Manufacturing Software

M A N U F A C T U R I N G S O F T W A R E

Whenever someone talks of software, it normally conjures up an image of computers. The fact, however, is that software is involved wherever there is hardware, and manufacturing is, if anything, predominantly hardware. Whenever a new unit is being set up or an existing one being expanded, a great deal of effort and planning goes into the acquisition of the latest technology and plant & machinery. Similar effort is invested in designing the plant layout and material flows, selecting material handling equipment and so on. Unfortunately, little, if any effort is made, or thought given, to determine and plan how this hardware is to be administered and run.


For example, even the financial institutions, when they are scrutinising a project report for a new venture, or expansion of capacity, make a lot of fuss about the bona fides / capabilities of the collaborator, assessing whether the technology is new or obsolete, whether the equipment being ordered is “state of the art” or not, whether, if the equipment being ordered is second-hand, it has sufficient life etc. However, no query whatsoever, is made as to whether the project promoters have made similar efforts in drawing up a plan as to how they are going to actually run this huge investment to ensure that they get the maximum output from it.


What does running this investment mean ? It involves very mundane things like determining the manning norms for the equipment, the shift starting and stopping times, development of production and productivity norms, multiple machine operation, inter - changeability of work force, preventive maintenance schedules, proper stocking for spares and, in general, preventing the development of any restrictive or wasteful practices, which can render the entire plant totally idle.

Experienced plant managers know only too well how these seemingly small, innocuous issues can and do bring production to a grinding halt, high technology and foreign collaboration, notwithstanding. The result is that one is rarely able to achieve the rated output and, as a corollary, unit production costs keep on increasing.

This can only be avoided if a conscious and planned effort is made to inculcate correct working habits, right from the beginning - - - a task that is at least as important as that of selecting the right plant and machinery.

How should one go about this task ?

The first and foremost step, in case of a new venture, is to study the practices of the collaborator, if there is one. Determine from him

· which are the bottleneck areas ?

· whether there is a requirement for continuous working without any interruption ?

· what is the kind of flexibility required from different grade / level of workmen who
are going to run the plant ?

· what are the practices which, though innocuous, can radically affect the output from
the system ?

· what is the documentation procedure to be followed, so that there is no hold up on
account of improper / incomplete records ?

· what are the major safety requirements ?

· which are the potential breakdown areas ?

· what should be the back-ups that must be kept ready and available ?

· finally, what is the rated output under different conditions and the highest achieved
output, on a sustained basis, by previously installed plants under normal operating
conditions.

Apart from all this, there are a series of administrative practices which can affect productivity. Take for example the case of shift starting time. There are at last 5 versions of it : Is it the time when the siren blows ? Or is it the time when the bus comes in from the station ? Is it the time when the workmen punch their cards ? or is it the time when the morning tea is served and consumed ? Or is it the time when the work for the day has been allocated / distributed ?

Practising managers know that, in effect, there can be a difference of anything from 15 minutes to 1 hour between the theoretical work starting time and the actual work starting time. Plant capacities are, of course, worked out on the theoretical work starting time --- is it any wonder then, that the effective output, no matter how modern the machinery, always seems to fall woefully short of the projected figures given by the manufacturers or the collaborators.

Consider the question of the classification of jobs in terms of salary grades. In many group operations, if one worker is short, the work simply stops, even if it is physically possible to do it with the reduced strength, although at a lower output rate. In such cases, even if an additional person is provided, many times work does not resume if the replacement is not of the same “grade” or “level” --- thus, a “semi skilled worker” will not come and do the loading/unloading or package labelling work (a task that he is perfectly capable of doing) because that is an “unskilled worker’s” job. Similarly, an unskilled worker will not do any counting or recording job, even if he knows how to do it, unless he is given an allowance for doing a “higher grade” job. In either case, the result is a considerable loss of production till the matter is resolved by either finding the right man or cajoling/browbeating the person available.

Another commonly occurring lapse seems to be in the area of production and productivity norms. Almost all “managements” bemoan the poor output rate and low productivity levels. But, if you were to probe a little deeper and ask them what the production and productivity levels ought to be, you will be confronted with a puzzled reaction ; after they have recovered from the shock of this direct question, at best they will splutter --- “it should be much higher, or course.”


The fact is (however hard it may be to believe) that in almost 90% of the cases, managements themselves do not know (nor are bothered to find out) what the attainable production rate is or what the desired productivity level should be) ; thus, in practice, workmen set the production/productivity norms by default and everyone is quite happy while the going is good. It is only when a competitive squeeze is felt or recession sets in for one reason or another, that everybody wakes up to the need for higher output and increased productivity levels. But even when such a realisation comes, there is a curious reluctance, almost bordering on fear, to spell out and demand from the workmen the production that ought to be achieved, based on machine capacities, and after making due allowances.

Possibly, the reason for this hesitancy is the fact that the theoretically determined production level is much higher than what was being achieved till date ; consequently, managers find it difficult to believe the figures themselves. Asking for this increased production would mean, on the one hand, a tacit admission that they had been accepting and acquiescing in the low output level prevailing so far. On the other hand, they also fear ridicule from the workmen / union for demanding, all of a sudden, such “unrealistically” high production. Under the circumstances, the easiest route adopted is to simply ask for an increase, leaving it to the worker to decide the quantum ; those, who are bolder, specify the universally popular and magical figure of “10 % increase”.

It is easy to see why this cannot and does not work - - - certainly not in the long run. Since the worker’ self-determined rate has been accepted for so long (and this is not because they have deliberately slowed down --- it could be for a variety of reasons like improper/inefficient methods, poor tooling, lack of knowledge of machine capabilities, not using the machine to its permissible limits, etc.), they perceive any ad-hoc demand (or request) for increase as unfair pressure and, therefore, resist it. Even if they finally agree, the effect is only temporary and sooner than later, everything slips down to normal. On the other hand, if the possible output is even 3 to 4 times the current level, but the same is properly explained and demonstrated to the workmen, it is more likely to be better accepted, though it is possible that it will be accompanied by demands for proportionate or, at least, commensurate increase in compensation.

The essential point being made here is that even a plainly obvious matter like determining, specifying and securing the desired production rate and productivity norm is, usually, overlooked in the general pre - occupation with “hardware” ; the consequence is, of course, predictable -- everybody clamours for higher production though nobody knows (or cares) what it ideally should be.

