In a developing economy like India there should not be dearth of opportunities. One reads about innovative devices conceived and manufactured by engineers and technicians. One also comes across interesting success stories of entrepreneurs and businessmen describing a life span from rags to riches. Presently, in our country several schemes of promotion and assistance for setting up small scale units or small businesses, by new or first generation entrepreneurs, are being implemented by the Central and State Governments. New product lines, new processes, new services and new technologies have made India their home in only recent past. This Unit, after making you understand what entrepreneurs do and how, takes you through the process of identifying an opportunity for business and how this process ends by deciding on what to do. The ancillary industry is an industry that has fixed investment in plants and machines that do not exceed 1 crore rupees. The ancillary industry manufactures parts, machinery, sub- assemblies, gears, intercedes, machinery, etc. These industries are also called tertiary or service industries. The industries which make parts and components used by big industries to assemble their final products are known as ancillary industries. For example: - Industries which manufacture automobiles, railway engines, tractors, etc. are ancillary industries. By popular definition, an 'ancillary business' is a business initiated by local entrepreneurs for setting up manufacturing facilities of various items within the command area of the company. Internal problems include lack of skilled and trained labour, lack of managerial skills, lack of marketing skills. Some of the external problems include delayed payments, shortage of working capital, inadequate loans and lack of demand for their products. Ancillary and auxiliary are both associated with the idea of help or support. Both words function as adjectives and nouns. The main difference between ancillary and auxiliary is that ancillary refers to providing something additional to a main part or function whereas auxiliary refers to offering or providing help. 7.2 IDENTIFICATION OF OPPORTUNITIES FOR ANCILLARY INDUSTRIES Ancillary industries are the industries that produce components and segments to be utilized by larger businesses. Ancillary, in simple terms, is something that has secondary importance. Thus, the meaning of Ancillary industry refers to the secondary industry that provides semi- manufactures materials to the higher industries. 7.2.1 Meaning of Ancillary Industries GE Company (that manufactures locomotive for the aircraft entrepreneurs) is one of the best examples of the Ancillary industries.The ancillary industry is an industry that has fixed investment in plants and machines that do not exceed 1 crore rupees. The ancillary industry 101 CU IDOL SELF LEARNING MATERIAL (SLM)
manufactures parts, machinery, sub-assemblies, gears, intercedes, machinery, etc. These industries are also called tertiary or service industries. One of the most important ancillary industries in India is the Auto Ancillary industry. The Auto Ancillary sector from India is mainly fixated domestically and does not play a large role globally. But this tips the scale in its favour when we look at the treads it can make in terms of progress. An Auto Ancillary Industry is heavily reliant on the Automobile Industry. Luckily enough the Indian Automobile industry is the world’s fourth-largest, with the country currently being the world’s fifth-largest manufacturer of cars and seventh-largest manufacturer of commercial vehicles in 2019. The Auto Component Manufacturers account for 2.3 percent of India’s Gross Domestic Product (GDP) and employ as many as 1.5 million people directly and indirectly each. As of now, the turnover of the business remained at Rs 1.79 lakh crore (US 25.62 billion dollars) in FY20 (till September 2019) and the fare of auto parts developed 2.7 percent to arrive at Rs 51,397 crore (US 7.35 billion dollars) during a similar time. Ancillary industry is an industry which has fixed investment in plant and machines that do not exceed 1 crore rupees. Ancillary industry manufactures parts, components, sub- assemblies, tools, intermediates, machines etc. Any heavy industry depends on the machinery for its work to progress; the heavy industry always require support of ancillary industry. Example: Aditya Gears Limited, Brakes India Limited etc. 7.2.2 Opportunities for Transportation Introduction The Indian auto-components industry has experienced healthy growth over the last few years. The auto-components industry expanded by a CAGR of 6% over FY16 to FY20 to reach US$ 49.3 billion in FY20. The industry is expected to reach US$ 200 billion by FY26. Due to high development prospects in all segments of the vehicle industry, the auto component sector is expected to rise by double digits in FY22. Auto-components industry account for 2.3% of India’s Gross Domestic Product (GDP) and employs as many as 1.5 million people directly and indirectly. A stable government framework, increased purchasing power, large domestic market, and an ever-increasing development in infrastructure have made India a favourable destination for investment. Market Size The industry can be broadly classified into organised and unorganised sectors. The organised sector caters to original equipment manufacturers (OEMs) and consist of high-value precision instruments while the unorganised sector comprises low-valued products and caters mostly to the aftermarket category. Automobile component industry’s revenue stood at US$ 49.3 billion in FY20, up from US$ 39.05 billion in FY16 and is expected to reach US$ 200 billion by FY26. Export of auto components grew at a CAGR of 7.6% to reach Rs. 102,623 crore (US$ 14.5 billion) during 102 CU IDOL SELF LEARNING MATERIAL (SLM)
the same time. As per Automobile Component Manufacturers Association (ACMA), automobile components export from India is expected to reach US$ 80 billion by 2026. The Indian auto components industry is expected to reach US$ 200 billion in revenue by 2026. Investments The Foreign Direct Investment (FDI) inflow into Indian automotive* industry during the period April 2000-December 2020 stood at US$ 25.39 billion as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Some of the recent investments made/planned in the Indian auto components sector is as follows: In May 2021, the Government of India approved a PLI scheme for manufacturing advanced chemistry cell battery at an estimated outlay of Rs. 18,100 crore (US$ 247.3 million). In March 2021, the government announced to offer fresh incentives to companies making electric vehicles (EVs) as part of a broad auto sector scheme. The scheme is expected to attract US$ 14 billion of investment in the next five years. In February 2021, Vedanta Resources launched its newest product—aluminium cylinder head alloy, a crucial raw material for manufacturing cylinder heads and other automotive components. A cumulative investment of ~Rs. 12.5 trillion (US$ 180 billion) in vehicle production and charging infrastructure would be required until 2030 to meet India’s electric vehicle (EV) ambitions. This is likely to boost the demand of auto components from local manufacturers. In January 2021, Suzuki Motor Corp. and Hyundai Motor Co. announced plans to explore ways to make India a key global hub for sourcing components and facilitate sharp rise in vehicle exports from the country. In January 2021, French battery system supplier Foresee Power committed to invest Rs. 82 crore (US$ 11.18 million) in phase 1 of the India project. In October 2020, Japan Bank for International Cooperation (JBIC) agreed to provide US$ 1 billion (Rs. 7,400 crore) to SBI (State Bank of India) for funding the manufacturing and sales business of suppliers and dealers of Japanese automobile manufacturers as well as providing auto loans for the purchase of Japanese automobiles in India. In October 2020, the government of Tamil Nadu signed 14 memorandum of understandings (MoU) worth Rs. 10,055 crore (US$ 1.4 billion) that will generate 69,712 jobs in the state. 103 CU IDOL SELF LEARNING MATERIAL (SLM)
In September 2020, off-highway tyre-maker Alliance Tire Group (ATG), owned by the Japanese major Yokohama Group, announced plans to set up its third plant in the country in Visakhapatnam, with an investment of US$ 165 million (Rs. 1,240 crore). The proposed plant will add over 20,000 tonnes per annum (55 tonnes per day rubber weight) capacity to the 2.3-lakh-tonne annual production from two India plants and will be commissioned by the first quarter of 2023. In September 2020, Toyota Kirloskar Motors announced investments of Rs. 2,000+ (US$ 272.81 million) aimed towards electric components and technology. In February 2020, National Engineering Industries Ltd (NEIL) announced investment of Rs. 100 crore (US$ 14.31 million) over the next three years for producing needle roller bearing at its Jaipur facility. In January 2020, Tata Auto Comp Systems entered a joint venture (JV) with Beijing- based Prestolite Electric to enter the electric vehicle (EV) components market. Achievements Following are Government’s achievements in the past four years: Production of two wheelers, passenger vehicles, commercial vehicles and three wheelers reached 21.03 million, 3.43 million, 0.75 million, and 1.13 million, respectively, in FY20. FAME - India Scheme formulated by Department of Heavy Industry, led to a continuous increase in registered OEMs and vehicle models. Also, the scheme enhanced the sales of EVs and about 261,507 electric/hybrid vehicles were supported under the scheme up to December 6, 2018. In February 2019, the Government approved FAME-II scheme with a fund requirement of Rs. 10,000 crore (US$ 1.39 billion) for FY20-22. Under National Automotive Testing and research and development (R&D) Infrastructure Project (NATRiP), various facilities including passive safety labs comprising of crash core facility and crash instrumentations including dummies were established at ICAT-Manesar and ARAI-Pune. To give a fresh thrust to E-mobility in public transport, Department of Heavy Industry announced the launch of public and shared mobility based on electric powertrain. Government Initiatives and Opportunities for Ancillary Industries The Government of India’s Automotive Mission Plan (AMP) 2006-2016 has come a long way in ensuring growth for the sector. Indian Automobile industry is expected to achieve a turnover of US$ 300 billion by 2026 and will grow at a CAGR of 15% from its current revenue of US$ 74 billion. 104 CU IDOL SELF LEARNING MATERIAL (SLM)
In November 2020, the Union Cabinet approved PLI scheme in automobile and auto components with an approved financial outlay over a five-year period of Rs. 57,042 crore (US$ 8.1 billion) Government has come out with Automotive Mission Plan (AMP) 2016-26 which will help the automotive industry to grow and will benefit Indian economy in the following ways. i. Contribution of auto industry in the country’s GDP will rise to over 12%. ii. Around 65 million incremental number of direct and indirect jobs will be created. iii. End of life Policy will be implemented for old vehicles. Road Ahead The rapidly globalising world is opening newer opportunities for the transportation industry, especially while it makes a shift towards electric, electronic and hybrid cars, which are deemed more efficient, safe, and reliable mode of transportation. Over the next decade, this will lead to newer verticals and opportunities for auto-component manufacturers, who would need to adapt change via systematic R&D. As per ACMA forecasts, automobile component export from India is expected to reach US$ 80 billion by 2026. With shift in global supply chains, the Indian global automotive component trade is likely to expand at ~4-5% by 2026. In December 2020, Power PSU JV EESL announced plan to install ~500 electric vehicle (EV) charging stations in the country in fiscal 2020-21. The Indian auto-components industry is set to become the third largest in the world by 2025. Indian auto-component makers are well positioned to benefit from the globalisation of the sector as export potential could be increased by up to US $ 30 Billion by 2021. 7.2.3 Opportunities for Distribution The distribution industry consists of unique segments such as food, chemicals, construction materials, office supplies, and home goods. Although the end products at the roughly 400,000 distribution companies in the U.S. may be vastly different, the challenges and opportunities are fairly consistent across these verticals. Through ongoing conversations with our clients in the distribution industry, we have noticed a number of challenges and opportunities currently impacting the industry. Challenges Faced by Distribution Industry Increasing competition - For most distributors, demand is closely linked to local economic activity. However, enhanced technology has added a layer of competition 105 CU IDOL SELF LEARNING MATERIAL (SLM)
as manufacturers and large retailers begin to bypass the local distributor. The Internet has made buying from distant distributors easier and prices continue to tighten as a result of competition. It is important to continually take a fresh look at your competitive landscape because the pool of competitors may be wider than ever before. Ensuring product and customer profitability - Every product in your portfolio must be a contributor to the company, and ensuring product diversity and quality must be at the forefront of your company’s strategic initiatives. Don’t automatically assume you have an accurate understanding of product or customer profitability. This requires rolling up your sleeves to investigate how each product is performing. It’s relatively common for companies to be distracted by products or customers that do not significantly contribute to overall performance. Product lifecycle management - Every product has a lifecycle that spans growth, plateau, and eventually, decline. It is important to assess where each of your products currently sits in the cycle, and how you can rejuvenate any products in decline to ensure they survive. Although product lives vary based on consumer demand, it is relatively certain that historical product offerings will need to be innovated in the near future. Opportunities in Distribution Industry Information technology advancements - Technological advancements in inventory tracking and management can offer a meaningful boost to your company’s bottom line. For example, a warehouse management system (WMS) can be used to automatically track the physical location of inventory throughout the warehouse by scanning bar codes. It may include using automated materials handling systems to convey inventory and automatically place it in bins for later retrieval. WMS systems also schedule dock personnel for loading and unloading according to anticipated traffic volumes. Enhanced order management systems - Online interfaces enable customers to place orders online, receive confirmations and shipping information, and track shipments. As customer orders are received and fulfilled, orders are automatically generated to suppliers so that inventory can be replenished. Financial systems capture order information and automatically generate accounts receivable and payable entries. Shifting financing arrangements - Most distributors have a large investment in their inventory, which may be financed through a working capital line of credit with a financial institution. While interest rates have been at record lows in recent years, interest rate risk is beginning to attract more attention. Companies are weighing options to mitigate interest rate risk by securing longer term debt for permanent working capital needs. 106 CU IDOL SELF LEARNING MATERIAL (SLM)
