Wednesday, October 31, 2012

Micro Enterprises in India – their Characteristics and Concerns

Micro enterprises drive local economies of the country. They provide wide range of vital products and services for their local communities. Thereby micro enterprises help reduce costs and add business convenience. Micro enterprises, many of which are craft enterprises comprise the vast majority of the small business sector of the country. Micro enterprises create jobs at local level, enhance income and strengthen purchasing power. In the context of India with its large rural population, micro enterprises help arrest migration to cities. They create employment opportunities as well as help them diversify their income. Micro enterprises thereby help instill self-reliance, positivity and self-confidence.

Majority of the micro enterprises in the country are founded on the rich heritage of Indian crafts that so beautifully integrate local resources and skills to create utilitarian products for the local needs and markets. "It was found that Shola craft is the key engine driving the economy of Mandirbazar block. A remarkable feature of this economy is the existence of a healthy balance between everyday work, environment and way of living of the local people. The Sholapith craft plays a valuable role in building a local economic sustainability and a contemporary local society in Mandirbazar area." writes Saurav Kumar the Strategic Design Management graduate, in his need assessment survey, NAS report as part of the Design Awareness Programme carried out under the Design Clinic Scheme for the micro enterprises engaged in Sholapith craft products at Mandir bazaar, West Bengal.

Micro enterprises normally would be self-initiated and self-managed. The owner of such enterprises would be fully involved in all aspects of business. He/she may be assisted by family members and some times few workers would be employed for manual support. Micro enterprises require relatively simpler technology and management methods. They would be based around labour intensive and traditional methods of production. These enterprises normally operate from their home or utilise the space available in or around their home. They thus operate with minimum of capital investment. These enterprises may be  involved in producing products - tailor-made or single size - in smaller quantities, component/s of the product/s or specific process/es. They may be service based enterprises or involved in trading.

According to Wikipedia, micro-enterprise is a type of small business, often registered, having five or fewer employees and requiring seed capital of not more than $35,000. And according to the MSME Development Act of 2006 (India), a micro enterprise is where the investment in plant and machinery does not exceed twenty five lakh rupees (for the enterprise involved in manufacturing).

The economic importance of this sector also lies in its high employment potential. Over 50,000 people, majority of them women are involved in agarbatti rolling industries in Baruipur, West Bengal. And over 60,000 people are engaged directly and indirectly with the scissors manufacturing industries at Meerut. The Meerut Scissors industry is over 360 years old. The Indian footwear manufacturing industries engage around 1.10 million people, with over 2000 artisans involved in ladies footwear industries in Lucknow itself. Channapatna, also called as the city of toys, is a hub of micro and small scale units involved in making lacquered toys. Situated at about 65 Kms from Bangalore towards Mysore, the sector engages around 6000 people directly and indirectly. The 150 years old brass and bronze utensil cluster at Pareo, 40 Kms. from Patna, Bihar, employs nearly 3000 people from the village.

These enterprises, as majority of them were established to serve local markets, are today struggling for their survival. The immediate markets catered earlier by these enterprises are now flooded with cheaper, mass produced products. Their products, majorly the handicrafts have lost their utilitarian values and the importance that they once held in societal functions, ceremonies, rituals, festivals etc. They are now sold mostly for their decorative and heritage value as gift items. The products and the skills that once commanded value have now been reduced to another labor / a manual work. Though considered as source of innovations, these industries today find themselves vulnerable and at a loss  to compete with the fast paced, better equipped industries. And their markets are now distanced. Most micro enterprises  are today completely cut off from their markets, for getting their raw materials as well as to sell their produces.

Micro enterprises  are thus dependent on local suppliers, dealers, middleman and/or the exporters, for their raw materials, for their work / order and also to sell their products. The markets and the business would be controlled by these dealers, the middlemen or by the exporters with strong power of negotiation. These expose the micro enterprises to exploitations. Most work gets done either at a very low labor charges or with minimum profit margins for the artisans/ enterprises. In spite of putting in long hours, high volume of production and involvement of family members, these units / artisans normally end up getting daily wages as their earnings. Irregular and limited orders create constant sense of insecurity and competition within the cluster. Being completely cut off from the markets, these units do not get any feedback on their work or their products, making them further dependent on the exporters / traders for their orders. Without the exposure to contemporary market demands and trends, the artisans feel handicapped to either improve / refine their existing products or innovate new products. These has caused stagnation and saturation of the markets as no new designs have been developed for many years and the traders/exporters normally do not posses these skills. "The current mode of design & product development is copying from the magazines & from the samples sent by the wholesalers." writes Mr.  Mansur Lari in his NAS report of the Ladies Footwear Manufacturing Cluster, Lucknow.

