Digitisation to transform supply chain

What does Industry 4.0 mean to naval shipbuilding?

According to leading analysts such as PwC and Strategy*, if the ‘fourth industrial revolution’ (or Industry 4.0) is to be realised, enterprise processes must become more digitised. Traditional supply chains will need to evolve towards a connected, smart, and highly efficient ecosystem.

The goal of the digital supply chain is ambitious - the building of an altogether new kind of supply network that’s both resilient and responsive. BAE Systems believes it can meet that criteria head on and hopes to deliver a new naval ship building capability to Australia if the company is successful on SEA 5000.

With its fully digitised frigate design, all the required data to build, maintain and optimise the entire ship and all its systems, from the keel to the stern, will be maintained in a fully integrated digital environment. And just as importantly that data will be available to assist Australian industry - not just to understand how to build the state-of-the-art ship, but to know how to optimise it. This gives Australian industry the opportunity to develop new exports, offering innovations to optimise the Global Combat Ship into the UK’s Type 26 program.

Industry 4.0 has been embraced by the Australian Government, with a Prime Minister’s Industry 4.0 Taskforce recently established to explore and promote the opportunities it represents for Australian industry.

Jeff Connolly, Chair of the Industry 4.0 Taskforce, says Australia should see the fourth industrial revolution as an opportunity. “If we establish a broad-based capability to use global engineering and manufacturing platforms based on advanced materials, the often spruiked access by our SME’s to global supply chains are more a reality now than they have been at any time in the past,” Mr Connolly said.

“Industry 4.0 (known as the ‘fourth industrial revolution’) refers to the current trend of improved automation, machine-to-machine and human-to-machine communication, artificial intelligence, continued technological improvements and digitalisation in manufacturing.”

In line with its commitment to Industry 4.0, the Australian Government recently renewed Australia’s Global Supply Chain Agreement. The agreement will allow BAE Systems to continue to provide Australian companies with access to commercial and defence opportunities within its international business. In 2016, BAE Systems had contracts with over 24,000 suppliers and a global spend of almost £9b (A$15b). In Australia, the company’s supply chain consists of over 1,600 companies purchasing goods worth A$360m, generating an additional GDP contribution of A$210m.

“The diversity of our Australian business across air, land, sea, joint and cyber domains means we are well placed to identify opportunities in the global business and match those with competitive local companies,” former BAE Systems Australia Chief Executive Glynn Phillips said.

“Opening the door to international opportunities supports the sustainable growth of Australia’s defence industry. Success for Australia’s industry works to promote innovation, improves our ability as a nation to compete globally, and generates exports and jobs.”

* “Industry 4.0: How digitization makes the supply chain more efficient, agile, and customer-focused,” by Stefan Schrauf, Philipp Berttram Strategy and PwC September 7, 2016

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