What is lean manufacturing all about?
The lean manufacturing process is a comprehensive way to reduce waste of all types. It could be a waste of time or material, it is still waste. Lean manufacturing is a manufacturing strategy that seeks to produce a high level of throughput with a minimum of inventory. This type of manufacturing is like adding spokes to a wheel, so the wagon can roll.
In addition to eliminating waste, lean manufacturing seeks to provide optimum quality by building in a method whereby each part is examined immediately after manufacture, and if there is a defect, the production line stops so that the problem can be detected at the earliest possible time. The lean manufacturing method has much in common with the Total Quality Management (TQM) strategy. Both strategies empower workers on the assembly line, in the belief that those closest to production have the greatest knowledge of how the production system should work.
In a lean manufacturing system, suppliers deliver small lots on a daily basis, and machines are not necessarily run at full capacity. One of the primary focuses of lean manufacturing is to eliminate waste; that is, anything that does not add value to the final product gets eliminated. In this respect, large inventories are seen as a type of waste that carries with it a high cost. A second major focus is to empower workers, and make production decisions at the lowest level possible.
How do you begin the lean manufacturing process?
Everyone in the organization will require significant training. You will need to develop an overall strategy and training plan and recognize that this is a major commitment from the management down to the lowliest employee.
A step by step approach would approximate this plan, depending on your specific needs. Here are 6 steps to implement lean manufacturing.
Determine which aspects of lean manufacturing apply to you, prioritize according to your needs and abilities.
* Categorize your people into groups according to similar training needs.
* Identify your programs and make a matrix, or chart.
* Decide whether you will hire an consultant or do it in-house.
* Develop a time frame or schedule according to work area or personnel.
* Prepare an immediate schedule and begin!
Advantages of Lean Manufacturing
* Lean manufacturing strategies can save millions of dollars and produce excellent results.
* It gives the manufacturer a competitive edge by reducing costs and increasing quality.
* Allows manufacturer to be more responsive to custom.
* Lower lead times
* Reduced set-up times
* Lower equipment expense
* Increased profits
Wednesday, April 28, 2010
Saturday, April 24, 2010
Credit Ratings for SMEs
Credit ratings specially designed for SMEs, factoring in their exclusive characteristics related to size and style of functioning, helps in bridging the information gap for well deserving SME units with their lenders. It also helps SMEs to encourage ties with new trade partners based on the strength of the ratings obtained. It anticipates the need for disclosing information that is confidential in nature while prospecting business.
For a successful and meaning rating exercise, cooperation between agency and the rated SME is very essential. While SMEs would provide the information more in direct association. The analysts undertaking the rating of SMEs should be able to understand the constraints obtaining in the SME unit, like scattered information without necessary skills in articulating the relevant information and knowledge. The analysts should have an SME assessment specialization and his focus should be SME ratings, only then he would be able to carry out a proper peer comparison.
A good rating from an external expert credit rating agencies like ICRA, ONICRA, SMERA etc emphasizes the best business practices adopted by an SME unit and helps in benchmarking its strength and reliability of performance. These agencies are unbiased and aims to bridge the gap between the needy SMEs to willing yet hesitant lenders by evaluating financial parameters as also qualitative factors like management profile, corporate governance, industry risk and similar other non-financial parameters that have bearing on the creditworthiness of units.
Firm information considered would include industry scenario, business financials, credit history, management expertise, future plans and business prospects. Mainly the rating process involves plant / site visits and interactions with the management of entities. Further, based on the quality of disclosures adopted by the entity, the rating highlights the intrinsic strength of the entity while giving due respect to confidentiality requirements of the rated SMEs. This provides a strong element of comfort to the SME client that his rating has been based on proper and evaluation of his business and also to the lending agency and anyone basing their credit or trade decisions.
For a successful and meaning rating exercise, cooperation between agency and the rated SME is very essential. While SMEs would provide the information more in direct association. The analysts undertaking the rating of SMEs should be able to understand the constraints obtaining in the SME unit, like scattered information without necessary skills in articulating the relevant information and knowledge. The analysts should have an SME assessment specialization and his focus should be SME ratings, only then he would be able to carry out a proper peer comparison.
A good rating from an external expert credit rating agencies like ICRA, ONICRA, SMERA etc emphasizes the best business practices adopted by an SME unit and helps in benchmarking its strength and reliability of performance. These agencies are unbiased and aims to bridge the gap between the needy SMEs to willing yet hesitant lenders by evaluating financial parameters as also qualitative factors like management profile, corporate governance, industry risk and similar other non-financial parameters that have bearing on the creditworthiness of units.