Looking through the lens of these challenges and opportunities on a regular basis is a smart approach to assessing company performance beyond the present day snapshot. It provides companies with a better view of where they’re headed, and how they can succeed into the future. 7.3 SUMMARY Identification and analysis of an opportunity represents first step towards establishing an enterprise. Opportunities manifest themselves in a number of ways; an effective technology, a cost effective method of doing an activity, a location advantage or simply a distinctive competence to enumerate a few. This unit on opportunity scanning and identification discusses the process of OSI and the various frameworks used to analyse an opportunity. It also presents a list of measures and programme developed by the state to assist the small entrepreneur. A concise description of the type of assistance and the authority concerned, to help the entrepreneur locate the information, assistance relevant to his needs during opportunity definition and enterprise establishment. The companies that use these challenges to optimize their businesses and capitalize on new opportunities will have the competitive edge they need now and into the future. The product life cycle is the process a product goes through from when it is first introduced into the market until it declines or is removed from the market. The life cycle has four stages - introduction, growth, maturity and decline. The ongoing process of considering, evaluating, and pursuing market-based activities that are believed to be advantageous for the firm. Prior experience informs the process, but it may also limit it: opportunity seeking calls for continuous reconsideration and adaptive learning. Internal problems include lack of skilled and trained labour, lack of managerial skills, lack of marketing skills. Some of the external problems include delayed payments, shortage of working capital, inadequate loans and lack of demand for their products. A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company. Environmental scanning meaning is the gathering of information from an organizations internal and external environments, and careful monitoring of these 107 CU IDOL SELF LEARNING MATERIAL (SLM)
environments to identify future threats and opportunities. It is the analyses of all factors that may affect the future of the organization and ancillary industries The industries which make parts and components used by big industries to assemble their final products are known as ancillary industries. For example: - Industries which manufacture automobiles, railway engines, tractors, etc. are ancillary industries. 7.4 KEYWORDS Ancillary: It refer to providing necessary support to the primary activities or operation of an organization, system etc. Product Life cycle: It refers to the amount of time a product goes from being introduced into the market until it’s taken off the shelves. Opportunity Scanning or Sensing and Identification (OSI): f the processes through which an enterprise gets established, this Unit discusses how an opportunity is identified by one who wishes to set up his or her own enterprise. The process by which an opportunity is identified is at times described as Opportunity Scanning or Sensing and Identification (OSI). CAGR: Compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each year of the investment’s life span. Foreign Direct Investment: A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company. 7.5 LEARNING ACTIVITY 1. How would you use SWOT analysis to identify opportunities for ancillary industry development for any two industries? ___________________________________________________________________________ _____________________________________________________________________ 2. List any ten initiatives taken by the Government for development of ancillary industry? ___________________________________________________________________________ _____________________________________________________________________ 108 CU IDOL SELF LEARNING MATERIAL (SLM)
7.6 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What do you mean by OSI? 2. What is ancillary industry? 3. What is the difference between ancillary industry and tiny industry? 4. Name any two opportunities in transportation sector for ancillary industry development? 5. What do you mean SWOT analysis? Long Questions 1. What do you understand by OSI? What is the role of OSI in successful enterprise management? 2. What are the main techniques utilized for opportunity scanning and identification? Discuss with examples? 3. What are measure taken by Government for development of ancillary industry? 4. What are challenges faced and opportunities available in transportation sector? 5. What are challenges faced and opportunities available in Distribution sector? B. Multiple Choice Questions 1. Which of the industries also serve as ancillary industries for the bigger industries? a. Large scale b. Cottage c. Small scale d. None of these 2. When did India globally become the 7th largest vehicle manufacturer? a. 2007 b. 2008 c. 2009 d. 2010 3. Which of the following comes under modern small industries? 109 a. Coir b. Power looms CU IDOL SELF LEARNING MATERIAL (SLM)
c. Handicrafts d. Khadi 4. Which of the industry does The small-scale industry can enjoy the status of if it supplies not less than 50% of its production to another industry, referred to as the parent unit? a. Micro business industry b. Export oriented unit c. Ancillary small industry d. Village industries 5. What is defined as one in which the investment in fixed assets of plant and machinery does not exceed rupees one crore. a. Small scale industry b. Limited companies c. Large scale industry d. None of these Answers 1-c, 2-c, 3-b, 4-c, 5-a 7.7 REFERENCE Reference Mukerji, S. K. (2007). Global Ancillarisation of Small and Medium Enterprises: The Role and Development of Ancillary Industries. Charantimath, P. M. (2005). Entrepreneurship development and sma Gupta, B., & Gupta, V. K. (2014). Innovation in small and medium auto ancillary enterprises in India. International Journal of Business Innovation and Research, 8(3), 333-351 Textbooks Debasish, Biswas&Chanchal, Dey. (2021). Entrepreneurship Development in India: Routledge Publisher. Khanka, S, S. (2006). Entrepreneurial development. S. Chand Publishing. Gupta, S, K. (1989). Entrepreneurship development: the Indian case. Journal of small business management. 110 CU IDOL SELF LEARNING MATERIAL (SLM)
Website https://brainly.in/question/1362975 https://www.ibef.org/industry/autocomponents-india.aspx https://www.kmco.com/resource-center/article/looking-forward/current-challenges- and-opportunities-facing-distributors/ https://blog.quadrent.com.au/key-challenges-and-opportunities-for-the-transportation- and-logistics-industry-in-2021 111 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT – 8: ENTREPRENEURIAL OPPORTUNITIES STRUCTURE 8.0 Learning Objectives 8.1 Introduction 8.2 Entrepreneurial Opportunities Service Industry 8.2.1 Meaning 8.2.2 Transportation 8.2.3 Distribution 8.3.4 Agro industries 8.3 Summary 8.4 Keywords 8.5 Learning Activity 8.6 Unit End Questions 8.7 References 8.0 LEARNING OBJECTIVES After studying this unit students will be able to Illustrate the ability to discern distinct entrepreneurial traits. Explain the parameters to assess opportunities and constraints for new business ideas. Describe the systematic process to select and screen a business idea. Design strategies for successful implementation of ideas. 8.1 INTRODUCTION The service industry is very wide in its nature. It covers a large range of activities that add value to businesses and individuals but the output is not a physical product, instead this industry enhances, maintains, repairs, shapes and perform different alterations to physical items. It also covers activities such as transportation, medical services, education, banking, insurance, waste disposal, telecommunications services and other complex activities that are crucial to a society’s proper functioning. This industry is said to produce more than 70% of the jobs of most developed economies and also represents a large part of these country’s gross domestic products. Services are also classified as the tertiary industry, where they are separated as profit and non-profit depending 112 CU IDOL SELF LEARNING MATERIAL (SLM)
on the nature of the organization’s activities. Highly developed economies regularly shift the largest portion of its economies towards the service industry, as the economic system becomes more professional and complex. The primary and secondary segments become smaller in proportion. Entrepreneurial opportunities are usually defined as situations where products and services can be sold at a price greater than the cost of their production. An 'entrepreneurial opportunity', thus, is a situation where entrepreneurs can take action to make a profit and to decide a high-level group of managers, so that entrepreneurial ventures may be started. To make an assessment of financial resources by making financial forecasts, in the context of the process if industrial development. To explore the opportunities for possible entry in other areas. Objectives of Business – Profitability, Growth, Stability, Efficiency and Survival. Business means busy in some activities. Business means conducting activities such as – sale, purchase and manufacturing etc for profit and growth. Business is also referred to a particular company, enterprise or corporation and The 10 talents of successful entrepreneurs are: Business Focus: You make decisions based on observed or anticipated effect on profit. Confidence: You accurately know yourself and understand others. Creative Thinker: You exhibit creativity in taking an existing idea or product and turning it into something better. Entrepreneurship is important, as it has the ability to improve standards of living and create wealth, not only for the entrepreneurs but also for related businesses. Entrepreneurs also help drive change with innovation, where new and improved products enable new markets to be developed and Instead of honing in on the great solution at first, work on identifying a common problem your product will solve. Research the competition. You may have never heard of your idea or see anyone around doing it, but take it step further. Do your homework to see if similar products or services exist. 8.2 ENTREPRENEURIAL OPPORTUNITIES SERVICE INDUSTRY 8.2.1 Meaning of Service Industry A service industry is an economic segment that provides certain intangible activity that fulfils a particular need. Companies within this industry perform tasks that are useful to their customers. Service industries are those not directly concerned with the production of physical goods (such as agriculture and manufacturing). Some service industries, including transportation, wholesale trade and retail trade are part of the supply chain delivering goods produced in the agricultural and manufacturing sectors to final consumers. Other services are provided directly to consumers. These include health care, education, information services, legal services, financial services, and public administration. The service sector accounts for around 70-80 per cent of employment in modern economies. 113 CU IDOL SELF LEARNING MATERIAL (SLM)
Service industry, an industry in that part of the economy that creates services rather than tangible objects. Economists divide all economic activity into two broad categories, goods and services. Goods-producing industries are agriculture, mining, manufacturing, and construction; each of them creates some kind of tangible object. Service industries include everything else: banking, communications, wholesale and retail trade, all professional services such as engineering, computer software development, and medicine, nonprofit economic activity, all consumer services, and all government services, including defense and administration of justice. A services-dominated economy is characteristic of developed countries. In less-developed countries most people are employed in primary activities such as agriculture and mining. The proportion of the world economy devoted to services grew steadily during the 20th century. In the United States, for example, the service sector accounted for more than half the gross domestic product (GDP) in 1929, two-thirds in 1978, and more than three-quarters in 1993. In the early 21st century, service industries accounted for more than three-fifths of the global GDP and employed more than one-third of the labour force worldwide. A service is an act of labour or a performance that does not produce a tangible commodity and does not result in the customer’s ownership. The simplest explanation for the growth of service industries is that goods production has become increasingly mechanized. Because machines allow a smaller workforce to produce more tangible goods, the service functions of distribution, management, finance, and sales become relatively more important. Growth in the service sector also results from a large increase in government employment. Example: Information Technology: Information technology is shifting away from products such as packaged software towards services such as software as a service. Hospitality: Any service that hosts guests such as a hotel, restaurant or pub. Travel: Travel services such as a flight or tour. 8.2.2 Opportunities in the Transportation Sector In India Essential Career opportunities in the Transport Sector Road transport is still the dominant mode of transportation – both for moving goods and passengers. India has a huge network of roads comprising of National Highways, State Highways, Major District Roads and Village and other roads. The road network is assuming a pivotal role in the movement of goods and passengers. There has been a substantial shift in the mode of transportation from Railways towards the road sector. 114 CU IDOL SELF LEARNING MATERIAL (SLM)
