DESIGN CHALLENGES OF MSME*S

Report
DESIGN CHALLENGES OF
MSME’S
Important for conducive Eco
Systems for Cluster Development
Charles Darwin’s –
theory of evolution
states that one who adapts
oneself to the changing
environment will undergo
evolution otherwise will
perish.
Adaptability with DESIGN…
21st February‘2014, a presentation by
Bindoo Ranjan
National Institute of Design
INDIA SHINING ---- yesterday an image at Yahoo home page
LIFE CYCLE OF A MSME
WHAT IS AN MSME
• MSME is an entrepreneur
• Explores and finds an opportunity.
• Builds upon it as a business venture.
• Identifies and organises all the required
resources.
• Accepts both the risks and rewards
associated with the venture.
Development of Entrepreneurship
• Earliest Period- Marco Polo
• Middle Ages- Theater,
Architectural Works
• 17th Century- Mississippi
Company
• 18th Century- Edison &
Whitney
• 19th & 20th Centuries
– Organize/Operate
– Innovate
The Entrepreneurial Revolution
“We are in the midst of a silent revolution – a
triumph of the creative and entrepreneurial spirit
of humankind throughout the world.”
“I believe its impact on the 21st century will
equal or exceed that of the Industrial Revolution
on the 19th and 20th.”
-- Jeffry A. Timmons (The Entrepreneurial Mind, 1989)
In his February 24th State of the Union Address, Barack Obama
publicly declared that “The future of our economy relies on
the imagination of our Entrepreneurs.”
Many people around the world are calling for an “entrepreneurial
revolution” to fix social and economic problems. This call naively
assumes that more entrepreneurs are needed to address these
issues.
7 Common Challenges-
faced by MSME for attaining sustainable ecosystem
1. Problem: Failed/Repeatative product line –a mundane activity.
Solution: Try adopting new product lines gradually rather than all at once,
suggests Jonathan Fields, social entrepreneur and author of two books,
2. Problem: Shady suppliers or customers.
Solution: Take precautions. Have network of suppliers lined
3. Problem: Too much paperwork.
Solution: Outsource and use effective technology.
4. Problem: Outmoded business model.
Solution: Listen to the market adapt for it.
5. Problem: Doing what you love or wear too many hats-Jack of all.
Solution: Research. It's easy to mistake your own enthusiasm for market
opportunity
6. Problem: Financing.
Solution: Have something real– to show potential investors. "Make sure
investors feel it as opportunity now to get involved," suggests John Friess,
Journey Gym's co-founder and CEO.
7. Problem: Too many competitors, not enough differentiation.
Solution: Find a niche. It is a trendy prescription.
Can U see common chord in the solutions- Be creative in ascertaining the solutions
So can we say they all are ----DESIGN CHALLENGES
The challenges in the minds
The challenges in the approach
The challenges in systems
The challenges in the processes
The challenges in the inputs
The challenges in the output
Design Clinic Scheme for MSMEs
DESIGN CLINIC SCHEME, NATIONAL INSTITUTE OF DESIGN, PALDI, AHMEDABAD 380 007
[email protected]
National Manufacturing
Competitiveness Programme (NMCP)
Sl. No.
Name of the Sub-Scheme
Amount
(In Crores)
1
National Programme on Application of Lean Manufacturing
300.00
2
Promotion of ICT in Indian Manufacturing Sector
160.25
3
Mini-Tool Rooms to be set up (by Ministry of SSI)
135.00
4
Technology And Quality Upgradation Support for SMEs
93.50
5
6
Support for Entrepreneurial and Managerial Development of
SMEs
Design Clinic scheme to bring design expertise to the
Manufacturing Sector
66.50
50.00
7
Enabling manufacturing sector to be competitive through quality
management standards and quality technology tools
50.00
8
National campaign for investment in Intellectual Property
50.00
9
Market assistance/SMEs and technology upgradation activities
(Ministry of SSI in co-operation with TIFAC/CSIR)
26.50
10
Marketing Support/Assistance to SMEs
24.25
DESIGN CLINIC SCHEME, NATIONAL INSTITUTE OF DESIGN, PALDI, AHMEDABAD 380 007
[email protected]
Design
Clinic
Scheme
MSMEs
+
Design Experts
To address issues of competiveness,
in view of Global challenges
Cluster/ Industries Sector Covered Across India:
Design Awareness Seminar:
Completed 263 seminars across the country covering
more than 25 states and union territories.
