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Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Increasing performance.

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Presentation on theme: "Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Increasing performance."— Presentation transcript:

1 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Increasing performance and sustainability of Small and Medium Enterprises (SME) in key national industries by Introduction of UNIDO Continuous Improvement Practices and Business Performance Management Software

2 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries  Most dynamic sector in development  60 - 95% of the nation's industrial units  40-70 % of industrial output  65 - 80 % of employment in the industry  25 - 50 % of nation's entire exports  15 - 45 % of the value added by the manufacturing sector  Size: between 10 - 250 people Typical Small and Medium Sector today:

3 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries National economic growth Stability of social and economic development Competitiveness of national economics internationally Small and Medium businesses in various industrial sectors influence If one tries to present national economy as graph it would look like pyramid with SME sector in its lower wide layer

4 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries 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 external 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)

5 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries The consequences occurring after successful start-up: Large uncontrollable losses and non- efficiencies unknown to management SME mortality rate due to premature death of SMEs ? Result: SMEs are running life time experiment “To win or to die” ! 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.

6 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Training Programmes for Small and Medium Enterprises in regional and national format Is there a way to address these problems in systematic way by some proved instrumental solution and at minimized costs?

7 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Small and Medium Enterprise represented by regional associations (after appropriate awareness campaign) National Governments represented by Ministries, National Economic Development Councils Political parties seeking economic policy implementation tools Regional Governments and Administrations seeking considerable improvement and economic change Chambers of Commerce and Industrial Associations in regions Large national and multinational corporations seeking improvement of local SME suppliers Training and certification institution network in regions Potential Counterparts and Customers

8 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries 1.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. 2.Bringing improvements to multiple enterprises achieving effect of scale for key industrial sectors 3. Delivery of complete service package at minimum price! Form Partnership Training of trainers Training and Certification of Management Installations & Consulting On-site Improved & measured SME performance Programme Overview

9 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Training and certification of national trainers/consultants from selected regional training and consulting institutions; Production, licensing and delivery of special training package with Programme materials for trainers/consultants; Trainers running training courses for SME senior management in the selected regional training institutions of the country; Supply of the UNIDO Business Performance Software packages with Pharos, Produce Plus & FIT to enterprises in regions; Installation of the software on-site with local consultant assistance National consultants support SMEs on-site for 6 -12 months after the courses developing continuous improvement procedures and practices The Programme Content: details 1

10 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Pre & Post Programme enterprise benchmarking, cost measuring, production efficiency analysis (suppliers, non-conformances, planning procedures, production resources' utilization) Analysis and Reporting on each enterprise improvements based on final benchmarking measurements and consultant statement Issuing the "Certificate of Enterprise Business Performance improvements"; Training of SME managers in presentation of the enterprise performance results to investment and credit institutions Setting up the Programme WEB site as public information resource supporting its implementation, continuous improvement of SMEs performance evaluation, self-audit, certification, human resource development in the country, exchange of experience by managers The Programme Content: details 2

11 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Study of performance results obtained by Programme for all enterprises and development of real-time e-performance evaluation and benchmarking for the industrial sectors Training and certification of the officers from governmental agencies, industrial associations, chambers, standardization institutions, etc which is involved in the development of the national SME sectors The Programme Content: options Implementation of wireless connectivity, providing SMEs with access to Internet and telephone networks for accelerated e-business developments in regions.

12 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Competitiveness and globalisation of markets Sustainability of economic growth and industrial developments Improving quality of management, efficiency of available resources Increasing quality of production and productivity, making the paths to ISO 9000 easier and less costly. Easy business monitoring as part of daily life of entrepreneurs at SMEs based on Information Technology tools Developing new business culture Development Needs Addressed:

13 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries 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 GLOBALIZATIONGLOBALIZATION Global Vision ?

14 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Achieve measured performance improvement of participating SMEs 24-28% in average within the duration of the Programme. To unfold self-development capacity at SME level which cultivates excellence in performance management, quality, productivity, competitiveness in domestic & export markets. To ensure effective SME business monitoring by having valid measured performance data easily available for top management and entrepreneurs and shareholders. To establish information exchange between SMEs, Associations and Governmental organisations in developing aggregated performance monitoring of complete industrial sectors in real time and providing SME managers with easy identification of their enterprise performance position both nationally and internationally. Key Programme Objectives

