Enhancing competitiveness in small and medium-sized manufacturing enterprises - A study of the manufacturing situation of subcontractors in Sweden

Licentiate thesis, 2009

It is increasingly important for all small and medium-sized manufacturing enterprises (SMMEs) to enhance competitiveness in this era of globalisation. To satisfy market requirements, SMMEs must have an understanding of manufacturing outputs as well as decisions made in manufacturing. Manufacturing is a competitive weapon when a company makes the products that are demanded by the customer. It is well known that SMMEs are different from larger companies. However, they must be able to compete on their own terms. The objective of this thesis is to identify characteristics of the manufacturing system in SMMEs that need to be enhanced for companies to stay competitive in the future. The manufacturing strategy content model is divided into two groups: competitive priorities and decision criteria. These two groups are the basis of the analysis of the manufacturing situation. Three case studies have been done at Swedish subcontractors. Each case focused on different industries: foundry, polymer and automotive parts industry; the cases contain interviews and observations at a total number of 20 SMMEs. The aim of the case studies was to understand the manufacturing situation and necessary improvements related to manufacturing. The analysis consists of identification of gaps between future manufacturing needs and today’s competitive priorities. Three order-winning priorities were identified: flexibility, delivery and quality. To enhance manufacturing, SMMEs must focus on these priorities. Cost is often mentioned as an order winner, however today it is a qualifier. The order-winning priorities are discussed using the decision criteria in order to understand what needs to be improved in SMMEs to remain competitive. Many of the criteria identified affect all of the three priorities. However, to remain competitive in the future, manufacturers should also have a long-term focus. It can be concluded that SMMEs lack appropriate performance measurement and written manufacturing strategies that can help SMMEs both in the short term and in the long term.