It should be clear from the above examples, and there are many more, that all the investment in advanced technology, sophisticated plant & machinery, new processing methods etc. can come a cropper in the face of such practices, which are more the rule in today’s industrial environment, Hence, unless these “software aspects” are properly understood and tackled, all efforts at securing higher productivity will come to nought.


In short, what is being proposed is that some definite effort and time must be invested in drawing up a list or manual of proper plant practices before a new project is started ; otherwise, the projected production figures are a mere pipe dream.

Based on my experience while working in industry, as well as my consulting experiences for the last couple of years, the following checklist has emerged which covers the major areas that tend to generate wasteful / restrictive practices :


ILLUSTRATIVE CHECKLIST FOR CARRYING OUT A PLANT PRACTICES AUDIT

1. Absenteeism
2. Facilities (Canteen, Co-op Society, PF Loans, Sales of Scrap & Company’s used goods to employees)
- - - Eligibility & Restrictions
3. Factory Timings
4. Housekeeping & Cleanliness
5. Identity Cards/Badges
6. Job Rotation
7. Leave Rules & Administration
8. Machine Cleaning & Lubrication
9. Movement Restriction within the Factory
10. Multiple M/c Operation
11. Overtime
12. Permissible limits of Union activity during working hours
13. Production & Process Parameter Recording
14. Production & Productivity Norms
15. Promotion Criterion
16. Safety
17. Standing Orders
18. Wastage Control
19. Workmen Induction Training


It is suggested that in case of an existing unit, a rigorous “Plant Practices Audit” should be carried out for the above area to determine the shortcomings, bottlenecks and lacunae that are affecting productivity and then necessary corrective action initiated. In the case of new units, the above list can form the basis for drawing up a “Plant Practices Manual” which would aim to prevent the growth and spread of wasteful practices, that would otherwise sprout in the absence of any specific guidelines or policy in the matter.

I would like to emphasise, here, that the purpose of the above proposed “Plant Practices Audit” is not to draw up an ironclad set of rules and regulations in which the workers are to be imprisoned. Far from it.

The idea behind suggesting the above “Audit” is that a deliberate and conscious effort is made to study the practices that are in vogue (or need to be instituted) so that instead of various working habits developing by default, proper and correct working practices are adopted which are in consonance with the requirements of the job in the overall organisational context.

Many of the “default practices” may be harmless in themselves ; however, by their very nature, they tend to be individualistic and, collectively, have a discordant and disruptive effect on work output and productivity. On the other hand if the “correct” practices are stipulated and underlined right from the beginning, it gets internalised as a part of the job and there is no feeling of being unduly pressured which is what the workmen feel when there is a move to change habits/practices of years in an effort to increase productivity.

In sum, it can be appreciated that the question is not so much about the workmen having a “right attitude”, as it is of the management effectively discharging its own responsibilities of (a) determining the right work practices and (b) teaching and imparting that knowledge to each workman right from the beginning, as an integral part of their training. The tragedy is that most managements are too lazy to do the first and, consequently, ill - prepared to do the second.

In case of existing units, which are expanding, the task is, both, much easier and far more difficult. It is easier because the wasteful practices are already known and, therefore, can be identified and their solution thought of or planned for. It is difficult because it is virtually impossible to break an existing practice. Examples abound in plenty about the most professionally companies falling victim to these wasteful / restrictive practices. A recent case in point is that of the Hindustan Lever unit at Sewri, Bombay.

However, when such existing units are having expansion programmes at a different location then it is incumbent upon the people in - charge of the project to ensure that such wasteful practices do not take root in the new location. However, once again, the reality is that planning is only done for the hardware part. There is increasing focus on how to reduce manpower by automating or mechanising or resorting to use of sophisticated material handling equipment etc.

What is lost sight of in this approach is that while certain manpower reductions can definitely be achieved, manpower, as such, cannot be totally eliminated. Therefore, the way to solve this problem is not merely by reducing manpower. Rather, the effort must be to install systems that do not give an opportunity for these restrictive practices to creep in.

For example, one of the major headaches faced on any shop floor is worker mobility / flexibility to shift from one job or machine or location to another. In case of a new unit, this problem can be tackled by instituting a system right from the start of operations at that unit that every worker will have a one or two year’s training period, during which he will work on several possible jobs that can be performed in his particular grade or skill level. Further, he should be asked to perform such different jobs (be it on a different machines or at a different location) as a matter of course. Once this practice is instituted from the very beginning, it will, hopefully, not give any cause for resistance or resentment later on.

It is not that the workmen, per se, are unwilling to perform different jobs. The fact is that if they have been working on just one job for years together and, then, they are suddenly asked to move, they naturally perceive this as a threat and encroachment upon their rights and get a feeling of insecurity. It is this that causes them to react with a sullen refusal which then gets unfairly and wrongly (though, not surprisingly ) interpreted as indiscipline or unreasonableness.

On the other hand, if there was a regular practice of job rotation or operator mobility, as per the exigencies of work, there would be no cause for alarm in a worker’s mind when he is asked to do a job different from the one he is currently engaged in.

Yet another example is the case of whether or not, if at all, an operator of a machine should maintain the machine himself. Today, the operator simply operates the machines ; the cleaning around the machine is done by a sweeper or cleaner. Its oiling and greasing is done by another person from maintenance department. Once again, shop floor managers know that this kind of work segregation is carried to ridiculous lengths.

For instance, if a belt slips from a pulley, the operator will sit idle for hours, till the maintenance man comes and remounts the belt on the pulley -- a job the operator could well have done in a couple of minutes !

Therefore, while starting a unit at a new location, these aspects could be built in as part of an operator’s job ; for example, he may be asked to clean his workplace at the end of the shift, regularly oil and grease his machine and he could also be asked to take care of certain, well defined minor faults himself (for which, of course, he needs to be provided proper training). As a result of the above, work interruptions on this count would drastically reduce and this would show up in a dramatic increase in productivity.

For far too long, these aspects have been ignored, as if by shutting one’s eyes to them would make them disappear. Every practising manager complains of these problems, but no systematic effort is being made to tackle them at the root. If we wish to see significant improvements in productivity, there must be a shift from hardware - obsession to software - concern.


