Evaluating supply chain risks in a capability-based sustainment environment

In recent years, the Australian Defence Force (ADF) acquisition strategy is evolving from a technology/platform-based to a capability-based. Many of the ADF’s legacy platforms were purchased ‘out-right’ where the procurement included the technology/platform itself and an initial delivery of some support systems such as simulators, training devices, technical publications, design documentation and spare parts. This technology/platform-based acquisition approach gave the ADF the flexibility to contract sustainment activities but at the same time took on full responsibility of asset performance. A capability-based acquisition approach on the other hand limits the ADF’s ability to independently manage sustainment activities but draws on expertise that are otherwise not available to ADF. The aim of this study is to evaluate the supply chain risks that the ADF faces as a result of adopting new capability-based platform acquisitions that are delivered with their own ‘specialised logistic support systems that integrate into bespoke global supply chains’. The research identified 15 supply chain risks. Local suppliers to ADF were surveyed to analyse and evaluate the risks. Most risks were found to be a medium to high levels and prompt attention to mitigate these risks would be required for both the ADF and industry partners urgently.