TRIPARTITE AGREEMENT

Transcription

1 TRIPARTITE AGREEMENT (TO BE EXECUTED ON STAMP PAPER OF RS 100/-) THIS JOINT AGREEMENT is entered into on the day of, 2014 AMONGST 1. SPV (MC), a trust/society/company formed and constituted under the Indian Trust Act, 1882 / The Societies Registration Act, 1860 / Indian Companies Act,1956 under section 25 (please strike off whichever is not applicable) having its registered office at, represented by its authorized official Shri., hereinafter referred to as TRUST/SOCIETY/COMPANY (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include it s successors and assigns) of the FIRST PART AND 2. NATIONAL PRODUCTIVITY COUNCIL, entrusted to act as National Monitoring and Implementation Unit (hereinafter referred to as NMIU), having it s registered office at Utpadakta Bhawan, 5-6, Institutional Area, Lodhi Road, New Delhi , and represented by its authorized official Shri M. L. Suryaprakash, Director Gr.I or any other senior Officer duly authorized on his behalf which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include it s successors and assigns) of the SECOND PART AND 3.,incorporated as an Individual Consultant / Consulting Organisation and entrusted to work as Lean Manufacturing Consultant, (Hereinafter referred as LMC ) having its registered office at, and represented by its authorized official Shri (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include it s successors and assigns) of the THIRD PART WHEREAS A. Development Commissioner Micro, Small and Medium Enterprises, Government of India ( hereinafter referred to as DC-MSME ) announced the Lean Manufacturing Competitiveness Scheme - Up-scaled: Revised 2013 (hereinafter referred to as LMCS or the Scheme ) of providing financial assistance in the form of grant to the MSME units for implementation of the Lean Manufacturing (LM) practices at their unit. The guidelines of the Scheme have been provided in the Schedule A to the Agreement. B. In response to the same, as per guidelines of the Scheme, the interested units formed a Special Purpose Vehicle (SPV) and submitted application to MSME. A copy of the

2 Memorandum of understanding (MOU) signed amongst the members of the MC has been enclosed and marked as Annexure A. C. Screening and Steering Committee (hereinafter referred to as SSC ), for the Scheme, has approved the application of SPV for financial assistance under the Scheme, vide its Sanction Memo No. dated, copy of which has been enclosed and marked as Annexure B. D. As per the guidelines of the Scheme, vide signing memo dated, has been appointed as the Lean Manufacturing Consultant (hereinafter referred to as LMC ), to work with member units of SPV. E. As per the guidelines of the Scheme, to spell out the roles and responsibilities of the parties, this Agreement has been entered into. Article 1: Terms of Association. 1.1 SSC would form the top tier, Tier III, of the implementation structure of the Scheme. 1.2 NATIONAL PRODUCTIVITY COUNCIL ( NPC ) has been identified as National Monitoring and Implementation Unit (hereinafter referred to as NMIU ) under the Scheme. This would constitute Tier II of the implementation structure. 1.3, the SPV, would form the bottom most tier, Tier I, of the Implementation structure. 1.4 Each member of the SPV would be the ultimate beneficiary of the Scheme and would work in close co-operation with LMC and NPC for successful implementation of the Scheme. 1.5 Each tier would be responsible for reporting to its next higher level tier, as per the details given in the subsequent Articles. Article 2: Roles and Responsibilities of parties 2.1 Roles and Responsibilities of SPV 2.1.1, the SPV, would identify and appoint a Nodal Officer for the purpose of implementation of the Scheme. He/she would also be the Authorized Signatory on behalf of the. Nodal Officer would be a single point of contact in the would facilitate LMC to work with its member units would encourage its member units and ensure that they are actively involved, in close co-operation with the LMC personnel throughout the implementation of the Scheme.

