CILT’s Second Defence Logistics Master Class event at London’s Charterhouse, UK

The changing nature of warfare, technological developments and spending constraints mean that the defence sector is undergoing a transformation in the way it manages and procures military assets. A growing proportion of defence support is now being outsourced and these elements are all reliant on intelligent information systems. Nearly 100 delegates attended CILT’s Second Defence Logistics Master Class in London, England, to discuss the challenges and opportunities this brings, as Edward Funnell reports.

Our armed forces exist to protect us and to repel attacks by land, sea and air, and their professionalism and standards of conduct are widely respected. Far less in the public eye is the co-ordination of the vast assets required to sustain the military’s activities – equipment and people – that need to be managed and replenished, whether a peace-keeping mission in the Middle East, routine maintenance of a helicopter fleet or military training exercises at home.

The master class, entitled: Logistics information systems in a new defence era, was held against a backdrop of a steady long-term decrease in the relative spend on defence. This, combined with the changing nature of the military threat and technological developments such as the use of multipurpose drones, is forcing change in how the armed forces procure, manage and pay for equipment. It also means changing the structure of the military supply chain, which they prefer to call a support chain. As was discussed during the day, an effective support chain in an era of constrained and smarter spending is increasingly reliant on robust information systems.

Steve Agg FCILT, Chief Executive, and Chris Markey, Chairman, Defence Supply Chain Forum, CILT, welcomed delegates and encouraged military and commercial logisticians to work more closely together to develop best practice solutions to maximise efficiency and effectiveness. The issues were covered under three key themes:

• Developing an intelligent customer capability

• Managing support chain partners in the defence support network

• Managing supply chain risk

In his keynote address, Air Vice Marshall Graham Howard set out some set out some big-picture challenges:

• What will defence needs look like following the 2015 Strategic Defence and Security Review (SDSR) and in the face of more spending cuts?
• More use should be made of contractors and outsourcing should surely be made, as is the case being adopted at RAF Brize Norton
• There is a need to expedite decision-making at the MoD, to make it more responsive and less bureaucratic, so more aligned to the commercial sector

In his keynote address, Sir Brian Burridge, Defence Sector Board, ADS, offered a strategic view of how organisations can maximise their capability. He outlined how a good support chain can be jeopardised either by lack of risk management or lousy management information. He said how, over 18 months, Finmeccanica had introduced a single management information system for all its 67,000 employees. This had been a painful process, but was worth it because the company now had an effective single version of the truth, thereby enabling it to make good decisions about where to invest and where not to invest. He argued that maintaining good-quality data can be the most important factor in keeping equipment up to date and well maintained – for example, the ageing Sea King helicopter.
Sir Brian Burridge also felt that good data is not something that should be delegated. There needs to be a strong commitment and active management of it, with leadership from the top. This is something he had learned from his own personal experience in senior officer roles in the armed forces.

Speakers and panellists on each of the day’s themes then expertly shared their knowledge and insights to help shape an active audience discussion.

On the first theme, developing an intelligent customer capability, retired Air Vice Marshall Matt Wiles, now at Serco, warned that logistics is not taken seriously enough at senior level and is often regarded as secondary and too specialist. He also felt there is too much wastage, with people leaving the MoD too readily to join the private sector.

In his view, there needs to be a cultural rebalancing of the relationship between industry and the MoD that needs to be put on a more professional footing.

To help achieve this, retired Brigadier Dr Roger Hood, now at Hewlett Packard, spoke about the need for a whole force concept that proactively and systematically seeks out and uses the professional skills of reservists who make up an increasing proportion of the armed forces.

The challenges do not just apply in the UK. As the event heard, similar challenges affect the armed forces of other advanced economies, including Germany and the USA.

General Michael Vetter, Commander of the German Army’s Logistics Centre, gave an insight into how his country’s air force procures and manages its assets cost-effectively, with the Luftwaffe acting as an ‘intelligent decider’. This is achieved through a close partnership with industry with military personnel jointly involved in planning and deployment of assets and the repair of key equipment.

Discussion then turned to managing support chain partners. Some speakers, such as Barrie Thomson, a retired Air Commodore now a Military Advisor on Global Defence Initiatives for Fujitsu – felt that the MoD is too slow and bureaucratic so that projects are slow to deliver, often because the MoD does not understand its information needs. He also drew a distinction between partnering (a behaviour) and partnership (a more legalistic construct).

Brigadier Martin Boswell, MoD, believed the department has improved its ability to manage support chain partners, by improved standards, processes and tools that have enabled it to become more output based. However, he accepted that more could be done.

Looking at how best to manage supply chain risks, speakers distinguished between risks (known) and uncertainty (unknown). This included using new but readily available techniques to manage risk effectively. A case study was given by Dr Tom Kirchmaier, Manchester Business School, about how BMW now ensures car production is maintained because of the safeguards and workarounds it has put in place to ensure that important spare parts from the Far East can still be obtained even in the event of sudden earthquakes and typhoons. Foreseeing risks and setting up processes to mitigate them was seen as something military and commercial logisticians should work together to improve.

To manage risk on a day-to-day level, Steve de Cato, a retired Lt Colonel, US Army, and now Leidos Inc, recommended three steps:

• Know what you have and consolidate your legacy information systems to achieve a single version of the truth
• Know where your inventory is located
• Modernise where necessary

Air Commodore Paul Higgins, MoD, argued for combining the provision of readily available inventory through the support chain through better data and information. He believed that information in the armed forces needed to be professionalised.

Building on this theme, Dominic Regan, Senior Director, Oracle, advised that every company and organisation has problems with data. He urged organisations to segment their supply chain to minimise impacts when one part of it went wrong. He observed that the top five supply chains demonstrate real innovation and leadership in managing their data and inventories; in the panel discussion, it was felt that the military could really learn from this.

This was an event with high participation levels and informed comments and questions from the specially invited audience. With a lunch sponsored by IFS and a reception sponsored by ToolsGroup, it was clear that the military and commercial logisticians clearly enjoyed and benefited from the discussion, shared ideas and fresh insights gained.