• Posted on: 2 March 2016
  • By: admin

Lean Manufacturing Competitiveness Scheme


Support to MSMEs for undertaking Lean manufacturing (LM) is to enhance their productivity and competitiveness by reduction of wastages in manufacturing processes, inventory management, space management, energy consumption, etc. The LM techniques also result in reduction in rejection, standardization of processes, better layout of machines resulting in reduced transportation of products during manufacturing, etc. The Scheme will be implemented in 500 clusters spread all over the country

The share of manufacturing sector in Indian National GDP over the years has stagnated to 14-15% only. The National Manufacturing Policy of Government of India envisages share of manufacturing to reach target of 25% of the National GDP by 2022.

Lean Manufacturing

Lean Manufacturing is a set of techniques, which have evolved over a long period and are based on various minor to major breakthroughs that help in reducing cost and hence increase productivity and competitiveness. It includes Systems of 5S System,Visual Control, Standard Operating Procedures (SOPs), Just in Time (JIT),KANBAN System, Cellular Layout, Value Stream Mapping, Poka Yoke or Mistake Proofing, Single Minutes Exchange and TPM.


Engagement of Lean Manufacturing Consultants (LMC) to work with selected MSMEs in the chosen clusters with financial support by the Government. Under the Scheme, MSMEs will be assisted in reducing their manufacturing costs through proper personnel management, better space utilization, scientific inventory management, improved process flows, reduced engineering time and so on with the application of LM techniques.

The Scheme is basically a business initiative to reduce “waste” in manufacturing and increase in competitiveness of the individual units i.e. They can manufacture better quality products with less cost by improvement in process flow, standardization of process, reduction in waste, processing time, etc.

Mini Cluster(MC)

Mini-Cluster is a group of preferably 10 MSMEs located within an identifiable and as far as practicable, contiguous area and manufacturing same/similar products. A mini cluster may be formed by new SPV or as a Sub group/ DPG of an Association or Existing SPV. MSMEs will be motivated to avail the scheme through awareness programmes. MSMEs are expected to assess the suitability of forming a Mini Cluster by exploiting the benefits of synergy, collective bargaining and economies of scale.

The scheme may be availed by existing Special Purpose Vehicle (SPV) by bringing in suitable changes in the mandate of the SPV. In case SPV is not available in the cluster, the scheme may be availed through another legal entity.

A MC will consist of ideally 10 MSMEs (minimum 6 units). All the units of the MC would work with the assigned LMC to implement the specific LM techniques. In case the scheme is being availed by SPV (existing or new).

Mini Cluster would be assisted by the field /branch/local office of NMIU and MSME-DI concerned to submit the application to avail the scheme.

National Monitoring and Implementing Unit (NMIU) 

National Monitoring and Implementing Unit (NMIU) will be responsible for facilitating, implementation and monitoring of the scheme. NMIU will be a competent National Level organization, with experience and competence in Quality Management and/ or Lean manufacturing programmes and will function as the MSMEs outsourced project "Control Room". It will monitor every stage of the programme on behalf of the Development Commissioner (MSME). The field level office/ project offices of the NMIU will function as Implementing Agency (IA) for implementation of the projects.

Selection of NMIU: NPC and QCI – two national level organizations having domain knowledge of lean manufacturing, quality assurance, etc will be considered as National Monitoring and Implementing Units (NMIUs) on nomination basis by the O/o DC(MSME). 

Lean Manufacturing Consultants

An Individual or a Consultancy Firm (National or International) duly registered with or certified by a reputed certification agency in the field of manufacturing technology, quality control etc., would be an eligible entity to participate in the Scheme as a LMC. NMIU will obtain the approval of the SSC for the criteria for empanelling the LM Consultants.

Mini Cluster in consultation with Implementing Agency will short list/ recommend the names of suitable LM Consultants for particular MC, out of the list of empanelled consultants.

NMIU in consultation with Office of DC, MSME would give approval for LMC on the basis of suitability of consultants for the respective MCs and the fees demanded.

COVERAGE AND ELIGIBILITY: The Scheme is open to all Micro, Small and Medium Manufacturing Enterprises throughout the country. The units should be registered with DIC (EM-II) or with any other agency (Professional body, association, Govt agency, department, etc). The units are required to form a MC ideally of 10 units (minimum 6) by signing among themselves a Memorandum of Understanding (MoU)  

Detail Guidelines of the Scheme