Standardization and SMEs: the experience of Peruvian Standards Body Soraya Lastra Casapía – Standardization Specialist

Agenda o What have we done? o Peru’s challenges on SMEs o What are we doing? o Case study: Logistics Best Practices for Peruvian SMEs o Conclusions

What have we done?

Project for SMEs Project: “Technical Assistance Facility for trade – FAT “Access to markets and Integration through Standardization” European Union Funding: EUR INDECOPI’s contribution: EUR General Objective: To promote SMEs competitiveness through their participation in national and sectorial standardization for facilitating goods and services trade to European market. Project Period:

To make awareness about Conformity assessment To promote technical standards implementation To strengthen Standardization To encourage formalization and quality through Management Systems To promote standardization as a tool for entering markets To elaborate Technical Standards Outcome: 1 TS new and 66 revised Pilot Program Outcome: 9 SMEs certificated Dissemination and Training to SMEs Outcome: 6 Training courses in 5 provinces with 197 attendees To participate in international and regional standardization Outcome: 4 Regional and International meetings attended Components Work with Technical Committees and INDECOPI Work with SMEs

From 18 SME of the Pilot Program, 9 faced this process: 5 SMEs certificated product lots with Peruvian Technical Standard NTP :2009 Textiles. Clothing labelling specifications. 4 SMEs certificated Management Systems with Andean Standard NA0079 Management Model for Micro and Small Enterprises Certification Implementation Selection Diagnose Training AssessmentCertification SMEs Pilot Program - There were 32 SMEs applicants to the Pilot Program: 28 from Lima and 4 form Arequipa -SMEs assessed: SMEs selected for the Pilot Program (15 from Lima and 3 from Arequipa). -9 selected to the Certification Stage (5 textile labelling standard and 4 SME management system). Pilot Program

National Technical Committee SME Integral Management Secretariat: Ministry of Production Scope: Standardization of management activities, services and trade that involves SMEs. NTP :2006 Interpretation guide of NTP-ISO 9001:2001 for SMEs (under revision) Draft Technical Standard Management Model for Micro and Small Enterprises (under development)

Peru’s challenges on SMEs

National Council of Competitiveness Agenda Targets to 2018 √ To assess and reformulate 10 main programs Business Productive Development in order to attend at aligned strategy Activity: To design and implement mechanisms for financing SMEs guarantees, factoring, etc ( ) √ Increase in 20 % sales from SME’s that participate in suppliers development programs. Activities: To adjust and implement a tool from suppliers development (2015) To implement suppliers development projects ( )

Productivity Diversification Plan Axis 1: Productivity Diversification Promotion Axis 2: Regulation adaptation and administrative simplification Target: Increase business profitability and investment through regulation adaptation and administrative simplification with government organizations Action line: To facilitate the taxes payment, specially for SMEs

Productivity Diversification Plan Axis 3: Productivity expansion Target: Increase economy productivity and heterogeneity reduction. Action lines: To create Technology Diffusion Program for SMEs and expand the offer of Technological Innovation Centers. To create the Supplier Development Program for SMEs. To improve financial options for SMEs.

Exporter National Strategic Plan This plan is under public discussion. It is very important because this will establish the principal products to export. With this plan, SMEs will have a guide to follow up for entering to new markets.

What are we doing?

Legal framework DS Nº PCM – June 2014, approves Quality National Policy Law Nº – July 2014, creates Quality National System and National Institute for Quality

Quality National System Accreditatio n Standardizat ion Metrology National Council for Quality- CONACAL National Institute for Quality- INACAL Quality National Policy ACCREDITATION STANDARDIZATION METROLOGY Political Focus Institutional strengthening Quality culture Services related to Quality infrastructure Production and trade of quality goods and services

Quality National System Quality National System (QNS) is a functional system. The highest authority and governing entity is INACAL. Nature CONACAL (government – private coordination) INACAL (QNS Governing entity) Government and private organizations related to quality infrastructure Members To harmonize quality sectorial policies and in government levels. To promote a quality culture To guide and assemble Standardization, Accreditation, Metrology and Conformity assessment activities To promote the adoption and certification of technical standards. Principal objectives To manage and promote the quality policy’s implementation. To manage standardization, accreditation and metrology activities. To promote the use of quality infrastructure by stakeholders. INACAL main functions

