Defence must address the elephant in the room to ensure the nation’s naval capability build up is successfully achieved, according to a group of WA SMEs.
The Henderson Alliance has called for recognition that interstate hubs will need to be established to directly complement the South Australian Future Frigates and Future Submarine construction programs, with an associated need for a focal shift towards collaboration, clustering and the integrated involvement of SMEs.
Henderson Alliance co-ordinator Darryl Hockey stressed that regardless of the planned development slated for the SA defence industry, defence pundits and industry fear the state does not have the capacity to do it all.
"The elephant in the room is that most key defence players now freely accept that despite the significant growth projections of SA's defence industrial capacity, the eventual outcome will be insufficient to meet the entire needs of the new navy construction program," said Hockey.
"To overcome these capacity constraints, who knows, as much as 40 per cent of the total build may have to be conducted interstate.
"The fantastic thing for SA is that every capable local business and worker will be saturated with opportunities – and we applaud this likelihood – however on the flipside it must also be recognised that as the local market fills, wage cost pressures will rise to make it cheaper to get work conducted elsewhere."
The Henderson Alliance said it sees significant potential for a national shipbuilding industry based in SA with interstate hubs contemporaneously building modules to manage risks, reduce build cycle times, relieve schedule and cost pressures, drive engineering efficiencies and spread economic opportunities.
While this would require a step-change in construction methodology, as well as highly-refined project management processes and logistics to ensure seamless just-in-time delivery to the SA aggregation and assembly hub, Hockey said the model has already been successfully proven elsewhere by many global shipbuilders.
"It is critically important this modularised block construction concept is embraced early so the optimum industry frameworks, infrastructure and workforce development requirements can be established in each construction node. All government and industry parties will need to work together so the maximum industrial, economic and commercial efficiencies can be generated for Australia," Hockey said.
"With a truly integrated collaboration model which properly utilises the SME sector we can surpass all current aspirations of productivity, industrial efficiency and risk management to deliver economic outcomes never previously envisaged. Furthermore, by having parallel construction channels in place it may even be possible to bring forward the build schedule to attend to any geopolitical military pressures which may potentially emerge."
The alliance is inviting government and large defence players to take a closer look at the capabilities of the WA defence industry and consider a more specific role for SMEs and industry clusters. It believes with the legitimate capacity limits of the SA industry, the Henderson precinct can provide the keystone to delivering success for the nation’s building of frigates and submarines.
"Henderson is easily the best laid-out industry precinct in Australia and as such is the perfect site to generate a high-functioning defence industry cluster to underpin the national shipbuilding and through-life support programs – we are perfectly placed to provide key construction support to SA and firmly bolster Australia's sovereign defence needs," he said.
"Therefore, governments need to significantly increase their WA focus with investments in infrastructure, education and training – plus helping to fund essential SME support services like the Defence Teaming Centre – to ensure the local industry is best equipped to deliver the best possible outcomes."
The Henderson Alliance was formed in March this year and has over 26 full members and a further 44 contributing firms.
Companies part of the alliance include Host Group, IKAD Engineering, L2S Engineering, Marine Construction Services, Marine Inspection Service, Marine Technicians Australia, Mackenzie Marine and Towage, PMC Group, Pozztech, Weldtech, C&J Rigging, Heat Exchangers WA, Kulin Group, PQR Quality Solutions, Subcon and Watmarine Engineering Services.