Which Small Scale Industries need Registration ?

Registration in the SSI sector is voluntary. The registration is done with the District Industries Centres (DICs), firstly on a temporary basis and subsequently, on the request of the concerned entrepreneurs, on a permanent basis.

However, as far as manufacturing units are concerned, their registration is mandatory under Sections 2m(i), and 2m (ii) of the Factories Act.

Section 2m (i) refers to units engaging 10 or more workers and using power whereas Section 2m (ii) refers to units engaging 20 or more workers and not using power.

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Which categories of Industries are covered under SSI?

The small scale industrial (SSI) sector is a vital constituent of India’s industrial sector. It contributes significantly to India’s Gross Domestic Product and export earnings besides meeting the social objectives including that of providing employment opportunities to millions of people across the country.

The SSI sector covers a wide spectrum of industries categorized under

Books on SSI Information

a) Small scale industrial undertakings,

b) Ancillary industrial undertakings (ANC),

c) Export Oriented Units (EOUs),

d) Tiny Enterprise (TINY),

e) Small-scale Service Enterprises (SSSEs),

f) Small-scale Service Business (Industry Related) Enterprises (SSBEs),

g) Artisans, Village and Cottage Industries, and

h) Women Entrepreneurs’ Enterprises, i.e., a small-scale unit where one or more women entrepreneurs have not less than 51 per cent financial holding.

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DIFFERENCE IN MANAGEMENT CONTROL BETWEEN PROJECT & ONGOING OPERATION

Management control of a project is different from an ongoing operation due to one or more of the following reasons:

1. Objectives: A project has a single objective, while operations have multiple objectives. Project manager has a fixed target that is the end of the project. His/her performance will be judged by the result of the end product. But manager for regular operation has to maintain his performance throughout the year.

2. Effect on organization:    

3. Emphasis of control : Control is emphasized on the project, so that the same can be satisfactorily completed within the projected time limit and at an optimum cost, preferably without cost overrun. Control in ongoing organization focuses on the activities for a specified time period on all the work done during that time period, keeping cost control, quality and delivery schedule in mind.

4. Interchangeability : Projects usually involve trade off among scope, schedule and cost. Cost can be reduced or increased by curtailing or increasing the scope of the project. Delivery schedule can be advanced by incurring extra cost by way of paying overtime, travel expenses, etc. Such practices are regulated in ongoing organization.

5. Cost standards : Cost estimates of a project are prepared by collecting data, which may be accurate or are unfamiliar at the time of making estimates. Hence, a contingency provision is created for adjustments. This is not accepted while computing standard cost of a product. Moreover, project plan may be changed frequently due to environment condition or unexpected situations which cause change in the cost estimates.

6. Environment: The projects which are undertaken outside the premises of the organization, suffer from numerous external problems arising out of natural calamity, political disturbance, interference by local people, etc. Ongoing organizations, generally, enjoy the protection of the factory premises.

7. Difference in rhythm : The rhythm of a project differs from that of an ongoing operation distinctly. Most of the projects start slowly, then build up momentum and take the activities to a peak, and then taper off as completion is in sight. Ongoing activities tend to operate at the same level of activity, unless there is a seasonal effect or change in activity plan.

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What is a Project ? Explain its starting and completion point?

A Project is a set of activities intended to accomplish a specified end result of sufficient importance to be of interest to the management. Thus, a project has limited purpose. Its object may or may not relate to the on going operations. Depending on the nature of the project, its durations may be a few weeks to a number of years.

Projects include improvement in plant, machinery, equipment and methods, substitutions of imported materials, setting up of a new factory or extension of a few bays in the existing structure, construction of building, bridge, etc.

A project starts when the management approves the project in principle, adopts it as a part of ongoing activities and allocates funds and other resources including appointing a Project Manager.

Normally, the execution of the project is done in phases unless the same is so small that it does not warrant detail planning by phases.

Thus, when a project is divided into several phases, evaluation is made at the end of each phase and necessary changes are incorporated in the next phase plan.

The project ends with either successful completion after final evaluation or cancellation at the point, when it is decided to abandon the project. Thus, a project always ends, unlike an ongoing organization where operations continue indefinitely.

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Admission in Post Graduate Diploma in Management

If you are a working executive  in or around Ahmedabad  and want to add a management qualification to your CV. There are three good colleges which you can look for :  B.K. School of Management, Som Lalit School of Management and Nirma.
Out of these three SLIMS  is most reasonable in terms of faculty and fees structure.

Define Financial System. Why should one study financial systems?

The word “System” is a set of inter-related components working together to achieve some purpose.

Financial System helps economic development of a country by acting as a bridge between savers and investors.

Financial system is set of inter-related institutions, instruments, and markets, that raise (saving) funds and channels them to their efficient use.

In other words, a financial system comprises individuals (savers), intermediaries (financial institutions), markets (money and capital markets), and users (borrowers of money). Hence, the financial system acts as a intermediary between the savers and users (investors).

Financial managers task is to provide sufficient funds to meet all the likely needs of a business undertaking. To provide sufficient funds, he/she needs to have a clear understanding of a financial system.   

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Explain Permanent and Temporary Working Capital

    Gerstenberg has conveniently classified the working capital into

(a) Regular or Permanent Working Capital and

(b) Temporary or Variable Working Capital.

1.   Permanent Working Capital:

It is the minimum working capital required for producing predetermined production

Permanent working is the minimum investment kept in the form of inventory of raw materials, work in process, finished goods, stores & spare, and book debts to facilitate uninterrupted operation of a firm.

Though this investment is stable in the short run, it certainly varies in the long run depending upon the expansion programmers undertaken by a firm. It may increase or decrease over a period of time.

The minimum level of current assets maintained in a firm is usually known as permanent or regular working capital.

2.   Temporary Working Capital:

It is the additional current assets required for temporary period, and it is above permanent WC

A firm is required to maintain an additional current asset temporarily over and above the permanent working capital to satisfy cyclical demands. Any additional working capital apart from permanent working capital required to support the changing production and sales activities is referred to as temporary or variable working capital.

In Other workds, an amount over and above the permanent level of working capital is temporary, fluctuating or variable working capital.

At times, additional working capital is required to meet the unforeseen events like floods, strikes, seasonal production and price hike tendencies contingencies.

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