Tapi-DOST's Manufacturing Productivity Extension for Expromotion (MPEX) Program: The Case of Three MSME Beneficiaries

Date

4-2011

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Dinah Pura T. Depositario

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Abstract

The micro, small and medium enterprises or MSMEs are regarded as the backbone of the Philippine economy. They contribute largely to economic growth and development through increasing the GDP and employment. However, the MSMEs are constrained with resources for maximizing productivity, a fact that the government recognizes. Hence, there are current government initiatives to enhance the productivity of MSMEs, one of which is the Manufacturing Productivity Extension for Export Promotion or MPEX by the Technology Application and Promotion Institute of the Department of Science and Technology (TAPI-DOST).

The study in general scrutinized the implementation of the MPEX Program and the impact it has made on three of its MSME beneficiaries. Since it was launched in 1991, the program has assisted one thousand nine hundred eighty eight (1,988) MSME beneficiaries.

The research design used for the study was descriptive. Case analysis was utilized for describing and evaluating the performance of the beneficiaries before and after the MPEX intervention. Specially designed questionnaires were used as a guide for interviewing the implementers and the beneficiaries. Annual reports from TAPI and accomplishment reports submitted by the consultants to the Regional Office (RO) were also validated to serve as a reference in determining the impact or changes that happened with the firm. Partial Budget Analysis was also used to determine whether the returns, generated by the firms in adopting the recommendations of the consultants, cover the costs incurred. The beneficiaries were also requested to rate the program based on its significance to the improvements or changes with the firm.

The Manufacturing Productivity Extension for Export Promotion (MPEX) Program is a free hands-on program that aids micro, small and medium enterprises (MSMEs) in the manufacturing sector with the primary goal of attaining higher productivity for firms. Technical experts are deployed to the beneficiaries to provide consultancy services and identify productivity improvements in the firm. The program is open to firms under the following sectors: agro and food processing, furniture, gifts and holiday decors (GHD), information technology, materials science, metals and engineering and micro- electronics. Among these sectors, majority of the beneficiaries of MPEX were found to be food processing enterprises. The process of intervention among the beneficiaries can be summarized into five steps. First is the offering of the program to potential beneficiaries. Second is the accomplishment of the requirements for the interested firms. The third step involves the site visit where the actual intervention process takes in. Fourth is the feeding back of the recommendations by the consultants to the firm beneficiary while the last step is the monitoring by the RO – once, six months after the receipt of the assistance – to find out whether the recommendations were implemented.

The beneficiaries tackled in the case analysis were Joshua’s Meat Products (JMP), Maco’s Meat Products (MMP) and N.S. Alba Handicrafts (NSAH). The first two are meat processors in Laguna while the last one is a handicrafts/furniture manufacturer in Cavite. The consultants identified different issues and made necessary recommendations for each firm and it was up to the beneficiary whether to implement them or not. For JMP, the recommendations which had been implemented were: (1) proceed with the plant expansion and install an advanced type of storage facility; (2) adopt the format of income statement for a manufacturing firm; (3) prohibit the workers from bringing out laboratory gears; (4) use labeled plastics for product packaging; and (5) improve plant flooring and sanitation. In the case of MMP, the implemented recommendations from the consultant were: (1) prohibit workers to bring out laboratory gears; (2) improve packaging style; (3) acquire more units of equipment; (4) acquire a walk-in freezer; and (5) have a defined organizational structure. Lastly, for NSAH, the recommendations which had been adopted were: (1) use the proposed plant layout; (2) concretize the plant flooring; (3) record and keep financial statements; and (4) implement strict sanitary practices.

It was found out that the firms experienced improvements in different aspects of productivity after two years upon intervention. All three had an increase with the total volume of production, production capacity, gross sales, net income, employment and markets served. They also had improvements with processing time, product design/packaging, product shelf life, sanitation, etc. From the partial budget analysis done for two firms (JMP and MMP), the returns associated were found to justify sufficiently the costs incurred with the implementation of the recommendations made by the consultants through the intervention. Based on the significance rating done by the beneficiaries, the MPEX program posted a score of 3.37 (fairly significant to significant). This implies that the three firms consider the program a significant contributor to the impacts.

A common problem with the program is that beneficiaries do not implement the recommendations due to various reasons. One was the management of the firm beneficiaries being preoccupied with other tasks of running the business. Certain recommendations also conflicted with the guidelines of other governing institutions which give accreditation to the firm. Another problem was the lack of resources for funding the recommendations and many more. Based on the interview from the implementors, there were many causes of delay in the implementation of MPEX. These were the waiting time involved in the proposal preparation by the DOST ROs, the completion of requirements by the ROs, the project approval among the Executive Committee and lastly, the release of funds for the actual implementation of the assistance program.

The study recommends that the implementors push through with their future plans of expanding the scope of the program to include service-type businesses. For the DOST- CALABARZON it is suggested that they identify and train local consultants involving trainers from the field of business/entrepreneurship. It is also recommended that the name of the program be changed to Enterprise Productivity Enhancement through Consultancy Services (EPECS) to make it more encompassing. The tapping of consultants from the business sector is also suggested. The monitoring process shall also be extended from six months to up to two years and it must also involve the consultants. Lastly, a ladderized program for MSME productivity enhancement is proposed.

For the consultancy firms, it is suggested that an MPEX consultancy team must include a technical expert and a business management expert. A preferred schedule of visits is also proposed. Lastly, they must orient the consultants in their roster that the MPEX is a social responsibility instead of an income opportunity.

Lastly, for the current and future beneficiaries, it is recommended that they give their full cooperation with the implementers and the consultants throughout the process of intervention. They must also be transparent with the operations of the firm. They must also utilize the free consultancy service by consulting future plans of the management. They must also orient themselves with different alternatives of sourcing funds for projects which require capitalization.

Language

English

LC Subject

Business enterprises--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2011 M17 P36

Notes

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Document Type

Thesis

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