The move to globally centralised procurement and supply-chain management by large corporations in recent years has made it a lot more difficult for local suppliers, in any country, to win business from their multinational neighbours. However, Brexit may well open up a new zone of opportunity for innovative Irish companies to buck this trend.
Brexit, particularly a hard one, will cause serious disruption to global supply chains. Irish-based companies selling into the European Union single market will have to rethink their procurement strategies if they involve UK suppliers who no longer enjoy the benefits of EU status. Enterprise Ireland is already gearing up to assist Irish companies take advantage of this changing situation.
"For Irish companies, Brexit means rethinking business strategies, diversifying into new markets, leveraging existing customers and sourcing new opportunities as part of a long-run plan", says Enda McDonnell, global sourcing manager with Enterprise Ireland. "Sometimes those opportunities are closer than you think."
He points out that while Brexit was not of Ireland’s choosing we must adapt to these new circumstances: “Now it has arrived our challenge is clear and the question is simple: how do we master the moment? Brexit presents the nation with our biggest external threat in generations.
“On the other hand, with threats come opportunities. What matters now is not whether Ireland’s enterprise base has the capacity or appetite to meet the challenge – that’s a given – but whether it is positioned to leverage every single asset and relentlessly pursue every single opportunity in this new reality. Only this will ensure long-run success.”
Rethinking strategies
Innovation will be key. “Brexit means rethinking business strategies, diversifying into new markets and leveraging existing customers and new opportunities as part of long-term planning,” McDonnell adds. “We are already working with Irish companies assisting them to improve their capability and innovation capacity in order to pursue these new opportunities.”
These companies enjoy the advantage of having a vibrant base of multinational companies located right on their doorstep and Enterprise Ireland has been working to exploit that advantage for some time. Since 2012, Enterprise Ireland and IDA Ireland been working together on a joint global sourcing initiative and developed an infrastructure to create connections between Irish-owned companies and multinationals based in Ireland.
This initiative involves direct introductions, specially arranged events in the regions, and regular trade and investment missions to Ireland. This is a highly innovative approach, as Enterprise Ireland’s trade missions and related events usually see companies visit a range of overseas markets.
The inward Irish programme has been intensified in response to Brexit and the 2017 trade and investment mission to Ireland will visit Dublin, Cork and Galway on May 18th and May 19th and will see dozens of one-to-one meetings organised between Irish based multinationals and Irish companies with product, service and technology solutions.
“Many Irish-owned companies are already providing service, product and technology solutions to multinationals based overseas and are adding significant value at all points along the supply chain,” says McDonnell. “Irish-based multinationals can also benefit from such solutions. This is not always easy and it can be a long process. The multinationals will often seek suppliers with an existing global footprint. But all our experience, particularly over the last four years, demonstrates there is no one simple approach and that multinationals will seek companies that are innovative, value-adding, competitive and reliable.”
Value is key. “It is all about the value proposition. Irish companies have got to build a relationship with the multinationals that enables them to demonstrate the value of their offerings. Irish companies have got to have something new and different to offer. It takes time and effort but when it works, the rewards for both parties can be significant.
Developmental supports
Enterprise Ireland already has a range of developmental supports aimed at Irish companies to help them meet the exacting expectations and needs of multinational clients including programmes in lean manufacturing, innovation, management capability and sales and marketing.”
McDonnell points out that the potential benefits of these programmes and trade missions stretch far beyond winning new business on this island. “If they are successful at winning business from multinationals here, Irish companies might then fashion future opportunities with parent and sister operations or similar enterprises overseas on the basis of that relationship,” he says.
“Enterprise Ireland’s network of 31 overseas offices works to review market opportunities and acts as an additional in-market resource for these companies.”
He also believes that there are longer-term benefits for both the multinational base here and for Ireland in terms of attracting future inward investment. “Ireland’s enterprise base should be seen as a national resource, one to be celebrated but never to be taken for granted,” he says.
“And creating connections between companies within that overall base can result in positive outcomes for both the multinationals based here and Irish companies. Increasing integration can serve to embed existing FDI [foreign direct investment] in Ireland as well as create a unique environment that adds to the Irish narrative in enticing future flows.”
He has a message for Irish companies eyeing the potential pipeline of opportunities to sell into multinational companies based here. “Some companies will be ready to run toward the prize; others will need support. Enterprise Ireland is there to give that support and guidance to companies that need it.”
