Interview
TBM FORAYS INTO CRUCIAL SME SECTOR
 Q : We understand that TBM Consulting Group has decided to foray in SME/SMB sector in India. What prompted this decision?
A : We believe that organization irrespective of its size will benefit from LeanSigma Principles which is the core in TBM’s work worldwide. SME Sector in India is an important contributor to nation’s GDP, employment generation as well as foreign exchange earnings. Many units in SME Sector are vendors to large OEMs and reputed international brands. Any buyer would expect similar level of performance in quality, delivery and costs from all vendors; whether SME or not. There will not be difference in customers’ expectations. However, SME units are
disadvantaged in respect of product mix, order sizes, access to professional management, ability to raise capital etc because of their size. It is, therefore, imperative that SME Sector needs support in modern tools & methodologies. That’s why we are here! Foray in SME Sector also provides us an opportunity to expand our operations in developing economies like India.
Q : Will it particularly focus on Indian textiles and garment sector, particularly when this segment plays a crucial role in view of humongous domestic demand, high export potential, apart from being a major employer in Indian economy ?
A : We plan to offer SME focused services to many sectors of the economy. However, textile and apparel segment will be our focus area. This sector is facing many challenges like rising input costs and labour costs and stiff competition from other countries.These challenges can be met using modern productivity methodologies like LeanSigma and convert these challenges into opportunities. We have already worked for some SME Units in India in this sector with good success.
Q : What and how you propose to help SME sector in textiles and garment manufacturing and export industry?
A : We have designed a special program for SME units in this sector. On operations side, it aims at increasing sewing line efficiencies, reducing lead times, reducing rework level. These actions will reduce inventories and working capital requirement. Time to market for new styles can be reduced substantially when the spread of LeanSigma principles reaches the high levels in SME unit.
Q : As a renowned global management consulting company, your presence and contribution to bigger units is quite well known and accepted, have you tried your hands on SME/SMB sector, too in India or elsewhere ?
A : We have serviced a few clients in SME Sector in apparel and garment segments in last two years. They are from India, Bangladesh and Sri Lanka. Operational results have exceeded client’s expectations in many cases. We have also learnt more about the unique challenges these type of units face; like small order sizes, labour skill levels, labour migration etc. We have incorporated suitable actions to face these challenges in special package we designed for this sector.
Q : How and how much did such SME/SMB units benefit from your consultancy services?
A : The results vary from unit to unit depending upon the how fast the new ways of working are spread across the entire workforce. We do have examples where sewing line efficiencies jumped by 25% (typically from 50 to 75%), reworked levels dropped by half to 3 %, WIP levels reduced to half and style change over-time dropped by 75%. Learning curves after putting a new style in production line have also reduced to half;so peak efficiencies are reached faster. All these improvements are achieved in six to nine months. Though it may be a bit early to say so; but I expect that the profit margins of these units can be higher by at least 2 to 3% after a LeanSigma Program.
Q : Do your consultancy services provide for the fast evolving situation of rising cost of labour, raw materials and contracting export demand on a continuing basis, which are seriously impacting the viability of SME/SMB sectors?
A : If we look at cost of labour and cost of capital per unit produced instead of absolute numbers, this program will make big improvements. Like 30% reductions ! In absolute terms, these costs are far less controllable due to macro-economic reasons; but productivity will make big improvements in terms of these costs per unit. This makes SME units not only viable but profitable in highly competitive World Markets. This is the only way in current situation.
Q : Are your consultancy fees affordable and viable for SME/SMB sector?
A : It is our experience that the returns to our clients after LeanSigma Program Implementation are at least three to five times our fees. In some cases, it is much more than this. We have hundreds of examples from all over the globe to substantiate it. The same will be true in SME Sector too. We always estimate the potential benefits from this program in the first event itself so that clients is aware of what to expect. Besides, TBM is probably only company who offers an unconditional customer satisfaction guarantee for each individual event.
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