Bombay
November 29, 1989

Role of the Press - A Citizen's Viewpoint

Role of the Press

- A Citizen’s Viewpoint



While the nightmare or emergency is behind us, two question continue to stare us in the face - one, “Why the emergency ?” and two, “How to prevent its recurrance ?” The answer to the first question can really, only be provided by those who enacted that high drama, though a number of plausible explanation have been put forth by those who were close to the scene of action. The answer to the second question, however, must be sought and provided by each and every citizen of our country. Succeeding generations will not forgive us if we do not take any corrective actions ; history will despise us.

Our representatives in Parliament are working on the legal and constitutional safeguards for preventing such safeguard would be to overhaul the social climate itself which permitted such abuse of power to take place with little challenge or resistance or protest ; which made us all so docilely submit to authority we knew to be wrongly exercise and which we roundly condemned after the emergency. It is in this task of building up a strong sense of democratic values and creating a reservoir of courage to stand up to and resist authoritarianism that the press has a crucial and vital role to play.

The emergency has underlined the importance of having a free and unfettered press which would keep the government aware of the people’s moods and reactions. It is a widely held view, to-day, that had the press been free, during the emergency, to mirror the people’s feelings may of the excesses would not have been committed. True, but what about the periods before the emergency ? There were no felters on the press then. If only the press had, at that time, taken upon itself to faithfully report to the people about the goings on in the government, if only it had discharged its function of exposing corruption and inefficiency wherever they occurred, if only it had educated the people about the principles of democracy and the dangers of their about the principles of democracy and the dangers of their about the principles of democracy and the dangers of their about the principles of democracy and the dangers of their abuse, if only it had emphasised the value of freedom and the agony of its absence, if only it had cautioned the people of impending authoritarianism and what it would lead to, it is conceivable the people may not have been numbed it is conceivable that people may not bave been numbed into such a state of shock as they were. It is possible into such a state of shock as they were. It is possible that the spark of resistance ignited by an informed and aroused public an inflamed by the courage and defiance of the news media would have spread a big enough conflagration that would have contained and arrested the tide of despotism which engulfed us all for nineteen moths. But all that is history now. It is the future we must look to and how we can protect it.

If, however, the performance of the news media during the five months after the emergency is any indicator, then it appears that no lessons have yet been learnt. Newspapers continue, as before, to be fully taken up with only reporting events. There seems to be very little effort at informative analysis (as opposed to opinion-expressing in editorials), information giving or educating or investigative reporting or racket-busting or exposing corrupt practices and so on. These are some of the more important features of any responsible newspaper which distinguish it from the routine news sheets. All that one sees in the newspapers these days is more reports of “What happened yesterday” and authentic (!) accounts of “What happened during the emergency”. There is hardly and attempts to go into the ‘why’ of things, to investigate incidents / controversies, to probe alleged scandals, to regularly and systematically inform the people about how the government is functioning, if at all, and such things.

Consider the Belchi incident, for instance. All that we have got so far is a report of the Belchi M. P., Mr. Gupta’s version and Mr. Ram Dhan’s version and Mr. Charan Singh’s version and MP’s team’s vesion. Where, may one well ask, is the newspaper’s version ? Why cannot the newspapers send their own journalists for an on-the spot and detailed investigation and let the people know their findings. Indeed, a team journalists drawn from various newspapers/news magazines could do a joint study and report. Such a report would not only carry a great deal of conviction and thus clear the confusion but put pressure on the governemnt to expedite its own enquiry into this and such matters. Similar individual / joint investigations could also be done on the widespread labour unrest and violence in the country, campus troubles, the working (or non-working) of the campus troubles, the working (or non-working) of the enquiry commissions, the Poona demonstrations against the Prime Minister, the violence in and around industrial areas in Poona on that occasion and such other incidents.

Consider another example. All newspapers have been dutifully reporting the massive under-utilisation of import licences for edible oils by the traders as also the alleged selling of oil meant for import to third parties abroad. And what is the source of their (the news papers) information ? - only statements made from time to time by Shri Mohan Dharia. How many newspapers of magazines have reported anything in this matter which they themselves have uncovered ? Why has no newspapers attempted to do its own detailed investigation in the matters to give the people a clearer and more complete picture of the whole affair ? Why is no attempt being made to unmark the cartal (if there is one) which is holding almost the entire country to ransom ? Organised corruption at influential levels and by moneyed people is not capable of being fought by the government alone. The government requires active co-operation and support, of all sections of the people, especially a vocal medium like the press, to weed out this malaise. Similarly, alleged scandals of cement hoarding, high vegetable prices, gulf employment agencies, college admission wrangles, actual election expreses of selected candidate who are known to have spent very large sums, etc. need to be thoroughly investigated and the offenders exposed. A newspaper is its task also lies in investigating matters of public interest and exposing law breakers so that not only do the people come to know who the real culprits are but also the fear of public exposure may desist many from indulging in such activities. it is hardly necessary to emphasize that such investigations must not degenerate into witch-hunting or lead to harrassment of innocent people - the only casualty in such a case would be the press credibility.


This is so far as investigating and exposing is concerned. There are still other important roles for the press. Educating is one. We talk a lot about democracy and its relevance to our conditions of life and so on and so forth. But what does and should it mean to a common man, has anyone bothered to explain ? How does our democracy work, what does it comprise of, what are its advantages and disadvantages, what rights does it bestow and what obligation does it cast upon a citizen, has anyone tired to explain to him ? who are our representatives in Parliament and assemblies, what is their background and previous record are things which many educated urbanites are not aware of, much less a common villager. With this level of ignorance and lack of awareness of such matters it is not difficult to relise why there is so much apathy towards the affairs of the country by large sections of the people. It also explains the considerable indifference of the large majority of the people towards the imposition of the emergency - a factor which decidedly made the things much easier and smoother for those who imposed it. If democracy is to strike permanent roots in our country it is essential that a basic training in democracy be imparted to the people and the news media is admirably suited to play this role.

To begin, with all MPs elected in the March elections should be introduced to the people through brief life sketches, listing, among other things, educational qualifications, political activities / background, special attainments / interest as also their addresses so that the people know who their representatives are, what their calibre is and where they can be contacted. To-day, save for the Union Ministers (and that too not all) and a fe prominent MPs, people hardly know even the names of other members of Parliament ! A similar exercise should also be done for all the legislators of states where, recently, elections were held.

