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How can worker-safety deliver profits for MSME businesses? Experts speak.

Updated: Jul 2, 2022

Do you think India has cheap labor that is dispensable, easily replaceable, and therefore their work place safety is not really important to your businesses' productivity and profitability? Our experts advise you are missing a trick! Please read on and see our experts' videos/presentations on technical and non-technical methods to improve worker-safety and productivity. Its a start so please send us your feedback/suggestions at team@safeinindia.org

The Quality Council of India (QCI) and the Safe in India Foundation (SII) organized a virtual conclave on 27th May 2022 where experts from the QCI, ILO, DG FASLI and business shared their expertise regarding workplace safety and its positive correlation with productivity and business. Indian MSMEs employ more than 110 million workers and contribute c.30% of GDP. It is important that they understand this correlation for the long term health and growth of their business and indeed that of millions of Indian workers and therefore the country. All the below presentations are in the videos below and can also be accessed at: Ppts of QCI-SII event - OneDrive (live.com)


1. C.K. Biswas, CEO, NBQP, QCI: "Health and safety are strengths and marks for the ‘quality’ infrastructure of the country and business"


Almost 89 percent of industries are Micro-enterprises and most of the machinery used by them is old and outdated, handled with limited manpower and low awareness about safety. These factors lead to accidents and injuries in the workplace”.


He discussed several solutions: hazard assessment, good housekeeping training, improvising PPE, developing a good safety culture, and reorienting the attitude of the workers for adopting the best practices of good housekeeping.


“The top management is responsible for the implementation of safety-enhancing systems and the development of safety-oriented culture”. The main barriers according to him are - financial constraints, lack of awareness, resistance to change, and lack of training for employees. This conclave is a step to address some of these.


2. Dr. Indrajit Bhattacharya, Director, NABET, QCI: Benefits of MoMSME’s LEAN Manufacturing Scheme for MSME


“Safety can be looked at as a cost, but when someone looks at it as an investment, they will get the returns and this will happen when you have the right people looking at the right problem”




He demonstrated, through eight different case studies that investment in safety and other LEAN initiatives in MSMEs delivered a return of seven times in between 2009 to 2013.

MoMSME is now planning the next phase of LEAN, which will be launched soon.


These case studies gave examples of changes using principles of 5S, Just-In-Time, cellular layout, process improvement, tool design etc. These businesses registered savings in terms of manpower cost, reduced material movement, process

efficiency, improvement in quality, etc. Their workers benefitted in terms of reduced stress (due to quality issues), reduction in effort for material handling, tool/die fixing and reduced exposure to heat. One MSME confirmed a turnaround to profit from a loss-making situation.


Overall, “..768 MSMEs invested 2.14 cr (20%), and the balance 80% was funded by the Government, to deliver savings of 190+ cr”.


If you have any experience of MoMSME’s LEAN program which can help us provide feedback to design the next phase of LEAN better, please write to team@safeinindia.org


3. Ms. Sudipta Bhadra, CTO, ILO: ILO’s SCORE program for MSMEs - Increasing operational efficiency (including OSH) to remain competitive


Ms. Sudipta emphasized on the importance of method of coaching and mentoring of programs like LEAN or SCORE at the shop floor. SCORE considers the difference in absorption capacities by micro enterprises when compared to small and medium enterprises.



It’s 26 key indicators enable the MSMEs to see the benefit of undertaking such programs.

ILO’s SCORE focusses on ownership of the process at each layer of management – from the owners to the plant head, supervisors and workers. It has been implemented in many companies like Mahindra and Mahindra, Thermax, TAFE and with FICCI, but would need funding from industry/government for any future implementation.


If you have any experience of ILO’s SCORE program and/or suggestions on how the system needs to raise funding for scaling up implementation of SCORE program, please write to team@safeinindia.org



4. Mr. Mukul Bhatia, Director, Champions Components: A case study of successful implementation of ILO’s SCORE resulting in business benefits.

Champion Components Private Limited became the first company in India to complete both LEAN and SCORE programs. Mr Bhatia stated that the "SCORE program resulted in better teamwork and communication, knowledge sharing and continuous improvement culture in the company, which resulted in direct monetary benefits from these programs, like improving the on-time delivery score, reducing electricity costs, etc".


“Improving the ergonomics in the factory can contribute to improving the efficiency and reducing occupational hazards”

The company has been able to derive cash benefits, improve its operating power-factor (from 0.78 in 2015 to 0.99 presently) resulting in saving electricity costs, reduction in health issues (like pain in legs, headache) and hence reduced absenteeism of workers due to better ergonomics and PPE.



“The learning curve [for Champion Components] was that safety, maintenance and productivity are linked. Safety and maintenance leads to increase in productivity and they both lead to increase in efficiency”. “There is a lack of knowledge in the micro and small sector” he said. “Simple things like moving from old electricity connection systems to advanced electrical connection systems improves energy efficiency or every rewinding of motor (an industry practice) reduces its efficiency by 20% is not known”.


