The collective efforts of small manufacturers can result in new opportunities for continued growth for our region.
Business “teaming” occurs when specialized providers of a commercial product or service combine resources to win sales or contracts. Similar to subcontracting, which has existed for years, teaming is regaining popularity because of two key economic factors. One factor is that large business and government agencies are reaching out to small business owners. Cost-cutting measures imposed by stakeholders on large business to reduce risk and excessive overhead are also driving new interest in teaming. To remain agile and competitive, these large businesses are eliminating complete assembly processes at their facilities. A coalition or “teaming” of companies that performs all of the manufacturing processes and delivers a completed product not only looks attractive to large businesses, but also allows small business to participate in major manufacturing while reducing operational costs for the larger organization.
Today, the federal government is the largest buyer of commercial products and is mandated to award 23 percent of contracting to small business. Large businesses participating in government contracting are also mandated to contract 23 percent of their supplier base to small business. As a result, the market for small business of contracting with large business and the federal government has never looked better. The Small Business Administration tracks these mandates and holds seminars and webinars to promote potential contracting opportunities with the federal government and large business. This appeal of government contracts has generated new support of the “teaming” concept by large corporations such as Lockheed Martin and government agencies like the Department of Defense.
During last year’s Small Business Administration Economic Recovery II Conference in Springfield, Illinois, a corporate panel from Lockheed Martin’s Supplier Diversity Division described how Lockheed seeks small business contracting to leverage their resources. Lockheed realizes a standalone small business may not have all the elements, assemblies or scope of work to support delivering a complete product. The example they gave was the wing of an aircraft and its components. Lockheed prefers to have a complete wing delivered to their facility over assembling the wing onsite. The company encourages and expects teaming to occur in its manufacturing processes. This example illustrates how a small organization can align its business with large businesses to integrate the manufacturing process for a complete product.
Considerations for Teaming
Teaming may hold some benefits and advantages for local businesses and manufacturers. To participate in these benefits, it’s necessary to know who is involved with teaming in central Illinois, and how businesses become part of a team.
The Economic Development Council of Central Illinois (EDC), in its ongoing efforts to create new opportunities and remain competitive in the marketplace, initiated a task force called EDGE Specialized Manufacturing. This is a community team of experienced business, education and economic development partners in central Illinois, including regional private-sector businesses, the Agricultural and Industrial Technology Department and Illinois Procurement Assistance Center (PTAC) at Illinois Central College, and IMEC at Bradley University. This year, EDGE Specialized Manufacturing has been charged with the task of developing a new market base for regional manufacturers.
A pilot program is in Phase I, and several manufacturers have come together to compete for a government contract. The government buys millions of dollars worth of metal parts and components from commercial business. The central Illinois region has outstanding quality suppliers to large commercial business who can convert their operations to government sales. To be eligible for government contracts, small businesses need to work together in creating requests for proposals for these contracts.
To be successful in Phase I, the involved organizations must have a high level of trust. Components are “handed off” in the manufacturing process from one organization to another. Processes such as metal fabrication and welding require that consistent quality standards are met. Consequently, members of the team must be able to communicate expectations across the manufacturing process and trust that these will be met by all team members. Each manufacturer involved in Phase I is willing to initiate this process for the expansion of opportunities for the region.
There are other requirements to becoming a member of the coalition or “team.” These include documenting the company’s capabilities, demonstrating work experience and establishing quality certification. To do business with the government, organizations also must be registered in the Central Contractor Registration (CCR) and ORCA. These are federal government databases that are required by federal acquisition regulations.
In addition to the federal government’s requirements, the most important consideration for businesses that want to participate in teaming is respect for the other team members’ proprietary products, systems and processes. These confidential items, usually the result of many years of work, often provide the business with its competitive edge. To assure confidentiality, each team member signs a memorandum of agreement.
Central Illinois has always been flexible and innovative in reacting to change in technology, processes or structure. The collective efforts of teaming for central Illinois’ small manufacturing businesses can result in new opportunities for continued growth for our region. iBi