A design skills workshop in the west is helping companies to revamp their products and compete with foreign counterparts, writes Gabrielle Monaghan .

Amid gloomy reports of faltering export growth, rising business costs and the loss of jobs and plants to low-cost economies, one initiative is providing a ray of light to manufacturers in the west of Ireland.

The Design Shannon Skillnet is showing 27 companies in the region how to use design and innovation to differentiate themselves from cheaper competitors and move up the value chain, a strategy it believes will be key to the survival of small- and medium-sized enterprises (SMEs).

The 18-month programme, which began in April 2006, employs a team of Irish and international experts to train managers of SMEs in market research, innovation, packaging and branding in venues in Limerick and Ennis. The 21 weekday sessions aim to enable these managers to use new knowledge and skills to gain a competitive edge over their low-cost counterparts in eastern Europe and Asia.

"Companies were thinking: 'Our whole reason for being is threatened - how can we solve the problem?'," said Laura Maye, manager of the Design Shannon Skillnet. The programme is "about upskilling the management of these businesses because they are the people who can implement change.

"A lot of companies here face a threat from lower-cost economies, but rather than hiding away from it they can gain knowledge and see what value they can retain and what they can outsource. They need to get value out of their core competence and use emerging markets as suppliers or team up with them if necessary."

The training has already borne fruit for Dermot Scanlon, managing director of Limerick-based Serosep. As a result of his participation in the programme, Scanlon was able to develop his company from being solely a distributor of diagnostic kits to Irish hospitals to designing and manufacturing products for sale in Spain, France and Italy.

Because design is now the driving force behind how Serosep's products are produced, packaged, branded and marketed, sales have risen 30 per cent in the last year, export sales have jumped 150 per cent and cashflow has doubled.

Scanlon, who has a background in industrial chemistry, set up the company as a supplier of kits for analysers in his house 10 years ago. By the time he moved Serosep to an industrial estate in Limerick, he was employing six people. The company now has a staff of 21, more than half of whom hold a PhD.

"Before we started the course, we believed we were an innovative company and were high and mighty because we never stopped to think about what we were doing," he said. "But we had just one product that we only sold in Ireland. And I once bought an analyser for €140,000 that was just sitting in our warehouse. I don't make these crazy decisions any more and our cashflow has improved hugely as a result."

Scanlon, who is attending the training programme with three other Serosep managers once a week, learned how to write a design brief and tell designers what he wanted customers to think about his products. By redesigning and rebranding Serosep's diagnostic kits, the company was able to compete with cheaper producers on the international market.

"We had a standard product that was around for years, a solution that labs put biopsy samples into to test for cancer," Scanlon said. "Because of the design course, we rebranded it, gave it a nice coloured label and a real quality feel. Last month, we sold 18,000 units in Spain - compared to 300,000 a year for Ireland - even though the local manufacturer in Spain is 50 per cent cheaper than us.

"We now take time out to look at the small things, which are important. We do focus groups with scientists from hospital laboratories, get them to sit around the table and answer our questionnaires. We have a process in place to keep improving our pro-ducts, so that in a few years we will have a superior product.

"The way we carry out our business has changed because of the Skillnet, which has taught us to look at the introduction of new products in a different way. I think we will become a successful company, whereas a year ago I wasn't so sure." Before taking part in the Skillnet programme, Serosep had no expertise in the design of plastics and mouldings or in strategic management. As a result, it relied on manufacturing and supplying products for other companies, having lacked the confidence to market its own products.

"The whole confidence of our company is huge now," Scanlon said. "The company is managed around design, and product development is very well controlled. We realised that other people in our company can be just as innovative and creative, even if they are not scientists. When we are thinking about innovation, we bring in everyone, down to the guy sweeping the warehouse floor."

Maye believes there is "huge potential" to make the 21-session pilot programme permanent and to roll it out nationwide. The future of the programme, however, depends on what further funding Skillnet Ltd can secure from the Department of Enterprise, Trade and Employment.

"If you can get owner-managers of small companies to give up six hours of their day, it must be important to them," she said.

Scanlon agrees. "I think it should be rolled out across the country," he said. "A few weeks ago, we had a person who worked in design for Gillette. Where else can you get that kind of training for €75 a day?"