Diagnosing productivity problems in manufacturing smes: A partial case study

This study implements the complementary steps of productivity management; namely productivity measurement and diagnosing productivity problems in a small enterprise. Productivity management is cyclic and includes measuring productivity, diagnosing productivity problems, planning for productivity improvement and implementing the productivity improvement plan as consecutive steps. Sustainable competitiveness of enterprises is considered possible by managing productivity. However, it is difficult to say that SMEs manage productivity, furthermore, productivity, on of the fundamental measures of performance, is considered as important as profitability on their agenda. Productivity ratios are measured in a small sized manufacturing enterprise using RAPMODS (Ramsay Productivity Modelling System) that has advantages such as using existing accounting data, high confidentiality and low cost. Results show that the total and partial measures of productivity increased betweeen 2006-2008 and decreased in 2009. The decrease in 2009 was partially interpreted as an outcome of the volatility in raw material prices and currency and also the slump in demand due to the global financial crisis. Measures that excludes external effects shows the same trend, indicating internal productivity problems. The next step, diagnose studies has shown the importance of principles of a succesful diagnose such as working in different levels of the enterprise, not accepting the enterprise owner?s thoughts as they are and reaching conclusions based on evidence, not prejudices. The diagnose studies show that the enterprise is a production oriented family business and it is on the edge of institutionalization. The problems are defined and analyzed, examples are given on how to solve the problems. Production management is its core competency and the found and analyzed problems are concentrated in the human resources and marketing management. Fisrtly, the enterprise should conduct a reorganization study and enhance the human resources and maketing management functions prefreably by employing professional managers that are not from the family. Secondly, detailed planning can be done by the assigned managers based on the problem analysis in order to solve the problems, and improve productivity.