Production and Operations Management is a peer-reviewed academic journal covering

research on all topics in product and process design, operations, and supply chain
management.

Production and Operations Management is published by Wiley-Blackwell on behalf of

the Production and Operations Management Society. It is listed as one of the 45 journals
used by the Financial Times to compile its business-school research ranks [1] and Bloomberg
Businessweek's Top 20 Journals.[2] According to ISI Journal Citation Reports, the journal is
ranked 5th out of 37 titles in the engineering and manufacturing category and 17th out of 74
in the operations research and management science category.

Portfolio Management (PPM) is the centralized management of the processes, methods,

and technologies used by project managers and project management offices (PMOs) to
analyze and collectively manage current or proposed projects based on numerous key
characteristics. The objectives of PPM are to determine the optimal resource mix for
delivery and toschedule activities to best achieve an organizations operational and financial
goals, while honouring constraints imposed by customers, strategic objectives, or external
real-world factors.

Key Capabilities[edit]

PPM provides program and project managers in large, program/project-driven organizations

with the capabilities needed to manage the time, resources, skills, and budgets necessary
to accomplish all interrelated tasks. It provides a framework for issue resolution and risk
mitigation, as well as the centralized visibility to help planning and scheduling teams to
identify the fastest, cheapest, or most suitable approach to deliver projects and programs.

Pipeline Management[edit]

This is the determination of whether (and how) a set of projects in the portfolio can be
executed by a company with finite development resources in a specified time. Fundamental
to pipeline management is the ability to align the decision-making process
for estimating and selecting new capital investment projects with the strategic plan.
Resource Management[edit]

The focus on efficient and effective deployment of an organizations resources where and
when they are needed. These can include financial resources, inventory, human resources,
technical skills, production and design. In addition to project-level resource allocation, users
can also model what-if resource scenarios, and extend this view across the portfolio.

Change Control[edit]

The capture and prioritization of change requests that can include new requirements,
features, functions, operational constraints, regulatory demands, and technical
enhancements. PPM provides a central repository for these change requests and the ability
to match available resources to evolving demand within the financial and operational
constraints of individual projects.

Financial Management[edit]

With PPM, the Office of Finance can improve their accuracy for estimating and managing
the financial resources of a project or group of projects. In addition, the value of projects can
be demonstrated in relation to the strategic objectives and priorities of the organization
through financial controls and to assess progress through earned value and other project
financial techniques.

Risk Management[edit]

An analysis of the risk sensitivities residing within each project, as the basis for determining
confidence levels across the portfolio. The integration of cost and schedule risk
management with techniques for determining contingency and risk response plans, enable
organizations to gain an objective view of a project uncertainties

Evolution of PPM[edit]

In the early 2000s, many PPM vendors realized that project portfolio reporting services only
addressed part of a wider need for PPM in the marketplace. Another more senior audience
had emerged, sitting at management and executive levels above detailed work execution
and schedule management, who required a greater focus on process improvement and
ensuring the viability of the portfolio in line with overall strategic objectives. In addition, as
the size, scope, complexity, and geographical spread of organizations project portfolios
continued to grow, greater visibility was needed of project work across the enterprise, allied
to improved resource utilization and capacity planning.

Enterprise Project Portfolio Management[edit]

Enterprise Project Portfolio Management (EPPM) is the practice of taking a top-down

approach to managing all project-intensive work and resources across the enterprise. This
contrasts with the traditional approach of combining manual processes, desktop project
tools, and PPM applications for each project portfolio environment.

Business Drivers for EPPM[edit]

The PPM landscape is evolving rapidly as a result of the growing preference for managing
multiple capital investment initiatives from a single, enterprise-wide system. This more
centralized approach, and resulting single version of the truth for project and project
portfolio information, provides the transparency of performance needed by management to
monitor progress versus the strategic plan.

The key aims of EPPM can be summarized as follows:

Prioritize the right projects and programs: EPPM can guide decision-makers to
strategically prioritize, plan, and control enterprise portfolios. It also ensures the
organization continues to increase productivity and on-time delivery - adding value,
strengthening performance, and improving results.

Eliminate surprises: formal portfolio project oversight provides managers and

executives with a process to identify potential problems earlier in the project lifecycle,
and the visibility to take corrective action before they impact financial results.

