The Australian Industry Group (Ai Group) and the Perth USAsia Centre (PUSAC) have been jointly awarded a 2021 Defence Strategic Policy Program Grant to evaluate strategic supply chain risks facing Australia’s defence and critical goods industries.

Ai Group is a peak national employer association and a principal voice for the defence industry, while the Perth USAsia Centre is a foreign policy think tank specialising in Australia’s relations in the Indo-Pacific. Their partnership will produce practical mechanisms for government and business to better secure Australia’s critical supply chains.  

The importance of secure supply chains for Defence and defence industry was highlighted in the 2020 Defence Strategic Update (DSU). Since the release of the DSU, the COVID-19 pandemic and increasing instances of trade protectionism and economic coercion have further disrupted global supply chains.

Ai Group and PUSAC will examine contemporary drivers of supply chain risks in defence and defence-related sectors (such as technology and critical minerals). From this, they will develop a risk assessment toolkit that can be used by government and business to coordinate their supply chain resilience efforts.

Head of Defence and National Security at Ai Group, Ms Kate Louis, said “Thanks to support from the Department of Defence, we will develop a new risk evaluation toolkit to respond to the new strategic challenges facing Australian defence industries. The toolkit will be informed by consultations with policy and industry experts and provide a best-practice framework to implement assessment and mitigation measures.”

Research Director at PUSAC, Dr Jeffrey Wilson, said “Existing supply chain management frameworks fail to capture new risks, such as geoeconomics and trade coercion. This new toolkit will cast a broader net than tradition supply chain analysis, and enable key government agencies and business partners to better identify and respond to strategic vulnerabilities.

Through the course of their work, Ai Group and USAC will also seek to improve collaboration and coordination across the sector – including government, private sector, and Australian Defence Force – to address supply chain challenges.

The Ai Group-USAC project is due for completion and rollout in May 2022.  

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