T.

Muralidharan

Zero Defect and Zero

Effect Futuristic
Avenues
Manufacturing in
India
GVA in Manufacturing sector grew at a CAGR of
7.32 per cent between FY12 and FY17.
The sector grew 7.7 per cent in FY17
The wholesale price index, in respect of
manufactured goods grew 2.4 per cent between
April 2016 and January 2017.
Note: CAGR - Compound Annual Growth Rate, FY -
Indian Financial Year (April to March)
Source: MOSPI
 Mission of ZED

Zero non-
conformance/non- Zero Defect
(focus on Zero pollution to
compliance
Zero Waste customer) Zero Effect environment Zero
liquid discharge
(focus on Society) (ZLD)/Zero Solid waste
Zero wastage of
natural resources
History of MSME
Indian Manufacturing
Goods produced in India
were for the Indian
Market
Very low prices
Low production
efficiencies which means
high cost
MSMEs have focused on
Survival
The Chalta hai Attitude
Environment not on the
priority list
 LARGE AUTOMATED UNITS
NATIONAL MARKETS
MEDIUM PRICE POINT Knowledge
NATIONAL QUALITY
MEDIUM ECOLOGY CONCERN
Services
How do we
STRUGGLING FOR SUSTAINANCE
implement
ZED in the Current Reality
current in Indian
scenario in Manufacturing
MSMEs? TINY/MICRO SMALL & MEDIUM
LOCAL MARKETS REGIONAL MARKETS
VERY LOW PRICE LOW PRICE
LOW QUALITY MEDIUM QUALITY
HIGH ECOLOGY CONCERN LOW ECOLOGY CONCERN
STRUGGLING FOR SURVIVAL STRUGGLING FOR GROWTH

EMPLOYMENT DENSITY / UNIT

 A Case of
Government
ZED cannot be Policy Mismatch
implemented in
the current
scenario
Technology Investment Economics Negative Key factors
level impact on
Ecology
Landfill Low to medium Short term High 1. Land is unusable
Attractive 2. Ground water, air pollution & bad odour
Long term - 3. Health hazard
Moderate
Bio Low Moderate Medium 1. Large residue to be still disposed of
methanation & 2. Compost from MSW not good & glass particles cause injury
compost
Mass burn High Moderate Medium 1. Air pollution (Furans and Dioxins, NoX and Sox) high
Incineration 2. Bottom ash toxic and hazardous and cannot be landfilled
in a Sanitary landfill

Pyrolysis High Moderate to Low 1. Produces Char that is difficult to dispose

Unattractive 2. Suitable for small and medium size plants- 100TPD

Conventional High Moderate to Low 1. Works well with Biomass & homogenous waste streams
Gasification Attractive 2. Poor Energy efficiency for Heterogenous, wet and mixed
waste
Advanced High Attractive NIL 1. Zero pollution and Zero Landfill
Plasma 2. Minimal footprint for the plant
Enhanced 3. More net power per ton of waste that is unsegregated
gasification (MSW, Bio Medical, industrial, Hazardous ) and high
moisture content
Challenges that the MSME Sector faces

Increasing raw Ever growing prices Non-availability of Delayed payments

material cost of industrial land labour
 Can we learn
from China?
We need a new
Paradigm of
Manufacturing to
implement ZED
in MSME
India Vs. China Paradigm Shift 1: Move from
Primary to Value Added Products
Indias exports to China rebounded to show a 42% increase in January, 2017
Data from Indias ministry of commerce showed that there was marked increase
in Indian exports to China in January (year-to-year comparison) 52% increase in
cotton (Containing 85% or more by weight of cotton, not put up for retail sale
single yarn), more than 810% in inorganic chemicals and nearly 200% in iron and
steel. Iron ore constitutes about 53% of the total Indian exports to China
China continues to hold a huge advantage in bilateral trade; the total value of
bilateral trade was around $6.83 billion in January and Indias export share was
around $1.34 billion
Global Times (China) article headlined China should pay more attention to
Indias increasing manufacturing competitiveness
Shift focus Auto engine components and automobiles
from Organic and inorganic products
primary
Pharmaceuticals
exports to
the export Metal and metal based products like alloy steel bars and rods
of diverse Agricultural products like grains, tobacco and oilseeds
range of
Engineering goods like diesel engines and compressors
high value
added Marine foods
products Fresh and processed fruits and vegetables
where
Medical and optical diagnostic equipment and laboratory equipment
MSMEs can
play a big Consumer durables
role Textile yarns
Paradigm Shift 2: How MSME Output +
employment should be the approach
Low cost manufacturing flourished and provided massive
employment opportunities, which allowed a Chinese person with
minimum skill to be engaged in a global manufacturing economy as
opposed to their traditional rural economy.
This fundamental change in attitudes among young people in rural
China is probably more significant and empowering than the money
they make. The catalytic effect of this transformation in attitudes is
believed also played an important role in the rise of many small
businesses and new entrepreneurs in China
 Can we balance
it out?
Challenges that
both Economies
face
 Double-digit increases in Chinas
minimum wages year-after-year have
driven some manufacturers to look for
lower-cost alternatives.
Labour
Challenges To that end, many companies have
India & China begun looking to India for
manufacturing. Ford Motor, Yamaha
Motor, Panasonic all have established
one or more plants in different states
in India
Labour Challenges India & China
01
AVAILABILITY OF LABOUR:
China and India represent
the two largest working
populations in the world.
Indias labor force amounted
to about 502 million people
in 2014, while Chinas was
approaching 802 million.
02
MANUFACTURING WAGES:
When it comes to
manufacturing wages, India
has some of the lowest in
the world. The average
manufacturing labor cost in
India in 2014 was just $0.92
per hour, as opposed to
$3.52 per hour in China.
03
LABOR PRODUCTIVITY:
According to a 2012 article
published by McKinsey &
Company - the average
worker in Indias
manufacturer sector is
nearly five times less
productive than their
counterpart in China.
Logistics Challenges India & China
Costs in the US and
China (14.9% in In 2017
2016) are high due
to widespread
geography.
Interestingly, costs
are also high in India
KPMG found,
estimates indicate
that Indias logistics
and transportation
bottlenecks hinder
its GDP growth by
one to two percent.
 Why not
India + China?
Futuristic
Avenues
 INDIA CHINA
Low Labour Cost Developed Infrastructure for
Excellent Exporter Orientation Logistics
Primary Products Large Government Support
Creative & Innovative
Entrepreneurship

Strengths
 ZED

Blueprint of the Solution Implementation in

MSME requires
better
pricingACCESS TO
GLOBAL MARKETS

Large
Large
Manufacturing
Manufacturing INDIA +
Complexes Complexes
CHINA
GLOBAL
SME SME
SUPPLY
Clusters CHAIN
Clusters

Local Markets - India Local Market - China GLOBAL MARKETS

 GLOBAL MARKETS

EXPORT HOUSES 50% India &

50% China

The Finishing Stage

India
(Coastline)
SMEs Apparel
Special
Steel

Global Core Large Mfg.

China Cloth Steel

Supply Manufacturing Companies

Chain Primary
Products
India
Large
Companies
Cotton
Yarn
Iron Ore
T. Muralidharan tmd@tminetwork.com