Most artisans / workers involved in this sector of industry come from economically and socially weaker strata of the society. Many of them fall below poverty line. Some of them even if have agriculture land, due to lack of resources would not be in a position to generate yearly income through the same. The young generation, educated and the ones with even minimum of skill and capability would prefer to move out to cities or take up a job. Micro enterprises and micro businesses are unattractive to the young generation.    Thus creating severe shortage of skilled labours for these enterprises . The ones thus left, majority of them with lower education and exposure thus prefer to work with traditional, many times primitive methods and processes of production, management and business. Though many of these artisans are talented and skilled workers and open to innovation, lack of fund deters them from taking any further development work or any risks. Coupled with this, inconsistent and irregular work / orders make them further dependent on traders and/ or established enterprises of the cluster. And in spite of producing same and/or similar products, and selling them mostly to the same dealers/ markets the micro enterprises prefer to work as individual unit rather than as a group / cluster. One would see  income disparity among the enterprises, among the owner/entrepreneur and his/it's workers. Even though the products, craft and/ or the cluster is well known and well established in the markets, financial conditions of its artisans /workers remain weak.

"Given the very expensive raw material, limited electricity, the need to buy many inputs, inadequate telecommunications and road infrastructure, and a labour force that does not always understand the efficiency demands of the market, the micro enterprises  fight an uphill battle against the efficient, low-cost alternate products and their manufacturers." writes Saurabh Kumar in his NAS report for the Sholapith Craft Products Cluster. Traditional methods of production, labour intensive processes, unergonomic and unhygienic work environment, old and improper tools and techniques, they all result in low productivity, lower quality of products and inconsistent outputs. "The process  usually practiced to roll Agarbatti here is unergonomic. The uncomfortable sitting posture can affect the spinal cord resulting in critical health problems. Providing proper sitting arrangements and tools will help the workers increase  their productivity." mentions Piyali Baruah in her NAS report of Agarbatti Cluster, Baruipur, West Bengal. Lack of proper storage space for both, the raw materials as well as for the finished products, results in increased rejection and wastage.

Micro enterprises demand  holistic, multi-pronged interventions to be initiated simultaneously at the individual unit level as well as at the cluster level to improve and upgrade overall quality and productivity of the products produced. Though each of them operate as individual units, these enterprises form a cluster of similar units. A cluster based interventions in the form of Common Facility Centre, Material Bank, micro-finance facility, primary health care facility/hospital and similar other interventions and initiatives, the ones that encourage and enhance community and cooperative participation would form some of the important initial initiatives at the cluster level.  This should result into a formation of an appropriate platform that helps connect the strengths of the cluster as well as the individual units to the demands of the contemporary markets. The interventions would also include trainings and exposure into various areas of business, management, technology and production.

Specific design interventions would include new design and redesign of products as per the demands of the markets catered, development of new range of products, improvement of processes, joineries, finishes and product quality etc., design of appropriate support systems including appropriate low cost material handling equipments/aids for internal transport, storage etc., packaging, branding, marketing and communication materials and strategy etc. The design interventions here should focus on improvement of work environments, workstations, development of appropriate tools, techniques and machines,

The objective of these initiatives, while to create the much needed value addition in the existing range of products for these enterprises, so as to compete and survive in today's contemporary and highly competitive markets, these interventions should help improve the quality of life of the people involved. "An ideal cluster should be a centre of better eco-friendly environment, quality production, with user friendly workstations and tools, with sustainable practices and processes in place."  writes Piyali Baruah in her NAS report of Agarbatti Cluster, Baruipur, West Bengal.  These initiatives will help country’s micro enterprises and the artisans /workers involved, move up the value chain in their life.

