Global SMEs summit at FICCI headquarters, 28-29^th of July 2009.

A delegation from UNIDO attended the two days session of the Global SMEs summit, Business Partnership Meeting 2009 at the Federation House, New Delhi. This meeting was jointly organized by the Ministry of Micro, Small and Medium Enterprises, the Federation of Indian Chambers of Commerce and Industry, and the Confederation of Indian Small and Medium Enterprises.

The participants had an intense training about the way to contribute to SMEs sustainable growth. A large panel of speakers from various business associations and companies shared their knowledge of the SMEs field. UNIDO participated in the summit informing the audience with brochures and posters about UNIDO activities for SME development.

Mr.KVL Narasimham, Senior expert on Cluster Development of the Consolidated project for SME development, addressed the audience as a speaker during the Interactive business session IV on 'SMEs Cluster Development in India: Policy practices and Future Outlook'. This session also involved M. Vijay Sardana, Director of ARPL, M. Mahesh Y Reddy, and M. B.L Malhotra, Former Director of NSIC. During this session, the speakers evoked difficulties the SMEs are facing and their possible solutions to resolve them.

Mr. KVL Narasimham explained to the participants the importance of the cluster approach to increase bargaining power of MSMEs, and pointed the need to focus on innovation. He shared the experience of UNIDO and its achievements in the SME sector. Mr. KVL Narasimham highlighted the role of SMEs to bring about competitiveness, and explained further the philosophy and the actors of a cluster. He also introduced the SPX platform to the participants.

The focus of the intervention was on sustainability, and on business partnership promotion. M. Vijay Sardana welcomed the address, stressing the need for cooperation between the SMEs.

Brief report on Best Managerial (Technical) Practices Training

Indian Finished Leather Manufacturers and Exporters Association (IFLMEA) Members: Chennai
To understand various demand driven capacity building interventions in the Chennai Leather Cluster, a technological-cum-training assessment was conducted by Mr. Umberto Sammarco, an international leather technology expert in select tanneries having different production capacities and processing different variety of skin and hides, under the ongoing UNIDO Consolidated Project for SME Development in India during April 2009. As an outcome of the audit, improving productivity, quality, yield and operational efficiency of the tanneries were identified as critical intervention areas to reach the long term objective of Cluster Twining.

First Module of the training in Best Managerial (Technical) Practices was conducted by Mr. Roberto Vago, an international tannery expert in Chennai during 22nd June-25th June 2009. First three days were dedicated to classroom training followed by practical demonstration in a tannery on the last day. Participation profile includes technical heads of 20 tanneries along with CEOs in most cases. In order to bank the knowledge in institutions, Central Leather Research Institute (CLRI) was also invited to participate in the programme. It is expected that CLRI will disseminate the outcome to larger number of SMEs in the cluster.

Mr. Roberto Vago started the presentation with pictures of Italian tanneries during 1957-58 in which the leather is dried under sunlight and primitive machines in tanneries. He has also detailed the modern layout the tanneries in Italy and the advanced machineries used by the Italian leather industry as of now thus demonstrating the transformation process.

The technical management training was divided into five different topics, namely, (1) machinery management, (2) chemicals management, (3) prevention of bacterial attack in various stages of tannery operations including best practices of application of biocides, (4) quality compliance to meet various standards and (5) microscopical examination of skins, hides at different stages of tanning process. The course materials also included video presentations on the advanced machineries.

The main specific topics covered under the machinery management are comparisons with different type of process vessels, namely, drums, paddles, stainless steel drums and polypropylene drums, effect of blade angles in rotary machines, control in splitting operation, optimizing drying process to obtain good quality in leather, optimum working practices of skins and hides to obtain increased area yield and proper maintenance practices for the machines.

The process management topics included certain recycling methods in different operations, hair save liming process, importance and best practices of degreasing, improvements in various unit processes and testing methods for various characteristics of leather. Proper application of biocides during the tanning processes were highlighted which will avoid quality deterioration in leathers.

