For companies that have “Defence” as a key theme in their Strategic Plan, the Defence White Paper and associated Investment and Industry Policy documents will help them to identify and win new business.
There are certainly going to be issues and ongoing discussions around some of the details mentioned in the paper; such as the competitive bidding processes, the selection of manufacturing locations and perhaps even at a later date, the quantity of units to be procured.
However, this document and the discussion which has led to its creation, now gives our country a far greater degree of certainty about the intent of Defence. This in turn gives greater certainty to suppliers in the defence industry – and with the declaration of plan for a “continuous build” regime, will provide more certainty to those companies that can demonstrate their ability to provide value to Defence.
Defence White Paper
This is a voluminous piece of work, covering the thinking behind what is needed for the defence of Australia over the next 30 to 50 years.
The thinking is covered in three lengthy documents:
1. The 2016 Defence White Paper – which talks about the overarching plan and the strategy to implement the plan.
2. The 2016 Integrated Investment Program – which lays out how the future investment is planned to be split out over the next 10 years to 2025-26.
3. The 2016 Defence Industry Policy Statement – talks to how Defence and Industry are envisaged to work together to deliver the large number of projects.
The White Paper – talks to the Australia’s Three Strategic Interests; covers likely threats from overseas; cyber conflict and from terrorists; and then goes onto explain in much detail how the Australian Navy, Airforce and Army, also with essential support services will be upgraded to be able to meet those threat.
The three Strategic Defence Interests are:
1. A secure, resilient Australia, with secure northern approaches and proximate sea lines of communication.
2. A secure nearer region,, encompassing maritime South East Asia and South Pacific (comprising Papua New Guinea, Timor-Leste and Pacific Island Countries).
3. A stable Indo-Pacific region and a rules-based global order – in which power is not misused, and threats to peace and stability from tensions between countries can be managed through negotiations based on international law and the threat from terrorism can be addressed and concerted by international action.
The Integrated Investment Program
The Integrated Investment Program lays out how the government will allocate funding to each of the 6 key areas over the period to2025/26. It’s important to note that there are detailed cycle plans for each key area; which show how the projects within them are planned to start and finish over the planning period. As the project overlap, it can be inferred that this will give the “continuous build” regime that has been spoken about.
1. Key Enablers – 25%;
2. Maritime and Anti-Submarine – 25%;
3. Land Combat and Amphibious Warfare – 18%
4. Strike and Air Combat – 17%
5. Intelligence, Surveillance & Reconnaissance,
Electronic Warfare, Space and Cyber Security – 9%
6. Air & Sea Lift – 6%
Defence Industry Policy Statement
The Defence Industry Policy Statement – describes how Defence plans to interact with Industry and Academia to implement the plans. This is an important element of the whole thinking process.
Suppliers in the Defence Industry will most likely wish to learn more about the new Defence Innovation Hub, and a new Centre for Defence Innovation Capability. The Defence Department is clearing looking at Australian industry to generate and provide innovative ideas for supporting their capability realisation.
The text of the policy statement makes it clear that the Centre for Defence Industry Capability is charged with assisting Australian SMEs to grow, develop and become more defence industry capable.
The use of innovation and bringing new ideas to fruition are seen to be fundamental.
The policy paper envisages that the Innovation Hub and the Centre for Defence Innovation Capability will be closely involved in this process too.
So what can you do if you have the Defence supply chain on your growth plan?
This is business development and company growth territory. Here are some ideas to throw into the mix.
• Add Defence to your Strategic Plan.
• Plan for a long lead-time from starting to revenue actually flowing.
• Put marketing, sales and product development resources (people and dollars) into the ongoing budget.
• Define “the special something” that your company does that is hard for others to copy.
• Read about the programs which are published in the Investment plan. Consider how you can add value to those programs.
• Understand the likely supply chain and where you might fit in it. Who do you have to sell to?
• Understand how the buying and selling processes work in the defence industry. Join AIDN and learn the ropes.
• Build the in-house capability to deliver “the special something” robustly and repeatably.
• Find and meet your contacts at the CDIC.
• Meet the Prime(s) who you believe will need your help. Talk to them and learn from them. Meet their top suppliers.
• Work your business and product development process.
If you are in Victoria contact the Victorian Government Defence Procurement Office on 03 5215 6071
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