BAE Systems: How to get on the supply chain of the Rochester base

When it comes to getting on a big company’s supply chain, they do not come much bigger than BAE Systems.

The defence giant, the maker of Typhoon and Tornado fighter jets, spends more than £10 billion a year with 25,000 suppliers around the world.

In the UK, it works with about 7,500 companies, of which approximately 2,200 are small and medium-sized enterprises.

The Striker II helmet-mounted display is made at BAE Systems in Rochester
The Striker II helmet-mounted display is made at BAE Systems in Rochester

Its base near Rochester Airport, which employs about 1,500 people, produces helmet-mounted displays and major parts for aircraft.

Bosses at the site have about 500 active and approved suppliers, of which 50 are strategic or preferred.

Supply chain director Lee Penfold made it clear there are opportunities for small businesses to join the party when he attended the Manufacturing and Electronics Expo at Kent Event Centre earlier this month.

“The majority of our future spend is still planned to be in the UK and Europe,” he told hopefuls.

However, getting a slice of the action is one of the toughest gigs in Kent.

BAE Systems supply chain director Lee Penfold
BAE Systems supply chain director Lee Penfold

“We need to be very demanding of our supply base,” said Mr Penfold. “There are several reasons our expectations are high.

“The engineering challenge we take on means many of our products are on the cutting edge of technology. It is often both safety- and mission-critical.

“We need to be able to prove we can keep an aircraft in the air way beyond its typical stress level..." - Lee Penfold, BAE Systems

“We need to be able to prove we can keep an aircraft in the air way beyond its typical stress level.

“Many of our products operate in a climate range between -40C and 80C. They are manufactured to incredibly high tolerances.

“We often test products far beyond reasonable expectations of its use. We throw everything at a product in an attempt to make it fail.

“After all, there are no lay-bys at 30,000 feet.”

Dealing with suppliers which do not meet these high standards can be hugely costly for BAE.

“The most minor changes can have very serious implications,” said Mr Penfold.

BAE Systems' base in Rochester
BAE Systems' base in Rochester

“We have had cases where a slight change to the length of a cable has cost £60,000 to the business in lost production to find the fault.”

Mr Penfold has considered a factory next door and even a sewage facility half a mile away as possible sources of contamination in faulty products.

In one case, it eventually turned out the problem had come from a silver compound which weighed no more than seven-thousandths of a gram.

“We have had cases where a slight change to the length of a cable has cost £60,000 to the business in lost production to find the fault...” - Lee Penfold, BAE Systems

It meant an entire product range had to be reworked and some units had to be recalled from US airbases.

“A tiny bit of silver we didn’t want or ask for cost a huge amount of money.”

BAE’s requirements are so exact it can border on the ridiculous – rejections have included the wrong colour black paint and glue that was too sticky – but suppliers have to live with such high standards if they want to win such lucrative contracts.

There are other pressures which mean suppliers have to be at their best to work with BAE. These days the defence firm has access to a global supply chain and changing economics have put more risk on its shoulders.

The requirements could not be higher. While it demands 100% quality and on-time delivery, it also wants organisations to have the right culture, a focus on removing waste and a drive to deliver products more quickly.

Mr Penfold said: “If your organisation can buy into that, we can work with you.”

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