Mr. Roberto Vago also explained the different levels of quality compliances for Italian tanneries, namely, criteria set by specific agencies, criteria set by local government and criteria set at the level of European Union. The case of Vero Cuio was explained, which is a brand owned by a consortium of tanneries who produce sole leather. There are different quality parameters set up by the consortium in order that the member companies can use the brand name. He has also briefed about the EU level compliances, namely, REACH and Biocides regulation.

The micro-scopical examination of hides and skins revealed the various process improvements required to increase the quality.

On the fourth day, all the participants attended the practical demonstrations in a tannery mainly to identify the improvements required to increase the quality. Some of the best practices discussed during the classroom session were practically demonstrated and experiences shared.

On 26th of June 2009, Mr. Roberto visited Central Leather Research Institute (CLRI), the partner in the programme. He discussed various research and development areas in tanneries especially in reducing water consumption and increased usage of enzymes in processes. He was fully convinced on the capabilities of CLRI to spearhead commercialization of R&D products for the larger benefit of Industry. He also stressed role of associations like IFLMEA in increasing the industry-institute cooperation in such areas.

Feedback received from the participants was very satisfactory with a request to conduct such high quality training periodically to abreast latest trends in the cluster.

Mission of Dr. Santa Mole, Director of the Italian Development Cooperation Office. June 2009, Chennai

Pallavaram Tanners Industrial Effluent Treatment Company Ltd (PTIETC)
Pallavaram Tanners Industrial Effluent Treatment Company Ltd (PTIETC) has been formed by the tanneries located in the Pallavaram, near Chennai to treat the effluent generated by them. At present, 151 tanneries (122 members are active)are connected to this common effluent treatment plant.

Points of discussions:

• The plant has three stages of treatment, namely, primary (physical-chemical), secondary (biological) and tertiary (physical-chemical) treatments. After the tertiary treatment, it is sent to Adyar River by pumping for about 5 km.

• The capacity of the plant is 3000 cubic meters per day (3 million litres per day), which is presently serving for 122 tanneries, the original design for this plant was provided by UNIDO

• The plant is installing reverse osmosis system to attain zero liquid discharge status which is the present norm prescribed by local pollution control authority. For this the company jointly promoted, including other CETPs in Tamil Nadu, Chennai Environmental Management Company of Tanners Ltd, a Special Purpose Vehicle, to implement the project utilising Central Government and State Government funding support along with 35% contribution by their members on the capital expenditure. Thereafter, the members will be operating the plant with their contribution completely.

• The average employment in tanneries in this cluster is about 50 per tannery. There are about 9,700 employees working in this cluster. Apart from the direct employees, about 5,000 employees are working indirectly, namely, chemical suppliers, machinery suppliers, mechanics, transport workers, etc.

• The annual turnover of the cluster is about Rs. 800 crores (€ 123 million).

Dr. Mole observed that colour of the discharged water needs further treatment and usage of chemicals may be reduced in the operations. The land fill dump also needs further treatment.

VRS Leathers Pvt. Ltd.
VRS Leathers has tannery in Pallavaram near Chennai. It produces mainly shoe upper leathers and leather goods leather from semi finished leather, i.e. wet blue leather. The major production is cow and buffalo while goat is also produced as another product. The company was started in 1986 and it has employed about 90 people.

Main points of discussions:

• Tannery produces leathers for leather goods and shoes from semifinished leathers, mainly cow hides

• Capacity of the tannery is 500,000 sq.ft / month

• The tannery is participating in the training programme organized by IFLMEA with support of UNIDO project

• A lady worker was interviewed: The details are: Working for 3 months, previously worked in other tanneries, have three children, being taken care of by her mother, eldest one goes to school, salary Rs.2400/- for normal working hours, sometimes does overtime and gets extra earnings, husband works as painter.

Central Leather Research Institute (CLRI)
CLRI is a central hub in Indian leather sector with direct roles in education, research, training, testing, designing, forecasting, planning, social empowerment and leading in science and technology relating to leather. CLRI has been playing a vital role in the transformation of the industry.

