Rail industry - a platform for new business

Organised by the Manufacturing Technologies Association (MTA - 0207 298 6400), the event outlined the opportunity and explained how suppliers might become involved and win business. But, at the outset, suppliers are advised that it is a sector that is difficult to get into; one that has its own processes and language; and that is highly diverse. But there is "a lot there", from nuts and bolts to trains, and everything in between. Speaking about the big picture, at a global level, UKTI's Bob Docherty, international rail business advisor, noted that the market was £120 billion in 2010, with 70% of it accessible to suppliers. And with world output set to triple by 2050, the need to move people and goods will similarly grow. For example, India is currently investing between $60 and $80 billion in its railways, and Singapore plans to invest $35 billion by 2020. The USA is also investing, while, in the Middle East, work has already started on building what will become 20,000 km of track, he advised. UKTI (www.ukti.gov.uk), through the Foreign and Commonwealth Office (FCO), has, Mr Docherty highlighted, access to 200 markets. UKTI can offer both free and paid-for services to companies wishing to gain access to this spend – for example, its Overseas Market Introduction Service (OMIS) and exhibition attendance support - while it also organises inward missions of buyers looking for UK suppliers. The UKTI website publishes information about rail projects/tenders, to which companies can sign up, as well. Image: High speed investment in the UK? It'll mean work for those ready for it Lubricating international trade is the IRIS system (International Railway Industry Standard – www.iris-rail.org), with its roots in 2005. Hadleigh Castings, Ipswich, and Park Sheet Metal, Coventry, are IRIS-accredited companies, for example. There are, of course, opportunities closer to home. Network Rail is currently in a five-year, £35 billion infrastructure investment phase, offered Neil Stevens, Rail Alliance, accepting, however, that the last year had seen an effective halt to this. But consultant Stuart Norfolk, Green Ginger Consulting, highlighted that Network Rail spends £4.5 billion annually with its supply chain. The Rail Alliance is a business networking organisation headquartered in Long Marston, Stratford-on-Avon (www.railalliance.co.uk – see also http://bit.ly/eCwaUV). It organises networking events, meet-the-buyer gatherings, provides business and project/tender intelligence (drawing on UKTI as one source) and supports collective exhibition attendance by sub-letting bulk space in lots that fall below minimum stand size limitations, for example. It has also recently been involved in the development of a supplier qualification system, ELSI (entry level supplier initiative), to help get new-to-rail companies into a position to supply the UK rail sector. USEFUL QUALIFICATION ELSI lies on the path to UK rail industry qualification Link-up, but is not a qualification itself. Link-Up is a system that vets suppliers on behalf of rail industry buyers, run by Achilles (www.achilles.com). Suppliers then become part of the Link-up database, which rail sector buyers can search. Suppliers opt to be associated with a product category/sub-category and type area of expertise, such as the supply of a product or maintenance service – there are some 2,900 products covered by the database, said Achilles' Andy Harrison, director, rail and transport (see http://bit.ly/fr8C01). There are already 3,500 suppliers in this database – including an increasing number of overseas firms. But Link-up requires a great deal of information to be supplied and has been seen as a potential barrier to new entrants to the sector. Via Rail Alliance/Achilles, ELSI allows potential suppliers to discover whether the rail industry does offer them an opportunity and, if so, then allows them to become 'visible' to specifiers using the Link-up database. Link-up is required by Network Rail for its major contractors, of which there are only some 18 accounting for 80% of the annual £4.5 billion spend. Their suppliers must also be Link-up qualified. But Network Rail also has its own database of parts that have been qualified for use within the UK rail network – PADS, or 'parts and drawing systems'. Companies can get their parts/products vetted by Network Rail for entry into this database and Link-up is not necessary for this to occur; indeed, Link-up is not mandatory in the industry, just a tool to aid suppliers and buyers. Consultant Stuart Norfolk highlighted that Network Rail is concerned with supplier diversity; that is, not being tied to a single source, so visibility of PADS database contents to potential new suppliers is a possibility, it was implied. Getting products or parts into the database will, however, require direct engagement with Network Rail and Mr Norfolk explained that potential suppliers here should understand the organisations viewpoint. Safety is the key concern, while what might seem to be a 'no brainer' from a supplier's point of view – "I can save you £250,000/year" – might not be such a great deal for Network Rail, because of issues of stock obsolescence or personnel training. And discussion within the set-up might require contact with multiple people who operate in vertical projects (ThamesLink, Crossrail, Maintenance), but where these are cut across by common areas (telecommunications, signalling, labour, design). If a supplier can align itself with a common area and get buy-in from multiple projects, then, clearly, there is a higher likelihood of success, Mr Norfolk, explained. But, with Link-up or a place in PADS, this is not marketing. Companies will have to raise their visibility and be proactive to get themselves noticed above and beyond this, it was stressed. Of course, entry into the rail sector at a lower level within the supply chain by making direct contact with those companies that make equipment for the rail industry and who may be part of the Link-Up database themselves is also clearly a strategy and one that Rail Alliance, for one, is well placed to advise on. BETTER BY DESIGN A final speaker at the MTA event was design consultancy Creactive Design director Neil Bates (www.creactive-design.co.uk). He outlined how good design can help new entrants win in the rail market, although the example given was the design of the new high speed train for Ireland. Creactive worked with Hyundai Rotem in competition with better known suppliers and helped the Korean firm win the business. On a smaller scale, an innovative cooling system for London Underground train cabs was exampled, with the same cooling system also being proposed for carriages for overseas customers. This demonstrated that suppliers that work with design agencies can see themselves win business, effectively by default. Creactive draws on its own network of suppliers, Mr Bates explained, adding that networking was vital for SMEs. In closing, he pointed out that the imminent McNulty report on the UK's railways will likely have an impact on the industry – viz change and innovation – through its 'value for money' theme, while, by 2020, modifications to the existing UK rail fleet must be complete to allow access by 'people of restricted mobility'. This latter requirement is being driven by the Disabilities Discrimination Act 1995, it was noted. Opportunity there clearly is and there are also, just as clearly, organisations that can help suppliers engage with it. First published in Machinery, March 2011