A One-Day Defence Procurement Conference & Exhibition for both MoD Buyers and Suppliers

REVIEW

Enabling the future: the commercial view

Attended by more than 400 delegates from across the UK, the recent Enabling the Future conference, hosted by the Defence Suppliers Service, saw discussion on the MoD's future requirements take place across all levels of the supply chain. MoD DCB Features Editor Rhona-Mairead Sweeting examines the main points of discussion and reports on the hot topics concerning buyers and suppliers at the event.

The MoD's position as one of UK industry's major customers remains constant, but significant changes to the Department's structure and buying procedures over the past twelve months has meant that many suppliers - particularly smaller firms - have a myriad of questions regarding the direction of the MoD's buying activities.

These were questions that several of the speakers at the recent Enabling the Future event attempted to answer. Much of the day was given over to addressing suppliers' questions - and concerns - in an attempt to cement essential relationships between buyers and suppliers.

Through a combination of keynote addresses, question-and-answer sessions and breakout meetings between delegates and representatives from MoD Integrated Project Teams (IPTs), both sides had a variety of opportunities to discover exactly what was required to provide capabilities in the forthcoming year and beyond.

One of the day's most popular sessions was hosted by Philip Margerison, Head of the MoD's Defence Suppliers Service. Mr Margerison delivered a detailed presentation on the relationship that the MoD expects to build with industry - and explained how suppliers can best help deliver those expectations.

One of the key elements of current working practice across the MoD concerns the rationalisation of the supplier base. The MoD currently works with around 32,000 suppliers, and moves are under way to reduce the number of direct suppliers and seek longer-term, larger contracts. The introduction of recent strategies, such as contracting for availability and partnering arrangements, is part of the drive to promote this functionality throughout the MoD, and Mr Margerison explained the MoD's acquisition strategy at length.

Following the creation of the Defence Equipment and Support (DE&S) organisation in April 2007, more than 160 IPTs are currently operating within the structure in a variety of 'clusters'. The MoD's intention is that these teams will become industry's key points of contact, allowing for effective and transparent audit trails and an effective assessment of all procurement options.

As Mr Margerison explained, the new operating structure of the IPTs informs and consolidates factors in acquisition decisions, including cost and operational effectiveness, affordability and value for money and the provision of capabilities.

Industry's role in this structure, according to Mr Margerison, can be defined in a number of ways, but industrial participation is vital - in accordance with the aims of the Defence Industrial Strategy (DIS), the MoD will continue to encourage this participation by informing and involving industry. Delegates heard about the success of recent industry days, bringing IPTs and suppliers together to discuss and better understand each other's requirements and working practices. However, it was stressed, suppliers must meet the Department 'half way' in order to develop current and future capabilities.

With much of the MoD's focus directed towards engaging with small and medium-sized enterprises (SMEs) and the development of the sub-prime supply chain, an address delivered by Steve Davies, Purchasing Director of Thales UK, attracted a great deal of interest from delegates from smaller companies.

Looking at how to best increase the chances of selling to a Prime Contractor, Mr Davies delivered a frank and informative talk on the issue, prompting some lively debate. Stressing the 'Three Ps', Mr Davies elaborated on the importance of engaging with suppliers at all levels, calling on subcontractors to be 'prepared, persistent and passionately focused'. 

Mr Davies explained in depth how the changes to the MoD's acquisition strategies - such as the focus on Prime/sub-prime contracting, concentration on customer-facing 'core' activities and the delivery of complete capability solutions - offer new opportunities to subcontractors. However, he also explained the 'purchasing challenge' - as Prime Contractors adjust to accommodate requirements more comfortably, the entire focus of the supply chain, from initial identification of requirement to delivery, must also adapt.

Mr Davies encouraged companies to consider and develop innovation, while drawing on a common platform of technologies across the sector. This would, he said, help to deliver the real-time information management and distribution and complex system architectures that customers, such as the MoD, require. Mr Davies also gave the example of how, through engagement and the sharing of information and innovation, Thales - and its supply chain - benefits from an exceptional international dimension. Ultimately, he said, the goal was to stay closer to the customers, deliver efficient and competitive solutions and leverage synergies across businesses and between countries - goals that can be delivered by being passionately focused on delivering a service.

Continuing the theme of engagements, the importance of delivering collaborative partnerships was the subject of the brief presented by David Hawkins, Director of Operations for Partnership Sourcing Ltd (PSL).

Established by the Confederation of British Industry (CBI) and the former Department of Trade and Industry (DTI) - now the Department for Business, Enterprise and Regulatory Reform - PSL exists to promote the concept of collaboration and partnering in business.

Mr Hawkins delivered the definition of partnering: "Partnering is a commitment between two or more parties in a collaborative relationship to create value by striving to achieve shared competitive goals and operational benefit through a spirit of mutual trust and openness."

Echoing Mr Margerison's comments on the MoD's development of its acquisition strategy, Mr Hawkins elaborated on the commitment of the public sector - not least the MoD - to creating partnering arrangements in order to deliver best value and the efficiency targets set out by the Government. However, he stressed the fact that industry is not, and should not, be alone, and explained the support networks and help available to industry.

An example of these support networks was given by Howard Chesterton, Executive Director of the West of England Aerospace Forum (WEAF). As a co-founder of WEAF, formed together with eight key aerospace companies, Mr Chesterton explained how an an existing association of 200 companies has developed it into a dynamic representative body for the aerospace and defence industry in the south west.

Continuing the SME theme prompted by the DIS and explained and discussed throughout the day, Mr Chesterton told how, over the last five years, WEAF has developed programmes to help SMEs which have generated real benefits for complete supply chains.

In a frank address, Mr Chesterton examined the value placed by the MoD on the purchasing service, as well as examining who the MoD actually contracts with. Appropriately, he addressed many of the issues faced by suppliers, such as the sharing of risk management, the funding of developments and the protection of intellectual property - a topic that concerns many smaller contractors keen to protect their innovative developments.

In order to answer these questions, Mr Chesterton stressed the need for the whole industry to recognise the benefits of true collaboration and called for improvements in the way that industry and the MoD work together. To achieve this, he asserted, there is a pressing need to understand who could and should work more closely - and the issues that will emerge from close working.

Prompting great debate among delegates, the event was an opportunity for the defence supply community to come together and discuss the issues closest to its heart - how the UK's defence base will respond to the needs of the Armed Services while protecting its own interests. While the conference answered a number of questions, there is no doubt that, judging by the keen response of delegates and speakers, there is an ongoing need for the MoD and industry to continue to engage with one another in an atmosphere of openness and sincerity, in order to best address the challenges of supplying a capability, now and in the future.