Notice from the General Office of the Ministry of Industry and Information Technology on Issuing the "Guidelines for the Management Improvement of Industrial SMEs (Trial)"

To the SME authorities of all provinces, autonomous regions, municipalities directly under the central government, cities specifically designated in the state plan, and the Xinjiang Production and Construction Corps:

To implement the decisions and deployments of the Party Central Committee and the State Council on promoting the specialized and innovative development of SMEs, and in accordance with the relevant requirements of the "Notice on Further Supporting the High-Quality Development of Specialized and Innovative SMEs" (Finance Construction [2024] No. 148), the Ministry of Industry and Information Technology has organized the preparation of the "Guidelines for the Management Improvement of Industrial SMEs (Trial)", which is now issued to you.

All units should strengthen publicity and interpretation, organize industrial SME management diagnosis and consulting services activities tailored to local conditions, especially for specialized and innovative SMEs, promote the awareness of scientific and standardized management among industrial SMEs, improve management measures, enhance management levels, and promote the high-quality development of SMEs.

General Office of the Ministry of Industry and Information Technology

August 29, 2024

Guidelines for the Management Improvement of Industrial SMEs (Trial)

General Secretary Xi Jinping has repeatedly emphasized "promoting the specialized and innovative development of SMEs" and "strengthening internal capabilities of enterprises, especially improving operational capabilities and management levels." The Third Plenary Session of the 20th Central Committee of the Party proposed "supporting and guiding various enterprises to improve the efficiency of resource factor utilization and management levels." Improving enterprise management capabilities and levels is an important means to tap internal potential, reduce costs and increase efficiency, and prevent risks in SMEs. It is an inherent need to promote the specialized and innovative development of SMEs and a necessary requirement for advancing new industrialization. To implement the decisions and deployments of the Party Central Committee and the State Council on promoting the specialized and innovative development of SMEs and advancing new industrialization, and to promote the improvement of management capabilities and levels of industrial SMEs, the "Guidelines for the Management Improvement of Industrial SMEs (Trial)" (hereinafter referred to as the "Guidelines") have been formulated.

I. Overall Requirements

The "Guidelines" mainly target industrial SMEs, especially specialized and innovative "Little Giant" enterprises, specialized and innovative SMEs, technology-based and innovative SMEs, management consulting service agencies, public service agencies for SMEs, and local SME authorities at all levels. The "Guidelines" aim to help industrial SMEs improve awareness and levels of scientific and standardized management, enhance the ability of service agencies to provide standardized and normative management diagnosis and consulting services, and provide guidance for localities to promote SME management diagnosis work. The implementation adheres to the following principles:

Adhere to the principle of enterprises as the main body and demand orientation. Respect the laws of the market economy and the dominant role of enterprises, guide by the actual needs of small and medium-sized enterprises (SMEs), and address existing management issues to promote tailored improvements in SME management.

Adhere to government guidance and collaborative linkage. Fully leverage the role of a proactive government, strengthen policy support, resource coordination, and service collaboration, promote a multi-party participation and professional efficient work pattern, and create a good service ecosystem.

Adhere to classified guidance and phased implementation. The management improvement work of industrial SMEs follows the idea of progressing from points to surfaces and from easy to difficult, implements in layers, categories, and steps according to the characteristics of different types of enterprises, focuses on key enterprises and key areas, and emphasizes effectiveness.

II. Enhance Enterprise Strategic Management Capability

(1) Clarify strategic positioning. Guide SMEs to take long-term sustainable development as the orientation, clarify the enterprise's mission, vision, and values, and unite all employees with cohesion. Clarify the main business and development direction of the enterprise, as well as medium- and long-term strategic goals, medium- and short-term work goals, key tasks, responsibility allocation, and expected results. Establish clear and detailed strategic execution plans and monitoring and evaluation mechanisms, regularly check the progress and effects of strategy execution, and adjust and optimize in a timely manner.

