Coordinating Industrial Modernization Se

COORDINATING INDUSTRIAL MODERNIZATION SERVICES: OVERVIEW OF IMPACTS AND INSIGHTS FROM THE U.S. MANUFACTURING EXTENSION PARTNERSHIP

Philip Shapira, School of Public Policy, Georgia Institute of Technology, Atlanta GA 30332-0345 USA (Email: philip.shapira@pubpolicy.gatech.edu); Jan Youtie, Economic Development Institute, Georgia Institute of Technology, Atlanta GA 30332-0640 USA (Email: jyoutie@mail.edi.gatech.edu)

Published June 1996. Presented at Annual Meeting, Technology Transfer Society, Cleveland, OH, July 1996.

ABSTRACT | INTRODUCTION | APPROACH | MEP AND SERVICE COORDINATION | SERVICE IMPROVEMENTS | BEST PRACTICES | TENSIONS/BENEFITS | CONCLUSIONS | ACKNOWLEDGEMENTS | REFERENCES | TABLE: BEST PRACTICES

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ABSTRACT: This study examines how programs sponsored through the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) have influenced the organization and delivery of industrial modernization services to small and medium-sized manufacturers in regions in the United States. In addition to providing an evaluation of the impacts of the MEP program on industrial services coordination, the study identifies and examines exemplary cases and best practices in service coordination which can be disseminated to assist MEP program management.

INTRODUCTION

Partnerships among and between private and public organizations are increasingly becoming important for technology program service provision in the United States (Osborne and Gaebler 1993). In the field of technology policy and technology transfer, there are cooperative programs in all fifty states which, from 1992 to 1994, were supported by $1 billion in funding. Ten federal agencies sponsored public-private collaborative technology programs in Fiscal Year 1994, with funding totaling $3.1 billion (Berglund and Coburn 1995).

The Manufacturing Extension Partnership (MEP) exemplifies this partnership trend. The MEP is a network of technology assistance and service providers which aims to upgrade the performance and competitiveness of small and medium-sized manufacturers in the United States (Shapira, Roessner, Barke 1994). MEP is a collaborative initiative between federal and state governments which also involves non-profit organizations, academic institutions, and industry groups. The U.S. Department of Commerce, National Institute of Standards and Technology (NIST) is the MEP's federal sponsor. From three Manufacturing Technology Centers (MTCs) in 1989, the MEP has now grown to a network of more than 60 centers in 42 states.

One of the major areas where NIST has sought to identify and disseminate program learning and best practice is that of service coordination (Shapira 1994). MEP centers usually involve various other organizations to operate their programs and provide services to their small and mid-sized establishment (SME) customers. Across the MEP system, there are hundreds of these partner organizations, including non-profit technology or business assistance centers, economic development groups, universities and community colleges, private consultants, utilities, federal laboratories, and industry associations.

STUDY APPROACH

This document reports on a study which has examined the development, operation, and effects of efforts to promote local service coordination in the MEP system. (Shapira and Youtie, with Kingsley and Cummings 1996). The study probed the extent to which service coordination has grown among MEP affiliates, the organizations and institutional relationships involved, and the impacts on how services are delivered to customer firms. In addition, the study identified and conducted six in-depth case studies of the following centers with exemplary service coordination features: Chicago Manufacturing Center (Chicago, Illinois area), Georgia Manufacturing Extension Alliance (state of Georgia), Great Lakes Manufacturing Technology Center (Cleveland, Ohio area), Manufacturing Extension Partnership of Southwest Pennsylvania (Pittsburgh, Pennsylvania area), Minnesota Manufacturing Technology Center (state of Minnesota), Oklahoma Alliance for Manufacturing Excellence(state of Oklahoma). These efforts were used to distinguish best practices in service coordination.

The study addressed three major questions.

Did MEP sponsorship lead to increased service coordination among industrial service providers at the regional level?
If increased coordination occurred, did this lead to improvements in the way services were delivered?
Can best practices in service coordination be identified and, if so, how might these best practices be more widely known and disseminated?

In pursuing answers to these questions, we considered rival explanations and then investigated these alternatives before arriving at final conclusions.

