Strengthening the operations of micro, small and medium wood processing enterprises through Good Manufacturing Practices

In wood products supply chains, micro, small and medium enterprises (MSMEs) are the most vulnerable to crises, face difficulties in complying with regulatory requirements and have the greatest training needs. Yet, they contribute to local economies by generating jobs and income and can play an important role in reducing climate impacts. This brief explains how Good Manufacturing Practices can increase the competitiveness and resilience of MSMEs and provide incentives for them to adopt legal and sustainable sourcing and processing practices. It is also a resource for industry associations, vocational training centres, and local and national authorities that build the capacity of wood processing MSMEs.

Key messages

  • To thrive in the forest industry and access more lucrative domestic and international markets, MSMEs need to improve their operations and increase their competitiveness through capacity building and long-term commitment to applying good practices.
  • Good Manufacturing Practices enable MSMEs to achieve continuous business operations. They consist in systems devised to ensure the consistent production and control of manufacturing following predetermined quality standards. They cover all aspects of manufacturing, from handling raw materials to the manufacturing premises and workers’ activities.
  • The two key aspects of Good Manufacturing Practices in the context of wood processing MSMEs are workshop operation management and material control. These practices tackle two challenges faced by MSMEs: irregular operations and the lack of material control.
  • Irregular operations are challenging for workers because they lead to an irregular work schedule, unspecified duties and responsibilities, and ultimately misinformation on the operation activities. The lack of material control is detrimental to wood processing workshops because it results in mix material arrangement, misprocessed product components, production cost miscalculations and the inability to comply with legal requirements, such as the traceability of the raw materials used.
  • Based on the pilot experience, the briefing makes the recommendations for Good Manufacturing Practices trainings, including the following:
    • Trainers should advise business owners to make improvements step-by-step. Radical overall changes are unlikely to be successful.
    • MSMEs’ first priority is profit generation. Training activities should therefore be geared towards increasing their profit. If not linked to profit, business owners will not be interested in participating in training activities.
    • Waste should be portrayed as cost and one of the components that determine the price of a product, besides material cost, labour cost, etc. By managing and reducing waste, MSMEs will be able to reduce costs and generate more income. Portraying waste as cost and income opportunity will encourage MSMEs to better manage it.
    • For each topic, training materials should be summarised and consolidated into a single, visually appealing and comprehensive poster. These posters will help participants revisit the training content from time to time and inform those who did not join the trainings. Depending on the location of the MSMEs and the local culture, information desks could be created in traditional houses or near local government offices.
    • Using social media, a network should be created among the trained MSMEs. After each training session, the content should be summarised into small sections and shared with all MSMEs via the social network. Participants should be encouraged to share their experience in the implementation of the training content to stimulate implementation by others.
    • Study tours should be organised to visit larger enterprises. Business owners should be encouraged to attend workshops and seminars outside their area. These activities will open their mind to different practices and motivate them to make changes to their businesses.
  • EFI has made the training materials used in the pilot projects available on its website. The training materials include drawings and photos of operations observed in the Mekong region. The materials are meant for micro and small operators in the Mekong region. However, they could be used more widely in other geographical areas where the challenges and training needs of MSMEs are similar.