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Experiences of Mexican SME's in the implementation of world class manufacturing

Experiences of Mexican SME's in the implementation of world class manufacturing © Copyright by Institute of Organization and Managment in Industry ,,ORGMASZ" Vol 1(1); p. 27 - 36 Year 2008 10.2478/v10061-008-0004-z M. C. Eligio Espinoza Méndez* Introduction There is little question that economic activity of all types is moving in the direction of globalization (Z. J. Acs 2002).1 Last years the accelerated markets globalization have been provoking a high world competition on business, and as Carlos Venegas Vargas mentioned on his paper titled Important Considerations nowadays in the SME'S,2 the characteristics of the scenes at the moment require for enterprises not only adapted to the requests to demand the competitiveness, but that the SME'S comply with the requests that today are necessary to trade with success. Since the globalization effect was taken like something inevitable, some Mexican enterprises saw it like an opportunity. However, others saw it like an avalanche that would threaten their surviving. At that time, the federal government since 1992 with relation to the ,,Trade Free Treaty of north-America" with United Stated of America and Canada began to send the first messages to all business sectors with the idea that this important change was planed and so these enterprises were prepared. After more one decade we can see some advertisements like: ,,According to Bank of Mexico (December 2007), 83% of the Mexican SME'S are facing problems of banking financing for quality problems in their products, among others."3 ,,The marketing management of the Bitaz consultancy Carlos A. Cruz Cristo warned that Mexican Small enterprises have to change quickly to the new set of high competitiveness or they will disappear" (February 21, 2007, http://www.canacomazatlan.bravejournal.com/).4 On the other hand, fortunately also we see advertisements like: ,,The ambassador of the United States in Mexico Mr. Antonio O. Garza, Jr. mentioned in the annual meeting of the American commerce chamber of Mexico (Mach 2003) ­ The society for the prosperity between Mexico and the United States has 40 projects with concrete results like the seminars organized for 2000 Mexican SME'S about how use the trade electronics to promote and to carry out transactions". ,,The Mexican Pyme magazine number 152 says in one of its articles that nowadays the economy secretary is stimulating Mexican SME'S with different plans of finance. Besides, with the propose to create alliances to share knowledge and to develop practices that development Mexican family enterprises, the organization Price water house Coopers signed an agreement with the University of Monterrey (UDEM) on April 2006 (http://www. revistapyme@grupogasca.com.mx)".5 Unfortunately the most of Mexican enterprises with * M. C. Eligio Espinoza Méndez ­ Polytechnic University San Luis Potosi, México, PhD Student in ORGMASZ Institute, Warsaw, Poland 1 Z. J. Acs and B. Yeung (2002), Small and Medium-Sized Enterprises in the Global Economy, The University of Michigan Press, p. 1. 2 M. C. Venegas, Consideraciones importantes en las PYMIS en el presente, http://www.degerencia.com/articulos. php?artid=378 3 http://www.banxico.org.mx/tipo/publicaciones/ 4 http://www.canacomazatlan.bravejournal.com/ 5 http://www.revistapyme@grupogasca.com.mx ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 an internal environment without a preventive culture and preoccupied only by results of short term they still have the problem of low productivity and competitiveness. Only some of these enterprises have reacted and searched support to implement models based on the concepts of quality­productivity­competitiveness. Studies done in Mexico about the small and medium sized enterprises show their internal situation is not appropriated for a strong competitive environment. A research made in the year 2002 performed by Sérvulo Anzola about this type of Mexican enterprises, mention that these have a few or nothing planning in the areas of finances and administration, is common to plan only for a short period. The business owner does the majority of these functions, this situation causes him not to have sufficient time to make or implant the management process that helps him to plan, organize, manage and control more efficiently his business. The financial operation in the management are efficacious factors very important for the decisions made in the daily work of the small owners, these guarantee that an enterprise to be successful in its growing and continuous economic development. ,,For the small owner, the production process is a constant preoccupation, because they consider that this area is the base to improve the performance of their business, this situation demands all his time to check all the activities that this involved, like: People, raw material, machinery, equipment, maintains, tools, quality, warehouse, requests, et cetera."6 These type of situations are very important because in Mexico a great percentage of its economic future will depend of the fast-growing of the Mexican small and medium sized enterprises, not only by the volume of employment that generate and the amount of establishment (they represent 98% and give to more of 50% of the employments. http://www.pyme.com.mx)7 but to have a size that in occasions allows them to perform the manufacture of products with effectiveness and flexibility that in good number of cases the great enterprises to make with high costs.8 In this last years find clearer that the competitiveness of the enterprises depend not only of the quality or the price of their goods, but also of their ability for continuous improvement and adapt to change of the market. To know what and how improve is the key for the survival and develop of the enterprises. Mexico will accelerate the growth of SME'S in the manner that owners, managers, consultants and researchers in this area, know and understand the situation of these SME'S. Only in this manner they will be in a best position to help them to improve their economies, and indirectly these enterprises will contribute to the country economy. Main Discoveries Management Skill The Mexican researcher Sergio H. Kauffman Gonzalez mentions one problem of the Mexican SME'S businessman among another is that they have not a suitable business planning systems.9 Most of the Mexican small and medium enterprises have not the habit to planning to long term, normally the interest is in the short-term and this is normally focused to aspects about accounts, neither the results are checked for feedback some aspects of S. Anzola (2002), Administración de pequeñas empresas, McGraw-Hill, p. 40. http://www.pyme.com.mx 8 V. J. Rodríguez (2002), Administración de pequeñas y medianas y medianas empresas, International Thomson Editores S.A de C.V., p. 46. 9 http://www.uv.mx/iiesca/revista2001-1/empresas.htm ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 the implementation process and when a plan the follow-up exist is almost invalid. Situations like these were verified by the researcher Joaquin Rodriguez in his research where he found the lack of management skill like the second cause of failure of the Mexican SME'S after of the lack of prevention studies of market, financial and tax (1993, CONACYT, reference 0880-59110).10 The professor and researcher Servulo Anzola (2002) found that "a great management limitation in the small business man is how to know and use techniques and, controlling and planning tools. The Mexican small enterprise simply don't exist the long term planning, only exist it in enterprises of this size that have international markets. The 30% of the Mexican small enterprises use the quality standards and the budgets like planning tool but these are not taken into account for their application and control".11 This situation impact negatively in the implementation of a manufacture system, method or technique because in this cases is important to understand that the results of a system o method are reached normally in the long term, in others words, when a new system is integrated to the work culture is when it has been implemented successfully. Employees Participation Richard J. Schonberger (1986) said ,,so that a manufacturer become of world category, the participation and communication is not