Some of the important characteristics and concerns of micro-enterprises emerging from the Need Assessment Survey carried out as part of the Design Awareness programmes under the Design Clinic Scheme for MSMEs for few of the micro-enterprises clusters, have been compiled and listed as under:


Uses all/ majority manual processes.
Labor intensive processes
Traditional (many times primitive) methods of production.
Inconsistent quality, low volume production
Reliance on dealers, traders, middleman, suppliers, exporters
No market exposure and/or marketing arrangements to sell their products
Similar looking, cheaper, mass produced products available in markets
Unhealthy competition with similar clusters /industries
Units / enterprises established nearby, forming a cluster of similar industries
Most units produce same or similar products, sells in the same markets/dealers
Lack of unity among the units, prefer to work as a single/individual entity rather than a collective one.
Majorly unorganised industry / time management an issue
Appropriate process of costing not followed, sudden changes in prices
No one sticks to prices, in a way no standard price for products
No product standardisation
Suitable for batch production, low production capacity
Work environment, workstation, safety some of the major issues
Lack of basic hygiene and health measures
Logistic issue to cater to market demands on time
Unavailability of workers, skilled workers
Young generation negligence towards this job

Workers / Artisans
Family members involved
Family members carry out each and every stage of production process.
Artisans / workers / people involved in this trade mostly from lower income group and many of them from below  poverty line.
From lower strata of society , many of them from minority / schedule cast
Old, traditional methods and processes still in use.
No work for artisans during monsoons.
Lower wages, laborious work,  irregular job forces artisans to  migrate to cities and/or other regular jobs, like  construction sites etc.
Diversification towards other jobs due to better pay & less labor.
High income disparity between the worker/s and the unit owner.
Raw material normally provided by local supplier & middle man.
Increased raw material price.
Irregular/ inconsistent supply of goods / orders
Do not get regular work for the whole month, sit idle for few days every month.
Labour charges provided to the workers  or the profit margin very low.
Dependent on traders, middleman, exporter for marketing or selling their products.
Doing only order work, decreased market orders
No or limited excess and exposure to market/s, buyers, users
Don't get any feedback on their work.
Unable to innovate, improve, refine their work as per market needs and demands.
Sense of insecurity and competition within cluster.
No medical facilities near by.
Low education level effect their growth
Technical qualifications absent
Illiteracy, lack of awareness hindrance to communicate, to avail  benefits of government policies.
Understanding of business, costing, management low or nil. Sometimes end up selling their products at minimum margin or at the cost rate.
Lack of awareness about education, technology, work environment and health consciousness.
Low / no motivation for further development.
Casual approach
Unremunerative/ low returns deter next generation taking the cluster forward. No system/ plan for future growth /interventions.
Young generations not very interested to continue the same profession/business, seeking different occupation /  new job opportunities.

Technology / Tools / Processes / Equipment

Very few units / enterprises equipped with machines.
Still use the same old techniques and machinery for production.
Old machines and manual processes affect the quality of products
Not much technological up-gradation visible
Unorganized work environment, working pattern, time management.
Haphazard layout of the working area / unit
Poor work conditions
Poor production quality results in wastage and rejection, especially for exports. Reduces market.
Laborious and time-consuming processes make it difficult to complete orders on time.
No system in place to regulate breakage, defects, quality standards
No quality check/ inspection of products and processes in place.
Difficult to standardize products / production. Variations in work / output.
Critical aspects of finishing ignored.
Do not have finishing machine/s
Restructuring of production process required
Process improvement required through basic systems, tools & technology up gradation for optimum design & quality delivery
Appropriate technology interventions to increase productivity, safety and health standards
Unergonomic and uncomfortable processes practiced
Uncomfortable work postures (coupled with long hours of work) results in critical health issues; decreased productivity
Traditional, mostly outdated tools & equipment used
Need to develop appropriate hand tools, equipment, logistic aids
Proper sitting arrangements through appropriate workstations to aid correct body postures
Work environment considering lighting, air circulation / ventilation required
Appropriate safety kits, masks, gloves etc. to enhance safety, overall health and hygiene condition.

