In recent years, governments and their agencies have increasingly made requirements for industry participation, which in many cases are mandatory criteria for the award of contracts in the defense industry.
Currently, more than 100 countries around the world require some form of localization projects in their defense procurement programs. The idea is that major defense contracts are typically multi-billion dollar investments that countries use to achieve political, economic, and defense goals by promoting their country's military and technological self-efficacy — and enlisting the participation of their local ones to do so take advantage of industry.
In most cases, the main contracts are awarded to the defense contractors, so the responsibility for creating concepts and fulfilling the requirements lies with them.
VINCORION, with its long heritage in the defense and aerospace industries and its wide range of competencies in power generation and energy management, is a company that offers its solutions to OEMs as well as to governments. And since the defense landscape is highly competitive, it is difficult to survive without forming partnerships and collaborating with other companies around the world. This is why the topic has already been a priority for VINCORION in the past.
A chance for partnership
General contractors often ask their suppliers for support in fulfilling parts of their obligations. However, because these issues are complex, many suppliers find it difficult to support such requirements - and often try to circumvent them. However, VINCORION sees offsets as a further step in working together with its customers and not only supporting them with quality products but also standing by their side in the challenge, as industrial participation is often considered.
"The core is to fully understand the requirements of the individual case," says Jenny Tsakalou, Senior Offset Manager at VINCORION. “If, and only if, we work closely with local industry and explore potential synergies, we can deepen the business relationship. This is only possible if you really understand your partner's abilities, concerns and long-term goals. These synergies could not only relate to a main program, but could also affect our broader product portfolio or our technology roadmap,” adds Aeronautical Engineer Tsakalou.
In doing so, VINCORION strives above alllong-term relationships. The company works with existing suppliers, but also wants to find suitable new partners with whom it can go that "extra mile", increase competitiveness through cost reductions and improved lead times, co-develop new products and jointly pursue further opportunities, nationally and globally. In addition, the company's quality department has experience in qualifying new suppliers, and the technical department is ready to provide the necessary technical assistance, support and troubleshooting.
VINCORION has already set high standards with its offset management in the past and is aiming for more. The goal is nothing less than using industry participation as a strategic key to international growth. "We want to become a reference organization in the field of international industrial participation by structuring, negotiating and implementing offset projects with the primary goal of supporting our own and our customers' long-term global growth strategy," says Jenny Tsakalou.
Valuable service established for industrial holdings
VINCORION has created a good example in Eastern Europe, especially in Poland. A few years ago, the government decided to modernize their tanks. There were localization requirements for that. VINCORION worked closely with local industry and sounded out their technical skills. Then partners could be selected for component production as well as to take over the lifetime maintenance and repair capabilities of the system.
As professionals know, the risks associated with localization are high since they are directly related to the main job. A delay in the localization project can result in a delay in the main program and thus the overall performance of the program. It was therefore important for VINCORION to also invest enough time in finding the best local partners and building a relationship with which all parties were satisfied.
VINCORION Advanced Systems GmbH
Senior Offset Manager