improving productivity, quality, competitiveness, sustainability and knowledge capital with unido...

Improving Productivity, Quality, Competitiveness, Sustainability and Knowledge Capital with UNIDO PHAROS

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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

Category Number of employees

Middle 50 - 250

Small 10 - 50

Micro < 10


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Business Navigation:

Measuring & Monitoring & Planning of Business Performance Results


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Sailing to target destination

Initial position

Target

(Promised Land)

Ideal path


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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

?Result: Most of SMEs are running life time experiment

“W i n or D i e” !

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.


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1. Mistakes in making business decisions by management based on inadequate assumptions and information, inadequate managerial skills

2. Financial mismanagement and ineffective use of own or borrowed financial resources

These 2 reasons constitute 65% of cases

Major reasons of SME mortality(SEBRAE, BRAZIL)


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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 €

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


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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 UNIDO’s Enterprise Business Performance Management Solution

Software SuiteClient Support &

Consulting on-site

Pharos – Business Navigator

Produce Plus

Financial Improvement

Toolkit

Training Course

In country – regional industrial center

Vienna or any

European location

Certification

Enterprise

Professionals

Benchmarking

Software Installation

Data collection & entry,

Biz target setup Reports,

Export-import

Measuring & Improving Business:

Developing best practices


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1. Awareness seminars,

selecting of enterprises

2. Training courses for SME

management (5 days, < 24

persons per group)

The UNIDO Upgrading Programme Content


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3. UNIDO Pharos Suite –

introductory software

tools for Business

Performance

Measurement &

Management &

Benchmarking (min 2 licenses per enterprise

for general and production

managers)

The Programme Components: Software


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4. Training and certification of client’s

support team

5. 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).

6. Final results evaluation and

reporting, conference

Programme components: on-site consulting & support


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UNIDO Performance measurement tools:

Business Benchmarking

Report


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Key performance indicator improvements at a glanceby summary performance graph


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Key BusinessIndicators

time-series

in bench-markin

g modul

e


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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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• 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

Enterprise Model Enterprise Model of Training Programme Efficiencyof Training Programme Efficiency

(net profit only)(net profit only)


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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 start–up

entrepreneur with license fee ~ 150 Euro (complete set of software & reference materials ensuring self-

training, education and best practices).


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Input:< N, 000 EURO per enterprise

Training Programme

with or without on-site support<12 months

1.1. The practical instruments exist and provedThe practical instruments exist and proved2.2. The cost of improvements in business culture, The cost of improvements in business culture,

knowledge capital, competitiveness, productivity knowledge capital, competitiveness, productivity and sustainability is reasonable & unique and sustainability is reasonable & unique compared to any existing options.compared to any existing options.

3.3. The results are measurable and documented.The results are measurable and documented.

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 SME’s 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 Company’s 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 Century:Realities 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

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

Esmeralda Leather, Bogota

Henry Mouse, Bogota

IMACAL De CALZADO Manufacturera, Bogota

Industria de Calzado Soani Ltda., Bogota

Manufacturas en Cuero V & C Ltda, Bogota

Confecciones Caribean S.A, Ibagué

Confecciones Cathy Ltda., Ibagué

Confecciones Mershy Collection, Ibagué

Ibis S.A, Ibagué

Industrias Titanic, IbaguéOutsoursing Industrial, IbaguéPlano y Punto Ltda., IbaguéRoot & Co Kids Ltda, IbaguéServiconfección, IbaguéSheffy Sports, IbaguéBasculas Prometalicos, ManizalesCI Plastigoma S.A., ManizalesConelec S.A, ManizalesSinterizados S.A, ManizalesCable Link de Colombia S.A, PereiraGL Ingenieros Ltda., PereiraIndustrias de Cables y Partes, PereiraMagom Electroinica, PereiraNormarh Ltda, PereiraIntegrando Ltda., Pereira Dosquebradas

ChileUniversidad de La Frontera, Temuco

EgyptCairo Int’l for Leather IndustriesShort Shoe FactoryBaramki Group Cairo Industry For Leather and ChemicalsArto M Co. Ramadan Chehata Sons FactoriesCondor FootwearLeather Technology CenterFLISC, UNIDOMinistry of Industry and TechnologyTCAE2 M Shoes CompanyASI-Egypt


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Wonder Foods productsGlacier Products Ltd.

KuwaitArab Planning Institute, Shuwaikh

IndiaVir Rubber Products, MumbaiStandard Radiators (metal-radiators producer), BarodaZylog Plastalloys Ltd, NasikManikprem Industries, Ahmednagar,Engineering Plastics, PuneACMA Technical Centre, DelhiFederation of Indian Chambers of Commerce & Industry

(FICCI), New DelhiPower & Energy Development Centre, BangaloreUTISTA Management Consulting, Bangalore

LebanonJoseph B. Amatoury s.a.r.lOriental Paper ProductsKfarshimaGeneral Packaging Industries Cortas Canning & Refrigeration Company s.a.l.TANMIA

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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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:

1. 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.

2. 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.

3. SMEs become much more transparent and attractive for national and international investments, improve capacity for trade and exports.

4. 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)

5. The Training Programmes complement and facilitate business developments, managerial capacity and potential, including path to ISO 9000, WTO requirements, decreasing SME mortality.

6. The Training Programmes deliver unique content and provide comprehensive package of services at acceptable cost level resulting in important Knowledge Capital Gain.

7. Governmental and international support of the Training Programs is an effective way to boost economic performance and sustainability of industrials sectors in regions.

8. The programme results are measured and documented providing vital economic and industrial statistics to organizers and donors.


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Official partner of UNIDO for international distribution, consulting and training for UNIDO Business Performance Measurement, Management and Benchmarking Software

Member of INSME Association

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: [email protected]

improving productivity, quality, competitiveness, sustainability and knowledge capital with unido...

Documents

knowledge capital

low competitiveness

navigation slide

sebrae slide

outcome slide

small enterprises

cease business

international centre