UK: UNITED THEY STAND.

UK: UNITED THEY STAND. - Opening the doors of the factory to the gaze of competitors does not come easily to manufacturers, particularly not to small producers. Except in Italy, that is, where the networks of competing firms in small towns - most notably

by
Last Updated: 31 Aug 2010

Opening the doors of the factory to the gaze of competitors does not come easily to manufacturers, particularly not to small producers. Except in Italy, that is, where the networks of competing firms in small towns - most notably in the Emilia-Romagna region - are widely believed to underpin the success of Italian shoes, textiles, ceramics. But such networks don't transplant easily. Governments in the US, Denmark and Portugal have all tried to recreate them, with no more success than sundry British initiatives. Nevertheless, openness - Italian style - could be catching on in the UK.

In the North-West, the Consortium of Lancashire Aerospace has 136 corporate members, from British Aerospace to tiny component suppliers, and plans a long-term strategy for the industry in the area. Joint bidding, marketing and training are on the agenda. Dennis Mendoros, one of the prime-movers in the CLA and managing director of Euravia, which repairs and overhauls aero-engines at Earby, claims that, 'We're unique in Europe'. In aerospace, perhaps. But the venture still has to prove its worth.

The North Lancashire Training Group is an entirely separate association which evolved from the former training board for the furniture industry.

Based in Accrington, it has grown slowly and steadily and now has 72 member companies which jointly own the group. Training remains the core service: courses go right across the board, from managers to shop-floor workers.

But this is much more than a training company. It is also a source of advice on everything from machinery to keeping up to date with health and safety regulations. Members are overcoming their natural suspicion of sharing with competitors, according to Jim Harkness, founder of the group. 'Three years ago they would have bolted the door on each other.' These days, 'when we go to trade shows, we go as a group', says an upholstery maker. And it's not merely to economise on fares. 'We get together at night and talk about what we've seen.'

From Lancashire, the co-operative spirit has spread to Northern Ireland where a dozen or so furniture makers - some in direct competition with each other - have joined an equivalent organisation. 'We visit each other's factories, share figures, talk about designs, while our supervisors meet on the same training courses,' says Terry McDonagh, managing director of T W McDonagh, cabinet furniture makers (he is also a director of the North Lancashire group). 'As long as somebody is not going to copy or abuse my designs, I think that we can learn from each other and go forward against other competition. In the broader sense, we are promoting furniture against competition from other types of consumer spending.'

But what might work in parts of Lancashire, and across the Irish Sea, hasn't worked elsewhere. 'There have to be organic links,' says Ash Amin, professor of geography at Durham University. Setting up shop is not enough.

'Either nobody knocks on the door, or else the callers want the sort of advice that they do not want to see being passed on to a competitor.' The first problem was what defeated a group of small engineering companies in Birmingham. Bill Nicholls, manager of education and training at the West Midlands Engineering Employers Federation - who was a catalyst for the government-funded pilot - denies that the Midlanders were secretive. 'It was not competitive issues but numbers,' he says.

'We needed a core of 15-20 companies but we had less than 10.'

Modular Automation was one of the member companies. David Cockayne, its managing director, thinks that managements were to blame. 'Some of us refuse to look in the mirror and admit that we don't know it all.' Cockayne is still in favour of co-operation and currently striving to get big Midlands employers working with smaller firms in the matter of training.

But big concerns supporting lesser ones is not what the Italian formula is about. Roger Sugden, professor in the department of commerce at Birmingham University, believes that 'webs' of criss-crossing relationships between small producers which support each other would do much to strengthen the small firm sector. Such webs would not be anti-competitive, he argues. Indeed, they would promote competition. 'New and rival production units' would emerge from time to time. Otherwise the webs would 'stagnate and wither away'.

Find this article useful?

Get more great articles like this in your inbox every lunchtime