SEMMA (South East Melbourne Manufacturers Alliance) has embarked upon a new project to assist its members to secure significant packages of work.
SEMMA’s membership is representative of Australian Manufacturing as a whole having a number of large iconic manufacturers, a greater number of medium-sized companies and a host of smaller companies right through to several classic “Mum and Dad” micro-companies.
One of the challenges for manufacturing SME’s has been to secure work with large primes on significant contracts. Increasingly, government agencies and major primes – particularly in rolling stock, defence and construction – are advising that they want to be able to access the great technical capabilities of our Australian SME manufacturers, however, they do not want to deal with a host of individual, small suppliers.
They want to simplify the administrative burden, reduce costs and streamline the supplier interfaces, as well as avoiding perceived risk associated with smaller entities. There is mounting pressure for SME companies to collaborate in order to meet the scope and scale required to satisfy the requirements of major projects.
Earlier in the year we approached our members and queried their willingness to look at collaboration. More than 80 per cent came back with a resounding “YES”, recognising that unless they combine resources and maximise their collective capabilities that they will not be considered for major projects and significant work packages.
The SEMMA Collaboration Project will prepare members to tender for work not available to them as individual SMEs by combining their capabilities to produce enhanced scope (the range of what they can produce collectively. E.g. an assembly instead of just components) and scale (volume of what can be provided collectively).
Collaboration is not a simple process – it requires development of trust between traditional competitors as well as a shared understanding of requirements by each of the participants in a collaborative model. Not everyone is suited to working collaboratively and research in this field indicates that, where collaboration fails, it is generally as a consequence of the soft skills/interpersonal factors/adaptive issues and differing levels of business maturity rather than the structural and mechanistic aspects of the relationships.
The SEMMA Collaboration programme consists of workshops and facilitated meetings to develop participants’ ability to collaborate effectively. It will be a case of enlisting and adapting ‘tried and tested’ information and models, including relevant international standards, and then tailoring them to suit the needs of our SEMMA members and specific business opportunities. There will also be development of agreed models and necessary legal documentation to support the SEMMA members preferred collaborative structures.
SEMMA has identified a recognised expert in the field who has demonstrable success getting SME collaborations “to the negotiating table”. He will be tasked with conducting the workshops, facilitating understanding of collaboration models and assisting a core group of companies to engage in opportunities not previously available to them as individual SME’s.
Recent UK research shows that collaboration efforts with other firms (and in particular with those companies using a systematic management framework such as the international standard for collaboration) were positively correlated with operational performance, business performance and innovation in products, services, processes and technology. So, it seems there is something beneficial in the process of collaboration, or learning to manage collaborative relationships effectively, which can benefit a business.
While SEMMA’s project initially focuses upon SME’s collectively winning business with major contractors through being able to leverage improved scope and/or scale, there are opportunities to implement collaborative thinking and practice within normal supplier-customer relationships, for mutual benefit. This may be as simple as working together on a perennial issue within the business interfaces to eliminate waste and cost for mutual benefit. It may involve a research and development opportunity working collaboratively with a university.
Our initial on-line collaboration workshop in November 2020 has received enthusiastic responses ranging from a modest “Pleasantly surprised … some very good models and the standard of information across the board was excellent” through to , “The best 3.5 hours spent this year”.
We are keen to progress this activity in the new year and very enthusiastic about the potential for our SME’s working collaboratively to not just ‘get a foot in the door’ but to be at the negotiating table for major contracts and securing major work packages. Our SEMMA members will be able to demonstrate the synergy of enhanced capability and the joint capacity to provide the required scope and scale to win work previously unavailable to any one individual member of the collaborative team.