Training Programmes for SMES

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Empowering entrepreneurs with knowledge capital
and best continuous improvement practices for
profitability, competitiveness, capacity for
trade, exports and investments, sustainable
growth by introducing basic IT tools for business
performance measurement, management and
benchmarking Capacity Building Programmes,
Tools and Results
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Serge Golovanov, PhD, Dipl.Eng., UNIDO
International Consultant Director, Enterprise
Performance Improvement Centre GOLEM IMS GMBH,
Vienna, Austria in partnership with United
Nations Industrial Development Organization, and
International Centre for Science and High
Technology by UNIDO, Trieste, Italy Centre for
Management of Innovation and Technology, Jakarta,
Indonesia www.win2biz.com
www.unido.org
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Definition of Small and Medium-sized Enterprises
in EU
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Business Navigation Measuring Monitoring
Planning of Business Performance Results
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Sailing to target destination
Target (Promised Land)
Ideal path
Initial position
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Sailing with navigation
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Sailing without navigation
New technologies do not help reaching the target
but can make failure impact more costly and
severe! (e.g. new engine, design or construction
of the ship do not change the outcome )
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MICRO AND SMALL ENTERPRISES IN BRAZIL

• Status (informal)
• 10.3 million informal microenterprises (2005)
• 4.9 million formal micro and small enterprises
  (2002)
• Low competitiveness only 2.4 of the Brazilian
  total exports are made by industrial SMEs (2003)
• High mortality
• 49.4 cease business in two years
• 56.4 in three years
• 59.9 in four years
• Sources IBGE and SEBRAE

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SME mortality rate after successful start-up is
caused by inadequate capacity to manage business
and its finances, 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 Most of SMEs are running life time
experiment W i n or D i e !
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Major reasons of SME mortality(SEBRAE, BRAZIL)

• Mistakes in making business decisions by
  management based on inadequate assumptions and
  information, inadequate managerial skills
• Financial mismanagement and ineffective use of
  own or borrowed financial resources
• These 2 reasons constitute 65 of cases

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The price of ignorance (UK case studies, CoVE
and MII, food industry)

• Estimations of lost 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

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Average enterprise improvement results
benchmarked after the Programme implementations
reveal average inefficiencies

• Overall Productivity Increase (or value
  Added/person) 9
• Improved Efficiency 18
• Improved Gross Profit 25
• Reduction in Labour cost - 15
• Overall Effective Efficiency increase 5
• Acceleration of business development - 6 years
• UNDO Integrated Programme for Colombia,
  2002-2004, Component II Quality and
  Productivity in 4 industrial sectors, 40
  enterprises (leather shoes, electronics,
  textile, metal processing)

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• Common situation in SMEs performance and capacity
  for innovation management
• Enterprises are not managed with high efficiency,
  available resources are not used up to full
  potential.
• Innovations and globalization impacts cannot be
  managed effectively
• There are no simple inexpensive educational IT
  tools for entrepreneurs for measuring /
  benchmarking of business results, simulating
  major decisions and developing knowledge capital
  after successful start-up.

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Key issue
Developing basic knowledge capital improving
control and transparency of business and
recognizing achievements in capacity for trade,
exports, investments access to markets complying
to new credit risk standards. When major
decisions are based non on assumptions, but
realities and multiple uncertainty factors
risks are taken into consideration the chance of
strategic failure or miscalculation decreases
significantly.
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Continuously improving business based on its
measurement
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Components of UNIDOs Enterprise Business
Performance Management Solution
Client Support Consulting on-site
Software Suite
Training Course
Certification
Software Installation Data collection entry,
Biz target setup Reports, Export-import
Enterprise
Vienna or any European location
Professionals
Benchmarking
In country regional industrial center
Measuring Improving Business Developing
best practices
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The UNIDO Upgrading Programme Content

• Awareness seminars, selecting of enterprises
• Training courses for SME management (5 days, lt
  24 persons per group)

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The Programme Components Software
3. UNIDO Pharos Suite introductory software
tools for Business Performance Measurement
Management Benchmarking (min 2 licenses
per enterprise for general and production
managers)
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Programme components on-site consulting support

• Training and certification of clients support
  team
• Transfer of know-how, methodology to Enterprise
  Management, setting best continuous improvement
  practices (up to 12 months, 1 consultant support
  up to 10 enterprises, installing software, data
  collection, business targets, decision support,
  results measurement, etc).
• Final results evaluation and reporting, conference

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UNIDO Performance measurement toolsBusiness
Benchmarking Report
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Key performance indicator improvements at a
glance by summary performance graph
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Key Business Indicators time-series in
bench-marking module
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UNIDO Performance Measurement tools Pharos
Business Navigator (main menu)
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UNIDO Performance Measurement tools Produce Plus
(main menu)

