MSME Competitive LEAN Scheme

About Lean Manufacturing:

  • Lean Manufacturing or Lean Production, which is often known simply as LEAN, is a production practice that considers the expenditure of resources for any goal, other than the creation of value for the end customer, to be wasteful, and thus, a target for elimination.
    • Lean manufacturing includes a set of principles that lean thinkers use to achieve improvements in productivity, quality, and lead-time by eliminating waste through kaizen.
    • Kaizen is a Japanese word that essentially means “change for the better” or “good change.” The goal is to provide the customer with a defect free product or service when it is needed and, in the quantity, it is needed.

Why the need for such a Scheme?

  • MSMEs form an integral part of almost every value chain and there is a symbiotic relationship between the large corporations and relatively small sized suppliers.
    • As domestic & global competitiveness becomes intensive, there is a need for MSMEs to transition to a new business environment especially with the disruption in the global supply chains and convergence of multiple sourcing as a methodology in vendor development.
    • Recognizing the importance of overall economic growth of a country and the need for enhancing its productivity, competitiveness and employment generation besides resource optimization, many countries have initiated institutional mechanisms for a national approach on improving the quality of manufacturing & services.


  • The objective of the scheme is to enhance the Domestic and Global Competitiveness of MSMEs through the application of various Lean Techniques that inter-alia includes:
    • Reduction In: Rejected rates, product and raw material movements, product cost.
    • Optimization Of: Space utilisation, Resources like water, energy, natural resources etc.
    • Enhancement Of: Quality in process and product, production & export capabilities, workplace safety, knowledge & skills sets, innovative work culture, social & environmental accountability, profitability, introduction & awareness to industry 4.0, digital empowerment.

Scheme Components:

  • Industry Awareness Programmes/Workshop: MSMEs will be made aware of the Scheme through Nation-wide awareness programmes (online and/or face-to-face, as appropriate) with the assistance of stakeholders like Industry Associations, Implementing Agencies, MSME-DFOs, District Industries Centres (DICs), Large Enterprises/OEMs.
    • Training Programmes: Stakeholders like the MSME Officers, Assessors and Consultants will be trained on the MSME Competitiveness (Lean) Scheme to enable an effective implementation by Implementing Agencies like QCI, NPC.
    • Handholding: MSMEs will be provided handholding towards the implementation of Lean Tools and Techniques at three different levels – Basic, Intermediate, and Advanced. Completion of each stage is verifiable end term assessment or assessment by Implementation Agency along MSME -DFOs as the case may be.
    • Benefits/Incentives: Graded incentives will be announced by the Ministry of MSME for MSMEs for encouraging MSME units’ participation under the scheme. Implementation of Lean (Generation of Lean ID) Lean Pledge & Undertaking (Generation of Lean Pledge Level) Implementation of Lean (Basic, Intermediate, Advanced).
    • PR campaign, Advertising & Brand Promotion: For popularising the Lean Scheme, a Nation-wide publicity will be done.
    • Digital Platform: Lean Scheme process will be e-enabled through a single window digital platform which will be utilised for the implementation of the scheme.

Coverage and Eligibility:

  • All MSMEs registered with the UDYAM registration portal (of the MoMSME) will be eligible to participate in MSME Competitive (Lean) Scheme and avail related benefits/incentives.
    • Scheme is also open to Common Facilities Centres (CFCs) under SFURTI (Scheme of Fund for Regeneration of Traditional Industries) and Micro & Small Enterprises – Cluster Development Program (MSE-CDP) Schemes.

Financial Assistance for MSME Units:

  • To support MSMEs, the government will contribute 90% of implementation cost for handholding and consultancy fees. There will be an additional contribution of 5% for the MSMEs which are part of SFURTI clusters, owned by women/SC/ST and located in NER.
    • In addition to the above, there will be an additional contribution of 5% for MSMEs registering through Industry Associations/Overall Equipment Manufacturing (OEM) organisations after completing all levels.
    • There is a unique feature to encourage Industry Associations and OEMs to motivate their supply chain vendors to participate in this scheme.

Scheme Levels: MSME Competitive (Lean) Scheme can be attained in THREE Levels after registering and taking the Lean Pledge:

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