Ch.2 CP AND THE ENTERPRISE (SME) Workshop on Cleaner Production Middle East Technical University Department of Environmental Engineering Ankara 31 March 2008

how to define SME and their role in modern production processes how to define SME and their role in modern production processes differences in the introduction of eco- efficiency in large industrial corporations and in small and medium enterprises differences in the introduction of eco- efficiency in large industrial corporations and in small and medium enterprises focusing on CP programmes in SME and increased competitiveness arising from its implementation focusing on CP programmes in SME and increased competitiveness arising from its implementation factors that have a positive or negative influence on CP implementation factors that have a positive or negative influence on CP implementationObjective

they use a wide range of raw materials they use a wide range of raw materials these raw materials are processed using complex technologies these raw materials are processed using complex technologies they are part of production chains between enterprises they are part of production chains between enterprises they involve specific and sophisticated machinery they involve specific and sophisticated machinery their work force is clearly divided into qualified tasks their work force is clearly divided into qualified tasks they require diversity of expertise of middle management positions and skilled workers they require diversity of expertise of middle management positions and skilled workers Modern industrial processes

lack of a dominant market position lack of a dominant market position management structures that are less defined, often family businesses that are managed by the owners management structures that are less defined, often family businesses that are managed by the owners they act without the support of participated companies, which is often linked with more difficult access to financing and external aid. they act without the support of participated companies, which is often linked with more difficult access to financing and external aid. Features of SMEs

80-90% of all enterprises 80-90% of all enterprises their contribution to the total production is important their contribution to the total production is important they prevail in traditionally polluting sectors such as the textile, tanning, printing, and surface coating industries they prevail in traditionally polluting sectors such as the textile, tanning, printing, and surface coating industries low level of technology low level of technology often in the cities often in the cities SMEs in the Mediterranean Area

lack of time, qualified personnel are too busy lack of time, qualified personnel are too busy lack of money, financial resources are aimed at other priorities lack of money, financial resources are aimed at other priorities lack of adequate technology, lacking the necessary information to design a strategy of change lack of adequate technology, lacking the necessary information to design a strategy of changeSMEs

SMEs However, SMEs have a capacity for innovation and flexibility to adapt to present conditions that is higher than for large enterprises However, SMEs have a capacity for innovation and flexibility to adapt to present conditions that is higher than for large enterprises industrial complexity requires decentralized and flexible production systems able to adapt more readily to the waves of changes industrial complexity requires decentralized and flexible production systems able to adapt more readily to the waves of changes opportunity to become more competitive by implementing eco-efficient measures, thus securing a place in the industrial future. opportunity to become more competitive by implementing eco-efficient measures, thus securing a place in the industrial future.

easy compliance with the regulation in force easy compliance with the regulation in force improve the business image improve the business image advantages for obtaining permits and simplified proceedings advantages for obtaining permits and simplified proceedings raw material and energy saving raw material and energy saving savings in waste flow management: controlled treatments and/or tanks savings in waste flow management: controlled treatments and/or tanks economic benefits economic benefits advantages with insurance companies advantages with insurance companies reduction of possible civil and criminal liability reduction of possible civil and criminal liability improved working conditions concerning safety and hygiene improved working conditions concerning safety and hygiene a safer value for shareholders, etc. a safer value for shareholders, etc. Incentives for CP Implementation

Absence of an efficient regulatory framework and lack of governmental commitment Absence of an efficient regulatory framework and lack of governmental commitment Overlapping of actions of governmental organisms with different driving forces Overlapping of actions of governmental organisms with different driving forces Insufficient application of existing regulations, unequal demands from one region to another Insufficient application of existing regulations, unequal demands from one region to another Lack of institutional financial aid to evidence the advantages of CP Lack of institutional financial aid to evidence the advantages of CP Difficulties in CP implementation at government level :

at company level : Businessmen are reluctant to change and mistrust innovation at intermediate level Businessmen are reluctant to change and mistrust innovation at intermediate level Conservative attitude of SMEs Conservative attitude of SMEs Lack of expert support to apply cost analysis to identify benefits of CP Lack of expert support to apply cost analysis to identify benefits of CP Lack of participation from industrialists in setting up development schemes Lack of participation from industrialists in setting up development schemes Ignorance of the advantages of CP and lack of information on experiences Ignorance of the advantages of CP and lack of information on experiences Lack of specialized human resources for technician formation and worker training Lack of specialized human resources for technician formation and worker training Difficulties in CP implementation

at economic and financial level : Lack of financial resources for implementing measures beneficial for the environment and competitiveness of the enterprise Lack of financial resources for implementing measures beneficial for the environment and competitiveness of the enterprise Difficulties in obtaining external financial aid in precarious business situations even though the CP options are cost-effective Difficulties in obtaining external financial aid in precarious business situations even though the CP options are cost-effective Difficulties in CP implementation

Technical Complexity of Manufacture One of the most specific factors of an enterprise is its technical manufacturing complexity One of the most specific factors of an enterprise is its technical manufacturing complexity Four principal groups: Four principal groups: –Productions per unit or in small lots –Mass productions or in large lots –Chemical based batch processes –Continuous flow processes Characterization of Enterprises:

Analysis of the Organisation’s Structure Questions to ask about some of the sizes or primary variables of any organisation: Specialisation Specialisation Standardisation Standardisation Formalisation Formalisation Centralisation Centralisation Configuration. Configuration. % of personnel is specialized % of personnel is specialized % of technology coming from external aid % of technology coming from external aid Characterization of Enterprises:

Integration in Customer/Supplier Chains Very important to assess level of integration and dependence in the customer-supplier chain. Know some aspects on the degree of interdependence between both parts: Level of integration with the supplier: simple orders vs. long term contracts Level of integration with the supplier: simple orders vs. long term contracts Level of integration with the customer: simple orders vs. long term contracts Level of integration with the customer: simple orders vs. long term contracts Dependence of the enterprise on its most important customer Dependence of the enterprise on its most important customer Dependence of the enterprise on its most important supplier Dependence of the enterprise on its most important supplier Sensitivity of the enterprise to the production volume of its customers Sensitivity of the enterprise to the production volume of its customers Characterization of Enterprises:

The resources belong to the departments The resources belong to the departments The specialized functions are gathered in the departments, which relate structurally with one another through a hierarchy of information The specialized functions are gathered in the departments, which relate structurally with one another through a hierarchy of information Functional View and Process View

The process view focuses on the work itself, identifying the work elements (processes) that must be developed for the company to function The process view focuses on the work itself, identifying the work elements (processes) that must be developed for the company to function This way of seeing the company is advantageous in the customer-supplier relationship because it corresponds to the way in which the customer interacts with the enterprise: hiring, quality assurance, reception of products and services, payments and after-sales service requirements This way of seeing the company is advantageous in the customer-supplier relationship because it corresponds to the way in which the customer interacts with the enterprise: hiring, quality assurance, reception of products and services, payments and after-sales service requirements Functional View and Process View