Page 147 - Australian Defence Magazine Sep-Oct 2022

SEPTEMBER-OCTOBER 2022 | WWW.AUSTRALIANDEFENCE.COM.AU
SUPPLY CHAIN MANAGEMENT RESILIENCE 147
Before the COVID-19 pandemic stressed global supply chains and prompted a renewed focus on the issue in Australian defence circles, the South Korean government and major defence companies were already grappling with the issue of ensuring supply.
THE capital Seoul is located in the northwest corner of the country, close to the North Korean border. It has few topo- graphical defences, bar the Hangang river that splits the city itself, and is close enough to North Korea to be vulner- able to artillery and rocket fire.
Conversely, South Korea’s defence industrial base is con- centrated in the city of Changwon, on the southeast coast – almost the opposite corner of the country. Major compa- nies including Hanwha, Samsung Techwin, and Hyundai Rotem all have manufacturing capabilities in Changwon and the city is a major export centre. It is separated from Seoul by 400 kilometres of forested hills and mountains.
The question was this: if the two cities were cut off, how could the South Korean government and local defence in- dustry guarantee military supply lines in the event of a war with the North?
At the ADM Townsville Defence Forum in late July, Mil- lie Keating, Hanwha Defense Australia’s (HDA) Industry Development Unit Manager, said that her company’s pres- ence in Australia is the answer to that question.
“It wasn’t Land 400 Phase 3 that brought Hanwha to Aus- tralia,” Keating said. “That decision was made previously to shore up supply for the South Korean military. There is a fear that if supply chains were cut off from the south – where we
“HANWHA LOOKED AROUND THE WORLD AND THOUGHT ABOUT WHERE A SECONDARY SUPPLY BASE COULD BE SET UP”
manufacture – to the north, where there are potential areas of conflict, then South Korea could be in some trouble.
“So Hanwha looked around the world and thought about where a sec- ondary supply base could be set up.”
The company settled on a few main contenders – the US, Eastern Europe, and Australia – and decided that Australia had the greatest ad- vantages. Hanwha then looked at
a variety of locations around the country and considered factors such as logistics, workforce, and port access before deciding to set up shop in Geelong.
“Hanwha Defense Australia is absolutely here to deliver capability to the ADF,” Keating said. “And in doing that, we want to make sure we have a secondary supply chain to support our interests in Korea, and other customers and places around the world.”
LESSONS FROM SOUTH KOREA
The story of Hanwha Defense Australia shows what both government and industry can achieve when a concerted ef- fort is made to build resilience into military supply chains.
Australia is well-placed geographically to supply material to South Korea. It is far enough from the Korean peninsula to provide safety to factories in the event of conflict; yet the sea routes from Melbourne to South Korea are shorter than those from Europe or North America.
LEFT: Army’s Australian-designed Hawkei protected vehicles on the production line at the Thales Protected Vehicles facility in Bendigo, Victoria
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