Data as on 20th Nov 2013
Zone
No. Of DASs
MSMEs
Designers
City/Location
West
North
South
East
North East
Total
77
46
57
51
32
263
3138
1820
2155
2163
1208
10484
188
88
102
86
52
516
40
31
30
34
27
162
S.R. No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Industrial Sectors
Agricultural Equipments
Auto Components
Ceramics & Glass
Electrical Equipments
Electronics Equipments
Engineering & Fabrication
Food Processing
Garments
Gems & Jewellery
Handicraft
Handloom
Jute Products
Leather Products
Machine Tools
Machinery
Medical Equipments
Metalware
Packaging & Branding
Plastic Products
Rubber Products
Safety & Security
Sport Goods
Stone & Marble
Textile Products
Toy
Wood & Bamboo
Wood/Steel Furniture
Multi Products
Total
Total
6
9
10
5
5
47
13
7
19
8
7
8
10
6
5
2
20
13
15
4
1
2
3
6
2
10
13
7
263
Design audit --to understand the challenges
Organisational Level
Inter-Department Level
Intra-Departmental Level
Corporate Communication
& Co. Image
Product. Processes. Design





Observations
Interviews
Video ethnography
Market Research
Scenario Building
©2009, SDM, National Institute of Design
National Institute of Design, Paldi, Ahmedabad
[email protected]
www.designclinicsmsme.org
Potential Markets – Wholesale, Retail, Exhibition, Export
Search for
Technique &
Technological
support
DESIGN
BLENDING
Business
development
Support
Researches in
Artisan social, cultural &
religious background
SWOT Analysis
S = Skill
W = Workmanship
O = Opportunities
T = Techniques
Individual & group
entrepreneurial
development
Design Awareness Programme (NAS + Workshop) :
Cluster/ Industries Sector Covered Across India:
Covered majority of sectors under the DAP and generated reports for
individual clusters from design and systems perspective highlighting
the issues related to products, processes, training, infrastructure,
technology etc
Interactive Study -- Brings design/er to the doorsteps of the MSME
units and expose MSMEs to the benefits of design and provides
expert advice and solutions on real time design problems.
Design Need Assessment Study Report-- highlights Design
Diagnosis / Design Opportunity .Mapping, cluster based macro study,
industry/ unit based micro study. Holistic Understanding of Design
Status at the cluster.
Workshop We Share overall understandings, insights and
opportunities identified Discussion on common design based issues
concerning the cluster. Train participants to the creative problem
solving techniques. Suggestions of Remedial Steps/ Solutions and
Strategy for Further Design Interventions.
Zone
No. Of DAPs
City/Location
MSMEs
Designers
West
North
South
East
17
25
13
57
15
13
9
38
285
319
139
1017
17
32
8
59
North East
46
40
1005
42
Total
158
115
2765
158
Data as on 20th Nov 2013
S.R. No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Industrial Sectors
Agricultural Equipments
Auto Components
Ceramics & Glass
Electrical Equipments
Electronics Equipments
Engineering & Fabrication
Food Processing
Garments
Gems & Jewellery
Handicraft
Handloom
Jute Products
Leather Products
Machine Tools
Machinery
Medical Equipments
Metalware
Packaging & Branding
Plastic Products
Rubber Products
Safety & Security
Sport Goods
Stone & Marble
Textile Products
Toy
Wood & Bamboo
Wood/Steel Furniture
Multi Products
Total
Total
7
2
11
2
27
4
1
14
15
5
11
4
1
1
15
4
4
1
2
3
2
14
7
1
158
MANUFACTURING CLUSTERS
TRADITIONAL CLUSTERS –
more than 200 years, some examples
• Textile – Handloom
/Printing- 600
• Firozabad –glass 400
• Moradabad- brass300
• Khurja- pottery 300
• Aligarh- locks
• Rampur - knifes
MODERN CLUSTERS –
about 100 years some examples
• Ambala- Scientific & home
Appliances.
• Jagadhari – stainless steel.