sufficient. It is necessary that the employees in the plant have a real intervention in the solution of problems".12 When a small or medium Mexican enterprise is beginning an implementation of any manufacture system or technique, the participation of its employees is almost invalid because ,,the owners are traditionalists, all the direction of their enterprises is in basis mainly to the knowledge derived of their experience and reject any help that it is meddling with their activities" (S. Anzola 2002).13 There are different activities where the employees can participate in an enterprise like: establishment of goals, decision-making, solution of problems, and planning of the mean changes of the organization. The participation will be more effective if the employees think that they have a contribution valid to do, if the organization appreciates their contribution and if the organization rewards it (K. Davis and J. W. Newstrom 1991).14 Any implementation of world class manufacturing needs the participation of all its employees. The employee's commitment increase when their participation increases too. In others words, like Keith Davis say "the employees show a personal commitment about the solutions that they generate because in some sense are of them".15 Some success Mexican SME'S like Crest, S.A. de C.V., Fábricas Monterrey, S.A. de C.V., Kluber Lubricación Mexicana, S.A. de C.V., ARMEX Tecnología en Arneses, S.A. de C.V., Colorgráfico, S.A. de C.V. have been involving all their employees in the mean changes of their organizations and this situation have accelerate the change (C. S. Andriani, R. E. Biasca, M. Rodríguez 2003).16 V. J. Rodríguez, Administración..., p. 90 S. Anzola (2002), Administración de Pequeñas Empresas, McGraw Hill, p. 13. 12 R. J. Schonberger (1986), World Class Manufacturing, The Free Press, Chapter 1, p. 20. 13 S. Anzola, Administración... 14 K. Davis, J. W. Newstrom (1991), Comportamiento Humano en el Trabajo, McGraw Hill, p. 276, 281. 15 Ibidem. 16 C. S. Andriani, R. E. Biasca, M. Rodríguez (2003), El nuevo Sistema de Gestión para las PYMEs, Grupo editorial Norma, p. 237­246, 255­262, 271­296. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Communication It is typical in a small or medium sized Mexican enterprise manages centralizing the information. The communication is focused in the control and possession of all the enterprise activities by the owner, where the orders and counter-orders are commons among the decisions taken for the employees that are normally relatives, confusing in all moment their roles as employees with the family relationship. This situation restricts the advance in the implementation of a manufacture method o technique. ,,Most of the small and medium sized enterprises have a family structure; the family is involved directly in the enterprise activities. The father, the uncle, the son, the wife or any other family member realize the main functions. It is important to mention that is common to find little differentiation between the family system and the enterprise system and to keep separated these two aspects, being this the main cause of many of the conflicts in the small and medium sized enterprises, where the personal feelings are constantly involved with the feelings of the enterprise activities"17 and when this happen the communication is lost. Training Is common to find small and medium sized Mexican enterprises to want implement a manufacture method o technique without training their employees. This is other situation that difficult the implementation of a manufacture method or technique, overcoat in the production area. ,,Many owners of small and medium enterprises have not the sufficient formal training about of the modern management, this often cause lost in workers, materials, quality, slowness in the delivery and a high rotation of people. This operation and management problems give like result blockings to the enterprise growth."18 Most of this enterprises that put some of care in the human resources look at the training like a necessary harm. In many cases, only the technical training is provided to the workers in their work. Fortunately nowadays the Mexican federal government is supporting the SME'S with develop programs like ,,FONDOPYME" to training in management skills and supports in consulting for the implementation of innovative processes (Official Journal of the federation February 28, 2007).19 Implementation Follow-up Dennis P. Hobbs (2004) remark the importance of the implementation follow-up when he say ,,to ensure successful implementation of the Lean manufacturing initiatives, it is imperative that a steering committee be created to oversee implementation activities".20 In the small and medium sized enterprises is normal that in the implementation of manufacture systems, methods or techniques have not a management group that gives follow-up to this implementation, normally the owner directs the implementation, but as is a person very busy he forgets the follow-up. There are many literatures that describe the advantages to form a management team that focus the tasks of the implementation with a spirit of team work, to generate a team work culture. In so many enterprises of this type, the implementations have failed by the lack of the team work. ,,The up-management teams in the conventional companies have typical characteristics of small and medium-sized family-controlled companies, i.e. the owners are very much at the centre of activities and only a few key individuals S. Anzola, Administración..., p. 22­23. Ibidem, p. 44­45. 19 http://www.emprefiscal.com.mx/revista/diario/2007/feb07/dia070228_02.htm 20 D. P. Hobbs, P. Dennis (2004), LEAN Manufacturing Implementation ­ A Complete Execution Manual for Any Size Manufacturer, J. Ross publishing, p. 186­187. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 outside that group are involved in management. The board of the directors is solely a formal institution. The only external influence comes from a few people who constitute the small personal networks of the owner-manager. The observation on the industry level that there are some very rigid rules of the game is also evident here; the significant people always act within a narrow band of action".21 Philippe Lorina (1993) in base to his researches suggests some practical rules to improve the opportunities of success in the implementation of new systems or methods. He say the implementation consist in a true cultural change not a simple tool change. The new systems and management methods most implement by stages and never pass to the next stage until to have assimilated knowledge consolidated.22 Operational conditions ,,housekeeping" Takahiro Fujimoto (1999) marks on the Shop Floor is very important the ,,Cleanliness, Order, and Disciplin".23 According to Larry Rubrich & Madelyn Watson the ,,5S" (Japanese method) are the keys to workplace organization and housekeeping.24 Many small and medium sized Mexican enterprises have not the culture of work in an ordered and clean environment. The mess and dirt block the implementation of a manufacture system, method or technique and the people mind too. Some enterprises of this size that have begun a continuous improvement, first they have been working in design and adapt parameters of tolerance/intolerance and discipline for their work areas. For this they have ensured to have the necessary elements like: prepared people, instruments or support devices, economics resources to apply the necessary improvements, and so on, but overcoat the leaders must dedicate sufficient time to live with an exemplary behaviour. The housekeeping does not consist in order, it is prevent the disorder. Human relations in the production area ,,One of the mistakes more serious in that fall the Mexican small and medium enterprises nowadays is the lack of motivation and validation of the people, essential condition to generate the team spirit that all enterprise needs to compete with possibilities to grow, but also it is something that the managers have to make from the heart."25 The human relations in the production area must have with basis a shared vision like Peter Senger (1990) say ­ the practice of shared vision suppose aptitudes for make visions of the future shared for all the employees in a enterprise that encourage a genuine commitment.26 The managers should enjoy more their people, to share more, leave them to create more, to participate actively and listen with more attention their points of view, and with more reason in the small and medium enterprise where the manager or the owner knows all the people by their name and with certainly many of them are accompany him since many years ago. The manager must trust in his people, and must be very careful with the selection of this people. 