Resources / Raw-materials / Infrastructure

Raw materials shortage, insufficient supply, unavailability
Raw material quality varies considerably
Poor quality of raw materials hamper quality, productivity and production resulting in loosing of markets, exports.
Improper storage affects quality, property, composition of raw materials
Lack of proper storage system, infrastructure for storage of raw materials, semi finished and finished products; spaces undefined
Appropriate storage space , staking facility
Appropriate technology / aids to reduce raw material wastage
Raw material testing facility required.
Common Facility Centre , Material Bank to provide standard quality  of raw materials

Training / Skill Up-gradation

Lack of / low awareness of new  designs and techniques developed in other parts of the country/world
Awareness and exposure of modern techniques and processes required
Technical training, skill up gradation and skill refinement trainings from time to time
Training and skill up gradation programme to improve quality, productivity packaging.
Awareness and training of comfortable work postures to reduce physical strain.
Handholding and technical support for implementation of best practices.
Training and awareness of best business, management practices, standard rates of the products (both purchase rate & selling rate)
Many of them  unaware about their buyers, name of the company under which their products are sold.
Exposure to contemporary market trends, customer demands, emerging life style
Exposure to creativity, design thinking to improve and develop new products to cater to current market demands.
Vocational training to make accessories, jewellery and/or small utility products to create and provide employment during monsoon.
Workshop / training to design and develop new products / accessories to utilise wastage.
Need for a platform for regular interaction, collaboration among  cluster members to develop ownership, positivity.
Co-creating strategy for future growth, cluster identity
Regular participation in exhibitions, industry expo.

Product / Design and Development

Present mode of design & product development is copying from magazines & from samples     sent by wholesalers.
Monotony in design and products
Lack of contemporary designs make cluster unattractive to buyers
Market penetration difficult without product variety and range
Need for diverse range of products as per contemporary market demands
Product range, specific to the end user needs, usage and purpose.
Contemporary aesthetics and  improved finishes required to attract new markets
Target new market areas not only nationally but also internationally.
Need for design interventions in the area of processes, material composition, assembly etc.
Devise modern packaging techniques as opposed to the current manual process.
Need for attractive, stylish and usable packaging to cater to global market.
Visual identity, branding, marketing support required
Development of a common (cluster) brand instead of multiple brands
Better displays and retail outlets required to showcase products.


Majorly a labor based industry, cluster gets formed due to cheap and ample labor around.
Though good demand and sizeable markets, very little development visible.
Constraints of processes used, economic imbalance, traditional social structure, some of the    issues stagnating the growth of the cluster/s
Lack of funding major concern and hindrance to the growth of individual units as well as the cluster
Absence of better, modern infrastructure inhibits international buyers to purchase despite good product potential & demands.
Established enterprises, larger units work as competitors; micro units do not get guidance, support from them
Cluster based, government interventions much required.
Unorganized industries, cluster; no cluster association
Unavailability / shortage of skilled labor, technicians
Competition within the cluster
Undercutting amongst the units
Competition from mass/machine producers
Over production of low quality goods
Limited product range
Dependence on regional market
Seasonal work only 6-8 months
Overall level of education within cluster poor
Transportation and connectivity important issue
Supply chain issues; common vehicle for the cluster
Better hospital, health facility, health security
Better Connectivity with internal roads to reduce demages, save time
Cluster and its units dependent for their work and raw materials on local dealers, middle men; exposed to negotiations, exploitations
Very few fixed clients, dealers; fluctuated orders
Need to move/ expand markets, dealers,
No brand & market identity makes units depend on wholesalers
Establish cluster as brand
Marketing & branding absent
Not a single website of any unit
Very less advertisement in markets
Usage of internet, emails absent
Change of Government policies such as imposition of duty & taxes
Need for common facility center / community store / material bank,
Micro finance / bank credit facility required
A localized quality testing lab, research and technical suggestions
Training Center, Product Development Center
Explore collaborative, joint venture to increase production & marketing
Need to develop cluster based professional system, approach and business model
Attract younger generation to take up responsibility
Awareness and exposure of the benefits of cluster based approach


My very own Training manual micro-‐‑enterprise development for project officers and field workers,
Micro-‐‑enterprise -‐‑ Wikipedia, the free encyclopedia,
Micro and small enterprise (MSE) development,
Flower of the Wood, Need Assessment Survey of Sholapith cluster, Mandirbazar block, South 24 Parganas, W.B.; Saurabh Kumar
Interactive Design & Technology Study & Need Assessment Survey of Lucknow Handmade Ladies Footwear Cluster, Mansoor Lari
Need Assessment Survey report-2011, Agarbatti Cluster, Baruipur, West Bengal; Piyali Barua

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Thursday, October 4, 2012

Small Scale Industries in India... Challenges and Opportunities

Over 94% of industries in India are MSMEs - micro, small and medium scale enterprises. To cater to the design needs and expectations of these three major Indian industry sectors is thus a major challenge for the Design Clinic Scheme. Each of these sectors, the micro, small and medium scale industry sectors, are fairly different in terms of their characteristics, the issues faced by them as well as their aspirations. The guidelines and formats for its three components should retain the much-needed flexibility to cater to the individual industry needs, expectations and contexts.