While the Railways handle only 40% of the freight and 20% of the passenger’s load, 60% of the goods and 80% of passenger’s movement takes place through roads. It is anticipated that the function of the road network will further increase in the foreseeable future. Here is the list of existing roadways in India with their respective length at present:- National Highways – 66,754 km State Highways – 1, 28,000 km District roads – 4, 70,000 km Village roads – 26, 50,000 km Roads are the vital lifelines of the economy making possible trade and commerce. Opportunities Road transportation manager: Road transport managers take overall responsibility for the efficient and safe running of vehicles carrying passengers and/or goods by road. Road transport clerks: Road transport clerks carry out a variety of administrative tasks for bus, coach or road transport companies. Duties may include dealing with customer enquiries, handling accounts, organizing vehicles and deliveries, processing orders and arranging staff roads. They are responsible for carrying out tasks under the direction of a road transport manager. Their tasks are mainly administrative and financial duties connected to the movement of goods and passengers by road and are likely to involve the use of computer systems. Traffic manager: Traffic manager Determines modes of transportation and routing based on best price and best service. Locomotive engineers:Locomotive engineers operate large trains carrying cargo or passengers between stations. Engineers check the mechanical condition of their locomotives, making any necessary minor adjustments and documenting issues. Railroad conductors:Railroad conductors coordinate all activities of freight or passenger train crews. Conductors assigned to freight trains review schedules, switching orders-, waybills, and shipping records to obtain loading and unloading information regarding their cargo. Subway operators:Subway operators control trains that transport passengers through cities and their suburbs. The trains run in underground tunnels, on the surface, or on elevated tracks. Operators must stay alert to observe signals along the track that indicate when they must start, slow, or stop their trains. The commercial division:The commercial division handles all commercial responsibilities like ticket checking, catering, administrative and management of stations, reservation and announcements on the platforms etc. 115 CU IDOL SELF LEARNING MATERIAL (SLM)
Railway engineers:Railway engineers are engaged in the technical activities like construction and planning of railway tracks and bridges. Customs department officers:Customs Department officers are in charge of checking luggage for goods that are liable for duties. Immigration department:Immigration department is responsible for checking the right of entry of individuals arriving at seaports and airports. The officers also examine documentation, where necessary and remove illegal entrants. i. Aviation sector also include job profile like Pilot, Air Hostess, Aeronautical Engineers, Airline ticketing etc. ii. The Merchant Navy deals with transporting cargo and occasionally, passengers, by sea. The main positions open in the merchant navy are navigating officers, radio officers and marine engineers. Women were not generally known to take up jobs in merchant navy but the past few years have seen a positive change with many women taking up jobs as ship doctors and radio officers. Transportation Industry Challenges & Opportunities in 2021 Here are the challenges facing the transportation industry. i. Supply chain integration ii. Altering customer expectations iii. Evolving digital requirements iv. Digital transformations v. Core systems transformation vi. Transport automation and the Internet of Things partnered robots. vii. Proactive cyber security Logistics is the management of the flow of assets or goods from the point of origin to the endpoint of consumption. The future of logistics and transportation lies in technology and innovation. This has been the issue of most concern. Consumers are eager for significant transformations in the transport industry. With so much heat, the transport sector has to disrupt itself, or else the demand will force consumers to look for options. Here are the Challenges Facing the Transportation Industry Experts in transport are incredibly concerned with the speed at which innovation is evolving. Technology is taking over like a disease. This has seen various logistics businesses struggle to keep up with the levels of developments in technology. 116 CU IDOL SELF LEARNING MATERIAL (SLM)
As digital disruption and innovation become critical parts of the entire strategy for many businesses, a lot needs to change. The role of supply chain and logistics needs to alter to capitalize on the value of any digital investment an organization establishes. 1. Supply chain integration - Trade has globalized. Presently, goods are bought and sold to and from different people across the globe. This has made it critical to overseeing universal trade flows and geopolitics to comprehend the impact of demand and supply. However, supply chain integration is not all about adhering to the present trade policies. Companies need to integrate all the significant points within the supply chain to avoid data silos. One of the most significant challenges of the transportation industry is elevating flexibility when shipping is the subject. But, the new transport administration can enable companies to manage or assist some of the demanding integrations in the supply chain. 2. Altering customer expectations Client expectations are now changing all because of technology. This is a fact. Moreover, as clients become information-enabled, they have expectations that their transport services keep them fully informed throughout the entire process. Similarly, because of the ballooning amount of accessible data, clients want to discover a business that operates with their precise expectations. This implies that the age of catch-all solutions is fast shrinking. It is being replaced with a more prominent, innovation–powered supply chain. With such information at hand, transport experts need to offer the most exceptional value possible to the clients. This implies that they will have to comprehend better the impacts of technology trends in the transport process to allow the clients to witness what is transpiring at each step. 3. Evolving digital requirements Several transport enterprises are still struggling with their approach when it comes to Information Technology systems. Correspondingly, the main challenge with the evolving digital requirements is extensive. They are jumping to the next digital bandwagon before solving the traditional tribulations. With such information at disposal, transport professionals need to act fast. They need to gear up for the right speeds. Failure to this will have to face two different ways of conducting business that collide with each other. 4. Digital transformations Digital transformation means reshaping both strategies and models of conducting business to stay fully competitive in the digital age. This includes both large and small 117 CU IDOL SELF LEARNING MATERIAL (SLM)
businesses. However, one thing is certain; failure to transform the transport processes to match the digital transformation can result in fewer revenue and profits because of few opportunities to do business. But, apart from implementing a new set of policies, the digital revolution also entails altering the mindset involved in doing business. Digital transformation goes beyond installing applications and adding Internet of Things powered GPS tracking systems to your assets. Much is needed, not only expanding on how information can disrupt your business. 5. Core systems transformation Transport firms need to know what their core systems are. They need to be aware of this before going ahead to attempt to disrupt their businesses. If they know, it’s wise they check again because companies develop unique architectures more often. Businesses growing disparately make it challenging for the stakeholders to comprehend the business. However, with the latest technologies emerging in the transportation industry, companies have a chance to rejuvenate their business. They will also be able to modernize their supply chain administration. 6. Transport automation and the Internet of Things partnered robots. Order fulfilment and automating warehouses with robots have been challenging for the industry. However, with the pushing demand, various transport organizations are looking forward to utilizing them. They will assist in simplifying the processes. Clients are pushing for more modern transport techniques. With the emergence of e-commerce, transportation providers are required to operate efficiently and faster. They need to process an individual’s orders quickly. This is a sector that has surprised the industry. Many transportation companies are still struggling to adjust. Either way, they have no choice. Labour shortages have handed robotics the platform to reshape the transportation landscape. Companies used to have 80% of the warehouse’s operation conducted manually. With the rising demand, they have to deploy robots to make things more accurate, flexible, and affordable. This is a puzzle that most transport companies will cross the year with attempting to solve. 7. Proactive cyber security With businesses transitioning to the digital age, so too are numerous cybercriminals improving and obtaining new objectives of all sizes and shapes. Transportation companies have been hacked not once but many times. 118 CU IDOL SELF LEARNING MATERIAL (SLM)
But, most cyber-attacks that have been happening come from the inside. Workers providing internal open vulnerabilities cause them. The vulnerabilities are caused by workers who fail to adhere to the designed Cyber Protocol. Transport firms have struggled with this menace for a long time. Until a permanent approach is made to solve this issue, the transport industry will still be battling cybersecurity problems in the coming year. The transportation industry aims to enhance the visibility of the supply chain as a means of elevating integrity and product security. However, this will not be met without efforts to solve the challenges facing the industry. The problems pose costly consequences for the sector. To keep the clients intact and trusting the systems, much will have to be done. 8.2.3 Opportunities of Distribution Powerful trends that have disrupted industries around the world are now affecting industrial distributors. A few are quickly building scale, making advances in commercial and operational excellence, and digitizing to create the seamless, multichannel experiences that customers now demand. But we expect slower-moving distributors to struggle—and some to go the way of Blockbuster and Borders. We also expect the disruption to accelerate. Fast-moving digital players eyeing the industry’s trillion-dollar revenue pools are offering best-in-class customer convenience and more price transparency. Sophisticated customers, armed with new data, are demanding deeper discounts and better promotions on more commoditized products. As manufacturers and customers gain leverage through consolidation, some are forging strong relationships that leave distributors in the cold. These and other challenges come at a difficult time for the industry, whose returns have lagged those of the overall industrials sector for 15 years. Margins have remained narrow even in the recent economic recovery, and the pressure may rise. We expect many industrial distributors to lose strong customer relationships in the next few years and become mere links in supply chains, rather than business partners who add value. But while the overall picture may look bleak, we see opportunities across sectors. A handful of leaders are growing share and margin. Based on our research and experience serving clients across industries, we believe that distributors who move quickly can create deeper customer relationships and sustainable competitive advantages to outperform consistently in the years ahead. The industry’s major challenges and then outline the five strategies that we believe will help the winners outperform in the next decade. 1. The business is getting tougher - Based on our research, experience, and discussions with industry executives, we’ve identified a combination of market 119 CU IDOL SELF LEARNING MATERIAL (SLM)
