Innovation
Annette Gevaert considers the plight of SME’s in placing their innovative rail products and services in the hands of buyers, and offers some solutions
I
nnovation always comes with a certain risk, however, with electrification, preventative maintenance and technological advances in the customer experience,
the UK rail sector offers great opportunities for innovation from suppliers of all sizes. Yet, despite government schemes, extra funding and universal enthusiasm, it remains prohibitively difficult for smaller businesses to place their innovative products and services in the hands of buyers. There are several organisations designed
specifically to enhance innovation in the rail sector: the Enabling Innovation Team, the Rail Innovation Fund, Network Rail’s innovation platform and member organisations like the Rail Alliance are all encouraging SME's to become more active in the rail sector. However, a culture exists wherein large contractors are still more likely to invest in products that guarantee price benefits rather than improvements in performance. The vast majority, or 77 per cent, of
suppliers on Link-up, the online community which connects suppliers and buyers, are SME's. In our experience, the desire to market innovative products within the rail sector is there, but there are some fundamental problems that are making it difficult for innovations to come through. The first is very basic. Products in the
rail industry are often built to last for 20 to 30 years. So some structural products won’t require updating for a very long time, while other areas will require sudden updating at relatively unpredictable times. Doors open and close for innovation very quickly, and it takes something truly groundbreaking to override existing technologies. Secondly, it is very difficult to criticise
the risk-averse mentality of those procuring new services and products. Multimillion pound corporations can be cautious when taking on a new product - especially if its safety and proof of performance are yet to be tested. It can be very difficult to strike the right balance between innovation, trust and reliability. As a result, there is evidence to suggest that suppliers are pitching products which are seen as easier to sell – even though they have more innovative products under the shelf which may not be offered, until asked. Suppliers are innovating all the time, but these products are in danger of being left untapped. Thirdly - and most importantly - it
can be a real struggle for smaller and relatively newly established companies with genuinely innovative and disruptive products to ensure they are included in large tenders. Infrastructure managers know which suppliers and contractors they can rely on, which leads to a gravitation of the whole supply chain to that of a closed shop.
Breaking through legacy providers is an enormous barrier for SME's and one that is unfortunately still stifling innovation.
Smaller suppliers led to big things Lessons can be learnt from other sectors. Take the iPod. In 2001 Apple unveiled a product that changed the digital music world forever. The concept was born with Apple, but the technology came from a complex range of suppliers. Toshiba provided the disk drive, PortalPlayer the reference platform and Pixo the user interface. Apple looked beyond the largest suppliers and instead identified the best suppliers. This tactic enabled them to piece together a truly innovative piece of hardware. Apple was willing to consider smaller suppliers in its determination to lead that specific market and its technology is now used extensively in the rail industry for tracking and monitoring trains and e-ticketing. The rail industry needs to emulate those
creative environments which cultivate innovation, and demand processes that promote the best and most efficient products. Of course, in the rail industry the prevalence of health and safety is non-negotiable. When lives are at stake, reliability does become a vital attribute. Once again, a natural conservatism seems to be the only way forward. When speaking to suppliers, this is a recurring question that arises – how can we prove our safety credentials with a new product and make ourselves seen? Is supplier pre-qualification part of the problem or can it assist in the change? To be qualified through Link-up, the SME must provide their credentials and depending on the potential risk of their product or service must meet a certain level of quality including safety and reliability. Instantly, this mark of quality can reassure buyers about quality and creates a level playing field for even the smallest and newest of suppliers. When a significant barrier involves mitigating the risk of innovation, proving auditable standards is necessary for a chance of inclusion in any tender.
Communicate and collaborate on your difference However, despite the fact that Link-up is a platform where all suppliers regardless of size are visible, the most substantial obstacle for innovative rail sector suppliers is likely
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