Capacity enhancement for MSMEs

Most of the business enterprises, specially the small ones reach a saturation phase early. This is because the physical capabilities of the owners get saturated by the increased volume not manageable by existing management personnel, complicity and other factors such as age. 

Success in growth at early stage of the entrepreneurs lead to complicity and rigidity. Highly centralized decision making power without any delegation of power lead to saturation of physical capabilities of the organization. Key management personnel should realize the fact and allocate his time judiciously.  There are many petty expenses which are large in numbers, but have little impact as a whole on financials. Small repetitive jobs be delegated and checked only periodically. Time saved can be utilized for more precious work. This not only releases the work load of senior management, but will also lead to built-up of mid-level management cadre.

The physical capabilities can be enhanced to some extent by standardizing the vendors for goods and services. If the organization choose just two or three vendors after proper screening for continuous supply of goods and services without any hiccups. It saves time too as vendors understand the need of the organization. Repeated orders to the same vendor will increase the importance of the organization in his business, which will be absent in case of off-the-shelf customer. One must realize that no vendor will antagonize his regular customer. One must consider the vendor as a stakeholder in business and pay him in time without any need to chase for payments. Automatic payments near due dates also build the confidence about the organization and considerable time is saved for non-receipt of calls and complaints of the supplier. Standardization of suppliers is of more important in Goods and Service Tax era and non-filing of timely returns by vendors can cause loss of Input. This can be more prominent in case of casual suppliers, who may miss putting the GSTIN of the organization in the returns.

Apart from vendors, the organization can standardize the conveyance and fooding expenses for outdoor employees avoiding the checking of detailed expenditures for conveyance and fooding. This will not only save time but also improve the moral of the employees.

The employees should also be respected and their feedback and suggestions for enhancing the productivity and business of the Organization. A well-planned stake in the company can also be considered for employees, who is crucial and have worked for long. There must be a gratuity policy for the employees, not just to abide by the law but to instill confidence and moral of the employees. Happy employees augur well for the company and improve its productivity and efficiency.

Better management of resources, both vendors and employees will enhance the capacity of the organization.