trends and internal challenges that threaten revenue growth and profitability in wholesale distribution. 2. Suppliers are aiming to build relationships directly with end customers - As manufacturers search for ways to increase margins, some are eyeing the profit pools of distributors. The rise of new digital technologies makes it easier than ever for manufacturers to pursue the idea at scale. Some manufacturers are building their own distribution channels. For example, Bridgestone and Goodyear, two of the largest tire manufacturers, announced a joint distribution partnership in 2018. The new venture, TireHub, complements the companies’ networks of third-party distributors and provides a fully integrated distribution, warehousing, sales, and delivery solution, competing directly with traditional tire distributors. Other manufacturers are selling directly to consumers on online platforms. For example, Dow Corning recaptured cost-sensitive customers by establishing Xiameter, a low-cost web-based brand. Within ten years of launch, online sales accounted for 40 percent of Dow Corning’s revenues. Kohler, a major manufacturer of plumbing products, has invested in direct-to- consumer and builders’ channels with a state-of-the-art e-commerce platform and supporting organization structure despite an extensive network of distributors and retailers who sell its products. The list goes on: prominent manufacturers across industries are looking for ways to capture a larger share of the overall value chain. Disintermediation seems poised to accelerate. According to 2018 survey of more than 100 senior manufacturing executives across the United States, manufacturers predict that the overall share of direct-to-customer sales will increase slightly in the coming years and that the share of products flowing via distributors and retailer channels will fall modestly. According to a senior leader at a midsize HVAC manufacturer, “Direct dialogue with customers is a more harmonious sales model.” A department head at a midsize general industrial firm agreed. “We save money working directly with consumers,”, “so we’d like to take care of distribution ourselves.” These themes echo across segments. Manufacturers aiming for more direct end-customer sales say they are developing more end-customer relationships (40 percent of survey respondents), easing customer accessibility on the web (21 percent), and aiming to capture distributors’ margins (14 percent). 1. Customer expectations are rising - Professional buyers who shop on Amazon now expect digitally enabled services such as customized reporting, multichannel ordering, and full visibility into distributors’ inventory. Among customers who responded to our survey, 57 percent said omnichannel convenience was one of the top three improvements distributors should provide. Features they want include 24/7 customer service, a complete e-commerce website, order tracking, and real- time inventory management. Customers expect to make 30 percent more of their 120 CU IDOL SELF LEARNING MATERIAL (SLM)
purchases from distributors via online means; those in the electrical segment expect a 50 percent increase. Our interviews with industry players confirmed the vital importance of value-added services. “I’m really worried about the labour shortage and our inability to build houses fast enough to meet demand,” said a local buyer at a national homebuilder. “A distributor who installs windows and doors will win my business day in and day out.” The chief of manufacturing engineering at a global auto parts manufacturer explained that his distributors “have always managed inventory for us—and that gives us peace of mind.” 2. Disruptive new entrants are accelerating competition New entrants are encroaching on distributors’ territory, disrupting the status quo, and accelerating the competitive intensity. Digital leaders with top-shelf talent and deep pockets, including Amazon and eBay, pose the greatest threats. By entering the B2B space, Amazon Business threatens to cut many distribution players out of the supply chain. Its integrated procurement system features multiuser accounts, flexible payment options, and enhanced invoicing capability. More than 100,000 business sellers now offer more than 400 million SKUs on the platform, serving a total of 300,000 business customers. If its growth continues, Amazon Business could approach $20 billion in sales around 2020. Experts tell us that in deciding whether to enter an industry, digital giants like Amazon consider how much they can improve customer experience with their current capabilities and infrastructure. The distributors at the greatest risk may therefore be those operating in large segments with high margins, limited technical expertise, low value-added services, low customer purchasing power, and easy-to-ship products Electronics, general industrial, and auto parts may therefore face the largest disruption risk. Electronics, even with a low EBITA margin of 2.8 percent, is the largest target, with $354 billion in revenues in the United States alone. All is not lost, however: distributors still have some advantages over other digital players. Customers tell us that distributors have the upper hand across several top selection criteria, for example. And while many distributors rightly fear Amazon and other digital attackers, top distributors are aggressively expanding their “moats”— including deep product knowledge, technical expertise, service capabilities, and a long tail of products that pure digital players can’t match without big investments in technical talent and physical assets. Competitive threats are not confined to digital entrants. Big-box retailers are also challenging traditional distributors, using their analytical prowess and customer insights to create tailored value propositions for contractors, for example, and using their large footprints to offer in-store convenience and extended hours. 121 CU IDOL SELF LEARNING MATERIAL (SLM)
3. Innovative technologies are disrupting traditional business models New entrants are encroaching on distributors’ territory, disrupting the status quo and accelerating the competitive landscape. New data and advances in computing power, data storage, analytics, and mobile platforms are turning industries as varied as music and healthcare upside down. Wholesale distribution is not immune, of course. Predictive and prescriptive analytics are helping the most sophisticated customers and manufacturers use dynamic pricing, predict churn, and optimize workforces and capital. For instance, UPS reports that its new navigation system saves its drivers about 100 million miles and 10 million gallons of fuel each year, reducing logistics costs by $300 million to $400 million. Automated warehouses are speeding deliveries while cutting labour costs. Robots can now handle every step of the warehousing process, from unloading to quality control, reducing order-picking labour costs by as much as 80 percent and boosting operational efficiency in industries with razor-thin margins. Autonomous vehicles are on the horizon—a potential boon to the distributors who can afford to put self-driving fleets on the road. Nearly every leading distributor tells us that transportation costs are affecting their margins. Flatbed trucking rates have risen 40 percent since 2016. Experienced drivers and high-quality warehouse workers are hard to find—and to keep. A senior executive at a leading North American building products distributor put it plainly. “The labour issue keeps me up at night,” he said. “We’ve paid millions in raises just to keep our people from accepting other jobs. This is especially true in our driver’s pool. We want to use technology to optimize our need for labour, especially in a world where it is increasingly difficult to fill positions.” Tomorrow’s Leaders are Building Five Advantages Today Winning distributors are already adapting to the major trends in the market. Based on our research and experience, we’ve identified five transformative actions that will distinguish the industry’s outperformers across segments. 1. Build scale where it matters most - Scale will continue to be a key to margins. It helps distributors gain purchasing power, create denser delivery routes, optimize warehouse locations, increase coverage of products and sales, and reduce redundancies. These and other synergies can expand margins by up to 3 to 4 percent return on sales in some mergers with significant overlap. Top distributors have been pulling this lever for decades and are going after larger targets or merging with other top distributors. Since the bottom of the recession, M&A activity for the large publicly traded distributors has increased: 27 percent of top distributors have acquired at least one other distributor, up from 20 percent in the 122 CU IDOL SELF LEARNING MATERIAL (SLM)
decade before the recession, and the average acquisition today is roughly 35 percent larger. Substantial rewards can come relatively quickly. For example, a building product distributor nearly doubled its combined-entity earnings before interest, taxes, depreciation, and amortization (EBITDA) within two years of an acquisition by pursuing procurement synergies. It consolidated suppliers in key categories; eliminated redundancies in finance, IT, HR, and back-office support; consolidated overlapping locations; and designed denser routes. The keys to the margin improvement included an engaged leadership team, well- resourced integration office and functional teams, a rigorous cadence, and careful performance management. Many acquisitions fall short of expectations, of course. Some distributors have left tens of millions of dollars on the table because of poor planning, a lack of sales integration, limited leadership and resource commitment to the transformation, or underestimates of cultural and technological integration challenges. Some companies also see diminishing returns as they keep building scale even after reaching number one or number two in a marketplace. For many large distributors, especially those who have reached the sweet spot of scale in their key markets, a better long-term bet is to invest in commercial and operational capabilities that they may have neglected as they scrambled to build share and integrate disparate pieces of the business. 2. Compete smarter - With countless customer-SKU combinations and constant margin pressure from manufacturers on one end and customers on the other, distribution is ultimately a low-margin business. Even the most profitable sectors such as general industrials and auto parts achieve only single-digit EBITDA margins. Leaders must therefore improve relentlessly in sales-force effectiveness, pricing, category management, and fleet operations. Some leaders are looking beyond M&A, using new treasure troves of data and strides in advanced analytics to unlock commercial opportunities. They’re shifting away from their traditional role of “cost-plus” or discount providers, building best-in-class commercial organizations to strengthen customer pull and differentiate their products and services. The best distributors equip sales staff to act as business partners who can identify customer pain points and co-create business solutions. For example, a leading distributor launched an initiative to shift its customers to a higher-margin mix of products. To get the sales force on board and help them execute, the company trained them on best practices in selling solutions. It invested in routines, processes, and tools to support frontline sales managers: a comprehensive sales playbook, ongoing 123 CU IDOL SELF LEARNING MATERIAL (SLM)
training, and a sophisticated customer-relationship management system that provides product and pricing recommendations directly to the sales force. Some distributors have not yet embraced the latest digital tools or dynamic pricing but have begun their journeys of commercial excellence. They are building pricing organizations to drive consistent pricing processes; crafting escalation and exception processes; implementing tight controls and best practices for contract setting, rebates, and payment terms; and building sales-force capabilities in value selling and negotiation. For most distributors, these changes represent a significant shift from traditional selling practices and oversight of highly entrepreneurial sales forces. But we are seeing that nearly every distributor who increases pricing discipline and sophistication has expanded margins and helped sales reps focus on what they do best: building and maintaining relationships with customers. We’re not alone in seeing commercial excellence as a pillar of success in the industry, of course: 60 percent of leading publicly traded distributors mentioned it in their latest annual reports. 3. Become leaner and execute flawlessly - Many large distributors still act like decentralized local businesses without consistent processes, routines, or performance management. The rapidly changing landscape is finally pushing many to reconsider investments in core operations to capture incremental efficiencies: the annual reports of around 50 percent of the largest distributors mentioned the need to improve operational capabilities. Most distributors can make significant progress in several areas. For example, smart, data-driven product purchasing and sourcing are helping leading distributors shape categories to optimize both their own and their customers’ P&Ls. They undertake thorough category reviews to understand improvement opportunities, regularly refine and streamline their assortments based on customer and competitive insights, and conduct fact-based negotiations with manufacturers for volume discounts and better pricing. Many are now using data-driven purchasing and supply management—for example, by standardizing specifications and using clean-sheeting and other sophisticated purchasing techniques. Some are establishing more robust vehicle maintenance programs and making better replace-or-repair trade-offs based on total cost of ownership over an asset’s life. Taken together, these improvements can reduce fleet-related costs by 10 percent or more, raise asset availability, and improve customer and employee satisfaction. A senior executive at a European packaging distributor, asked to describe a best-in-class distributor, talked about “tremendous cost management and flawless execution.” A final area of improvement involves streamlining administrative and overhead functions to reduce cost and improve effectiveness. While most distributors are 124 CU IDOL SELF LEARNING MATERIAL (SLM)
