“We’ve been doing this polishing job for 15 years, and the client still won’t pay even ₹3 extra per part.”

A small automotive supplier shared this line with me last month.

He wasn’t inefficient.
He wasn’t unskilled.
He just had no bargaining power.

Why?

Because he had built a business around tasks, not value.
And in today’s manufacturing ecosystem, transactional job work will not ensure long-term sustainability.

This old MSME model — depending on 1–2 big clients, doing machining/polishing/stamping where the buyer dictates price and terms — is reaching its limit.

The question large OEMs now ask is simple:
“How are you adding value to our system?”

If the answer is “We polish parts,” the business is replaceable.
If the answer is “We improve durability, reduce rejection, and save you ₹40 lakhs annually,” the business becomes indispensable.

So what should MSMEs do?

✔️ Improve Value Addition
 Upgrade processes, materials, durability, design support — not just execution.

✔️ Shift Mindset from Volume to Margin
 Better quality → reduced wastage → more bargaining power.

✔️ Offer cost savings, not just job work
If you impact their bottom line, you earn a premium.

The capacity to grow starts with the capacity to think beyond job work.

Margins don’t come from machines.
They come from strategy, capability and value.

Are we running manufacturing units as vendors?
Or are we building partners in the supply chain?

#ValueAddition #MSMEChallenges #ManufacturingMindset #BargainingPower #SustainableBusiness #OEMPartnerships #CostSavings #OutcomeBasedPricing #StrategicGrowth #SupplyChainInnovation