Build contingencies into the overall portfolio: flexibility often exists within individual
projects but, by integrating contingency planning across the entire portfolio of
investments, organizations can have greater flexibility around how, where, and when
they need to allocate resources, alongside the flexibility to adjust those resources in
response to a crisis.
 Maintain response flexibility: with in-depth visibility into resource allocation,
organizations can quickly respond to escalating emergencies by maneuvering resources
from other activities, while calculating the impact this will have on the wider business.

Do more with less: For organizations to systematically review project management

processes while cutting out inefficiencies and automating those workflows and to ensure
a consistent approach to all projects, programs, and portfolios while reducing costs.

Ensure informed decisions and governance: by bringing together all project

collaborators, data points, and processes in a single, integrated solution, a unified view
of project, program, and portfolio status can be achieved within a framework of rigorous
control and governance to ensure all projects consistently adhere to business
objectives.

Extend best practice enterprise-wide: organizations can continuously vet project

management processes and capture best practices, providing efficiency as a result.

Understand future resource needs: by aligning the right resources to the right
projects at the right time, organizations can ensure individual resources are fully
leveraged and requirements are clearly understood. EPPM software also allows an
organization to establish complete project capacity.

Project Portfolio Optimization[edit]

A key result of PPM is to decide which projects to fund in an optimal manner. Project
Portfolio Optimization (PPO) is the effort to make the best decisions possible under these
conditions.

See also[edit]

Materials management can deal with campus planning and building design for the
movement of materials, or with logistics that deal with the tangible components of a supply
chain. Specifically, this covers the acquisition of spare parts and replacements, quality
control of purchasing and ordering such parts, and the standards involved in ordering,
shipping, and warehousing the said parts.
upply Chain Materials Management Areas of Concentration [edit]

Goals[edit]

The goal of materials management is to provide an unbroken chain of components for

production to manufacture goods on time for the customer base. The materials department
is charged with releasing materials to a supply base, ensuring that the materials are
delivered on time to the company using the correct carrier. Materials is generally measured
by accomplishing on time delivery to the customer, on time delivery from the supply base,
attaining a freight, budget, inventory shrink management, and inventory accuracy. The
materials department is also charged with the responsibility of managing new launches.

In some companies materials management is also charged with the procurement of

materials by establishing and managing a supply base. In other companies the procurement
and management of the supply base is the responsibility of a separate purchasing
department. The purchasing department is then responsible for the purchased price
variances from the supply base.

In large companies with multitudes of customer changes to the final product over the course
of a year, there may be a separate logistics department that is responsible for all new
acquisition launches and customer changes. This logistics department ensures that the
launch materials are procured for production and then transfers the responsibility to the
plant materials management

Standards[edit]

There are no standards for materials management that are practiced from company to
company. Most companies use ERP systems such as ARA5,SAP, Oracle, BPCS, MAPICS,
and other systems to manage materials control. Small companies that do not have or
cannot afford ERP systems use a form of spreadsheet application to manage materials.
Some other construction projects use barcode and GPS materials management systems
like Track'em.[1]

Materials management is not a science and depending upon the relevance and importance
that company officials place upon controlling material flow, the level of expertise changes.
Some companies place materials management on a level whereby there is a logistics
director, other companies see the importance level as managing at the plant level by hiring
an inventory manager or materials manager, and still other companies employ the concept
that the supervisors in the plant are responsible accompanied by a planners.

Materials Management[edit]

The major challenge that materials managers face is maintaining a consistent flow of
materials for production. There are many factors that inhibit the accuracy of inventory which
results in production shortages, premium freight, and often inventory adjustments. The
major issues that all materials managers face are incorrect bills of materials, inaccurate
cycle counts, un-reported scrap, shipping errors, receiving errors, and production reporting
errors. Materials managers have striven to determine how to manage these issues in the
business sectors of manufacturing since the beginning of the industrial revolution. Although
there are no known methods that eliminate the afore mentioned inventory accuracy
inhibitors, there are best methods available to eliminate the impact upon maintaining an
interrupted flow of materials for production.

