risks and opportunities to supply defence sector and
TRANSCRIPT
Overview of Process Model© McLean Management Consultants Pty Ltd M:
+61 419 225 996 E: [email protected] W:
https://mclean-mc.com/
Risks and Opportunities to Supply Defence Sector
and Collaborate outputs 22 August 2019
Michael W McLean
© McLean Management Consultants Pty Ltd M: +61 419 225 996 E: [email protected] W: https://mclean-mc.com/
ISO 31000: Risk management guidelines
https://www.iso.org/iso-31000-risk-management.html
“Risk management as the effect of uncertainty on objectives”
• Managing risk concerns the way in which uncertainty affects [the dependability of systems and
services].
• Risk can have positive consequences (effects of uncertainty may be positive as well as
negative).
• Sources of potential benefit (opportunities) need to be managed as well as a source of potential
loss (threats).”
“ISO 31000:2018 provides a common approach to managing any type of risk and is not industry or sector specific.
ISO 31000:2018 can be used throughout the life of the organization and can be applied to any activity, including decision-making at all levels.”
ISO 31010:2019 Risk management – Risk assessment techniques
https://www.iso.org/standard/72140.html
“When the only certainty is uncertainty, the IEC and ISO ‘risk management toolbox’ helps organizations to keep ahead of threats that could be detrimental to their success.
All businesses face threats on an ongoing basis, ranging from unpredictable political landscapes to rapidly evolving technology and competitive disruption. IEC and ISO have developed a toolbox of risk management standards to help businesses prepare, respond and recover more efficiently. It includes a newly updated standard on risk assessment techniques.
Professor Jean Cross, who is the Convenor of the group of experts who maintain and revise IEC 31010 said “IEC 31010 is a valuable complement to ISO 31000 by providing detail on how risk can be assessed and describing the advantages and disadvantages of the different techniques that can be used”.
“The standard is useful both as part of a process to manage risk and when comparing options and opportunities so that decisions are based on a good understanding of risk,” she said.
QUALITY SYSTEM REQUIREMENTS – Seller shall have a current third party
certification from an accredited registrar listed in the “On line Aerospace Supplier
Information System” (OASIS) per the following criteria. For all products AS/EN9100 is
required, except as defined below:
a. AS/EN9120 is required for suppliers performing as Distributors. Suppliers acting as non-
value added distributor with AS9100 certification must have a Scope of Approval that
includes Distribution if AS9120 certification is not held
b. AS9110 is required for suppliers performing Alternate Repair Activity on non-OEM
product. Suppliers with AS9100 certification must have a Scope of Approval that includes
MRO activity if AS9110 certification is not held
c. ISO-9001, as a minimum, is required for suppliers providing ground support or
manufacturing support equipment
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
1 Having sufficient cash to support R&D investment
2 Having the skill sets to manage risk https://www.iso.org/iso-31000- risk-management.html
3 we have to self fund managing risk within our ISO and AS9100D systems
4 Each of the States fights for more of the defence budget e.g. Defence NSW
5 NSW seems to have ignored defence until just recently compared to others
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
6 The risk of not having and attracting the right skills/kids for industries to generate jobs in the Hunter region
7 Navigating all the assistance and services in government to help us
https://www.business.gov .au/
8 The risk to our intellectual property
9 The risk of complex in multifaceted export control and ITAR is another overlay and cost
https://www.australiandefence.co m.au/budget- policy/understanding-us-influence- on-defence-export-controls
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
11 Risk of not enforcing and realising, The Australian Industry Capability Plan with Primes seeking lowest cost and not necessarily with JAS- ANZ accredited and certified management systems SMEs
12 Investment in defence sector in not getting back a return
13 Not having a defence ready workforce and management team
14 Failing to enter defence sector would hinder or LT resilience
ISO 22316:2017 guidance to enhance organizational resilience https://www.iso.org/standard/50053.html
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
15 Not having the right People to understand the defence customers real needs and requirements
16 Not understanding Defence technical regulatory requirements and material regulatory requirements for Primes and CASG
https://www.dst.defence.gov.au/si tes/default/files/basic_pages/docu ments/TRL%20Explanations_1.pdf
17 Defence primes here focus on global supply chains not Australian
18 Defence sector can be a long game if it's outside current sector business
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