21 A. Haahti, G. Hall, R. Donckels (1998), The Internationalization of SMEs; Published by Routledge 11 New Fetter Lane, London EC4P 4EE. 22 Ph. Lorina (1993), El control de Gestión Estratégica, Alfaomega Marcombo, p. 165. 23 T. Fujimoto (1999), The Evolution of a Manufacturing System Toyota, Oxford University Press, p. 292. 24 L. Rubrich, M. Watson (2000), Implementing World Class Manufacturing, Third Printing, WCM Associates. 25 http://www.prodigy.msn.com/empleos/tips/desarrollo/default.asp. 26 P. Senge (2005), La Quinta Disciplina, Ediciones Granica, S.A., 11ª edition, p. 19. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Reference Point ,,Benchmarking" Tony Bendell, Louise Bouler y John Kelly (Benchmarking for competitive advantage, Pitman Publishing, London 1994), underline the first reference of the benchmarking goes back to beginning of 1950 when the Japanese carried out many visits to western organizations.27 In the Mexican small and medium enterprise is common begins an implementation about some manufacture system without have made an investigation of how others enterprises have implemented the same manufacture system or method. This situation also is important by the form in that it is implemented. ,,Nowadays, exist in the world performance index banks of big number of industrial sectors, so many of them adapted to Mexican experiences".28 With the benchmarking the enterprises look at the benefice of the learning of good practices of others enterprises, by this reason is important in a implementation about of system, method or technique, first to do an investigation or benchmarking, this will help to get an implementation success. The simple knowledge of how an enterprise is compared respect to the best, it is an information very values for motivate itself and to act in the correct direction, in other words, this information help it to implement those manufacture systems, methods and techniques more convenient for its domestic situation. Ideas destroyer managers vs. ideas sponsor managers ,,It is easy to perceive in the traditional organizations of the country a common tendency to destroy the new ideas".29 This situation in Mexico is more critical than others counties overcoat in small and medium enterprises. The main reason is that in these enterprises there is a type of traditional management technology and their culture tends to be preserved and oriented to the control, so, in this environment to prevail the boycott to the creation. It is common to find in this type of enterprises ideas destroyer managers to obstruct the implementation of manufacture systems, methods and techniques. One aspect about this situation is marked by W. Nasierowski and M. Bednarek (1998), in their research about the Mexican experience with TQM, they fond a ,,feudal" culture in Mexican organizations that block the communication between the top management with the others levels.30 Fortunately some enterprises of this type have ideas sponsor managers to promote and support the new ideas, this type of managers to protect the ideas generating workers against the ideas destroyers. Necessaries cultural changes About the theory of the cultural influence we can that: ,,Not necessarily to correspond to the scientific of the behaviour to verify if the principles or strategies that are implemented in a culture can not be implemented in other culture, but if to correspond him to understand the mean and the importance of this cultural variable". As result of a pioneering investigation of Geert Hofstede (1980, 2001),31 now we know enough about of the characteristics that define 27 Mencionado por C. Mora en su artículo El futuro del Benchmarking http://www.degerencia.com/articulo/el_futuro_del_ benchmarking 28 J. Giral, A. Eroles, V. Estivill, E. García, L. Larraza, G. Biseca, Empresas Competentes, Grupo editorial Iberoamérica, p. 27. 29 M. Herrer, Biocot a la creatividad en la empresa, http://www.lagente.com/cgi-bin-t1/contenido.pl?Art=81 30 M. Bednarek, W. Nasierowski (1998), The Mexican Experience with TQM, University of New Brunswick, Canada. 31 F. J. Landy, J. M. Conte (2005), Psicología Industrial; McGraw Hill, p. 26. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 a culture in particular the culture in the labour set. He developed a theory that mentions five basis elements in where the cultures can be different. The five elements are presented and defined in the table 1 (individualistic/collective, distance of power, prevention of the uncertainty, masculinity/femininity, long term orientation vs. short term orientation), and in the table 2 we can to observe the implications of the cultural dimensions for the resources management. In accordance with Hofstede, these cultural dimensions can to compare and to contrast different countries. Table 1 The five dimensions of the Hofstede`s culture theory 1. Individualistic/collective: Extent in that the persons procure for themselves vs. to remain integrated to one group. 2. Distance of power: Extent in that the members of less power of an organization accept and expect an unequal distribution of the power. 3. Prevention of the uncertainty: Extent in that the members of a culture feel comfort in unstructured situations. 4. Masculinity/Femininity: Distribution of the emotional roles among the genders, where the masculine role is ,,rude" and the feminine is ,,tender"; the masculine cultures tends to emphasize the achievement and the technical performance while that the feminine cultures to emphasize the interpersonal relationship and the communication. 5. Long term orientation vs. short term orientation: Extent in that the members of a culture expect to fill their materials necessities, socials and emotional, immediately or after of a time. In Mexico there are some small and medium enterprises that are managed by foreigners obviously with different culture and when they implement a manufacturing system expect a similar behaviour of the workers like in theirs countries. In these cases, is important that foreigners managers identify the cultural differences and to try to adapt the system to implement or try to change those cultural characteristics to block a success implementation. Some examples of small and medium size Mexican enterprises that implemented successfully, world class manufacturing systems, methods and techniques in the last years.32 First Case: The enterprise Crest, S.A. de C.V. (plant of Tizayuca, Hidalgo), belonging to the adhesive business of the Lamosa Group of Monterrey, Mexico, began operations in 1999 with 8 administrative employees and 40 workers. The top management took the decision of implement since the start of the plant the ,,total quality management system". With help of a consulter in quality its director received training in basis concepts and then he explained these concepts to his management team for this the education in the quality system to come down to the others organization levels. The department chiefs took a seminary about total quality management and they were formed like instructors of the education program and human development. Between the months of June and July of the year 2000 the department chiefs gave the education program and human development to all the workers that consisted in subjects like: How carry out your destine?, concepts about the human life, enterprise concept, quality control, the 5`Ss, work techniques and the seven steps for the quality. On the other hand, they implemented the management for politics where established the strategic vision basis in an analysis of the enterprise-environment system and the values of the own enterprise, and the establishment of the practice of the quality control for all the enterprise people. C. S. Andriani, R. E. Biasca, M. Rodríguez, El nuevo..., p. 255­262, 271­296. