Generating Products in Small and Medium Sized Enterprises : Challenges and Potential Improvements

University dissertation from Stockholm : Universitetsservice US AB

Abstract: In contemporary society, companies are faced with new demands and challenges, due to increasing competition and customer requirements. The development of products affects to a great extent, the future earnings and costs of an enterprise, and is therefore very important for its long-term survival. Small and Medium Sized Enterprises (SMEs) are of great importance to national welfare today, and also offer a great potential for the future. The conditions for SME are somewhat special compared to large enterprises. Moreover, many SMEs as sub-contractors to larger companies, and others in networks alongside other SMEs. The overall aim of this thesis is to increase knowledge regarding how to achieve increased long-lasting competitiveness in SMEs. The focus is on efficient development activities for complete project portfolios in SMEs. To fulfil this aim, a rather broad theoretical framework and results from three qualitative studies are presented.The findings presented show that several challenges exist regarding the execution of product generation in manufacturing SMEs. Maturity with regard to process can be improved, and there are a number of obstacles regarding management. Long term planning should be treated as more important than it is today, but it also has to be resource efficient and yield results. Subcontractors with several customers need to be flexible, and roles can be somewhat fuzzy. Inter-organisational cooperation is essential to many SME, and also of decisive importance to them. Cooperation within inter-organisational business networks enables SMEs to develop and offer more complete systems and products by means of aggregation of resources and knowledge.The thesis also presents several proposals for improvements. Many SMEs might improve their efficiency by means of adopting a more comprehensive view on product generation. It is also emphasised that domain of responsibility, not only regarding the product but also type of cooperation, might affect the process. Further, processes have to be aided by management and support tool. The approach of integrated product development has been found to be successful in SMEs, and aspects of integration are divided into five areas: Inter-organisational aspects, organisational functions, individuals, projects and activities. Three main activities are proposed with regard to the process of generating products: product planning, preparing the organisations, and product development.Also, an approach to implementing improvements is discussed. SMEs often have little time and resources for improving work practices. Customising generic process models can have several advantages. However, the goal should be efficient and well functioning work practices, not a model. By contrast, models are proposed as a means for supporting change work. A proposed approach to this encompasses four main steps: analysis of present situation, development of new working practices, tests, and improvements. Finally, it has been found beneficial to combine a top-down and a bottom-up approach, analysing all the factors constituting the organisational work setting, using external change agents, executing changes in more than one company in parallel, using a multifunctional base, and including newly appointed personnel. 

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