The ardent task of taking this unique design intervention scheme to the needy MSME units across the country, also provide us the opportunity to meet and interact with the owners and members of MSMEs and thus gain better understanding of some of the challenges and issues faced by them.  Also the Need Assessment Survey reports ( part of the Design Awareness programme, DAPs) developed by the designers based on their visits to the units and their detailed interactions with the members and owners of these units have helped generate fair amount of information on their present status as well as opportunities  for further improvements.

From the three MSME sectors, the small-scale industry, SSI, sector is the dominant industry sector of the country. This sector contributes significantly in terms of its manufacturing output as well as towards employment generation for the country. These industries are also the main suppliers of the components/parts to most of the products manufactured in the country. Majority of these industries would thus be either vendors, original equipment manufacturers for medium/ large industries, fabricators, and/or component manufacturers, thus relying heavily on labor and process costs as their earnings. The sector thus faces constant competition from within and outside the cluster as well as also from the international suppliers/industries.

Small-scale industries thus face constant struggle for their survival. And to survive in todays’ fiercely competitive and fast paced global markets, they either need to develop themselves as more effective and productive vendor/s and component manufacture/s for the larger industries or to move up their value chain to be product manufacturers. As their own product manufacturer the industries can command value for their core strengths and product features, rather than rely on labor and/ or process costs. The scheme is designed such to support SSIs to improve their existing processes, products and systems to be more productive and efficient as well as also to explore their own products and unique solutions for the contemporary markets. The scheme brings designers to the doorsteps of these industries to identify opportunities to improve their existing products/components and processes. It thereby helps develop the much needed platform for their constant and continuous interactions.

Small-scale industry usually works and operates around individual / owner's interests, passion and understanding. The ones that have succeeded over the years have normally grown together with its group of workers. It creates a healthy relation between the owner/s and its workers. Amar Industries, the small-scale industry at Samalkha, the industrial town 75 Kms north-west of Delhi, was established in 1965 and majority of its workers are with the industry for more than over 30 years. Similarly Moonlight Engineering Work, a small scale industry involved in manufacturing and repair of dispenser pumps and nozzles in Kolkata has most of their workers with them since the establishment of the unit in 70s. Most of them the school dropouts got themselves trained here. The workers on the shop floor enthusiastically shared and explained many of their improvements/ innovations for their existing processes, work area, products etc., when Mr. Niyogi one of its partners was taking me around to show their factory.  As I was late to reach the place, they had postponed their lunch break by an hour so that I can see the factory in its working condition and interact with all of them. The workers here are in charge of his/their work area and/or the specific processes handled.

With further understandings and experiences as the industry grows in confidence, it invests and expands at different levels. It expands internally or set up another industry/unit, thus offering fair degree of flexibility and opportunities to its workers, to the partners and to the relatives/ siblings to be part of the growth process.  While Moonlight Engineering Work has now set up departments within the unit, Amar Industry has now three units working in tandem with each other. Anjali Products, one of the Kitchen appliance-manufacturing industries in Mumbai developed themselves into cluster of units each owned by relatives/ friends that together produce variety and range of products.

The focus of these industries, as majority of them/their owner/s would have started as fabricators, machinists and/ or vendors, would thus be on technicalities of the product / components.  Value addition in their products/components in terms of improved quality, finishes and finesse through appropriate design intervention would be an important contribution here. The famous saying  "quality products are designed rather than inspected" will be most appropriate here.

While these industries utilise their limited resources - their available manpower, skills, machines, etc. most effectively, the inherent limitations of these resources form   barrier for them to compete with today's contemporary industries. Design here should act as catalyst to convert these constraints into unique opportunities. A user-centric approach would help them convert their technological solutions into products and user-required solutions thereby help create the much needed value addition to their strengths. While developing such unique solutions / products as per the market and user needs design will help align the solutions to the available resources and capabilities of the individual units. The creative engineering and design approach would help offer solutions to improve their existing products, processes, productivity, the ones that can be immediately implemented with minimum of investment and resource allocations, thereby demonstrate immediate benefits for these industries.