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Table 2 Dimension Distance of high power Low power distance Prevention of high uncertainty Implications in the human resources management Decision-making centralized, many supervisors by employee, autocratic leadership. Decision-making decentralized, few supervisors by employee, participative leadership Acceptance of techniques solutions, strong loyally with the enterprise, restricted innovations for rule. Sceptic techniques solutions, wick loyally with the enterprise, innovations Prevention of low uncertainty within restriction for rule. High Individualism Low Individualism High masculinity Low masculinity Employees to act by their individual interest, poor performance legitimate reason for the dismissal, training focused to individual level. Employees to act by the interest of the group, poor performance legitimate reason for the re-assignation of tasks, training focused to group level Less women in professional/technical positions, pressures towards the roles of traditional genders, the men described themselves how more competitive that women. More women in professional/technical positions, roles of no traditional genders, the women described themselves how more competitive that men. The position is valorised in the trade and the creation of interpersonal relationship, daily human relationships how satisfaction supply, accept of the delay to cover necessities. The essential results to short-term are valorised, daily human relationships are not satisfaction supply, it hopes to cover necessities of immediate manner Orientation to short-term Orientation to long term Since the beginning of the process the organization worked in the implementation of: 1. Basis management units. It get to establish the ,,routine management" by the own employees taking like basis the standardization and the control, through to turn the Deming cycle PDCA. In this point was produced the ,,manual of the basis managements units", where was specified how to form work-teams in eight work sessions. 2. Quality assure system. This system was implemented under the regulations ISO 9002:1994. The certification in ISO was gotten in six months. 3. 5' Ss. The implementation of this system was coordinated by a committee. After two years all people of the enterprise got to keep the first 3'Ss in operation and a great advance in the maintenance and the discipline. Two years after to implement the work system basis in the model of total quality management, this enterprise got excellent results like: ­ Reduction in consumption of bags from 1.83% to 0.77%. ­ Reduction in raw material inventory from 2 to 0.6 days. ­ Reduction in chemistry products inventory, from 1.3 to 1.12 days. ­ Increase of three times more in conversion efficiency of the raw materials. ­ Compliance 100% in the sales plan. ­ Increase in the equipment global affectivity from 69% to 85%. ­ Zero accidents incapacitates in a year. ­ Reduction of the unjustified absenteeism, from 17 absents to 0.66. ­ The attitude of the continuous improvement was taken root in the all people. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Second Case: The enterprise ,,Fábricas Monterrey, S.A. de C.V." (plant of Toluca). This is a case of a Mexican enterprise that did a transformation towards a high performance organization, implementing different techniques of the management system underlining a creative participation model and the total productive maintenance system TPM. This is a producing plant of beer cans and sanitary packets. This plant began operations in 1967 and actually has around 162 employees. In 1990 began a ,,change process" to raise the performance level of the organization. From 1991 began a total modernization process of the machinery and the implementation of use of ecologic materials. During the year 2000 was made a series of management where were studied the market trends. In the year 2001 the actions were: ­ Review of the organizational structure. The administrative staff was reduced from 64 to 36 employees, the persons that were removed of their place were relocated in others plants. ­ The supervision level was eliminated by the auto-control and the autonomy of the work teams. ­ New complementary functions were adding to the operative workers like implemented and improvement the system 5'Ss, work methods, analysis and solution of problems, visual management and process control. ­ The top management team defined the roles of the natural work teams and mixed committees. This also designed a formal communication structure. In the year 2002 this enterprise designed and implemented an innovation and creativity system trough the natural work teams. After the year 2002 this enterprise began an implementation about the improvement system that would be the main route to get the objectives of the next years, this system was the total productive maintenance. The main achievement with the implementation of the high performance organization and the total productive maintenance was a change in the work culture that generated new habits of order and cleaning, improvement of the work environment, detection and solution of problems of manner more agile with the participation of all the people, and in general a satisfied personnel. Third Case: The Mexican enterprise ARMEX Tecnología en Arneses, S.A. de C.V., is a manufacturer company of harnesses that began operations in the year 2001 with 8 employees and increasing to 40 employees in the year 2002, of these 29 were operators (most of them women). Its main customer is the company 3M in USA. ARMEX develops technologic products for special applications with a high technologic contented in great variety and few volume. This enterprise was a problem referent to negative values that some employees showed. For this problem the company adopted the Dia-LAJACONET system (Latin America Japan Consulting Network) basis in a program of education and human develop. With this system the general manager researched to develop an environment of harmony and cooperation. All the operators and employees followed the schedule of education and human development. Also, the top management did changes like: 1. The personnel of the production area don't have to check arrival and way out. 2. There isn't additional time. 3. The inspector and supervisor positions changed for the leader figure and basics managements units were formed. 4. The processes were redesigned in accordance with the techniques specifications solicited for its main customer that is 3M. 5. The system 5'Ss was implemented in all the plant. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Some results that were obtained: 1. It was obtained a work team engaged with the enterprise. 2. The absenteeism, rotation and scrap were minimized. 3. Nowadays the satisfaction in the workers is higher. 4. The products exportation was increased. 5. Complaints and rejections were reduced. 6. Aspects like security, work team and the working environment passed to be part of the enterprise culture. Conclusions These last years the Mexican SME'S have been improving their productivity but very slowly, compared to others countries. The success Mexican SME'S more than implement some method o technique of World class has changed their work culture. David P. Hanna said in 1968 that an organization should identify the behaviours or specific practices that are necessary change if it wants to improve its performance.33 It's very important to mention that small and medium sized Mexican enterprises should take the experiences of others enterprises to implement methods or techniques of world class manufacturing and identify the good practices or behaviours that support this implementation. The final result of the implementation is not only more productivity, the most important is that this implementation changes the enterprise towards a work culture more flexible to accept a continuous improvement. To encourage the participation of all the employees is the key of the success. Summary The article presents the experiences of Mexican SMEs in implementation of world class manufacturing methods. The author attempts to find the justification of success or failure in introduction of models, methods, and techniques of world class manufacturing by Mexican businesses. Market situation of Mexican SMEs in recent years is described, chief factors influencing effectiveness of implementation of certain manufacturing method are analysed. D. P. Hanna (1988), Diseño de organizaciones para la excelencia en el desempeño, Editorial SITESA, p. 97. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics and Organization of Enterprise de Gruyter