• Machine tools –Ludhiana.
• Surgical tools &
equipments- Bhiwani.
MANUFACTURING CLUSTERS
TRADITIONAL CLUSTERS –
more than 200 years old, some
characteristics
 Large broad based markets
 Emotionally rich designs
 Traditional manufacturing
practices.
 Strong production systems
may be time consuming &
involve drudgery
 System is deeply embedded
emotionally.
MODERN CLUSTERS –
more than 100 years, some characteristics
 Market is specific –focus on
functional items.
 Sales is on technical
specifications
 Thinking /approach is with a
systematic processes.
 Comparatively faster
production systems may be
not sturdy
Case study of two MSME sectors
• Textile Industry –an age old cluster.
• Scientific Instruments cluster Ambala –
a modern cluster.
Indian Textile Industry– a current scenario
 Second largest producer of textiles and garments after China.
 Second largest producer of cotton in the world.
 Second largest employer in India after agriculture –
Direct Employment to 35mn.people
 Constitutes about 12% of India’s exports.
 Contributes about 14% to Industrial production.
 Contributes about 4% to GDP.
 Investment made in Textile sector since launch of TUFs scheme is
Rs.208000 crores till June 2010
Indian Textile Industry Size -2010:
Source : Ministry of Textiles –India/Technopack units in USD bn.
India’s current USD 52 Billion Domestic Textile
and Apparel industry has the potential to grow
to reach USD 140 Billion by 2020
----- reflecting a substantial growth…
Indian textiles- export potentials
• Textile manufacturing continues to shift to low cost Asian countries.
• Increasing cost of labor, scarcity of raw material and other key
resources like power, rising domestic demand is restricting China’s
ability to further increase its share in the world trade thereby
making it as fourth largest importer of textiles.
• Buyers need to diversify sourcing risk.
• Availability of raw materials, especially cotton, integrated
operations and design skills in India.
• Favorable demographics, rising income and population levels, and
rising retail penetration in other developing countries (other Asia
countries, Latin America etc.)
Hence…Good Opportunity for India to Increase Exports TOO….
Some innovations with respect to markets.
Raw materials- eco friendly, natural,
regenerated, organically produced etc
Weaving processes- technological interventions
to retain the essence but remove drudgery
Dyeing/ Printing processes and other
embellishments - use of azo free/ natural dyes
Product diversifications– to cater to wider
market segments
A case study –
to promote sustainable textiles
in a grass root handloom cluster
while adapting to the expected
market demand in the journey
of sustenance.
Handloom weavers of Barabanki, U.P
Design developments planned and executed under the Integrated
Handloom Cluster Development, pilot project of o/o DC Handlooms,
Ministry of Textiles, GOI , with a vision to inculcate sustainable
development in the textile cluster of Barabanki.
.
Traditional products– of the cluster
Is the low priced rayon stoles and Arafat scarves priced at Rs 35 to Rs 42/including raw material and wages of weaving.
Strength of the cluster –
Weavers have great weaving skills and knowledge of weaving structures and
patterns and motivation to adapt to new designs.
Challenge was For sustainability they have to adapt and cater to wider market segment unlike
their present image of creating only low cost, cheap quality stoles ie
TO CREATE AND ESTABLISH A NEW BRAND – with emphasis on
Sustainable Development- the future milestone.
DEVELOPMENT in WEAVING PATTERNS &
COLOUR COMBINATION
• Stoles
INTRODUCTION OF SURFACE
EMBELLISHMENT SKILLS
 Block Printing
INTRODUCTION OF ALTERNATE YARNS in Weaving• Introduced
alternative natural
yarns like --- Eri silk,
 Muga silk,&
 Bamboo yarns
in weaving stoles.
Attempts were also
made to use
Mulberry silk and
wool.
PRODUCT DIVERSIFICATION
• Home Furnising range
 Accessory range
IMPACT of this intervention
 The cluster could adapt for a wider and varied
market segment by positioning its products
differently.
 A much improved range and quality of
products in terms of weaving quality, dyeing
and colouring and design and colour
combinations.
 Great improvements in the per stole wages
earned by the weaver. They are almost able to
get three times the price of the stoles with
quality and design interventions.
