Knowledge-sharing can create great benefits by flattening out the learning curve for those lucky enough to be included in the sharing network. In India, many small and medium-size enterprises – which often lack the formal and informal networks enjoyed by larger organizations -- have struggled to understand how technologies used by others could help them improve productivity while in some cases also helping to protect the environment.
But now an outreach waste-minimisation program, orchestrated by the state-owned National Productivity Council (NPC), is helping some 500 smaller firms drive down costs significantly by reducing inputs such as electricity, water, fuel, and raw materials, which also helps to reduce emission of pollutants.
Officially known as the Waste Minimisation Circle, the knowledge-sharing program has created 153 “circles” of five or six firms each. Its reach has steadily expanded to cover more than 40 industries, including makers of printed circuit boards, plywood, dyes, hosiery, utensils, and also tanneries, foundries, and food processing units such as rice mills.
The waste minimisation circles, in effect a best-practices network, led to a combined investment in new technology and processes of about Rs. 30 crore (6 million USD), and annual savings to participant firms of Rs. 20 crore (4 million USD) from 1997 to 2005, according to Harsh Thukral, deputy director of the environment group at the NPC.
One participating company is Three Star Paper Mills, a manufacturer of writing and printing paper produced from waste paper in Dadri in Uttar Pradesh state. Small paper mills jump at every opportunity to cut costs, particularly given that they face intense competition from imports and bigger domestic producers, and are often unable to invest in pollution control equipment.
At Three Star Paper, the NPC’s Waste Minimisation Circle identified about a dozen areas that could benefit from technology improvements. Installation of equipment to recycle wastewater cut fresh water consumption by 60 percent, for example, and that led to a 60 percent savings in electrical energy consumption, which the firm would have spent on treating wastewater before discharge.
What is more, a waste paper de-duster helped reduce consumption of chemicals used to remove contaminants and that also helped improve quality. Productivity improvements also came from changes in the manufacturing process, including increasing the paper machine’s diameter, installing equipment to reduce machine vibrations and thereby improving speed, helping to boost production by 20 percent. In all, Three Star Paper invested about Rs. 52 lakh (104,000 USD) in new technology and processes, generating 190,000 USD in annual savings.
The program initially focused on polluting industries, with the twin objectives “of helping small and medium-scale industries enhance their productivity and profitability, and also aiming to protect the environment,” says G.V. Subrahmanyam, an advisor in the ministry of environment and forests and one of the architects of NPC’s Waste Minimisation Circles. Before introducing technology inputs such as pollution-control equipment at these firms, NPC encouraged them to adopt better housekeeping practices, and the Waste Minimization Circles helped in the cross fertilization of ideas, he adds.
Thukral talks of a “multiplier effect” that occurs through the knowledge sharing by the clusters of firms in the Waste Minimisation Circles in their respective industry groups. Besides helping small businesses that benefit from the program, it also helps generate business for the small and midsize private consulting firms that train the beneficiary firms, including Maruti Consultants in Hyderabad, Essen Energy Technologies in Indore and Jaydev & Associates in Jamnagar.
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