The penetration of automation is often less, in most SMEs, and many of the manufacturing processes have a high fraction of manual intervention either in their methods or in inspection activities.
FREMONT, CA: Micro, Small and Medium Enterprises (MSMEs) play a significant role in the financial growth of any country. Many giant corporate houses of today began as a small enterprise when they were founded. Conversely, at the same time, there are a few unique challenges that MSMEs in manufacturing sectors face making it difficult for them to implement digital manufacturing and industry 4.0 related practices. MSMEs face three common problems that are outlined below:
1. Liquidity Risk and Cash Flow Maintenance
Most SMEs, particularly those operating with a B2B Business model, frequently sell their products on credit for a minimum of 30-90 days. Additionally, they function on strict cash flow margins, making it hard for significant investments essential to upgrading technology. Similarly, MSMEs operating on B2C models continuously face the challenge of standing out in the market and invest significantly in marketing.
2. Manual Intervention and Mistake Proofing
The penetration of automation is often less, in most SMEs, and many of the manufacturing processes have a high fraction of manual intervention either in their methods or in inspection activities. While lean manufacturing concepts such as mistake-proofing are being adopted, the effect of implementation is often very less as compared to large manufacturing enterprises. The instance often leads to inappropriate process standardization that might have a direct impact on product quality.
3. Availability of Skilled Workforce
The tight cash boundaries often force a lot of MSMEs to adopt for contract staffing, making it tricky for the business to invest in training programs needed to up-skill and sustain employees to work and function in a higher technology-enabled atmosphere.
Given the nature of functions that the firm’s face productive employment of digital transformation and other concepts falling under the umbrella of industry 4.0 is necessary. They can assist enterprises in realizing better working competencies across all fronts like quality, productivity, and others.