Management Of Change

Management of Change

Capacity Building Programmes for Entrepreneurs, Consultants and Policy Makers

Management of Change: Business Assistance Programme for Entrepreneurs

Actually it is the only constant in our life!

Additional information is presented in the slide notes

Do You feel the Change?


Serge GolovanovPhD, 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, Business consultants 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, potential risks maximizing competitiveness. 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.


1. Mistakes in making business decisions by management based on inadequate assumptions, information,

2. 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):


-5000

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

Money

Time

Business growth Revenue

Expenditures

Results


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 Timetable Organigram Organizational Culture Monitoring and Benchmarking of Key

Performance Indicators Comparing assumptions vs. realities


Module 2. “Improving performance with UNIDO Pharos and FIT software Pharos concepts: Key Performance Indicators (KPIs) 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 glanceby performance summary graph


Key BusinessIndicators 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

Enterprise database updates

Calculation of indicators

(index profile)

Benchmarking Reports and

Graphs

Pharos Suite

Manager

Laptop

Owner


Policy Making Level Applications Benchmarking & Monitoring performance of SME Groups

Monthly uploading of benchmarking reports by SMEs

Policy Makere.g. Bank, Governmental Agency, Association, etc

Server Policy assessment


Policy Making Example: The Vision Positioning of reference enterprise in the national industrial sector benchmark scale “Best vs Least Performing SME”

Add

ed V

alue

per

Em

ploy

ee

Leather Production Enterprises in the region 1 500


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 User interface Diagnostic Questionnaire, Diagnostics

results overview and reporting Overview of Produce Plus indicators Data collection and entry.



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



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

Concepts, methodology, training and reference materials, practical exercises, lecturing, action learning, 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 ExampleThe Example: : Training Programme Training Programme Efficiency for a Small EnterpriseEfficiency for a Small Enterprise

(actual data for shoe production factory, net profit only)(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)


Awareness workshops

Managing of Change Capacity Building and Upgrading Programmes Entrepreners by ELCIM

Training Workshops

UNIDO software for business performance

measurement and benchmarking

Consulting & Coaching on-site

Certification in Business

Excellence Achivements

Industrial centers in country

Beirut

Improving results: Industrial engineering

methods

Measuring business results

Developing best practices

Pharos - Business Navigator

Financial Improvement Toolkit - FIT

Produce Plus Enterprise Certificates

Benchmarks

Managerial Certificates


1. Awareness seminars in

country, promotion,

contracting, selecting of

enterprises and consultants

2. Training workshops for

SMEs (3 days / module)

The Programme Content


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)

The Programme Components: Software


4. Training and certification of national consulting and support teams

5. On-site implementation: developing knowledge capital, setting best continuous improvement practices (up to 12 months, consultant assisting and supporting each enterprise).

6. Benchmarking and certification of

each participating enterprise.

7. Final results evaluation, reporting,

conference of stakeholders.

Programme components: on-site consulting & support


Programme Modules’ Schedule

Strategic Planning:

2 days

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:

1. Most SME industrialists do not have best practices of systematic measuring of results and its planning.

2. Implementation of productivity & industrial engineering methods using simple and inexpensive personal performance management tools allow eliminating inefficiencies systematically, maximizing business results.

3. The new Capacity building and Upgrading Programme provides practical combination of methodology, best practices and software for improving productivity, competitiveness, quality

for sustainable growth.

4. SMEs become more transparent and prepared for national and international investments, improve capacity for trade and exports.

5. 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)

5. The Programme facilitates business developments, managerial potential, facilitating implementation of ISO 9001.

6. 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: [email protected]

Additional information: www.win2biz.com

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