Experiences of Mexican SME's in the implementation of world class manufacturing

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© Copyright by Institute of Organization and Managment in Industry ,,ORGMASZ" Vol 1(1); p. 27 - 36 Year 2008 10.2478/v10061-008-0004-z M. C. Eligio Espinoza Méndez* Introduction There is little question that economic activity of all types is moving in the direction of globalization (Z. J. Acs 2002).1 Last years the accelerated markets globalization have been provoking a high world competition on business, and as Carlos Venegas Vargas mentioned on his paper titled Important Considerations nowadays in the SME'S,2 the characteristics of the scenes at the moment require for enterprises not only adapted to the requests to demand the competitiveness, but that the SME'S comply with the requests that today are necessary to trade with success. Since the globalization effect was taken like something inevitable, some Mexican enterprises saw it like an opportunity. However, others saw it like an avalanche that would threaten their surviving. At that time, the federal government since 1992 with relation to the ,,Trade Free Treaty of north-America" with United Stated of America and Canada began to send the first messages to all business sectors with the idea that this important change was planed and so these enterprises were prepared. After more one decade we can see some advertisements like: ,,According to Bank of Mexico (December 2007), 83% of the Mexican SME'S are facing problems of banking financing for quality problems in their products, among others."3 ,,The marketing management of the Bitaz consultancy Carlos A. Cruz Cristo warned that Mexican Small enterprises have to change quickly to the new set of high competitiveness or they will disappear" (February 21, 2007, http://www.canacomazatlan.bravejournal.com/).4 On the other hand, fortunately also we see advertisements like: ,,The ambassador of the United States in Mexico Mr. Antonio O. Garza, Jr. mentioned in the annual meeting of the American commerce chamber of Mexico (Mach 2003) ­ The society for the prosperity between Mexico and the United States has 40 projects with concrete results like the seminars organized for 2000 Mexican SME'S about how use the trade electronics to promote and to carry out transactions". ,,The Mexican Pyme magazine number 152 says in one of its articles that nowadays the economy secretary is stimulating Mexican SME'S with different plans of finance. Besides, with the propose to create alliances to share knowledge and to develop practices that development Mexican family enterprises, the organization Price water house Coopers signed an agreement with the University of Monterrey (UDEM) on April 2006 (http://www. revistapyme@grupogasca.com.mx)".5 Unfortunately the most of Mexican enterprises with * M. C. Eligio Espinoza Méndez ­ Polytechnic University San Luis Potosi, México, PhD Student in ORGMASZ Institute, Warsaw, Poland 1 Z. J. Acs and B. Yeung (2002), Small and Medium-Sized Enterprises in the Global Economy, The University of Michigan Press, p. 1. 2 M. C. Venegas, Consideraciones importantes en las PYMIS en el presente, http://www.degerencia.com/articulos. php?artid=378 3 http://www.banxico.org.mx/tipo/publicaciones/ 4 http://www.canacomazatlan.bravejournal.com/ 5 http://www.revistapyme@grupogasca.com.mx ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 an internal environment without a preventive culture and preoccupied only by results of short term they still have the problem of low productivity and competitiveness. Only some of these enterprises have reacted and searched support to implement models based on the concepts of quality­productivity­competitiveness. Studies done in Mexico about the small and medium sized enterprises show their internal situation is not appropriated for a strong competitive environment. A research made in the year 2002 performed by Sérvulo Anzola about this type of Mexican enterprises, mention that these have a few or nothing planning in the areas of finances and administration, is common to plan only for a short period. The business owner does the majority of these functions, this situation causes him not to have sufficient time to make or implant the management process that helps him to plan, organize, manage and control more efficiently his business. The financial operation in the management are efficacious factors very important for the decisions made in the daily work of the small owners, these guarantee that an enterprise to be successful in its growing and continuous economic development. ,,For the small owner, the production process is a constant preoccupation, because they consider that this area is the base to improve the performance of their business, this situation demands all his time to check all the activities that this involved, like: People, raw material, machinery, equipment, maintains, tools, quality, warehouse, requests, et cetera."6 These type of situations are very important because in Mexico a great percentage of its economic future will depend of the fast-growing of the Mexican small and medium sized enterprises, not only by the volume of employment that generate and the amount of establishment (they represent 98% and give to more of 50% of the employments. http://www.pyme.com.mx)7 but to have a size that in occasions allows them to perform the manufacture of products with effectiveness and flexibility that in good number of cases the great enterprises to make with high costs.8 In this last years find clearer that the competitiveness of the enterprises depend not only of the quality or the price of their goods, but also of their ability for continuous improvement and adapt to change of the market. To know what and how improve is the key for the survival and develop of the enterprises. Mexico will accelerate the growth of SME'S in the manner that owners, managers, consultants and researchers in this area, know and understand the situation of these SME'S. Only in this manner they will be in a best position to help them to improve their economies, and indirectly these enterprises will contribute to the country economy. Main Discoveries Management Skill The Mexican researcher Sergio H. Kauffman Gonzalez mentions one problem of the Mexican SME'S businessman among another is that they have not a suitable business planning systems.9 Most of the Mexican small and medium enterprises have not the habit to planning to long term, normally the interest is in the short-term and this is normally focused to aspects about accounts, neither the results are checked for feedback some aspects of S. Anzola (2002), Administración de pequeñas empresas, McGraw-Hill, p. 40. http://www.pyme.com.mx 8 V. J. Rodríguez (2002), Administración de pequeñas y medianas y medianas empresas, International Thomson Editores S.A de C.V., p. 46. 9 http://www.uv.mx/iiesca/revista2001-1/empresas.htm ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 the implementation process and when a plan the follow-up exist is almost invalid. Situations like these were verified by the researcher Joaquin Rodriguez in his research where he found the lack of management skill like the second cause of failure of the Mexican SME'S after of the lack of prevention studies of market, financial and tax (1993, CONACYT, reference 0880-59110).10 The professor and researcher Servulo Anzola (2002) found that "a great management limitation in the small business man is how to know and use techniques and, controlling and planning tools. The Mexican small enterprise simply don't exist the long term planning, only exist it in enterprises of this size that have international markets. The 30% of the Mexican small enterprises use the quality standards and the budgets like planning tool but these are not taken into account for their application and control".11 This situation impact negatively in the implementation of a manufacture system, method or technique because in this cases is important to understand that the results of a system o method are reached normally in the long term, in others words, when a new system is integrated to the work culture is when it has been implemented successfully. Employees Participation Richard J. Schonberger (1986) said ,,so that a manufacturer become of world category, the participation and communication is not sufficient. It is necessary that the employees in the plant have a real intervention in