Success and failure factors of collaborative networks of SME Success and failure factors of collaborative networks of SME USCO

Content of the presentation: l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions

Introduction Collaborative networks in the manufacturing sector : m Now a rather well known concept m Few real applications m Only ~5 cases in Switzerland Analysis of 2 networks running since a couple of years, one competitor based and a complementary one.

Content of the presentation: l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions

Swiss Microtech and USCO networks First case study : Swiss Microtech q Founded in 2001 q Legal form : association with lucrative goals q 8 subcontracting SME (4 competitors, 4 complementary enterprises) q Objectives : u To address together new markets and develop new products beyond the possibilities of each enterprise alone

Swiss Microtech and USCO networks Achieved results u 10% reduction of the production costs through common purchases u less investments needed through « outsourcing » within the network u reduction of monoculture (dependence on a few customers) u common sales and marketing activities u a few new products developed (medical sector) u intensive exchange of information and knowledge u a certain sense of security for the members

Swiss Microtech and USCO networks Second case study : USCO q Founded in 1995 q Legal form : company with limited responsibility q 11 broadly complementary subcontracting SME q Objectives : u To deliver complete assemblies and machines and develop new products beyond the possibilities of each enterprise alone

Swiss Microtech and USCO networks Achieved results u delivery of assemblies and complete machines to their customers u new customers found u industrialisation and sale of a new hardness measurement machine developed by a technical university u reduction of monoculture (dependence on a few customers) u few common sales and marketing activities u a certain sense of security for the members

Content of the presentation: l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions

Success and failure factors Common success and failure factors : q Customer orientation (added value) q Careful selection of the partners (equal chances) q Strategic goal for all partners q Network size adapted to the goals q Similar partners (size, resources, “the rich and the poor”) q Common business ethics q Transparency q Presence of “motors” q Balance between activities for the network and for its own company q First success quickly reached

Success and failure factors Success and failure factors depending of the network characteristics “Narrow band networks” q Common purchase of goods and services very interesting and motivating q Common marketing and sales make sense q Exchange of information and knowledge very valuable q High level of fear, at least at the beginning q Transparency between members not evident q Trust is crucial

Success and failure factors Success and failure factors depending of the network characteristics “Large band networks” q Common purchase less evident q Common marketing and sales make sense q Level of fear and risks of conflict considerably lower q Equal participation to the benefits q Common activities must be organized

Content of the presentation: l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions l Introduction l Swiss Microtech and USCO networks l Success and failure factors l Conclusions

Conclusions  Promotion of the concept of network is strongly needed in Europe  Further research is needed to answer the question “What would the participation to a network really bring to my company”, particularly to quantify the “soft” factors like - created synergies for the customer - exchange of information and knowledge - reduction of the investments - sense of security - avoidance of monoculture

Conclusions Thank you for your attention !