In the wake of escalating tensions between the USA and China, global supply chains are undergoing a significant realignment. To reduce dependency on any single country or geopolitical bloc, many importing nations are actively diversifying their sourcing strategies. Amidst this shift, India (Bharat) is emerging as a preferred alternative, offering relative stability and growing manufacturing capabilities. This global trend has created unprecedented opportunities for Indian SME manufacturing companies. Many of them are now expanding aggressively — some using their own capital, others tapping into public funding. However, it is becoming clear that financial investment alone is not enough to meet the rising global demand. SMEs have set up new plants, acquired cutting-edge machinery, and started recruiting top talent from the corporate world. Yet, despite these efforts, many are still struggling to scale effectively. The core issue?
A weak and underprepared middle management layer.
The Middle Management Bottleneck
Traditionally, Indian SMEs have been driven by their top leadership. The middle layer — often promoted from within — grew organically over time, with limited exposure to structured management practices. Even in companies with ISO certifications and process documents, real decision-making and problem-solving remained centralised at the top. This approach worked well when operations were smaller. But now, with larger facilities, broader product portfolios, greater production volumes, and increased regulatory requirements, the limitations of the existing middle layer are becoming apparent. The newly hired senior professionals bring experience and expectations of professionalism. However, they often find themselves frustrated by the lack of execution capability below them. Many are forced to step in and do the work themselves — or worse, they exit the organisation disillusioned.
Bridging the Gap: What Needs to Change
The situation demands a deeper introspection. Companies must assess their current capabilities realistically before scaling further. This includes:
- Evaluating infrastructure and identifying potential points of failure under higher operational loads.
- Assessing department-wise capacity, including the leadership capabilities of existing staff.
- Identifying individuals with growth potential, as well as those who may be nearing their professional limits.
Such an analysis will reveal the gaps in both equipment and human capital. At the same time, strategic use of technology can amplify the capabilities of an average team. Investments in ERP systems, automation tools, and AI-based decision support platforms can streamline operations and reduce dependence on individual heroics.
Conclusion
This is a golden moment for Indian manufacturing. Global demand is knocking — but growth must be carefully managed. Companies can purchase machines, set up factories, and hire talent, but transforming team culture and management capacity takes time and planning. Before taking the leap, SMEs must prepare their organisational foundation — especially the middle management — to support sustainable, long-term growth.