The Defence Industrial Strategy is not just a call to arms to the UK’s big players. It recognises that small- and medium-size enterprises (SME) and universities are crucial to UK industry retaining an edge in defence technology. Traditionally, the Ministry of Defence largely concerned itself with its direct suppliers, usually highly vertically integrated manufacturers, which were then left to manage their own suppliers. These suppliers usually carried out simple subcontract or build-to-print work.
Now, however, there is a recognition that, with the emphasis on through-life capability and retaining strategic technology and intellectual property onshore in the long term, the focus has to shift beyond the primes and to the tier of industry that is often the crucible for innovation, particularly in such fields as computer software, electronics and biotechnology. How these companies work with their customers – the systems integrators – and ultimately with the MoD is crucial to the new industrial strategy being a success, says the document.
Sally Howes, director general of the Society of British Aerospace Companies (SBAC), welcomes the DIS’s highlighting of the importance of supply chains, but says industry has been pushing this way for years, embracing concepts such as “lean manufacturing” where the whole chain is constantly put under scrutiny to iron out inefficiencies and waste. “Through the 1990s we began introducing lean into the system, working with and learning from the automotive industry.” She also says recent work by the Aerospace Innovation and Growth Team – a project run by the SBAC – highlighted “that we had further work to do to make supply chains very productive”.
Ian Stopps, chief executive of Lockheed Martin UK, says one of his company’s main roles in the UK has become mentoring innovative suppliers. “There is a lot of innovation in the supply chain that needs support, that needs to come up through the process. Our job is to help them to become world class, help them become even better,” he says. It is a view echoed by BAE Systems’ group strategic development director Alison Wood, who says: “Healthy onshore capability requires a healthy onshore supply chain. How do we help them remain competitive?”
One remaining issue for many concerns how the government intends to ensure research and development by SMEs is funded. Opposition Conservative defence spokesman Gerald Howarth says the DIS has an “insufficient commitment” to R&D spending and how this can be pushed down the supply chain. Stopps also says more clarity in “how the funding works” is crucial. “I want a supply chain that can support us. Instead of beating them over the head, we need to understand subcontractors in a different way. If we spend money on R&D, we won’t see the fruits for 10 years,” he says. “That’s a lifetime in today’s environment.”
Source: Flight International