3 2.1.4 would facilitate NPC to have, periodic or otherwise, inspections of the beneficiary units under the Scheme would adhere to the periodic reporting requirements, as per the Guidelines of the Scheme would be responsible for keeping accounts of fund utilization under the Scheme would first spend the amount of its contribution as stipulated by the guidelines of the Scheme and submit documentary evidence to that effect to NPC would spend its share (Ist tranche of 20% of the LMC s fee) towards the cost of the Scheme would encourage its member units and ensure that they are following the LM practices as suggested by LMC under the Scheme In case of any disputes the, the SPV would adhere to the procedure as detailed in the Dispute Redressal Procedures, (Article 3) of the Agreement. 2.2 Roles and Responsibilities of LMC LMC would appoint a Nodal Officer for the Purpose of single point of contact for the implementation of the Scheme LMC would assess the existing system at each member unit Based on its assessment, LMC would submit Diagnostic Study Report (DSR) (tentative guidelines enclosed at Annex I) along with firm Action Plan (as per Format I enclosed) by the end of the second month i.e by date to NMIU and, the SPV for approval. The Plan should contain details for implementation of LM practices, which would comprise, inter alia, pre-defined milestones for implementation progress, the detailed step by step procedures, and time lines for implementation at each of the units. The DSR should include measurable targets with respect to baseline. The baseline data and monitorable incremental improvements may be different for each unit The detailed Terms of Reference for the LMC has been provided at Schedule B LMC would identify the end targets in quantified parameters to be achieved by each unit by the end of the Scheme LMC would work in close co-operation with each of the units to assess and then achieve the LM practice LMC would raise periodic bills/invoices against the achievement of pre-defined milestones by the units in, the SPV LMC would undertake periodic reporting as stipulated by guidelines of the Scheme or as advised by NMIU from time to time LMC would also respond to specific queries raised by NMIU on its performance In case of any disputes the LMC would adhere to the procedure as detailed in the Dispute Redressal Procedures, (Article 3) of the Agreement LMC would also ensure that only empanelled consultants with NMIU, NPC are

4 working in the cluster. 2.3 Roles and Responsibilities of NMIU (NPC) NPC would identify and appoint a Nodal Officer from HQ, New Delhi or from its respective regional offices situated at Bangalore, Bhubaneshwar, Chandigarh, Chennai, Gandhinagar, Guwahati, Hyderabad, Jaipur, Kanpur, Kolkata, Mumbai and Patna for the purpose of implementation of the Scheme The nodal Officer so appointed would also be the Authorized Signatory on behalf of NPC and would be a single point of contact in NPC NPC would facilitate higher tiers to undertake periodic and otherwise inspection, visits to the beneficiary for the purpose of monitoring implementation progress NPC would undertake periodic reporting as envisaged by the guidelines of the Scheme NPC would be responsible for keeping proper records on the progress of implementation of the Scheme NPC would also respond to specific queries raised by higher tiers on the overall progress of implementation of the Scheme In case of any disputes the LMC would adhere to the procedure as detailed in the Dispute Redressal Procedures, (Article 3) of the Agreement. Article 3: Dispute Redressal Procedure 3.1 Dispute Resolution Any dispute arising out of or in relation to this Agreement shall at first be attempted to be resolved amicably in accordance with the conciliation procedure stipulated in Clause The parties agree to use their best efforts for resolving all disputes arising under or in respect of this Agreement promptly, equitably and in good faith and further agree to provide each other with reasonable access during normal business hours to all non privileged documents information and data pertaining to any Dispute. 3.2 Conciliation Procedure In case of issues/disputes raised by beneficiary units, the arbitration would be according to the provisions of the MoU as signed by the units (copy attached as Annexure A) For any issues/disputes raised by any of the parties to the Agreement, nodal officer appointed by NPC would facilitate amicable resolution In case an amicable resolution is not reached, the party may refer the issue/dispute as per the provisions of Clause Arbitration As per the guidelines of the Scheme, at NMIU level the Technical Advisory Committee would act on behalf of NMIU as a Sole Arbitrator Decision of Technical Advisory Committee would be final and binding on all

5 parties. Article 4: Validity of Agreement 4.1 The Agreement would be valid for a period of eighteen months from the date of execution of this Agreement. 4.2 The parties are required to adhere to the stipulations of the guidelines of the Scheme for this period. Article 5: Exit Option 5.1 As per the provisions of the guidelines of the Scheme, the SPV viz. is not allowed to exit from the Scheme, once the implementation of the Scheme has been undertaken. Article 6: Assignment 6.1 Except as otherwise agreed by the parties in writing, accreditation shall not be assigned. Article 7: Force Majeure 7.1 No failure or omission by either party to carry out or observe any of the stipulations, conditions or warranties to be performed shall give rise to any claim against such party or be deemed to be a breach of contract to the extent that such failure or omission rises from causes reasonably beyond the control of such party. Article 8: Indemnity 8.1 Parties hereby agree to indemnify each other against the loss incurred by such other party caused out of negligence. Article 9: Payments of fees 9.1 The total lump sum fee to be paid by, the SPV to the LMC for undertaking Lean Implementation shall be Rs. 9.2 The milestones based payment in each of the five phases shall be as below: Payment (Rs. Lakhs) Phase-1 Phase-2 Phase-3 Phase-4 Phase-5 Total

