8 Ways MSMEs Can Fulfill Evolving OEM Requirements


Having worked in OEMs throughout my career of 12 years in automotive and aerospace industry, I can proudly say that Indian MSMEs have come a long way. MSMEs are a big part of OEMs (Original Equipment Manufacturer) supply chain, and thus become a reason for end-user satisfaction. 

Last one or two decades have seen MSMEs evolving with the below changes-

  • Moved from locally developed machining centers to buying high precision sophisticated machines from the global market.

  • Developed their in-house tooling centres to produce low precision tools, thus saving cost in the long run.

  • Introduced decentralised hierarchy rather than having a centralised one. Now MSMEs are not a one man show, they are slowly adopting the organizational hierarchy.

  • Got away from gold-plating only specific customers of high stakes and ignoring small customers. Gold-plating is when you delight a customer by giving more than he demanded.

  • Focused on improving safety conditions and respecting labor laws

  • Tried implementing quality systems of their own rather taking it only from the customer cascaded requirements.

But with the current technological developments, entire manufacturing industry is on a revamp, the OEMs are changing the way they produce components. We are in Industrial Revolution 4.0.

MSMEs need to adopt to be in the market. Only those that can sustain such an evolving environment will continue to grow. Earlier there were few companies who can produce parts and had a monopoly of producing specific design, but now things are changing, it is becoming even more competitive with government favoring growth of startups in every sector. With that, MSMEs need to adopt several changes in their systems.

1)  Customer Centricity

It is necessary to understand the evolving customer’s needs. Of course, companies receive product definition dossier, and they would satisfy such requirements. But companies also need to satisfy off-shelf urgent requirements from time to time, and maintain a good relationship with all the customer stakeholders.

2) Data Collection and Analysis

To match the pace of global industrial development, they need to record and analyze data at each stage of the process. It helps them to use statistical tools to take decisions for future product developments and also, at a later stage of product life cycle, helps them to analyze a potential problem of an end-user.

3) Communication skills and Practicality

One thing that most MSMEs lack is the ability to communicate effectively. Speaking garnished language is one thing, and talking logically with technical slang in a good English is another. Companies need to adapt to the latter action.

Also, they need to adopt the approach to give practical timelines for any project. In the pressure from customer, they end up agreeing to timelines which are impossible to meet, and eventually create customer dissatisfaction.

4) Process Driven Approach

It is the people who drive MSMEs. Changing people is no less than inviting troubles for them and for their customers. Companies should adopt process driven approach, and should get away from people-dependent activities.

5)  Lean Manufacturing Systems

Better late than never, MSMEs need to adopt Lean Manufacturing systems. It helps to eliminate industrial waste, reduce cost and generate profits at the same time. In simple words, it increases the efficiency of the entire industry. Implementing such systems requires discipline. Any company who doesn’t adopt such methods may lose business significantly in the time to come.

6) Quality and Risk Management Systems

Quality Management System or QMS is the backbone of any industry. If a company has a good QMS, customers or OEMs will not interfere much in their operation and governance..

Many MSMEs have a misconception that getting a high First Pass Yield (FPY) means to have an enhanced quality system. But, it is just one output of having such a system. A good, well-defined QMS system considers a formal management of Quality Assurance and Quality Controls in the overall manufacturing process, managed by controlled procedures.

7) Predictive (not only preventive) Maintenance tools

With Industry 4.0, MSMEs need to adopt predictive maintenance tools that would help them know when their machine is going to break down. Industries globally are adopting and developing such systems with the help of digital tools and data analysis.

8) Networking and Creating Perception

Many MSMEs, or should I say, only few MSMEs give importance to managing networks and relationships with customers and other stakeholders. Today, networking, marketing, and creating perceptions are the added advantages that no one can afford to ignore.

Customers can ignore minor quality issues if they share a good working relationship with the vendors. I would end it up by quoting

“Customer’s perception is your only reality,”

Above are few necessary developments that MSMEs should introduce in their organization to sustain the growth and development for a longer horizon. Companies should not hesitate to take consultancy support to develop such practices.

MSMEs, being the backbone of the country’s manufacturing industry, shall adopt such practices to compete with global industries. Otherwise, OEMs would source parts from global suppliers rather than relying on local MSME strength.

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Image source: Civildaily

Chetan Maheshwari

Hello, I am a Project Management Professional, and an author and a blogger by passion. I like good sarcasm and humor. Books, people around me, and nature inspire me, and my blogs and book reflect the same.

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