SME DEVELOPMENT THROUGH TECHNOLOGY AND QUALITY

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SME DEVELOPMENT THROUGH TECHNOLOGY AND QUALITY

• Technology
• Audit for SMEs
• By
• Dr Baharum Ismail
• General Manager, Incubator SMI development
  department
• SIRIM Berhad, Malaysia

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Technology Audit For SMEs

• Technology
• Technology Audit (TA)
• Investigation factors in the TA
• Example of rating system for TA
• SIRIM Berhad Experiences
• Suggestions

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1.Technology

• Technology is that body of systematic rational
  knowledge that makes possible the design and
  production of goods and/or services
• Technology is know-how and concerned only with
  how to make things work.

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1.Technology

• For an entrepreneur, keeping abreast with
  technology involves 3 functions
• Developing an awareness of available technical
  options
• Acquiring appropriate equipment and techniques
• Ensuring the proper application of technology on
  the shop floor

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2.Technology Audit

• Technology audit is means of evaluating the
  performance of a manufacturing plant in carrying
  out these three functions
• available technical options
• appropriate equipment and techniques
• the proper application of technology on the shop
  floor

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2.Technology Audit

• For the extension officers whose role is to
  assist in the application of new technical,
  operational and managerial knowledge can use the
  TA to identify the steps necessary to upgrade the
  technological competence of their client
• For the policy makers or government, the
  accumulative TA reports may assist them to
  introduce better policy and supports for the long
  term SME development in their country

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3. Investigation factors for Technology Audit

• Three categories of investigation factors can be
  used in the technology audit, which related to
  the SMEs
• A Awareness of technology (3 factors)
• B Appropriateness of plant process (3)
• C Application at the operating level (4)
• And each factor can be described in
• terms of four levels of attainment from
• highest to lowest.

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3. Investigation factors for Technology Audit

• A Awareness of Technology
• A1 Level of Education
• Key personnel have had a formal education in
  applied science specializing in an appropriate
  discipline and have continued to stay abreast of
  the technology by attending courses or technical
  seminar at least once every 2-3 yrs
• A2 Basic Technical Literature
• Standard texts in up-to-date editions, covering
  the basic technologies employed are readily
  available for references. In addition, the SMI
  subcribes to appropriate technical and trade
  journals and circulates them to key personnel

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3. Investigation factors for Technology Audit

• A Awareness of Technology
• A3 Knowledge of Development
• Key personnel keep aware of technological
  changes affecting the industry by attendance at
  technical seminar, maintaining close contact with
  equipment salesman, membership in trade
  association and using available tech info
  services. Files are kept of new eqpt, new
  processes and new idea that may have application
  to the industry.
• B Appropriateness of Plant Process
• B1 Machinery and equipment
• Machinery and equipment are modern in design and
  up-to-date. They are well maintained and break
  downs are at a minimum. The production system is
  balanced, machinery are properly sized and are
  appropriate for the purpose.

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3. Investigation factors for Technology Audit

• B Appropriateness of Plant Process
• B2 Degree of Automation
• Machinery performs routine operation without
  human intervention. Cycles are started and
  repeated automatically in obedience to an
  internal or external program, for example,
  chemical process apparatus, refinery.
• B3 Rate of Innovation
• The SME is continually experimenting with new
  idea and new methods, and adopting them as soon
  as they have demonstrated their worth. Not only
  are major innovations made, but small improvement
  are regularly introduced in processes, tools and
  products.

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3. Investigation factors for Technology Audit

• C Application at the operating level
• C1Definition of Products Processes
• The product and the processes required to make
  them are defined by written document ( drawings,
  parts lists, process sheet, etc.) which are
  available where needed. Such instructions are
  regularly followed and an effective procedure
  exists for emending and updating them.
• C2 Training of Operators
• The skill required for each job have been
  carefully analysed and recorded. New applicant
  are tested by objective means to determine their
  potential, and are trained systematically to
  bring them up to required levels of performance.
  Records are kept of each operators performance
  and further training is provided where skill fall
  below the norm. Operators demonstrate competence,
  consistency and self confidence in their actions.

