Implementation of the Single Minute Exchange of Die (SMED) Methodology in Small to Medium-Sized Enterprises: A Portuguese Case Study

Innovation plays a key role in Small and Medium-sized Enterprises (SMEs). Process innovation is extensively used to improve the production of a product or to provide a better service. Normally, process innovation plays a silent role in productivity improvement, as it is less tangible than product innovation. The Single Minute Exchange of Die (SMED) is a Japanese process-based innovative methodology that involves the separation and conversion of internal setup operations into external ones. The SMED makes it possible for firms to respond to demand fluctuations and results in the reduction of lead time as well as the elimination of wastefulness during changeover activities. Although its implementation has yielded important productivity increases, SMED experiences have not been quite widespread among SMEs and its implementation outside the Die cast technologies in large firms are still very limited. The main objective of this article is to provide an insightful case study implementation addressing this understudied topic: SMED implementation in a SME processing polyurethane poly ether foam. The case study took place in 2010 in a manufacturing firm employing 140 people in northern Portugal. A case study was deployed emphasizing a process-based view of the setup operations in a Looper, a machine that transforms sixty and twenty-meter long foam blocks into rolls. The main finding of this study is that by implementing SMED techniques, the firm managed to eliminate wastefulness and non-added value activities over 240 Keuro, consisting of about 0.9% of the firm's sales volume. (ProQuest: . denotes formulae omitted.)IntroductionThe increasing competitiveness in global markets unleashed a quest in the industrial business world for the improvement of firms' productivity.The last two decades have witnessed a great deal of changes in the management and organization of production systems in such a way that industrial firms, whether large or small, need to keep up with their main competitors on a global scale. Two important innovations underpinned these changes: the technological revolution and the introduction of new organizational techniques. The former, led by the introduction of information systems, machinery, telecommunications, pervasive automation and robotics, created unprecedented productivity gains and improved operations planning and control. The latter allowed for a larger focus on internal resources, as most of the firms realized that despite their technological acumen, it was their human and organizational capital that underpinned their productivity improvement, helped them reduce their time to market efforts, and improved their flexibility (Womack et al., 1990; Mcintosh et al., 2001). Innovation is recognized as one of the key success factors for the improvement of productivity (Freeman and Soete, 1997; ODCE, 1997; Utterback, 1971), being that it is structured around three main blocks: products, processes and organizations (European Commission, 1995). Product innovation is closely related to the development of new technologies and products that satisfy market needs. On the other hand, process innovation is related to new elements, equipment or manufacturing methods that improve the production of a product and provide a better service (Utterback and Abernathy, 1 975; Damanpour, 1 99 1 ; Damanpour and Gopalakrishnan, 2001; Dantas and Moreira, 2011). Ettlie and Reza (1992) and Frost and Egri (1991) defend that process innovations are less tangible and more difficult to implement than product innovations. Daft (1992), Ettlie and Reza (1992) and Damanpour (1996) state that product innovations are easier to imitate whereas process innovations are more organization specific, given that they cannot be copied without implementing changes in the organizational structure or management system.In organizational terms, it is possible to distinguish two types of innovation processes: the firm as provider or user of innovation. …