19 Our customers real needs and specifications are controlled by the Defence prime
20 Defence primes and CASG Systems Divisions requiring multiple ‘systems’ conformance and regulatory compliance and yet we have to still make money
21 Talks about collaboration but we rank one of the lowest in the OECD
https://www.bhert.com/news/2019-06- time-to-recognise-and-support-australia-s- industry-university-partnerships
Supply Chain Risks - https://www.iso.org/obp/ui/#iso:std:is o:28000:ed-1:v1:en
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
23 The CASG Smart Buyer is understood but we're hardly involved in upfront design to build quality Inn before they cut steel
http://www.defence.gov.au/An nualReports/16- 17/Features/SmartBuyerprogra m.asp
24 Life cycle costing and sustainment is a big commitment for SME’s
https://infostore.saiglobal.com/sto re/details.aspx?ProductID=384885
25 Navy requires us to support them where they operate which is costly for SME’s to ‘be there’ in support
26 Being responsive / agile means SMEs have sufficient resources to respond to a defence need
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
27 The operating environment and situational awareness is a major concern to all SMEs besides Australian defence industry
28 SMEs have a constant watching brief BREXIT, South China Seas, Freedom of Navigation
29 Costs to have DISP clearances NV1+
30 Export Control, ITAR compliance and Cyber & ISO 27001 information security certifications demand
https://www.iso.org/isoie c-27001-information- security.html
Brainstormed opportunities by Suppliers
1 Building sufficient experience in exporting
2 AUSTRADE and state export services needed
3 Defence innovations and improvements can also be spun off to other commercialisation opportunities
4 Defence is a sexy business with long term growth and employment prospects
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
5 Having ISO 9001 and then AS9100D certifications has opened up other doors in other sectors
6 Defence disciplines in systems have enabled us to diversify and be credible in other industries
7 Our systems enable us to lock-in improvements
8 CDIC, METS, Ausmine, AMGC support and access to external resources
Brainstormed opportunities by Suppliers
9 ASDEFCON could be simplified for SMEs
10 Develop a road map for SMEs for NSW defence sector like Queensland
11 Learn from WA, SA, QLD and Victoria in how they supported defence
12 Defence readiness opens up other doors that we may not have seen for other industries in sectors
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
13 Collaboration opportunities but we need to know the qualities in capabilities of the target collaborating firms here and elsewhere
14 We should collaborate with air NZ defence partners
15 Continue to build sovereign capability to reduce risk to our supply chains
16 Australian Industry Capability should be mandated more strongly
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
17 We should all have a better engagement with schools and TAFE not just universities
18 We should all recognise that like us perhaps a trade is the entry qualification to then have a pathway to higher skills / learning
19 Education to be blending Commonwealth and State education systems
20 Attract the millennials
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
21 Longer life cycles in cost downs should be an opportunity for defence suppliers to support the primes
22 We should not just make processes of vision but we need to move up the food chain to make our product effective for defence
23 Sustainment is the key
24 Talent in needed at all levels – basic to high
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
25 A Risk and Opportunity if new employees do not have the right Primary School Education to achieve literacy, numeracy and technological skills to proceed in work and life
26 The AQF – Training and Assessment ‘TAE Upgrade’ 2019, should enable better contextualisation of and RTO /TAFE course materials learning outcomes to SMEs
Global benchmarking shows innovation & skills power Australian prosperity - Austrade
Australians’ prowess in two key areas – innovation and skills – continue to underpin the country’s strong investment track record, according the latest edition of the Why Australia Benchmark Report 2019.
“Time to recognise and support Australia's industry-university partnerships” https://www.bhert.com/news/2019-06-time-to-recognise-and-support- australia-s-industry-university-partnerships
30 January 2017 noted:
participating countries for
collaboration by large
DMTC - EXPERTISE IN COLLABORATION RECOGNISED DMTC Limited has achieved what we believe is an Australian first, being awarded certification against the International Standard for Collaborative Business Relationship Management Systems (known as ISO 44001). https://www.dmtc.com.au/news/expertise-in-collaboration-recognised/
The 2016 Defence Industry Policy Statement highlighted that collaboration was needed between Defence and industry but also in the industry-to-industry and industry-to-research context.
