I haven't tried the physics on small objects. It's possible it's too small (8mm is really small). There are tweaks you can make to the collision, I think there is a hit box sort of cage that is slightly bigger than the object. You should try to tweak this stuff, there may be a way to get it to work. Also, I'm not sure why the physics would be slow. I don't think the size of the object is taken into account (either in the engine, or in real life). Only the mass would, but even then it should not make a difference because friction (on air or ground) is not simulated. So the speed should be the same AFAIK.