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Proof that Intelligent Manufacturing Systems (IMS) works for SMEs

06 February, 2006

There is a perception in some quarters that the Intelligent Manufacturing Systems (IMS) program is not suited to Small and Medium-sized Enterprises (SMEs). In this article we examine some of the myths surrounding this perception and provide evidence that the myths are unfounded.

Intelligent Manufacturing Systems (IMS) - http://www.au.ims.org/

Myth 1: The cost of participating is prohibitive for SMEs.

Access to IMS is free for Australian organisations.  All Australian companies and research organisations are eligible to join projects free of charge.  IMS membership fees and Secretariat costs are funded by the Australian government.  Australian organisations are however expected to bear their own costs of participation - that is their own labour costs and expenses.

Australian SMEs are offered significant assistance in meeting the costs of collaborative R&D with partners across the globe.

The IMS Australia Secretariat provides financial assistance in the formative stages of an IMS Project to allow companies to travel to meet other prospective consortium partners and to prepare the project for IMS endorsement.  The guidelines are provided on our website here.... 
Public funding schemes such as the AusIndustry ICIP and Commercial Ready programs can be utilised to provide funding for execution of the project scope.  While these schemes are competitive, Australian IMS project consortia have been successful in obtaining public funds to allow their projects to proceed.

Return on investment is attractive.  The cost to an SME of their own participation is usually only a small part of the overall effort contributed by the consortium partners in executing an IMS project.  Usually this cost would be eligible for the 125% R&D tax concession.  However all project partners share the foreground IP rights in a project, these being the products of the gross collaborative effort of the consortium.  Therefore the benefit available to the SME is well beyond the capacity of any SME working on their own.  To date Australian organisations in IMS projects have enjoyed access to a pool of R&D effort 15 times greater than their own contributions.

Myth 2: It takes too long to see the benefits.

One of the most common concerns for SMEs is that their business is unable to sustain a significant investment in R&D that will only yield benefits in the medium to long term.

Focus on SME problems. In practice most SMEs that are involved in IMS projects act as case studies, and as such get benefits from participation in the short-term as their problems are solved by world-class researchers.  Past newsletter articles have given case studies on how IMS projects assisted SMEs in better understanding and improving their business processes, and removing constraints on production capacity.

Early access to advanced technologies.  As a consequence of being the focus of research, SMEs obtain early access to and experience with the products of the R&D, such as advanced technology and/or management techniques.  By way of example, IMS projects have given Australian companies access to rapid prototyping and rapid tooling technologies, and new environmental sensing technologies, all of which have enhanced their competitiveness.

New market opportunities.  In the course of IMS projects, SMEs are introduced to international businesses they may not otherwise encounter, enabling their access to new market intelligence, new business contacts and new supply chains.   Through early adoption of leading technology, new market opportunities will arise in their existing markets as they gain an edge over competitors.

“I know on a first-name basis the Vice President of Fanuc, the Chairman of the Board of Finmeccanica, and the Vice Presidents of Research for Toshiba and Samsung,” says one participant, “I would never have gotten into the door to see any of these people on my own.”

Myth 3: SMEs are overwhelmed by the big companies in project consortia.

The assumption underlying this myth is that an SME will not have the resources to negotiate an equitable position in a project consortium.  SMEs fear that larger organisations will use their deeper pockets to negotiate more favourable terms for themselves, often at the expense of the SMEs.

SMEs have equal and mandatory IP rights. A central feature of the IMS scheme is that the intellectual property rights (IPR) provisions are pre-negotiated, balanced and mandatory, which enables small businesses to co-operate effectively and on an equal footing with large firms.  Therefore the negotiating burden on SMEs has been eliminated.  While the ownership of Intellectual Property (IP) developed as part of a project remains with its creator, the other partners in an IMS consortium may use that IP free of charge and have guaranteed access to the IP for subsequent commercial exploitation.

SMEs do participate in significant numbers.  As illustrated above, the IMS scheme is very favourable to SMEs and this is reflected in the participation rate of SMEs in the program. Worldwide 40% of participating organisations are SMEs, the balance are larger industrial, academic or researcher organisations. In Australia, which has the highest SME participation rate, 71% of participating organisations are SMEs.

If you are an SME and think you might benefit from collaborating in an IMS Project, then contact the IMS Australia Secretariat.  There is no charge, and no obligation, so you have nothing to lose and much to gain.

For more information visit http://www.au.ims.org/

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