the solution of problems".12 When a small or medium Mexican enterprise is beginning an implementation of any manufacture system or technique, the participation of its employees is almost invalid because ,,the owners are traditionalists, all the direction of their enterprises is in basis mainly to the knowledge derived of their experience and reject any help that it is meddling with their activities" (S. Anzola 2002).13 There are different activities where the employees can participate in an enterprise like: establishment of goals, decision-making, solution of problems, and planning of the mean changes of the organization. The participation will be more effective if the employees think that they have a contribution valid to do, if the organization appreciates their contribution and if the organization rewards it (K. Davis and J. W. Newstrom 1991).14 Any implementation of world class manufacturing needs the participation of all its employees. The employee's commitment increase when their participation increases too. In others words, like Keith Davis say "the employees show a personal commitment about the solutions that they generate because in some sense are of them".15 Some success Mexican SME'S like Crest, S.A. de C.V., Fábricas Monterrey, S.A. de C.V., Kluber Lubricación Mexicana, S.A. de C.V., ARMEX Tecnología en Arneses, S.A. de C.V., Colorgráfico, S.A. de C.V. have been involving all their employees in the mean changes of their organizations and this situation have accelerate the change (C. S. Andriani, R. E. Biasca, M. Rodríguez 2003).16 V. J. Rodríguez, Administración..., p. 90 S. Anzola (2002), Administración de Pequeñas Empresas, McGraw Hill, p. 13. 12 R. J. Schonberger (1986), World Class Manufacturing, The Free Press, Chapter 1, p. 20. 13 S. Anzola, Administración... 14 K. Davis, J. W. Newstrom (1991), Comportamiento Humano en el Trabajo, McGraw Hill, p. 276, 281. 15 Ibidem. 16 C. S. Andriani, R. E. Biasca, M. Rodríguez (2003), El nuevo Sistema de Gestión para las PYMEs, Grupo editorial Norma, p. 237­246, 255­262, 271­296. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Communication It is typical in a small or medium sized Mexican enterprise manages centralizing the information. The communication is focused in the control and possession of all the enterprise activities by the owner, where the orders and counter-orders are commons among the decisions taken for the employees that are normally relatives, confusing in all moment their roles as employees with the family relationship. This situation restricts the advance in the implementation of a manufacture method o technique. ,,Most of the small and medium sized enterprises have a family structure; the family is involved directly in the enterprise activities. The father, the uncle, the son, the wife or any other family member realize the main functions. It is important to mention that is common to find little differentiation between the family system and the enterprise system and to keep separated these two aspects, being this the main cause of many of the conflicts in the small and medium sized enterprises, where the personal feelings are constantly involved with the feelings of the enterprise activities"17 and when this happen the communication is lost. Training Is common to find small and medium sized Mexican enterprises to want implement a manufacture method o technique without training their employees. This is other situation that difficult the implementation of a manufacture method or technique, overcoat in the production area. ,,Many owners of small and medium enterprises have not the sufficient formal training about of the modern management, this often cause lost in workers, materials, quality, slowness in the delivery and a high rotation of people. This operation and management problems give like result blockings to the enterprise growth."18 Most of this enterprises that put some of care in the human resources look at the training like a necessary harm. In many cases, only the technical training is provided to the workers in their work. Fortunately nowadays the Mexican federal government is supporting the SME'S with develop programs like ,,FONDOPYME" to training in management skills and supports in consulting for the implementation of innovative processes (Official Journal of the federation February 28, 2007).19 Implementation Follow-up Dennis P. Hobbs (2004) remark the importance of the implementation follow-up when he say ,,to ensure successful implementation of the Lean manufacturing initiatives, it is imperative that a steering committee be created to oversee implementation activities".20 In the small and medium sized enterprises is normal that in the implementation of manufacture systems, methods or techniques have not a management group that gives follow-up to this implementation, normally the owner directs the implementation, but as is a person very busy he forgets the follow-up. There are many literatures that describe the advantages to form a management team that focus the tasks of the implementation with a spirit of team work, to generate a team work culture. In so many enterprises of this type, the implementations have failed by the lack of the team work. ,,The up-management teams in the conventional companies have typical characteristics of small and medium-sized family-controlled companies, i.e. the owners are very much at the centre of activities and only a few key individuals S. Anzola, Administración..., p. 22­23. Ibidem, p. 44­45. 19 http://www.emprefiscal.com.mx/revista/diario/2007/feb07/dia070228_02.htm 20 D. P. Hobbs, P. Dennis (2004), LEAN Manufacturing Implementation ­ A Complete Execution Manual for Any Size Manufacturer, J. Ross publishing, p. 186­187. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 outside that group are involved in management. The board of the directors is solely a formal institution. The only external influence comes from a few people who constitute the small personal networks of the owner-manager. The observation on the industry level that there are some very rigid rules of the game is also evident here; the significant people always act within a narrow band of action".21 Philippe Lorina (1993) in base to his researches suggests some practical rules to improve the opportunities of success in the implementation of new systems or methods. He say the implementation consist in a true cultural change not a simple tool change. The new systems and management methods most implement by stages and never pass to the next stage until to have assimilated knowledge consolidated.22 Operational conditions ,,housekeeping" Takahiro Fujimoto (1999) marks on the Shop Floor is very important the ,,Cleanliness, Order, and Disciplin".23 According to Larry Rubrich & Madelyn Watson the ,,5S" (Japanese method) are the keys to workplace organization and housekeeping.24 Many small and medium sized Mexican enterprises have not the culture of work in an ordered and clean environment. The mess and dirt block the implementation of a manufacture system, method or technique and the people mind too. Some enterprises of this size that have begun a continuous improvement, first they have been working in design and adapt parameters of tolerance/intolerance and discipline for their work areas. For this they have ensured to have the necessary elements like: prepared people, instruments or support devices, economics resources to apply the necessary improvements, and so on, but overcoat the leaders must dedicate sufficient time to live with an exemplary behaviour. The housekeeping does not consist in order, it is prevent the disorder. Human relations in the production area ,,One of the mistakes more serious in that fall the Mexican small and medium enterprises nowadays is the lack of motivation and validation of the people, essential condition to generate the team spirit that all enterprise needs to compete with possibilities to grow, but also it is something that the managers have to make from the heart."25 The human relations in the production area must have with basis a shared vision like Peter Senger (1990) say ­ the practice of shared vision suppose aptitudes for make visions of the future shared for all the employees in a enterprise that encourage a genuine commitment.26 The managers should enjoy more their people, to share more, leave them to create more, to participate actively and listen with more attention their points of view, and with more reason in the small and medium enterprise where the manager or the owner knows all the people by their name and with certainly many of them are accompany him since many years ago. The manager must trust in his people, and must be very careful with the selection of this people. 