By delivering innovative solutions Raytheon Australia has forged a valued position as a trusted partner with the Australian Defence Organisation. This has been on the back of a significant depth of local capability, strong customer relationships and a clear focus on contract performance.
It has also resulted from strong relationships with other potential partners including a strong commitment to the role of small to medium sized enterprises in Australia’s defence market.
Just as SME’s are the engine room for jobs and growth in the Australian economy, they are fundamental to building a strong Australian defence industry. Indeed, one of the factors that characterise Raytheon Australia is the company’s determination to partner with capable SME’s to best deliver on the requirements of the Australian Defence Force and to export local capability to the world.
It is a simple truth that SME’s do not have the capacity to cope unassisted with the extended business development cycle that characterises the market for defence materiel.
In addition, primes and small business tend to possess quite different characteristics. On the one hand, primes have an immense capacity to offer strong management practices, mature processes, the skills of highly competent engineers and technicians, as well as what is often termed “reachback” to parent companies overseas. Small business, on the other hand, is endowed with great agility and an incredible capacity for innovation beyond that which rests with larger organisations.
Combining these assets is tremendously important, not only for primes and SME’s but for a dynamic defence industry focused on the successful delivery of defence capability.
Unlike some of the other players in the Australian defence market, Raytheon Australia has generally not approached the market from a vertically integrated perspective. Rather, our competitiveness has been enhanced by an approach which is focused on identifying those areas not absolutely core to our business and then seeking to develop partnerships to satisfy those needs.
It has been this approach that has been important to engender an environment of trust between businesses large and small and to ensure that the agility and innovation of small business is not smothered.
The simple proposition remains that, in many cases, small business is in a position to undertake certain tasks more efficiently than larger organisations, just as they are able to meet needs for unique skills and capabilities.
Practical Help for SME’s
Over many years, Raytheon Australia’s strong commitment to small business has been backed by a robust SME engagement plan and a comprehensive set of business tools.
We have always demanded a level of confidence that our potential partners have the processes and the depth to be able to deliver to a consistent standard. To this end, we have sought to partner with small business in a very practical sense and to act as a mentor. At times this has meant offering assistance to enhance the capability of SME’s by working to develop the maturity of their processes and the skills of their employees.
In particular instances, we have involved SME’s in Raytheon Australia courses on principles of systems engineering and integrated product team leadership, just as we have sought to maintain active engagement with small business associations in the industry and advocated the cause of SME engagement in the policy development processes of government.
We have also held SME Forums to showcase and acknowledge particular capabilities in the defence small business community.
The company’s determination to involve SME’s in the Raytheon global supply chain starts with acceptance of the important responsibility to open doors. To this end we have funded SME participation in Raytheon Company’s global supply chain forums in the United States and have, on occasions, sponsored Australian defence industry trade delegations to that country.
The Raytheon Australia Industry Development Unit
At the last Defence and Industry Conference in July 2009 Raytheon Australia became amongst the first in the industry to sign an Australian Industry Capability Deed with the Defence Materiel Organisation under the Australian Government’s program to facilitate global supply chain opportunities.
This coincided with the launch of the company’s Industry Development Unit (IDU) by the Minister for Defence Materiel and Science, the Hon. Greg Combet which was seen as an important next step in Raytheon Australia’s efforts to promote the interests on Australian SME’s.
The company stated at the launch that the IDU would work to identify potential opportunities for Australian firms, mentor Australian industry on the US defence market, work with the DMO and other Federal Government agencies to co-ordinate trade missions and help break down the barriers that may otherwise deter local firms from doing business in the US defence market.
It was emphasised that Raytheon has a strong understanding of US export control arrangements including the International Traffic in Arms Regulations (ITAR), other US Government acquisition regulatory requirements and intellectual property issues and that one of the tasks of the IDU would be to help guide local firms through this maze of process.
The unit was also charged with distributing expressions of interest to Australian SME’s for relevant technologies and products as well as to work with firms to secure new business for local industry.
Early progress has been particularly encouraging. In addition to maintaining a strong relationship with Industry Division within the DMO there have been extensive activities with local industry.
The number of companies registering with the IDU has now grown to 185, of which there are 46 companies actively involved in marketing, bidding or in contract with Raytheon Company programs.
The Pacific 2010 International Maritime Exposition, together with other trade conferences and events, have been used to meet with SME’s and introduce firms to visiting Raytheon Company US based personnel.
Particular efforts have been undertaken to focus upon the training needs of small business. Ethics training documentation has been supplied to AIDN by Raytheon Australia to facilitate the ethics training of the AIDN membership while there has been individual cases of training being offered on certain eBusiness applications and mentoring to improve quality assurance processes.
Global Supply Chain Success
The IDU is working closely with US potential buyers to identify companies with the capability, experience and product that can make the transition to the US market and be competitive.
In the first year of operation support provided by Raytheon’s IDU has ensured 12 contracts for Australian companies with Raytheon’s US based businesses worth over A$50 million.
The recent arrival of Australia’s new Super Hornet highlighted the IDU’s efforts in promoting the involvement of the Brisbane based SME Micreo Ltd in supplying radio frequency modules in the production of Raytheon’s ALR67(V)3 radar warning receiver. Not only are these components to be used on the Australian Super Hornet but also for fighters for the United States, Canada and Switzerland. The company has also undertaken an extensive Raytheon six sigma activity to help improve the manufacturing processes of Micreo and the SME achieved a 500th unit production milestone earlier in the year.
A further beneficiary of a long term relationship with Raytheon has been Poseidon Scientific Instruments of Fremantle, Western Australia. The company is a leader in providing sapphire oscillator technology and has been contracted to provide oscillators for Raytheon’s involvement in the US DDG 1000 Zumwalt Class destroyer program in the United States.
In addition to contracts with these and other firms there are numerous examples of introductions of Australian firms to the Raytheon Company US Corporate Supply Chain.
For example, the Brisbane based, Ferra, involved in precision aerospace metal fabrication is currently associated with the Raytheon global supply chain through other companies. The IDU is working with Ferra to more directly involve the firm with Raytheon Company.
Similarly, PHM Technologies, a Melbourne based developer of reliability engineering software applications has made presentations to various Raytheon Company US based business units with the support of the IDU. In such instances, the IDU is supporting their marketing effort and can undertake the necessary due diligence for the US Raytheon business units.
Following the successful completion of a recent program management review by the DMO’s Industry Division the company is pleased with the progress that has been made by the Industry Development Unit within its first year of operation. There is also cause for optimism about the unit’s ability to foster new opportunities for Australian industry in the future.
Raytheon Australia considers that building Australia’s defence industry and the involvement of SME’s in particular is a responsibility that belongs to us all. As a trusted partner of Defence we believe that we all gain when we can bring together the innovation and agility of local SME’s with the mature processes, management skills and wealth of international resources of companies such as Raytheon.
As of June 2013, Raytheon’s IDU has supported 145 Australian companies in more than 120 opportunities across 27 of Raytheon Company’s program areas. The Raytheon IDU list of achievements includes 71 contracts to the total value of $A 250m won by Australian SME’s in Raytheon’s global supply chain.
Raytheon’s IDU support involves practical guidance for the preparation and submission of company capability briefs, technical papers and other supporting documentation to Raytheon businesses for analysis and initial assessment.