The MSMEs contribute nearly 8 per cent of India's GDP and act as a major source of employment and entrepreneurship. Inspite of that, there are certain challenges the MSMEs face due to larger and recognised companies in the market and imports. Karan Bose discusses how an MSME can prosper by implementing a modular manufacturing system for the apparel sector.

Micro-, Small- and Medium- Enterprises (MSMEs) serve as source of employment and entrepreneurship in India. According to a report published in 2013 by the Ministry of Micro, Small and Medium Enterprises, MSMEs contribute nearly 8 per cent of the country's GDP, 45 per cent of the manufacturing output and 40 percent of the exports.'

Given the flexibility of the Indian economy, MSMEs offer opportunities for the poverty-stricken families, across all age groups and genders, and help them earn money. Since the requirements of these enterprises are different than large organisations, policies to safeguard them should zero in on benefits set up for business owners and workers. Furthermore, there is a requirement for skill improvement to keep up the operational uprightness consistently. Improvising the industrial and the management study plan and bringing in new additions on teaching rights, showcasing skills, accounting, financial management, and sourcing can help MSMEs make traction in the international market. Utilising media sources to make vocational education possible can likewise stir up the innovative soul of the country.

MSMEs give an entrepreneurial and innovative edge to any geographical location. They additionally give profundity to the manufacturing industry of a country. By creating employment opportunities and lowering the capital expense per worker, they can be useful to any economy's growth. With the service sector all over the MSMEs and MNCs outsourcing services to Indian companies, the chances for financial help has expanded.

Key challenges

MSMEs face certain challenges as a result of their own nature. One of the greatest is the competitiveness from two sources - larger and recognised companies in the market and imports. These make it important for MSMEs to advance and either present a product or service to make up for the shortfall made by greater players or decrease costs and smooth out cycles to empower them to be a more levelled player against the big companies.

Today, the market situation has become an endless loop keeping the MSMEs down. As most of these enterprises are small with lesser resources, more than 90 per cent of them are outside the proper credit framework, unfit to get financial help to improve their capacities or expand. Unfit to contribute and improve profitability, they stay uncompetitive, ready to endure exclusivity by staying outside the tax structure, sustaining the pattern of being subscale, with helpless efficiency and even lesser attention.

The solution

The prospering significance of SMEs in the manufacturing segment is because of its important contribution to the vital elements of developing the Indian economy. SMEs at present contribute 45 per cent of the country's manufacturing yield and 40 per cent to the exports. They capture about 95 per cent of all the industrial units in the country and assemble around 8,000 quality items for the Indian and overseas clients.

An all-inclusive and directed focus on building an all-India entrepreneurial environment can reshape India's financial scene in the following decade and improve its financial components of development. Nationwide startup ecosystem improvement with scalable growth plans and development will have a significant effect on the upliftment of MSMEs.

The small to medium enterprises can transform a country's development for two reasons. To start with, integrating a practiced approach and advancement is quicker and more secure than testing new territories, and SMEs have an enormous adoption gap to close. This way, SMEs can surpass their competition quicker by embracing the tested innovations and practices of larger successful organisations. Second, new enterprises, which are a sub segment of SMEs, have become significant wellsprings of development. Since they haven't experienced legacy frameworks or obsolete methodologies, new market players are able to redefine practices and slice through conventional industry limits.

Impact of modular system on MSMEs

Modular manufacturing was just a "buzzword" in the mid-2000s which has now become the most awarded innovation that could improve execution in the manufacturing industry, particularly for the apparel sector. Another factor of modular manufacturing is that the top management could sit through the entire process of an apparel creation, all the while upgrading teamwork, quality and output. Manufacturing process is coordinated in a synchronised way that facilitates the progression of any product through the different cycles. To achieve the desired production, jobs are divided with the end goal that every action ends up in an exact amount of time to adjust the line of production effectively and efficiently.

It is one of the most impactful ways that MSMEs could prosper. Here's how - if a small to medium organisation depends on manual production cycles for order fulfilment, the workers fail to deliver as expected when the demand is high. While a critical expansion in volume will cause developing challenges for any business, adding modules can extraordinarily decrease the effect. Digitisation alone will take a significant part of the weight off workers while ensuring a strong record of the work process. That liberates the most important asset - labour - to deal with all the other things. The benefit of fusing a modular manufacturing arrangement is impressive. Likewise, cloud computing can make an organisation more pragmatic today, more than ever.


To help MSMEs succeed, we need to introduce innovation and smart manufacturing processes, machine production, unique framework, smart gadgets controlled either manually or with the help of IoT (internet of things), artificial intelligence, machine learning, and so on. MSMEs have gained importance over the years in our thriving economy by adding to employment generation and rural industrialisation. This sector has enough potential and conceivable outcomes to accelerate the manufacturing industry in our developing economy and is very much ready to help public programmes like 'Make in India'.