Smes Six Sigma and Smes

SMEs

Six Sigma and SMEs

SMEs Defined

SMEs (small to medium enterprises) are defined by a number of telltale characteristics, none the least of which include the entrepreneur as "a key figure in business operations" (Bigras & Gelinas, 2004: p. 253). Within SME's organizational structure and processes are often simpler. In many cases an owner-manager is responsible for carrying out corporate vision and translating objectives into action oriented processes (Filion, 1991: 45). SMEs are typically defined by a high need for achievement and success, independence an autonomy (Bigras & Gelinas, 2004). Many focus on the effectiveness rather than the efficiency of processes.

SMEs are also defined by greater flexibility with respect to production capabilities (Bigras & Gelinas, 2004; Filion, 1991). SMEs are typically characterized by less comprehensive and sticky bureaucracies and more versatility in production. Many adapt well to environmental changes (Bigras & Gelinas, 2004). SMEs are also much smaller than large enterprises and hence typically entail independent units of management, which may be dependent on the experience of top management or the manager owner in many cases (Bigras & Gelinas, 2004). More often than not SMEs rely on hierarchical structures for support which can make the decision making process move much more swiftly.

Strategic planning in the SME is often dictated by the environment and organizations perceptions of changes in that environment in the short- and long-term (Bigras & Gelinas, 2004). SMEs often rely less on standard processes than do larger organizations, making six-sigma implementation more challenging and often a more time consuming effort.

Aragon-Sanchez & Sanchez-Marin (2005) also define SMEs by their flexibility, organizational processes and hierarchical management style. They suggest that SMEs are often defined by their proactive and innovative strategies that enable cooperation agreements with other firms (p. 287). The authors suggest that a strategic overhaul in SMEs is more cost prohibitive and may impact an organizations culture more so than in a large enterprise environment.

Limitations of SME's To Implement Six Sigma

Six sigma is a quality driven process that requires organizational processes produce nearly flawless execution of processes. It suggests that an organization take steps to delivery what the customer wants, needs, seeks and feel sand ensure that predictable processes are available to improve customer experiences. Predictable business processes are often difficult to establish in the SME environment.

For one six sigma integration often requires logistics integration which historically has been one of the more prevalent challenges SMEs face in managing processes (Bigras & Gelinas, 2004: p. 263). SMEs must often change operational and organizational styles to conform to six sigma strategies and replace traditional ways of doing business with more integrated systems to help synchronize transactions (Bigras & Gelinas, 2004: p. 263). This is particularly challenging for small industries where replacement of management methods or integrated practices is not feasible in most situations.

Why Cost Likely to Big Deterrent for SME's When Financial and HR Resources Limited

Cost is often a large deterrent for SMEs desiring six-sigma implementation. Large enterprises often have no trouble delegating the resources necessary to promote successful implementation. For years human resource management and financial resources have often been highlighted as primary concerns for SMEs (Aragon-Sanchez & Sanchez-Martin, 2005). A positive relationship however is often correlated between HR and financial resources and business performance, thus many SMEs have to work extra diligently to adopt adequate HR and financial practices within the organization (Aragon-Sanchez & Sanchez-Martin, 2005).