quality within small to medium size enterprises (smes) standards in action quality within small to...
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Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Quality within Small to Medium size
Enterprises (SMEs)
Cornering the supply chain
Author: Dr Rhys Rowland-Jones
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
DTI. 2005 Figures on SMEs
• At present there are over 3.7 million Small to Medium Size Enterprises (SMEs) in the UK, this figure includes small firms which employ fewer than 10 people, and makes up over 90% of all firms in the UK, contributing around 40% to the to the UK’s Gross National Product
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Risky Business
• Launching a small business can be risky and success is not always guaranteed. Businesses are most vulnerable to failure during the early years of trading, with 20% of new businesses folding within their first year and 50% within their first three years (DTI. 2005)
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Business executives' perceptions of the quality of management
0-10 Rating Scale
0
1
2
3
4
5
6
7
8
Canada USA Germany France UK Japan Italy
Country
1995 & 1996 1999 & 2000 2003 & 2004
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
What is Competitiveness?
Competitiveness is determined by the productivity with which an organisation uses its human, capital, and natural resources.
Productivity depends both on the value of products and services (e.g. uniqueness, quality) as well as the efficiency with which they are produced.
It is how firms compete in their chosen marketplace.
The productivity of “local” industries is of fundamental importance to competitiveness.
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
SME Sources of Competitive Advantage (based on Porter 1984)
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
The SME in Context
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Managerial Issues• Concentration of resources on the firm’s core competencies such as
supply chain management.
• Increasing proportion of purchased goods and services as inputs into products.
• Increased pressure to reduce inventories.
• Applying advances in information technology to strategically manage supplier relationships and the supply chain itself.
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
A Company’s Supply Chain
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Motor Vehicle Parts Distribution Chains
Distribution Chain of Parts Manufacturer
Distribution Chain of Parts Manufacturer
Distribution Chain of
V.M.
Distribution Chain of
V.M.
Manufacturing Chain
Manufacturing Chain
Dealer network
Vehicle manufacturer
Installer
Local distributor
Area distributor
Prime distributor
Supplier
Sub-supplier
Stockist
Raw materials
Source: Slack N. ‘Operations Management’,
Prentice Hall 2004
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Price
Cost
Cost
Price
Time Time
From To
From cost driving prices up to prices driving cost down
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Quality
Dependability
Speed
Flexibility
Cost
QualityQuality + Dependability
Quality + Dependability + SpeedQuality + Dependability + Speed + Flexibility
Quality + Dependability + Speed + Flexibility + Cost
(FERDOWS & DeMAYER)
Improving Performance Improvement
The Ferdows and DeMayer ‘Sandcone’ Model of Operational Improvement
Quality within Small to Medium size Enterprises (SMEs)
Standards in Actionwww.bsieducation.org/standardsinaction
Discussion Questions
• Discuss and map the supply chain for your organisation• What are the implications to your organisation’s overall product quality of this
supply chain• What kind of relationships does your organisation have with its supply chain?