• Produce Plus

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UNIDO Performance Measurement tools Financial
Improvement Toolkit

• Produce Plus

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Expected Results

• Improvement of Key Performance Indicators (KPI)
  10 - 24 in average, e.g. Gross Profits,
  Productivity (Added Value per Employee), etc.
• Benchmarking diagnostics reports for each
  enterprise
• Documented Upgrading Programme results
• Benchmarking data for evaluation of sectoral
  performance
• Investment facilitation due to increased
  transparency of businesses
• Personal UNIDO Certificates for Enterprise
  Management
• Improved culture in management of business
  performance and innovations, sustainability,
  competitiveness, productivity and quality
• Compliance to BASEL II standard

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Enterprise Model of Training Programme
Efficiency (net profit only)

• Average annual sales, USD - 632 000
• Net Profit average (shoe production factory) -
  5
• Increase of net profits, post programme - 24
• Increase of net profits, post programme, USD -
  7,584

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Practical solutions

• Capacity building programmes enhancing regional
  business support / consulting organisations in
  country with knowledge, best practices and UNIDO
  Pharos IT tools
• Certification of entrepreneurs acknowledging
  achievements in best practices, improving
  knowledge capital, productivity, quality,
  competitiveness, capacity for managing
  innovations, investments, trade exports.
• UNIDO suite for each female male startup
  entrepreneur with license fee 150 Euro
• (complete set of software reference materials
  ensuring self-training, education and best
  practices).

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• The practical instruments exist and proved
• The cost of improvements in business culture,
  knowledge capital, competitiveness, productivity
  and sustainability is reasonable unique
  compared to any existing options.
• The results are measurable and documented.

Input lt N, 000 EURO per enterprise
Output Measurable increase of major indicators
including net profits, productivity, etc.
The total enterprise service package price
depends on the Programme duration, national
consultants salaries in country, number of
participating enterprises and some other factors
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Implementations international programs and
events

• UNIDO Pharos Training Workshop Measuring,
  benchmarking and managing industrial enterprise
  with UNIDO Pharos Software Suite", ICS-UNIDO,
  Ministry of Research and Technology (MoRT),
  Centre for Management of Innovation and
  Technology (MIT), Jakarta, Indonesia 31 July 4
  August 2006.
• Presentation Upgrading programmes improving SME
  capacity to cope with globalization and other
  challenges by using UNIDO information technology
  tools, methodology and best practices sharing
  the experiences and results at 3-rd India Global
  Summit on SMES organized by Confederation of
  Indian Industry (CII), Ministry of Small Scale
  Industries (SSI), Government of India, Delhi,
  November 2005.
• UNIDO Pharos Training Workshop Measuring,
  benchmarking and managing industrial enterprise
  with UNIDO Pharos Software Suite", UNIDO, Vienna,
  Austria, 5-9 Dec. 2005.
• Presentation Improving productivity, quality,
  competitiveness and sustainability of SMEs by
  applying UNIDO IT solutions for business
  performance measurement, management and
  benchmarking at World Association of Small and
  Medium -sized Enterprises Convention WASME 2005,
  Bucharest, Romania, May 2005.
• Meeting presentations Applying UNIDO IT
  solutions for business performance measurement,
  management and benchmarking to capacity building
  and upgrading of entrepreneurs during official
  state of Dr. Schuessel, PM of Austria visit to
  China, April 2005 (Peking, Shanghai, Nanjing).
• Presentation Improving business results by
  applying UNIDO IT solutions for business
  performance measurement, management and
  benchmarking for Industrial Committee Meeting of
  the Chamber of Commerce Industry of Eastern
  Province, Dammam, Saudi Arabia, April 2005.
• Meetings and presentations Applying UNIDO IT
  solutions for business performance measurement,
  management and benchmarking to capacity building
  and upgrading of entrepreneurs during state
  visit of Dr. Fisher, President of Austria to
  India, Feb.2005 (Delhi, Hyderabad, Bangalore,
  Mumbai).
• Small Medium Enterprises International
  Conference Exhibition, Dubai, UAE by INSME and
  Department of Economic Development Government
  of Dubai, Emirates Bank, UAE, 31 Jan. - 2 Feb.
  2005.
• Presentation at the Business Symposium "SMEs
  Competing in a Knowledge Economy", 2 OECD
  Ministerial Conference, Istanbul, Turkey June
  2004. Recognition of Knowledge Capital in
  Knowledge Economy
• UNIDO Programme for Palestine Improving Business
  Performance by Introducing Continuous Improvement
  Practices Based on UNIDO Business Performance
  Management Software, August November 2004.
• UNIDO Upgrading programme Measurement for
  continuous improvements in quality, efficiency,
  productivity, competitiveness by UNIDO,
  Association of Lebanese Industrialists (ALI),
  Euro-Lebanese Center for Industrial Modernization
  (ELCIM), Lebanon, June October 2004.

