Marshall Plan Type Study Tours
USAID DVD – Inspiring Success – Rediscovering the Marshall Plan Productivity Program
USAID has produced a DVD that discusses the original Marshall Plan Technical Assistance program and gives 3 examples of its application today – one of which is based on CEI’s experience in Ukraine. To watch, press the button in the left panel on the home page. Program Overview
The Marshall Plan or MTM Productivity Study Tour program for Kharkiv, Ukraine was designed to give rise to a rapid and visible increase in living standards for the Ukrainian population as a whole by introducing Ukrainian managers of large enterprises in key industrial sub sectors to modern management, technology and marketing methods in the U.S. This program was funded by a grant from the U.S. Agency for International Development (USAID).
This pilot program consisted of two study tours, each targeted at different industry sub sectors. Tour #1 (August 5 – September 1, 1998) was directed at fruit, vegetable and sugar processing. Tour #2 (September 13 – October 10, 1998) was for meat, dairy and edible oil processing.
In June 1998, CEI representatives visited Kharkiv and, with the help of the Regional Business Assistance Center (RBAC) and IESC representatives, conducted a selection seminar. A total of 88 representatives from 59 organizations applied for the program. From these applicants, 32 were finally selected to participate. The breakdown by industry for tour #1 (15 participants) was: fruit 4; vegetable 5; sugar 5; equipment supplier 1. For tour #2 (17 participants), the breakdown was: meat 4; dairy 11; edible oils 2. In addition, both groups also included two interpreters and one technical writer.
The major benefits of the program for the Ukrainian companies were:
- New and modified products that can easily be added to existing lines without significant investment;
- A greater understanding of the role of advertising, marketing and distribution;
- Productivity changes that will increase product shelf life and reduce costs;
- An awareness and appreciation of new management techniques;
- New products and equipment they can purchase from the U.S.
- A greater awareness of changes they can make in their own firms and industries.
The fruit/vegetable/sugar study tour visited 15 food processors, 2 distributors, 2 retailers, 1 exhibition, 2 equipment suppliers, 1 trade association, 1 government agency and 1 university. In addition, there were 5 separate lectures. The meat/dairy/edible oils study tour visited 25 organization including 6 meat processors, 6 dairy processors, 3 edible oils plants, 2 retailers, 1 government agency and heard 3 separate lectures.
The sites visited were carefully selected to meet the diverse needs of each group. Since the tour group represented different sub sectors, participant visited some plants that were outside their area of interest. Nevertheless, there was much to be learned on every visit since marketing, management and distribution were common to all.
The length of each visit was determined by the host company. In almost all cases, the visits were scheduled to last three hours. At each site there was a short introduction by management followed by a tour of the facilities. A question and answer period followed. In almost all cases, this was an extremely lively session that extended far beyond the initial schedule. The U.S. hosts were extremely generous with their time and information.
The length of each tour was 28 days. This time was needed for the new concepts to be fully understood and appreciated.
When the group first arrived in the U.S., the participants had various fixed ideas about conducting their business. Although they were looking for new information, they were not necessarily open to new ideas. By the end of the tour, this attitude had completely changed. Most were eager to return and try out new ideas and products. The evolution in thinking was remarkable.
At the conclusion of each study tour, each participant was interviewed to record what they had learned and to measure the potential impact of the tour on their individual firms. Each had concrete plans to introduce productivity changes in their firms. Each participant had identified new products they could add with a minimum of investment. Typically, the firms felt that the new products would lead to sales increases of up to 50%. The participants estimated that the technical improvements would result in cost reductions of up to 30%. These and management changes would lead to increased profitability of about 20%.
One of the frequently asked questions was “How do Americans make the products at such a low cost?” Almost every host company discussed the importance of increased volume to drive down costs. This implied a greater need for effective marketing and for specialization. Both were opposites of the business thinking in Ukraine where there is little advertising and each firm struggles to diversify into different product lines and even different industries.
A surprising degree of bonding took place between the tour members. At the conclusion of the tour most agreed to meet again and possibly to form an association. Several were exploring business arrangements, not only among themselves, but with the U.S. companies they visited.
Some of the participants expressed serious interest in purchasing American products and equipment. CEI will facilitate communications between the Ukrainian and American companies.
There was considerable press coverage of the study tour. Both Cincinnati daily newspapers carried stories. One of the main local TV stations covered tour #1 three times, once on their main evening news.
This pilot Marshall Plan program was deemed a great success by all the participants and by CEI. Only by seeing for themselves were these industry leaders able to learn new techniques and discover new products they can apply to their firms without the need of large new investments. A program review will be conducted in early 1999 to evaluate the success of the program. CEI is confident that the impact on the participating firms can be just as great as it was in Western Europe under the original Marshall Plan.
Information dissemination is one of the key ingredients of the program. After the tours Technical Reports were written which described the information learned.