already lean, we often see opportunities to consolidate functions such as accounts payable, purchasing, HR, and IT that have become widely dispersed throughout the organization as a result of continual M&A activity.4 Some distributors are also adopting robotic process automation that can free resources now devoted to repetitive tasks such as invoice matching, processing expense approval requests, and auditing reported hours versus schedule (a common pain point in warehouse operations). 4. Move beyond product distribution - Most wholesale distributors who have reached scale do much more than product distribution: they’re core value chain partners who provide customers with a suite of value-added services such as credit financing, inventory management, and product expertise. In surveys and interviews, customers tell us that these traditional value-added services are now becoming table stakes. With that in mind, a few leading distributors are taking a customer-back view of their customers’ challenges and pain points, partnering with them in new ways to raise satisfaction, such as by installing windows and doors for the many custom home builders struggling to find qualified labour. Some are improving customers’ margins—for example, by offering international sourcing and providing high-end packaging solutions. 5. Tech-enabled transformation: The trillion-dollar opportunity for industrials - Many distribution leaders tell us that building differentiated value-added services that address customer pain points can help them fend off challenges from traditional and online competitors alike. An automotive distribution company is making significant investments in value-added services, for example, to provide incremental value to customers—especially those willing to pay a premium. Many distributors can use their superior product knowledge and technical expertise to provide clear customer value, maintain premium pricing, and create a moat against pure digital players. 6. Embrace the digital revolution - As noted, digital advances are game changers in the distribution industry. But most distributors are still in the early innings of digital adoption and lag other logistics industries, despite customer demands for more convenient omnichannel experiences. In fact, our digital survey of more than 1,000 business purchasers found that over 90 percent of B2B buyers conduct research online before making a purchase, and 84 percent prefer to make repeat purchases through online channels,6 given their convenience, cross-channel services, and features. We believe every distributor needs a clear digital strategy. Digitizing the go-to-market model, the typical first step, means redesigning key customer journeys, offering a cohesive and integrated omnichannel experience (website, mobile app, in-store 125 CU IDOL SELF LEARNING MATERIAL (SLM)
location, and social media), simple credit applications, paperwork integration software, and a coherent online portal to track orders. Developing a rich data ecosystem with robust analytical tools can give distributors and their sales teams a 360-degree view of customers, which can drive targeted product recommendations and service decisions. Some distributors are building novel, customer-first digital flows that reimagine the typical “stock and flow” distribution model to better reflect how customers operate. For example, instead of requiring contractors to visit a location each morning to pick up supplies for that day’s work, digital buy flows can ingest bills of material to help customers forecast purchases and consolidate a single weekly delivery. This saves restocking costs for the distributor and time and money for customers. Distributors with the talent and imagination to reengineer their business models will differentiate themselves from the competition and generate outsize value for customers and shareholders alike. Distributors investing in digital and e-commerce strategies are accelerating sales growth, expanding customer reach, and improving customer retention and loyalty. Grainger has led the pack, creating three e-commerce platforms—Gamut, Grainger, and Zoro—to reach different types of customers. The company’s dedicated digital team has also built analytics-based personalization and real-time inventory updates. These investments have consolidated Grainger’s spot as a leading distributor in digitally enabled operations, with e-commerce generating 51 percent of revenue in 2017 (up from 25 percent in 2012). Apart from manufacturing and retail, distribution is a profitable opportunity for new entrepreneurs. The intent of crafting this article is to provide the most lucrative distribution business ideas to the individuals who look for the same. Actually, starting a distribution business is a wise decision for first-generation entrepreneurs. Because this type of venture allows initiating a business by taking less risk (financial investment). Even, if you want to understand a product or industry in a better way, the distribution business is the best possible option. And finally, shifting to manufacturing from a distribution business is the easy way of expanding a business. Distribution Business Ideas Find below our list of recommended distribution business opportunities that have a good profit potential. Agricultural Product Distribution Business Agriculture is a big industry worldwide. And there are several items that are perfect for the distribution business. Some of the most trending items are farm equipment, irrigation supplies, seeds, seedlings, fertilizers, growth promoters, pesticides, etc. 126 CU IDOL SELF LEARNING MATERIAL (SLM)
Auto Spare Parts Distribution Currently, the automobile industry is growing rapidly. If you are searching for a distribution opportunity in this industry, you can consider auto spare parts. This is a huge segment. And there are numerous items that come under this segment. Bakery Products Distribution Bakery and confectionery are great items for the distribution business. Some of the most popular items are donuts, cakes, bread, biscuits, cookies, pastry, etc. Also, there are several allied products that are very profitable in the bakery segment. Building Material Rapid urbanization is the major reason for the growth of the construction and real estate industry. And due to this, building material distribution business has the potential of fetching good revenues. Some of the most potential items are cement, TMT rods, stone chips, nails, stone chips floor tiles, etc. Car Accessories Distribution This is another great business you can with moderate investment. he car accessories segment is now very vibrant. There are so many utility and luxury items very popular these days. Some of the most trending items are air freshener, dent remover, seat cover, mobile accessories, car lighting, etc. Crockery Distribution Crockeries are essential items in every kitchen. Also, restaurants, hotels, canteens are the regular user of crockeries. he segment caters a wide range of items. The list includes cup set, coffee mugs, glass sets, jugs, dinner set, tray, bowls, etc. Also, there are several brands available in the market that look for potential distributors. Dairy Product Distribution If you want to start a distribution business in the processed food industry, then you can consider dairy product distribution. Generally, butter, cheese, yogurt, cream, toned milk are the most popular items in this segment. Though, the per-unit revenue is lesser than other products these products enhance the volume of turn over. Electrical Item Distribution The electrical industry is very lucrative for starting a distribution business. Broadly, there are two segments. These are domestic items and industrial items. Electrical wires, switches, fans, lights, home appliances are the most potential items in the distribution business. Fabric Distribution 127 CU IDOL SELF LEARNING MATERIAL (SLM)
Actually, different types of fabrics are the major raw materials in the garment industry. Also, people buy fabrics from retail to produce customized dresses. Overall, the fabric has a wide market globally. Broadly, there are two different types of fabrics – natural and man-made. Flooring Distribution If you want to start a distribution business in the interior and real estate industry, then you can consider flooring distribution. Nowadays, people prefer using different types of flooring materials like carpets, boards, wooden, etc. This type of distribution venture demands moderate capital investment. FMCG Distribution In the food segment, FMCG distribution is the most profitable business. Also, the FMCG caters to a wide range of products other than food items. These are personal care, home care, beauty products, etc. You can start the business either with a single brand or multi-brand too. Furniture Distribution This is another great industry you can consider for starting a distribution business. Apart from wooden furniture, wrought iron furniture, patio furniture, plastic furniture, leather furniture, and steel furniture are very popular. Also, you can cater to both the domestic and commercial markets in this business. Gift Items Distribution Generally, gift items ensure high revenue. Due to this reason, gift items are very popular in the retail distribution segment. Some of the most popular products are showpieces, toys, wall hangings, personalized gifts, corporate gifts, etc. Greetings Card Distribution Globally, a greeting card is a multi-million-dollar industry. And digitally printed cards have the highest demand. Apart from that some of the handcrafted cards and hand-painted cards have good demand also. You can start the greetings card distribution business with different brands also. Herbal Products Distribution Due to the awareness about the harmful chemical products, people these days prefer to buy herbal products. Generally, personal care products, home care products, and herbal cosmetics have a major share in the herbal product industry. Also, the demand for herbal medicines is getting huge popularity. Hosiery Distribution Actually, hosiery is a major sector in the readymade garment industry. Different types of undergarments, vests, leggings, jeggings, Capri, trousers, track pants are the most popular 128 CU IDOL SELF LEARNING MATERIAL (SLM)
items in this segment. The industry caters to men’s garments, women garments, and kid’s garments too. Jewellery Distribution Gem and jewellery is a vibrant industry globally. Apart from precious jewellery, semi- precious and costume jewellery are getting huge popularity these days. Because of the low price, a wide range of population can afford to buy these pieces of jewellery. So, according to your investment capacity, you can consider staring a jewellery distribution business in your area. Laboratory Equipment Distribution There are several companies you can find who produce laboratory equipment and tools. Generally, these are different types of glassware, balance, digital weighing machine, tester, etc. Most of the companies that have specific R&D segments are the buyers of these items. Also, the educational institutions and Govt. laboratories are the regular buyers. Leather Products Distribution Leather is itself a big industry. Apart from footwear, there are several items that have huge demand. Some of the most lucrative items are handbags, office bags, wallets, purse, belt, gloves, leather garments, wristwatch strap, etc. Hence, you can cater a wide market in the leather products distribution business. Lubricant Distribution If you want to start a distribution business in the petroleum industry, then you can consider his business. However, lubricants come in different grades for different engines. Apart from the automobile, the lubricants have industrial applications also. Medicine Distribution Medicine or drug distribution is one of the most profitable businesses in the pharmaceutical industry. Most of the medicine producing companies appoint distributors zone wise. Therefore, you will need to identify the companies that are interested in recruiting the distributors in your area. Organic Food Distribution Globally, the demand for organic food items is increasing rapidly. Both the processed food items and fresh food items have good demand. However, organically grown fresh fruits and vegetables have a very short shelf life. Also, you can consider distributing organic animal protein items. Paint Distribution 129 CU IDOL SELF LEARNING MATERIAL (SLM)
Paint itself a huge industry. Globally, you can find several established brands that produce paints. Actually, paints come in the building material segment. Some of the most potential items are wall putty, white cement, Stainer, interior paint, outer wall paint, etc. Perfume Distribution This is another great item for the distribution business. Perfume and deodorants are a huge industry. And literally, there are numerous companies that appoint distributors to capture the market. Depending on your investment capacity and demographics, you must select the brand very carefully. Readymade Garment Distribution If you want to start a business in the clothing and textile industry, them readymade garment is the best segment to start with. Practically, there are thousands of different products that you can consider. However, readymade garments distribution business demands strategic planning and moderate start-up investment. School Stationery Distribution Actually, there are numerous products that come under the school stationery segment. Currently, the education industry is growing rapidly throughout the globe. Hence, the demand for different types of items is also increasing. Both the school students and students who are in higher studies need school stationery items on a regular basis. Security & Surveillance Products Distribution Nowadays, it is a well-known fact that people’s concern about security is increasing. So, both in the commercial and domestic segments there is a huge demand for security and surveillance items. Generally, the CCTV cameras and other devices have a huge demand in this segment. Smartphone Distribution This is another great product you can consider in the distribution business. Globally, the smartphone market is increasing very fast. And specifically, the developing countries hold the major share of the total smartphone market. Apart from renowned brands like Apple, Samsung, there are several small companies that are entering the market too. Sports Goods Distribution If you are passionate about games and sports, you can consider initiating a sports goods distribution business. Actually, the sports and games industry is now fully commercialized. And you can make handsome money from this type of business. Some of the most popular items are sports apparel, trophy, sports equipment, etc. Tailoring Items Distribution 130 CU IDOL SELF LEARNING MATERIAL (SLM)
