, single product-single location to multi product-multi-locations and so on.
How fast are these SMEs growing? It is very difficult to estimate the growth across this segment as the growth rate is very specific to a particular unit. It depends on its linkages, connections to OEMs and also the growth of that OEM. As they are primarily in auto and general engineering segments, we can estimate a growth of about 7% to 10 % which is also in line with the growth of the economy and the related industry segments. However, I think the challenges before this sector are basically how to come up and speed up with technology.
Manufacturing has now moved up quite a few notches and big companies are now readying to use artificial intelligence (AI), Internet of things (IoT), data analytics and so on. To keep growing SMEs will have to adapt to these changes or then fade away. The ones who understand this and invest in such technologies will be the ones who will continue to grow.
Another area that SMEs need to consider very seriously is sustainable manufacturing. Adopting environmentally sound manufacturing practices is the need of the hour and, to remain relevant, we will have to adapt such techniques soon.
We at the Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) have initiated many activities to help this sector. Since 2009, we have been actively promoting lean manufacturing clusters under a government of India initiative. We have so far promoted and operated about 13 lean manufacturing clusters which involved about 130 SMEs. We have been organising vendor development programmes for the SMEs, especially under the public procurement policy of the government.
This is an initiative to develop a linkage between SMEs and public sector undertakings (PSUs) like Indian Railways, which are undergoing massive modernisation and expansion. We have conducted similar business-to-business programmes for the SMEs that are interested in participating in the defence manufacturing under the central government’s defence offset programme.
We have been providing networking platforms for our members, including SMEs, to network with companies from different countries. Every year, we get about 20-24 delegations from different countries. During the implementation phase of goods and services tax (GST), we initiated a GST War Room at the MCCIA which was ready to provide all assistance to SMEs in the implementation of GST. We conducted awareness events and training programmes which benefitted more than 3,000 members directly and indirectly.
We conduct awareness and training programmes and interactions with government officials throughout the year and the number exceeds 200. We have tied up with Small Industries Development Bank of India (SIDBI) for preferential credit facility to our MSME members at reduced rates. We are working in the areas, including innovation, entrepreneurial development, intellectual property (IP) and technology transfer. On top of all this, we are also engaged in problem resolution and extending help as required by our members.
First Published: Jul 08, 2018 15:40 IST