Any Javelins or Stingers in the Aldi Special Buy's this week?
Where is the Aldi 'Special Buy' for Stingers?
I don’t know about you, but among the ski jackets, ham slicers and plasma cutters ($299 with 1 year warranty), I haven’t seen too many Stingers in the Aldi special’s aisle this year. Sure, I’m not always there bang on opening time (last week I did miss out on a collapsible kettle - $29.99). But I’m fairly sure mum would’ve texted about a shoulder-launched missile system capable of acquiring targets over 4km away.?
And if not from Aldi, where does one acquire Stingers? Or Javelins, Bushmasters, hundreds of military-grade drones, and over 50 million rounds of ammunition? The answer, of course, is various sovereign military stores - most of which will need to be replenished imminently. These products are not available on the open-source market, and are mostly supplied by large organisations with very complex supply chains.?
Image: Australian Defence Force
All the Chips; The Tasty Ones, The inedible Ones
What you will find on Aldi shelves are delicious potato chips and other snack foods. Ukraine is responsible for 50% of the world’s sunflower oil supply; companies like Nestle and Unilever use the oil in a large percentage of their food and beverage products. In addition, Russia has strategically capped their exports of sunflower oil causing the spot price of this, and other oil commodities, to skyrocket. Even simple supply chains are being disrupted, leading to huge global price rises.?
And let’s not forget the other chips - computers. Ukraine supplies 70% of the global neon gas supplies, crucial for chip manufacture. Add to this the increased demand for tech products during the pandemic and decreased production capacity due to public health measures and you have a perfect storm for decreased electronic chip supply. Everything uses chips - the blind on my skylight requires a chip to open and close. No, not the remote. The *actual* blind. What?
So, with increased demand and supply chain pressures across just about every industry on the planet due to the pandemic, the war, and geopolitical instability, may I be the first to officially welcome you to the Impending Defence Supply Chain Crunch: 2022 - 2026 Edition.
Welcome to the Impending Defence Supply Chain Crunch: 2022 - 2026 Edition
But what does this actually mean??
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There is practically no supply chain on the planet untouched right now. Any government delaying decisions, particularly around major acquisitions, will find itself at the back of the queue. These impacts may be felt for more than a decade, given large-scale bulk acquisition orders take years to complete.?
Image: Defence SA
Indo Pacific 2022 demonstrated the world is eager to take advantage of Australia’s well trained, hugely innovative and highly motivated industrial workforce to build their capability. And while defence industry sees this as an opportunity, it could well be its biggest challenge to date, due to:?
Given it’s unlikely Aldi will be added to the Foreign Military Sales pipeline, how do we solve this problem?
GOVERNMENTS: Sitting on a major acquisition decision? Now might be the time to raise that PO. If not, other governments will take advantage of our tooled-up manufacturing capability to fill their gaps and changing capability profile. Governments will be well served by respecting the investment, planning, resourcing and risk management suppliers juggle while pitching for (and waiting on) major acquisition decisions.
DEFENCE INDUSTRY SUPPLIERS: fearful of being honest with your customer? Now might be the time to have very frank and fearless conversations about what’s ahead - the risks you’re facing and the potential ramifications for supply.
GDI Strategies can support your business by helping you de-risk your supply chain and your management structure, and helping to shore up your pipeline.?
GDI Strategies can support your business by helping you de-risk your supply chain and your management structure, and helping to shore up your pipeline.
Likewise, we can support governments and defence by taking a holistic view of live projects, and flagging the ones most at risk due to global and local issues.?
We all have the same goal: to ensure the warfighter is protected, trained, and effective.?
(Note - the views expressed are my own)
2 年Capability vacuum indeed. If the current state of the world has taught us anything it has shown us that both capability and capacity are important soverign considerations. Not only do we need to be able to make our own stuff…we need LOTS of it.