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Implementations

• The UNIDO/IMC workshops "Application of UNIDO
  benchmarking and business excellence tools for
  enterprise upgrading, strategic and production
  management, IMC/UNIDO workshops,
  Cairo/Alexandria/Borg El Arab, Egypt, February -
  April 2004.
• 2nd INSME Association Committee Meeting, 25th of
  February in Malmö, Sweden.
• INSME THINK TANK, The International Network for
  Small and Medium Sized Enterprises, Rome, Italy,
  11th -12th December 2003.
• Presentation of UNIDO Business Performance
  Management Products and its application in
  upgrading programmes at the UNIDO Conference
  Improving Efficiency of Companys Business
  through Implementation of TQM/EMS, Moscow,
  Russia, 13-14 October 2003.
• The results and experiences of bringing
  continuous improvement know-how and UNIDO
  business performance information technology tools
  to industrial entrepreneurs, presentation at the
  Forum by UNECE, UNDESA, ILO, UNAIDS, UNICEF,
  UNDP Youth of the XXI CenturyRealities and
  Perspectives, 24-26 September 2003, Kyev,
  Ukraine
• The UNIDO workshop "Strategic and production
  management of industrial enterprise application
  of UNIDO benchmarking and business excellence
  tools Pharos Produce-Plus", UNIDO ITPO/ARCEIT,
  Jan. 2003 Manama, Bahrain
• UNIDO Integrated Programme for Colombia,
  Component II, Improving Quality Productivity in
  Leather, Electronics, Metal Processing, Textile
  sectors by applying continuous improvement,
  workshops and implementations in Bogota,
  Barrancabermeja, Ibague and Pereira, Colombia,
  2002 2003.
• Presentation UNIDO Business Performance
  management tools for entrepreneurs at E4PQ
  Regional Forum on e-Productivity and Quality by
  UNIDO, 21-23 Nov. 2001, Warsaw, Poland,
• UNIDO Industrial Upgrading Programme, Pharos
  Training Workshop, UNIDO, Ministry of Industries
  and Palestine Federation of Industries, Ramallah,
  Palestine, July Oct. 2001
• UNIDO Workshop and upgrade programme Application
  of Quality Principles to The Leather Production
  Sector in Egypt, April 2001, Cairo, Egypt
• UNIDO Training workshop for national consultants
  Application of Quality Principles to The Food
  Processing Sector of 7 Sub-Sahara African
  Countries with UNIDO Business Excellence
  Software, July 2000 and on-site installations in
  Kenya, Uganda, Tanzania, Zambia, Ethiopia, and
  Zimbabwe.
• UNIDO Workshop Training of Trainers on UNIDO
  Business Excellence Software July 2000, Kenya,
  Uganda, Tanzania, Zambia, Ethiopia, and Zimbabwe.
  
• UNIDO Upgrading Programme Strengthening of Small
  and Medium automotive component suppliers to
  deliver export quality products in India, Nov.
  1999, New Delhi, Pune, Bangalore, Mumbai, Baroda,
  Nashik, Ahmednagar, India.
• UNIDO Training Workshop Facilitating Sustainable
  Industrial Development and Competitiveness by
  Applying UNIDO Pharos IT tools for
  entrepreneurs, Oct. 1999 Siktivkar, Republic of
  Komi, Russia

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International customer list

• Industrias Titanic, Ibagué
• Outsoursing Industrial, Ibagué
• Plano y Punto Ltda., Ibagué
• Root Co Kids Ltda, Ibagué
• Serviconfección, Ibagué
• Sheffy Sports, Ibagué
• Basculas Prometalicos, Manizales
• CI Plastigoma S.A., Manizales
• Conelec S.A, Manizales
• Sinterizados S.A, Manizales
• Cable Link de Colombia S.A, Pereira
• GL Ingenieros Ltda., Pereira
• Industrias de Cables y Partes, Pereira
• Magom Electroinica, Pereira
• Normarh Ltda, Pereira
• Integrando Ltda., Pereira Dosquebradas
• Chile
• Universidad de La Frontera, Temuco

• Bahrain
• UNIDO ITPO/ARCEIT office, Manama
• Bulgaria
• BUSINESS CENTER INCUBATOR ISKAR Ltd., Sofia
• HIRON Management Consulting Ltd., Sofia
• Colombia
• De Williams Servicios, Barrancabermeja
• ELECTROTÉCNICOS, Barrancabermeja
• IMSOL, Barrancabermeja
• INDUSTRIAS PALMIRA, Barrancabermeja
• MEC LTD., Barrancabermeja
• METALMAQ, Barrancabermeja
• METALTEC, Barrancabermeja
• METCOL, Barrancabermeja
• REYMOM, Barrancabermeja
• TALLERES UNIDOS, Barrancabermeja
• Boston Shoes, Bogota
• CALZADO ATLAS LDTA, Bogota
• Curtiembre el Reno ltda, Bogota

