CII to launch 15 new SME clusters

As part of the industry cluster initiative for small and medium enterprise (SME) sector Confederation of Indian Industry (CII’s) southern region (SR) is planning to launch 15 clusters across southern states in 2009. The industry body has started the initiative in 2004 to bring Internal Competitiveness in the SME sector.

C R Swaminathan, chairman, CII Southern Region (CII-SR) said so far around 93 companies from the southern states have benefited from CII’s cluster approach, which was launched to improve the internal competitiveness and to gain sustainable advantage. It has generated recurring savings to the tune of Rs 70 crore every year in the region.

The main objective is to incorporate best manufacturing practices by eliminating the non-value added activities and costs inside both the manufacturing and administrative facilities.

In 2009, 15 more clusters will be started in Tamil Nadu, Kerala, Karnataka, Andhra Pradesh and Puducherry. Each state will have 2-3 clusters. In Tamil Nadu the CII is planning to set up a cluster in Madurai for textile, rubber, chemical and food processing. So far, 23 firms have show interest, he said. Similarly, two clusters each in Tiruchy and Erode, and one in Pudhucherry. While in Andhra Pradesh the focus will be OEMs, in Kerala it would be rubber. CII is looking to launch the clusters in three months, said B T Bangera, chairman, Cluster Forum, CII - SR.

He said that invariably large companies have resources for training people and implementing best manufacturing practices. The SMEs encounter stumbling blocks in accessing competent cost effective training programme on an extended time basis of 15-18 months.

It is this aspect that makes cluster approach a viable tool as the handholding sessions provide group learning, which automatically result in sharing the training cost among the members to a very viable level.

Automobile components manufacturers, machine tool manufacturers, special purpose machines manufacturers, foundries, tool and die makers, suppliers of textile machine manufacturers, food industry, leather and footwear manufacturers are some of the sectors of the CII SR Clusters.

The programme would also help conservation of energy, incorporate best costing methodologies, improve total employee involvement, reduce customer returns and rejections. It inculcates the habit of continuous improvement in all processes and helps in problem solving through implementation of various quality tools and techniques.

This approach has helped SMEs to face downturn and stay competitive in exports. The approach has dwelled in the culture of looking at delighting the customer through quality that has inundated the strong partnership between OEMs and suppliers, said Swaminathan.

He added, innovative approaches have evolved, which has reduced the lead-time and rejection levels and changeover time. These parameters by itself have brought down the operating costs 30 per cent.