Next, there could be a more detailed / elaborate reporting of the Parliament / Assembly sessions regarding both the debates and the question hour where a lot of useful information is given. These reports should also comment on the attendance in the House viz., how many members present at the start of the day’s proceedings, how many present during the course of the day, say, immediately after lunch, as well as total present and participating whenever a bill/motion is voted on. The people are entitled to know whether or not their representatives are doing the work they were electedd for, which when the Parliament / Assembly is in session, is primarily legislating. Similarly MPs/MLAs with less than 3 days attendance in a week’s session of Parliament / Assembly should be named (An explanatory remark should be added only for those who are ill). Such a report, it is expected, will have a salutory effect on members who treat their legislative functions lightly.

Further there could be a series of articles on various facets of democracy like the election process, the distortion it produces, safeguards and remedies against election malpractices, the functioning of Parliament and Supreme Court, the structure of government at district and panchyat level, the planning process and how a citizen can contribute to it, the five-year plans, the citizen’s avenues for redressal of grievances, especially against violation of his civil / fundamental rights by those in authority and other related topics.

One more equally important area of activity for the press is ‘informing’ (not to be confused with reporting of recent events). In this field, newspapers should regularly report on the functioning of each and every ministry, functioning of various National Laboratories and Central Research Institutes, review periodically the actual receipts and expenses on different items of the budget, the deviation from the budgeted estimates and the reasons thereof, review periodically the progress of work on various projects (dams, steel plants, road networks, community welfare schemes) which are started with much fan-fare before every election and then conveniently forgotten, the actual expenditure incurred till date on such projects as composed to the expenditure estimates for the whole project as composed to the expenditure estimates for the whole project made when the project was started, a periodic comparison of standard economic / social / other indicators with our immediate neighbours, countries in this region and developed countries of the world, and other information of general interest. Apart from keeping people informed of what is happening to the tax-payer’s money, the fact that such reports are going to be published for public consumption is bound to have a salutory effect on various public bodies concerned and keep them on their toes. More-over, this will. Induce in the latter a habit of periodic review (which doesn’t seem to be very common now) and thus enable them to detect deviation from plan at an early stage itself which would be beneficial for taking necessary corrective actions.

The task of nation-building is a collective responsibility and so single agency or group can do it alone. Nevertheless in the conditions obtaining in our country to-day, the new media, which has the largest reach as a single group, has a very significant role to play and will have a very decisive bearing on the shape of things to come in the future.

Our recent traumatic experience has shown that ignorance of and indifference to public affairs are the surest breeding grounds for totalitarianism and dictatorship with all its associated evils. In the recent elections the people have cast a clear verdict against authoritrianism, but unless the basic reasons which permitted those in power to get away with its abuse are tacked we will continue to remain vulnerable to reimposition of the kind of rule we went through during the emergency.

If we wish to follow the democratic path, if we value our freedom and individual dignity and wish to safeguard these, then, it is the twin enemies of ignorance and indifference which must be attacked first. And it is here that the news media must play a vigorous role. The emergency showed up the strengths and weaknesses of our news media - unfortunately more of the later than the former. The present affords an opportunity to the news media to retrieve its former credibility and prestige. Let this chance not be lost by default again.


H. K. Varma
11th August, 1977
Bombay.

An Open Letter from an Anguished Citizen

An Open Letter from an Anguished Citizen


Dear Professor Mahapatra,

I have been following with great interest your recent pronouncements as reported in the press. They are very illuminating and, as a harbinger of things to come, very revealing. Like your illustrious predecessors, M/s. Borooah, Antulay and Sathe who have also adorned the offices of President and General Secretary of your party, you have held aloft the torch of sycophancy and inspired by its brilliance gone on to express your views on the political system, the opposition and the press.

Shall we take them one by one ?


On Rajiv Gandhi : “Mr. Mahapatra opined that he (Rajiv) should occupy a “pivotal position” in the organisation. Mr. Gandhi had an “excellent perspective” about the nation’s future. He had also demonstrated his “tremendous organisational abilities” and it was highly necessary that he be given a “pivotal position”. ( Times of India, July 26, 1981 ) and further --- He (Prof. M.) indicated that Mr. Rajiv Gandhi would soon be Secretary-General of the AICC(I). “He does not need special grooming because he has seen politics from his childhood.” ( TOI, July 27, 1981 )

A few more statements like this and your future is made, Professor. In fact, why don’t you straightaway propose Rajiv as deputy Prime Minister - obviously, no grooming is required and how much relief that will give to Mrs. Indira Gandhi who can then turn her attention to “bigger things”. Keep right at it. You are on the right track.

On our political system : “Prof. S. S. Mahapatra, General Secretary of the AICC(I) said here today that it was impossible to achieve socialism through parliamentary democracy........ He said the main reason for this was that the bureaucracy in a parliamentary democracy served the interests only of contractors and not of the people” (TOI, July 27, 1981) But I am really at a loss to understand why you complain ? We neither have Parliament, nor democracy. Just how many MPs of your party attend Parliament while it is in session and of those that do, how many take part in the proceedings other than shouting down opposition speakers, and of those that do participate in the discussions how many contribute something worthwhile ? As for democracy, surely you are not guilty of practising it.

Your party is named after an individual ; there have been no organisational elections in your party ever since it was formed. All Chief Ministers of the states where your party is in power are appointed by the Prime Minister or her son and given the boot whenever the lady is annoyed ; much fuss is made about the party being against a person holding a cabinet post as well as an organisation post at the same time and much fanfare has attended the Prime Minister’s “firm step” in asking Mr. Darbara Singh to resign from the Presidentship of the PPCC. But, why, oh why, Professor, does Mrs. Indira Gandhi not take a similar “firm step” to either resign from the Party Presidentship or the Prime Ministership and why don’t any of you have the courage to ask her to do so ?