Main points of discussions:

• A presentation was made by Dr. Mandal on various activities of CLRI

• A handful of research projects were undertaken by CLRI on bio-processing of leather, particularly from raw to semifinished stage of leather processing. The bio-processes use various types of enzymes. Some of them are in commercialization stage.

• Technologies were also developed to bring down the water consumption for leather processing from 30 litres per kg of raw hide / skin to less than 5 litres per kg of raw hides / skins

• CLRI actively participates in the UNIDO projects

• A visit was made to Shoe Design and Development Centre of CLRI, where Mr. Sadiq explained various initiatives of this department in the fashion forecasting and design area

Central Footwear Training Institute
MSME Technology Development Centre, popularly known as CFTI (Central Footwear Training Institute), Chennai and autonomous Institution under Ministry of Small Scale Industries, Government of India, develop Human Resource for Footwear Industry since 1957. This Institute got modernized through UNDP during 1993 and equipped with modern infrastructure.

Main points of discussions:

• Different departments were visited

• A presentation was made by Mr. Puri on various activities of CFTI

• CFTI is planning to set up 5 training centres in the clusters under "employment linked skill upgradation programme" of DIPP, Government of India. Under this project CFTI will be training 7365 candidates within 2012 and 80% of them will be placed in the industry.

• CFTI is planning to buy seat and side lasting machine and upgraded Procam software for shoe design during the current year as part of keeping in line with the recent technological development

Shri Ramm Auto Components
The unit started as typical SME and entered into automotive sector as a subcontractor. Their customers include; PHA-strategic sourcing group for Hyundai, Ford Mitsuba-Sical and BHEL.

Main points of discussions:

• The unit is manufacturing auto components for the last 15 years and the present CEO is second generation entrepreneur.

• 16 people are employed and the average salary is Rs,3000 pm plus housing and food facilities provided

• Internal rejection is 2% and the rejection at customers place is 0.2%

• The unit is aspiring towards expansion and needs technology partner for the same.

Devendra Exports (P) Ltd.
Established in 1965, Devendra exports are a private limited company operating in Ambattur Industrial Estate. Mr. Nirmal Kumar is the Managing Director and CEO. Product range of the company include: Automotive fuel injection parts, Feed Pumps, Hand Primer, Filter and parts and are employing 115 persons.

Main points of discussions:

• After visiting the facilities, Dr. Mole suggested to increase investments in employees through training and other social aspects of business.

Ambattur Industrial Estate Manufacturers Association (AIEMA)
AIEMA is an organization for the entire Ambattur Industrial Estate and the focus group of the project "Auto Component Manufacturers" is a part of the gamut. AIEMA ATC is another entity formed for AIEMA members for extending value added services.

Main points of discussions:

• Mr. Sredhar, Vice President of AIEMA, Mr. Srinivasan, immediate past president explained activities of AIEMA and progress on various activities of the ongoing project.

• Various participating SMEs spoke on benefits of the UNIDO intervention and requested for a common facility center.

Dr. Mole expressed satisfaction on the progress and suggested SME owners to invest on human capital (employees) and bring a change in the life styles so that they contribute dedicated services to employer resulting in productivity and quality.

Confederation of Indian Industry (CII)
An interactive meet was organized by CII with various stake holders to highlight ITP activities.

Main points of discussions:

• Mr. Amrolia briefed on the potential opportunities of Tamil Nadu for the growth of Auto Cluster including the infrastructure and prevailing conducive business environment.

• Mr. Sujith explained progress on various UNIDO led initiatives and assured of its objectives been met in the agreed timeframe

• Mr. Bruno explained various components of the ongoing project and briefed participants the context of this meeting

• Mr. Sivaganam and Mr. Moinudeen spoke on UNIDO SPX programme.

Meeting with Indian Finished Leather Manufacturers and Exporters Association (IFLMEA) and Indian Shoe Federation(ISF)

Main points of discussions:

• Dr. Zackriah Sait briefed about the leather industry in India and the industry in Tamil Nadu and also briefed about the IFLMEA and its members

• Dr. Santa Mole insisted that the social factors in the industries should be looked into and that will be the target of the Italian Cooperation. These includes avoidance of child labour, improved working conditions, improvement of living standards of workers, improvement of occupational safety and health (OSH) conditions, etc.