MEP SPONSORSHIP AND INCREASED SERVICE COORDINATION

On the first question-whether MEP sponsorship led to increased service coordination-we found the following:

Federal initiatives-through such programs as the Technology Reinvestment Project (TRP) and the MEP- stimulated state and local service providers to work together in more coherent ways than they had previously. An analysis of 40 MEP centers showed affiliations and linkages with more than 750 external organizations in the public and private sectors. Without stimulation and support of federal funds, it is unlikely that the often extensive coordination alliances and measures now seen in the industrial modernization field and documented in the case studies would have occurred.

We did not find that state governments consistently required public providers of manufacturing assistance to coordinate their efforts. Drawing on the six detailed case studies of MEP centers, we saw instances where states had sought to promote service coordination alongside (and occasionally prior to) federal efforts; however, mostly there was "benign neglect" of issues of service coordination at the state level.

Most of the case study centers had, at their own initiative, developed a wide range of informal (and in some instances, formal) alliances and linkages. But for new programs developed under stimulus of the TRP and MEP, service coordination has been built from the beginning into the program design. And particularly for long-established programs, it really took the stimulation of federal TRP and MEP funding for serious attention to be paid to coordination (Coburn 1994, Advanced Research Projects Agency, 1994, National Institute of Standards and Technology 1994).

We did not find substantial evidence that coordinated service provision would be self-sustaining in the absence of a federal role. Coordinated service provision appeared as an "externality" which benefits customers and regional economies more than individual programs. In fact, individual program efforts to generate funds through managing external service providers did not generate substantial revenue for the program relative to the costs involved. Continued efforts at coordination are most likely to be encouraged by ongoing attention to this element by federal program sponsors.

SERVICE COORDINATION AND IMPROVEMENTS IN SERVICE PROVISION

For the second question-whether increased service coordination led to improvements in industrial modernization service provision-our conclusions were:

Enhanced service coordination has made available a wider range of expertise to firms and, in many instances, a more systematic approach to providing assistance. Involving other partners has allowed MEP centers to maintain flexibility and particularly helped the newly established centers to "ramp-up" their services fairly quickly by "leveraging" existing resources. In these and other ways, the quality of the service provision has been improved.

While there were benefits from increased coordination, it was apparent that these improvements had some direct (i.e., MEP) and indirect (i.e., non-MEP) costs. For example, MEP programs actively engaged in service coordination incurred various transactions costs, including the expense of information exchange, contracting, consulting, and monitoring. In some cases, the minimization of interorganizational tensions required the expenditure of "political" capital. It was also noted that the other program resources "leveraged" by MEP centers were not "free" in that they had to be paid for by other public or private sources; at the same time, there was a reduction of inefficient program overlaps.

BEST PRACTICES IN SERVICE COORDINATION

Finally, we probed whether best practices in service coordination could be identified and, if so, how these best practices might be more widely known and disseminated within the national MEP system. Through the case studies, we identified a series of service coordination best practices (Table 1). These practices included:

Shared systemwide partnership vision, in which centers select certain partners and arrangements that fit their program's vision. Two models include (1) for newer programs, partnership arrangements involving organizations taking on central program management and delivery roles, (2) for long-standing programs, partnership arrangements in which organizations are selected to fill relatively narrow roles such as providing key services or access to certain segments of new customers

Structured flexibility, through which MEP programs consciously consider and anticipate the evolution of partner capabilities and relationships. Strategies, plans, and organizational mechanisms should address partnership development over time and consider how partner relationships might need to be modified

Joint marketing efforts-such as uniform marketing materials, jointly sponsored seminars and workshops, and co-locations (two organizations occupying the same office space)-which help to diminish the complexity in the large and diverse number of service providers, and overcome the high cost of marketing to small and medium-sized manufacturers

Cross-training, which allows organizations to learn skills and capabilities from one another, as well as imparting the center's approach and process for delivering services so that manufacturers receive uniform services regardless of the organization managing the project

Shared information, through formal methods such as systemwide electronic information systems, regular partnership meetings, or program-wide telephone directories; or through informal means, such as the establishment of personal relationships among individuals in different organizations who perform similar tasks

Development, sharing, and usage of tools such as assessment protocol and database systems which save development costs and promote cohesion throughout the MEP system

Coordinated referral systems which collect and disseminate information (through formal interviews with consultants and service providers, and shared databases) and furnish service providers with access to small and medium-sized manufacturing customers (through providing multiple referrals to a customer, and electronic or traditional requests for quotations or proposals)

Collaborative service delivery of assessments and projects

Specific mechanisms (e.g., staff functions, networks) to promote, monitor, and facilitate paperwork and other requirements of partnerships.