Dr Mark Hodge receives the ISO 44001 certificate from Dianne Gibert, Managing Director of Certex https://www.certex.com.au/certification-program
ISO 44001:2017 Collaborative Business Relationships
“ISO 44001 recognizes that effective collaboration requires two or more organizations to engage together and that management systems need to accommodate the joint activities of the parties.
In addition to addressing the overall requirements to establish a management system, this document addresses operational process requirements for specific or individual organizational relationship engagement”
https://www.iso.org/obp/ui/#iso:std:iso:4400 1:ed-1:v1:en
ISO 44002 Collaborative Business Relationships
https://www.iso.org/obp/ui#iso:std:iso:44002:dis:ed-1:v1:en
Facilitator – Defence Future Skills, Supplier Risks and Opportunities sessions
MANAGING DIRECTOR - MCLEAN MANAGEMENT CONSULTANTS PTY LIMITED
FELLOW AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS
INSTITUTE OF MANAGEMENT CONSULTANTS AND CERTIFIED MANAGEMENT CONSULTANT
AUSTRALIAN ORGANISATION FOR QUALITY; AND DR JM JURAN MEDALLIST
AUSTRALIAN INDUSTRY GROUP REPRESENTATIVE:
• HUNTER DEFENCE TASK FORCE
• AIG DEFENCE INDUSTRY COUNCIL
• STANDARDS AUSTRALIA NATIONAL QUALITY QR-008 AND OH&S SF-001 COMMITTEE
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION [ISO]:
• EXPERT, CONVENER, MEMBER
DEFENCE & GOVERNMENT CLIENTS: AUSTRALIA, NEW ZEALAND AND INTERNATIONALLY
GOAL GROUP MEMBER FIRM FOR DEFENCE PANELS:
DEFENCE SUPPORT SERVICE; MASTER SERVICES PROVIDER; DISP ACCREDITED FIRM AND AIDN MEMBER SERVICES
© McLean Management Consultants Pty Ltd M: +61 419 225 996 E: [email protected] W: https://mclean-mc.com/
Risks and Opportunities to Supply Defence Sector
and Collaborate outputs 22 August 2019
Michael W McLean
© McLean Management Consultants Pty Ltd M: +61 419 225 996 E: [email protected] W: https://mclean-mc.com/
ISO 31000: Risk management guidelines
https://www.iso.org/iso-31000-risk-management.html
“Risk management as the effect of uncertainty on objectives”
• Managing risk concerns the way in which uncertainty affects [the dependability of systems and
services].
• Risk can have positive consequences (effects of uncertainty may be positive as well as
negative).
• Sources of potential benefit (opportunities) need to be managed as well as a source of potential
loss (threats).”
“ISO 31000:2018 provides a common approach to managing any type of risk and is not industry or sector specific.
ISO 31000:2018 can be used throughout the life of the organization and can be applied to any activity, including decision-making at all levels.”
ISO 31010:2019 Risk management – Risk assessment techniques
https://www.iso.org/standard/72140.html
“When the only certainty is uncertainty, the IEC and ISO ‘risk management toolbox’ helps organizations to keep ahead of threats that could be detrimental to their success.
All businesses face threats on an ongoing basis, ranging from unpredictable political landscapes to rapidly evolving technology and competitive disruption. IEC and ISO have developed a toolbox of risk management standards to help businesses prepare, respond and recover more efficiently. It includes a newly updated standard on risk assessment techniques.
Professor Jean Cross, who is the Convenor of the group of experts who maintain and revise IEC 31010 said “IEC 31010 is a valuable complement to ISO 31000 by providing detail on how risk can be assessed and describing the advantages and disadvantages of the different techniques that can be used”.
“The standard is useful both as part of a process to manage risk and when comparing options and opportunities so that decisions are based on a good understanding of risk,” she said.