15 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries 1.Training course of two senior managers, 5 days, 8 hours per day, total 40 hours 2.On-site guidance, consulting and support for 9-12 months after the training course, two full working days by regional consultant per month, 126 - 192 hours in total 3.Benchmarking of initial enterprise status when the Programme starts 4.Benchmarking/measurement of post – programme performance and improvements 5.Issuing “The Certificate of Enterprise Performance Improvement" upon actual measured results after the Programme 6.Issuing the “Certificates of Business Performance Management Excellence” for 2 senior managers, which were trained and passed tests 7.Two sets of “Pharos - Business Navigator”, “Produce Plus” and “Financial Improvement Toolkit” software by UNIDO with licenses and sample enterprise databases 8.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. 9.Web site resources assisting know-how development and user experience exchange. The service package The service package for each enterprise: The Content

16 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries EXAMPLE: PROGRAMME PACKAGE & BUDGET Mixed cost sharing mode: 50% SME and 50 % by national or international financial donors  Package cost part paid by one SME < $1,800  Coverage by Gov and sponsors< $1,800  Total Programme budget< $36,000,000  Pay back period- 12 months  Banks credit interest coverage - 15% per annum  Provision for coordination, fund and implementation management for Coordinators - $ 2,750,000  Programme duration - up to 2 years Number of participated SMEs – 10,000

17 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries 1. Programme scale: 10,000 enterprises Price per package - $ 3,600. Programme budget – $36,000,000 2. Programme scale: 2,500 enterprises Price per package - $ 4,700. Programme budget – $11,750,000 The price of enterprise service package delivered within the Programme

18 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Programme Budget Distribution

19 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries The role of Experts and Programme Content providers: Deliver comprehensive package of integrated services Throughout interdisciplinary teamwork, In the interests of SME sustainable industrial development To improve sustainability of industrial sectors Controlling quality of implementation and results Methodology: UNIDO methodology and experience reviewed International practice analyzed Guidelines prepared and tested Feedback obtained Quality of implementation controlled at each stage

20 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries 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 CONTINUOUS IMPROVEMENT

21 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Higher revenue Higher revenue Lower costs MARKET DRIVEN CONTINUOUS IMPROVEMENT Better Processes Better quality products & Services Less waste & rework SALESPROFITSALESPROFIT More satisfied customers

22 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Programme in Colombia 2002-2003 results: (preliminary measurements, Sept. 2003) Industrial sectors:Leather/Shoes, Electronics, Metal Processing, Textile Regions: Bogotá, Barrancabermeja, Ibague, Eje Cafetero (Pereira) Duration: 12 months 1.Average measured increase in profits per SME + 24% 2.Increase in invoicing per SME + 200% 3.Acceleration of business development - 6 to 7 years saved

23 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries What can mean such results? Analysis by different levels: Enterprise Industrial sector Government

24 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Annual sales, USD- $632 000 Profit average % (shoe production factory example)- 5% Profit Net, annual pre-programme, USD- $31 600 Increase of monthly net profit, post programme %- 24% Annual Net Profit increase post-programme, USD- $7 584 Annual sales post-programme, USD- $639 584 Increase of annual sales post-programme, %- 101,2% Cost of the service package per enterprise - $4 600 Return on investment per enterprise, annual- 165% Enterprise Model of Efficiency (net profit only)

25 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Number of enterprises in the sector of industry served- 2 500 Annual net profit per sector, pre-programme - $79 000 000 Annual net profit per sector, post-programme- $97 960 000 Net profit increase per sector, post-programme- $18 960 000 National Industry Model of Efficiency (limited by considerationnet profit factor only) (limited by consideration net profit factor only)

26 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Taxation of annual balance profit, %(example)- 35% Taxation total pre-programme for the sector - $27 650 000 Taxation post-programme - $34 286 000 Increase in taxation income for Government, annual - $ 6 636 000 Sharing Enterprise service package costs Partial coverage of service package costs, %- 50% Partial coverage of service package costs in USD- $2 300 Total annual investment into Programme- $5 750 000 Return of investment (only by taxation)- 115% Model of Investment Efficiency for Government (limited by taxation revenue consideration only)

27 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Efficiency of Programme evaluated by Return of Investment (ROI)

28 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries SME Efficiency of Programme by Return of Investment (ROI) (the costs of service package covered by enterprises in full)

29 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Efficiency of Programme evaluated in Net Profit Increase

30 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Funding Institution Donor, Sponsor, Creditor Bank or Industrial Dev. Agency National Agency Programme coordination in the industrial sectors, planning, funds management UNIDO Experts GOLEM & MDA Programme Content National Consultants Quality, Entrepreneurship, Productivity and ICT Centres Small & Medium Enterprises Financing by both Enterprises and Donors with initial credits for Programme setup

