Business Standard Smart Business Event in Association With CICU

Country’s one of the largest industrial town Ludhiana, which is home to more than 50,000 small and medium enterprises (SMEs) need to shed old ways and diversify as well as adopt new technology and best industry practices to stay relevant, said panelists at Business Standard Smart Business Event and members of Chamber of Industrial & Commercial Undertakings (CICU). Challenges, road blocks and issues faced by SMEs in the region were extensively discussed.

According to panelists, SMEs need to work more efficiently including using the right kind of machinery, technology, keeping a check on manpower costs as well as use better energy efficient mechanisms to cut down on costs and increase profits.

According to government reports, the country which has over 51 million SMEs and is the largest employer in the country with over 95 percent of establishments and over 80 percent of jobs coming from the manufacturing sector.’

The latest export figures from the government suggest that the exports had risen for the second consecutive month in October, growing by 9.59% to $ 23.51 billion. This was only the second occasion in the 22 months since December 2014 when a chronic fall in exports started. This is due to a pickup in global import conditions which saw export figures for most major economies improve.

Sachit Jain, managing director of Vardhman Special Steels, said that the biggest problem faced by SMEs today is capital crunch. “There is a major issue of Capital. SMEs need to be cost competitive as well as focus on quality. They need to make better quality products and improve yield, eliminate wastage of water and electricity. If it is possible then they should align with a major company so that they have a constant source for orders,” he said.

There is also a need to work on operational excellence said Upkar Singh Ahuja, President, CICU. “We need to have a lean manufacturing layout to cut costs. Because our processes are not lean the manufacturing practices are not good. Industry needs to adopt modern tools. There is a need to have a good layout in the manufacturing unit to reduce wastage and save on manpower. SMEs need to work in line with big firm. They need to also spend at least 20 percent of resources on new technology and new product development,” he said.

Experts also believe that there is a need to diversify as well as adopt digitization of resources. SC Ralhan, past president FIEO, said SME need to modernize. “Even SMEs need to keep track of the markets. They should know what is happening the world over especially in China and Taiwan,” he said.

According to Vinay Kumar, AGM, Credit, Ludhiana Module State Bank of India, banks are working with MSMEs to help them get much needed loans. Kumar said that banks have come out with variety of schemes to help the sector. Neeraj Arora, Assistant Director MSME-DI said that the manufacturing sector should avail services given by the government including an MSME mobile app which helps SMEs stay abreast with new guidelines related to the sector.