If you want to start a distribution business with a small investment, then you can consider this opportunity. Actually, different types of needles, thread, zip, buttons, appliques are the most popular items in this segment. Tea & Coffee Distribution Actually, tea and coffee are the high-value food items. And these two items are popular globally. Also, the tea and coffee manufacturers widely appoint distributors to sell the products. And definitely, these products ensure good revenue. Telecom Products Distribution If you are interested in starting a business in the telecommunication industry, then you can consider telecom products distribution business. Some of the most potential items are 4G routers, GPS personal trackers, handheld two-way radios, GPS vehicle tracking systems, fibre optic transmission products & systems, etc. Tobacco Products Distribution Though the tobacco items injurious to health, the industry is growing rapidly. In tobacco products, you will get a small margin per unit. However, the huge sell volume ensures a high return in this business. Also, the tobacco products market is highly competitive. Two-wheeler Distribution This is another profitable distribution business you can start in the automobile segment. Currently, the two-wheeler market is booming like never before. Apart from petrol bikes, electronic bikes are getting huge popularity these days. Due to the electric charging facility, these two-wheelers don’t need petroleum fuels. Wine Distribution Actually, beers and wines are the huge industry. And you must have the substantial investment capacity for starting a wine distribution business properly. Also, the industry is highly regulated by the Govt. So, you will need specific licenses and permissions from the authority. Actually, initiating a distribution business demands moderate investment capacity and strategic planning. And before entering the industry, you must understand the market potential of that particular product. We hope this list of 35 most trending distribution business ideas will help you in making an informed decision in starting your own venture. 8.2.4 Opportunities in Agro Industries Agriculture and Allied Sector Agriculture and allied sectors are always been the backbone of the Indian economy and despite concerted industrialization in the last six decades; agriculture still occupies a place of pride. The significance of agriculture in the national economy arises from the role it plays in 131 CU IDOL SELF LEARNING MATERIAL (SLM)
India’s national income, employment and export. Agri business development benefits in an economy in various forms and viz., it generates immediate large scale employment, utilizes the ideal human and natural recourses, promotes capital formation by mobilizing the ideal savings of the public, reduces unemployment, promotes balanced regional development, reduces concentration of economic power , promotes equitable distribution of wealth, income and even political power, induces backward and forward linkages for industrial and economic development and promotes countries exports. Agriculture and allied industry is further divided into several segments, namely; horticulture and its allied sectors (including fruits and vegetables, flowers, plantation crops, spices, aromatic and medicinal plants); fisheries sector, animal husbandry and livestock and sericulture. Horticulture & Allied sectors Horticulture is yet another Agro-based important industry improving the productivity ofthe land, generating employment, improving economic conditions of the farmers andentrepreneurs, enhancing exports and above all providing nutritional security to the people. Horticulture sector includes fruits, vegetables, spices, floriculture and coconut.The Government of India has recognized horticulture crops as a means of diversification in agriculture in an eco-friendly manner through efficient use of land and optimum utilization of natural resources.Horticulture seeks to create ample opportunities for employment, particularly for unemployed youths and women folk. India has maintained leadership in the production of many commodities like mango, banana, acid lime, coconut, areca nut, cashew, ginger, turmeric and black pepper. Presently, it is the second largest producer of fruits and vegetables in the world. India is next only to China in area and production of vegetables and occupies prime position in the production of cauliflower, second in onions and third in cabbage in the world. India has also made noticeable advancement in the production of flowers. Further, it is the largest producer, consumer and exporter of spices. India is home to a wide variety of spices like black pepper, cardamom (small and large), ginger, garlic, turmeric, chilly and a large variety of tree and seed spices. Almost all the States in the country grow one or more spices. The major spice producing States are Andhra Pradesh, Tamil Nadu, Odessa and Madhya Pradesh. North Eastern region and Andaman and Nicobar Islands also have potential areas cultivated for spices, particularly organically. Further, coconut is a versatile crop and about 10 million people depend on its cultivation, processing and related activities. It is grown mainly along the coastal States of the country as well as in the North-Eastern region. It is grown over an area of 1.84 million ha with a production of 8.67 million tonnes. India is a leading country in the world for coconut production. Thus, over the years, much progress has been made for the advancement of horticultureand allied sector. Rising investments have resulted in increased production and availability of horticultural produce in the rural and urban areas. Many schemes and policies have been introduced, from time to time, for upliftment and 132 CU IDOL SELF LEARNING MATERIAL (SLM)
commercialization of the sector. Large number of investors are taking advantage of the existing potentials in the sector, as well as trying to explore the untapped potentials. Sericulture Sericulture, also known as ‘Silk Farming’ is the rearing of silk worms for the production of raw silk. Although there are several commercial species of silkworm’s bombyx mori is the most widely used and intensively studied. Now sericulture has become one of the most important cottage industries in a no. of countries like Japan, China, republic of Korea, India, Brazil, Russia, Italy and France. Today China and Japan are the two main producers together manufacturing more than fifty percentage of the world silk production each year. Sericulture industry is an oriental industry in India and its famous for its silk products worldwide. Silk is a way of life in India. Over thousands of years, it has become an inseparable part of Indian culture and tradition. No ritual is complete without silk being used as a wear in some form or the other. Sericulture and Silk Textiles Industry is one of the major sub-sectors comprising the textiles sector. Sericulture is an Agro-based cottage industry. Sericulture refers to the mass-scale rearing of silk producing organisms in order to obtain silk. Sericulture is one of the most labour intensive sectors, combining activities of both agriculture (sericulture) and industry. India is ranked as the second major raw silk producer in the world. It is this position along with its immense employment potential that makes sericulture and silk, indispensable in the Indian textile map. Silk is a high value but low volume product accounting for only 0.2 % of world's total textile production. It churns out value added products of economic importance. India holds the monopoly on producing the Mega silk. It is the only one cash crop in agriculture sector that gives returns within 30 days. Sericulture emerged as an important economic activity, becoming increasingly popular in several parts of the country, because of its short gestation period, quick recycling of resources. It suits very well to all types of farmers and exceptionally for marginal and small land holders as it offers rich opportunities for enhancement of income and creates own family employment round the year. Food Processing Food Processing involves set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for consumption by humans or animals either in the home or food processing industry. Broadly, food processing industries include cannery, meat packing plant, slaughterhouse, sugar industry, vegetable packing plants, industrial rendering etc. Food processing provides special benefits to the society. These include toxin removal, preservation, easing addition, all-season availability of many foods, easing marketing and distribution tasks, and make many kinds foods safe to eat by de-activating spoilage and pathogenic micro-organism. Animal Husbandry and Dairying 133 CU IDOL SELF LEARNING MATERIAL (SLM)
Animal husbandry, also called animal science, stockbreeding or simple husbandry, is theagricultural practice of breeding and raising livestocks.The industries that come under animal husbandry include aquaculture, beekeeping, cuniculture, dog breeding, horse breeding, poultry breeder and factory farming. Animal Husbandry and Dairying is a State subject and the StateGovernments are primarily responsible for the growth of the sector. Dairying has become an important secondary source of income and employment for millions of rural families. Government of India is making efforts to increase the productivity of milch animals andthus increase the per capita availability of milk. Most of the milk is produced by small, marginal farmers and landless labourers who are grouped into cooperatives at the village level. To provide them a steady market and a remunerative price for the milk produced, about 12 million farmers have been brought under the ambit of more than one lakh village level cooperative societies in the country. Fisheries and Aquaculture Sector The 'fisheries and aquaculture sector' is recognized as the sunshine sector in Indian agriculture. It stimulates growth of number of subsidiary industries and is the source of livelihood for a large section of economically backward population, especially fishermen, of the country. It helps in increasing food supply, generating adequate employment opportunities and raising nutritional level. It has a huge export potential and is a big source of foreign exchange earnings for the country. The major thrust in fisheries development has been focused on optimising production and productivity; augmenting export of fishery products; generating employment and improving welfare of fishermen and their socio- economic status. Over the years, fisheries' industry is emerging and rapidly growing. This covers both capture and culture including inland and sea, aquaculture, gears, navigation, oceanography, aquarium management, breeding, processing, export and import of seafood, special products and by products, research and related activities. There exists several investment opportunities in the sector for the entrepreneur’s world over. 8.3 SUMMARY The transportation industry aims to enhance the visibility of the supply chain as a means of elevating integrity and product security. However, this will not be met without efforts to solve the challenges facing the industry. The problems pose costly consequences for the sector. To keep the clients intact and trusting the systems, much will have to be done. Apart from manufacturing and retail, distribution is a profitable opportunity for new entrepreneurs. The intent of crafting this article is to provide the most lucrative distribution business ideas to the individuals who look for the same. Actually, starting a distribution business is a wise decision for first-generation entrepreneurs. Because 134 CU IDOL SELF LEARNING MATERIAL (SLM)
this type of venture allows initiating a business by taking less risk (financial investment). Even, if you want to understand a product or industry in a better way, the distribution business is the best possible option. And finally, shifting to manufacturing from a distribution business is the easy way of expanding a business. The Ministry of Agriculture is the main authority in India for regulation and development of activities relating to agriculture, horticulture, fishing, animal husbandry, etc. It is implementing various schemes and policies for the sector through its divisions like Department of agriculture and Cooperation and Department of animal husbandry, Dairying and Fisheries. Further the Ministry of Food Processing Industries is actively engaged in promotion of entrepreneurial activities in the segments of fish processing as well as fruits and vegetable processing. Besides, commodity boards, like tea board, coffee board, rubber board, medicinal plants board etc. have been set up to boost the growth of the sectors like tea,coffee,rubber,medicinal plants, respectively. Developing entrepreneurship in Agri business is as much useful is not so easy and simple. In fact, there are certain challenges before entrepreneurship development in agri- business as follows: Lack of required skilled manpower, Lack of infrastructural facilities, Problem of marketing, Competition with medium and largescale enterprises, Lack of awareness and appreciation about career in Agro- entrepreneurship. Hence, all those involved in the endeavour of developing entrepreneurship in agri-business need to sincerely put in their best efforts its development. Then only, entrepreneurship development will take place in agri-business sector and in turn agri-business develops in the country. 8.4 KEY WORDS Service Industry: Service industry, an industry in that part of the economy that creates services rather than tangible objects. Sericulture: Sericulture, the production of raw silk by means of raising caterpillars (larvae), particularly those of the domesticated silkworm. Horticulture: Horticulture, the branch of plant agriculture dealing with garden crops, generally fruits, vegetables, and ornamental plants. SWOT analysis: It is framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential. Aquaculture: Aquaculture is the breeding, rearing, and harvesting of fish, shellfish, algae, and other organisms in all types of water environments. 135 CU IDOL SELF LEARNING MATERIAL (SLM)
8.5 LEARNING ACTIVITY 1. How would you use SWOT analysis to identify opportunities for agro industries? ___________________________________________________________________________ ____________________________________________________________________ 2. List any 10 opportunities available for entrepreneur in transportation sector? ___________________________________________________________________________ ____________________________________________________________________ 8.6 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What do mean by service industry? 2. Name few opportunities in agro industries? 3. What do you mean by horticulture? 4. What do you mean by sericulture? 5. What do you mean by compete smarter? Long Questions 1. Explain the challenges and opportunities available of transportation industry in 2021. 2. What are opportunities available in distribution sector? Discuss in brief. 3. Explain few distribution business ideas. 4. Explain the opportunities available in agro industries. 5. Describe any two industry entrepreneurial opportunities. B. Multiple Choice Questions 1. Which sector is the backbone of Indian economy? a. Service sector b. Financial sector c. Tourism sector d. Agriculture sector 2. Which among the following does not belong to welfare schemes for the farmers? a. Kisan Credit Card Scheme b. SHG Bank Linkage Programme 136 CU IDOL SELF LEARNING MATERIAL (SLM)