31 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Results overview: Enterprise level 1.Effective feedback and visibility of key enterprise business processes for management 2.Improved enterprise performance and competitiveness 3.Improved transparency of a company for managers 4.Better use of existing resources and its monitoring 5.Customization and integration with existing information systems 6.Protocols and certificates of pre and post-programme benchmarking 7.Improved capacity and opportunities for the receipt of national and foreign investments

32 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Programme Results: Governmental and Industry levels Increased taxation revenue by Government by the level comparable to the overall Programme costs Increased measured contribution of SMEs to the national economy and export Increased growth, sustainability and predictability of the sector performance and workforce occupation More efficient use of existing resources in industries for developments Increased management and entrepreneurship qualifications, quality of production, customer services and competitiveness Improved image of the country as an investment destination, greater flow of foreign investment and technology Increased level and quality of jobs Accelerated development of e-business practices to address new technological opportunities Pre-conditions of prospective implementing of performance monitoring and benchmarking of complete industrial sectors in real time

33 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Programme Results: Institutional Level Upgrading the regional networks of quality management consultants New training programmes and sources of income for professional consultants working with SMEs Upgrading of participating regional centers and national consultants with know- how and ICT tools, Strengthening capacity, capabilities, skills at counterpart and support institutions to undertake training and upgrading programmes in larger scale appropriate for accelerating the pace of economic developments, Development of nation-wide information exchange resource and know-how distribution WEB based services supporting and facilitating improvements in industrial sectors, business growth as well as investments opportunities. Improved possibilities to address further SME development needs

34 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Opinions about the results: What industrialists and experts say? “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."

35 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Identification of main Programme Contributing Partners Program formulation and approval by all collaborative partners, establishment of the Program Coordination Agency Programme marketing for national SMEs, identification and selection of participant applications on competitive basis Budget structure approval and availability Selection of Training Institutions, National Consultants to be trained and certified by applications Development of the implementation procedures and guidelines in quality of training and certification Programme Setup Stages 1

36 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Training and certification of national consultants/trainers from the selected Training Institutions and Regional Support Centers, Obtaining multiple End User Licenses for the UNIDO software products under special high discounts provided to such Programmes to be distributed to participants, Implementation of the Management Training and Certification for the participating SMEs in Regional Training and Support Centers, On- site consulting under monitoring and coordination by National Agency responsible for Programme Implementation. Preparation of final reports, analytical materials and Final Programme conference. Programme Stages 2

37 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries C o n c l u s i o n s : 1.Training Programme for SME based on continuous improvement practices and Business Performance Software by UNIDO provides for effective tool to increase economic performance of SME industries and sectors, obtaining measurable improvements for participating enterprises in the range of 24% - 32% within the period of 12 months after the start-up. 2.The Programme costs can be recovered within 12 months. 3.Governmental and international support of the programs is an effective way to boost economic performance and sustainability of industrials sectors. If such support cost is considered as investment into industry then the estimated ROI is above 100% after first year of implementation. 4.The experience, know-how, UNIDO software and methodology are available for implementing new Programmes in regions by GOLEM, Austria and MDA,UK as UNIDO programs content and service providers. 5.Contacts, information: WWW.WIN2BIZ.COM; WWW.UNIDO.ORG

38 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Tanzania, Uganda & Kenya Can export fish to the EU Again Indian Car Component Manufacturers can now supply multinationals Shrimps producers in Ecuador can export high quality products (ISO 9000, 14000 & HACCP) Shrimps producers in Ecuador can export high quality products (ISO 9000, 14000 & HACCP) Brazilian Agro-business supply European Large distribution chains IMPROVEMENT OF QUALITY, COMPETITIVENESS AND PERFORMANCE OF COLOMBIAN ENTERPRISES

39 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries Tanzania, Uganda & Kenya Can export fish to the EU Again Indian Car Component Manufacturers can now supply multinationals Shrimps producers in Ecuador can export high quality products (ISO 9000, 14000 & HACCP) Shrimps producers in Ecuador can export high quality products (ISO 9000, 14000 & HACCP) Brazilian Agro-business supply European Large distribution chains IMPROVEMENT OF QUALITY, COMPETITIVENESS AND PERFORMANCE OF COLOMBIAN ENTERPRISES = PHAROS PROGRAM FOR COLOMBIA IMPROVEMENT OF QUALITY, COMPETITIVENESS AND PERFORMANCE OF COLOMBIAN ENTERPRISES = PHAROS PROGRAM FOR COLOMBIA

40 Improving Quality, Productivity, Competitiveness, Performance Management & Business Benchmarking Training Programmes for SME Industries What about achieving similar measurable improvements of the industry in your region or country? www.win2biz.com


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