Now more than ever in these challenging times, governments around the world are looking for stability, continuity and familiarity. Australia is no different – especially when it comes to defence programs and systems. For this reason, the Government has been strongly supporting small to medium enterprises (SMEs) with the aim of increasing Australia’s sovereign industry capabilities.
Businesses with a track record of reliability, performance and quality are best placed to serve our national defence procurement needs. One such company is Elexon Electronics. This Australian-owned, Brisbane-based company prides itself on delivering innovative solutions to customers from ‘niche’ markets, with an unmatched ability to offer turnkey solutions of electronics products using local suppliers and Australian resources.
“Throughout the last 16 years, we have successfully developed a wide range of unique products serving the medical science, mining and automotive industries,” says Frank Faller, CEO of Elexon. “Now we are offering our extensive intellectual property (IP), ability to quickly innovate, and state-of-the-art manufacturing facility to defence suppliers.”
Elexon’s growth and development over the past two decades means their customers now include many renowned national and international companies such as Rio Tinto, Newcrest, Volvo, Aurizon, Aim Lab, Agilent and EM Solutions.
Strengthening local supply chains
Recent times have proved challenging for Australian manufacturers across many industries, while exposing our over-dependence on international suppliers. It’s become widely realised that our supply chains for critical technologies in Australia must become more resilient, particularly when it comes to the procurement of our defence capabilities. This is one of many reasons that the Australian government has committed to investing almost $3bn in a new strategy for defence innovation, science and technology over the next decade.
“Agility and capacity for innovation – hallmark qualities of Australian small businesses – are the attributes empowering business to successfully withstand the unprecedented impacts of COVID-19,” said Melissa Price, the Minister for Defence Industry.
Importantly, the announced strategy will allow the Department of Defence to draw on the innovation and expertise that resides in universities, start-ups, small businesses, publicly funded research organisations and corporations across Australia, and transition that research directly into outcomes for defence.
“Small businesses always have – and always will – play a vital role in building Defence capability here in Australia,” Price added. “There are great opportunities on the road ahead. And I’m looking forward to helping them to get there.”
Elexon is a great example of how an Australian SME can use government support, improve its operations and confidently find its place in the defence supply chain. Two years ago, the company started turning their strategic growth plan into reality.
“Like many Australian companies, we also considered offshoring of manufacturing at one stage,” says Faller. “However, we’re proud to say a decision was made to keep manufacturing here in Australia. We realised there are immense opportunities, especially in the growing defence sector. But to be able to offer high-value solutions that meet Australian and international defence Prime contractor requirements, we had to transform and invest significantly in technological innovation.”
One of the key elements in Elexon’s defence-readiness project was the procurement of state-of-the-art automated surface-mount technology (SMT) from leading European electronics machinery producers Mycronic and Asscon. Their new intelligent material handling system, vapour phase soldering, solder paste jetting and X-Ray inspection has given the Australian SME the capability to now tender for projects in highly competitive markets that require fast and versatile production, with final products of impeccable precision and integrity .
Faller adds: “We were fortunate to make this significant $2m investment in our manufacturing capabilities through our partnership with the Queensland Government and the Made in Queensland grant program. The result is a truly world-class production system that puts Elexon Electronics on the map of advanced manufacturing in Australia.”
Technological progress never stops, especially for Elexon. In this fast-changing industry, it is crucial to focus on building agile capabilities. Elexon’s next step is a significant investment in new testing capabilities.
Defence networking
A high-tech technology and process improvement isn’t everything though. Brand awareness and marketing, networking and creating partnerships are vital parts of business development.
In the defence environment, a great way to learn about business opportunities, industry requirements and events is by joining an industry association such as the Defence Teaming Centre (DTC) or the Australian Industry & Defence Network (AIDN). These organisations are able to make connections to opportunities as well as arranging introductions to other companies – from the smallest SMEs to Primes.
“Participation in defence networking associations like AIDN QLD and the DTC has skyrocketed our defence journey,” reveals Faller.
AIDN works to assist SMEs to build opportunities with the Department of Defence and Prime contractors in the sector. AIDN focuses on SMEs, works with the Department of Defence to influence policy and to maximise SME involvement in defence procurement. DTC is also a member organisation; its goal is to support and develop the Australian industry to be more competitive and meet the needs of the Department of Defence.