On the opposition : “... the opposition had been rendered ‘irrelevant’ by the recent elections .....” This has been a recurrent dream of your Party, dear Professor, so I’m afraid you are not exactly original. In the heydays of the emergency, Mrs. Indira Gandhi had declared that “the opposition is subdued but not vanquished.” However, it is interesting that in the same breath she and you blame this ‘subdued’ irrelevant opposition as being the cause of all the troubles in the country, be it riots, declining industrial production, deteriorating law and order, death of Sanjay Gandhi, agitation by any section of the populace etc.

On the Press : “Indian newspapers and journalists have ‘no commitment, principles, integrity and ideology’ according to Prof. S. S. Mahapatra, AICC(I) general secretary” (TOI, July 27, 1981). You have already decried that political system, you have labelled the opposition irrelevant i.e. to say --- only you matter ; your party has always held that the judiciary and the constitution are the biggest roadblocks to your efforts to improve the country and now you feel that the press is another major evil.

All you and your party and its leaders want to do is the undo things. You want to do away with Parliament, with democracy, with opposition with the judiciary and with the constitution. Is there not a single thing you want to build ?

You know what you really want Professor ? You want ---- no shackles, no controls, no questions on what you do, how you do it and to whom, when and where. That is why you are against the Constitution which lays down the limits to a Government’s powers and regulates its conduct. That is why you are against Parliament because it calls for a discussion on what you propose to do and how and why. That is why you are against the opposition which can ask inconvenient questions or seek revealing information.

That is why you are against the press because it can report your doings and keep the people informed. That is why you are against the judiciary because it can censure you and call you to order whenever you flout the constitution and invade the citizen’s rights.

And that is why, in your party, you have none of these --- no Constitution, only ad-hoc appointments, ad-hoc committees and the President’s orders ; no Parliament ------- no discussion or questioning of what the President says or does ; no opposition --- need I elaborate ? No press --- i.e. no expression of views contrary to the President’s, all functionaries of the party to only act as mouthpieces for the President ; the clever ones amongst you still manage to express conflicting views but this, too, only in the name of the President. (That is why you have this spectacle in all the states ruled by you of a ruling group and a dissident group, both claiming support and blessings of the Prime Minister and, what is more interesting, getting it) ! And of course, no judiciary --- no appeals against any decisions. Can you, if you feel aggrieved against the Prime Minister appeal to the party President ? Or, vice - versa ? Quite a teaser, isn’t it ?

Professor, let us for a moment grant you your scenario. Let us imagine that there will be no Constitution, no Parliament, no Opposition, no Press and no Judiciary with your party in power. What will it be like ? Is this your definition of ‘socialism’ ? Assume for a moment that all these five roadblocks are removed overnight ; will prosperity shower upon us and alleviate all our miseries ?

You know what we will have when you remove these five impediments - an unambiguous monarchy which is what all of you have really been craving for. No longer will you have to justify or explain hereditary succession to the throne; no longer will you have to bother about things like public opinion or the opposition’s demands nor for any legal restraint on your actions ; you can now have a regular durbar where all of you can compete at paying court and showing obeisance to the monarch and the royal family, and poor commoners like us will be at your bid and command and grateful for the morsels you might care to toss our way. What a wonderful dream, isn’t it ?

But just a minute, professor. Unfortunately, by a quirk of nature, the common man also dreams. And what else can he do ? Fed, as he has been, on dreams for over three decades (of which all save two years have been under your rule, he lives from day - to - day on the strength of his dreams alone. What is his dream ?

Let me describe it for you. An opportunity to do an honest day’s work, enough earning to feed and clothe himself, and have a modest roof above his head. A clean and safe environment, an access to education that would keep his mind usefully engaged. A government that would look after its citizens rather than be after them, that would help them grow rather than curb their growth, that would do what they want rather than dictate what they should do and what they should not. A mundane sort of dream that cannot hold a candle to your dreams, that are woven with grandeur, ambition and power.

But this is all that the people want. They do not envy your palaces and parties nor grudge your foreign trips and lavish weddings. They do not mind your looting and squandering away public money for they knew that this is an inborn trait that you cannot easily shake-off. They even tolerate your perpetuating yourselves in power by violating laws or by simply changing them with retrospective effect to regularise your actions.

In return for all the indulgence they show you, all that they ask is to be left alone and allowed to live a life of dignity with their minimum physical requirements fulfilled.

The tragedy is that you are not bothered in the least about their dream, much less, willing to do something about it. It is a tragedy, not for them but for you. You imagine that having won an election you have received sanction to do what you want for as long as you wish ? You think that with all the money that you have amassed you can purchase every soul ? You believe that by subduing the Opposition and the Press, by ignoring Parliament, by bullying the Judiciary and by destroying the Constitution you can keep yourselves in power indefinitely ? You are wrong, my friend.

You are wrong because you have forgotten one inconvenient factor - the people. You can destroy everything, but not them. You can change everything and fashion it to your will, even history, by rewriting it or, as in the case of the Shah Commission reports, suppressing it, but you cannot erase people’s memories. They will not forget what you promised and what you delivered. They will not ignore what you took versus what you gave.

And then they will act. Do not mistake their silence for consent, nor construe their tolerance for approval. Everything in this world has a flash point. Indians have a very high flash point but you may yet earn the distinction of being the first to ignite them.

Come back to earth, Professor, and tell your friends that they are servants of the people and not vice - versa, that the Constitution is a body of rules enacted by the people to regulate the affairs of the government and not an instrument for the latter to usurp the rights of the citizens, that the Parliament is a forum to question the government on its actions and inaction and ensure full public participation, through the MP’s in the decision-making process of the government, that the press is a media to inform how the people feel about its various actions, that the judiciary is the citizens’ leash on the government to ensure that it acts according to the Constitution and does not assume authority which has not been given to it. Tell them that they have been elected to do work for the people and not to get people to do work for them.

Let your friends understand this fast, Professor. Time is running out. The people want results, now. The people cannot wait, forever.


Yours sincerely,


hemendra k. varma

Mumbai
August 12, 1981

Leadership Challenges in the Small Scale Sector

LEADERSHIP CHALLENGES IN THE SMALL SCALE SECTOR


                                                                               by hemendra k. varma




The first thing to recognise about the Small Scale Sector is that it is no longer so. Comprising over 11 lakh units and with an output valued at approximately Rs. 41,000 crores, it accounts for around 50% of the total industrial production in India. When viewed along with the other identifiable sectors, viz. the public sector and the medium and large scale private sector, it will be seen that the contribution of the Small Scale Sector in the total industrial output is the largest. Any operations management practitioner would recognise that in terms of an ABC analysis, the Small Scale Sector falls squarely in the ‘A’ category and deserves appropriate attention. The tragedy, however, is that the pampered sector still remains the Public and the Large & Medium Scale Private Sector. Be it in terms of finance, or of foreign collaborations, be it in terms of political clout and support or be it in terms of news value - the small scale sector is very much an ignored one.

