By Mark Robinson, PTAC Counselor – Supply Chain at North Carolina State University
The supply chain function is so rooted in the business process that we often overlook it in favor of individual business operations because the term “supply chain” is so broad. Employees will often identify as working in finance, operations, customer service, or manufacturing… when they in fact work in the supply chain. The supply chain is the entire network of entities, directly or indirectly interlinked and interdependent in providing goods and services to a customer. It is comprised of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who sell to the customer. In short, the supply chain is everyone and all the processes involved in getting the end product or service to the consumer.
This is important to the United States Government and critically important to the Department of Defense because they are both concerned with the development and growth of small businesses. According to the Federal Acquisition Regulation (FAR), all government contracts awarded over a certain amount require small business subcontracting plans. Aside from the monetary benefit, this regulation has afforded small businesses participation, growth opportunities, and supply chain alignment in terms of fully understanding the Department of Defense requirements through the prime contractor.
The Department of Defense realizes that its prime contractors, and the large companies that support them, need to have a well-functioning supply chain management process in place that includes small businesses. Working with a large private company is not much different than working with a government agency or prime contractor for a mid-sized small business. Both entities require subcontractors to deliver on price, quality, and schedule. The Department of Defense benefits because the mid-sized small business subcontractor is maintaining and using the skills that will eventually be needed by a prime contractor.
By creating partnerships with large companies, mid-sized small business subcontractors benefit by diversifying their portfolio for potential downturns in the economy and it grows their current workforce. The large company is able to integrate a small business as an additional source of supply into its supply chain for a possible long-term partnership.
The North Carolina Procurement Technical Assistance Center (PTAC) has the responsibility of facilitating partnerships between prime contractors / large companies with qualified small business subcontractors. This is accomplished by aligning the supply chain requirements of the prime contractors / large companies with capable mid-sized small businesses.
For additional information on Supply Chain please contact me at email@example.com or 919-600-5397 ext. 627.