One challenge for materials managers is to provide timely releases to the supply base. On
the scale of worst to best practices, sending releases via facsimile or PDF file is the worst
practice and transmitting releases to the supplier based web site is the best practice. Why?
The flaw in transmitting releases via facsimile or email is that they can get lost or even
interpreted incorrectly into the suppliers system resulting in a stock out. The problem with
transmitting EDI releases is that not all suppliers have EDI systems capable of receiving the
release information. The best practice is to transmit the releases to a common supplier web
base site where the suppliers can view (for free) the releases. The other advantage is that
the supplier is required to use the carrier listed in the web site, must transmit an ASN
(advanced shipping notification), and review the accumulative balances of the order.

Improving circulation infrastructure[edit]

Redundancy can be reduced and effectiveness is increased when service points are
clustered to reduce the amount of redundancy. An effective materials management program
can also resolve island approaches to shipping, receiving, and vehicle movement.
Solutions can include creating a new central loading location, as well consolidating service
areas and docks from separate buildings into one. Developing better campus circulation
infrastructure also means re-evaluating truck delivery and service vehicle routes. Vehicle
type, size, and schedules are studied to make these more monument for other uses.
Materials Management Week[edit]

Each year, an entire week is dedicated to celebrating resource and materials management
professionals for their outstanding contributions to healthcare and the overall success of the
supply chain. Sponsored by the Association for Healthcare Resource & Materials
Management (AHRMM), National Healthcare Resource & Materials Management Week
(MM Week) provides an opportunity to recognize the integral role materials management
professionals play in delivering high-quality patient care throughout the health care industry.
In 2010 Material Management Week is October 410.

Materials Management Campus Planning and Building Design[edit]

Overview[edit]

Materials management plans and designs for the delivery, distribution, storage, collection,
and removal of occupant-generated streams of materials and services. It is usually an
additional service that is offered as part of a campus planning process or a building design
project. It is most beneficial for university, health care, and corporate environments.
Materials management looks at the planning and design considerations needed to support
the efficient delivery and removal of goods and services that support occupant activity. The
streams of occupant-generated materials and activity include mail, office supplies, lab
supplies, food, special deliveries, custodial services, building supplies, waste and recycling,
and service calls.

A materials management plan may include planning guidelines or full design for the
following:

Truck delivery and service vehicle routes, to reduce vehicle / pedestrian conflict

Loading docks and delivery points, to increase accommodation and reduce queuing
and vehicle idling

Recycling, trash, and hazardous waste collection and removal, to increase waste
diversion and reduce costs

Service equipment and utility infrastructure relocation or concealment, to improve

aesthetics and realize landscaping goals
 Regulatory and operation planning [2]
Benefits[edit]

The effective materials management plan builds from and enhances an institutional master
plan by filling in the gaps aNd producing an environmentally responsible and efficient
outcome. An institutional campus, office, or housing complex can expect a myriad of
benefits from an effective materials management plan. For starters,there are long-term cost
savings, as consolidating, reconfiguring, and better managing a campus core infrastructure
reduces annual operating costs. An institutional campus, office, or housing complex will also
get the highest and best use out of campus real estate.

An effective materials management plan also means a more holistic approach to managing
vehicle use and emissions, solid waste, hazardous waste, recycling, and utility services. As
a result, this means a greener, more sustainable environment and a manifestation of the
many demands today for institutions to become more environmentally friendly. In fact,
thanks to such environmental advantages, creative materials management plans may
qualify for LEAD Innovation in Design credits.

And finally, an effective materials management plan can improve aesthetics. Removing
unsafe and unsightly conditions, placing core services out of sight, and creating a more
pedestrian-friendly environment will improve the visual and physical sense of place for
those who live and work there.[3]

An increased range of borrowers, increasingly complex financial transactions and

large quantum of debt borrowed in India warranted the need of provider of objective, accurate
and timely information of credit quality. To fulfill this objective, CRISIL was incorporated in
1987 as public limited company. Today CRISIL is Indias largest and most respected rating
agency. CRISILs majority share holder is standard $ Poors the worlds foremost provider of
independent credit rating, indices, risk evaluation, investment research and data. Leading
corporation worldwide are rated by S&P. S&Ps credit risk tracer (CRT) has analyzed about 10
lakh SMEs in Europe

