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Quality within Small to Medium size Enterprises (SMEs)

Quality within Small to Medium size Enterprises (SMEs). Cornering the supply chain Author: Dr Rhys Rowland-Jones. DTI. 2005 Figures on SMEs.

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Quality within Small to Medium size Enterprises (SMEs)

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  1. Quality within Small to Medium size Enterprises (SMEs) Cornering the supply chain Author: Dr Rhys Rowland-Jones

  2. 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

  3. 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)

  4. 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.

  5. SME Sources of Competitive Advantage (based on Porter 1984)

  6. The SME in Context

  7. 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 supplychain itself.

  8. A Company’s Supply Chain

  9. Installer Dealer network Local distributor Area distributor Vehicle manufacturer Prime distributor Distribution Chain of V.M. Distribution Chain of Parts Manufacturer Supplier Sub-supplier Manufacturing Chain Stockist Raw materials Motor Vehicle Parts Distribution Chains Source: Slack N. ‘Operations Management’, Prentice Hall 2004

  10. From To From cost driving prices up to prices driving cost down Price Cost Price Cost Time Time

  11. Improving Performance Improvement The Ferdows and DeMayer ‘Sandcone’ Model of Operational Improvement Cost Flexibility Speed Dependability Quality (FERDOWS & DeMAYER) Quality Quality + Dependability Quality + Dependability + Speed Quality + Dependability + Speed + Flexibility Quality + Dependability + Speed + Flexibility + Cost

  12. 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?

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