Promoting Australia’s manufacturing capabilities overseas could be just the ticket to sustaining our capacity. Katherine Crichton writes.
TIMES may be tough, but there are still opportunities out there for local manufacturers, particularly for those involved in the Defence sector.
While manufacturing locally in a fiercely competitive global marketplace has never been easy, Australian SMEs involved in the ‘Team Australia’ initiative seem set to see out the global financial crisis better than most.
Launched in March 2005, Team Australia is a partnership between the Department of Defence (DoD) and Australian industry designed to promote Australia’s defence capability solutions to global customers.
Managed on behalf of the Australian Government by the Defence Materiel Organisation (DMO), Team Australia brings together the operators and suppliers of a range of capabilities, services and packaged solutions.
However as Al Uzubalis, Director Defence Export Unit, from DMO stresses, the initiative was developed as an overseas promotional package, not as a program to assist Australian defence companies to win Australian defence orders.
“Team Australia manages the facilitation and promotion of Australian industry overseas. That often takes the form of facilitating access to particular markets by attending trade shows or having targeted missions to promote industry for particular identified opportunities,” Uzubalis told Manufacturers’ Monthly.
“Australian defence industry needs to remain viable during the peeks and troughs of Australian Defence acquisitions.
“Helping Australian defence industry to export their capabilities overseas is a way of sustaining those capabilities in Australia.”
One of the key benefits of the Team Australia initiative is the ability to facilitate access and introduce Australian defence capability to senior military and government procurement agencies overseas.
But Uzubalis warns defence work can be demanding. “Not only in compliance with quality, performance, cost, schedule etc but also in tender and contractual response requirements.
“Defence is a major buyer of equipment and systems and orders can be quite large but also spasmodic. Sustainment contracts are much longer term and if a company is successful it can mean a longer term revenue stream.”
Uzubalis recommends companies interested in defence manufacturing visit www.defence.gov.au/teamaustralia and to participate in the workshops and training programs on offer.
Making the transition
Founded in 1954, Lovitt Technologies Australia started off as a cutting tools and components manufacturer based in Montmorency, Victoria. Today, the company is a provider of precision machined tools, components, parts and assemblies to customer design and specification particularly within the aerospace and defence industries.
Kevin McMahon, Marketing Executive for Lovitt, said it was a big decision for the company to make the move into defence manufacturing and one which involved considerable thought and investment.
“As well as the stringent quality standards, there’s extreme traceability of the product right through production to consider, as well as the differences in volumes.
“In automotive manufacturing for example, you are talking about high volume components. In aerospace and defence the volumes are substantially smaller, very high spec and technically complex, and so our whole facility needs to be flexible enough to cater for the requirements,” McMahon told Manufacturers’ Monthly.
This flexibility is demonstrated in the cutting edge technology and equipment the company has invested in to provide the very high tolerances required.
These include million-dollar 5-axis CNC machines and Flexible Manufacturing Systems (FMS), which importantly, McMahon says, can be utilised across a number of programs.
“For instance, parts that we machine for the F-35 Joint Strike Fighter (JSF) are very similar in technology, shape and size to parts we machine for other commercial aircraft.
“These machines are million-dollar investments and we need to be conscious of the machines’ utilisation, because unless they are turning we are not making money.”
With projects like the JSF worth billions of dollars, it is easy for companies to get dazzled by the numbers, but McMahon warns it can be a matter of months or even years before many of these companies will see the money.
Another company that has made the successful leap into defence manufacturing is Broens Australia, and Lee Edgecombe, the company’s Business Development Manager, told Manufacturers’ Monthly it was just a logical step for the company.
“Our other industry sectors are tracking towards the same way as defence in terms of component requirements etc and it is smart thing for us to continually upgrade people, skills and technology.
“For a company the size of Broens there really isn’t enough consistent work to be able to support the organisation, and the defence industry programs are just the right size for our capabilities,” Edgecombe said.
With the company’s ability to provide a total turnkey solution including full design, failure mode analysis, full machining and through-life support program, Edgecombe says it makes the company a very attractive option for defence projects.
He says another benefit of being involved in defence programs is the kudos and increased recognition that comes with being involved in projects such as the JSF.
“From a marketing perspective, each successful tender is a flag to industry as it shows that if the military is purchasing from us, then the quality systems potential customers would expect are already in place.”
Also with the weakness of the Australian dollar, currently 64c against the Greenback, Edgecombe says despite the global financial situation and the slowdown of the local economy, there has never been a better time to invest in defence programs.
“With the low Australian dollar making our exports much more cost effective, this is a perfect time for Australian companies to be targeting not only defence, but overseas-related defence programs,” Edgecombe said.
Broens Australia 02 9829 1111.
Lovitt Technologies 03 9431 7300.