c. National Agricultural Insurance Scheme d. Employee Referral Scheme 3. Which of the following is the commercial crop in India? a. Mustard b. Tobacco c. Jute d. All of these 4. Who regulates the markets in agricultural products in India? a. Essential Commodities Act. 1955 b. Agricultural Produce Market Committee Act enacted by States c. Agricultural Produce (Grading and Marking)Act,1937 d. Food Products Order, 1956 and Meat and Food Products Order, 1973 5. Which of the following is not the management category of roads in India? a. National Highways b. State Highways c. Border Roads d. District High ways Answers 1-d, 2-d, 3-d, 4-c, 4-d 8.7 REFERENCES Reference Eckhardt, J. T., & Shane, S. A. (2003). Opportunities and entrepreneurship. Journal of management, 29(3), 333-349. Sigala, M., &Dolnicar, S. (2017). Entrepreneurship opportunities. Corner, P. D., & Ho, M. (2010). How opportunities develop in social entrepreneurship. Entrepreneurship theory and practice, 34(4), 635-659. Textbooks Tiwari, A. (2007). Entrepreneurship development in India. Sarup& Sons. 137 CU IDOL SELF LEARNING MATERIAL (SLM)
Chatterjee, S. Gupta, S, D& Upadhyay, P. (2018). Empowering women and stimulating development at bottom of pyramid through micro- entrepreneurship. Management Decision. Thaddeus, E. (2012). Perspectives: Entrepreneurship development & growth of enterprises in Nigeria. Entrepreneurial practice review. Websites https://linchpinseo.com/challenges-facing-the-transportation-industry/ https://www.99businessideas.com/distribution-business-ideas/ 138 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT – 9: ENTREPRENEURSHIP DEVELOPMENT STRUCTURE 9.0 Learning Objectives 9.1 Introduction 9.2 Institutional Framework for Entrepreneurship Development in our Country 9.3 New Schemes Initiated Toward ED 9.4 Summary 9.5 Keywords 9.6 Learning Activity 9.7 Unit End Questions 9.8 References 9.0 LEARNING OBJECTIVES After studying this unit, you will be able to Describe the importance of entrepreneurship development in India. Explain various new schemes initiated toward entrepreneurship development. Describe the institutional framework for ed in India. Explain the different financial support schemes. 9.1 INTRODUCTION Entrepreneurship development is the process of improving the skills and knowledge of entrepreneurs through various training and classroom programs. The whole point of entrepreneurship development is to increase the number of entrepreneurs. By doing this, the pace at which new businesses or ventures are made gets better. On a wider level, this makes room for employment and improves the economy of a business or country. In other word, Entrepreneurship development is the process of enhancing the entrepreneurial knowledge and skills via structured training programmes. It deals with the study of entrepreneurial behaviour, dynamics of business, and its development and expansion. The objectives of entrepreneurship development programme are to increase the knowledge and skill of existing entrepreneurs and encouraging others to become one. Ultimately, it helps in increasing the number of such individuals in an economy. 139 CU IDOL SELF LEARNING MATERIAL (SLM)
Entrepreneur development focuses on training individuals who are interested in commencing their venture or expand their existing one. Furthermore, it concentrates more on encouraging innovation and evaluating the growth potential of an enterprise. This development process helps new firms to perform better and achieve their goals and expand their businesses. As a result of it, the economy of a nation also improves. Moreover, it enables entrepreneurs to develop and manage their business better along with the financial insecurities associated with it. An increase in the rate of development of entrepreneurship ventures alleviates the problem of unemployment in an economy. Additionally, it decreases the issue of stagnation and increases competition in the market. A process like this aims to develop the competence of an entrepreneur and his/her venture. Therefore, it enhances entrepreneurial objectives and encourages more people to become an entrepreneur. 9.2 INSTITUTIONAL FRAMEWORK FOR ENTREPRENEURSHIP DEVELOPMENT IN OUR COUNTRY Institutional framework for entrepreneurship development in our country. This institutional support system has been designed at following four levels. 1. Central Government 2. State Government 3. Non-Government support system 4. District Industries Centres (DIC) Each shall be discussed briefly, one by one, below Central Government Institutions The Government Formulated the Micro, Small and Medium Enterprises:Development Act, 2006 and established the National Board for Micro, Small and Medium Enterprises (NBMSME) and made rules there under in the year 2006. This Board examines the factors affecting promotion and development of MSMEs and reviews policies and programmes from time to time relating to these enterprises, from time to time and makes recommendations to the Government in formulating the policies for the growth of MSMEs. The Government of India constituted the National Commission for Enterprises in the Unorganised Sector (NCEUS) to examine the problems of the enterprises in the unorganized/informal sector. The Commission has made recommendations to provide technical, marketing and credit support to these enterprises. The various policies and schemes of Government assistance for the development of rural industries insist on the utilisation of local resources and raw materials and locally available manpower. These are translated into action through various agencies, departments, 140 CU IDOL SELF LEARNING MATERIAL (SLM)
corporations, etc., all coming under the purview of the industries department. All these are primarily concerned with the promotion of small and rural industries. Some such support measures are being discussed briefly below. Small Scale Industries Board (SSIB) It was established in 1954 to provide effective coordination and inter- institutional linkages for the benefit of small-scale sector. It consists of the following members. i. Union Industry Minister ii. State Industry Minister iii. Selected members of Parliament iv. Secretaries of department concerned v. Eminent experts in the field National Bank for Agriculture and Rural Development (NABARD) NABARD is designated as an apex development bank in the country. This national bank was established in 1982 by a Special Act of the Parliament, with a mandate to uplift rural India by facilitating credit flow in agriculture, cottage and village industries, handicrafts and small- scale industries. It is also required to support non-farm sector while promoting other allied economic activities in rural areas. NABARD functions to promote sustainable rural development for attaining prosperity of rural areas in India. It is basically concerned with “matters concerning policy, as well as planning and operations in the field of credit for agriculture and other economic activities in rural areas in India”. It is worth noting with reference to NABARD that RBI has sold its own stake to the Government of India. Therefore, Government of India holds 99% stake in NABARD. Role of NABARD It is an apex institution which has power to deal with all matters concerning policy, planning as well as operations in giving credit for agriculture and other economic activities in the rural areas. 1. It is a refinancing agency for those institutions that provide investment and production credit for promoting the several developmental programs for rural development. 2. It is improving the absorptive capacity of the credit delivery system in India, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, and training of personnel. 141 CU IDOL SELF LEARNING MATERIAL (SLM)
3. Its co-ordinates the rural credit financing activities of all sorts of institutions engaged in developmental work at the field level while maintaining liaison with Government of India, and State Governments, and also RBI and other national level institutions that are concerned with policy formulation. 4. It prepares rural credit plans, annually, for all districts in the country. 5. It also promotes research in rural banking, and the field of agriculture and rural development. Various Services Offered by NABARD i. Attracting youth to rural non-farm sector ii. District Industries Rural Project (DRIP) iii. Rural Entrepreneurship Development Programme (REDP) 1. Small Industries Development Organization (SIDO) - It was constituted in 1954 to develop support services for promotion of SSS. Over the years, it has seen its role evolve into an agency for advocacy, hand holding and facilitation for the small industries sector. It has over 60 offices and 21 autonomous bodies under its management. These autonomous bodies include i. Tool rooms ii. Training institutions iii. Project-cum-process development centres. The SIDO provides a wide spectrum of services to the small industries sector. These include i. Facilities for testing, tool making, training for entrepreneurship development, preparation of project and product profiles, technical and managerial consultancy, assistance for exports, pollution and energy audits etc. ii. The SIDO provides economic information services and advises Government in policy formulation for the promotion and development of SSIs. Consequent to the increased globalization of the Indian economy, small industries are required to face new challenges. The SIDO has recognised the changed environment and is currently focusing on providing support in the fields of credit, marketing, technology and infrastructure to SSIs. Global trends and national developments have accentuated SIDO’s role as a catalyst of growth of small enterprises in the country. The Institutions/ Centres Administered by SIDO 142 CU IDOL SELF LEARNING MATERIAL (SLM)
The SIDO has promoted the following institutes and centres and is responsible for their management. Small Industries Service Institutes (SISI) The institute functions under the Ministry of SSI, Government of India and it provides services such as preparation of project reports, training programmes in different activities, extending technical assistance and offering guidance on Industrial policy of Government of India. It is a pioneer organisation, to develop small scale industries through counselling, consultancy/training. It also assists the industries in marketing the products and acquiring quality standards. SISI also provides various types of extension services and assistance in setting up of units, promoting and developing product and services by the Small-Scale Industries. The small industries service institutes have been set up in state capitals and other places all over the country to provide consultancy and training to small entrepreneurs both existing and prospective. At present the SIDO has been administering 28 SISIs and 30 branch SISIs working in different parts of the country. Product-cum-Process Development Centres These have been promoted to provide specific service to different types of small scale units concentrated in different locations. These centres are responsible for serving as research and development institutions in areas of dense industry clusters, to encourage product design and innovation, to develop new processes and upgrade the existing level of technology, to act as centres of excellence in respective areas and • to provide technical and managerial support services. Regional Training Centres (RTCs) These centres are located in major cities and are responsible for quality awareness programme among the small units. For this purpose, they are engaged in systematic testing and technical consultancy services. These centres are also responsible for assisting field testing stations which are expected to provide testing services to SSI units. Establishment of Training Institutes The SIDO also controls the affairs of NISIET (Hyderabad), NIESBUD (New Delhi) and integrated training centre (Industries) at Nilokheri. These institutions are responsible for arranging training facility to entrepreneurial trainers. Main objectives of SIDO are: i. To formulate policy for promotion of SSI ii. To Provide coordination of policies of state government iii. To collect and disseminate information 143 CU IDOL SELF LEARNING MATERIAL (SLM)
iv. To provide wide range of extension services through allied institutions v. To promote facilities for technology up gradation vi. To offer consultancy services Various Services Rendered by SIDO i. Entrepreneurship development and Management training. ii. Efforts for skill development. iii. Preparation of feasibility reports for different products. iv. Provision of testing services. v. Availability of tool room facilities. National Small Industries Corporation (NSIC) The National Small Industries Corporation (NSIC) Ltd. was established by the Government as a Public Sector Company in 1955. Its main functions are To arrange for supply of machinery and equipment. To arrange provision of financial assistance. To provide assistance for arrangement of raw materials. To aid establishment of technology transfer centres. To make arrangement of marketing assistance. To ensure priority in government purchase programme. To promote, aid, and foster the growth of micro and small enterprises in the country, generally on a commercial basis. To provides a variety of support services to micro and small enterprises catering to their different requirements in the areas of raw material procurement; product marketing; credit rating; acquisition of technologies; adoption of modern management practices, arranging for business partners, ensuring technology transfer programmes through missions, delegations and expositions etc. The Technical Service Centres (TSCs), established by NSIC are functioning in different parts of the country, providing diverse technical support to the small scale sector. Entrepreneurship Development Institute of India Entrepreneurship development and training is one of the key elements for the promotion of micro, small and medium enterprises, especially for creation of new enterprises by the first 144 CU IDOL SELF LEARNING MATERIAL (SLM)
