Training Programmes for SMES

1
What conclusions can be drawn from the following
average improvement results for SMEs measured in
the Training Programmes?
2
Average Enterprise Improvement Results

• Overall Productivity Increase (or value
  Added/person) 9
• Percentage failure to meet delivery promise
  reduction - 75
• Stock turns per annum average increase 17
• Percent of process time adding value to total
  process time 25
• Utilities cost per unit of output decrease - 16
• Defect or fault rate per unit of output (index of
  product purity, process consistency and product
  yield) decrease - 22
• Cost of Overheads Average decrease - 25
• Overall Effective Efficiency average increase 5

3
Average Enterprise Improvement Results 2

• Improved Sales 27
• Improved Efficiency 18
• Improved Gross Profit 25
• Reduction in Labour cost (people productivity) -
  15
• Acceleration of business development - 6 years
  saved
• Final cumulative result
• Gross Profit increase 25
• (variability range 10 - 72)

4
The conclusion Businesses run with high losses
and inefficiencies without being aware of it!
5
The price of ignorance (UK case studies, CoVE
and MIIL, food industry)

• Lost (not obtained) gross profit (GP) due to
  various inefficiencies, per annum
• Enterprise Group 1 (GP 400,000) 54,900
  
• Enterprise Group 2 (GP 3,000,000) 215,500

6
Economic impact for industrial sector
(estimation of potential losses)

• Number of enterprises used in analysis for a
  sector - 2 500
• Net profit loss estimation per sector per annum -
  30,020,000
• Lost taxes by Government, annual - 10,507,000

7
The mortality factor after successful start-up
SME mortality rate is high due to premature
death of SMEs caused by uncontrollable losses
and non- efficiencies unknown to management
Actual data by San Paulo Department of
Statistics, Brazil 5 billion dollars lost and
530 thousands jobs in the medium and low range
of manpower are lost within one year in San Paulo
State only. 1,000,000 businesses closed between
1990-2002 just in the State of San Paulo worth
of 62 billion dollars in invoicing and consequent
losses in taxes. (Source Newspaper O Estado
de San Paulo, Economy and Business Section, 4th
December 2003) Similar situation exists in other
developing countries lacking of official
statistics.
Result SMEs are running life time experiment
To win or to die !
8
Sailing to target destination
Target (Promised Land)
Ideal path
Initial position
9
Sailing with navigation
10
Sailing without navigation
The results does not depent on how innovative the
technology is ! (e.g. how new, fast and powerful
the ship is )
X
11
Small and Medium-sized businesses in various
industrial sectors influence

• National economic growth
• Stability of social and economic development
• Competitiveness of national economics
  internationally

If one tries to present national economy as graph
it would look like pyramid with SME sector in its
lower wide layer
12

• SME Problems after successful start-up
• Entrepreneurs management are generally lack of
  the following
• business culture, know-how and skills in
  management of companies,
• understanding Total Quality Management principles
  
• planning and ability to monitor their businesses
• structured approach for practical management
  (simple basics of Continuous Development
  /Improvement)
• resources and knowledge to introduce and
  effectively use information technology tools for
  business monitoring and development
• official support in accessing markets
• assistance by Regional Governments, Associations,
  Chambers, etc. in building capacities to improve
  the situation
• interest and support by suppliers of ICT tools
  consulting services
• possibility obtaining know-how, be trained in
  performance management (busy, no time, no funds,
  training services are costly, not well targeted,
  etc)

13
Training Programmes Increasing performance and
sustainability of Small and Mediumsized
Enterprises (SME) in key national industries
by Introduction of UNIDO Continuous Improvement
Practices and Business Performance Management
Software
14
Programme Overview

• Introducing and enabling acceptance of continuous
  improvement strategies methodology by
  comprehensive SME management training,
  transferring know-how, developing skills and good
  practices in fostering quality, productivity,
  competitiveness, performance management capacity
  based on UNIDO software tools for managers.
• Bringing improvements to multiple enterprises
  achieving effect of scale for key industrial
  sectors
• 3. Delivery of complete service package at
  minimum price!

15
The Programme Content details 1

• Training and certification of national
  consultants
• Training courses for SME senior management in the
  selected regional training centers in the country
  
• Supply of UNIDO Business Performance Management
  Software Pharos, Produce Plus FIT licenses to
  participating enterprises under special fee
  discounts.
• Installation of the software on-site with local
  consultant assistance
• Supporting SMEs on-site for 6 -12 months after
  the courses by national consultants developing
  best continuous improvement procedures and
  practices

16
The Programme Content details 2

• Pre Post Programme enterprise benchmarking,
  diagnostics, performance measuring, production
  efficiency analysis (suppliers, non-conformances,
  planning, production resources' utilization,
  etc.)
• Issuing the "Certificate of Enterprise Business
  Performance Improvements for enterprises and
  Certificates of Business Performance Management
  Excellence for entrepreneurs and managers based
  on analysis and benchmarked improvements.
• Training of SME managers in presentation of the
  enterprise performance results to investment and
  credit institutions