The DTC’s industry advisors provide members with industry development and market awareness services and help businesses grow and increase their presence in defence markets. This includes consultants like Les Shearn from Shearn Consulting, who is an experienced advisor in guiding companies like Elexon along the path towards being ready to take on defence market opportunities.
Shearn says: “It is important that any SME seeking to work in the defence sector has done their homework to determine whether the defence industry offers the opportunities that suit the business. If so, having a quad chart reflecting the company’s differentiators as well as capabilities, and either having in place or working towards accreditations such as Quality (AS 9001 or AS9100D), Safety (AS45001) and membership of the Defence Industry Security Program (DISP)”.
Securing a contract in Defence does take time, requiring a commitment of time, delivery of quality and a point of differentiation to others in the market. When it comes to advising SMEs new to defence, Shearn says that the best advice is to look to work with others as opposed to doing it on their own – speak with other companies, and whereever possible collaborate with those already working in the sector. A final point for a company to remember is to do the necessary preparation from the outset, be innovative and form connections with others within Industry including academia, government and research institutes.
“A company should consider its strategy for entry into the defence sector, establishing why they want to enter, the products they will offer, and willingness to effectively collaborate with others,” Shearn adds.
Numerous companies have fallen at the first hurdle when it comes to engaging with defence opportunities. Shearn says that it is vital that the industry behind the Australian Defence Force (ADF) is committed to delivering excellence and is in it for the long term.
“Our service personnel must have the very best equipment to keep them safe and out of harm’s way. That means if a company is unsuccessful in an opportunity but has a great product or technology, keep trying. It is about being resilient.”
With a focus on collaboration and industry relations, Elexon joined the Industry Capability Network (ICN) to further promote its brand and enhance market awareness. ICN is an industry networking association specialising in helping industries to gain a greater share of domestic and international business opportunities. The association also organises courses, publishes tenders and work packages announcements, and provides spaces for networking and business presentations.
“Elexon has quickly established a good relationship with ICN QLD,” said ICN Queensland consultant Abhiney Arora. “The company has taken part in a number of defence and aerospace capability development workshops, such as quad charts development and pitch mentoring training that ICN QLD organised on behalf of Defence Jobs Queensland.
Elexon also got the opportunity to live-pitch to Federal Government’s Department of Defence, Rheinmetall Defence Australia and Hanwha for the Land 400 Phase 3 opportunities. This was again facilitated by ICN QLD at its office on behalf of the Department of Defence.
Industry engagement and networking helped Elexon to secure its first important project with EM Solutions (EMS), delivering radio frequency printed circuit boards (RF PCB) assemblies for its marine Satcom terminals. EMS is also a Tier 1 supplier to the Royal Australian Navy (RAN) and major defence contractors such as Raytheon and BAE for naval projects.
Currently, Elexon is tendering for manufacturing work with the Land 400 program and exploring opportunities for engineering collaboration in space programs applications.
Grants to support Australian SMEs
One piece of strategic advice Elexon has for companies new to defence is to contact the Centre for Defence Industry Capability (CDIC). Last year, Defence Industry Minister Melissa Price announced $12.4m worth of grants for small businesses that contribute to the development of Australia’s defence industry capability.
Grant recipients include manufacturing companies supporting land combat vehicles, businesses undertaking research & development on cutting-edge technologies, and local businesses delivering the Government’s naval shipbuilding plan. The Sovereign Industrial Capability Priority Grants are distributed by CDIC.
Faller strongly recommends to other SMEs to reach out to the CDIC and apply for its advisory and facilitation service.
“CDIC gave us invaluable exposure to the defence industry and a chance to build connections with Prime contractors,” says Faller.
Mark Ryan, CDIC Defence Business Advisor, says: “Our job is to make it easier for the industry to work with the Department of Defence. We want Australian SMEs like Elexon Electronics to be able to access all the opportunities in the defence sector. We can help with your capability development, gap analysis defence marketing or networking.”
With help of CDIC, Elexon is planning to focus on strategic development, defence marketing and cybersecurity.
To become a valued Defence supplier it is essential to continuously become more agile, forward-thinking and rise above industry standards. Elexon stands ready to meet these challenges and work side by side with other like-minded companies in the Defence space.