Hong Kong Manufacturing SMEs: Preparing for the Future

111• Implement suitable workplace safetyregulations to minimise on-the-job risksSMEs should ensure that workers are well trainedin the safe use of machinery, and that machineryand vehicles are properly maintained. SMEsalso should ensure that there is a culture thatencourages safety in the workplace.• Provide ongoing training for staff consistentwith the needs of the businessStaff training is crucial across the board.Employees will usually not become moreproductive without some form of training.Investments in training can be seen asinvestments in productivity improvement.• Seek cost–reducing business processesBookkeeping, accounting, payroll, simple ITfunctions, and other processes can often beoutsourced inexpensively. If not, ensure that inhousepersonnel can take on these functions in acost-effective manner.• Develop strong human resources policiesDealing with employees is one of the mostimportant functions of the firm. SMEs shouldattempt to ensure that their HR practices areattractive to workers. In a competitive market,workers who feel that they are well treatedand respected, who are fairly paid, who receiveworkplace training and on-the-job support, andwho can see a future with the company are lesslikely to leave to seek opportunities elsewhere.• Use IT effectivelyComputers and IT systems can be a huge benefitin administering the SME. Ensure that someonein the firm has the necessary skills to use IT tosupport the firm across its administration tasks.SMEs also should have computer security, datacontrol, off-site storage, disaster recovery, anddata location (where they want their data stored)policies.• Set up strong sales proceduresOften SMEs have rather haphazard salesprocedures. The firm should set forth clear salesprocedures that identify how much discretionsales people have in making sales, what creditchecks of customers may be necessary, whatpractices are not acceptable from sales staff,and how sales are to be logged into companyaccounts and systems.• Set up strong purchasing proceduresSMEs should have procedures that governarrangements with suppliers, quotationrequirements, acceptance procedures, andpayment processes. The payment system shouldensure payments are made in a timely manner,against valid invoices, and without overpaymentor duplicate payments.• Set up strong monitoring and controlfunctionsSMEs often do not have strong monitoringand control functions. As a result, they oftenrecognise problems only when it is too late.Inventory control, cash control, fraud prevention,risk management, and internal reportingprocedures are all crucial to firm success.Keeping Up To Date on Market, Technological,and Managerial DevelopmentsMany SME owners and managers are so busymanaging their companies that they do not keep upto date on market, technological, and managementdevelopments. Doing so is crucial for companiesto be able to compete effectively. SMEs cannotafford to lose customers to their competitors onthe basis of slow response times or lack of currentknowledge. Steps that can be taken include:• Keep up to date on market developmentsMeetings with customers and potentialcustomers, the general business press, tradepublications, and active participation in industryassociations can aid in this area. The Hong KongTrade Development Council also provides periodicmarket updates for major markets and industries.