Development of an effective training programme for manufacturing SMEs
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Why this plan was written
In New Zealand, the Tertiary Education Commission (TEC) provides funding support to Industry Training Organisations (ITOs), enabling them to deliver training to people employed within their particular target industries. Traditionally the ITOs have focused primarily on training programmes and learning pathways involving individual employees and individual employee outcomes. To be eligible for funding the trainees needed to be engaged in a formal Individual Training Agreement with their employers, and the learning outcomes must lead or relate to the achievement of a National Certificate or equivalent qualification. This scheme has been very successful in providing learning opportunities for people under employment, and for developing individual technical (e.g. machine operation, driving forklifts, etc) and non-technical capabilities (e.g. computing, literacy and numeracy, etc).
However, today’s business environment has presented the training providers and their client companies with new challenges. Manufacturing organisations are competing in an environment characterised by uncertainty, global competition, and high levels of technological change. The challenging task of managing the chaotic mix of people, machinery and materials must be achieved in such a way that it not only caters for every need of their demanding and knowledgeable customers, but also does it profitably in order to satisfy shareholders (Hammer, 2001). To achieve this, companies are increasingly moving towards newer paradigms like lean manufacturing, mass customisation and agility (ReVell, 2002). Successful implementation of these concepts requires manufacturing companies to be in a constant state of change, improvement and learning, as maintaining the status quo will no longer be enough to survive.
In such circumstances the focus shifts from individual learning to organisational learning. To achieve this, information and knowledge has to become embedded across the organisation which is comprised of a broad mix of individuals, skills and talents. The acquisition of knowledge by individual employees is not sufficient to achieve organisational learning (Jones, 2003), and in most cases changes in company culture are required to ensure that new staff knowledge is fully exploited. This is not to say that individual training is no longer important. Instead it is argued that the individual learning must take place within a wider framework of the organisational learning and cultural transformation.
Furthermore, in the case of small to medium-sized enterprises (SMEs), this new challenge for the ITOs and training providers is compounded by a number of distinct characteristics that differentiate SMEs from most of their larger counterparts. Along with deficiencies in human resources, managerial capabilities and financial resources, SMEs are subject to greater external uncertainty, which forces them to be more reactive and unstructured in their response to the changes in their business environment. SMEs are particularly important to the national economy as they are responsible for most net job creation in OECD countries and make important contributions to their productivity and economic growth. Manufacturing SMEs are responsible for a substantial portion of these contributions, generating a considerable share of value added output for a number of OECD countries, notably Italy, Portugal, Spain, Japan, New Zealand and Norway (OECD, 2005).
With the above in mind, Competenz (the New Zealand Engineering, Food and Manufacturing Industry Training Organisation) set out to develop an organisational training model tailored to the requirements of manufacturing SMEs, and in support of their existing individual training programmes. A pilot project was funded through TEC’s “Encouraging and Supporting Innovation Fund” to develop and validate the new organisational training model. The project carried out with a number of manufacturing SMEs was focused around the theme of competitive manufacturing.
As part of this pilot project, University of Auckland was commissioned to conduct independent research in order to validate and provide the required theoretical foundation for the developed programme. This report contains the outcome of the research project. First, the results of the theoretical research on the characteristics of SMEs that impact on their organisational learning are presented. This is followed by describing the key features of the organisational training programme developed by Competenz, and illustrating how they address the specific requirements of SMEs. Finally, the results of the case study analysis conducted on six manufacturing organisations taking part in the pilot programme, are presented.