At the very outset it might be stated that the small-scale sector also accounts for the largest number of sick units and we will begin our discussion here.

Why is this so ? The answer is not too difficult to find. The small scale sector being very much a priority sector on paper, the success of any State government financial or industrial development institution is gauged by the number of small scale units that they are able to promote. The attitude and the practices that flow from such an attitude, have been fully exploited by a large number of unscrupulous people. Projects that are either not viable or only marginally viable are getting approved. Loans are granted and disbursed, and that’s the end of the story in so far as the institutions are concerned.

Unfortunately, what follows is equally important but sadly neglected. The real work of the development and financial institutions actually beings after the funds are in the hands of the entrepreneurs to ensure that their spending is in accordance with and for the specific purpose indicated in the approved project. This is rarely done, with predictable consequences.

Thus, we have two major questions to be tackled. The first problem is to regulate the growth of the small scale sector into only those units that are viable. The second is to ensure that in case of viable projects, sanctioned funds are not frittered away in what may aptly be described as non-plan expenditure. How does one do this ?

Let us take the question of viability first. So far, the practice is to examine viability on the basis of the project report only. While this is no doubt an important dimension, it is certainly not a complete analysis in itself. What is equally, if not more important, is that the approving institutions take a good, hard look at the promoter. The same project in the hands of two different people can turn out diametrically opposite results, and the factor responsible for this is management. Therefore, while assessing the potential of a project, there must be a good and proper assessment of the entrepreneur.

Of course, while saying this it is realised that one is introducing a very subjective element in the scrutiny of a report, which, in the context of the atmosphere of corruption that pervades our entire economic system, can be exploited and lead to harassment. Nevertheless, there is no escape from such an assessment of the promoter. It would not be too difficult to lay down some basic norms for such an assessment.

While the benefit of doubt may definitely be given to the entrepreneur, what can be done is that in cases where this is the first project of the person concerned, or his capabilities are not fully reassuring, a closer scrutiny of the project should be made, and in the initial stages he must be prevailed upon to employ suitable professional expertise, or suitable professional expertise should be provided from the pool available with the industrial development bodies themselves.

Next, we come to the question of the performance of the small scale sector today. While the figure of 50 % share in the total industrial output is no doubt impressive, the individual performance of most of the small scale units is rather poor. The performance failures have been mainly on the following three fronts :

(1) Capacity Utilisation
(2) Quality reliability, and
(3) Adherance to Delivery Schedules


Each of these aspects is very much a management problem. The point, therefore, being made is that management of small scale industries, or to use a hackneyed expression, “professional management” of small scale industries, is almost non-existent. Let us consider each of the three major shortcomings listed above.

Capacity Utilisation

In a country like ours where capital is scare and labour so costly - I say the latter because what must be compared is not the wage level along, but, rather, the wage level in relation to a worker’s effective output - every capital asset has not merely to be worked but to be overworked to the maximum permissible limit.

Today, large numbers of machines lie unused or partially used in the small scale sector. Conservative estimates place the extent of non-utilisation at a minimum of 25% excluding down-time on account of power shortages. There are a variety of reasons for this. Wrong or inappropriate choice of equipment at the initial stages, unattended breakdowns, non-availability of spares from machine manufacturers, discontinuance of a product or a particular operation or process for which the machine was specially bough are some of the major causes leading to this state of affairs.

What is even more tragic is that while one unit may be having a low utilisation of one kind of machine, say a milling machine, another unit in the same or nearby area may be crying for milling capacity and may be having to decline orders on this count. True, units in such situations do get together to mutual advantage, but such cases are few and far between owing to very poor infrastructural set-up for information exchange.


From the foregoing two paragraphs it will be seen that the causes for low capacity utilisation are essentially of 3 types :


· Due to mistakes in initial planning/procurement decisions in respect of capital equipment.

· Due to external factors beyond one’s control - especially change in market demand, product/process obsolescence, etc.

· Due to operational shortcomings, poor spares management, defective scheduling etc.


Of the above 3 factors, the first and third fall squarely within the purview of management’s responsibility. In the case of the second factor, whilst there may be external forces at work over which one may hot have control, it is certainly possible, with some perceptiveness and a little bit of conscious effort, to anticipate the effect of these external factors and, since forewarned is forearmed, one can prepare for the eventuality such that damage to oneself is minimised.


As will be readily recognised, the essential input required for tackling these situations is management competence coupled with some infrastructural support and facilities.



Quality Reliability


One of the myths about our small scale sector is that it is largely promoted and run by educated or technically qualified entrepreneurs. The truth is far from this.


A very large number of such units have been started by non-technical people or by workers who are employed in industries and have grown from single machine units to larger establishments over the years. In most such cases, the entrepreneur had adequate competence for the initial activity he undertook, but, with growth in his volume and span of activity his competence bank has not kept pace. As a result, in times of demand boom, while he may have been able to get by, he suddenly finds himself out of depth when there is a demand slump or some technological advancement, for he is unable to innovate and respond actively to such challenges. He never had any reservoir of technical competence nor has he taken any steps to keep himself updated.

The output from such establishments, is always woefully poor on the quality front - both in conformance as well as consistency. Procurement personnel of various large companies are painfully aware how difficult it is to locate a “reliable” supplier - either his quality is inconsistent or his delivery unreliable. Rare is the case when a supplier performs well on both factors.


Secondly, because of shortage of working capital, as well as the constant pressure for “immediate delivery” form customers (owing to poor planning on the latter’s part) small scale suppliers tend to do a hurried job. Their chief objective is to deliver so that they can bill. What happens in the process is that a shoddy product is delivered and a lot of re-work has to be done by the supplier (or, sometimes, the buyers). This really is a national wastage of manpower and resources and, so far as the supplier is concerned, means a proportionate reduction in his net earnings.


