10 February 2000 | David Arminas
The chief executive of the government's new Small Business Service has called on purchasers in large firms to think local as they search for supply chain efficiencies in a global economy.
David Irwin, who begins his two-year stint at the executive agency on 6 March, also called on small and medium-sized enterprises (SMEs) to improve their marketing to larger firms. He told SM: "Where purchasers in big firms can help is to be clear and public about what is expected from their suppliers. Small firms must understand exactly who the end users of their products are."
Irwin stressed that small firms didn't need preferential treatment, but must be given the chance to enter a potential supply chain on their own merits.
SMEs should make the most of networking with their current customers, said Alan Duffield, managing director of WB Machining Services in Warwickshire. Since last year the firm, which employs 54 people, has supplied turbine-blade liners for power plants to GE, the US electrics giant. Orders in 1999 came to £400,000 and should be worth more than £2 million this year.
The American parent company of one of WB's UK customers was a GE supplier, said Duffield. "We sent information to the US firm, who passed it on to GE."
He explained that quality assurance measures had played a big part in maintaining the GE relationship. "They have been hard to implement," he added, "but it will improve us in the long run. We have also had to invest in IT to support GE's world-class systems."
SMEs were often hindered by a lack of financial support, such as help in attending overseas exhibitions, he said.
They should be able to talk the same valued-added language as a potential client, according to Russell Chesterman, manager of the Supply Chain Relationships in Aerospace (Scria) scheme. "Be clear about your proposals and how they add value to the larger company's product," he advised.
SME directors should be able to listen well enough to challenge "in the nicest possible way" the larger partner's argument against a contract.
Scria, supported by the Society of British Aerospace Companies, was launched in 1995. It followed an approach to the Department of Trade and Industry by SMEs that needed help to improve their trade in the industry. Nearly a third of the 3,500 people who have taken part in Scria programmes have been from SMEs. "A prime contractor will often pay for its SME supplier to attend," said Chesterman.
David Irwin, who will have direct access to prime minister Tony Blair and trade secretary Stephen Byers when the agency starts work in April, has pledged to improve government support for small businesses.