QUALITY SYSTEM REQUIREMENTS – Seller shall have a current third party
certification from an accredited registrar listed in the “On line Aerospace Supplier
Information System” (OASIS) per the following criteria. For all products AS/EN9100 is
required, except as defined below:
a. AS/EN9120 is required for suppliers performing as Distributors. Suppliers acting as non-
value added distributor with AS9100 certification must have a Scope of Approval that
includes Distribution if AS9120 certification is not held
b. AS9110 is required for suppliers performing Alternate Repair Activity on non-OEM
product. Suppliers with AS9100 certification must have a Scope of Approval that includes
MRO activity if AS9110 certification is not held
c. ISO-9001, as a minimum, is required for suppliers providing ground support or
manufacturing support equipment
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
1 Having sufficient cash to support R&D investment
2 Having the skill sets to manage risk https://www.iso.org/iso-31000- risk-management.html
3 we have to self fund managing risk within our ISO and AS9100D systems
4 Each of the States fights for more of the defence budget e.g. Defence NSW
5 NSW seems to have ignored defence until just recently compared to others
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
6 The risk of not having and attracting the right skills/kids for industries to generate jobs in the Hunter region
7 Navigating all the assistance and services in government to help us
https://www.business.gov .au/
8 The risk to our intellectual property
9 The risk of complex in multifaceted export control and ITAR is another overlay and cost
https://www.australiandefence.co m.au/budget- policy/understanding-us-influence- on-defence-export-controls
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
11 Risk of not enforcing and realising, The Australian Industry Capability Plan with Primes seeking lowest cost and not necessarily with JAS- ANZ accredited and certified management systems SMEs
12 Investment in defence sector in not getting back a return
13 Not having a defence ready workforce and management team
14 Failing to enter defence sector would hinder or LT resilience
ISO 22316:2017 guidance to enhance organizational resilience https://www.iso.org/standard/50053.html
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
15 Not having the right People to understand the defence customers real needs and requirements
16 Not understanding Defence technical regulatory requirements and material regulatory requirements for Primes and CASG
https://www.dst.defence.gov.au/si tes/default/files/basic_pages/docu ments/TRL%20Explanations_1.pdf
17 Defence primes here focus on global supply chains not Australian
18 Defence sector can be a long game if it's outside current sector business
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
19 Our customers real needs and specifications are controlled by the Defence prime
20 Defence primes and CASG Systems Divisions requiring multiple ‘systems’ conformance and regulatory compliance and yet we have to still make money
21 Talks about collaboration but we rank one of the lowest in the OECD
https://www.bhert.com/news/2019-06- time-to-recognise-and-support-australia-s- industry-university-partnerships
Supply Chain Risks - https://www.iso.org/obp/ui/#iso:std:is o:28000:ed-1:v1:en
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
23 The CASG Smart Buyer is understood but we're hardly involved in upfront design to build quality Inn before they cut steel
http://www.defence.gov.au/An nualReports/16- 17/Features/SmartBuyerprogra m.asp
24 Life cycle costing and sustainment is a big commitment for SME’s
https://infostore.saiglobal.com/sto re/details.aspx?ProductID=384885
25 Navy requires us to support them where they operate which is costly for SME’s to ‘be there’ in support
26 Being responsive / agile means SMEs have sufficient resources to respond to a defence need
Brainstormed risks by Suppliers
# Risk Suppliers risk mitigation
27 The operating environment and situational awareness is a major concern to all SMEs besides Australian defence industry
28 SMEs have a constant watching brief BREXIT, South China Seas, Freedom of Navigation
29 Costs to have DISP clearances NV1+
30 Export Control, ITAR compliance and Cyber & ISO 27001 information security certifications demand
https://www.iso.org/isoie c-27001-information- security.html
Brainstormed opportunities by Suppliers
1 Building sufficient experience in exporting
2 AUSTRADE and state export services needed
3 Defence innovations and improvements can also be spun off to other commercialisation opportunities
4 Defence is a sexy business with long term growth and employment prospects
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
5 Having ISO 9001 and then AS9100D certifications has opened up other doors in other sectors