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3. Investigation factors for Technology Audit

• C Application at the operating level
• C3 Measuring and Recording
• Appropriate and accurate measuring devices are
  used at every stage in the process where a
  measurement of temperature, dimension, weight,
  pressure, speed, etc., is indicated. Records are
  kept of results for each batch or piece so that
  causes of variations can be analysed. The
  measuring devices are regularly calibrated to
  ensure their accuracy.
• C4 Control of Quality
• Design and performance specification appropriate
  to the attributes required of all components and
  finished products are set down in writing, and an
  effective inspection system uses statistical
  methods to ensure that only a known low level of
  faulty work at a known degree of imperfection is
  released.

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3. Investigation factors for Technology Audit

• Technology audit assists the extension officer
  in measuring an SMEs awareness of technology, in
  determining the appropriateness of its plant and
  processes and in evaluating the manner in which
  the technology is actually put into practice on
  the shop floor.
• Technology audit then, is a tool, but a tool to
  be effective, require back up resources of
  technical information and advice that are fully
  adapted to the needs of the local situation.

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3. Investigation factors for Technology Audit

• Limitation
• An industrial extension services that seek to
  raise the technical competence of SMEs must be
  prepared, however, to do more than just identify
  the weakness of its clients, although this is a
  necessary first step. It also respond to the
  needs of industry by disseminating information
  about technological development, by making
  recommendation on material and process, by
  providing answer to the technical problem and by
  giving operating advice on the shop floor.
• The technical information and advice thus
  provided must be tailor made to the local
  economic and social reality, rather than an
  attempt to transplant overnight the latest
  sophisticated technology from elsewhere, for
  there is a danger that the transplanted latest
  development will not fit in the recipient area
  which may have a different history, economy,
  social structure or culture.

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4. Investigation factors for Technology Audit
An Example of Technology Audit Rating system

Factor
level
remarks

1 2 3 4 Awareness Level of
education Basic
technical literature
Knowledge of development Appropriateness
Machinery and equipment
Degree of Automation
Rate of Innovation Application
Definition of P P
Training of Operators
Measuring and Recording
Control of Quality total Action
recommended
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4. Investigation factors for Technology Audit
An Example of Technology Audit Rating(factor)

Factor
level
remarks

1 2 3 4 W Awareness
Level of education
2
Basic technical literature
1
Knowledge of development
1 Appropriateness Machinery and
equipment
2 Degree of
Automation
1 Rate of
Innovation
1 Application Definition of
P P
1 Training of
Operators
1 Measuring and
Recording
1 Control of Quality

1 total Action recommended
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5. SIRIM Berhad Experiences

• 1975 SIRIM as been established
• 1978 Industrial Extension Unit introduced
• industrial technical advisory services
• project evaluation for SME
• technical input for government program
• 1985-95 Technology Transfer Division introduced
• Quality certification system for industry
• Quality improvement program for SMI
• value analysis value Engineering for SMI
• Industrial diagnostic/factory audit
• technology audit technology mgmt
• entrepreneurship program for new SMI

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5. SIRIM Berhad Experiences

• 1996-2005 Additional program for SMI
• Introduced Incubator program
• industrial extension program outside Malaysia
• Supervise financial grant for SMI
• ERP/office automation audit
• financial mgmt consultation
• marketing mgmt consultation
• industrial master plan for the country
• extend incubator concept abroad

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6. Suggestion

• a) Industrial Extension officer group training
  in the area of factory audit and technology audit
• b) carry out technology audit for a selected
  SME and selected technology area
• c) consultancy work to establish industrial
  extension centre, outreach centre and incubator
  concept
• d) SME industrial master plan, various grant
  incentive for SMI and SMI international
  networking collaboration

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Technology Audit For SMEs

• Thank you
• for communication
• Ms Goay Peck Sim peck.sim.goay_at_sirim.my
• Mr Azhar Ahmad azhar_at_sirim.my
• Dr Baharum Ismail baharum_ismail_at_sirim.my