(2) Clarify market positioning. Guide SMEs to clarify the core competitiveness of the enterprise, that is, what pain points or difficult problems the product can solve for customers or what unique value it can bring to customers. Based on industry and geographic location, own advantages, and other factors, accurately position the segmented market and potential customer groups, clarify main competitors, benchmarking standards, and own advantage gaps.

(3) Shape corporate culture. Guide SMEs to establish a corporate culture compatible with the enterprise's mission, vision, and values, strengthen innovation orientation, and enhance internal promotion and external presentation. Actively organize activities such as knowledge sharing, social services, cultural and sports events, and team building to create a good cultural atmosphere of respect, trust, positivity, and striving for progress.

III. Enhance Enterprise Human Resource Management Capability

(1) Ensure staffing of key positions. Guide SMEs to assess the matching of departments and positions with enterprise development, establish recruitment and talent introduction mechanisms, and basically meet the needs in terms of number, structure, and quality of recruited personnel. Employees' skills, experience, and qualifications basically match job requirements, with high adaptability and future development potential. Establish talent training and backup plans for key positions to ensure continuous supply and stable inheritance of talent.

(2) Improve compensation system. Guide SMEs to establish a clear and fair compensation system, clarify the basis, composition, reasons for differences, and adjustment mechanisms of compensation policies, stimulate employees' enthusiasm and creativity. Set clear work goals, tasks, responsibilities, and expected results for management, departments, and employees, establish performance evaluation mechanisms, and formulate personalized incentive mechanisms for high-contribution and high-skilled talents.

(3) Improve training system. Guide SMEs to formulate training plans oriented to improving employees' work enthusiasm and skills, ensuring all employees have opportunities to participate in relevant training. Training methods are flexible, content is rich and practical, establish training effect evaluation mechanisms, and adjust and optimize training plans based on feedback.

(4) Enhance employee welfare. Guide SMEs to provide "five social insurances and one housing fund" for employees according to law. Consider the actual situation of the enterprise and employee welfare needs in a coordinated manner, gradually provide supplementary insurance, health check-ups, holiday benefits, major event subsidies, and appropriate cultural and sports facilities to enhance employees' sense of belonging and recognition.

IV. Enhance Innovation Management Capability

(1) Shape innovation culture. Guide SMEs to establish a culture that encourages innovation, is tolerant of innovation risks, establish innovation achievement incentives and benefit distribution mechanisms, and provide a good innovation atmosphere and support for teams. R&D teams communicate closely with production, marketing, and other departments to form a positive cycle of demand, problems, and innovation.

(2) Strengthen product innovation. Guide small and medium-sized enterprises (SMEs) to establish standardized product development processes and formulate full-process operation manuals including requirement analysis, design, prototyping, testing, and feedback collection. Actively utilize external resources to improve innovation efficiency, seek opportunities for technology transfer from universities and research institutes, explore cooperation with upstream and downstream partners in technology and product innovation, and form collaborative innovation relationships.

(3) Strengthen intellectual property management. Guide SMEs to establish a sound intellectual property management system and a technology innovation development roadmap, and establish an iterative innovation mechanism. Use patents, copyrights, trade secrets, and other means to enhance intellectual property protection capabilities. Strengthen intellectual property asset management to scientifically account for intellectual property assets. Enhance the awareness of intellectual property protection among all employees and strictly comply with relevant laws and regulations.

(4) Encourage customer participation. Guide SMEs to orient research and development directions based on market demand. Build demand forecasting models, introduce customer participation in the product development process, fully understand customer needs, and ensure products keep pace with market trends. Use agile development and other methods to rapidly iterate and optimize technology and products according to market changes, shorten development cycles, and accelerate new product launches.

5. Improve production management capabilities

(1) Implement lean production. Guide SMEs to focus on creating customer value, formulate standard operating procedures covering the entire process from procurement, production to sales, and eliminate redundant processes and waste. Through value stream analysis, identify value-added and non-value-added links, implement pull production, and arrange production plans based on customer order demands. Adhere to "full participation and continuous improvement," adopt continuous improvement methods such as Six Sigma or lean management, and continuously enhance employees' lean concepts and skills.