6 Defence disciplines in systems have enabled us to diversify and be credible in other industries
7 Our systems enable us to lock-in improvements
8 CDIC, METS, Ausmine, AMGC support and access to external resources
Brainstormed opportunities by Suppliers
9 ASDEFCON could be simplified for SMEs
10 Develop a road map for SMEs for NSW defence sector like Queensland
11 Learn from WA, SA, QLD and Victoria in how they supported defence
12 Defence readiness opens up other doors that we may not have seen for other industries in sectors
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
13 Collaboration opportunities but we need to know the qualities in capabilities of the target collaborating firms here and elsewhere
14 We should collaborate with air NZ defence partners
15 Continue to build sovereign capability to reduce risk to our supply chains
16 Australian Industry Capability should be mandated more strongly
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
17 We should all have a better engagement with schools and TAFE not just universities
18 We should all recognise that like us perhaps a trade is the entry qualification to then have a pathway to higher skills / learning
19 Education to be blending Commonwealth and State education systems
20 Attract the millennials
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
21 Longer life cycles in cost downs should be an opportunity for defence suppliers to support the primes
22 We should not just make processes of vision but we need to move up the food chain to make our product effective for defence
23 Sustainment is the key
24 Talent in needed at all levels – basic to high
Brainstormed opportunities by Suppliers
# Opportunity Suppliers response to Opportunity
25 A Risk and Opportunity if new employees do not have the right Primary School Education to achieve literacy, numeracy and technological skills to proceed in work and life
26 The AQF – Training and Assessment ‘TAE Upgrade’ 2019, should enable better contextualisation of and RTO /TAFE course materials learning outcomes to SMEs
Global benchmarking shows innovation & skills power Australian prosperity - Austrade
Australians’ prowess in two key areas – innovation and skills – continue to underpin the country’s strong investment track record, according the latest edition of the Why Australia Benchmark Report 2019.
“Time to recognise and support Australia's industry-university partnerships” https://www.bhert.com/news/2019-06-time-to-recognise-and-support- australia-s-industry-university-partnerships
30 January 2017 noted:
participating countries for
collaboration by large
DMTC - EXPERTISE IN COLLABORATION RECOGNISED DMTC Limited has achieved what we believe is an Australian first, being awarded certification against the International Standard for Collaborative Business Relationship Management Systems (known as ISO 44001). https://www.dmtc.com.au/news/expertise-in-collaboration-recognised/
The 2016 Defence Industry Policy Statement highlighted that collaboration was needed between Defence and industry but also in the industry-to-industry and industry-to-research context.
Dr Mark Hodge receives the ISO 44001 certificate from Dianne Gibert, Managing Director of Certex https://www.certex.com.au/certification-program
ISO 44001:2017 Collaborative Business Relationships
“ISO 44001 recognizes that effective collaboration requires two or more organizations to engage together and that management systems need to accommodate the joint activities of the parties.
In addition to addressing the overall requirements to establish a management system, this document addresses operational process requirements for specific or individual organizational relationship engagement”
https://www.iso.org/obp/ui/#iso:std:iso:4400 1:ed-1:v1:en
ISO 44002 Collaborative Business Relationships
https://www.iso.org/obp/ui#iso:std:iso:44002:dis:ed-1:v1:en
Facilitator – Defence Future Skills, Supplier Risks and Opportunities sessions
MANAGING DIRECTOR - MCLEAN MANAGEMENT CONSULTANTS PTY LIMITED
FELLOW AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS
INSTITUTE OF MANAGEMENT CONSULTANTS AND CERTIFIED MANAGEMENT CONSULTANT
AUSTRALIAN ORGANISATION FOR QUALITY; AND DR JM JURAN MEDALLIST
AUSTRALIAN INDUSTRY GROUP REPRESENTATIVE:
• HUNTER DEFENCE TASK FORCE
• AIG DEFENCE INDUSTRY COUNCIL
• STANDARDS AUSTRALIA NATIONAL QUALITY QR-008 AND OH&S SF-001 COMMITTEE
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION [ISO]:
• EXPERT, CONVENER, MEMBER
DEFENCE & GOVERNMENT CLIENTS: AUSTRALIA, NEW ZEALAND AND INTERNATIONALLY
GOAL GROUP MEMBER FIRM FOR DEFENCE PANELS:
DEFENCE SUPPORT SERVICE; MASTER SERVICES PROVIDER; DISP ACCREDITED FIRM AND AIDN MEMBER SERVICES
© McLean Management Consultants Pty Ltd M: +61 419 225 996 E: [email protected] W: https://mclean-mc.com/