Partnership performance review, both review of individual partnership accomplishments relative to what was promised in a contract or memorandum of understanding and review of partnerships in context of changing industry needs and existing resources.

TENSIONS AND BENEFITS OF SERVICE COORDINATION

While service coordination has significant benefits, we also draw attention to the fact that there are costs and potential tensions from this approach. These drawbacks included increased costs (e.g., identifying service providers, lost learning within the organization, information sharing, contract management and monitoring projects), difficulties in maintaining quality across partner organizations, delays in timely service delivery, and inter-organizational tensions. At the same time, the benefits associated with service coordination included avoiding the duplication of services, tapping specialized skills, spreading development costs of new tools, broader marketing to new industrial customers, improving access to particular industries and areas, flexibility in staffing and the delivery of services, improving service quality, enhancing visibility in the locality, and strengthening state and local support.

CONCLUSIONS

We recommend that it would be useful to make these best practices more widely known and disseminated. Attention should also be paid to the required investments and tensions associated with efforts to implement service coordination. The mechanisms to promote knowledge about these best practices (and required investments) could certainly include circulating information about these practices through written and electronic forms. However, most useful in our view would be efforts to promote information and experience exchange across different MEP programs through forums, training events, and exchanges of personnel. The development and dissemination of case examples where firms have been assisted through coordinated services might also prove helpful (several such examples are documented in the full program case studies). And, of course, continued attention to issues of service coordination in program reviews, periodic guidance to program managers, and funding decisions is most important.

ACKNOWLEDGEMENTS

This paper draws upon research sponsored through a grant from the U.S. Department of Commerce, National Institute of Standards and Technology (NIST) under award 50SBNBC8305. (For the full report of the study, see Shapira, P., and J. Youtie, with G. Kingsley and M. Cummings 1996.)

COPYRIGHT INFORMATION

Permission is granted to copy or reproduce this document providing a full citation is used. The recommended citation is: Philip Shapira and Jan Youtie, Coordinating Industrial Modernization Services: Overview of Impacts and Insights from the U.S. Manufacturing Extension Partnership, School of Public Policy and Economic Development Institute, Georgia Institute of Technology, Atlanta, Georgia, USA, June 1996. We would appreciate copies of publications in which this document is cited.

TABLE 1. SUMMARY OF BEST PRACTICES IN INDUSTRIAL MODERNIZATION SERVICE COORDINATION

Practice           Description        Observations        Examples           

Shared             Partnerships fit   Because programs    The Chicago MTC    
system-wide        into the goals     have different      has                
partnership        and vision of the  strategies and      multi-organization 
vision             program.           local conditions,   al team            
                   Partners may take  their partnership   management.        
                   on central         arrangements are    Georgia has a      
                   management         likely to differ.   lead organization  
                   functions or (in                       using partners to  
                   longer-standing                        provide specific   
                   programs) play                         services.          
                   specific roles in                                         
                   providing service                                         
                   or access to new                                          
                   customer                                                  
                   segments.                                                 

Structured         Strategic and      In practice,        Oklahoma and       
flexibility        operating plans    external            Chicago both used  
                   recognize phases   changes-e.g.,       NIST planning      
                   of change in       customer needs,     grants to evolve   
                   partnership        budgetary,  or      their              
                   arrangements.      political           multi-organization 
                                      factors-often       al programs        
                                      drive                                  
                                      modifications in                       
                                      partner                                
                                      relationships.                         

