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Becoming Defence ready

Becoming Defence ready

There has never been a greater need for Australia to develop and maintain a sovereign defence industrial base. Sascha Sinclair from Systematiq shares with Manufacturers’ Monthly how to best deliver products to the defence industry.

Australia faces an increasingly contested geopolitical environment, it is important for the Australian Government to grow the industrial base required to support the Australian Defence Force.

The Hon. Pat Conroy MP, minister for defence industry and minister for international development and the Pacific recently stated, “Our strategic environment dictates the need to build and maintain a robust, resilient, and internationally competitive sovereign defence industrial base.

“This is an absolute necessity in order to provide the support our men and women in uniform need. There are significant opportunities to grow our industrial capabilities through collaboration with key partners. In order to grow these capabilities, we must do more than just highlight them, we must support their growth in Australia.”

There’s never been a better time for advanced manufacturing businesses to look towards the defence industry for opportunities in supply chain participation. The benefits can be great: business growth, jobs growth, long term security, and a chance to contribute to the local economy, not to mention be part of some innovative programs developed by the ADF and its strategic allies.

But delivering your products into a Defence program is not like any other commercial arrangement. You need to structure your business in a way that conforms to the requirements of working with the Federal Government and Defence Force. If you don’t prepare adequately, you may succumb to some of the risks of project failure that unfortunately are all too common.

Risky business

The ADF and the large prime systems integrators who establish local supply chains and engage SMEs are extremely risk adverse. They will be looking to engage businesses who provide the least risk to the success of their project, so your business needs to make sure you have the right evidence to support your business case and tick all the boxes when it comes to producing compliance documentation. This may include becoming ISO9000 certified, providing previous financial history, and evidence that you are locally owned and operated.

SMEs also need to demonstrate their ‘ability to supply’ and the capacity to support a project through its entire development and delivery. This can be demonstrated by making sure you have identified people who can be dedicated to the project, and if they aren’t available, a suitable budget and a plan to recruit and train for the project or a partner or supplier who can assist. Often businesses don’t plan for this and overload their workforce, which can cause strain on staffing.

Systematiq’s director of strategy, Brydon Johnson also noted, “A key aspect that a lot of businesses overlook is documenting how the project elements will be delivered. While the solution is important to the Department of Defence, the way your business plans to implement the solution is just as important. Your response needs to reflect the project
delivery aspect of the solution too, for the entirety of the project.”

From little things, big things grow

Queensland generator manufacturer Eniquest is an example of a company who successfully moved into the Defence sector, with the majority of their business now supplying units for various Defence programs.

“The transition wasn’t without challenges,” Eniquest general manager – Don Pulver said.

“But the benefits are enormous. The Australian Defence Force is one of Australia’s largest customers so you’re never going to go to sell as many products as you can to Defence.”

Pulver’s advice to SMEs eager to pursue Defence contracts is simple: start by understanding the products needed, establish how you can meet those needs, and reach out to those in the supply chain that you can partner with.

“We started our defence business 19 years ago, sourcing and suppling in service spares. Our first Commonwealth contract was more than 10 years ago. It was a minor contract to manufacture and supply Field Power Distribution Boxes. Follow-on orders still continue today.

“Now we have been successful supplying into a major contract in the Land 8140 program and hopefully more to come.”

LAND 8140 is the Deployable Force Infrastructure Project and aims to modernise deployable sanitation, catering, water management and treatment, shelters, and power generation. It will provide responsive, scalable, and adaptable deployable infrastructure to meet the evolving operational needs of the Australian Defence Force.

Ex-Defence Industry Minister Reynolds stated, “While this modernised capability will be used on missions overseas, it will also enhance support the ADF provides for humanitarian assistance and responding to natural disasters, including bushfire emergencies in Australia.”

The program is also providing significant new partnership and supply chain opportunities with Australian defence industry and will provide ongoing work for years to come.

Don Pulver commented also on the benefits to Eniquest that have resulted from these contracts. “We’ve experienced continuous growth from 10 to 25 per cent a year,” he said.

“Our recent L8140 contract will more than double our business and will require up to 20 new staff including 12 new technicians and up to 8 new support staff. To support this new business, Eniquest is expanding its facility by another 2,600 sqm on its current site including stores, machine shop, and assembly areas.”

All in good time

Often the Defence program lead time is lengthy – from an initial Request for Information, through to the tender process or Request for Tender, then the decision and mobilisation of delivery can be years. A business needs to be able to withstand these timeframes and manage their own expectations through this process – which can often be opaque and delayed.

“You need to be good at what you target before you attempt to get this business,” Pulver added.

“Once you have an initial contract you can expand on this, but it is a process, so be patient and remain focused. We always had a vision to win a contract such as L8140. Even before we knew the requirement, we developed products with anticipation. These products were far more advanced than the current in-service equipment and provided increased capability so when the opportunity for a tender final came, we were already on the front foot.

“You’ve got to be patient and you’ve got to be persistent.”

One of the major challenges with this process can be managing cash flow and resourcing. This can be especially tricky with the current labour shortages and material delays being experienced across the globe. Being aware and planning ahead as much as possible will prepare you to weather some of the challenges that come with delays and uncertainty.

Pulver agreed with this sentiment, “Such growth comes with strain on cash flow and while we are extremely grateful for the contract, we are under immense pressure to ensure we balance this correctly to deliver a successful program.”

Brydon Johnson added, “One area often overlooked is how you can break up a project into milestones to assist with cashflow pressures. We assist SMEs with this process by developing Work Breakdown Structures which can be very effective in easing this burden.”

Landing opportunities

This year’s Land Forces exhibition and conference, from 4-6 October 2022 at the Brisbane Exhibition and Convention Centre in Brisbane, Queensland, was a key meeting hub for Australian and international industry, defence, academia, and government, as the Australian Army implements the most substantial period of recapitalisation and optimisation since the Second World War.

Land Forces is always a powerful forum for key decision-makers from throughout the region, enabling government representatives, defence officials, military procurement managers and senior army officers to network with defence materiel manufacturers, equipment suppliers and service providers.

State and Commonwealth representatives, along with all the major primes and defence industry partners are able to engage in a range of information and networking events.

This year proved to be no different with the increase in focus in our region, and the upcoming Defence Strategic Review that aims to help Defence better understand where it should prioritise investment.

Systematiq, a Defence Industry consulting company, that provides procurement, consulting, and project management services, was in attendance at Land Forces this year.

“Land Forces is really the premier event of the year when it comes to the defence industry supporting the Australian Army,” Johnson said.

“We see it as a great opportunity to connect not just with our clients, but with other industry partners, and get a sense for what direction the Government is going and what are the key focus areas for the short, medium, and long term. Not to mention the fact that the products on display are always impressive and feature some of our most innovative developments.”

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