Partnerships between Large Organisations and SMEs Help to Achieve More Business Opportunities
ST Kinetics (STK), one of Asia’s leading land systems and specialty vehicles companies, has embarked upon a partnership project with 11 SME suppliers to upgrade their capabilities and competencies under the Partnerships for Capability Transformation (PACT) programme. This includes training the suppliers in the Kaizen methodology and coaching them in technology, automation and mechanisation upgrading, to increase their quality, productivity and efficiency levels. Supported by SPRING Singapore, these collaborations are aimed at achieving mutually beneficial relationships, which increase the quality of products, productivity levels and hence competitiveness for both STK and its suppliers. STK expects business volumes of its SME suppliers to increase between five to seven per cent each year for the next three years.
This was shared at the STK Productivity Day today, which was graced by Minister of State for Trade and Industry, Mr Teo Ser Luck. “The Government has been actively supporting SMEs through a series of initiatives ranging from productivity and capability upgrading to technology and innovation. However, some SMEs may still be hesitant or lack the resources to do so. Partnering with and learning from MNCs or large local organisations like STK will provide SMEs with the opportunity for more secured and focused upgrading.”
This collaboration between STK and its suppliers is supported by SPRING under the PACT programme, which was enhanced earlier this year as part of a review of the
SME development strategies, chaired by Minister of State Mr Teo Ser Luck. The review focused on boosting existing SME development strategies and proposing new measures to help SMEs transform their businesses and cope in the new operating environment.
One focus area of the review was on helping SMEs access more business opportunities through PACT. The programme, which was introduced in 2010 by the Economic Development Board (EDB), was expanded this year to include additional manufacturing sectors as well as non-manufacturing sectors1, with respective agencies like SPRING leading PACT for its respective sectors. PACT now supports collaboration projects between large organisations2 and SMEs in areas that involve partner development, knowledge transfer and co-innovation. Such collaboration projects will help SMEs build a better track record and expand their businesses. SMEs can also gain from valuable, real-time feedback and guidance from their existing customers.
Since the expansion of PACT in April this year, SPRING has supported 20 partnership projects between large organisations and SMEs, with another 12 project applications being processed. From these projects, close to 130 SMEs are expected to benefit through some form of capability upgrading or increased opportunities in developing innovative products and solutions.
Under the PACT programme, SMEs are eligible for up to 70% funding support of qualifying project costs. Large organisations may also consider hiring a PACT manager, dedicated to driving such PACT collaborations, which can be supported under the PACT programme.