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ICN director offers SMEs advice to crack defence supply chain

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Image via Commonwealth of Australia, Department of Defence.

With more SMEs from outside the defence industry looking to diversify their businesses and break into the defence supply chain, the Industrial Capability Network (ICN) has offered advice to both primes and SMEs.

With more SMEs from outside the defence industry looking to diversify their businesses and break into the defence supply chain, the Industrial Capability Network (ICN) has offered advice to both primes and SMEs.

Executive director of ICN NSW Peter Webster spoke with Defence Connect about his 30 years of experience working with large businesses and SMEs, and said a boots on the ground approach is still crucial to cracking the defence supply chain.

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"Probably just get out there more, and talk to local companies more," explained Webster.

"One of the real problems I see for SMEs is that we'll have large projects in Australia, and we tend not to have resident primes in Australia. We have got a couple, but on the whole, they're not resident. So you'll have a large project, the overseas prime will come in and set up a base here, set up a platform from which to work the project, and that's not only through acquisition, but often through-life support stage."

While SMEs have in the past been successful in securing work from tier two companies acting on behalf of international primes, Webster said this has not always translated into SMEs joining that prime's supply chain, which ICN is looking to change.

"They'll [primes] often buy from the tier twos, the companies that provide the major platforms within these capital spends," said Webster. "So your major hydraulic system, say, for submarines. We tend not to have those sorts of companies in Australia. And it's quite often those that will be buying from the SMEs, rather than the primes direct. So it's a matter of helping them to slot into that supply-chain."

But with Australian industry capability a key focus of the government's major defence acquisitions, Webster said the intent of primes to work with local companies stands to be implemented more effectively in the coming years.

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"In working with the primes, I often see that they are genuine when they say, 'We want to work with local ... ' because they've got things they need to fulfil, and quite often that's better done on a local basis," Webster explained.

"But if they can work together, and work closer with their tier two suppliers to ensure that they're cascading opportunities down to local SMEs, which is usually the level where those opportunities fit, that would be a great help."

To hear more from ICN NSW executive director Peter Webster, stay tuned for our exclusive podcast.

ICN director offers SMEs advice to crack defence supply chain
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