Established in 1987, CRISIL has been promoted by leading Indian financial institutions like
The Industrial Credit and Investment Corporation of India Limited (ICICI), Unit Trust of India
(UTI) and Housing Development Finance Corporation Limited. The major shareholders include
Standard & Poor's, ICICI, UTI, Life Insurance Corporation, General Insurance Corporation and a
host of nationalized and foreign banks. CRISIL became a public limited company in November
1993 and is presently a quoted company on the Bombay Stock Exchange and the National Stock
Exchange
.
Crisil pioneered the concept of credit rating in India and developed the framework and
methodology for rating debt in the context of the India financial, monetary and regulatory
system. CRISIL today has attained a pre-eminent position in the rating industry. It is the largest
rating agency in the South East Asia region and is amongst the four largest ratings agencies in the
world. In February 1996, CRISIL entered into a strategic alliance with Standard and Poors .The
relationship got strengthened with S&P with CRISILs working credibility, competence and
management. The relationship got further strengthened with S&P taking up a majority stake in
CRISIL.
CRISIL started with the rating of corporate dept and other the years extended its
scope of activities. Its range of services one includes rating services, advisory services and
investment research related services.

1.2 CRISIL Business and Services

CRISIL Limited is Indias leading Ratings, Financial News, Risk & Policy Advisory
Company. CRISIL helps clients manage and mitigate business and financial risk, enables markets
to function better through benchmarks and best practices and provides workable inputs in
shaping public policy. CRISILs services and products span the entire value chain starting from
data collection and management to providing opinions and integrated solutions. These products
and services are backed by highest standards of integrity, independence and analytical rigor,
making CRISIL the most credible provider of these services in the market. CRISILs clients
depend upon it to constantly deliver objective opinions and the most workable solutions.
Through a sustained theme of innovation and thought leadership, CRISIL has led the markets
with new thoughts, new analytical frameworks and new approaches, placing it in its leading
position in the Indian market place. to all participants in the financial markets. CRISIL
Infrastructure Advisory Group provides workable policy and transaction level solution to Central
and State governments, public sector and private sector entities, that help them make the
difference. CRISIL Investment and Risk Management Group (part of CRISILs advisory
services) and Global Data Services India Ltd (GDSIL), both CRISIL subsidiaries. CRISIL Ltd
provides business knowledge through research on industries, companies and the economy,
GDSIL provides analytical data base to support CRISIL as well as external clients in there
research and analysis. CRISILs news services (CRISIL Market wire CMW) are Indias leading
provider of real time news and analysis on India debt markets.

1.2.a CRISILSME RATING SERVICES

CRISIL commenced its SME (small & medium enterprises) rating services in April
2005. CRISIL has two product for rating small scale industries SSIs and SMEs viz. NSIC-
CRISIL performance and credit rating for SSI and SME rating respectively CRISIL rates SSI and
SMEs on two separate rating scales as given below:

A. NSIC-CRISIL performance and credit rating for SSIs

CRISIL signed an MOU with NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) to

rate SSIs in India at a subsidized cost.

An NSIC CRISIL RATING reflects CRISILs opinion on companys performance capability

and financial strength. Rating is assigned on following rating scale.

NSIC rating scale TABLE NO .1

Financial Strength

High Moderate Low

Performance Highest SE 1A SE 1B SE 1C
Capability
High SE 2A SE 2B SE 2C

Moderate SE 3A SE 3B SE 3C

Weak SE 4A SE 4B SE 4C

Poor SE 5A SE 5B SE 5C

For example, a company with high Performance Capability and high Financial Strength will be
rated 'SE2A', while one with weak Performance Capability and low Financial Strength will be
rated 'SE4C'.
B. SME RATING

CRISIL SME Ratings will reflect the level of creditworthiness of an SME, adjudged in
relation to other SMEs. CRISIL SME Ratings will be assigned with the following rating
definition:

"The rating indicates that the level of creditworthiness of an SME, adjudged in relation to
other SMEs is " (as per table below)

TABLE NO .2

CRISIL SME Rating Definition

SME 1 Highest

SME 2 High

SME 3 Above Average

SME 4 Average

SME 5 Below Average

SME 6 Inadequate

SME 7 Poor
 SME 8 Default

1.2b CRISIL Rating Symbols For Long Term Ratings

AAA Instruments rated 'AAA' are judged to offer the highest degree of
(Triple A) Highest safety with regard to timely payment of financial obligations. Any
Safety adverse changes in circumstances are most unlikely to affect the
payments on the instrument

AA Instruments rated 'AA' are judged to offer a high degree of safety

(Double A) High with regard to timely payment of financial obligations. They differ
Safety only marginally in safety from `AAA' issues.
A Instruments rated 'A' are judged to offer an adequate degree of
Adequate Safety safety with regard to timely payment of financial obligations.
However, changes in circumstances can adversely affect such issues
more than those in the higher rating categories.

