Held in Adelaide’s Grand Chancellor Hotel on December 4th and 5th, the inaugural ADM Defence Supply Chains Summit provided an opportunity for Small to Medium Enterprises to engage with representatives of the industry primes and Defence officials and learn about opportunities within the global supply chains of OEMs.
The full two day event was structured to provide varying perspectives and valuable advice for SMEs looking at working with the primes in the global supply chain space. A range of presentations from industry and defence covered many topics, ranging from an overview of the Defence Materiel Organisation’s Global Supply Chain Program to individual SME experiences in gaining work in this area.
The Defence Supply Chains Summit was supported by the South Australian Government and sponsored by KPMG (as the gold sponsor) and Defence Health was the supporting sponsor.
Chairing proceedings on the first day of the conference was Steve Clark, Lead Partner Defence for KPMG and on the second day the honour fell to Chris Burns, CEO of the Defence Teaming Centre (DTC).
SOUTH AUSTRALIAN GOVERNMENT OVERVIEW
Tom Kenyon MP, Minister for Manufacturing, Innovation and Trade and Minister for Small Business in the South Australian Government began the conference with a presentation on how his government is supporting Defence and defence industry.
Noting that, in recent years, defence sector employment in South Australia had grown by 18 per cent, to around 27,000 people and revenues had increased by 50 per cent to $1.8 billion, Kenyon said that the South Australian Government has identified Sea 1000 (Future Submarine) and Land 400 (Land Combat Vehicle System) projects as future opportunities. However he flagged genuine collaboration between all levels of government and between states as essential.
“South Australia is in a unique position to play a key role in delivering these projects, given the robust infrastructure at Techport Australia, our strong industry base and a critical mass of skills resident in our state,” he said. “We are under no illusion that South Australia can deliver on its own. We know it will provide effort and investment from industry and governments in a number of states.”
DMO GLOBAL SUPPLY CHAIN PROGRAM
Wendy Messer, Director General Australian Industry Programs for DMO runs a number of programs focussed on building Australian industry, including the Defence Industry Innovation Centre, Priority Industry Capability (PIC) program, Skilling Australia’s Defence Industry (SADI) program and Business Access Offices.
In her keynote address to the conference, Messer also highlighted the work done by the Global Supply Chain Program, which since 2009 has been providing funding for participating primes to identify opportunities for SME’s to join their global supply chains. Since its inception, the program has grown to include many of the major defence primes and today includes BAE Systems, Boeing, Finmeccanica, Lockheed Martin, Northrop Grumman, Raytheon and Thales.
Initially expected to achieve, in dollar terms, a ten to one return upon investment, Messer reported that the scheme is currently achieving a 14:1 return and there are plans to expand this even further.
“I think it’s fantastic, it is a real opportunity for industry and the primes have been nothing but supportive,” she said, before speaking at length about how SMEs can make themselves ‘Defence Ready’ to improve their capacity to participate in the global market.
ADVICE FROM INDUSTRY BODIES AND PRIMES
Over the two days of the summit, presentations were given by a range of industry bodies aimed at providing attending SME representatives with advice and information from several perspectives.
Steve Wynd, General Manager, Global Access Program for BAE Systems Australia, a participant in the GSC program, provided a wealth of information in his presentation, titled ‘Winning Business in Global Supply Chains’. Some of the key points, also echoed by other speakers, were the need to have patience with the defence contracting process and the importance of understanding how an SME’s niche capability fits in with the requirements of the global primes.
“Part of our role is to help you understand the challenges in those markets: who to talk to in those markets, what the specific requirements of those markets are; who the competitors are and the cultural differences of doing business in those markets,” he advised.
“Get to know your competition, it is not sitting in this room and it’s not sitting in Australia. Your competition is global; you need to know who is going to be competing in that market and what their strengths are.”
Other advice was provided by Andrew Garth, Director of the Defence Industry Innovation Centre (‘Assisting SMEs To Improve – and Put Their Best Foot Forward); and Kerryn Smith, Deputy CEO and General Manager Capability Development and Stewart Hodge, Industry Development Co-ordinator from the DTC (‘Collaborating to Compete – Moving Towards an Industry Alliance Model’) .
SME EXPERIENCE
Other presentations ranged from an independent view of the whole of defence logistics provided by KPMG’s Peter Griffiths to thought-provoking comment by Professor Goran Roos, Chairman of the Advanced Manufacturing Council SA about the disadvantages of off the shelf equipment purchases.
However, several SMEs shared their mixed experiences of winning work in the global supply chain space and spoke openly and candidly of their lessons learned.
Chris Stecki, CEO of PHM Technology and Marcus Ramsay and Managing Director of Lovitt Technologies participated in an enlightening panel discussion and later provided further detail in individual presentations. Finally, Steven Faulkner, CEO of PMB Defence closed the summit with a fascinating account of utilising an SME’s niche capability to support the main batteries of Australia’s Collins class submarine fleet.
Once again, the common themes arising from lessons learned were patience, persistence and the need for SMEs to understand their own business, the competition and the business of the customer.
KPMG’s Steve Clark summarised the opportunities available to Australian SMEs.
“Defence doesn’t have all the answers and needs industry support,” he said. “There are great opportunities for Defence and industry to work together to help Defence face some big issues.”
