The Avantha Group has been working with the Confederation of Indian Industries (CII) since 2004 to sharpen the competitive edge of small and medium enterprises (SMEs) to enable them to meet challenges in the global and domestic markets. Gautam Thapar, the Chairman and CEO of the Avantha Group and Chairman of the CII-Avantha Centre for Competitiveness for SMEs, shares his vision for small businesses with Komal Amit Gera. Edited excerpts:
What is the CII-AVANTHA Centre doing to facilitate the development of SME clusters?
The centre offers advisory and consulting services on a wide range of critical issues such as manufacturing excellence, energy management, cost management, human resource development, among others. The centre does this through clusters of SMEs, grouped together according to location, sector or OEM vendor. This encourages SMEs to form, share and draw from a common knowledge pool. The centre is also committed to helping SMEs remain abreast of contemporary issues through seminars, conferences and training programmes.
Already 203 SME clusters have been formed by the centre and its strategic partners, thereby impacting 2,192 companies. Currently, there are 47 ongoing clusters covering 946 companies. Cluster companies achieve quantifiable results, namely, manufacturing excellence, cost management, energy efficiency and total employee involvement. Some new areas include new product development and e-learning. Successful clusters have been established in Mohali, Gurgaon and Jalandhar, and they run parallel clusters in Pune, Faridabad, Kolhapur, Kolkata, Trichy, Chennai and other locations.
For cluster companies, the primary advantage is return on investments. Other benefits include reduction in customer complaints by about 50 per cent, reduction in process rejections and re-work, reduction in break-downs by about 50 per cent or more and improvement in inventory turn ratio by as much as 100 per cent. It also goes a long way in enhancing the skills of workers, improving product quality and in making the SMEs aware of the best practices.
Does the centre work with the government for the development of SMEs?
We have worked with the government, especially the ministry of small and medium enterprises (MSME) on improving the competitiveness of MSMEs by advocating the setting up of the Lean Cluster Scheme for MSMEs.
What focus do you give to energy savings by SMEs, to reduce their carbon footprint and add to their profitability?
We have a team of energy auditors certified by the Bureau of Energy Efficiency (BEE). We conduct technology gap assessments for SMEs to help identify ways to upgrade technology. We prepare project reports and assist them in the implementation process through vendor support and monitoring. We also organise technical sessions, training programmes and seminars on energy efficiency. Apart from the economic benefits, these interventions result in reduced emissions. In the realm of tangible returns on investment, companies have reported 10 to 30 per cent reduction in their energy bills. The centre regularly collaborates with the BEE and has worked with it on energy clusters for more than 600 SMEs.
What programmes do you conduct to give SMEs global exposure?
The centre organises international events for SMEs to promote benchmarking with the world’s best and bring new concepts on competitiveness to India. We have organised several SME missions to Japan, which is the Mecca of efficient SMEs. Our counselors visit the world’s best SMEs in countries like Japan, Germany, Indonesia and Finland. The lessons from these visits are shared with SMEs back in India. At the same time, SMEs from the world over have visited the centre to learn the cluster approach. In 2011, 25 delegates from 18 countries visited the centre to understand its activities.
What is the centre doing to encourage innovation by SMEs?
Every year we organise a National Cluster Summit in which hundreds of SMEs participate and ideate. We have also instituted the Cluster Championship Awards, which recognise outstanding achievements by SMEs. The awards are given away at the National Cluster Summit. Similarly, we have Kaizen Awards for innovative thinking at the shop-floor level. Interestingly, last year the centre generated 10,753 Kaizens. The 4th National Cluster Summit is to be held in New Delhi on Sept 30-Oct 1, 2011.
