Small can be (more) efficient

SMEs (Small and Medium Enterprises) have a number of problems reaching optimum productivity when comported to ‘the big boys’.  

It is harder for them to achieve the same economies of scale and hard for them to put the same pressure on their suppliers to contain costs.  They are less likely to employ consultants and advisers, yet also less likely to have their own productivity specialist on board.

Does this means that SMEs are likely to be less productive?

Well no, actually.  Small organisations tend to maintain focus on costs and cashflow, and they are are often small enough for the owner/manager to keep an eye on all parts of the business. They also generally have shorter communication channels.  

So, they hove some inherent advantages.

This does not mean that they have no need to think about their productivity - or perhaps think about it in a more coherent and structured way.  But they can blend productivity analysis with these inherent advantages.

For example, it can be easier to practice forms of kaizen if you already have effective teams and effective communication with and between teams.  If they have effective ways of monitoring costs and cashflow, they possibly have the basis of a set of productivity metrics.

If they have a number of managers, they may be  able to use each one to review/analyse another section or department to lend an untutored and fresh eye. (If these manager are given some basic training in productivity analysis and improvement, so much the better.)

‘Use what you have to give you more’ should be their strategy and motto.

Focus on productivity as well as costs.  And take advice occasionally to get some specialist knowledge and input.

You might be efficient (relatively) now - but you can improve further!