Management of Change Capacity Building Programmes for Entrepreneurs, Consultants and Policy Makers
Actually it is the only constant in our life! Additional information is presented in the slide notes Do You feel the Change?
Serge Golovanov PhD, Dipl. Engineer UNIDO International Consultant Director, Enterprise Performance Improvement Center Vienna, Austria Member of Board, INSME, Rome, Italy
The Programme objectives are to integrate:
Learning targets, methodology in strategic business management and industrial engineering
Practical applications of UNIDO Pharos software suite for business performance management, measurement and benchmarking to facilitate Management of Change by entrepreneurs
Developing of best practices providing systematic way of Change Management
Who should attend
The business owners, entrepreneurs,
Senior management and specialists supporting strategic, financial and production management,
Assistants to senior management,
Vocational Training and Executive Education professionals
What participants receive
Valuable knowledge capital
Best practices and Training materials
UNIDO software suite with 6 software items Pharos-Business Navigator, Enterprise Benchmarking and Advanced Data Export-Import, Financial Improvement Toolkit, Produce Plus Database and Graph
2 End User licenses per each software
Follow-up assistance by consultants
UNIDO-Certificates “Business Excellence in Enterprise Performance Management”
Module 1. “Strategic & Financial Planning in industrial enterprise”.
Development strategies shall include
adapting to changing business environment,
Different attitude and approach of the enterprises, especially that of the owner and / or management,
Business Navigation in Times of Change: Measuring & Monitoring & Planning of results in the process of change
Sailing to target destination Initial position Business Target (Promised Land) Ideal path
Sailing with navigation: smooth, cost-effective and adaptive to changes
Sailing without navigation Investments, innovations and new technologies may not help in navigation in times of change however making impact from failure harder ! (e.g.. new ship or new engine may not change the outcome)
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. ?
Mistakes in making business decisions by management based on inadequate assumptions, information,
Financial mismanagement and ineffective use of own or borrowed financial resources
Only these 2 reasons constitute 65% of cases !
Major reasons of SME mortality (10,9 million enterprises, data SEBRAE, BRAZIL) Were it the issues: Bad products? No market demand? Lack of financial resources or investments? No innovations? NO !!! It were the major problems!
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):
Module 1: The Components
Key competencies and skills of Change Leaders
Methodologies of Strategic Planning:
How to develop and implement a strategic plan? (Measure and Planning based on realities, simulating the decision options)
Implementing Strategic Plan
Targets and Milestones
Monitoring and Benchmarking of Key Performance Indicators
Comparing assumptions vs. realities
Module 2. “Improving performance with UNIDO Pharos and FIT software
Main modules: Costs, Performance, Quality, Competitiveness, Product Contribution, Sales, Budgeting, Cash flow and Profit margins, Competitiveness
Defining business targets: Basic principles, Formulas, Setting up, Best practices, goal functions
Pharos enterprise database, preparing and updating, export-import for data exchange with third party software
Presentation of business results for prospective investors and programmes, using the results for compliance to BASEL II Standard to minimization of credit risks and its implications on enterprise capacity for investment
UNIDO Performance Measurement tools: Pharos Business Navigator (main menu)
Business benchmarking & reporting
The basic principles and implementation (averaging, reference date and period), KPIs used in benchmarking, benchmarking results and its tuning, report preparation, reviewing benchmarking graphs
Practical exercises: Developing sample enterprise database, Defining business targets, Making production planning and simulations, Running data export-import,
Preparing benchmarking reports
UNIDO Pharos performance measurement tools: Business Benchmarking Report
Viewing Key Performance Indicator change at a glance by performance summary graph
Key Business Indicators time-series in bench-marking module
Developing best practices:
Problems and how to address them, Managerial dedication, Value of unmeasured, Staff attitude, training and stimulation: who is really interested in the measurement results?
Making the measurement, management and benchmarking the component of a business culture, Expected results and realities in practice
“ Where we are compared to others?” Self-assessment and positioning of enterprise achievements against the others by industry, region, country; obtaining the vision of industrial trends
SME Level Applications
Policy Making Level Applications Benchmarking & Monitoring performance of SME Groups
Policy Making Example: The Vision Positioning of reference enterprise in the national industrial sector benchmark scale “Best vs Least Performing SME”
Financial Improvement Toolkit (FIT)
FIT roadmap, installation, example enterprise database, user interface, basic features, functions, graphs, applications, main menu, utilities, Database preparation and update, Preparing reports and setting up best practices
Key Performance Indicators (KPIs), Applications for credit risk assessment and compliance to Basel II standard,
Presentation of business results to prospective investor or evaluation of capacity for investments
Financial Improvement Toolkit - FIT
Module 3. “Improving of the manufacturing efficiency and performance”
Which manufacturing operations add value?
