Statement of Corporate Intent
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1 Statement of Corporate Intent ASC Pty Ltd
2 02 STATEMENT OF CORPORATE INTENT ASC Pty Ltd About ASC ASC Pty Ltd is a proprietary limited company registered under the Corporations Act ASC is wholly owned by the Commonwealth, represented by the Minister for Finance (Shareholder Minister). Initially established in 1985, ASC was subsequently chosen in 1987 as the prime contractor for the design, manufacture and delivery of the Royal Australian Navy s (RAN) fleet of six Collins Class submarines. At the conclusion of the Collins Class submarine build program in 2003, ASC commenced a 25-year contract for the ongoing repair, maintenance and design upgrades of the submarines through-life support. This contract was replaced by the In Service Support Contract (ISSC) in mid In 2005, ASC was awarded the role of Shipbuilder for the Hobart Class Air Warfare Destroyer (AWD) project. These are the most advanced and complex warships ever built in Australia and are being constructed at ASC s state-of-the art shipbuilding facility, ASC South, located at Osborne, South Australia. ASC is the lead Shipbuilder for the AWD Alliance, which is made up of ASC, the Department of Defence representing the Australian Government, and Raytheon Australia as the mission systems integrator. With more than 2,500 employees across our three facilities in South Australia and Western Australia, ASC has evolved into Australia s largest specialised defence shipbuilding organisation, with naval design and engineering resources unparalleled within Australia s defence industry. ASC is committed to supporting the Australian Defence Force by maintaining open lines of communication with our customer, understanding our customer s expectations and priorities, implementing productivity and efficiency improvements, and striving to deliver the best results for Defence.
3 STATEMENT OF CORPORATE INTENT ASC Pty Ltd 03 Chairman s message ASC s Statement of Corporate Intent summarises ASC s Corporate Plan which sets out the company s strategy and objectives and provides analysis of future business opportunities, corporate performance requirements, risks and initiatives. The Corporate Plan builds on the significant operational improvements the company has achieved over the last two years. These are now delivering efficiency gains in both the Collins Class submarine maintenance and Hobart Class air warfare destroyer programs. ASC s immediate strategic imperative is to build on our strong performance in our current programs by maintaining better than benchmark levels of submarine availability and reliability and delivering the three Hobart Class air warfare destroyers within the expected cost, schedule and quality parameters. The Plan also highlights the company s commitment to actively pursuing future business opportunities identified by the 2016 Defence White Paper, namely the Future Submarine, Offshore Patrol Vessel and Future Frigate projects. As such, ASC has refined our strategy to ensure we are able to maximise the opportunities that these projects offer and to effectively contribute to the Government s plans for naval submarine and shipbuilding. Partnerships form the strong foundation of ASC s business model and we remain committed to strengthening our existing relationships with our Customer (the Capability Acquisition and Sustainment Group within the Department of Defence), Submarine Enterprise and AWD Alliance partners, suppliers, capability and industry partners whilst also building new partnerships. ASC remains committed to providing a safe working environment for our people and building a performance-driven culture where continuous improvement and innovation is the norm. ASC s Statement of Corporate Intent has been prepared in accordance with section 95(1) of the Public Governance, Performance and Accountability Act 2013 and Public Governance, Performance and Accountability Rule Bruce Carter CHAIRMAN
4 04 STATEMENT OF CORPORATE INTENT ASC Pty Ltd Our Vision To be an enduring and integral part of Australia s maritime strategy and national security Our Mission To be a trusted and efficient partner with sovereign design, build and sustainment capabilities driving best value for our customers Our Strategy Grow ASC s design, build and sustainment capabilities to deliver successful maritime programs through: Delivering existing programs beyond benchmark performance. Strategically partnering across government and industry. Building sovereign platform asset management knowledge and capability. Actively influencing design to improve functionality and reducing cost of ownership. Aligning ASC to meet organisational and government objectives. Key Enablers What we must have to deliver our Strategy Safety and quality systems People and Culture Leverage core capability and knowledge Strategic Partnering Innovation and Technology Business systems and infrastructure Our Values Safety Service Leadership Integrity Results Innovation
5 STATEMENT OF CORPORATE INTENT ASC Pty Ltd 05 Purpose In addition to ASC s strategic objectives outlined on the previous page and agreed with the Shareholder Minister as part of the annual corporate planning process, ASC s constitution sets out objectives that guide the company s activities: Enhance and maintain the Australian Defence Force s maritime defence capabilities; and Support Australian Government policies in relation to the Australian naval surface shipbuilding and repair industry and the submarine construction and repair industry. ^ Future destroyer Hobart preparing to be launched in South Australia. < HMAS Waller preparing to undock in Western Australia.
