The degree and nature of government involvement in the production of war materials has changed markedly in recent years. This dissertation traces events that have occurred and the background to these. It attempts to put in context, changes that have taken place particularly over the past decade, and which to date have not been placed in a connected sequence or described as part of an overall plan. The dissertation commences with a brief outline of the growth of defence industry in Australia and its subsequent decline in size and performance during the last forty years. From this base, it looks at options which faced governments at the beginning of the 1980's, decisions which were made, and the reasons for those decisions. It then goes on to examine whether the "best" options were followed from a number of viewpoints. These include defence strategic considerations, matters of probity and equity in the disposal of assets, (particularly the public good), as well as the impact on those affected by the decision. The process of change, including the extent to which decisions and their effects were scrutinised by external and auditing agencies, is then considered. The experience in this country has to a large extent paralleled, although lagged, that in the United Kingdom. Accordingly, appropriate references are brought from the UK experience to highlight alternatives to, or weaknesses of, the processes followed and policies implemented locally. Finally, the essay provides some discussion of the benefits and costs which have been observed so far, as well as postulating options which may be taken in Australia as the process of change continues.

Abstract Owing to environment highly competitive, In order to reduce the cost or occupy market, the companies must seek the best new process or model to face this situation. Highly secret of Military Defence Industries is proprietary business in the domestic. The inbound process cannot satisfy requirements of user now. So, many opportunities of demand were lost. In recent years, the Defence budget deflated. How to use this geographic advantage¡H Not only sell the product, but also provide the more and best service. To cerate one position which cannot be replaceable. The research applies business process reengineering. Having two faults in current supply process of Military Defence Industries are¡G(1) It may restrict service to user.(2) It cannot control the conditions of product of using. When implement Integrated Logistics Support project, we cannot find the powerful point to link with user. Through the process reengineering thinking, we don¡¦t change the user organization process. Only change supplier the source of demand and the manufacturing & delivery planning. Apply Vendor Managed Inventory model, explicit objects can reach reducing supply cycle time. Improving the availability ratio of products. Implicit objects can control the conditions of products and real requirements of user. This information will also help to improve the quality of products and avoid put resource in wrong place.