Practical incremental application of process improvement, optimisation and manufacturing theories in small to medium enterprises (SMEs)

Abstract

Due to rapidly changing and highly competitive nature of today’s market place, manufacturing companies now recognise that survival and profitability are functions of continuous improvement. High quality and reliable products must be produced and delivered at lower cost than the competition. This has led to adoption of a range of time and quality based competitive paradigm/programmes such as Zero Defects, Lean Manufacturing, Six Sigma, JIT, SMED, etc. Evidence from many large Japanese companies and others large companies in the EU and USA showed that these programmes contribute substantial benefits. However, in the case of SMEs, proofs of such successes are scant. Factors such as lack of resources, knowledge and culture are some of the factors shown to be militating against SMEs. By extension, it can also be argued that such factors are the main grounds why SMEs have problems adopting and implementing improvement programmes because improvement programmes require time, money and knowledge. This research focused on how to evaluate and assist SMEs to achieve the most out of existing resources, and hence become more competitive, using a case study company as an implementation and validation platform.

A framework for achieving process improvement despite limited resources and resistance to change was demonstrated utilising widely available and often inexpensive tools. The main outcomes of this study include a £4 per unit cost reduction and more than 54% increase in capacity, and actual increase in sales of those products affected by the project of £868000. Other outcomes include productivity increases and stabilisation of lead times, knowledge-capture, and development of in-house MRP spread sheet and standard times to help with accurate product costing, culture change, reduced space requirement and production process layout. Most significantly the study established a new empirical stage on which others can build upon and understand how to implement process improvement in SMEs. Specifically, sensitivity to an organisation’s environment and its politics as essential ingredients, must accompany World Class Manufacturing techniques.