Land Warfare: I'm here from the government and I really will help | ADM October 2012

For 483 Australian defence small and medium-sized enterprises (SME), one government program has been helping them to become more sustainable, innovative and globally competitive.

The Defence Industry Innovation Centre (DIIC) - established in 2009 - is a Government approach to assisting defence businesses and the defence industry. Funded through the Defence Materiel Organisation (DMO), the centre is administered through the Enterprise Connect program. Enterprise Connect is an Australian Government initiative established in 2008 and managed by the Department of Industry, Innovation, Science, Research and Tertiary Education. It is backed by industry and offers comprehensive advice and support to eligible Australian SMEs to help them transform and reach their full potential.

With an appreciation that every business is different, Enterprise Connect aims to help SMEs boost productivity, improve innovation and ensure that their businesses have better access to new ideas and new technology. “The defence industry comprises many important niche businesses, some of which don’t necessarily fit the standard service offerings of Enterprise Connect,” Defence Industry Innovation Centre Director, Andrew Garth said. “As a result, the DMO chose to work with Enterprise Connect and established the Defence Industry Innovation Centre to provide tailored services specific to the defence industry.”

Participants have access to specialist Defence Industry Business Advisers in Perth, Adelaide, Melbourne, Sydney and Brisbane, where the DIIC works one-on-one with them to assist in generating increased business in the defence sector. The advisers also help prepare the businesses to enter global supply chains (GSC) in collaboration with the DMO GSC program.

Working with SME defence contractors, the DIIC provides guidance on accessing defence opportunities, sourcing technology and advice, and identifying strengths and opportunities, including benchmarking against industry best practice. The centre also provides SMEs with an assessment of potential areas of growth and new engagements, as well as access to valuable business tools.

Accessing DIIC services often begins with a no financial cost comprehensive and confidential Business Review that provides a top-to-bottom analysis of the business’s operation. Once an SME has completed a Business Review, it can then apply for the Tailored Advisory Service. The service helps businesses follow through on the outcomes of the review by providing matched funding of up to $20,000 to engage a consultant to implement the recommended business improvements.

“For every recommendation implemented with assistance of a Tailored Advisory Service grant, Enterprise Connect clients implement approximately four Business Review recommendations themselves,” Garth said.

“This demonstrates the value our clients place on the advice they receive over and above the grant funds available. As further evidence of the value offered by the DIIC, a number of clients return to the DIIC for additional services offered through second and third year engagements.” Many businesses also benefit from a Defence Industry Change Plan, which provides defence specific guidance and implementation support to businesses on topics that may be difficult and costly to source. The plan focuses the business on the topic, recommends realistic, achievable goals, facilitates closer connections to market players and provides access to new ideas and technologies.

Garth explained the Centre had been encouraged by the large number of letters clients had written, highlighting the benefits of the services the centre provided to their businesses, ranging from diversification through to significant increases in productivity and turnover.

A.W. Bell, Beak Engineering and Micreo are just three SMEs that have benefited from the Enterprise Connect program. Read about their journeys and what the program did for them below, as well as about services such as the Supplier Continuous Improvement Program, Defence Industry Change Plan, Researchers in Business and Leadership 21.

A.W. Bell

One of the businesses that has greatly benefited from the services of the DIIC program is Australian family-owned and operated A.W. Bell. Established in 1952, A.W. Bell employs over 70 people at its Victorian facility.

A.W. Bell works with a number of key defence businesses to supply complex metal parts to the defence industry. The company provides door and grill hinge castings for the Bushmaster, components for swing-mount and ring-mount weapon systems for W&E Platt, and components for the F35 JSF engine trailer, as well as holding contracts with BAE Systems and Northrop Grumman.

A.W. Bell started its journey with DIIC with an independent Business Review. Through the review, the business identified an opportunity to enter a new export market in the aerospace sector.

In order for A.W. Bell to meet the strict mechanical requirements of the opportunity it needed to develop a new improved investment casting process. The company was introduced to Enterprise Connect’s Researchers in Business program, and was soon partnered with CSIRO manufacturing, materials and minerals researcher Dr Roger Lumley.

