Manufacturing and partnering with supply chain companies

The Advanced Manufacturing Supply Chain Initiative is making it easier than ever to partner with supply chain companies

Partnering or collaborating with supply chain companies is a strategy with a great deal of potential to deal with some of today’s most supply chain and logistics in the UKpressing business challenges. Supply chain companies are particularly adept at bridging gaps in supply chain efficiency, skills and innovation.

This kind of collaboration is becoming more and more commonplace across many industries. Relationships between customers and suppliers are no longer purely transactional, no longer about cost and nothing else. Primes are increasingly opting for collaborative, partnership models than traditional top-down models of supply chain management.

Collaboration with supply chain companies can yield substantial benefits, especially in light of the government’s Advanced Manufacturing Supply Chain Initiative

This shift is occurring for simple business reasons. Tier-ones and primes have determined that resilient, innovative and sustainable supply chains pay for themselves and more in the long run, so turning to supply chain companies to take advantage of their specific skills and positioning is simply in their best interests.

Later, we will look at three specific business challenges where collaboration with supply chain companies is yielding particularly effective solutions, particularly those where industry and government have developed specific initiatives to address particular challenges. Some of these initiatives are driven by the tier-ones and primes, others by government, and still others are ‘bottom-up’ initiatives that originate with the supplier. All of these initiatives feature collaborative methods, though, whether vertical, with suppliers and primes working together, or horizontal, characterised by suppliers parallel to each other in supply chains working with each other, often facilitated by primes.

Fortifying the UK’s supply chains and making them more resilient, more resistant to disruption s one of the government’s top priorities in this, and as such it is offering various kinds of support to industry to encourage it to explore collaboration with supply chain companies and other similar strategies.

The AMSCI (Advanced Manufacturing Supply Chain Initiative) in particular is a funding competition that was designed to improve the competitiveness of the UK’s manufacturing supply chains in and against global markets. 245 million pounds of public money have been dedicated to the initiative so far to support and improve skills training, research and development and capital investment with the aim of improving the UK’s supply chains, and to encourage major suppliers to relocate to the UK. [https://www.gov.uk/government/news/120-million-funding-competiton-for-manufacturing-supply-chain-companies ]

Other sources of funding can be used in conjunction with the AMSCI. For example, the RGF (Regional Growth Fund) has devoted some 3.2 billion pounds to assisting English companies in creating jobs, and this money is expected to be available for at least another ten years. [https://www.gov.uk/understanding-the-regional-growth-fund]The MAS (Manufacturing Advisory Service) provides assistance and support for English manufacturing companies in particular, intended to foster growth in the industry. There are also programs that will provide funding for employer-led vocational education that can be used by supply chain companies and their partners to improve your organisational skill-set.

3 business challenges supply chain companies are well placed to address

Resilient, sustainable supply chains require tier-ones and primes alike to use collaborative approaches with suppliers and supply chain companies, to work together towards long term success. This collaboration can solve problems with innovation, efficiency, skill gaps, and even finance issues in ways that benefit the entire supply chain. There exists the potential for government and industry together to leverage the support and funding which is already on the table through the AMSCI and MAS to improve the state if the UK’s supply chains dramatically, and collaboration with supply chain companies will be a large part of it.

Skills

The larger manufacturing primes attract more qualified applicants than they can realistically use. In comparison, many supply chain companies are less publicly known, and struggle to attract the new talent they need to meet demand for their services. Primes and supply chain companies can cooperate, using the prime’s brand power to direct surplus high-quality candidates to their partners.

Some supply chain companies also wrestle with providing training to their extant workforce. Some primes are working to expand their apprenticeship and training facilities in order to channel more skills through their supply chains. Similarly, some primes run mentoring programmes intended to improve the management capabilities of their suppliers and supply chain companies. These in-house methods are aimed at providing access to the skill sets these suppliers need to meet the challenges of the coming years

Finance

If the UK’s manufacturing industry is to really thrive in coming years, it is critical that they begin to release working capital downward throughout their supply chains. Larger operations in several different sectors have adopted supply chain finance programs intended to improve the cash flow and resilience of their suppliers whilst keeping their own working capital intact. Such programs leverage the prime’s credit strength, giving suppliers advances on outstanding invoices of up to 100% at a lowered cost.

There are also programs in play designed to alleviate the pressure that late payments are putting on the supply sector. More than 1500 companies now belong to the government’s Prompt Payment Code initiative, and sector-specific codes of practice have also been successful lately.

Innovation

Primes and tier-ones are coming to view suppliers and supply chain companies as sources of innovation. 50% of the respondents to a recent survey said they were looking to these kinds of partners for innovation rather than to in-house R&D efforts.

The Technology Strategy Board is an important factor, as they facilitate collaboration for R&D purposes. Certain sector-specific programmes also provide funding to encourage suppliers to introduce ‘bottom up’ innovations to their respective markets. Information exchanges, both face to face and online, can be effective in improving customer awareness of innovations along the supply chain.

Open innovation campuses are an effort to bring academia and the supply chain together in a single research facility. Often prime-led, these initiatives are already bearing fruit in the form of new, more efficient processes and solutions.

 

 

 

 


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