Consider Flex Networks

Let's say your small business can handle only one or two manufacturing processes, giving it a limited core competency. How can you succeed in doing business with the federal government or prime contractors? Well you may want to consider joining a flexible network of manufacturers.

This concept originated in Old World Italy, in the northern region of Emilia-Romagna, where very small furniture, ceramic, textile and metalworking firms organized into flexible networks that created an industrial renaissance for the region. The idea has traveled the world, and thousands of networks proliferate Europe. But here in the United States, its time has only recently come.

The modern flexible network is a group of companies that have formed an alliance to serve or enter a new market. The arrangement ebbs and flows, as projects come along and customers' needs change. The organization takes many forms, from joint ventures to traditional prime/sub relationships. Some produce parts; others assemble. The key is to leverage each partner's strengths to create something that could not be produced alone.

A successful flexible network can be a boon to its partners, but getting one off the ground is difficult and time-consuming. There are many pratfalls, so due diligence is required. As with all partnerships, all members need to be satisfied with the efforts, or else the arrangement falls apart. Careful planning and communication go along way.

The flexible network needs much more than just a manufacturing arrangement and a paying customer. Begin with good legal advice, drawing up contracts and managing expectations. Be sure to enlist the help of available financial resources, such as banks and local, state and federal governments (community and regional governments are a large source of support). Finally, get a director or project manager to oversee the entire operation.

Potential partners are usually found locally, but don't limit yourself. In this age of digital communication and overnight delivery, the world is much smaller and partners are much closer.

But a good network takes time to develop, sometimes years, if done correctly. There are managers to hire, relationships to cultivate and customers to find. But the opportunities are numerous, if you're flexible enough.

The grease that makes a network work is communication; you must network and talk. There must be regular meetings, sharing of information, going over opportunities, resources, new technology, who is doing what and finally what is going wrong. There must be honesty for this to work. Learn and share is not only important, but also vastly less expensive for each company. Consider the following points:

• Sales/Marketing - train each team member about your company and they become a resource for you.
• Technical/Management - together the team can hire a shared resource or resources that is too expensive for just one.
• One member may be able to attract more work in one area, like aerospace or printing, but need more resources to be able to pursue.
• Equipment - share vs. buy.
• Bid Board Services - a dedicated shared resource.