• Dr. Sait expressed that the labour laws are very strict in Tamil Nadu and the enforcement of the same is also strict in this state. He also mentioned that the leather industry has done lot of work in the environment area but still more can be done.

• Dr. Mole expressed that the future programmes should be considered in keeping focus on these areas. She also briefed about the activities in the project on avoidance of child labour in silk industry in Karnataka. Safety in machine working practice could be one of the areas for training.

• Mr. Khaleel of Nibras expressed that the upgradation of lower selection and better utilization of locally available materials like Brazil and Mexico should be focussed in the training programmes

• Dr. Sait expressed that the training programme is requested by 20 more companies and he requested Mr. Bruno whether it is possible to include in this programme. Replying to this Mr. Narasimham mentioned that the institute representatives should provide the training to next batch companies. Ms. Mole suggested the cost sharing method.

ISF

• Mr. Aqeel Ahmed briefed about the project activities, like training and signing of MoU with Italian association.

• Mr. Ahmed was expressing that design programme has not taken up as we planned due to exorbitant fees by two design training institutes in Italy.

• He was requesting whether companies can also be included along with the institute representatives for the design training in Italy. He said that the industry candidates will be sponsored by respective companies. Mr. Narasimham expressed that this will be possible only if the budget is available.

• While replying to query of Mr. Ahmed on the candidates from institutes, Mr. Viswanathan expressed that the candidates has to be nominated by ISF and ISF will engage the institutes in order to participate in the programme. Mr. Narasimahm expressed that the institutes candidates has to conduct two batches of training to industry free of cost.

Visit to Ankur Footwear and Saktthi Footwear

• Worker welfare conditions were the focus of visit to these two units. Some of the work conditions like, application of solvent containing glue which exposes the workers continuously to VOCs (volatile organic chemicals), proper flooring of work place, etc. were noticed.

• Saktthi Footwear is implementing the suggestions provided by Italian experts during the training programme

• Saktthi Footwear has started preparing samples for Zeis Excelsa, the company assisted by the project

Wrap-up meeting

• Focus should be made in our future activities which addresses the social issues, like occupational safety and health, minimum wages, avoidance of child labour, etc.

• Possible areas include assistance in obtaining voluntary standards like SA8000, OSHAS 18000, etc.

• Dr. Mole pointed about possible project proposals that could address the social issues.

Training cum technological assessment in member companies of IFLMEA.

UNIDO is implementing a Consolidated Project for SME Development in India with main objective of facilitating sustainable business linkages between clusters in leather, footwear and automotive components.. The project has three components, namely, cluster twinning, investment and technology promotion and introduction of mutual credit guarantee scheme. Chennai leather cluster is one of the clusters selected for technical interventions by the project steering committee.

Indian Finished Leather Manufacturers and Exporters Association (IFLMEA) is a trade association headquartered in Chennai with prime focus on addressing interests of finished leather manufacturers and exporters. IFLMEA is the partner association to UNIDO under the ongoing project towards implementation of demand driven technical interventions.

In the globalised scenario, competencies of SMEs is to be strengthened benchmarking with worlds best standards for their continuous growth. In this context, under the cluster twining component, the need for technical training has been identified as one of the main gap area of the cluster. The proposed training is expected to build capacity accordingly at the enterprise as well as the institution level. Though the association is taking a proactive role in addressing the training needs of the companies in the past, this training programme is expected one of the additional services to the IFLMEA members, thus increasing the value addition at the association level as well.

Under the ongoing UNIDO project, IFLMEA has entered into a cooperation agreement with Associazione Conciatori, a trade association in Santa Croce, Italy in the following four main areas (1) promotion of Italian cluster model within IFLMEA (2) training of selected IFLMEA companies on best practices (3) technology upgradation and (4) exchange of information.

As the first step towards realising the above agreement, Mr. Ummberto Sammarco, an International leather technology expert has been identified for training cum technological assessment of selected IFLMEA companies for a period of two weeks with an objective to provide a plan for (1) address training needs of companies and (2) provide a technological upgradation plan.