Doing it right the first time, with some extra effort pays in the long run but is not a philosophy practised or accepted by the small scale sector. This is yet another case of management failure, or, rather, shortcoming.



Delivery


Planned job scheduling and machine loading are unheard of in the small scale sector. The result is inevitable delay and non-adherence to promised delivery dates. The customer who follows up most gets his job first - for the rest, it is as and when, if at all ! Lack of planning stems from two basic causes - lack of knowledge (of planning methods and practices) and lack of attention to this aspect, chiefly owing to the entrepreneur having to attend to every job himself.


At the risk of repetition, it has to be once again stated that this too is another case of management failure. There is rarely an initial expertise on such matter available and, if available, it is confined to the entrepreneur himself. Rarer still is the case where such expertise is added on in a running small scale unit, however well it may be doing. Inputs in terms of intangibles like management expertise are always viewed with suspicion and treated as “cost additives”. The argument runs somewhat like this : for the salary I am going to pay this manager, I can hire two more workmen and run these two machines in 3rd shift as well ; or, I can buy an additional machine with six months of his salary equivalent and increase my production by 25 % etc.


What is ignored is that even to keep going, an enterprise must be constantly improving its operating performance and this is only possible with better management and not with more output of doubtful quality and beyond delivery deadlines.


The purpose of such an elaborate discussion on the operational shortcomings of the small scale sector has been to underline that they all stem from a single basic cause - indifferent, unresponsive and inadequate management effort.


This is a major challenge that is squarely the responsibility of the small scale sector industrialists. The leadership of the SSI must spend time to consider this challenge in all its dimensions and evolve a strategy for converting this challenge into an opportunity.


So much for the challenges of the physical operating aspects. Another important challenge for the small sector is manpower availability, retention and utilisation. It is perhaps the single most important factor affecting the performance of a SSI unit for it greatly affects the three aspects of physical operations discussed earlier.


Manpower utilisation is an important issue through the country, whether in the bureaucracy, educational institutions, service establishments or the industry. In the case of the small scale sector, the problem gets accentuated because by the nature of their set up the SSI have fewer people to begin with. Reference has already been made to the usual tendency among industrialists to save on manpower expenses by hiring “cheap” personnel rather than the best person for the job at hand whose salary expectations might be higher than what they industrialist considers reasonable or worthwhile. Thus there is already a natural barrier to the employment of “good” people.


This situation is compounded further by the fact the even if the entrepreneur wishes to take good people he is not able to attract the best talent for the following three reasons :


· He cannot locate them easily - advertisement and/or selection consultants are expensive and even if he resorts to these avenues the response is less than adequate for most people have not probably heard of his organisation.

· If, perchance he can locate them, in most cases he cannot afford them or, rather, he thinks he cannot afford them. This is, of course, the major barrier to entry of good managers in the SSI.

· Lastly, there is a natural and understandable desire among job-seekers to work with a big company or a big or well-known name. The more qualified and talented a manager, the more intense such a desire. Further, the big companies are in any case waiting like sharks to snap up such talent at the first opportunity and imprison them with golden handcuffs of inflated salaries and unmatchable perquisites. In most cases, such talent is literally snatched off from the cradle, so to say, by the medium of the campus interviews/selection.


As if this were not enough, those who do seek jobs with the small scale sector - be it a qualified manager or a skilled workmen - do so with the intention of, sooner than later, changing over to a better/bigger company after having acquired some job experience. Thus, mobility of all category of employees is very high in the small scale sector.


The enlightened entrepreneurs will need to devote a considerable amount of time and energy into tackling this situation so that not only can the SSI’s get a good set of people, to begin with, but they should be able to train them suitable for matching the work requirements. What is more important, they should be able to retain such employees for sufficiently long periods so that the latter make a reasonable contribution to the concern’s growth and profitability before they decide to seek a change.


So far we have been discussing what may be described as essentially internal challenges to the SSI leadership and, therefore, responsibility devolves on them to take the initiative to seek solutions and make the necessary intervention.


Let us now look outwards and examine the various interacting forces that affect the performance of the small scale sector. The small scale industries face a formidable host of obstacles by way of the large number of agencies that they have to be in touch with for each of their separate requirements.


For instance, at the national level there are two nodal agencies, viz. NSIC, the National Small Industries Corporation whose key activities are supposed to be supply of machines or hire - purchase, single point registration, development of prototypes of machines, setting up turnkey projects abroad, etc. and the DCSSI, the Development Commissioner, Small Scale Industries who concentrates on various promotional and technical advisory activities through the SISI, the Small Industries Service Institutes and its regional offices.


At the State level there are a series of bodies starting from the Department of Industries, Small Industries Development Corporation, State Financial Corporation, Small Industries Consultancy Corporation, Small Industries Export Corporation, and finally, the all-encompassing District Industries Centres.


The establishment of so many separate functional bodies was presumably to provide specialist assistance in each of these areas. Unfortunately, it has had the opposite effect. It is only served to compound the confusion owing to a large extent of overlapping of functions and responsibilities and lengthened the bureaucratic path that an entrepreneur must traverse before he can get what he wants.


As is bound to happen in such situations, there is a great deal of buck-passing and tendency to secure approvals of “all concerned” agencies leading to inevitable delay, dilution of original assistance sought, and what is worse, a great degree of corruption.


To add to the confusion, two more set-ups, are proposed viz. CFTC - Common Facilities and Training Centre and PDTC - Prototype Development and Training Centres and to cap it all yet another expert body is being set up under the Chairmanship of the Secretary, Industries Department to examine the whole gamut of the problems of the SSI :


Consider the following

As will be seen from the above sketch and SSI entrepreneur has to deal with a large number of bodies. This is true for all other industries, too, but with the important difference that while the bigger organisations can afford to and do have full-fledged separate departments to deal with each such body or group of bodies, the SSI entrepreneur has to co-ordinate with all these bodies are forces almost single-handedly.


In the process more than half his time is spent in commuting and waiting to meet these people and talk to them. Is it any wonder, then, that the SSI man can find little time to devote to the actual running of his unit, much less to make a good job of it ?