21 A. Haahti, G. Hall, R. Donckels (1998), The Internationalization of SMEs; Published by Routledge 11 New Fetter Lane, London EC4P 4EE. 22 Ph. Lorina (1993), El control de Gestión Estratégica, Alfaomega Marcombo, p. 165. 23 T. Fujimoto (1999), The Evolution of a Manufacturing System Toyota, Oxford University Press, p. 292. 24 L. Rubrich, M. Watson (2000), Implementing World Class Manufacturing, Third Printing, WCM Associates. 25 http://www.prodigy.msn.com/empleos/tips/desarrollo/default.asp. 26 P. Senge (2005), La Quinta Disciplina, Ediciones Granica, S.A., 11ª edition, p. 19. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Reference Point ,,Benchmarking" Tony Bendell, Louise Bouler y John Kelly (Benchmarking for competitive advantage, Pitman Publishing, London 1994), underline the first reference of the benchmarking goes back to beginning of 1950 when the Japanese carried out many visits to western organizations.27 In the Mexican small and medium enterprise is common begins an implementation about some manufacture system without have made an investigation of how others enterprises have implemented the same manufacture system or method. This situation also is important by the form in that it is implemented. ,,Nowadays, exist in the world performance index banks of big number of industrial sectors, so many of them adapted to Mexican experiences".28 With the benchmarking the enterprises look at the benefice of the learning of good practices of others enterprises, by this reason is important in a implementation about of system, method or technique, first to do an investigation or benchmarking, this will help to get an implementation success. The simple knowledge of how an enterprise is compared respect to the best, it is an information very values for motivate itself and to act in the correct direction, in other words, this information help it to implement those manufacture systems, methods and techniques more convenient for its domestic situation. Ideas destroyer managers vs. ideas sponsor managers ,,It is easy to perceive in the traditional organizations of the country a common tendency to destroy the new ideas".29 This situation in Mexico is more critical than others counties overcoat in small and medium enterprises. The main reason is that in these enterprises there is a type of traditional management technology and their culture tends to be preserved and oriented to the control, so, in this environment to prevail the boycott to the creation. It is common to find in this type of enterprises ideas destroyer managers to obstruct the implementation of manufacture systems, methods and techniques. One aspect about this situation is marked by W. Nasierowski and M. Bednarek (1998), in their research about the Mexican experience with TQM, they fond a ,,feudal" culture in Mexican organizations that block the communication between the top management with the others levels.30 Fortunately some enterprises of this type have ideas sponsor managers to promote and support the new ideas, this type of managers to protect the ideas generating workers against the ideas destroyers. Necessaries cultural changes About the theory of the cultural influence we can that: ,,Not necessarily to correspond to the scientific of the behaviour to verify if the principles or strategies that are implemented in a culture can not be implemented in other culture, but if to correspond him to understand the mean and the importance of this cultural variable". As result of a pioneering investigation of Geert Hofstede (1980, 2001),31 now we know enough about of the characteristics that define 27 Mencionado por C. Mora en su artículo El futuro del Benchmarking http://www.degerencia.com/articulo/el_futuro_del_ benchmarking 28 J. Giral, A. Eroles, V. Estivill, E. García, L. Larraza, G. Biseca, Empresas Competentes, Grupo editorial Iberoamérica, p. 27. 29 M. Herrer, Biocot a la creatividad en la empresa, http://www.lagente.com/cgi-bin-t1/contenido.pl?Art=81 30 M. Bednarek, W. Nasierowski (1998), The Mexican Experience with TQM, University of New Brunswick, Canada. 31 F. J. Landy, J. M. Conte (2005), Psicología Industrial; McGraw Hill, p. 26. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 a culture in particular the culture in the labour set. He developed a theory that mentions five basis elements in where the cultures can be different. The five elements are presented and defined in the table 1 (individualistic/collective, distance of power, prevention of the uncertainty, masculinity/femininity, long term orientation vs. short term orientation), and in the table 2 we can to observe the implications of the cultural dimensions for the resources management. In accordance with Hofstede, these cultural dimensions can to compare and to contrast different countries. Table 1 The five dimensions of the Hofstede`s culture theory 1. Individualistic/collective: Extent in that the persons procure for themselves vs. to remain integrated to one group. 2. Distance of power: Extent in that the members of less power of an organization accept and expect an unequal distribution of the power. 3. Prevention of the uncertainty: Extent in that the members of a culture feel comfort in unstructured situations. 4. Masculinity/Femininity: Distribution of the emotional roles among the genders, where the masculine role is ,,rude" and the feminine is ,,tender"; the masculine cultures tends to emphasize the achievement and the technical performance while that the feminine cultures to emphasize the interpersonal relationship and the communication. 5. Long term orientation vs. short term orientation: Extent in that the members of a culture expect to fill their materials necessities, socials and emotional, immediately or after of a time. In Mexico there are some small and medium enterprises that are managed by foreigners obviously with different culture and when they implement a manufacturing system expect a similar behaviour of the workers like in theirs countries. In these cases, is important that foreigners managers identify the cultural differences and to try to adapt the system to implement or try to change those cultural characteristics to block a success implementation. Some examples of small and medium size Mexican enterprises that implemented successfully, world class manufacturing systems, methods and techniques in the last years.32 First Case: The enterprise Crest, S.A. de C.V. (plant of Tizayuca, Hidalgo), belonging to the adhesive business of the Lamosa Group of Monterrey, Mexico, began operations in 1999 with 8 administrative employees and 40 workers. The top management took the decision of implement since the start of the plant the ,,total quality management system". With help of a consulter in quality its director received training in basis concepts and then he explained these concepts to his management team for this the education in the quality system to come down to the others organization levels. The department chiefs took a seminary about total quality management and they were formed like instructors of the education program and human development. Between the months of June and July of the year 2000 the department chiefs gave the education program and human development to all the workers that consisted in subjects like: How carry out your destine?, concepts about the human life, enterprise concept, quality control, the 5`Ss, work techniques and the seven steps for the quality. On the other hand, they implemented the management for politics where established the strategic vision basis in an analysis of the enterprise-environment system and the values of the own enterprise, and the establishment of the practice of the quality control for all the enterprise people. C. S. Andriani, R. E. Biasca, M. Rodríguez, El nuevo..., p. 255­262, 271­296. