Posted: Wed 23rd Jul 2014
Following on from Alison Lewy's advice on sourcing a production partner for a fashion business, in this post, Head of Manufacturing Advisory Service (MAS), Steven Barr, offers advice on keeping production in Britain and forming a relationship to suit both parties.
How do I go about looking for the best manufacturing partner?
Before you start, have a clear idea on what you want from your manufacturing partner and how closely you need them to be involved.
The main drivers behind production continue to be cost, quality and flexibility. You need your supplier to understand very clearly from the outset what you are expecting and you will also need to produce drawings - or better still - a prototype with which to work.
While you may think you have the world's next big product, a small business with ambitious ideas can sometimes be seen as a risk to manufacturers so it may not be just as easy as placing an order.
In terms of finding who might be suitable, there are a number of options:
If you want to do your own research, the Internet and industry search engines like Qimtek and Applegate are valuable sources of finding suppliers
Talk to other people connected with the industry you are operating in or looking to get into. They may know exactly the right manufacturer and might be able to open doors or broker introductions
Identifying possible partners is something MAS can help with. Our network of advisors has incredible visibility of the range and capability of manufacturers active in the UK
We can help small manufacturing buyers work out the best strategy including sourcing, capacity, identifying risks and product introduction.
What would be your advice to small businesses in terms of what they should look for when concluding a manufacturing partnership/agreement?
When forming a partnership, it's important to look beyond the bottom line and think in terms of a long term relationship.
As above, have your specifications laid out and give potential suppliers access to drawings, background information and prototypes that will immediately create transparency in the relationship. You may need to put a Non Disclosure Agreement (NDA) in place to protect your intellectual property/pending patent at this stage.
Agree from the start the level of involvement from the manufacturing partner, quality expectations, delivery schedules, materials to use and the procedures they have in place if something goes wrong.
Visiting the manufacturing line and meeting the key people involved is a must, so one of the positives of being located closer to a supplier is a reduction in travel time and cost. It's also surprisingly reassuring to know that you can jump in the car/on the train and be on-site within 60 minutes.
Proximity can also be beneficial in gaining an in-depth working knowledge of your partner's business - their capabilities, challenges and growth ambitions. These, strong relationships may enable you to innovate together and there may also be the possibility of co-investing on future projects.
Seeing things firsthand is great. However, we would also advise to check out what the manufacturing company is saying, perhaps ask to speak to similar sized customers about their relationship and ability to deliver. You might well pick up on something that could change your mind or help in negotiations.
Will British manufacturers produce samples and agree to run small volumes to give the small business owner time to test the market and then scale up?
We know from experience that British manufacturers can be more responsive and better geared up to deliver small production runs than overseas rivals.
Being close to the customer means they are also able to work together and turnaround the product quickly, especially in the delicate stages of pre-production and completing the first batch.
There are inevitably teething problems with all manufacturing so locality can be important, especially if you are on a strict deadline or have a budget that can't sustain too many international trips.
This does not mean you should be lured into thinking every manufacturer you bump into will be jumping at the chance of small runs. The reality is that the decision will be based on how they view your product and its potential.
If they feel it has the chance to increase in volume and you need support in the early stages then most will probably give you the benefit of doubt. However, you should remember this as you are growing"¦loyalty and faith flows both ways.
With more work being re-shored from large companies such as John Lewis, will this take up the skills and resource that could have been utilised by small businesses?
Manufacturing provides high value-added jobs, with those entering by either the vocational or the academic route typically going on to earn higher than average salaries compared to people with equivalent levels of qualification.
Increased demand for manufacturing skills is therefore a powerful driver of growth throughout the UK economy and, as large companies reshore, many small businesses will benefit from increased demand, as the pull comes up through the supply chain.
While there is a short-term danger that larger companies will have the edge in attracting skilled technicians, in the long-term it will likely lead to an overall upturn in the skill level of people employed in the manufacturing sector, as large companies have more resources to train staff, who may in turn go on to work in smaller companies.
Additionally, the increased demand for these skills will serve to raise the profile of manufacturing overall, encouraging more young people - in schools, college and further education - to enter into industry.
What support is there for small businesses looking for manufacturers?
The Manufacturing Advisory Service has been helping manufacturing SMEs since 2002. We have a team of 80 specialist advisors working on the ground with companies to develop strategy, improve processes, bring new products to market and strengthen their supply chains.
There's a lot MAS can do to help and I hope you will read this and decide to get in touch!
Steven Barr is Head of MAS and Area Director for London and South East regions