ANCILLARISATION IN INDIA

Unit 8

About Ancillarization

Ancillary Industrial Undertaking in which investment should not exceed to 1 crore is termed as Small Scale Industries

Unit engaged in services like manufacturing or production of parts, components. Tooling. Intermediaries, storage, transportation

In India……the Importance

Existence of Large scale Units & Small scale Units gives boost to various ancillary units opportunities to grab it.

It helps to generate employment Lessens the burden of Large scale

units Increase in production of SSI’s Development of various sectors being

on the verge of loosing the existence.

Factors due to which ancillaries are born

Sub Contracting

A subcontract is broadly defined as an understanding agreed upon by a prime contract and subcontractor to provide goods or services needed for complementing the performance of the prime contract.

Advantage

Subcontracted out to specialist firms with specialist skills.

Passing over responsibility Your permanent staff can concentrate on the

core business Keeps a lot of businesses alive which depend on

the larger businesses which dominate the market share

Constant flow of money. Some contractors/ subcontractors can start the

work or project atshort notice, even when large numbers of workers are required

Disadvantage

Arguments can arise when something does go wrong

Contractors/subcontractors may cost the business more than the equivalent daily rate for employing someone

Your business does not acquire or develop skills in-house and relies on suppliers

You have no direct control over the quality of subcontractors' work

Contractors/subcontractors may not appreciate your business culture and may lack the motivation andcommitment of permanent staff

Sectors of Ancillarization

Hotels Hospitals IT BPO Banking Logistics

Industrial Sector

SSI Medium Scale Industries Manufacturing Technology Ancillaries

Agro Industry Sector

Farming Agro Based Products industries Milk Processed Industries Cold Storage Industries Poultry

Supplier Organization Network

Whether your supply chain organization is well-established or in its infancy, it’s worth taking a close look at this critical business component and asking: “Is our supply chain organization truly acting as a value chain? If not, what can we do to

improve its contributions?”

Effectively managing your human inventory

Supply chain organizations vary as much as the people who manage them—and every business will have its own set of human characteristics that define success. In my experience, successful humans in the supply chain organization share some common traits:

Process orientation Pragmatism Global perspective Relationship focus Dogged determination Superb communication skills Tendency toward action