(2) Promote production intelligence. Guide SMEs to advance digital management of production planning inspection and scheduling, intelligent dispatching, use CNC equipment and automated production lines to monitor key processes, achieve real-time automated monitoring of the entire production process, implement online video monitoring of key links, ensure network coverage for key office and production positions, and realize collaborative management of production operations and on-site logistics.

(3) Strengthen quality management. Guide SMEs to conduct self-assessment according to the "Manufacturing Quality Management Capability Assessment Specification," continuously optimize and improve weak areas. Set annual quality goals, establish a quality performance indicator system, regularly conduct measurement, analysis, and evaluation, identify problems, and continuously improve. Clarify quality management positions and responsibilities, assign dedicated personnel for quality inspection and assurance activities, and improve quality control capabilities through digital detection, precise quality traceability, and quality collaboration using digital means. Encourage enterprises to hold valid quality management system certification certificates recognized by the China National Accreditation Service for Conformity Assessment.

(4) Emphasize green production. Guide SMEs to integrate the concept of green and low-carbon development throughout the entire process including product design, raw material procurement, production, transportation, storage, product sales, use, and disposal. Focus on energy saving and consumption reduction, introduce energy-saving equipment and environmentally friendly materials, adopt green production processes, and reduce resource consumption. If there are pollutant emissions or waste disposal, they should comply with relevant standards.

(5) Strengthen emergency management. Guide SMEs to establish emergency management systems, create standardized systems for safety management, operational behavior, equipment facilities, and working environment, implement a full-staff safety production training system and safety hazard inspection system to prevent accidents. Establish emergency response plans, clarify response procedures, responsible persons, communication mechanisms, resource requirements, and responsibility handling mechanisms, and continuously improve them.

6. Improve supply chain management capabilities

(1) Strengthen supplier management. Guide SMEs to establish sound supplier management systems, strengthen supplier qualification review, credit management, and performance evaluation, and establish close cooperative relationships with supply chain partners. Regularly conduct supply chain risk assessments and supplier audits, formulate emergency plans, and ensure supply chain stability.

(2) Strengthen inventory and logistics management. Guide SMEs to establish inbound and outbound warehouse management systems, realize automatic inbound, inventory, and outbound management of procurement, production, and sales logistics through digital systems. Establish warehouse and distribution linkage models, optimize distribution processes and timing, deliver timely and quantitatively according to orders, improve goods turnover efficiency, and reduce distribution costs and damage rates.

7. Improve marketing management capabilities

(1) Strengthen qualification management. Guide SMEs to fully understand the relevant qualification requirements of their industry and the qualification requirements for entering the supply chains of leading enterprises, obtain relevant qualifications as early as possible, and take targeted measures to enhance cooperative relationships according to the classification and grading management requirements of leading enterprises.

(2) Strengthen customer relationship management. Guide SMEs to focus on stabilizing and expanding the customer base, establish customer relationship management systems covering the entire process of pre-sale, in-sale, and after-sale, provide standardized and high-quality customer service, and improve customer satisfaction. Establish effective customer feedback systems, optimize products based on customer opinions, improve service team response speed, and form a closed-loop mechanism for issue handling and satisfaction feedback.

(3) Strengthen marketing channel management. Guide SMEs to focus on increasing market share, establish diversified sales channels, and establish dynamic management systems for partners. Actively use e-commerce platforms, social media platforms, exhibitions, and fairs to effectively reach potential customer groups, showcase the company's products, technical capabilities, and typical application cases through multiple channels, and enhance the professional image of the brand.

8. Improve financial management capabilities

(1) Strengthen cash flow management. Guide SMEs to establish robust cash flow management systems, maintain continuous and stable cash flow, and keep cash reserves to cope with emergencies. Establish financial planning and major decision review systems, cash flow risk assessment and early warning mechanisms to effectively avoid financial risks. Strengthen cash flow process management, focusing on key points such as inventory and accounts receivable and payable.