6 Notes: 1 The payment is inclusive of all taxes. 2 Payment for each period will be released after completion of agreed milestones certified by, the SPV and approved by NMIU. 3 The submission of the DSR and the firm Action Plan as per Article along with acceptance letter by the, the SPV and subsequent approval by NMIU, shall form the completion of first phase and therefore, achievement of first milestone. 4 The completion dates of achievement of milestones for subsequent phases shall be based on the Action Plan submitted by the LMC at the end of second month which has been certified by, the SPV and approved by NMIU. 9.3 As detailed in the guidelines for the Scheme, the MC would pay LMC periodically upon completion of the pre-defined milestones, against the bill or invoice raised by LMC. 9.4 Cases where some of the participating units resign after the formation of SPV so as to bring the strength of remaining participants below the critical figure of 6 units, the SPV may be allowed to function under the circumstance that the remaining members are ready to make the required 20% contribution as per the scheme, alternatively, if feasible, new units can be allowed to replace the dropouts, failing which the SPV may be dropped/pre-closed. The LMC fees also may be suitably negotiated and reduced during pendency of the scheme. Article 10: Termination of the Agreement 10.1 As per the guidelines of the Scheme, no exit option is given to the member units of SPV. In line with the same, the parties hereby agree that, no party is having a right to unilaterally terminate this Agreement However, if any party which wishes to raise complaint/disputes, agrees to follow the Dispute Resolution procedure as envisage in the guidelines of the Scheme Decision arrived at under the procedure referred to at 10.2 above would be final and binding on the parties. In Witness whereof the parties hereto have caused this Agreement to be executed the day and year first before written in accordance with their respective laws. Signed by: Signed by: Signed by:

7 Witness: Witness: Name Name: Address Address: Date: Date:

8 Schedule B TERMS OF REFERENCE i) To work in close co-operation with each of the units to assess and then achieve the LM techniques implementation; ii) To assess the existing system at each member unit of the concerned SPV; iii) To stipulate detailed step by step procedures and schedules for implementation of the LM techniques (pre-defined milestones); iv) To identify the end targets in quantified parameters to be achieved by each unit at the end of the Scheme; v) To assess and undertake the training and other such implementation requirements; vi) To take videos in the beginning of the interventions as well as at different stages of implementation and submit to NMIU along with the periodical progress reports; vii) To prepare Milestone Based Reports (MBRs) in the prescribed format to be submitted by the completion date of each of the implementation phases. The report shall highlight implementation procedure, difficulties faced, success factors etc. for such implementation activities undertaken by it in each of the units; viii) To prepare case studies and closure report in the prescribed format for the SPV; and ix) Any other related activities as assigned by NMIU

9 Annexure 1 Guidelines on Preparation of Diagnostic Study Report (DSR) SUMMARY OF DETAILS OF UNITS Sr. No. 1 Name of the Enterprise Name of Owner Type of Enterprise (Micro/ Small/ Medium) Address, Contact No. & Id Category of the Entrepreneur (General, SC, ST, Woman, Physically Handicapped) SSI Registration No. / EM-II No. Annual Turnover No. of Employees

10 1.0 Basic Information Unit s Name Unit Owner s Name & Designation Category of Unit (Micro / Small / Medium) Passport Size Photograph of Unit Owner Year of Establishment Address of Unit Turnover Contact Details ID Business Activity Major Products Categories & Customers: Product categories/ customers Client 1 Client Organization Structure Organisation structure to be provided Manpower Strength X Officers Staff Workmen 3.0 Plant Layout & Manufacturing process flow Plant layout of the unit and process flow chart

