Andrew Forzani, the MOD’s Chief Commercial Officer, told a packed DPRTE 2018 of his ambition to improve SME engagement within the defence supply chain as he looks to implement the Modernising Defence Programme.
Attending DPRTE at Cardiff’s Motorpoint Arena for the first time, Mr Forzani provided the first keynote address at the event’s Keynote Arena and took the opportunity to discuss his first six months in his new role.
He spoke of his strong background in the world of procurement but preferred to see his lack of specific experience in the defence industry as a positive; his unfamiliarity has allowed him to look at things with a fresh set of eyes and without preconceived ideas but crucially with the understanding that a change of approach will be needed in some areas.
He said: “It’s been a really busy first six months trying to understand the landscape and the defence sector is different; very different actually but also very special.
“As somebody coming in new, what is obvious is that UK defence is in very challenging times in terms of financial climate, budget pressures and the amount of investment needed in defence. We are only going to make any success out of that with the way that we work with industry and the way we work with this sector.”
Mr Forzani acknowledged the MOD’s economic responsibility to business in the UK, saying: “When you look at the number of jobs and organisations that are relying on MOD investment, that is a big responsibility. It’s important that we recognise that.”
December 2017 saw the Government launch its Defence Industrial Policy –essentially a policy refresh that contained a three-pronged strategy that aims to deliver improvements to the way that defence delivers wider economic benefits; to foster a competitive, innovative and secure UK defence industry; and to make it easier to do business with defence.
Mr Forzani said that this document would act as a catalyst for review and change, which would be realised through the Modernising Defence Programme (MDP) and the upcoming Dunne Review – undertaken by former defence minister Philip Dunne, which is examining the contribution made by defence to UK prosperity.
He allayed fears that these strategies would be empty rhetoric, citing the endorsement of the Defence Secretary, Gavin Williamson, and reiterated his desire to make good on these ambitions.
He explained: “That’s the bedrock of how we want to work with industry. The danger of these things is that it’s just another policy strategy document that sits on the shelf and then gets dusted off again in three or four years time. We are really keen that we do something different and it does drive some change and some action.”
One of the MDP’s focuses is on the MOD’s commercial outreach and interface with industry, something that Mr Forzani felt was good news for the defence supply chain. He said: “It’s really positive that it has been acknowledged that as part of a modernising and improving defence initiative that the role of the supply base has been recognised and we have a strand specifically to look at that.”
Within this commercial strand of the MDP, there are a number of different facets including an analysis of the MOD’s commercial capacity and capability as a buyer.
“There is a real rich opportunity there, particularly around speed; about how we put some of our processes together and interact with the market,” said Mr Forzani.
The MDP will also see examination of the MOD’s relationship with Prime Contractors, with Mr Forzani saying: “It’s about strategic supply management and working better together with our top 25 suppliers.”
The third area is the acquisition process, predominantly the function of DE&S and reviewing the organisation’s progress in modernisation.
It’s clear that time is of the essence as a report on the progress of the implementation of these strategies will be made to the Defence Secretary at the end of June.
Mr Forzani called for the MOD to improve upon its “visibility” and its understanding of the supply chain.
He said that the biggest focus would be on the SME agenda, with the MOD’s spend with SMEs having declined over the past three years. Mr Forzani described the figures as “disappointing” but it was a trend that “we absolutely want to reverse”.
Mr Forzani used his appearance at DPRTE 2018 to announce three key initiatives to deliver upon this objective.
Large suppliers will soon be mandated to advertise new sub-contracting opportunities through the main government portals such as Defence Contracts Online.
The MOD will also be writing to the Prime Contractors and reminding them of their responsibility as major partners to the MOD to ensure flow-down to SMEs on the supply chain with greater visibility.
The third initiative will see an industry consultation launched on how prompt payment requirements can be passed down the supply chain and impact on supplier selection.
Mr Forzani said he hoped these announcements demonstrated “a genuine commitment to drive opportunities and spend with SMEs.”
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