(2) Strengthen cost and budget management. Guide SMEs to establish full-process cost management systems, deeply analyze cost structures, variation patterns, and influencing factors, and optimize cost control. Support scientific decision-making in cost management and project budgeting through digital systems such as business-finance application platforms. Enterprises with conditions can establish comprehensive budget management systems and regularly analyze and report budget execution.

(3) Strengthen internal control and internal audit. Guide SMEs to establish financial internal control management systems, including authorization and approval systems, accounting system controls, property security controls, and business procedure controls. Establish relatively independent internal audit personnel and systems; enterprises with conditions can establish external audit systems. Establish risk assessment mechanisms and regularly evaluate and assess asset management ratio indicators.

(4) Strengthen financing management. Guide SMEs to plan financing according to enterprise development needs, financial status, and financing environment. Comprehensively consider financing scale, term, cost, and factors such as enterprise financing structure, financing ability, and financing risk to choose appropriate financing methods. Strengthen financing management, clarify repayment plans, analyze potential risks, and ensure debt repayment ability.

9. Improve decision-making management capabilities

(1) Standardize corporate governance. Guide SMEs to standardize governance structures, reasonably determine the number of shareholders, shareholder structure, shareholder contributions, and shareholding ratios, and clarify the rights and obligations of major shareholders. For family businesses, clarify the enterprise property structure, separate personal property from enterprise property, clarify the amount of corporate legal person property, property distribution among family members, and quantify shareholding by individual.

(2) Promote digital application. Guide small and medium-sized enterprises (SMEs) to focus on cost reduction, efficiency improvement, and quality enhancement, promote the digitization of key business processes, and improve the standardization and normalization of management. According to the actual situation of enterprises, prioritize "small, fast, light, and precise" solutions, emphasize system integration, ensure free data flow, and effectively support business process automation and work collaboration.

(3) Strengthen decision support. Guide SMEs to cultivate a data-driven decision-making culture, build intelligent forecasting, early warning, and decision-making models through applications such as big data and artificial intelligence, and support scientific decision-making. Develop detailed data security policies and data backup mechanisms to ensure stable business operations.

10. Enhance public image management capability

(1) Improve public relations. Guide SMEs to formulate pragmatic and effective public relations strategies, communicate and maintain corporate image, and ensure consistency and professionalism in external communication. Develop brand communication strategies so that target customers can accurately identify and understand the company's value proposition, enhancing market recognition. Establish public opinion crisis management plans to ensure rapid response in case of crises and reduce negative impacts.

(2) Focus on social reputation and responsibility. Guide SMEs to adhere to legal compliance and honest operation, focus on their main business, refine their work, continuously improve product and service quality, enhance customer experience, and strengthen brand credibility and reputation. Actively undertake social responsibilities by participating in and implementing social service projects such as charitable donations, public welfare activities, educational support, and improvement of public facilities to give back to the community and society.

11. Strengthen organizational support

(1) Strengthen policy coordination. Combine the promotion and application of the "Guidelines" with the tiered cultivation of high-quality SMEs, actively carry out public services such as management diagnosis, management consulting, management evaluation, and personnel training to help SMEs improve management levels. Support management diagnosis services for specialized and innovative SMEs through financial subsidies, government service purchases, and other means based on actual conditions.

(2) Strengthen service support. Combine activities such as the annual SME service action and SME service month, leverage the roles of SME public service demonstration platforms, small and micro enterprise entrepreneurship and innovation demonstration bases, and SME characteristic industrial clusters, and carry out universal management improvement services centered on promoting and applying the "Guidelines." Strengthen training for SME business management talents and include the "Guidelines" in training content.

(3) Strengthen overall coordination. Actively leverage the roles of SME public service institutions at all levels and the advantages of professional management consulting service organizations, and based on the "Guidelines," research and refine standardized, productized, modular, and rapid diagnostic consulting services. During the work promotion process, respect the will of enterprises, and do not forcibly promote or seek improper benefits. Actively summarize and promote typical cases of SME management innovation to guide SMEs to learn by example and improve management levels.