The design clinic approach of design intervention therefore is more appropriate for this industries, and by now interesting results and outcomes have been demonstrated through the design awareness programmes and design projects undertaken with the support of the scheme. Design approach helps look at the industry and the business in holistic form and develop range of opportunities and their implementation strategy for the specific unit/s. Developing indigenous semi-automised machines and equipment of appropriate scale, capacity and size, the ones that are affordable and practical for these industries, is one such critical area of intervention emerged from these studies.

These industries as they would be operating with limited resources, appropriate common facility centers for their research and development activities, quality improvement processes, data and information sharing, knowledge of market and user expectations and trends etc. will form an important support towards handholding and capability development  process. The Product Design and Development Centre, PDDC, Manila, Philippines, and Tapei Design Centre, Tapei, Taiwan are some of the examples of such common facility centers.

Small scale industries, by the very nature of their business, are more agile and closer to the markets and their users. These industries are best placed to understand individual user needs and expectations and offer customised solutions and services. The small scale industry that will be able to combine its local understanding and experiences with global knowledge and contemporary approaches will gain the much needed edge in the mass-customised markets of the future economies.

We have organized 200 design sensitization seminars for various different sectors of MSMEs. Also over 80 design awareness programmes for different micro, small and medium industry clusters are at various stages of their completion. The need assessment survey reports of few of the small scale industry clusters indicates following broad macro level challenges faced by these SSIs

Traditional manufacturing processes, mostly with low level of technologies, make units less competitive in regional /national and international market.
Old, inherited plants make it difficult to compete against today's energy efficient and higher productive technologies.
Though better and larger markets available, majorly manual processes make it difficult for the units to cater to them.
Low level of mechanisation leading to dependence on unskilled and scarce labours.
Poor operational practices and processes.
Unbalanced investment of resources, ie. machines, workspace etc.
Unhealthy competition exists due to close proximity of large numbers of similar units.
Lack of cooperation and sharing of facilities among units
Competition within the cluster / group of units - no one stick to the price

Limited knowledge of newer and advanced technology and processes among the unit owners.
Lack of interest among younger generation to get involved in their traditional business
Lower motivation level and professional approach to manage their business among the unit owners
As mechanisation involves huge investments, the unit owners are forced /prefer to work with the existing technology only
Very few young and qualified entrepreneurs in the profession.
Younger generation more open to change
Systematic plan for future intervention /development from government agencies missing
Collaborative efforts with Academic/ R&D institutions are missing.

Haven't moved/ up-graded to modern technologies and designs
Investment for modernization/ mechanization/ technology up-gradation, nearly impossible
Lack of knowledge of standard accessories, newer manufacturing techniques etc. and their availability in the market.
Limited or no input drawing / data management, revision / change request procedures
Limited capability/capacity of tool design, development
No / limited resources for investment as whatever available is used for regular turn over
Need for R&D facilities, shared design services, designer on demand, CAD tools/ training centers, skill-set improvement, up-gradation, further skill-development training centers
Lack / shortage of skilled and unskilled manpower
Workers education and lack of use of standard procedures
No trainer/knowledge provider in the cluster for skill development.
Skilled workers / graduates from the technical institutes located nearby not connected / do not join the units
Shortage of molders/ machinist (skilled manpower)
Need for information data base of locally skilled workers on demand
Moulder/ pattern makers / machinists (skilled workers) share the design/s with other units
Unskilled local workers also involved in farming ( seasonal work and thus their non availability during certain period of the year)
Labor/ workers shifts from one unit to another
Unavailability of continuous power
Poorly constructed roads, internal roads leading to increase in breakage, rejection

Raw Materials
Scarcity and/or unavailability of raw material/s.
High cost of raw material/s and their price fluctuations
Use of poor quality and untested raw material/s. The units not able to get the right material individually due to low off take. No efforts made to pool requirements and buy the same collectively to get volume, price and supplier preference
Units/business developed over the years, around the availability of raw materials ( furniture units etc.).  With the unavailability of raw materials in the present situation, it becomes unviable for them to compete. New material (wood alternatives) not manufactured locally and thus has to be brought from outside
Productions, manufacturing processes developed around earlier available raw materials and the change of raw materials make it difficult for the units to reorganize their manufacturing set up.
Unstable and irregular market demands forces the units with steady /good production to store raw materials, products in and around/outside the units.
Need proper and effective raw material, scrap material, finished and unfinished components and products etc. segregation, storage, inventory methods and management processes, proper storage,stacking space and packaging to reduce damages and wastage

