Partnering for success: SMEs crucial to maritime endeavour

With construction of the first Hunter-class frigate now well under way, it is important to acknowledge just how vital Australian SMEs will be to the success of the critical endeavour before us.

Teams leading the manufacturing of modules and the larger construction blocks for the first Hunter Class frigate at Osborne Naval Shipyard in Adelaide.

With construction of the first Hunter-class frigate now well under way and our AUKUS partnership also announced, it is important to acknowledge just how vital Australian SMEs will be to the success of the critical endeavour before us.

Our commitment to partnership with defence industry for the delivery of these programs is absolute. On Hunter, there are already more than 1800 Australian companies signed up to compete for contracts.

More than 80 contracts have been placed with local companies for those first three frigates.

Although AUKUS is at an early stage, we are already working to establish a clear supply chain ­policy across the Tri-National ­jurisdictions.

Our supply chain is robust, truly national and even incorporates companies new to the defence industry.

The importance of these trusted industry suppliers to work at speed and deliver capability has never been greater. For AUKUS, this also presents a real opportunity for Australia to lean in where existing supply line fragilities exist and to establish itself as a fourth production supply line.

The federal government’s focus on local manufacture is intensifying, with greater emphasis on the capabilities at every level of the supply chain.

On Hunter, every opportunity is being pursued to increase Australian industry content across the program. We are committed to meet a minimum of 58 per cent Australian contract expenditure over the life of the shipbuilding phase – and we are currently tracking above 60 per cent.

We’ve also moved well beyond shipbuilding methods of the past. We’re collaborating with industry and academia to find solutions to modern problems by testing and trialling new and innovative technologies into our shipbuilding practices. It is clear the technology we are developing at our Tonsley Precinct will reduce the safety risk to employees, increase productivity and cut operating costs across the Osborne Naval Shipyard.

The signing of the Hunter Batch One contract with the commonwealth government is one of the most important milestones in the program’s journey so far.

Craig Lockhart, managing director, BAE Systems Australia – Maritime.

I am grateful also to those trusted industry partners who took time out of their day to attend the recent cut steel ceremony at ­Osborne, for they have a stake in this contract as well.

Programs of this scale are not without challenge. Like our partners, we are subject to the impact of increased global tensions. This brings with it the challenges of price volatility, logistics disruption throughout our supply chains due to cyber and trade route threats, as well as the collective race to meet our sustainability goals.

In this environment, sovereign industry capability becomes much more than just spending money in Australia. It’s about employing Australians, doing work in Australia, developing innovative technologies, and continuing to grow capability over time.

We are a tight-knit industry. Across primes and SMEs, there are so many transferable skills across a wide array of disciplines. Collectively, we’re focused on building workforces with skills that will serve our industry and our country. While I am incredibly proud of the work BAE Systems has done to achieve milestones on the Hunter program, success isn’t achieved in a vacuum. To achieve what we need to do, we must go beyond simply owning and operating capability.

We need to collectively embrace an innovative mindset in overcoming our challenges, uplifting our people in the process.

It is through this shared effort and obligation that we, as an industry, will ensure that the men and women of the RAN will serve on world-leading platforms to keep our nation secure.

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Craig Lockhart is managing director, BAE Systems Australia – Maritime.