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International customer list

• Wonder Foods products
• Glacier Products Ltd.
• Kuwait
• Arab Planning Institute, Shuwaikh
• India
• Vir Rubber Products, Mumbai
• Standard Radiators (metal-radiators producer),
  Baroda
• Zylog Plastalloys Ltd, Nasik
• Manikprem Industries, Ahmednagar,
• Engineering Plastics, Pune
• ACMA Technical Centre, Delhi
• Federation of Indian Chambers of Commerce
  Industry (FICCI), New Delhi
• Power Energy Development Centre, Bangalore
• UTISTA Management Consulting, Bangalore
• Lebanon

OPTIMA Systems Ltd. Siemens Business Services
GMBH, Russia Palestine UNIDO Integrated
Programme for Palestine Birzeit Pharmaceutical
Company NBC-Cocacola ASI- Egypt Pharmacare
PLC Sinokrot Food Co Al Haya Food Co. Jerusalem
Pharmaceuticals Nassar Invest. Co Ministry of
National Economy Gama Pharmaceutical Flefel
Co. Russia Center for Executive Education,
Siktivkar State University ENIGMA Training and
Constructions, Ltd Serbia VING Doo, Novi Sad.
Saudi Arabia Plastic Production Components
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International customer list
OPTIMA Systems Ltd. Siemens Business Services
GMBH, Russia Slovakia Industrial Management
Consulting s.r.o, Bratislava Melli Interiery,
s.r.o., Bratislava Sri Lanka University of
Kelaniya, Kelaniya Sudan Solutions Company Ltd.,
Khartoum Thailand Thai Pharos Software Company
Ltd., Asian Institute of Technology,
Turkey USEGO Consulting, Istanbul Zambia Eureka
Chickens Ltd. (Zambia) Meatland Ltd, Lusaka
(Zambia) Uganda Hwan Sung Ltd., Ngege Ltd Uganda
Fish Packers Greenfields Limited
United Kingdom Centre of Vocational
Excellence, The Humber Institute of Food and
Fisheries, Grimsby, Manufacturing Improvement
International Ltd., Grimsby, N E
Lincolnshire Hull University MSc Food Standards
Science Disposables UK, Ltd. Vickers Laboratories
Ltd, Graftons Bakery Ltd. Yorkshire Farm Bakery
Ltd Riverside Food Services Ltd. Wensleydale
Creamery Ltd. Smales Fish Merchants Ltd. Regal
Fish Ltd Kwoks Ltd. Healthfresh Ltd. Bleikers
Smokehouse Ltd. Food Design Ltd. Shepherds Purse
Ltd. University of Wales Institute, Cardiff
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• C o n c l u s i o n s
• Most of industrialists do not have sufficient
  capacity knowledge for implementing performance
  management tools and practices to monitor and
  measure their businesses, optimize decisions,
  eliminate inefficiencies systematically and
  maximize use of available resources.
• The Training and Upgrade Programmes for SMEs
  introduce best continuous improvement practices
  and UNIDO IT tools facilitating productivity,
  competitiveness, quality, sustainable growth in
  areas where real and tangible improvements can be
  made.
• SMEs become much more transparent and attractive
  for national and international investments,
  improve capacity for trade and exports.
• The Training Programmes facilitate entrepreneurs
  capacity building in introduction and managing of
  innovations, new technologies.

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• C o n c l u s i o n s (cont)
• The Training Programmes complement and facilitate
  business developments, managerial capacity and
  potential, including path to ISO 9000, WTO
  requirements, decreasing SME mortality.
• The Training Programmes deliver unique content
  and provide comprehensive package of services at
  acceptable cost level resulting in important
  Knowledge Capital Gain.
• Governmental and international support of the
  Training Programs is an effective way to boost
  economic performance and sustainability of
  industrials sectors in regions.
• The programme results are measured and
  documented providing vital economic and
  industrial statistics to organizers and donors.

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Contacts Enterprise Performance Improvement
Centre GOLEM IMS GMBH, Vienna, Austria Official
UNIDO partner in development, distribution and
implementation of capacity building programmes
based on UNIDO IT solutions for enterprise
performance management, measuring and
benchmarking in developing countries
www.win2biz.com e-mail
info_at_win2biz.comd
Official partner of UNIDO for
international distribution, consulting and
training for UNIDO Business Performance
Measurement, Management and Benchmarking Software
Member of INSME Association