Best practices of collaboration between university and industrial SMEs P. Pec ¸as and E. Henriques Technology and Management Group, Department of Mechanical Engineering, Instituto Superior Te ´cnico, Lisboa, Portugal Abstract Purpose – The purpose of this paper is to contribute to the implementation of best practices of collaboration between university and industrial small- and medium-sized enterprises (SMEs). Design/methodology/approach – This paper presents the experience carried on by a university group fostering the collaboration with SME companies involving young engineering students and researchers in projects designed for the resolution of real industrial problems. A collaboration model is proposed and described. Four real case studies are presented. Findings – The purposed model promotes the involvement of the young engineers with authentic industrial experiences, enables the build-up of their practical framework and encourages their entrepreneurial growth. It also promotes the innovation process in SME companies through the close collaboration with universities. Practical implications – The collaboration between universities and SME companies should be based on a small projects base. These projects must be focus in localized and specific problematic areas in the industrial companies, where the potential of improvement and innovation is large, must diagnose the problematic situation and propose new and efficient solutions supported by technical/scientific methodologies. The involvement of managers and collaborators of SME companies and the clearly definition of their roles in the project are fundamental issues for the collaboration success. Originality/value – The model presented in this paper describes an innovative step-by-step procedure, easy to be implemented by the universities. It emphasises the impact of some details during the collaboration process that enhance the success potential of university-SME companies’ projects, the quality of the research work produced and the quality of young future engineers training. It also fits with the SME companies’ demands of a mix of structured knowledge and empirical experience. Keywords Universities, Small to medium-sized enterprises, Lean production, Best practice, Partnership, Portugal Paper type Research paper Introduction Manufacturing has changed radically over the course of the last 20 years. Moreover, the only thing certain in the future is the change acceleration in the manufacturing domains. New products and processes are and will be foster by the emergence of new manufacturing technologies, stimulated by intense competition. As complement, new management and labour practices, organizational structures and decision-making methods will emerge (NRC, 1998; Tavares, 2000). With regard to recent studies concerning the manufacturing challenges for the following decades a critical step will be the development of an underlying technical foundation through research performed by industry, academia, and government institutions (NRC, 1998; Mateus, 2000). Taking advantage of the synergies of these three research actors, manufacturers will fulfil The current issue and full text archive of this journal is available at www.emeraldinsight.com/1463-5771.htm BIJ 13,1/2 54 Benchmarking: An International Journal Vol. 13 No. 1/2, 2006 pp. 54-67 q Emerald Group Publishing Limited 1463-5771 DOI 10.1108/14635770610644574