6 06 STATEMENT OF CORPORATE INTENT ASC Pty Ltd Collins Class Submarine Sustainment ASC s focus in the Collins Class Submarine program is to provide design, upgrade and maintenance services for the submarines, and to continually improve the efficiency of these services. ASC undertakes maintenance and upgrades of the Collins Class submarines in purpose-built facilities in South Australia and Western Australia. ASC also provides submariner training at the Submarine Training and Systems Centre in Western Australia. Our high-level objectives include: Continuing to work closely with our Submarine Enterprise partners to improve submarine availability and value for money; Continuing implementation of a cultural and behavioural change process to improve performance and accountability; Embedding the lessons learnt from the completion of the first two-year full cycle docking under the new maintenance regime, in future dockings; Develop ASC West s capability to safely deliver sustainable performance for supporting submarines; and Sustainably delivering long term value for both the Enterprise and our Shareholder. ^ HMAS Collins on the move at ASC North in two parts ahead of its full cycle docking. ^ HMAS Waller recently underwent complex maintenance and repair activities at ASC West. ^ HMAS Farncomb was the first Collins Class submarine to complete a two-year full cycle docking under the new maintenance regime.
7 STATEMENT OF CORPORATE INTENT ASC Pty Ltd 07 Air Warfare Destroyer Shipbuilding ASC is the lead shipbuilder for the Air Warfare Destroyer program, as part of the AWD Alliance, and is committed to applying the lessons learnt from the first ship to deliver significant productivity improvements on the second and third ships. The Government-led AWD Reform Strategy concluded in December 2015 and ASC is now working closely with Shipyard Management Services Contractor, Navantia, on the shipbuilding and design aspects of the program, and together with our Alliance partner, Raytheon, to the re-baselined cost and schedule targets. ASC will continue to execute the five point plan to deliver productivity, efficiency and capability outcomes: Increasing shipbuilding experience within the ASC and Alliance management teams; Actively reducing the cost base through targeted reform of cost structures and staffing; Improving shipbuilding performance through current and future initiatives; Controlling the program by developing a Project Management Organisation and clear change control capability; and Accelerating learning with the support of capability partners and management. ^ Significant learnings are being applied to Ship 03 to ensure higher levels of outfitting, saving time and money in the later stages. < The mast for Ship 02 was outfitted prior to being installed, saving 10,000 hours or 50% in cost, compared to Ship 01. > Main Engine Light Off has been achieved on Ship 01.
8 08 STATEMENT OF CORPORATE INTENT ASC Pty Ltd Future opportunities The 2016 Defence White Paper presents significant future business opportunities for ASC. ASC is well positioned to support Government s future naval programs, having invested in world-class facilities and our highly skilled and capable workforce. ASC recognises that successful delivery of our Collins Class submarine sustainment and Hobart Class destroyer construction commitments are fundamental to securing future work. ASC will actively engage with Government, and international design partners with the aim of securing key roles on the following projects: SEA 1000 Future Submarine; SEA 5000 Future Frigate; and SEA 1180 Offshore Patrol Vessel. ^ ASC s facilities in Techport South Australia will be the centre of future naval submarine and shipbuilding programs. ^ The future submarine program offers significant opportunities for ASC.