How to improve product and production performance?
How to measure and prepare major decisions regarding changes in manufacturing, introduction of innovations and restructuring of business to adapt to requirements of change?
How to prepare and run diagnostics / benchmarking for business actual results evaluation
Participants learn and practice:
Introduction to Performance Measurement in manufacturing,
Relation between lean manufacturing and production performance measurement, diagnostics and benchmarking, value added stream mapping
Produce Plus (main menu)
Working with Produce Plus
The modules and components
Diagnostic Questionnaire, Diagnostics results overview and reporting
Overview of Produce Plus indicators
Data collection and entry.
Working with Produce Plus
Production: Calculation of standard work rates, Measuring Actual Work Rates, Method of Data Entry
Quality: Defining Losses & rework, ‘Right first time’ approach, Quality Data
OEE – Overall Equipment Efficiency: What it measures and how calculated
Working with Produce Plus
Performance/Efficiency in Production: terminology, calculation of measures based on actual data,
Costs: complete Ex-Factory Cost, calculation of standard labor hours and cost, costs data entry
Labor Performance: its calculation, Data Collection and Entry, Use of factory floor control sheets
The Programme Modules Integrate
training and reference materials,
team work/group work,
case studies, simulations,
games and computer-based training.
Expected Results by the Programme
Best practices in business improvement
Improvement of Key Performance Indicators (KPI) ~ 10% - 45% in average, e.g.. Gross Profits, Productivity (Added Value per Employee), etc.
Benchmarking & diagnostics reports for each enterprise
Benchmarking data for evaluation of sectoral performance
Documented results of the Programme implementation
Investment facilitation due to increased transparency of businesses
UNIDO – Certificates of Achievements in Business Performance Excellence
Improved culture in Management business, innovations, competitiveness, productivity, quality and sustainability
Average annual sales, USD - $632 000
Net Profit average % (leather & shoe production) - 5%
Increase of net profits, post programme in % - 24%
Increase of net profits, post programme in USD - $ 7,584
Participation costs per annum < $2,500
The Example : Training Programme Efficiency for a Small Enterprise (actual data for shoe production factory, net profit only)
Average business result improvements achieved in UNIDO Pharos Programme implementations
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
Source: UNDO Integrated Programme for Colombia, 2002-2004
Component II – Quality and Productivity in 4 industrial sectors, 40 enterprises (leather & shoes, electronics, textile, metal processing)
The Programme Content
Awareness seminars in country, promotion, contracting, selecting of enterprises and consultants
Training workshops for SMEs (3 days / module)
The Programme Components: Software 3. UNIDO Pharos Suite – simple & inexpensive software tools for Business Performance Measurement & Management & Benchmarking (includes min 2 End User Licenses per enterprise for strategic, financial and production management )
Programme components: on-site consulting & support
Training and certification of national consulting and support teams
On-site implementation: developing knowledge capital, setting best continuous improvement practices (up to 12 months, consultant assisting and supporting each enterprise).
Benchmarking and certification of each participating enterprise.
Final results evaluation, reporting, conference of stakeholders.
Programme Modules’ Schedule
Monitoring and improving business performance: 3 days
Monitoring and improving manufacturing performance: 3 days
On-site implementation support by local consultant:
up to 12 months, 2 working days per month
C o n c l u s i o n s :
Most SME industrialists do not have best practices of systematic measuring of results and its planning.
Implementation of productivity & industrial engineering methods using simple and inexpensive personal performance management tools allow eliminating inefficiencies systematically, maximizing business results.
The new Capacity building and Upgrading Programme provides practical combination of methodology, best practices and software for improving productivity, competitiveness, qua lit y for sustainable growth .
SMEs become more transparent and prepared for national and international investments , improve capacity for trade and exports.
The Programmes improves entrepreneurs capacity for Management the Change, investments, introducing innovations, new technologies.
C o n c l u s i o n s (cont)
The Programme facilitates business developments, managerial potential, facilitating implementation of ISO 9001 .
The Programme delivers unique content and provide comprehensive package of services at acceptable cost level resulting in important Knowledge Capital gains.
Thank you for reviewing this material. We look forward for collaboration with you and your colleagues in the Programme implementation in your country! Enterprise Performance Improvement Centre e-mail: firstname.lastname@example.org Additional information: www.win2biz.com