Major defence players willing to listen to SMEs, says SC21 director

The head of the UK's Supply Chains in the Twenty First Century (SC21) aerospace and defence programme has said that defence industry primes recognise the critical importance of their suppliers and are "prepared to listen" to small and medium enterprises (SMEs), particularly in the current downturn.

Peter Hogg, SC21 Programme Director and Head of Procurement, BAE Systems Programmes & Support and International, said prime contractors are working to understand the "fragility and vulnerability" of smaller suppliers, adding that assistance to mitigate the effects of the downturn could range from improved payment terms to soft loans.

"I don't believe that there are any players in this industry who don't recognise our reliance on the SMEs and that, without them, we wouldn't have a business.

"I need every single supplier to our organisation [BAE Systems] and the rest of the SC21 signatories to be profitable," Hogg told Jane's on 31 March.

He said that the defence industry is moving away from a "win-lose" culture, towards a "win-win" balance, "particularly as you look down the chain. The question about value for money is becoming ever more acute".

Discussing the vulnerability of SMEs during the current economic downturn, Hogg said: "What we don't know today is what level of pain they're feeling. In our industry, we're not insulated from the economic situation today. I think we're dampened ... I don't think we've seen the impact on a lot of the SMEs yet, but we're putting in extra resources to try to understand the fragility and vulnerability of the SMEs."