Large Scale
Manufacturers capture the Manufacturers’ market giving barely minimal market
for the entrepreneurs and SMEs. The lower cost of production results in the
lower price of the product which is unachievable for entrepreneurs. Other major
problems entrepreneurs face especially in the manufacturing sector would be:
●
Lack of Research –
Everything has its pros and cons. Hence a SWOT analysis would give the
manufacturers sufficient information to plan for the hazards or contingencies.
But most of the manufacturers fail at their research, which technically should
be their primary process. Research would enable a manufacturer learn about the
demand-supply, product pricing, varied machinery and advanced technology.
●
Finance- Finding
venture capital especially for manufacturing sector is burdensome for
entrepreneurs. VCs tend to migrate towards the IT than the manufacturing
sector. Kajal Shah, co-founder of automotive start-up Adrian ET mentioned that
getting to talk to VCs for funding was the greatest difficulty. Even banks
demand assets for collateral which closes doors for entrepreneurs with lack of
funds.
●
Technological
Advancement – Something Indian manufacturing
sector has not been able to manage. Countries like China and Japan are always
advanced or way ahead of India especially in the field of engineering
technology which gives them enough time to
conquer the global market by the time India adapts to the technology.
●
Marketing – An area
that is less focused or given importance to when compared to other countries.
Most of the manufacturers negate the marketing costs which can play a vital
role. Marketing could not only expand the business but helps to study the
market, competition, quality control and product enhancement.
●
Globalization – For
cost reduction in supply chain management,
companies set up manufacturing units where labour costs are cheaper than home
country for eg. In countries like India. However, the foreign company, because of
their capability to pay higher labour costs (which would still be less than
home country) as compared to the Indian counterparts, Indian manufacturers face difficulty to meet
the labour cost as it makes them impossible to compete with global industries.
●
Utilization – Capacity
utilization showed not much growth, especially due to the appreciation in the
exchange rate which has negatively impacted exports by 5%. The export of raw
materials would start scarcity of raw materials
for Indian manufacturers also causing high demand with increased price.
●
Women Entrepreneurs’
Challenges – The patriarchal society closes door for women entrepreneurs, they
are either not taken seriously or their ideas are seen as a mere hobby. VCs
hesitate to fund a woman entrepreneur especially because of the taboo that
manufacturing sector is not seen as a woman’s cup of tea. They’re perceived to
be passive and not as a leader.
●
Insufficient
administrative support – This has seen a decline even after the Make in India
campaign. The introduction of GST has also been viewed as an obstacle in smooth
flow of production and income due to the timely tax refund and complex
software.
Due to the basic muddles like the electricity supply which
is not continuous in many parts of India, costly technology, higher cost of
production, higher demand for imported goods, manufacturing sector conceives
lesser growth. In order to understand
more on the typical pitfalls and ways to avoid while setting up and operating
any manufacturing industry, take a look at the range of projects posted and
resolved on www.solutionbuggy.com
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