Pro MFG Smart MSME Forum: How can MSMEs shift from survival mode to excellence mode?

#SmartFactories #Industry4.0 #MSME #DigitalStrategy

Team Pro MFG Media

Mr. Rama Shankar Pandey, MD Hella India, emphasized the importance of making skilled jobs cool in his keynote address at the Pro MFG Smart MSME Forum:

MSME - Micro, small and medium enterprises are the backbone of any economy. If we would want to put up an analogy, the big manufacturing companies, the MNC and the conglomerates are just the tip of the iceberg, while it is these micro enterprises, small businesses and medium ventures that form the base of that iceberg.

It is a largely an unorganised sector in India, built by the enterprising souls trying to get out of the daily grind and signing up for a lifetime of it to build something that can make a difference. And in these challenging times of the pandemic and its aftermath, Pro MFG Media had organised a summit with industry leaders to try and offer advice to the ailing and struggling enterprises in their way forward to build robust business models.

Mr Rama Shankar Pandey, MD Hella India and Chairman on Connected Vehicles (CFT) - ACMA India and also the architect of its turnaround to a global competitor 10 years ago, addressed the Pro MFG Smart MSME Summit stressing on the need of skilling, forging mutually beneficial partnerships and pointing towards the mindset that allows growth.

‘How to get from survival mode to excellence mode?’ This is a question that all entrepreneurs and business leaders need to ask themselves.

“The first topic I would like to touch upon is the mindset. When we start small and medium enterprises with a cost arbitrage mindset. I think this is where we should be careful. Rather, we should look into creating a value proposition to the large sector. When that happens, the interdependency is very, very strong, because then we are an integral and unique part of the value chain. This uniqueness will take away the small or micro or medium tag. Look at it not as economies of scale rather as economies of scope. And adding the value creation portfolio to it, the overall ecosystem works” says Mr Rama Shankar Pandey.

For example, you can start a small job in value creation. As you take the job further ahead, work on it like it is your own product and try and improve it. Slowly we go to the partial ownership or full ownership of the whole design and development activity, technology activity, and from build to print, we finally get into a proprietary or IP based continuous improvement innovation process. And when that happens, your business has a core competency and a fixed revenue that allows you to foster.

Moving ahead Mr Pandey said that “The biggest start or door opener for any MSME will be, I always say, quality is your business card. So whatever is done in the past with costs, people will forget it over the long run. So it's good to negotiate, it's good to be on the cost level, but I think that mindset has to move to quality. Because that really is a business card for any MSME, even for the large sector.”

Speaking about Indian ingenuity called Jugaad, Mr Pandey said, “I think we need to build the quality first approach and then we need to invest into a quality system. I think there are very few MSMEs in our experience who actually invest in it. Jugaad is a good thing that the idea is coming. But we need to build on that with a continuous improvement process like Poka Yoke till it becomes a stable process.”

“The third thing which I would like to have an opinion on is, customer first or employee first. I think my recommendation will be, for the MSME sector, we should start with employees first but then the precondition will be that you should have only customer-centric employees. Because for a small organization in terms of numbers, you can have employees recruited on the basis of an intrapreneurial value system. If you have more employees with an entrepreneurial mindset, they will take care of the customer and then you will eventually move to the customer first approach.” said Mr Rama Shankar Pandey.

“But to attract those entrepreneurial employees, you need to have professional governance, something I think many MSMEs fail to understand. They think that it is only when you go big that you can have an HR department and you can take care of the hygiene factor. No, even from a two-people team, five-people team or 50 people team, we can start the governance on a very high level to attract professionals. And these professionals should be given the employee-first feeling.”, he added.

Taking up the last major topic, Mr Pandey reminisced about his days as a student of Dr Kalam. “To improve productivity, we need to invest in skill-building. Skilling should be something we have to do to ourselves as the industry because today's education system doesn't do it. We need to make it effective and also rewarding. So we can make a circle where the increased productivity sustains the skilling expense. By productivity improvement, I think we should not underestimate what is possible. And this will happen if we start recognizing these people more and rewarding more and also expose our talents to global best practices.”

Speaking about the latest trends and digitalization, Mr Pandey said that “There is a lot of discussion regarding industry 4.0 and I think we have to start granular. We should go for the need based transformation from physical to cyber, step by step first, in our day-to-day working. Begin with management and then we get onto the shop floor. And I think this investment into smart initialization has to happen. What is your core competency, your core processes and how can the core process be mechanized and digitized. Once we do that, I think that becomes a very good cocktail putting it all together.”