Leather trade is global. Competitiveness in global trade has become a critical factor in emerging market economy. Global competitiveness demands matching of value of products with money and matching service support. The flow of resource inputs to rate of delivery of product outputs form the basis for benchmarking of best practices.
Best practices in manufacture include strategic sourcing of raw materials, processing, environmental safeguards, compliance to social audit norms on the one hand and productivity, cost effectiveness, quality, reducing cycle time and other parameters on the other.
In order to enable a critical segment of the Indian leather sector gain strength in converting comparative advantage to competitive strength in global leather trade, global benchmarks for Indian manufacturing units are needed. This provides vital clues for measuring the strength of India in global leather trade.
Government of India as a part of the Tenth Plan activity for Indian leather sector has a special programme to benchmark select production units in each segment of leather industry against the global best practices in manufacturing and marketing. The project aims at global standards with reference to both systems and people productivity, improved quality consistency and unit value realization at global best.
Studies indicate that about 30 units in India command about 40% of exports in each product segment of Indian leather industry. Benchmarking such units against best practices of the world in the sector could lead to significant competitive advantages for the country in leather sector .
Interventions from the Government would involve support to programs like ISO and social audits and obtaining accreditations for global quality standards. Interventions with a total of about 50 units across the country will link Infrastructure Strengthening for Leather Sector (ISLS) to about Rs 3500 crores of export realization. Consolidation of such an export base through ISO and social audit systems is in the interest of the country. An investment of Rs 5 crore has been planned under this Scheme. Representative group of production units will be identified based on well defined parameters for benchmarking their practices against global standards.
The best practices in management of production units in leather sector include sourcing of raw materials and inputs, inventory control, improvements in productivity & production and any other activity considered appropriate by the Steering Committee
Exclusive training programmes will be supported for adoption of best practices in production units such as
Centralized training programme at management level. On site training programme to suit the requirements of individual units.
For Centralized Training programmes
| Govt.support | 80% of the total cost subject to a ceiling amount of Rs.25,000 per unit |
| Contribution of the industrial unit | 20% of the total cost |
For the on-site training programmes
| Govt.support | 50% of the actual cost subject to a ceiling of Rs.20,000 per unit |
| Contribution of the industrial unit | 50% of the actual cost |
Under the present international trade practices, certification under ISO series especially in Environmental Management System ISO: 14001, Occupational Health & Safety O HSAS: 18001, as well as in Quality Management Systems ISO: 9001 – 2002 is becoming increasingly important. There is also global awareness on corporate social accountability to provide safe and healthy work environment to ensure care and welfare measures for the employees.
Awareness of such International Standards and their adoption by the production units has become a norm to enter dynamic competition in global trade. International standards of environmental and social audit practices have become necessary to establish long term business relationship with importing houses in WTO regime and emerging business environment.
Financial support in gaining certification for global standards from the internationally authorized certifying agencies will be provided.
Sharing of professional fees for audit procedures in gaining ISO standards for environment and social audit on equal basis subject to a ceiling amount of Rs1.25 lakh.
| Govt.support | 50% of the fee payable to certifying agencies |
| Contribution of the industrial unit | 50% of the fee payable to certifying agencies and other expenses towards Pre-Audit etc. |
*Government support is subject to the condition that the participating units do not avail assistance from other sources for this purpose.
Gaining global competitiveness in leather processing, product designing and use of newer materials / inputs, seems to require specialized training from technical personnel and experts sourced form global market. Specialized technical personnel have to be invited from abroad to impart on-site training to the field staff in various production units. Support for availing of the services of such professionals / experts will be provided. Technical experts so hired will be stationed in India for a specified period of about one month and provide technical consultancy and guidance in newer processing methodology, improved production techniques and operation systems. Such training & guidance is expected to boost the overall performance of the production units to meet the changing demand in international market as well as quicker turn-around time.
| Govt.support | 50% of the professional fee of technical expert, subject to a ceiling of Rs. 5 lakh per unit |
| Contribution of the industrial unit |
Balance 50% of the industrial Unit fee, stay and local hospitality expenses |
Five manufacturing units will be selected each from different segments of the leather sector i.e. (1) finished leather (2) leather footwear & footwear components (3) leather garments (4) leather goods & gloves (5) Harness & saddlery goods. A total of 25 participants will be enrolled into the programme in the first phase based on stated and objective parameters, which will include, also the level of counterpart support provided by the participating unit.
As a first step all the 25 participants will be deputed for centralized training programme on management practices for a period of one month with identified institutes. Thereafter, on-site training programme will be organized in each production unit for a period of one month by deputing the faculty from the identified institutes. Such on-site training programme will continue during the whole year.
As a second step, the identified units should initiate action for obtaining certification under various international standards, by availing the services of professionals/consultants for pre-audit and other related matters.
The identified units will be involved in the selection of technical experts in design & product development, production techniques, quality management. Consultation with institutions like CLRI/FDDI/NIFT/NID/ CETI/IILP will be held to engage them in their production units for imparting on-site training to technical personnel in respective areas of their specialization. All these programmes should be concurrently implemented to complete it within one year.
An expertise Panel will be prepared in consultation with industry for selection of suitable experts.
Allocation of the Government of India funds for this project is limited to Rs 5.00 crore. The level of counterpart gained and mobilized from the participating units will influence the extent of fund support from the Government of India.
The project period is May 2004-March 2007. Central Leather Research Institute (CLRI), Chennai is the implementing agency. Interested units may contact Director, CLRI for further details.
Proposals in duplicate may be sent to Director, CLRI.