Firm information considered would include industry scenario, business financials, credit history, management expertise, future plans and business prospects. Mainly the rating process involves plant / site visits and interactions with the management of entities. Further, based on the quality of disclosures adopted by the entity, the rating highlights the intrinsic strength of the entity while giving due respect to confidentiality requirements of the rated SMEs. This provides a strong element of comfort to the SME client that his rating has been based on proper and evaluation of his business and also to the lending agency and anyone basing their credit or trade decisions.
Friday, April 23, 2010
Only Your Balance Sheet can Oxygenate Your Enterprise, says B2B tycoon, Dinesh Agarwal reports SME WORLD (Magazine-April Issue, Page-45)
The Balance Sheet is the life blood of enterprise. It must be kept in good health as only the balance sheet attracts the oxygen needed to survice and grow. This is the explanation given by Dinesh Agarwal, Founder and CEO, IndiaMART.com, the successful Indian B2B portal.
He was 'x-raying' the MSME sector's impediments to growth and the measures required to remove the funding road blocks at the ASSOCHAM Seminar on 'SMEs-Finance with Governance in Delhi recently. SME WORLD was the magazine partner at the event.
"Micro, small and medium enterprises, especially the micro and the small do not worry about their balance sheets 'which are often guided by their profit and loss accounts. Balance sheet should never be treated casually. In the mad rush to upward their tax saving graph they neglect to symbolize their rate of growth in their balance sheet which is the primary need to raise funds from all sources - banks, private equity, venture capitalists or anywhere."
Agarwal expressed his concern about this serious issue of the blatant neglect of their balance sheets by the SMEs. He said, "most of the micro enterprises are hurting their balance sheet. Almost all their efforts are targeted to save the taxes or get subsidies or any other promotional assistance from the government."
Agarwal observed 'the government must simplify the tax structure'. He said the enterprises often feared to show their growth in their balance sheets and in the process they become keen to remain in the 10% and 20% tax brackets. "Rather than focusing on tax slabs, there must be gradual shift in the tax limits," he said.
Sharing his experience of dealing with thousands of SMEs everyday, he said "our interaction with enterprises has revealed that there are essentially two kinds of enterprises. One is those who are growing regularly and the other who are waiting for the government's initiatives to excel."
Raising the issue of complexity of the government schemes, he urged the government to have fewer schemes rather than a whole gamut of them which eventually die down on their own. "There is a need to simplify the procedures to take benefits of different schemes. Multiple mechanisms to avail the benefits of the schemes and assistance being rendered by the government are cumbersome and discourage the entrepreneur. The schemes should have an elaborate canvas with tangible framework to attract maximum number of the targeted segment."
Agarwal pointed out that most of the schemes created unnecessary confusion and remain on papers because either they are not publicized or they are too complicated.
He was 'x-raying' the MSME sector's impediments to growth and the measures required to remove the funding road blocks at the ASSOCHAM Seminar on 'SMEs-Finance with Governance in Delhi recently. SME WORLD was the magazine partner at the event.
"Micro, small and medium enterprises, especially the micro and the small do not worry about their balance sheets 'which are often guided by their profit and loss accounts. Balance sheet should never be treated casually. In the mad rush to upward their tax saving graph they neglect to symbolize their rate of growth in their balance sheet which is the primary need to raise funds from all sources - banks, private equity, venture capitalists or anywhere."
Agarwal expressed his concern about this serious issue of the blatant neglect of their balance sheets by the SMEs. He said, "most of the micro enterprises are hurting their balance sheet. Almost all their efforts are targeted to save the taxes or get subsidies or any other promotional assistance from the government."
Agarwal observed 'the government must simplify the tax structure'. He said the enterprises often feared to show their growth in their balance sheets and in the process they become keen to remain in the 10% and 20% tax brackets. "Rather than focusing on tax slabs, there must be gradual shift in the tax limits," he said.
Sharing his experience of dealing with thousands of SMEs everyday, he said "our interaction with enterprises has revealed that there are essentially two kinds of enterprises. One is those who are growing regularly and the other who are waiting for the government's initiatives to excel."
Raising the issue of complexity of the government schemes, he urged the government to have fewer schemes rather than a whole gamut of them which eventually die down on their own. "There is a need to simplify the procedures to take benefits of different schemes. Multiple mechanisms to avail the benefits of the schemes and assistance being rendered by the government are cumbersome and discourage the entrepreneur. The schemes should have an elaborate canvas with tangible framework to attract maximum number of the targeted segment."
Agarwal pointed out that most of the schemes created unnecessary confusion and remain on papers because either they are not publicized or they are too complicated.
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