generation entrepreneurs. In order to inculcate the entrepreneurial culture amongst the first generation of entrepreneurs on a regular basis, the Ministry has set up Three national entrepreneurship development institutes namely 1. National Institute for Micro, Small and Medium Enterprises (NI-MSME) at Hyderabad. 2. National Institute for Entrepreneurship and Small Business Development (NIESBUD) at NOIDA (Uttar Pradesh) and 3. Indian Institute of Entrepreneurship (IIE) at Guwahati, as autonomous societies. These institutes are engaged in developing training modules; undertaking research & training; and providing consultancy services for entrepreneurship development & promotion of MSMEs, including enhancement of their competitiveness. National Institute for Micro, Small and Medium Enterprises (NI-MSME) The National Institute of Micro, Small and Medium Enterprises was established with the mission of promoting the growth and development of MSMEs through services in the areas of policy, entrepreneurship, technology, information, education, management and extension. NIMSME has designed specialized and need-based programmes, workshops and seminars in tune with the current developments in policy and the economy. NIMSME has been providing unstinted support, in terms of offering services like research, consultancy, information, training and extension not only to enterprises but also to concerned developmental agencies. It deserves all appreciation for its outstanding work and contribution to MSMEs, the demand for more such institutes in the country is gathering momentum. National Institute for Entrepreneurship and Small Business Development (NIESBUD) NIESBUD is an apex body established by Ministry of Micro, Small & Medium Enterprises. The Government of India for coordinating, training and overseeing the activities of various institutions/agencies engaged in entrepreneurship development particularly in the area of small industry and small business. Its main activities are to evolve effective training strategies and methodology, standardising model syllabi for training various target groups, formulating scientific selection procedure, developing training aids, manuals and tools, facilitating and supporting Central/State/ Other agencies in organising entrepreneurship development programmes, conducting training programmes for promoters, trainers and entrepreneurs and undertaking research and exchange experiences globally. Indian Institute of Entrepreneurship (IIE) The Indian Institute of Entrepreneurship (HE) was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India as an autonomous national institute with an aim to 145 CU IDOL SELF LEARNING MATERIAL (SLM)
undertake training, research and consultancy activities in small and micro enterprises focusing on entrepreneurship development. The main objectives of the institute are 1. To organize and conduct training for entrepreneurship development 2. To evolve strategies & methodologies for different target groups & locations & conduct field tests 3. To identify training needs and offer training programmers to Government and non-Government organisations engaged in promoting and supporting entrepreneurship etc. Small Industries Development Bank of India (SIDESI) It is a Subsidiary of IDBI and was setup as an act of parliament, for ensuring larger flow of financial and non-financial assistance to the small scale sector. The SIDBI has taken over the outstanding portfolio of the IDBI relating to the small scale sector for promotion, financing and development of the SSI sector and for coordinating the activities of other institutions. It is the principal financial institution for the promotion, financing and development of industry in the small, tiny and cottage sectors and for co- coordinating the functions of the institutions engaged in similar activities. Over the years SIDBI has striven to fulfil the role enshrined in its charter by formulating and reorienting its policies, gearing up operations and enlarging the profile of its promotional and developmental activities aimed at facilitating entrepreneurial entry and strengthening the small scale sector to enable them to meet the emerging challenges. From being a mere traditional refinancing institution, it has emerged stronger in meeting the varied requirements of the SSI sector by exploring new areas and seeding option for the future growth, like launching new financial products and instruments and support service programmes.It has also devised tailor-made schemes for direct lending to small scale sector so as to supplement the efforts of Primary Lending Institutions (PLIs), which includes 1. State Financial Corporation’s (SFCs), State Industrial Development Corporations (SIDCs), Scheduled Commercial Banks (SCBs) both in the public and the private sector. 2. State Co-operative banks, scheduled urban co-operative banks and regional rural banks SIDBI – Venture Capital Ltd. 3. SIDBI has also encouraged the growth of the venture capital industry for hi-tech SME units in India by promoting 13 State/regional level funds and setting up an all India Venture Fund. It provides assistance for 146 CU IDOL SELF LEARNING MATERIAL (SLM)
1. Setting up of new SSI units, small hotels, hospitals and so on. 2. Technological up gradation and modernization, expansion and diversification. 3. Quality up gradation. 4. Development of markets. 5. Development of infrastructure. 6. Discounting of bills of manufacturer-seller in selling either equipment or components. National Board for Micro, Small and Medium Enterprises (NBMSME) In pursuance of the MSME Development Act, 2006, the National Board for Micro, Small & Medium Enterprises consisting of a total of 47 members have been constituted. The 20 non- official members on the Board represent industry associations of MSMEs from all over the country while the other 27 members comprise Members of Parliament, Ministers of six State Governments, representatives of RBI, Banks etc. The main purpose of the board are 1. To solve the various issues relating to development of MSMEs. 2. To come out with remedial measures which are undertaken in consultation with the concerned departments/agencies. Khadi and Village Industries Commission (KVIC) The Khadi & Village Industries Commission (KVIC), established under the Khadi and Village Industries Commission Act, 1956, is a statutory organisation engaged in promoting and developing khadi and village industries for providing employment opportunities in rural areas, thereby strengthening the rural economy. Main reasons for its formation are 1. The KVIC has been identified as one of the major organisations in the decentralized sector for generating sustainable rural nonfarm employment opportunities at low per capita investment. 2. This also helps in checking migration of rural population to urban areas in search of employment opportunities. 3. New reform programmes are undertaken which aim at revitalizing the khadi sector for enhanced sustainability of khadi; increasing incomes for spinners and weavers; increasing employment; enhancing artisan’s welfare and gradually enabling khadi institutions to stand on their own feet. Mahatma Gandhi Institute for Rural Industrialisation (MGIRI) 147 CU IDOL SELF LEARNING MATERIAL (SLM)
In order to strengthen the R& D activities in khadi and village industry sectors, a national level institute namely ‘Mahatma Gandhi Institute for Rural Industrialization (MGIRI)’ has been established at Wardha, Maharashtra in association with IIT, Delhi by revamping the erstwhile Jamnalal Bajaj Central Research Institute. A brief account of these organizations is given below. The national level institute namely Mahatma Gandhi Institute for Rural Industrialization (MGIRI) has been established at Wardha, Maharashtra, to strengthen the R&D activities in khadi and village industry sectors. The main functions of the Institute are To improve the R&D activities under rural industrial sector through encouraging research, extension of R&D, quality control, training and dissemination of technology related information. Coir Board The Coir Board is a statutory body established under the Coir Industry Act, 1953 for promoting overall development of the coir industry and improving the living conditions of the workers engaged in this traditional industry. The activities of the board for development of coir industries include 1. Undertaking scientific, technological and economic research and development activities. 2. Developing new products & designs and marketing of coir and coir products in India and abroad. 3. Promoting co-operative organisations among producers of husks, coir fibre, coir yarn and manufacturers of coir products; ensuring remunerative returns to producers and manufacturers. 4. Promoting two research institutes namely; Central Coir Research Institute (CCRI), Kalavoor, Alleppeyand the Central Institute of Coir Technology (CICT), Bengaluru for undertaking research activities on different aspects of coir industry, which is one of the major Agro based rural industries in the country. National Institute for Small Industry Extension Training (NISIET) The NISIET, since its inception in 1960 by the Government of India, has taken gigantic strides to become the premier institution for i. The promotion, development and modernisation of the SME sector. An autonomous arm of the Ministry of Small-Scale Industries (SSI). 148 CU IDOL SELF LEARNING MATERIAL (SLM)
ii. The Institute strives to achieve its avowed objectives through a gamut of operations ranging from training, consultancy, research and education, to extension and information services. State Government Institutions The State Governments also execute different promotional and developmental projects and schemes to provide number of supporting incentives for development and promotion of MSMEs in their respective states. These are executed through the State Directorate of Industries, which has District Industries Centres (DICs) under it, for implementing the central/state level schemes. 1. State Financial Corporation (SFC) Its main objectives are: i. To provide term loans for the acquisition of land, building, plant and machinery. ii. To promote of self-employment. iii. To encourage women entrepreneurs iv. To bring about expansion of industry v. To provide seed capital assistance. 2. State Small Industries Development Corporation (SSIDC) The State Small Industries Development Corporations (SSIDC) were set up in various states under the companies’ act 1956, as state government undertakings to cater to the primary developmental needs of the small tiny and village industries in the state/union territories under their jurisdiction. Incorporation under the companies act has provided SSIDCs with greater operational flexibility and wider scope for undertaking a variety of activities for the benefit of the small sector, such as procuring and distributing the scarce raw materials, supplying machinery on hire purchase system, providing assistance for marketing of the products of small-scale industries, constructing industrial estates /sheds, providing allied infrastructure facilities and their maintenance and to extend seed capital assistance on behalf of the state government concerned etc. SSIDC provides the following important functions. 1. Procurement and distribution of raw materials. 2. Supply of machine on hire-purchase basis. 3. Construction of industrial estates. 4. Providing assistance for marketing of products of SSI. 149 CU IDOL SELF LEARNING MATERIAL (SLM)
Technical Consultancy Organisation (TCOs) Services of TCOs includes 1. Preparation of project profiles. 2. Undertaking industrial potential surveys. 3. Identification of potential entrepreneurs. 4. Undertaking market research. 5. Project supervision and rendering technical and administrative assistance. 6. Conducting EDPs. Khadi and Village Industries Commission (KVIC) It is engaged in the development of khadi and village industries in rural areas. Main objectives of KVIC are 1. To provide employment in rural areas. 2. To help in skill improvement. 3. To bring about rural industrialization. 4. To facilitate transfer of technology. Non-Government Institutions Besides the Central Government and the State Government agencies, there are some non- Governmental agencies that are also supporting the cause of small-scale industries in the country. These agencies include Non- Government organisations and industry associations. They provide a common platform to voice SSI needs and initiate co-operative efforts. Government policies have stressed the increasing role of these associations and NGO’s in setting up common facilities and other cooperative ventures in technology, marketing and other support systems. Some of these major associations are as follows: Indian Council of Small Industries (ICSI) It was established in 1979 to help tiny, cottage and small industries and artisans of rural areas. Membership of ICSI constitutes about 1500 associations of the decentralized sector. Main functions of ICSI are 1. Information dissemination. 2. Entrepreneurship development. 3. Consultancy and managerial support. 4. Training and research. LaghuUdyog Bharti (LUB) 150 CU IDOL SELF LEARNING MATERIAL (SLM)
Search
Read the Text Version
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- 16
- 17
- 18
- 19
- 20
- 21
- 22
- 23
- 24
- 25
- 26
- 27
- 28
- 29
- 30
- 31
- 32
- 33
- 34
- 35
- 36
- 37
- 38
- 39
- 40
- 41
- 42
- 43
- 44
- 45
- 46
- 47
- 48
- 49
- 50
- 51
- 52
- 53
- 54
- 55
- 56
- 57
- 58
- 59
- 60
- 61
- 62
- 63
- 64
- 65
- 66
- 67
- 68
- 69
- 70
- 71
- 72
- 73
- 74
- 75
- 76
- 77
- 78
- 79
- 80
- 81
- 82
- 83
- 84
- 85
- 86
- 87
- 88
- 89
- 90
- 91
- 92
- 93
- 94
- 95
- 96
- 97
- 98
- 99
- 100
- 101
- 102
- 103
- 104
- 105
- 106
- 107
- 108
- 109
- 110
- 111
- 112
- 113
- 114
- 115
- 116
- 117
- 118
- 119
- 120
- 121
- 122
- 123
- 124
- 125
- 126
- 127
- 128
- 129
- 130
- 131
- 132
- 133
- 134
- 135
- 136
- 137
- 138
- 139
- 140
- 141
- 142
- 143
- 144
- 145
- 146
- 147
- 148
- 149
- 150
- 151
- 152
- 153
- 154
- 155
- 156
- 157
- 158
- 159
- 160
- 161
- 162
- 163
- 164
- 165
- 166
- 167
- 168
- 169
- 170
- 171
- 172
- 173
- 174
- 175
- 176
- 177
- 178
- 179
- 180
- 181
- 182
- 183
- 184
- 185
- 186
- 187
- 188
- 189
- 190
- 191
- 192
- 193
- 194
- 195
- 196
- 197
- 198
- 199
- 200
- 201
- 202
- 203
- 204
- 205
- 206
- 207
- 208
- 209
- 210
- 211
- 212
- 213
- 214
- 215
- 216
- 217
- 218
- 219
- 220
- 221
- 222
- 223
- 224
- 225
- 226
- 227
- 228
- 229
- 230
- 231
- 232
- 233
- 234
- 235
- 236
- 237
- 238
- 239
- 240
- 241
- 242
- 243
- 244
- 245
- 246
- 247
- 248
- 249
- 250
- 251
- 252
- 253
- 254
- 255
- 256
- 257
- 258