IFLMEA has identified 14 tanneries which represent the tanning industry of Tamil Nadu, covering most types of raw materials; processes adopted in tanneries and finished leather. Mr. Sammarco visited all 14 tanneries and made a detailed assessment of equipment and production facilities available in each tannery and capabilities of employees in terms of technological level and productivity.

The following are the important observations of the assessment:

Quality:
Quality of the products are satisfactory and comparative to International markets. While this is true for big tanneries, there are some issues related to quality problems in smaller tanneries. However it is possible to meet the international quality and its consistency. Compared with Italian companies, the variety of products made in these tanneries are much less.

The objectives of the modern leather manufacture must satisfy at the same time:

• requirements of fashion

• requirements of chemical, mechanical and physical parameters according to the product

• safeguard of environmental resources (water, air, ground: eco-friendly process and eco-friendly chemicals use)

• safeguard of consumers health of leather products (limiting the presence in the leather of toxic substances : eco-friendly process and eco-friendly chemicals use)

• rationalization of production costs

The main gaps identified are (lack of) uniformity in colour, consistency in production and quality, loose grain, difficulty to obtain satisfactory quality of leather starting from lower selection, softness, lack of cleaner technologies and insufficient knowledge of eco-labels and International marks.

Productivity:
The productivity is not satisfactory compared to Italian tanneries with respect to the factories potential (installed capacity) and number of workers. The production of sq. ft per worker per hour is not comparable with the average of Italian standards. For many reasons, it is difficult to compare precisely the productivity of an Indian tannery with those one of an Italian company. Approximately, it has been estimated that the well-organized Italian tannery produces 6-7 times more.

The low productivity is due to obsolete and sometimes incomplete mechanical equipment, lack of automation, ineffective of management of human resources and machinery, limited skill levels of employees and insufficient safety measures in machines.

Yield
The yield of finished leather varies from tannery to tannery. In the well-organized ones, it is near to the Italian standards; in others, it is lower, due to improper use of machinery, over-trimming, or incorrect chemical processes.

UNIDO in consultation with IFLMEA is preparing an action plan for the next twelve months to address the above issues. CLRI as an institute will also participate in the planned interventions. The core objective is to build capacitates in to the Chennai cluster so that Confidence of Italian companies will increase during business linkages.

WORKSHOP ON VISION AND STRATEGY PLANNING
AIEMA Auto Cluster: Chennai

To understand various demand driven capacity building interventions in AIEMA auto Cluster, an Enterprise Gap Analysis (EGA) was carried out during Nov 2008. This EGA highlighted the need for Vision and Strategy Planning apart from other components of SWOT analysis.

Schedule of programme

Based on the EGA findings a Two Day Workshop on Vision and Strategy Planning was organized for SMEs on 30th and 31st of May 2009 at Hotel Greenpark, Chennai, with the following agenda

The Programme started with Welcome remarks by Mr.KVL Narasimham, Cluster Development - Senior Expert, outlining the initiatives of UNIDO and the need for understanding Vision building and Strategy Planning Techniques.

An overview of the Workshop was given by Mr.G.Rangarajan, National Expert - Auto Components. A consolidated account of SWOT analysis of SMEs, business turnover, methodology of the Workshop and expected out come of the Workshop were briefed in the Introduction.

Concepts of Vision Building was explained in detail with Mission, Values and Vision by Mr.S.Vasudevan, formerly of M/S.Ashok Leyland. This session included fundamentals of Vision, its need, the techniques of preparing the Vision Statement and examples of Vision statements of well known and successful organizations. This lecture was followed by a practical session wherein the participants were made to prepare Vision for their own industries with the help of a Template provided.

Mr.K.N.Krishnamurthy, formerly Special Director and Technical Advisor to Managing Director of Ashok Leyland gave valuable inputs to the participants on Market and Market Dynamics. This session also contained the present automobile market scenario, potential threats, and possible strategies for fast changing global trends.

