The Federal Government hopes its $90bn Naval Shipbuilding Plan will provide much-needed stability and certainty to the Australian shipbuilding industry. It also offers the potential to drag Australian manufacturers into the Fourth Industrial Revolution. By Brent Balinski.

Set to run well past 2040, the three-part, continuous build program will include 12 submarines, nine frigates and 12 offshore patrol vessels (OPVs). Canberra hopes it will do away with the cyclical, feast/famine nature of the sector, allowing it to build up muscle tissue, target export markets, and improve the digital literacy of the small and medium enterprises (SMEs) involved. As Prime Minister Malcolm Turnbull put it, when the winning Future Submarine bid was finally announced in 2016: “The spin-offs to the rest of the economy will be immense.”

The nature and magnitude of spinoffs from this “generations-long national endeavour” of naval work will be known later. However, the efforts needed to grow the SMEs (there are an estimated 3,000 SMEs in the sector, according to the Defence Industry Policy Statement) that will support the endeavour are already underway.

The Australian Manufacturing Growth Centre has described the submarine project, properly approached, as offering a “moon-shot opportunity” for the country’s manufacturers. Get them up to the high standard required as suppliers, and those skills become vastly valuable beyond the confines of the project itself.

“All of the big shipyards are quite advanced regarding Industry 4.0 approaches to manufacturing, and they have to be, given the complexity of their systems,” says Michael Haddy, Deputy Director – Victoria, South Australia and Tasmania, at the AMGC. “Historically our SMEs are not particularly large, and their traditional markets haven’t been necessarily as sophisticated as some of these international companies.”

As with other parts of manufacturing, Australia’s defence SMEs could benefit from being more to the medium-sized rather than small side of the description. Regardless, they are recognised as essential to the ambitious shipbuilding program, with key enablers identified as infrastructure, workforce, industrial ecosystem, and a national approach.

Bringing them up to international standard will be a spillover benefit, says the Naval Shipbuilding Plan, and success will include “…an industry that has seized the opportunity to integrate into global supply chains and is able to take advantage of export opportunities in niche export markets”.

One effort aimed at assisting this is a Virtual Shipyard project, supported by the AMGC, the South Australian Government, industrial software giant Dassault Systemes, and others. A group of 16 SMEs in South Australia will go through a six-month curriculum and then six months of mentorship, aimed at bridging digital capability gaps. The goal is to ready these companies – including Redarc, B&R Enclosures, and Mincham Aviation – to serve in the supply chains of naval Primes and other multinationals, in sectors such as defence, energy and health. The first eight began the program in October, with the second cohort scheduled to start in April.

“This isn’t just defence,” says Michael Grogan, the AMGC’s Director – Victoria, South Australia and Tasmania. “This can be applied to any of these manufacturing processes; [for example] it’s very similar to some of the disciplines from automotive. This is going to become more and more important in mining, and some of the other major industries.”

Each company trains in up to 12 categories, including issues management, production scheduling, quality assurance and value management on Dassault’s product lifecycle management dashboard. According to the AMGC, the program will not lock its participants into this proprietary solution.

“It’s about the skills that go around the software, and [these] could be applied to a competitor’s software platform,” adds Haddy. “There’s a lot more to it than just training them for a particular piece of software.”

There will be further programs to help digitise the operations of smaller manufacturers.

“Industry 4.0 is a non-trivial jump for a lot of SMEs, and really this is one of the first of a number of programs we hope to establish in the coming months and years to assist SMEs nationwide,” says Haddy.

End-to-end digitisation

The Virtual Shipyard program is about South Australia reassessing itself and its industry and preparing itself for a digitised future, according to Masaki “Sox” Konno, Dassault’s Managing Director for AP South. The naval focus is just a means to this end.

Dassault will establish its Australian headquarters in the state this year, and has offices in Sydney, Melbourne, Perth and Brisbane. Its relationship with Australian shipbuilding goes back over a decade, with ASC (formerly the Australian Submarine Corporation) upgrading its old Enovia software in 2016 for Dassault’s 3D Experience product lifecycle management dashboard. The company’s biggest market in the Australian market is in mining software, says Konno.

Future Submarines builder Naval Group (then DCNS) began a partnership with Dassault in February 2016, and has continued to build the naval customer base since for its 3D Experience platform, which includes “3D design, analysis, simulation and intelligence software”.

Within Konno’s region, Industry 4.0 capability-building projects have been focussed around the automotive supply chain. Being digitally literate enough to meet the needs of Tier One companies is a highly translatable thing across industries, he says.

“What I see on top of this, regarding adopting new technology across Industry 4.0 and all the different buzzwords of technology, is really the digitisation of different systems and processes end to end for many different industries,” he adds. “That starts from shipbuilding and submarines to mining industries, to aerospace and defence, space. Really across all industries is what I see South Australia looking at. So it’s not just shipbuilding, and it’s not just digital submarines.”

Being able to create a virtual, 3D-modelled environment, with a “digital twin” of everything made, was a huge benefit to manufacturers in the supply chain and within companies. Within an organisation, according to Konno, combining ideas and intelligence from different departments, based on 3D data, was “the secret sauce” of innovation.

“It’s having a platform able to handle scientific data, engineering data, unstructured data, images, CAD files, simulation data, etcetera,” he explains. “Incredible amounts of data, and being able to really exaggerate that and have it at people’s fingertips and being able to share that with each other.”

Konno declines to talk in specifics about the capability levels of participants – who each went through an assessment of requirements – or where the capability gaps are. For those in the program and Australian industry in general, he believes there will be opportunities worth targeting in sectors ranging from the marine and offshore industry, supplying the needs of “smart cities”, and in an increasingly digitally literate architecture, construction & engineering (ACE) market.