11 4.0 Identification of Seven wastes Evaluation on a scale of 1 to 5. 5 being completely lean and 1, completely traditional. Scale Description 5 - Completely Lean Fully follows Lean principles in both letter and spirit and thereby enjoys benefits of high efficiency fully meeting customer requirements. 4 - Largely Lean Follows lean principles in many areas with few of the traditional practices 3 Moderate Follows a mix of lean and traditional practices equally 2 - Largely Traditional Follows Traditional practices largely just getting aware of lean practices and practicing in few of the areas 1 - Completely Traditional No existence of any Lean practices S.No Type of Waste Current Level 1 Over production 2 Waiting time 3 Transportation 4 Over Processing 5 Inventory 6 Motion 7 Defects Comments 5.0 Base Lining of Current level Photographs

12 Sort 5.0 Base Lining of Current level 5.1 5S Assessment (shade boxes to indicate current level) Level Baseline 0 Beginner 1 Basic 2 Visual 3 Systematic 4 Preventive 5 Score Unsafe items in work area. Set in Order Shine Placement of items causes unsafe conditions. Spills, waste, trash, etc. produce unsafe conditions. Needed and unneeded items found in work area. Needed and unneeded items are placed randomly throughout the workplace. Work area and machines are not cleaned on a regular basis. Needed /un-needed items separated, unneeded tagged. Needed items stored in an organized manner. Area and equipment cleaned daily. Red tag area created, all unneeded items removed. Needed items have dedicated positions that are clearly indicated. Standard work layout posted and maintained. List of needed items developed, maintained, posted. Needed items can be retrieved within (cell target) seconds and (cell target) number of steps. Daily inspection of plant and area occurs. Un-needed items are not allowed in area. Method for adding/deleting indicators for needed items Root cause sources of dirt, grease & spillage have been eliminated. Standardize No work methods or procedures documented. Methods of work not completely documented. Methods of work documented but not consistently used. Methods of work posted and consistently used by some cell team members. Methods of work consistently used by all cell team members. Methods of work are regularly reviewed and improved. Sustain No routine review/correction of unsafe conditions. Occasional, unscheduled 5S activity. 5S activities conducted on regular basis. 5S assessment conducted occasionally and results posted. 5S assessment conducted on a regular basis and recurring problems are identified. Root causes of problems revealed by 5S assessment are identified and eliminated. TOTAL SCORE (MAX OF 25) OVERALL 5S SCORE - X % (INDEXED TO 100)

13 5.2 Visual Base lining Summary S.No Focus Area Current Status 1. 5s 2. Safety 3. Visual Control 4. Storage 5. Maintenance 5.3 Inventory Metrics RM FG WIP Non moving (as on date) Scrap (as on date) Total Inventory Sales turnover (last 6 months) Inventory turnover Units Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs No. of times Preceding 6 Months Comments /reasons on Inventory turnover. Other practices carried as on date. 5.4 Quality Certification: ISO: (YES/NO), if No then what certification? 13

14 Inhouse PPM and supplier PPM. Current Level of quality practices Quality Practices Current Status Suggestion scheme Quality Circles Shop floor meetings Monthly meetings Use of problem solving techniques Continuous Improvement (Kaizen) Cost of Quality 5.5 Delivery Performance Fulfillment level of orders for last 6-12 months 5.6 Maintenance Breakdown hours Quantitative figures Maintenance Practices Breakdown maintenance System followed 14

15 FORMAT I Subject: Phase-wise and Unit- wise Action Plan Dated: Name of the SPV Location of SPV Project Details Project 1 Project Name A. Define quantified targets for parameters i. Parameter 1 ii. Parameter 2..n B. Training of project teams i. Training 1 ii. Training 2..n Project 2 Project Name A. Define quantified targets for parameters iii. Parameter 1 iv. Parameter 2..n B. Training of project teams iii. Training 1 iv. Training 2..n (* Mention similarly, for other Projects. Project nos. may be 1..n) Overall Realization of benefits i. Project 1 ii. Project 2 iii. Project n Remarks by UNIT (if any) Name of the Unit Name and contact details (including address, phone and ) Name & Address of the Consultant Date of Appointment of Consultant Current Status of parameters PHASES I II III IV V Milestone Completion Date <Date> <Date> <Date> <Date> <Date> Activities & Targets for Each Parameters Quantitative Qualitative Monetary Signed by: (Signature) Name of Authorised Signatory, LMC Signed by: (Signature) Name of Authorised Signatory, SPV Signed by: (Signature) Name of Authorised Signatory, RPMG, NPC 15