By Sascha Sinclair, Systematiq Marketing Manager

In the current political and financial climate, Australians are looking to see a real return on investment made on major projects by all levels of government.

There is also a strong support for local manufacturing to boost supply chain resilience in the long term by developing and maintaining sovereign capabilities and thereby strengthening the ability to deliver locally. Australia must look to diversify its industrial capability in order to deal with global supply chain uncertainty.

A company’s Australian Industry Content (AIC) or Local Industry Development (LID) plan will become a key element when governments look to make investment decisions in all future projects.

Organisations that are focussed on winning defence, rail or other major government-related work will need AIC and LID to be a part of their strategic planning. 

Supporting local industry development will need to become a part of an organisation’s ‘DNA’ as it shapes the decision making across the business in its entirety. No longer will it be acceptable to pay ‘lip service’ to the AIC or LID component of a bid or tender – there will need to be demonstrated commitment to this for businesses to be competitive.

AIC or LID plans in a business strategy

Paul Gibbs is Systematiq’s Regional Manager for Queensland, and an AIC/LID specialist, who comes with 25 years of experience within the defence and rail environment and five years in a senior leadership position in a global logistics organisation.

“The reality is that the Australian public expects to see real and meaningful commitments by organisations to ensure a particular project is on-time and on-budget but also as promised with regards to opportunities for jobs, local supply chain expenditure, commitments to veterans, disadvantaged persons, indigenous communities, investments in education and development of sovereign capability,” Mr Gibbs said.

“In fact, we are already seeing tender submissions requiring significant expenditure percentages on the AIC/LID plans being put forward and it is now very much front and centre of the decision-making process.”

Part of an AIC or LID plan is the inclusion of a social procurement strategy that demonstrates how a business is going to support local industries, Indigenous and Torres Strait Islander people (ATSI) and disadvantaged community groups. 

This is designed to optimise opportunities for local suppliers and governments alike, by ensuring that government contracts are supporting local, regional, state, and Australian businesses, industries, and jobs.

An AIC or LID plan should not be enacted as a result of a tender opportunity but should be woven into a business strategy with a view to win business that will benefit the local community.

“In order to put forward a successful AIC/LID strategy that has full organisational buy-in, you need to tie it to a commercial imperative that gives a compelling reason why the business needs to invest time, energy and funds,” Mr Gibbs said.

In fact, in most states, local industry involvement and social procurement has been factored into the planning and development phases of major new infrastructure projects. 

This is designed to generate value above and beyond the value of the goods, services or construction being procured. Benefits accrue to all when the social and sustainable outcomes are achieved, both directly and indirectly.

A tender response will be assessed on where and how the applicant will invest in order to fulfil a contract. This becomes quite granular in the level of detail required, for example, providing information such as the number of trainees, gender breakdown, number of indigenous employees, or number of people with a disability.

Systematiq provides expert strategy and advice

There is a huge opportunity for small businesses to participate and partner with larger organisations and primes by becoming supply chain partners on large, long-term defence or infrastructure projects. 

Systematiq works with both large companies and small businesses alike to provide these requirements and ensure they are submitting compliant, locally targeted responses. Systematiq also provides research and assessments so that businesses can prepare themselves in advance.

Mr Gibbs has worked with organisations to deliver highly-detailed plans as well as broader strategy recommendations that look at the commercial aspect of a tender response.

“Our approach is to look at the bigger picture for a client when providing these plans. 

“Through the AIC and LID related work accomplished for our clients, Systematiq operates as a ‘think tank’, wherein we have been able to tap into various resources within our network to lend our expertise to various areas of developing each component – be it developing a template, responding to specific requirements, queries, and questions,” Mr Gibbs said.

This sponsored editorial is brought to you by Systematiq. For more information, visit www.systematiq.com.au.

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