Same / similar products manufactured since years / decades, without keeping abreast of ever changing market trends.
Mostly vendors, the units are dependent on other industries and their product/ market demands
Products mostly of jobbing ( job work , made to order ) nature and changes from time to time
Owners need to be on constant look out for new product /parts that can have good volume
Products/ jobs uncompetitive due to poor design
Units work at marginal profits / only on labor cost, mainly due to poor finish of their products / jobs.
Poor quality standards and poor packaging techniques make the units unable to cater to export markets.
With weak / poor brand image of the cluster, the units are forced to sell their products in unorganised markets.

The level of technical knowledge and practices normally poor across all the units of the cluster.
Limited or no exposure to better and efficient technology and operational practices.
Majorly manual operation of production used, with limited or no control on quality, finishes, productivity.
Rejection and rework at every stage due to process inaccuracies and human error
The methods and practices of manufacturing do not offer much room for achieving cost efficiency in production.
Wastage at every stage, too much of wastage
Process does not allow usage of alternate materials
Higher overheads and maintains
Improper / unbalanced utilisation of production capacity
Difficult to scale up operation/s.
Limited or no in-process material handling system and methods for subcontracting, product delivery, raw material procurement etc.
Scope to upgrade skills and overall working method at every stage of manufacturing
Scope for redesign / improvements to reduce numbers of processes/ operations, easier assembly, inventory management etc.

Final product quality poor/weak, no / limited attempt towards improving the same.
Lack of Inspection procedures
Quality inspection not regular as is done with in-house facilities
Unit wise test lab/ department is not available
Absence of quality inspection leads to wastage and low export market.

Work area
Undefined work areas; unorganized workplaces, storage, tools
Poor working conditions leading to labor absenteeism and low turnover.
Inadequate ventilation, inadequate and improper lighting conditions, space congestion, etc. common issues
Need of proper uniform /work-suits as workers wear loose clothes, improper foot wears
Vey few material handling devices - leading to most material handling tasks performed manually
Lack of / few basic facilities for workers
Environmental compliance not strictly followed
Absence of proper waste / solid-waste disposal system, leading to polluted and unhygienic surroundings
Pollution control devices normally not installed / not in proper working conditions

No brands and/or  visual identity of the unit/s and/or cluster
Unable to compete with branded products
Lack of orders from organised buyers; restricted to unorganized markets
Traditional marketing system through middlepersons, weekly markets/ bazaars etc.
Traditional markets fetches them very low margin. Owners are not aware of modern marketing channels
For years, the units confined to same products, many of them seasonal products thus limited business during offseason.
No export and no participation in displays/ exhibitions in India and/or abroad
Limited or no knowledge of national and global market expectations and trends.

Product development process lacks some of the key elements of a design process, ie. market context, research, user study, product context, technology integration, material innovation etc.
Originality, exclusivity & contextual thinking are not always found as core drivers of business.
Newer segments are not adequately addressed
Not enough awareness or consciousness about new trends and markets.

Smaller units work mostly on credits and thus with weak financial position.
Low volume and declining markets threaten these units towards financial bankruptcy.
Lack of awareness of business costing
Lack of awareness of different government schemes
Lengthy process involved in accessing government subsidies and schemes resulting in unit owners loosing interest.

[Reference :
Interactive Design Study, Cluster level report, Thangarh Cluster, Submitted by Dirtyhands, Ahmedabad ;
Need Assessment Study Report for Samalkha Foundry Cluster, Foundation for MSME Cluster & Sudihr Kumar, Amit Sharma, Anupam Banerjee
Report of the Need Assessment Survey conducted at Malabar Funriture Consortium, Taliparamba, Designscope, Bangalore
Presentation of Need Assessment Survey & Design Clinic Workshop for  Kerala Furniture Consortium Pvt. Ltd., Tycka Design Pvt. Ltd.
Need Assesment Study report for Kaithal Foundry Cluster, Sudhir Kumar
NCR Toy Cluster Study for Design Integration, Prof. Jatin Bhat, New Delhi
Need Assessment Survey Report, Refractory Cluster, Asansol, Purulia, Barakar, Dr. Amiya K. Samanta  ]