An interesting practical session and group discussion followed with the participants giving a thought to price reduction demand by auto OEMs. The participants formed three groups, discussed the strategies required to meet the demand of OEMs and made an interesting presentation to all the participants.

Mr.N.Ramachandran, Managing Director - MEL Systems & Services, gave a lecture on Business Planning and Resource Planning. This session was full of examples and experiences of a successful entrepreneur. The participants eagerly interacted with the speaker to understand and appreciate the various strategies.

The sessions of 1st day came to a close with presentations on Value Addition and Waste Elimination by Mr.G.Rangarajan, National Expert Auto Components. The session briefed upon the cost saving measures and identification of areas which are prime requirements for the present situation. These sessions were well received by the participants as this directly affects their margins through value added activities to their present business.

The second day of the Workshop started with the session on Strategy Planning, Introduction and Techniques by Mr.G.Rangarajan " National Expert " Auto Components.This session enabled the SMEs to understand the need for strategy planning, types of plans, tools and techniques along with examples of well known organizations.

Subsequent to the above, the participants were provided with a Template to prepare strategies for their own industries and assisted in developing the Strategy Planning through the Workshop. This strategy planning would be the basis for preparing a full scale strategy plan later at their site.

It is heartening to note that at the end of the Workshop, 95% of the participants expressed their opinion that Reading material, Faculty and Programme content were GOOD to EXCELLENT. This feed back and experience encourages for similar programmes in future.

Brief report on Workshop on Web Site Development Support to AIEMA Auto Cluster Members

To understand various demand driven capacity building interventions in AIEMA auto Cluster, an Enterprise Gap Analysis (EGA) was carried out during Nov08. This EGA threw up need for synchronization of website information with Buyer Perspective apart from other components of SWOT analysis.

Based on the EGA findings a half Day Workshop on Website Development Support was organized for SMEs on 9th May 2009 at Chennai,

Twenty participants of the Auto cluster participated in the workshop. Mr. Muniasamy of RV Matrix explained the need and rational behind standardized template that has been finalized with Mr. Mustak Cagler, International expert on auto sector. Buyers perspective of looking the website, information on products, standards, process certification were explained and the new template addresses all of these points.

The Following CEO Techniques in the website development were explained.

• Site Design:
  The Site design has no more flash and animation content. So it will be loaded as quick as possible it reduces the traffic in the web server.

• Keyword Phrases:

  • Use keywords that are being searched for. Check our keyword phrases with either the Search Term Suggestion Tool.

  • We should use our keyword phrases from the page we are linking to, in our anchor text on the site map.

• Keyword Density:
  Keyword density is a very important part of search engine optimization. Keyword density is the percent that our keyword or keyword phrase are of our web page text. If we want to look that our competition to see what keyword density they are using. To high a keyword density will be considered search engine spam and can get us blacklisted. Our keywords should be toward the top of our page and our keyword phrase is in either every paragraph or every second paragraph depending on our paragraph length.

• Title & Meta Description Tag:
  Construction of our title tag is one of the most important things need to do. Each page should have a different title with 2 or 3 of our keyword phrases at the beginning. When search engine results are displayed the title is the first thing people see. Below the title is a description which will be either be taken from our meta name description content="Description phrase" or from the first sentence on at page. Our description should also have 2 or 3 of our keyword phrases at the beginning as so should first sentence. We should have a different title, description and first sentence on each page.

• Meta Keywords Tag:
  The meta keywords tag is not as relevant as it used to be and some say Google doesn't ever look at it anymore, but we put it in anyway. It is as follows, <Meta name="keywords" content="keywords, go, here" /> and put in it all our keywords and keyword phrases. This tag should be different for each page.

• Author & Robots Tags:
  The Author Tag should contain the name of the company that owns the site. This tag will help us to get a #1 position for our company's name.Use a generic Robots Tag on all pages that want indexed. This instructs the robots to crawl the page. The following is the generic robots tag.

• Frames:
  Many search engines can't follow frame links. So we are not using the frames here

• Site Map:
  A good menu system is really a site map. A well constructed menu system that is on each page and contains a link to very page on the website is all you need.