9 STATEMENT OF CORPORATE INTENT ASC Pty Ltd 09 Environment ASC s environment is influenced by Government-led processes which present both opportunities and challenges for the company. Strategic Review of ASC The Government is undertaking a strategic review of ASC to ensure that the capabilities exist to support the Government s long-term plan for a strong and sustainable naval shipbuilding industry. ASC s Board and Management are working with Government and its advisers as part of the strategic review and the outcomes of the review will be considered by Government in conjunction with future decisions about Australia s naval shipbuilding program. Ongoing Competitive Evaluation Processes Competitive Evaluation Processes remain ongoing for the SEA 5000 Future Frigate and SEA 1180 Offshore Patrol Vessel projects. ASC is engaging with Government and overseas design partners as appropriate. Future Submarine Project On 26 April 2016 the Australian Government announced French submarine designer DCNS as its design partner for the SEA 1000 Future Submarine project. The Government and DCNS will enter into a contract for the next phase of that project and ASC will continue to engage with both parties to ensure Australia s sovereign submarine capability is maintained.
10 010 STATEMENT OF CORPORATE INTENT ASC Pty Ltd Performance Financial The Collins Class submarine maintenance and the AWD contracts are the two primary sources of revenue for the company. ASC s financial objectives are to achieve profit before tax and cash reserves in accordance with or better than the Corporate plan forecasts. Non-Financial ASC continues to gain greater efficiencies in the business and improve customer outcomes. ASC s non-financial objective is to meet, or exceed, its key performance indicators, particularly in the areas of schedule and quality. In , ASC will: Complete HMAS Dechaineux s intermediate docking, Perform HMAS Rankin s intermediate docking; Commence HMAS Sheean s mid cycle docking in Western Australia; Prepare the first air warfare destroyer for sea trials, launch the second and continue block consolidation and outfitting on the third; Progress HMAS Collins full cycle docking in South Australia; Provide high quality submariner training to the Royal Australian Navy; Continue to perform on the AWD project in cooperation with the Shipyard Management Services Contractor, Navantia; and Further improve shipyard cost performance and capability. Risk and Oversight Management ASC has a comprehensive Risk Management Framework, including processes to identify and assess risks, and ensure appropriate mitigation, system controls, reporting and risk management practices are in place and continually monitored. Risk committees at Board, Executive and Program level meet regularly to review risks and to ensure appropriate risk management strategies and reporting systems are in place and work effectively. ASC s risk management approach is compliant with the Australian Standard AS/NZS ISO 31000:2009 Risk Management Principles and Guidelines.
11 STATEMENT OF CORPORATE INTENT ASC Pty Ltd 011 Capability ^ Specialist facilities, such as the submarine maintenance support tower, drive productivity improvements. ASC will leverage and build upon its existing capabilities to achieve its strategic objectives. People ASC s workforce is the foundation upon which our ongoing success is built. We value the contributions and diverse talents of our workforce and invest in their development through the delivery of tailored training solutions aimed at increasing our overall productivity and efficiency. Supply Chain ASC manages a large, complex and diverse supply chain across both its programs and sources materials and services from local and international sources. ^ ASC has comprehensive warehousing facilities at each site. Facilities ASC continues to invest in its specialised submarine and shipbuilding facilities through upgrades and new facilities that enable it to meet its customer s objectives. Capability Partners ASC has longstanding collaborative relationships with organisations that provide specialised expertise in technologies that contribute to the continuous improvement of submarine maintenance and shipbuilding activities. In addition the technical support network that includes subject matter experts, industry, tertiary institutions, and government research establishments, ASC also partners with world-leading submarine and shipbuilders, Electric Boat and Bath Iron Works. ^ ASC s shipyard has several crane and haulage options.
12 ASC REGISTERED AND HEAD OFFICE 694 Mersey Road North Osborne South Australia 5017 GPO Box 2472, Adelaide South Australia 5001 Telephone: Facsimile: another castondesign/4239
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