17
The cost of finding the unknown
Input lt 9,000 EURO per enterprise per year
Output Measurable increase of all major
indicators (e.g. GP 25 average)
18
Global Vision
Managerial Skills and Qualifications
Productivity Quality Methods and Tools to
measure results
Stable, Consistent and Predictable Growth based
on Continuous Improvement
SOCIAL OBJECTIVES
ECONOMIC OBJECTIVES
?
19
METHODOLOGY OF IMPROVEMENT MANUFACTURING
OBJECTIVES IN PRODUCING GOODS AND SERVICES
Right CUSTOMER (s) Right PRODUCT (s) Right
QUANTITY (ies) Right QUALITY (ies) Right
TIME Right PRICE (s) Right COSTS control
20
MARKET DRIVEN CONTINUOUS IMPROVEMENT
S A L E S P R O F I T
More satisfied customers
BetterProcesses
21
Implementation of Training Programmes for SMEs in
various countries introducing UNIDO Continuous
Improvement Practices and Business Performance
Management Software Pharos-Business Navigator.
Produce Plus and FIT proved that the
solutions are available.
22
Programme results Industrialist and expert
opinions Most of enterprises had few or almost
no idea about enterprise management mechanisms
before joining the Programme. Most of management
attitudes were empirical and it was difficult to
managers even to understand and to use Pharos in
an adequate way. Based on this verification and
simultaneous Pharos implementation, the managers
had been introduced to the most important and
relevant managing tools to permit them to enter
in a continuous improvement process, aiming at
need to address a word class demand for good
manufacturing and managing behavior. The results
are explosive. The managers improved their real
results which is confirmed by Pharos
benchmarking, in a very mature way. They started
knowing what they are doing and where are
getting. They began measuring and controlling
their companies very well. Most of companies are
now continuing business in a solid, stabilized
situation, even those that had been ready to
close business in the past. Some others have
specific problems and are not so solid but
problems are clearly known now and are observed
by using Pharos, could be interpreted and solved.
There are some exceptions based on natural
inefficiency of some managers but when detected
by their staffs it would permit finding possible
future solutions in a continuous improvement
process. Pharos and the continuous improvement
methodology are playing together an excellent
game to increase real efficiency, productivity
and the capacity to compete for these
participating companies."
23
The enterprise service package The Content

• Training course of two or more senior managers, 5
  days, 8 hours per day, total 40 hours
• On-site guidance, consulting and support for 6 -
  9 months after the training course, two full
  working days by regional consultant per month,
  126 - 192 hours in total
• Diagnostics and benchmarking of initial
  enterprise status when the Programme starts
• Diagnostics and benchmarking of post programme
  performance and improvements
• Two sets of Pharos - Business Navigator,
  Produce Plus and Financial Improvement
  Toolkit business performance management software
  by UNIDO licensed to each enterprise

24
The enterprise service package The Content 2

• Issuing The Certificate of Enterprise
  Performance Improvement" by UNIDO upon actual
  measured results after the Programme
• Issuing the Certificates of Business Performance
  Management Excellence by UNIDO for 2 senior
  managers trained in the Programme
• Comprehensive Reference Materials on business
  management principles, continuous improvement
  methodology, strategic and production performance
  monitoring based on Pharos, Produce Plus and FIT,
  simulation of business targets, decisions and
  developments based on Pharos and Produce Plus
  enterprise models. The materials are prepared
  supporting self-training by persons with minimum
  educational backgrounds.
• Know-how in presentation of the business
  performance information based on UNIDO software
  to potential investors and banks .

25

• C o n c l u s i o n s
• Knowledge capital loss The average results of
  latest training programs show that enterprises
  are run with significant average inefficiencies
  and losses not knowing about it.
• Training Programmes for SMEs introducing best
  continuous improvement practices and UNIDO IT
  tools provide effective tools for eliminating
  losses and inefficiencies of SME industries
  bringing new culture of Knowledge Capital into
  coming Knowledge Economy.
• Participating SMEs become much more transparent
  and prepared for national and international
  investors, improve export potential.
• Programmes facilitate human resource
  developments, managerial capacity and potential,
  path to ISO 9000 standardization, meeting WTO
  requirements, decrease the level of SME mortality
  in the regions.

26

• C o n c l u s i o n s 2
• The Programme delivers the unique content in the
  international market by providing comprehensive
  package of services at acceptable cost level.
• The costs of stakeholders can be recovered with
  ROI above 100.
• Governmental and international support of the
  Training Programs is an effective way to boost
  economic performance and sustainability of
  industrials sectors. The programme results are
  measured and documented providing vital
  statistics to organizers.

27
C o n t a c t s www.win2biz.com E-mail
info_at_win2biz.com Enterprise Performance
Improvement Centre GOLEM IMS GMBH, Vienna, Austria
Home