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Table 2 Dimension Distance of high power Low power distance Prevention of high uncertainty Implications in the human resources management Decision-making centralized, many supervisors by employee, autocratic leadership. Decision-making decentralized, few supervisors by employee, participative leadership Acceptance of techniques solutions, strong loyally with the enterprise, restricted innovations for rule. Sceptic techniques solutions, wick loyally with the enterprise, innovations Prevention of low uncertainty within restriction for rule. High Individualism Low Individualism High masculinity Low masculinity Employees to act by their individual interest, poor performance legitimate reason for the dismissal, training focused to individual level. Employees to act by the interest of the group, poor performance legitimate reason for the re-assignation of tasks, training focused to group level Less women in professional/technical positions, pressures towards the roles of traditional genders, the men described themselves how more competitive that women. More women in professional/technical positions, roles of no traditional genders, the women described themselves how more competitive that men. The position is valorised in the trade and the creation of interpersonal relationship, daily human relationships how satisfaction supply, accept of the delay to cover necessities. The essential results to short-term are valorised, daily human relationships are not satisfaction supply, it hopes to cover necessities of immediate manner Orientation to short-term Orientation to long term Since the beginning of the process the organization worked in the implementation of: 1. Basis management units. It get to establish the ,,routine management" by the own employees taking like basis the standardization and the control, through to turn the Deming cycle PDCA. In this point was produced the ,,manual of the basis managements units", where was specified how to form work-teams in eight work sessions. 2. Quality assure system. This system was implemented under the regulations ISO 9002:1994. The certification in ISO was gotten in six months. 3. 5' Ss. The implementation of this system was coordinated by a committee. After two years all people of the enterprise got to keep the first 3'Ss in operation and a great advance in the maintenance and the discipline. Two years after to implement the work system basis in the model of total quality management, this enterprise got excellent results like: ­ Reduction in consumption of bags from 1.83% to 0.77%. ­ Reduction in raw material inventory from 2 to 0.6 days. ­ Reduction in chemistry products inventory, from 1.3 to 1.12 days. ­ Increase of three times more in conversion efficiency of the raw materials. ­ Compliance 100% in the sales plan. ­ Increase in the equipment global affectivity from 69% to 85%. ­ Zero accidents incapacitates in a year. ­ Reduction of the unjustified absenteeism, from 17 absents to 0.66. ­ The attitude of the continuous improvement was taken root in the all people. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Second Case: The enterprise ,,Fábricas Monterrey, S.A. de C.V." (plant of Toluca). This is a case of a Mexican enterprise that did a transformation towards a high performance organization, implementing different techniques of the management system underlining a creative participation model and the total productive maintenance system TPM. This is a producing plant of beer cans and sanitary packets. This plant began operations in 1967 and actually has around 162 employees. In 1990 began a ,,change process" to raise the performance level of the organization. From 1991 began a total modernization process of the machinery and the implementation of use of ecologic materials. During the year 2000 was made a series of management where were studied the market trends. In the year 2001 the actions were: ­ Review of the organizational structure. The administrative staff was reduced from 64 to 36 employees, the persons that were removed of their place were relocated in others plants. ­ The supervision level was eliminated by the auto-control and the autonomy of the work teams. ­ New complementary functions were adding to the operative workers like implemented and improvement the system 5'Ss, work methods, analysis and solution of problems, visual management and process control. ­ The top management team defined the roles of the natural work teams and mixed committees. This also designed a formal communication structure. In the year 2002 this enterprise designed and implemented an innovation and creativity system trough the natural work teams. After the year 2002 this enterprise began an implementation about the improvement system that would be the main route to get the objectives of the next years, this system was the total productive maintenance. The main achievement with the implementation of the high performance organization and the total productive maintenance was a change in the work culture that generated new habits of order and cleaning, improvement of the work environment, detection and solution of problems of manner more agile with the participation of all the people, and in general a satisfied personnel. Third Case: The Mexican enterprise ARMEX Tecnología en Arneses, S.A. de C.V., is a manufacturer company of harnesses that began operations in the year 2001 with 8 employees and increasing to 40 employees in the year 2002, of these 29 were operators (most of them women). Its main customer is the company 3M in USA. ARMEX develops technologic products for special applications with a high technologic contented in great variety and few volume. This enterprise was a problem referent to negative values that some employees showed. For this problem the company adopted the Dia-LAJACONET system (Latin America Japan Consulting Network) basis in a program of education and human develop. With this system the general manager researched to develop an environment of harmony and cooperation. All the operators and employees followed the schedule of education and human development. Also, the top management did changes like: 1. The personnel of the production area don't have to check arrival and way out. 2. There isn't additional time. 3. The inspector and supervisor positions changed for the leader figure and basics managements units were formed. 4. The processes were redesigned in accordance with the techniques specifications solicited for its main customer that is 3M. 5. The system 5'Ss was implemented in all the plant. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008 Some results that were obtained: 1. It was obtained a work team engaged with the enterprise. 2. The absenteeism, rotation and scrap were minimized. 3. Nowadays the satisfaction in the workers is higher. 4. The products exportation was increased. 5. Complaints and rejections were reduced. 6. Aspects like security, work team and the working environment passed to be part of the enterprise culture. Conclusions These last years the Mexican SME'S have been improving their productivity but very slowly, compared to others countries. The success Mexican SME'S more than implement some method o technique of World class has changed their work culture. David P. Hanna said in 1968 that an organization should identify the behaviours or specific practices that are necessary change if it wants to improve its performance.33 It's very important to mention that small and medium sized Mexican enterprises should take the experiences of others enterprises to implement methods or techniques of world class manufacturing and identify the good practices or behaviours that support this implementation. The final result of the implementation is not only more productivity, the most important is that this implementation changes the enterprise towards a work culture more flexible to accept a continuous improvement. To encourage the participation of all the employees is the key of the success. Summary The article presents the experiences of Mexican SMEs in implementation of world class manufacturing methods. The author attempts to find the justification of success or failure in introduction of models, methods, and techniques of world class manufacturing by Mexican businesses. Market situation of Mexican SMEs in recent years is described, chief factors influencing effectiveness of implementation of certain manufacturing method are analysed. D. P. Hanna (1988), Diseño de organizaciones para la excelencia en el desempeño, Editorial SITESA, p. 97. ECONOMICS AND ORGANIZATION OF ENTERPRISE 1/2008

Journal

Economics and Organization of Enterprisede Gruyter

Published: Jan 1, 2008

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