The SSI units start with a very small capital base, they are short of manpower and very unsure on the marketing front. Therefore, the SSI’s need a drastic reduction in the number of referral bodies they must go to for any assistance or information. The DICs were conceived to fulfil this need by providing a single-window service but their actual performance has fallen woefully short of expectations. They are poorly manned and ill-equipped.


They have neither the requisite autonomy nor sufficient authority for taking quick decisions thus defeating the very purpose for which they were established.


The above situation, then poses a major challenge to the political and bureaucratic leadership concerned with the small-scale sector to restructure the set-up for providing infrastructural guidance and support to the small scale sector. It is obvious that a drastic pruning upgradation is required in the capability of the staff manning such bodies.


Next, we come to the question of finance. This is a major and constant source of worry for the small scale industrialists. First of all their sources of finance are limited. SSI’s can get terms loans from only State Finance Corporations and cannot resort to public borrowings, while the organised sector has ICICI, IFCI, IDBI, LIC and UTI and various State investment corporation plus access to public borrowings.


As if this were not enough, the Government has now permitted the SFC, the only avenue for SSI term loan to lend to medium sector units as well upto to Rs. 30 Lakhs, thus reducing and restricting the resources available to SSI.


Secondly, as has been mentioned earlier, owing to insufficient scrutiny of the initial project report approved and almost total absence of any monitoring thereafter, the entrepreneurs, most often, do not make the most efficient capital equipment decision.


The most common practice of ordering equipment is (a) either to buy what his friends has, or (b) to go buy what his consultant recommends to him, which more often than not is equipment from a company which is giving a commission to the consultant. At the time of drawing up the equipment requirement of the next 4/5 years, the advantages and disadvantages of going for a more versatile equipment straight away so that the branching out into diversified products is eventually cheaper. No doubt, these considerations are also dictated by the present fund availability.


However, when one is starting a fresh project and has to go in for a loan anyway, a projection of activities in the next 4/5 years should certainly be taken into account and appropriate allocations made and approvals requested for. The net result of the present approach is that the little money that is received is poorly spent and very soon more funds are required whilst the previous loan lies locked up in unwanted assets.



The next area of fund lock-up is raw material and in-process inventory. This happens mainly on two accounts :

• Due to generally poor supply conditions, people tend to overstock. First of all, this results in a lock-up of funds and, secondly, a good percentage of the inventory which is remaining in storage for a long time either gets spoilt or lost or becomes unserviceable i.e. beyond use.
• 
  
• The other reason for higher - than - required inventory is the whims and fancies of the large buyers on whom the small scale industries depend. It is a very common practice for the large buyers to be clamouring for material one day, and on the other, to suddenly cancel all orders. The victims of such whimsical working are of course the small scale industries.

Last, but not least, the squeeze comes from the delayed payment from the buyers. As it is, the large and medium scale industries corner a lion’s share of bank credit for working capital. Bank credit to SSI amount to barely 12 percent for to gross bank credit and only 30 percent of the advances to industry (medium and large), for matching output in the country. Of the little that goes to the small scale industries, virtually, the entire amount is sucked up by these large buyers when they receive the goods from the supplier but delay their payments.


A promised payment period of 30 days is invariably converted to an assured period of 90 days, which is finally effected only after 180 days or more. One estimate is that over Rs. 1000 crores are blocked up in the organised sector, at any point of time. This is a very big lacuna in the entire system of granting working capital credit to the industry.


This aspect needs to be seriously examined so that some way is found of preventing this diversion of bank credit from the small scale sector to the large and medium scale by this devious device of withholding payments. Mention has also been made of the difficulties the SSI face in the matter of obtaining qualified personnel. One possible solution is to use consultants for specific problem as an when required.


Unfortunately, as of today, none of the consultants is willing to even touch small scale enterprises. On their part the small scale sector is also shy of approaching consultants partly for the reason that they feel they will not be entertained, partly for the reason that they have a notion that such advice is extremely costly and of doubtful usefulness.


Except for the Bombay Management Association which runs a window for the small scale sector, there is no known formal advising authority. Similarly, none of the Management Institutes OR Schools provide programmes specifically beamed at the small scale sector though there are a few programmes where SSI entrepreneurs can and do participate.


As mentioned above, management is a key resource that is being under utilised in the small sector and by far, this will be the biggest leadership challenge in the years to come.


The difference in the effectiveness of our small scale sector can be easily weighed against the performance of the Japanese small scale sector, or, what is less - widely known, of the American small scale sector. Everybody has heard of General Motors and General Electric but it is not very well known that over 65 % of American industries are in the small scale sector.


The point that is being attempted to be made here is that, in the coming years, the small scale sectors will require a very large dose of managerial inputs and advice. Not only must the leaders in the small scale gear themselves up to improving their managerial inputs and performance, but a very large responsibility devolves upon the consultants, to focus their attention specially and specifically to this large clientele.


The point that is being attempted to be made here is that, in the coming years, the small scale sectors will require a very large dose of managerial inputs and advice. Not only must the leaders in the small scale gear themselves up to improving their managerial inputs and performance, but a very large responsibility devolves upon the consultants, to focus their attention specially and specifically to this large clientele.


To summarise -


The leadership challenges in the small scale sectors, therefore, are very basic and fundamental in nature. In brief, these are :


1. Ensuring greater attention to the problems of SSI and constructive involvement in their development by the government and bureaucracy commensurate with the size of contribution made by the SSIs to the nation’s industrial output.

2. Evolutions of systems for the proper appraisal of a unit’s viability and potential at the proposal stage, with special emphasis on promoter’s background and capabilities.

3. Enriching the managerial capabilities of the SSI Units through inputs like trained manpower, updating of technology and production practices, and a sensitive and relevant information system encompassing market intelligence and performance measurement, which will make the SSIs more responsive, to the environment and strengthen them to better face the challenge of change.

4. Reducing number of specialist bodies in existence for ostensibly servicing the SSI units by, merging the existing bodies, where feasible, to enable the SSI entrepreneur obtain a single-roof service as far as possible.

5. Evolving suitable control and monitoring systems to prevent diversion of small scale sector’s bank credit to the medium and large scale sector by the tactic of delayed payments.

6. Attracting sufficiently large number of management consultants to assist and advise the small scale units.

7. Inducing Management Institutes to run special courses designed to improve managerial effectiveness in SSI units.


Bombay :
September 1983.