Through the Researchers in Business grant, Enterprise Connect placed Dr Lumley within A.W. Bell to benchmark, develop and improve its processes. Dr Lumley brought a mix of theory, experience and practical hands-on capability to the project which, when combined with A.W. Bell’s manufacturing experience, enabled the development of a new technique for metal processing. The new technique produced an end product of superior physical properties to that of A.W. Bell’s international competitors. As a result of its involvement in Researchers in Business, and the work performed throughout Dr Lumey’s placement, A.W. Bell is now the preferred supplier to two major international companies in the aerospace sector.

With the success that the business gained through taking part in the program, it is no surprise that A.W. Bell CEO Andrew Meek says he would gladly use DIIC’s services again.

“Enterprise Connect was invaluable in helping us developing our business plan around our key strengths. Through their networks they were able to arrange introductory meetings with large international defence contractors that we otherwise would not have had. Many of these introductions have led to supply contracts,” Meek said.

Beak Engineering

Another Australian-owned and operated company, Beak Engineering is based in Victoria and employs 27 people. Working on-site and at Beak’s repair facilities, these workers repair and overhaul work for the DMO, Naval Inventory Procurement Office (NIPO) and the Navy.

The business was originally established to provide support to the aviation systems aboard Royal Australian Navy (RAN) ships, in particular the RAST (Recovery Assist, Secure and Traverse) helicopter landing system. More recently, Beak Engineering has expanded to become Australia’s largest manufacturer of ground power equipment. Beak heard about DIIC and decided it could benefit from a third party health check, so a qualified Business Adviser conducted a Business Review.

From there, the company participated in the Enterprise Connect Leadership 21 program. Designed specifically for managers and owners of SMEs, the program combines basic management theory with practical implementation projects drawn from the Business Review.

The company also worked with the DIIC on a Defence Industry Change Plan. This service provides specific guidance and implementation support to businesses on topics that might otherwise be difficult and costly to source.

Through the Defence Industry Change Plan service, Beak attracted the attention of an overseas company interested in an agreement to manufacture its aircraft ground support equipment.

Beak’s CEO, Terry Knowles, explained that this would not have been possible without the DIIC and Enterprise Connect program, which organised several visits from major defence equipment manufacturers to meet with the company and to discuss the prospect of Beak providing in-country support.

“We have a good relationship with one of the DIIC Business Advisors who has a great deal of experience in the defence industry and often provides excellent advice and coaching,” Knowles said.

DIIC Director Andrew Garth confirmed that the centre finds many SME businesses return for assistance in the form of mentoring.

With the assistance of the program, Beak was able to improve internal processes, which in turn improved efficiency.

Micreo

Currently employing 60 people, Micreo has contracts with defence for supply of counter-IED products to the DMO, as well as contracts for development of RF products used in Electronic Warfare (EW) systems. This year, the company was recognised at the annual Australian Defence Magazine (ADM) Awards in the category of Rapid Acquisition. It received this reward for utilising innovative risk management measures and Australian technology to deliver a complex solution to reduce the threat Improvised Explosive Devices (IEDs) pose to the ADF.

While over 70 per cent of Micreo’s sales are export, the ties the company has with Defence Research and the DMO have been instrumental business growth. With a focus on improving productivity and counteracting the effects of the high Australian dollar, Micreo enlisted the help of the DIIC. “We found the team [at DIIC] to be extremely helpful in providing an outsider’s perspective, which sometimes highlighted issues that we had missed,” Micreo’s Managing Director Tim Shaw said.

Shaw said the program provided new ideas and a framework for reporting on the many different metrics that his company uses in running its business. Micreo first undertook a Business Review and from this received a rating under the Supplier Continuous Improvement Program (SCIP) – a three-year change program that accelerates industry competitiveness by raising the performance of suppliers and supply chains. It focuses on embedding best practice leadership, continuous improvement and provides benchmarked performance measures and an improvement plan. The company also received funding assistance through the program to help it participate in the Lean Manufacturing Consortium in Melbourne.

“By rubbing shoulders with many likeminded businesses and involving all of our engineers and manufacturing staff in these productivity improvements, we have been able to stay competitive in the tough economic environment which Australian manufacturing faces,” Shaw said. “There is always more to be done, but we aim to still be there when the GFC has passed and the minerals boom is over.”

Looking for more information?

For more information, including eligibility information, visit the Enterprise Connect website or call 131 791.