Sustainable Textiles– in news
“Recycling the Dead” Turns Cremated Remains Into Textiles for Products
Nike Accelerates Sustainable Textiles
IKEA Pledges to Transition to 100% “Better Cotton” by 2015
Designer Suzanne Lee “Grows” a Wardrobe From Bacteria
ECOLLECTION DAY 2: Fresh Eco-Friendly Fashions
SUSTAINABLE STYLE SUNDAY:
Exception de Mixmind by Ma Ke
Solar Harvesting Textiles Energize
‘Soft House’
Discovery of -Recron® Green
Fashionably Natural Opens
LA Fashion Week
DENMARK: Sustainable textiles fair to launch in September’2013 by CIFF
Scientific Instruments Cluster,
Ambala,Haryana
Ambala Cantt is a hub for scientific instruments with
more than 800 units engaged in this business.
Is employing more 4000 skilled and semi-skilled people.
Using more than 50 types of different raw material to
manufacture more than 20,000 different types of
instruments, which are being used in schools, colleges,
engineering institutes, medical colleges, hospitals,
universities, research laboratories, quality control lab of
industries and defence/space applications.
The annual turnover of the industry is approx. 800 crore
with approx 200 crore being the export cater destinations
in Africa, the Far East and the Middle East. The larger
players sell to the United States and Europe.
1.
2
12 Industrial clusters from the
city of AMBALA
Electronics
Ambala
Heating Equipments
Ambala
3
Physics Instruments
Ambala
4
Optical Instruments
Ambala
5
Pharmacy
&Pharmacology
Woodware
Ambala
7
Electrical
Ambala
8
Biological Microscope
Ambala
9
Clean Air Equipments
Ambala
10
Glassware
Ambala
11
Opthalmology
Ambala
12
Home Appliances
Ambala
6
Ambala
“Ambala main koi bhukha nahi marta,
lekin koi tarakki nahi karta”
…one of the MSME unit owner at Ambala
The cluster Ambala-- today
The Ambala Scientific Instruments Cluster almost 100 years old but the
complacency among the players, is today struggling for survival.
It was a flourishing industrial centre until the late 1990s, but the rapid pace
of change in the business environment in post-liberalisation India and
growing competition in the international market has jeopardised its future.
Over the years, manufacturing activity in the cluster has declined in the
absence of technology upgradation.The technology used, is obsolete. The
demand for scientific instruments is nevertheless increasing. So those who
once manufactured them now find it more profitable to import products
from China and trade in them. About 400 of the 1,000 enterprises in this
hundred-year-old cluster are now purely traders.
Scientific instrument manufacturing runs on low margins, We have
consequently lost the competitive edge in the global market as well as the
domestic market,” he said.
The cluster, has the potential to yield annual sales revenue of Rs10,000
crore, but is doing business of only about Rs1,000 crore. A large chunk of
this is accounted for by a couple of big players which have the funds to
invest in R&D.
Need is to achieve the unified ecological
approach-----Taking the positive strengths
of both clusters systems – The robustness
and emotional stability of the traditional
clusters and the technology advancement
and future vision of the Modern clusters
in the most balanced harmonious manner.
A FOOD FOR THOUGHT
IS’ NT IT IS AMAZING,
JUST BY TAKING A DECISION OF USING DESIGN AS A TOOL FOR
THE SUSTAINED DEVELOPMENT OF OUR LOCAL MSME
WHAT WE ARE FURTHER DOING IS
•
STOPPING MIGRATION FROM SMALL TOWNS TO CITIES .
•
STOPPING CORRUPTION & MAL PRACTICES.
•
MAKING OUR VILLAGES/TOWNS MORE SOCIO ECONOMIC POWERFUL.
•
PROVIDING BETTER STANDARD OF LIVING FOR ALL.
•
INCREASING THE FLOW OF FOREIGN CURRENCY IN OUR COUNTRY.
•
BY FOLLOWING THE TRADITIONAL GREENER PRACTICES WE WOULD
CONTRIBUTE OUR PART IN SAVING MOTHER EARTH.
The biggest challenge is then to keep abreast
with the changing paradigm to be able to
ADAPT INNOVATE and ADOPT
THANK YOU
ranjanbindoo@ yahoo.co.in; [email protected]

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