World class manufacturing and employment


The Economy is integrated to the global economy and industry is facing global competition it is, therefore, necessary to improve performance. Performance measures indicate the real problems and how to overcome them. If a system does not deliver, the blame cannot be placed at the door of culture, level of technology, or labor. Mostly, it is due to faulty performance measures. Identification and definition of the right type of performance measure is thus a priority.

World Class Manufacturing (WCM) concept has emerged of late. The following characteristics of WCA are used to fulfill the consumer expectations:

1. Products of high quality.

2. Products at right price.

3. Products with enhanced features.

4. Products in a wide variety.

5. Products delivered in time, in fact short time.

6. Products delivered with shorter lead times.

7. Flexibility in fulfilling the demand for the product.

The above listed performance measures are external to the manufacturing system but are vital for the success of the organization. These can be measured internally. Such performance measures improve the acceptability of the product.

The success of an organization in this competitive environment is due as its superior performance measuring system in manufacturing. Under WCM, the products should have specifications closer to the customer needs.

Indian agriculture was growing at the rate of 2.5% in the 90s. In the 1993-94, agriculture employed 239 million people. Government as a traditional employer has been rightsizing, and offering VRS Schemes. It has already declared that creating jobs is private sector’s responsibility. Jobs in the manufacturing sector increased to reach 44 millions by a meager 3.7 millions. Manufacturing has to be the key to increase employment. While the manufacturing sector’s output grew by about 5.5% annually, over the past decade, employment grew by a shade over 1%. Perhaps our archaic labor laws come in the way of employment generation.

Another impediment is the open system with reduced import tariffs, which make companies more competitive. Asian paints saw an average 11% growth sales but work-force increased by 3% annually. In India, the biggest growth has been seen in trade, hotels and restaurants. Its share in the country’s work force is now 10.4%, up from 7.6% in 1993-94. IT at best can employ up to 1-1.5 million people over the next ten years. Our labor force will grow at 2.5 times the pace of job creation. This is a time bomb. We need a GDP growth rate on a sustained basis of 7-8%.