BBB Instruments rated 'BBB' are judged to offer moderate safety with
(Triple B) Moderate regard to timely payment of financial obligations for the present;
Safety however, changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal than for
instruments in higher rating categories.

BB Instruments rated 'BB' are judged to carry inadequate safety with

(Double B) regard to timely payment of financial obligations; they are less
Inadequate Safety likely to default in the immediate future than instruments in lower
rating categories, but an adverse change in circumstances could lead
to inadequate capacity to make payment on financial obligations.

B Instruments rated 'B' are judged to have high likelihood of default;

High Risk while currently financial obligations are met, adverse business or
economic conditions would lead to lack of ability or willingness to
pay interest or principal.

C Instruments rated 'C' are judged to have factors present that make
Substantial Risk them vulnerable to default; timely payment of financial obligations
is possible only if favourable circumstances continue.

D Instruments rated 'D' are in default or are expected to default on

Default scheduled payment dates.

NM Instruments rated 'NM' have factors present in them, which render

Not Meaningful the outstanding rating meaningless. These include reorganisation or
liquidation of the issuer, the obligation being under dispute in a
court of law or before a statutory authority etc.
ABOUT- NSIC

National Small Industries Corporation Ltd. (NSIC), an ISO 9001 certified company,
since its establishment in 1955, has been working to fulfill its mission of promoting, aiding and
fostering the growth of small scale industries and industry related small scale services/business
enterprises in the country. Over a period of five decades of transition, growth and development,
NSIC has proved its strength within the country and abroad by promoting modernization, up
gradation of technology, quality consciousness, strengthening linkages with large medium
enterprises and enhancing exports - projects and products from small industries.

NSIC operates through 9 Zonal Offices, 33 Branch Offices, 14 Sub Offices, 10 NSIC
Business Development Extension Offices, 5 Technical services Centers, 3 Extension Centers and
2 Software Technology Parks supported by a team of over 500 professionals spread across the
country. To manage operations in African countries, NSIC operates from its office in
Johannesburg.
NSIC carries forward its mission to assist small enterprises with a set of specially
tailored schemes designed to put them in a competitive and advantageous position. The schemes
comprise of facilitating marketing support, credit support, technology support and other support
services.

NSIC carries forward its mission to assist small enterprises with a set of specially
tailored schemes designed to put them in a competitive and advantageous position. The schemes
comprise of facilitating marketing support, credit support, technology support and other support
services.
RATING FEES

NSIC-CRSIL PERFORMANCE AND CREDIT RATING FOR SSIs

Turnover (Rs . Turnover (Rs. Turnover (Rs.

Lakh) Lakh) 50-200 Lakh) > 200
< 50

Rating fees (Rs.) 40,000 45,000 60,000

Service tax @ 4,120 4,635 6,180

10.30% (Rs.)

Total fees (Rs.) 44,120 49,635 66,180

Subsidy from NSIC 25,000 30,000 40,000

(Rs.)

Amount payable by 19,120 19,635 26,180

SSIs (Rs.)

*Concessional Fees 7,456 9,927 13,236

*concessional fees are applicable for CRISILs partner MOU bank customers and
industry association members. The fees mentioned above are inclusive of all expenses
CRISIL will occur in connection with the exercise.
RATING FEES FOR CRISIL SME RATING

Companies under Operations

Turnover Turnover Turnover Tunover (Rs.Turnover

(Rs . Crore) (Rs. Crore) (Rs. Crore) Crore) (Rs. Crore)
< 10 10-25 25-50
50-75 >75

Rating fees
(Rs.) 60,000 65,000
70,000 85,000 110,000

Service tax
6,180 6,695 7,210
8,755 11,330

Total fees (Rs.)

