TECH MONITOR  May-Jun 2005 23 Special Feature : Innovation Management by SMEs Green Black Green Black Advanced manufacturing technologies in SMEs Strategic requirements for implementation in a developing country Rosnah Mohd. Yusuff, M. S. J. Hashmi and Lo Woon Chek Small and medium-scale enterprises (SMEs) are the backbone of the industrializa- tion process of many developed countries and play a crucial role in increasing a country’s economy. To be able to survive and grow, SMEs must adopt strategic tech- nologies and innovative management practices to survive. A study on the imple- mentation of advanced manufacturing technologies (AMTs) in SMEs in Malaysia, however, showed that the companies were more concerned with short-term gains, rather than the strategic benefits offered by AMTs. The lack of an organic structure, the lack of understanding of technologies, the inadequate levels of skilled workers and engineers and the culture of the industries are factors that will hinder SMEs from achieving the strategic benefits of AMT and adopting innovative management practices. Introduction MEs are the lifeblood of modern economies. The need for them to remain competitive and pro- duce high quality outputs is important not only at a national employment lev- el but also at industry level, where SMEs are often suppliers of goods and services to larger organizations. 1 SMEs comprise about 92.6 per cent of the total manufacturing establish- ments in Malaysia. 2 The Second Out- line Perspective Plan 3 and the Sixth Malaysian Plan 4 clearly laid down the role of SMEs as the backbone of Malay- sia’s industrialization process. S Dr. Rosnah Mohd. Yusuff Lo Woon Chek Department of Mechanical and Manufacturing Engineering Faculty of Engineering Universiti Putra Malaysia 43400 UPM, Serdang Selangor Darul Ehsan, Malaysia Tel: (+60-3) 8946 6342/6336/6335 Fax: (+60-3) 8656 7122 E-mail: rosnah@eng.upm.edu.my M. S. J. Hashmi Professor, Faculty of Engineering & Design, Dublin City University Dublin, Ireland E-mail: Saleem.Hashmi@dcu.ie Globalization, shortening product life cycles, increasingly sophisticated consumers, increasing labour costs and volatility in input prices has creat- ed an environment where manufactur- ers must be flexible, adaptive, respon- sive and innovative. 5 Also, firms must compete simultaneously on a variety of competitive priorities in order to re- spond quickly to market opportunities and threats. Global markets require that manufacturers have multiple compe- tencies. 6 In finding ways to increase com- petitiveness and productivity, the use of an advanced manufacturing technolo- Special Feature : Innovation Management by SMEs