Tips for CEO

• Objective is to improve the volume and quality of traffic to the site

• Get the domine name registration from a top company. Saving some money with local players doesn't help in long run

• Title tag: 60 characters max, related to main activity

• Meta description tag, 150 characters

• Keywords are mandatory

• Go to the site http://www.google.com/addurl.html and do some research on your existing url.

• http://www.scrubtheweb.com is another site to explore effectiveness of your site and examine the results

• Conduct a research on 5 competitors sites, pick up the key words, avoid the same in your web page. Go for different keywords

• No frames in the design

• Please avoid flash animation as far as possible

• For all the pictures, Alt tags are mandatory. Don't leave any picture without the tag

• While structuring the url, please pay attention to the indexed items: when you are clicking on quality, it should appear as www.xyz.com/quality and not as www.xyz.com.203456.6789 This is very important

• Site name: better select a site name which has at least one of your key words. Example: Ashok enterprises limited (wrong) instead try Ashok gears limited for easy catch by robots of search engines.

• Also try the following:

  • Register with alibaba, indiatrade.com or any such sites

  • Exchange links of your URL with friends, similar product groups, institutions etc

  • Please create e-groups and exchange messages

  • Create internal links in your site, example: at the end of each page, create a link to top or home page

• Site map is critical

• Trends in Google, google.com/analytics, google.com.adwords, page rank check, webmaster tools may also be explored

• Update contents regularly

Inter-firm Co-operation Workshop Between AIEMA Auto Cluster Members and Rane (Madras) Limited [19th April2008]

Background
As a part of the ongoing cluster development initiative, a request was made by cluster members during the last cluster meeting for exposure to various quality systems that can be adopted by them to become competitive. This idea, nurtured further, evolved in to an exposure visit to an established manufacturer so that cluster members can have firsthand experience and understanding in adopting such systems. In this connection, UNIDO approached M/s Rane Madras Ltd, an OEM and Tire-1 manufacturer, through Mr. PN Muralidhran of Ventech Services to organize the workshop.

M/s Rane Madras Ltd manufactures steering assemblies including power steering, gear boxes and allied products having 41% market share for their products in India. The workshop was conducted jointly by VP (Operations) and VP (TQM & Materials) followed by a factory visit to our cluster members.

Learning for the cluster members

• Selection of the appropriate quality strategy TQM for Rane

• Involvement of work force in the process, training, incentives for innovation etc

• Firm and transparent management

• Process system management- 5S, Quality Circles, periodic meetings with workers, champion concept

• Productivity improvement and elaboration on two specific cases; one is the improved production from 14nos per day to 144 nos per day without new investment in a span of 2-3 years and the second is to bring down machining cost of one component from Rs.140 to Rs.20

• Evolution of the Zero ppt in Rane and adoption of best manufacturing practices in the shop floor

• Lean manufacturing

• Empowering workers to solve day to day problems and group solution techniques

• Vendor development and the Rane model

• Maintenance of tools

• The company is 40 years old with most of the machines having 15 plus years life but able to modernize internally to increase productivity

• Factory visit provided lot of insights in practicing TQM, 5S and other programmes

• The R&D facilities and testing facilities are in conformity with German and UK standards

The entire visit has been an eye opener for the UNIDO-AIEMA team members and will serve as a great Change agent in this initiative of UNIDO. Rane Madras Ltd opened their doors for further learning by interested cluster members in the areas of 5S, preventive maintenance, optimal utilization of tools, productivity improvement etc. They have also expressed interest on the cluster in identifying new vendors (as none of the cluster members present in the workshop were suppliers to Rane).

Learning for the Association
The core committee members of the Auto sub-cluster of AIEMA who attended the workshop realized that these initiatives are necessary in creating awareness among the members and also show-casing strengths of their members to potential corporate like Rane. They are eager to see completion and uploading of their SPX profiles (which are being done through the ongoing project) on the web.

Cluster members requested for an interactive meet next time with Tire-1 manufacturer of Hyundai. In order to facilitate, we need to complete the comprehensive audit of members to understand the strengths and also introspect for necessary interventions.