Need a more efficient business? Take the Productivity Challenge
There is limited time available to apply for the competitive funding initiative, which helps businesses identify areas where productivity could be improved
Productivity vouchers can be used to engage expert consultants to help assess a business’s value chain and operations. Photograph: iStock
Small Irish businesses have until November 22nd to apply for productivity vouchers valued at €2,500 each, to help them become more efficient, productive and profitable. The vouchers are available as part of the Productivity Challenge, a new national programme being run by Local Enterprise Offices (LEOs) around the country.
The scheme is aimed at helping small businesses boost their bottom lines by funding, resourcing and guiding them towards a more productive future.
“Both the government’s Future Jobs Strategy and the recent OECD report on entrepreneurship and SME growth in Ireland identified the need for small businesses to be more productive and competitive,” explains Oisin Geoghegan, head of the network of Local Enterprise Offices, which are located in 31 local authorities across the country and funded by Enterprise Ireland through the Department of Business, Enterprise and Innovation. “Small businesses grow organically and tend to evolve their own ways of doing things. They have their own procedures and processes that may have worked well when they were a start-up, or very small, but could be improved now.
“They may not be aware of that because everything seems to be going fine and they are very busy running the business,” he continues. “It’s very important that owner-managers take the time out to look strategically at their business and identify areas where productivity could be improved.”
The productivity vouchers can be used to engage expert consultants to help you assess a business’s value chain and operations. This can cover supply chain management, internal business and production processes and operations, right through to logistics and distribution networks. They can also be used to support the development of a more effective, capable and efficient workforce through relevant training.
“The voucher, which was announced by Minister Heather Humphreys earlier this year, can be used to deploy a member of a panel of consultants who the LEO will match with the company,” Geoghegan adds. “It can be used for up to three days’ consultancy work but that can be spread out and broken up in any way the company and the consultant deem appropriate. The consultant goes in and assesses the business processes using lean principles. They identify bottlenecks, weak spots, and productivity constraints and offer recommendations for improvements. The vouchers are worth up to €2,500 each and the business only has to make a contribution of €250.”
One company which has seen a quite dramatic gain in productivity since participating in a similar LEO programme is Arderin Distillery in Tullamore, Co Offaly. The company, which produces the premium Mór Irish Gin tripled output as a result of participating in the LEO Lean for Micro programme.
“We were producing 490 bottles a day and we got an order in for more than 15,000 bottles in a month,” says founder Eoin Bara. “We had to go back to the customer and say we couldn’t do that at such short notice and could only give them 7,000 bottles. That was about a month before our year end and it would have made a real difference. We just said to ourselves that we couldn’t let it happen again.”
That led to first contact with the Offaly LEO last February. “We told them we had two problems; we were running out of space and we couldn’t manufacture quickly enough. We said we needed new machinery and they asked how long it would take to get it, how much it would cost, and so on. They then suggested we try a Lean programme. We said we were already running pretty lean, but they said to try it and see how we got on.”
That resulted in the engagement of consultant Dick Whelan. “He came in and asked what our problem was and started looking at optimising our processes. He shot some videos and measured how long various parts of the process took and looked at ways to speed it up. We eventually achieved time savings of 30 seconds a bottle. That doesn’t sound like a lot but when you add it all up it took us from about 498 bottles per day to over 1,500.”
That came as a bit of a shock. “We asked ourselves how we were doing so badly but it wasn’t that, it just took someone impartial to come in and identify the areas for improvement and make recommendations. We made each change straight away as soon as it was recommended. They were all small things; four seconds here and five seconds there. Things like changing the physical layout of the line, shortening the line and so on. We looked at logistics as well and things like warehousing space and racking.”
Employee engagement was a critical success factor, Bara believes. “Everyone bought into the Lean mentality. Dick would come in and play a game. We would manufacture a paper plane and look at how we can make it better. That gave our employees a sense of ownership, and a by-product of the process is that we still have staff making suggestions on how to improve things. It’s been fantastic from a culture point of view.”
And it was very quick. “It took about six weeks to get from point A to point B. We were iterating very, very quickly and we could see the incremental improvements each time. We tried to standardise it and made sure people weren’t working faster than normal. We made sure the improvement was sustainable.”
While LEO support is usually restricted to companies with 10 employees or less, the Productivity Challenge is open to companies with up to 50, according to Geoghegan. “This allows us to assist those businesses that might have outgrown the LEO threshold but continue to have a need for programmes like this.”
He urges businesses to apply to take part in the Productivity Challenge as soon as possible. “It is a competition”, he explains. “There is a limited number of vouchers available and they will go to the most deserving applicants. They will be businesses who make a convincing case, demonstrating how they could make the best use of this funding opportunity. The application process is very straightforward, and businesses should apply now to avail of this very valuable funding opportunity.”
For more information, and to apply before the deadline of November 22nd, visit localenterprise.ie/productivity