SC21 aims to make supply chains fit for the 21st century but is it being hampered by the chains of its own making? What does it mean for SMEs that may be wary of sharing best practice with competitors? Ed Hill spoke to SC21 project manager Phil Curnock from ADS.
Forty three companies received SC21 awards at this year’s Farnborough Airshow, showing it is establishing itself as the industry benchmark by which existing and prospective suppliers are assessed. However, the supply chain improvement programme, launched in 2006, requires significant commitment from management in time and resources.
The latest development to make the process easier for small suppliers is the introduction of SC21 Lite. The new scheme is aimed at companies with as few as 10 employees.
“It is a self-diagnostic process where organisations do not have the initial step of having a consultancy and the cost involved,” explains SC21’s project manager, Phil Curnock. “Mentoring comes through the ADS website. It allows them to make their first Continuous Sustainable Improvement Plan (CSIP). We really want to get smaller companies on the continuous improvement journey.”
The self-assessment process also allows SMEs to consult ADS’s team of experts on how to make improvements in their work practices. However, at some point the business has to agree to be mentored by other companies already signed up to the scheme and be independently assessed to qualify for the awards programme.
Competitive edge concerns
Supporters of the programme say companies must agree to share what they have learned about the process if it is to deliver the efficiencies required, but what if those companies are rivals and worried about losing their competitive edge or risking the Intellectual Property (IP) of the products or services they provide?
Curnock maintains companies have nothing to fear about cooperating with each other. “Some of them may be competitors but IP does not enter into the discussions between them,” he explains. “SC21 is about improving the process rather than the product and if members feel there may be a conflict of interest between them, they can sign a non-disclosure agreement. This is all part of the ethics and code of practice.”
But is such a UK-focused programme beneficial in an age when globalisation means company structures and co-partner agreements between aerospace primes traverse national boundaries?
“We have to help UK companies become more global,” Curnock continues. “Through SC21 organisations that want to partner globally can demonstrate they have world class performance when they enter into those partnerships.”
Spreading the word
Curnock reckons the programme is having an impact beyond UK shores: “In Europe they are more aware of SC21 just by working with UK manufacturers. The strength of the process is that it is recognised at a national level and the primes agree on it, along with the Government and the industry.”
ADS also works with other aerospace associations around the world on supply chain improvement; although a pan European equivalent to SC21 does not appear to be in any immediate plans.
“SC21 is essentially about supporting UK manufacturing,” says Curnock. “But we recognise primes are global companies and we have memorandums of understanding (MOU) with countries like Australia or in France, where it is driven by Airbus for example.
“These methods are what any good business should be doing. I would be astonished if global corporations don’t have a continuous improvement programme for their subsidiaries. SC21 is an enabler into that kind of programme.”
Curnock asserts companies signed up to the process see significant returns. “Reports from regional trade associations and the Department of Business, Innovation and Skills (BIS) demonstrate the millions of pounds it has returned and those results are endorsed by the managing directors of the companies involved,” he adds.
So far around 600 companies have registered with SC21. There have been 100 award winners, two reaching the highest Gold accreditation.
Curnock maintains primes such as Thales see a significant improvement in their suppliers who have signed up to the scheme. The defence group is leading more than 30 companies in its supply chain.
Laurence Barrett is Thales’ supplier relationship manager. He commented on the company’s involvement with the programme at this year’s Subcon Show.
“We need our supply chain to help us come up with solutions for our customers so rather than having a top down chain we have a cluster,” he explains. “The cluster interacts with each other as well as with Thales. Advances in IT have allowed this to be possible even if it does take a little more time and investment. Every cluster member has decided this is something good for their business.”
Keeping pace with capacity
According to Curnock, the UK aerospace and defence supply chain has to improve if it is to keep pace with increased demand, particularly in the civil aerospace sector.
“We have a lot of big challenges ahead of us. There is a big ramp up in demand; Rolls-Royce has a ten-year order book and Airbus is increasing output all the time. We have to create the capacity in the industry to absorb it. Companies on the right cycle of improvement are able to absorb that demand without increasing their head count, so it demonstrates it is good for business.”
However, he maintains there is still a lot of work to do. The Government backed Aerospace Growth Partnership wants to increase the UK aerospace industry’s share in the world market from 17% to 20%.
And ADS is also looking to work with other sectors such as Nuclear and Oil that share suppliers with aerospace and defence. It also wants to fill the skill shortage in manufacturing and help accelerate the development of new products and their progress to market.
The way ahead
To make the most of opportunities in the global marketplace the UK supply chain needs to be leaner and fitter than ever before.
“SC21 is all about helping companies grow their business by building up better relationships with customers,” concludes Curnock. “The adversarial arm’s length approach to supply chains is a thing of the past. Collaborative working enables primes to get closer to their strategic suppliers and build long term relationships.
“Companies should not come on this journey if they are not passionate about improving their business. There has to be a commitment from the top down through the organisation. Unless we improve Britain will fall by the wayside in our global position as an aerospace manufacturer.”