“The earnings out of 5S exercise in 2011 was 1.5 lakh rupees and the per month savings of Rs.24000/- was made on account of space generation of 1236 sq. ft.”


Mr Bhatia advocated simplified Standards and audit systems for SMEs: “If micro and small sectors have to adopt ISO standards [to stay competitive], it’s difficult, as there is a huge training cost, implementation costs and maintaining costs for ISO standards . In addition to this, there are multiple audits and bookkeeping required. Some of these costs are creating barriers and are harming the Micro sector”.


Mr Bhatia emphasized on the need for the Government to have a toned-down version of these standards which will cover all the basics of safety for SMEs to achieve safety in phases.


Should you like to join SII’s advocacy for simplified audits for MSMEs, please do write to us as team@safeinindia.org


5. Mr Sumit Roy, Director, Regional Labor Institute: Safety and Preventive maintenance improves Productivity


He stressed that “safe machines are crucial for a successful business, and to make them safe it becomes necessary to understand the importance of proper maintenance”.


Preventive maintenance is not cheap as it requires planning based on the available information about the machines. However, it is one of the most efficient ways to reduce workplace accidents if it is well executed. The absence of this preventive maintenance can lead to major injuries and accidents which can result in the dysfunction of the entire production line, further losing the production target and reducing revenue.


“The cost incurred in purchasing safety measures in the workplace like safety gears, gloves, helmet, is miniscule when compared with the cost of disruption in production process, along with serious injuries to workers, therefore it becomes increasingly important to focus on preventive maintenance of the machines”


He presented a study where by providing safety guards on machines, businesses have an opportunity to reduce their operating cost by reducing the cost of accidents while also increasing the morale of employees. He also explained this by bringing in cases of two types of guards: removable and telescopic.


The guard for the drill machine would have cost 2k to 3k max and for the cut off saw it would cost 4.5K to 6K. This is certainly less than the accident cost incurred by the factory in terms of work interruption, medical attention etc. besides the indirect costs of reputation. The direct and indirect cost of the workplace injury can hamper the production of the firm and especially when it is MSMEs, it can do a lot more damage.”


In other case studies, the risk assessment and the safe work procedures were already established but the employees were not made aware of the job-specific risk assessment and safe work procedures, resulting in accidents. He emphasized training the workers to avoid accidents, and his message to the employers was not to assume that the workers would know or will have adequate skills based on their experience.


6. Mr. IV Rao, Ex-director, Maruti Suzuki Centre for Excellence: OSH contributes to improving the quality of the product.


He talked about the needs of various stakeholders in the business. “Customer wants a trouble-free product of the right quality at the right price. Owner wants profits. But it is the workers who have to make the products of high quality continuously, for which in addition to the right manufacturing processes and equipment, the worker needs peace of mind, which can only be ensured by an accident-free and a safer place”


His emphasis was on making organizations realize that implementing a safe workplace is not an additional expense but an incredibly important component of business success and additional checks for a safe environment should not be looked at as additional time and money. “Small money spent for preventive care is better than large amounts in an emergency”


7. Mr. Sandeep Sachdeva, CEO & Co-Founder, Safe in India Foundation: The need for improving professionalism in MSMEs in supply chains in increasingly challenging geo political/corporate responsibility environment.


Sandeep Sachdeva moderated the session and spoke about the thousands of workers losing their hands/fingers in the Indian auto sector, that comprises half of the manufacturing sector’s GDP and employs 10m+.



"Sadly, India has a poor track record in OSH for workers especially among MSMEs. That does, however, provide a relatively easy opportunity, given a number of low-investment solutions presented by experts, not only upgrade to responsible corporate citizens but also become more competitive. This is especially important now, as the global brands may potentially shrink their supply chains in the new geo-political climate and the increasing pressures on sustainability in the supply chains.”


"This needs both a more effective labor movement around OSH but also showing what ‘good looks like’ for MSMEs with its business benefits. We will do a series of such webinars for MSMEs but for that we need your feedback, suggestions and expertise so please write to us"


Our other experts (in the past) on importance of worker safety and its linkages with growing businesses:


In its prior events, SII had invited other experts and business owners from Maruti Suzuki, Sriram Pistons and Rings and Abilities Pistons and Rings on the same subject. Their presentations and videos are available at: SafetyNiti 2021: How can the auto-brands prevent thousands losing their hands/fingers?


Will so many of our MSMEs remain mom-and-pop factory shops or will we move forward together to accelerate professionalism and productivity, which goes hand in hand with a mind-set that looks at workers and their safety much more positively?


If you have any thoughts and/or suggestions on how we can do a better job of OSH in MSME on above lines or another or know of good worker-centric OSH-productivity experts who can speak at these forums, please contact us at team@safeinindia.org


Stay safe!


team@safeinindia.org






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