Joint marketing    Collaborative      The cost of         Southwest          
efforts            activities for     outreach to new     Pennsylvania has   
                   increasing         types of potential  a uniform          
                   outreach to        customers or those  brochure which     
                   customers,         in a broader        all partner        
                   involving          geographic areas    organizations use  
                   marketing          is shared.  In                         
                   materials,         practice, the                          
                   jointly sponsored  partner that gets                      
                   seminars and       the first call may                     
                   workshops, and     keep the project.                      
                   co-locations.                                             

Cross-training     Programs to learn  Some centers        Georgia's          
                   skills and         provide little      partners have      
                   capabilities from  training to         held training      
                   one another as     in-house staff or   sessions in        
                   well as improve    partners.           financial          
                   inter-organization                     analysis, working  
                   al understanding                       with the federal   
                                                          laboratories, and  
                                                          other areas.       

Shared             Regular            Implementing        Southwest          
information        communication      shared electronic   Pennsylvania has   
                   among              information         an electronic      
                   organizations can  systems can be      information        
                   occur through      difficult and       system used by     
                   periodic           expensive.          more than 15       
                   meetings,          Personal links may  partner            
                   electronic         be weakened as      organizations.     
                   systems, and       staff turnover                         
                   informal           occurs.                                
                   mechanisms.  The                                          
                   institutionalizati                                        
                   on of personal                                            
                   relationships is                                          
                   particularly                                              
                   important.                                                

Development and    Collaborative      Saves development   Cleveland has      
sharing of tools   development of     costs, promotes     participated with  
                   assessment tools   cohesion, and       several other MEP  
                   and database       enhances expertise  centers in the     
                   systems for        of developers       development of     
                   distribution to                        assessment tools   
                   centers                                and an electronic  
                   throughout the                         reporting system.  
                   MEP                                                       

Coordinated,       Program-wide       Provides            Minnesota has a    
program-wide       mechanisms for     consistency in      system-wide        
system for making  accessing common   quality of          shared database    
referrals          information about  referrals           of external        
                   external service   throughout the      service providers  
                   providers for      program and lowers  and bulletin for   
                   making referrals   the cost of         posting project    
                                      finding referrals;  proposal           
                                      quality control a   requests.          
                                      possible problem                       
                                      for referrals                          

Collaborative      For assessments    May be more         Chicago uses       
service delivery   and projects,      objective, leading  multi-organization 
                   teams involve      to new              al teams to        
                   staff from more    observations and    deliver            
                   than one           recommendations,    assessments.       
                   organization.      but can cause                          
                                      delays                                 

Specific           Functions for      Prevents service    Oklahoma's         
mechanisms to      promoting and      coordination from   Regional           
promote            monitoring         taking a lower      Coordination       
partnership        partnerships       priority to daily   Councils organize  
                   within the         operational         existing           
                   organization       issues;             resources to help  
                                      facilitates         broker/agents      
                                      paperwork           effectively        
                                                          identify service   
                                                          providers.         
                                                          Georgia's          
                                                          Technology         
                                                          Linkages Office    
                                                          facilitates        
                                                          relationships      
                                                          with federal       
                                                          laboratory and     
                                                          university         
                                                          departments.       

Partnership        Evaluation of      Helps deal with     Chicago and        
performance        partnerships       changes in          Pennsylvania have  
review             against            partnership         modified           
                   contractual goals  performance over    contractual        
                   or manufacturing   time                relationships      
                   needs                                  with partners      
                                                          after review.

REFERENCES

Advanced Research Projects Agency, 1993, FY93 Technology Reinvestment Project, Solicitation.

Berglund, D. And C. Coburn, 1995, Partnerships: A Compendium of State and Federal Cooperative Technology Programs (Battelle Press, Columbus, OH).

Coburn, C., 1994, State Perspectives on the Technology Reinvestment Project Round I: A Report of Interviews of State Technology Program Leaders (Battelle Press, Columbus, OH).

Osborne, D. and T. Gaebler, 1993, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector, (New York, Plume).

Shapira, P., 1994, A Guide to Best Practices in Industrial Modernization, (Georgia Institute of Technology, Atlanta, GA).

Shapira, P., J. D. Roessner, and R. Barke, 1994, "New infrastructures for small firm industrial modernization in the USA," Entrepreneurship and Regional Development, 7.

Shapira, P., and J. Youtie, with G. Kingsley and M. Cummings 1996, Coordinating Industrial Modernization Services: Impacts and Insights from the U.S. Manufacturing Extension Partnership, (Georgia Institute of Technology, Atlanta, GA).