66,180 71,695 77,210
93,755 121,330
CRISIL
 CRISIL has set up a dedicated team of specialists in SME rating, and designed separate
rating scale for rating SMEs and SSIs (entities with valid SSI certificates). CRISILs SME
Rating has a team of 25 professionals and a company wide network to provide the rating
services to SMEs and SSIs in any part of the country.

In association with NSIC, CRISIL is now rating small scale industries (SSI) on special
rating scale. NSIC provides subsidy for rating of SSIs. CRISIL has already rated 350
SMEs SSIs on the NSIC-CRISIL and the SME rating scale. More than 100 additional
mandates are under the process of execution. CRISIL has conducted studies on 19 SME
clusters across 8 industries. CRISILs SME risk assessment model installed in 8 reputed
public and private sector banks. CRISIL provided its expertise in the SME sector for
emerging India award 2006, organized by ICICI Banks and CNBC. Of 35000 entries
received for the awards, best SMEs were identified across 10 categories.

Besides marketing the rating services directly to the SMEs through one-to-one contact,
other alternative approaches were adopted to develop the business. To address the large number
of SMEs (including SSIs) in India, CRISIL adopted an aggregator approach wherein SMEs
could be accessed in groups through an aggregator like a bank, an industry association, or a large
corporate with several SME dealers or vendors

Since bank in India have large SME portfolios as part of their priority sector business, and
SMEs depends substantially on banks for their fund requirements, CRISIL decided to enter into
national level tie-ups with banks to provide rating services to their SME borrowers

CRISIL SME Ratings

 Partner Banks

CRISIL has partnered with 26 banks and two financial organisations to extend the special
concessional rating fees to its customers.

The following partner banks and financial organisations are giving interest rate benefits to the
customers rated by CRISIL.

1. National Small Industries Corporation

2. Bank of India
3. Canara Bank
4. Central Bank of India
5. Corporation Bank
6. Punjab National Bank
7. Syndicate Bank
8. UCO Bank
9. Union Bank of India
10. United Bank of India
11. Vijaya Bank
12. Kerala Financial Corporation

In addition to the above banks, CRISIL has partnered with the following 16 banks to give special
concessional fees to rate their customers.

1. Allahabad Bank
2. Andhra Bank
3. Bank of Baroda
4. Bank of Maharashtra
5. Dena Bank
6. The Federal Bank Limited
7. HDFC Bank Limited
8. Indian Bank
9. Indian Overseas Bank
10. State Bank of Bikaner & Jaipur
11. State Bank of Hyderabad
12. State Bank of India
13. State Bank of Indore
14. State Bank of Mysore
 15. State Bank of Saurashtra
16. State Bank of Travancore

It is in discussion with other banks to enter into similar tie-ups.

CRISIL rating provide banks a ready reliable third party credit opinion and facilitate lending
decision by helping fix appropriate quantum of loans, rate of interest, margin and security. As per
these MOUs, CRISIL charges fees at concessional rates (as low as Rs. 7456 for small
companies) to the banks, customers and the bank in turn offer favorable terms to entities with
high CRISIL Ratings. UCO bank, United and Union bank have already announced reduced
interest rates for highly rated entities.

Though SMEs in India are dispersed across the country. There are certain pockets with
concentrations of SMEs. These are called SMEs clusters. The SMEs in cluster or otherwise have
organized themselves into industry associations which work as a platform for the welfare of
members. CRISIL has reached an understanding with several industry associations across the
country to provide rating service to their members at attractive terms.

Similarly, large companies in India deals with several SMEs in their supply chain as
dealers for selling finished goods, and the vendors for procuring raw material or sub-assemblies.
CRISIL has signed agreements with such companies for grading their deals or rating their
vendors.

CRISIL, with its reliability, width, and depth of experience in rating services, made a
world of difference to the corporate sector when it is pioneered the concept of rating in India.
CRISIL believes it will make the same difference to the SME sector with its SME sector rating.

1.2.c An overview of the SME\SSI sector in India

In the India market, the common concept was that of small scale industry (SSI); the
definition of a medium enterprises is of more recent origin. The government of India has
historically tracked the profile and growth of the SME sector in terms of SSIs. SSIs are a vibrant
and important sector of the Indian economy. They make significant contribution to the annual
GDP, exports and employment. In an environment of sustained high economic growth, economic
reforms and economic liberalization, the role and the importance of the SSI sector will be even
more significant in the future.

