SSI Units Issues

SSI Units Issues

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In comparison to large-scale companies, SSI units confront a variety of issues, which frequently drive these units to shut. The minimum size of operation is the most serious issue for SSI units. This sector has a high rate of occupational illness. The two primary causes of industrial disease in these businesses are a lack of enough finance and a lack of electricity. The following are the primary issues with SSI units:

1. Financial issues - Finance is an issue for the SSI units. They are having difficulty raising cash for operations in addition to fixed capital. In rural locations, SSI units and cottage enterprises confront the most severe financial difficulties since they are unable to seek financial help from the banking industry. Inadequate and irregular financing causes manufacturing losses, lowering profit margins. The unit eventually becomes ill, which leads to the closing of the units in the long term.

2. Raw Material Issue - Another significant impediment to the smooth growth of the SSI industry is the scarcity of raw materials. SSI units confront the challenge of raw material shortages, which affects the production cycle and, as a result, the delivery of the products in the market place. Many units were loss-making because to high domestic raw material costs and a lack of foreign cash for raw material imports.

3. Outdated Technology - Numerous SSI units employ obsolete technology.A significant proportion of them buy used machinery.This obsolete and used machinery reduces production quality and quantity while increasing costs owing to increased waste, loss due to failures, excessive machine maintenance, and so on.

4. Lack of R & D - In order to increase product quality, features, and cost, SSI units must do research and development (R & D). However, R&D is rarely prioritised in SSI units. They continue to produce the same sort of things year after year. Product attributes, packing, and so forth are rarely innovative. Lack of R&D not only impacts product quality, but also forces units to produce items at greater costs.

5. Infrastructure issue - A lot of SSI units are located in outlying rural or semi-urban locations. In these places, SSI units encounter challenges because to a lack of adequate infrastructure such as transportation, power, roads, telecommunications, banking, and so on. As a result, the efficiency of SI units suffers.

6. Ineffective Marketing - The SSI entities struggle with effective marketing. They may not be able to conduct efficient advertising due to a lack of enough cash.Because these units cannot afford to engage marketing professionals, the quality of items manufactured by SSI units is subpar. All of these factors have an impact on their sales.

7. Inadequate Plant Capacity Utilisation - The capacity utilisation of SSI units is insufficient. This is because of a lack of interest in their items. The SSI units expand their plants without first doing a thorough review of market demand for what they produce. It has been discovered that SSI plants in India do not use 50% of their installed capacity.

8. Tax weight - The SSI units are exposed to a variety of taxes and levies, including octroi duty, which contribute to their financial weight. These taxes have a negative impact on the majority of SSI unit profits.

9. Pricing Issue - The pricing structure of SSI units is flawed since their rates are not competitive.Many SSI units demand high prices for high profit, and as a result, their sales suffer. Sometimes, in order to promote product sales, SSI units charge cheaper prices, even if this reduces profit.

10. Distribution Issue - The majority of SSI units lack a strong dealer network. Because of weak relationships with dealers, SSI units have sales and profit challenges. As a result, dealers are uninterested in stocking and promoting SSI unit goods.

11. Negative consequences of reforms in the economy and globalisation - As part of globalisation, opening up the market for local and international competition, cutting tariffs, and removing quantitative constraints have all had a negative impact on the SSI industry. Imported items of lower cost and higher quality are posing a major challenge to SSI units operating in a variety of industries such as chemical compounds, silk, auto parts toys, sporting goods, footwear, and so on. The most significant danger is presented by low-cost Chinese imports, since the so-called 'China Price' (a rock-bottom price) is causing many SSI facilities to close.

12. Other Issues - SSI units suffer a number of other issues, including a dearth of marketing research, bad product packaging and design, competition from major companies, a shortage of skilled workers, poor relationships with consumers, and so on. All of these restraints have culminated in a lopsided cost structure, putting this industry at an unfair competitive disadvantage in both home and export markets.