“Mining for sure is one industry that’s gone through a lot of changes, but in the past year the industry is serious about reinventing themselves and adopting technology,” he notes. “I would say another one is the ACE space: very traditional in the way they’ve done things, but the ability to use digitisation end-to-end, to re-look at their processes, see if they can manufacture smarter, better, bringing buildings faster to market with high levels of compliance and quality. I think you’ll see that industry change quite a lot as well.”

B&R Enclosures

B&R specialises in manufacturing enclosures, racks and cabinets made from a variety of sheet metal materials, to provide safety to people and protection of equipment. The company, says General Manager Chris Bridges-Taylor, “is seeking to develop their Industry 4.0 methods to achieve an agile, competitive and integrated response to meet customer needs and requirements”.

The family-owned business, founded in Adelaide in 1955 (it is headquartered in Brisbane nowadays) comprises four separate divisions, each serving a different sector. There is a strong focus on industry-specific knowledge across the business, as well as the ability to deftly respond to a customer’s requirements.

Defence work makes a small but meaningful contribution to revenues, and B&R has been a part of projects including the 23rd Squadron RAAF Base Amberley, the Department of Defence Data Centre Migration to Global Switch Data Centre, and the Battlefield Airlifter Phase 2, C and D. Among its accreditations and certifications is the SCEC (Security Construction and Equipment Committee) approval for its range of Class C and Class B security cabinets.

“We have currently only participated in small work projects, except in the data cabinet area,” Bridges-Taylor explains, adding. “This sector is strategically important to B&R and defence work is something we are hoping to see more of.”

According to Bridges-Taylor, the Virtual Shipyard project represents “an important opportunity for us to gain knowledge and experience of the Dassault 3D Experience platform, which is about digital continuity, the reuse of information, and collaboration”.

“From the early discussion with a customer there are requirements, both technical, supply chain, and commercial through to the development product lifecycle delivery and after-supply service,” she adds.

For B&R, digitalising operations is essential for any Australian manufacturer that wants to be internationally competitive, enabling profitable high-mix, low-volume production. B&R is also currently part of a collaborative project for an agility-boosting Industry 4.0 application at its Brisbane site, enabling transparency throughout production and being able to re-prioritise different work orders on the go. Bridges-Taylor says the Virtual Shipyard program is an excellent educational opportunity and will lead to further trials of digital manufacturing concepts at the company.

“It’s a major commitment,” she adds. “And it is worth doing because of the knowledge that we’ll gain and the opportunities presented, is consistent with our Industry 4.0 strategy.”


Committing as a supplier to defence projects is a long-term project, requiring investment in resources, as well patience to learn a new market and a new language, believes Dr David Murfett, Engineering Manager and Defence Liaison at Redarc Electronics.

“It’s something you need to invest in very, very heavily upfront to get any sort of long-term payoff,” he says. “Each tender you receive is packaged in a different way. It’s framed with different expectations. All of these things add to quite a high burden for an SME, upfront, to be able to adequately respond to the Prime and understand what it is that they’re seeking.”.

Redarc is a successful, fast-growing electronics manufacturer, best known for its power solutions for vehicles, which have seen it land awards such as Telstra Australian Business of the Year in 2014 and the Endeavour Awards Manufacturer of the Year in 2017. Its 2015 five-year plan involves doubling revenues of $50m by 2020. Plans to continue its growth trajectory include a hefty R&D spend (15% cent of annual revenues), growing exports, acquisitions, and moving into newer areas such as defence and medical. It is currently in the process of adding a 2,000sqm expansion to its Lonsdale factory, expected to be complete in mid-to-late 2018.

The company has achieved some early successes in defence by taking existing automotive-grade COTS (commercial off-the-shelf) technology and adapting it into MOTS (military off-the-shelf) gear. Defence vehicle projects include the Land 106 (M113AS4) and Land 121 Phase 4 (Hawkei) programs.

More recently Redarc has been targeting maritime work, starting with the Future Frigates program. In November it signed an MoU with naval systems integrator Raytheon Anschutz, initially for Australian projects, which will ideally lead to work within the German company’s supply chain.

Digital capability is an important area for Redarc, says Murfett, and the company has invested in strategic advice from organisations such as Germany’s Fraunhofer Institute to this end. He likens it to other methodologies the company invests in to keep the local workforce competitive, such as sending staff to Japan to learn Lean manufacturing ideas from the best.

“As we expand the organisation we’re investing in equipment, investing in equipment that is Industry 4.0-ready,” explains Murfett. “And likewise we are investing in the systems for the organisation, be it ERP or PLM or any of these other manufacturing control systems.

“We’re certainly making sure that we’re with programs that are available to us to be able to understand the world’s best practice.”

According to Murfett, the Virtual Shipyard program “certainly parallels” previous investments in training.

“It provides Industry 4.0 capability, PLM capability, it provides a common platform between the different parties who are using that tool,” he says, adding that it will benefit the ambitions of being an international-level company.

“And we certainly seek to be a globally recognised organisation, an organisation that can deal and talk with global partners, such as the Primes in defence, or with the global automotive manufacturing we’ve been [involved in] for many years.”

The Virtual Shipyard project and other Industry 4.0-related efforts will help Redarc meet a market described elsewhere as “if it’s got a battery and it moves, it’s a customer”.

Murfett thinks 2018 will be an exciting year for his company and to be an engineer working in manufacturing in South Australia. Redarc will be eagerly watching the expected Future Frigates and LAND 400 announcements, and is a teaming partner for both projects.

“For those and other programs we are very keen to see the work commence, understand better how we can then invest in ourselves and in those programs, and to be able to contribute our part to making those programs the best they can be,” says Murfett. “I think that it is going to be a very exciting next couple of decades to be an engineer in this state.”