The small scale sector has grown rapidly over the years. The growth rate during the
various plan periods has been very impressive. The number of small scale units has increased
many folds over the years. Currently there are about 118 SSIs in India.
The sector accounts for around 95 percent of the industrial units in the country,
contributing 40% of the manufacturing sector output and approximately 35% of the nation
exports. The total value of production by SSI units for the year 2004-2005 was approximately
Rs. 418300 crore. In addition to the contribution of 40% towards direct export, the SSI
contributes around 15% to export in directly.

It has been estimated that an investment of Rs. 10 lakh in fixed assets in the small
scale sector reduces Rs. 46.2 lakh worth of goods or services.
SSI sector in India creates the largest employment opportunities for the Indian
populace, next only to agriculture. It has been estimated that investment of Rs. 1 lakh in fixed
assets in the small scale sector generates employment for four persons. Overall, the sector
currently employs around 2.83 crore people.

Small Scale Industries

As defined by the ministry of SSI, government of India, the policy making and
promoting body for SSIs in India, an SSI is defined as:

An industrial undertaking in which the investment is fixed assets in plant and machinery,
whether held on ownership terms, on lease, or on high purchase, does not exceed Rs. 1 crore,
subject to the condition that the unit is not owned or controlled by, or a subsidiary of, any other
industrial undertaking.

SSI units mostly belong to the manufacturing sector. However some service
enterprises such as software development enterprises, cold storage units etc. Have also been
included under the SSI umbrella. Previously the ministry of SSI also defined small scale services
and business enterprises (SSSBEs) as enterprises having investment equipment excluding
investment in land and building up to Rs.10 lakh. SSSBEs include enterprises working in close
association with manufacturing enterprises like CAD\CAM blueprinting, and industrial
consulting etc.

Small enterprises both manufacturing and service sector are eligible for receiving
subsidy in the rating fees norms national small industries corporation limited (NSIC)

As per the new SMED (small and medium enterprises development) act the limited
for investment in plant and machinery in small enterprises has been increased to rs. 5 crore. the
new act is expected to become operational with effect from oct,2,2006.

Consideration the growing importance of the service sector in the countrys

economy, the SMED Act defined the small enterprises in the service sector as one having
investment in equipment(excluding investment in land and building) up to RS. 2 crore

Small and Medium Enterprises

The SMED Act defines a Medium Enterprises as one with investment in the plant
machinery in excess of the SSI limit and up to Rs.10 crore. Before this there was no commonly
accepted definition of medium enterprises.

The SMED Act defines a medium enterprises in the service sector as one having
investment in equipment (in excluding investment in land and building) up to Rs.5 crore.
Medium enterprises, which are relatively bigger in size, have different credit needs.
Looking at this, CRISIL has developed a separate scale for rating these enterprises (an 8 point
scale as given in the brochure for SME rating). For rating the medium enterprises, CRISIL goes
by the definition of such enterprises by the banks.
Tabular representation of ceiling in investment for enterprises in manufacturing and
service sector as per the new SMED Act:
 TABLE NO .3

Manufacturing enterprises Services Enterprises

Investment in Plant and Machinery Investment in Equipment

Micro Up to Rs.25 lakh Up to Rs.10 lakh

Small Above Rs. Lakh up to Rs.5 crore Above Rs.10 lakh up to

Rs.2crore

Medium Above Rs.5 crore up to Rs.10 crore Above Rs.2 crore up to

Rs.5crore
1.3 PROFILE OF THE COMPANY

CRISIL is India's leading Ratings, Research, Risk and Policy Advisory Company.
CRISIL offers domestic and international customers a unique combination of local insights and
global perspectives, delivering independent information, opinions and solutions that help them
make better informed business and investment decisions, improve the efficient Locations.

CRISIL Headquarters Address

Crisil House (Pinnacle Chambers) 121/122 Andheri Kurla Road Andheri (East)
Mumbai,Maharashtra,400093
India
Phone:-912256913001
Fax: 91 22 56913000

Headquarters Bombay Area, India

Industry Financial Services

Type Public Company

Status Operating

Company Size 2,000 employees

Revenue 2,873 mil [INR] (65%)

Founded 1987

Website www.crisil.com

Parent company Standard & Poors

subsidiaries
Irevna