National Council for Quality CONACAL is a multi-sectorial coordination body in quality matters. It will depend on Ministry of Production. Nature Government: Ministry of Production (Head) - The following Ministries: Economy and Finances, Foreign Trade and Tourism, Agriculture and watering, Health, Environment, Energy and mines, Labor and employment - National Council of Competitiveness. - National Council of Science, Technology and Innovation - Regional Government National Assembly - Peruvian local Council Association, - INDECOPI - INACAL (technical secretary) Private: Universities, consumers, Business Associations (1 from Largest companies and 1 from SMEs ). Members (18) To propose Quality National Policy to the governing entity for its approval. To check and follow-up the policy’s implementation Main functions

INACAL- National Institute for Quality Governing entity and technical high authority of QNS, in charge of Standardization, Accreditation and Metrology activities (today belongs to INDECOPI). Belongs to Ministry of Production Nature Ministry of Production (Head); the following Ministries: Economy and Finances, Foreign Trade and Tourism, Agriculture and watering and Health; INDECOPI, Business Associations and Consumers organizations. The Ministry of Production’s representative will be Chairman of INACAL Board of trustees (8 members) To manage and promote the quality policy’s implementation. To manage standardization, accreditation and metrology activities. To promote the use of quality infrastructure by stakeholders. Main functions

INACAL - Institutional Strategic Plan Axis 4: To generate a systematic approach of Standardization, Accreditation and Metrology Services Strategic objective: To promote development and demand of Quality Infrastructure services Strategic Actions: To give SME’ support in order to increase the use of Quality Infrastructure Services

With all these inputs we are drafting the Standardization Strategic Plan Indicator N° annual programs for technical assitance to SMEs in QI 12222

Case Study: Logistics Best Practices for Peruvian SMEs

Background INDECOPI, Peruvian Standards Body has a National Technical Committee on Logistic Best Practices. This Committee developed the Peruvian Technical Standard NTP :2010 SMEs Logistic Best Practices Standard. GS1 Perú – CITE Logística (Logistic´s Innovation and Technological Center) is a peruvian organization, leader in technical assistance and training in the implementation of global standards on logistics and supply chain years of presence in the country. Similar projects developed in Lima, Ica, Piura, Arequipa y Tacna based on Peruvian Technical Standard NTP

Objective Increase peruvian SMEs competitiveness through identification and implementation of logistics and supply chain improvements.

Project Scope - Specialized Training: Improve companies staff skills - Technical Assistance: Identifying logistics improvements opportunities. - Tracking & Tracing / Monitoring: Support the best practices implementation processes. - Certification: based on the standard and the implementations maded. Training and Technical Assistance in:  Business management and planning  Visibility and Global Standards  Sourcing  Warehouse and Stocks  Transport and Distribution  Operations/Manufacturing/ Service Level (*) (*) Based on the company sector Modules

Project Phases Execution Period: 12 months Training Technical Assistance Certification Assesment Implementation and Monitoring Audits

Inventory Turnover Productivity and Competitiviness Increase From 8 to 13 times Finantial Costs Companies Liquidity Increase (better stocks turnover and planning processes) Warehouse Processes Optimization Productivity in reception and dispatch process increase Products & Clients ABC Products & Clients Segmentation Out of Stocks 5% Sales Increase Logistics Costs Reduction Results and Benefits for companies

Better use of space has allowed to take inventory more accurately. This result and the correct sales planning has made it possible the monthly inventory turnover increase. Before After

Increased Storage Capacity 98 positions 154 positions = 57 % storage capacity Before After

Handling equipment improvement Stocka for reception and dispatch process 50% time reduction on reception and dispatch processes Better warehouse slotting based on products segmentation (items popularity analysis) Basic handling equipment purchase Better warehouse slotting based on products segmentation (items popularity analysis) Basic handling equipment purchase

Better use of internal areas Production area distribution improvement Unorganized production area Before After

Warehouse Area Improvement Initial Warehouse space New warehouse area and handling equipment implemented Before After

Key Success Factors There is a National Standard NTP approved by INDECOPI (Peruvian Standards Body) with stakeholders consensus. This standard stablishes general requirements of Logistic Best Practices for SMEs in order to make logistic processes in a more efficient (less effort) and effective way (better results). Colaborative and team working within the personal of the participating companies and GS1 Team. Support from a Project Facilitator that is going to monitor in real time the progress of each participating company. Top level commitment with the project and the best practices implementation process.

Conclusions National Standards Body has been done efforts to have an approach with SMEs through Funded Project such as FAT project. There is a National TC which is aimed to elaborate Technical Standards on micro and SME’s requirements. Peru has been issued Strategic Plans with specific actions to increase micro and SME’s competitiveness. There are successful peruvian experiences on implementation of technical standards in SMEs, such as case study on Logistics Best Practices. With these lessons learned and with the Strategic Plans as an input, in this new stage we aim to be closer to SMEs in order to support them more actively in their standardization requirements.

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