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Leidos Europe – Improving Military Based Procurement Logistics By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

Based in Emmerson Green on the outskirts of Bristol, whilst it is perhaps fair to suggest that the Leidos name is yet to become universally known here in the UK, make no mistake that the fascinating activities of Leidos Europe are growing fast.

As an advanced, global logistics innovator, Leidos Europe provides transformational end-to-end support using alternative business models that lower cost and aim to improve efficiency within national defence organisations such as the MOD in the UK, other government agencies and commercial organisations. One important aspect of this is military based logistics operation, an area that through lack of investment over many years, the UK has fallen well behind in respect of efficiency of operation.

With the award by the MOD to Leidos Europe of the Logistic Commodities and Services Transformation (LCST) contract in 2015 what is now known as ‘Team Leidos’ which comprises a partnership of four companies is now heavily engaged in a process of much needed change in how procurement based logistics operation is conducted across the UK military.

Complex and by virtue of the need to initially work within a process of aged building infrastructure that has lacked investment for too long, ‘Team Leidos’ is already well down the road creating what the end user military require in respect of logistics based procurement support that emphasises on speed of order process and delivery, efficiency of overall operation and improved flexibility. Suffice to say here that new systems that will be rolled out over the next few years will enable not only what I have mentioned above but also visibility of near real time data, clarity information supply that leads to the same data being provided for all stakeholders, better management information, quality and reliability of procurement logistics service and importantly, the much needed development of trust.

Leidos Europe is part of the Reston, Virginia US based Leidos Inc, an organisation that prior to 2012 was known as Science Applications International Corporation (SAIC). This organisation had been founded over forty years earlier predominantly as a science and technology based solutions organisation working to address a mix of growing challenges ranging from national security issues and in health and engineering. With 32,000 employees internationally, the renamed Leidos Holdings Inc is a US quoted science and technology organisation that prides itself on providing a range of technology and engineering solutions in the defense, intelligence, homeland security, civil, and health markets both in the US and internationally.

Leidos Inc is a powerful and well respected company that operates predominantly through areas such as National Security Solutions (NSS) which includes security solutions and systems for air, land, sea, space, and cyberspace for the U.S. intelligence community, the U.S. Department of Defense (DoD), military services, Homeland Security, Information Systems & Global Solutions (IS&GS) and Health and Infrastructure (HIS) segments – in other words a full range of government agencies both in the US and allied nations abroad plus federal based and commercial organisations.

Leidos Europe

UK and Continental European operations of Leidos Europe are now playing a central role in the forward strategy of Leidos Inc to grow, Building on foundations of work conducted for the MOD, NATS, Ministry of Justice, NATO and other government, commercial and defence organisations, the operation sustains more than 1,500 employees and is still actively growing.

Main activities of Leidos Europe are concentrated on Defence based logistics and supply chain operation, IT modernisation, Cyber Security, Airports and Air Traffic, Data Analytics and Health. Senior Vice President, UK & Europe is Bill Krampf and the Senior Vice President & LCS(T) Programme Manager is Matt Wiles who retired from the Royal Air Force as Air Secretary in 2013.

Having recently visited the Emmerson Green base of Leidos Europe on the outskirts of Bristol the first thing that strikes one is that this is an organisation that is not only very enthusiastic and determined to succeed but also one that growing fast.

Military based logistics operation is a hugely important area and it is one that while recognised as being crucial to operation and mission success it is, as I have found during visits to various military bases over the past few years, one that gets too little broad attention in relation to its vital importance and value.

In respect of the 2015 Logistic Commodities and Services Transformation (LCST) award the aim is simple – transform the way that the UK provides common logistics support and services. In short, build better infrastructure, equipment and systems together with building in improved flexibility and people development. The bottom line is to provide the MOD with improved visibility and control, speed and reliability, supply the military with what they want, when they want it and to provide a greatly enhanced level of logistics based procurement services at a much lower cost.

Leidos has been operating in the UK for many years but the award by the MOD of the LCST contract to Leidos Europe really has now put the company on the map. Behind the 13 year contract award was a requirement for Leidos to run existing MOD based warehousing procurement and stock control of food, clothing, general and medical supplies as well as storage and distribution. However, built around the award is a requirement to significantly improve efficiency within an areas of MOD logistics operation that had for too long been ignored.

Team Leidos which consists of Leidos Europe supported by its key subcontractor partners, Kuehne+Nagel and TVS Supply Chain Solutions, is already well advanced in modernising the primary Donnington, near Telford, and the Bicester based warehousing facilities. Both locations are at the heart of commodities based military procurement, warehousing, and distribution based activities.

The LCS(T) contract requires that significant financial investment is made in the facilities including approximately £83 million for the construction of a defence fulfilment centre next to the existing LCST site at Donnington together with an estimated £40 million to be spent on new IT based systems in order to provide 21st century based logistics efficiency. The intention is to drive improved performance throughout and generate significant savings through the programme life.

Logistic Commodities and Service Transformation – LCS(T) Contract Overview

Managing a team of four sub-contractors and over 1,500 personnel involved, the LCTS contract awarded to Leidos Europe has a value of £6.7 billion spread over 13 years. With an investment requirement estimated to be  in excess of £120 million together with a requirement to provide £500 million cost savings for the MOD by 2028, while this is a huge undertaking it is one that ‘Team Leidos’ is in my view very well placed to operate. The requirement is based on Team Leidos taking responsibility for all LCS(T) operation within the UK, maintaining continuity of service whilst at the same time transforming procurement and logistics operation to a new operational model. In total the requirement is based on managing 70 warehouses at eight sites in the UK and that have an inventory of over one million Nato Stock Numbers (NSN’s) valued in the region of £5.8 billion. In turn this will require modernising an organisation that is required to procure 70,000 NSN’s valued at £130 million for common supply chains such as medical, food, fuels, clothing and general supplies and importantly, to deliver military material to more than 600 sites worldwide.

As already mentioned, Team Leidos consists of Leidos Europe Ltd whose specialisms surround support chain integration, information systems, business intelligence and customer relationship management and Kuehne+Nagel (a global leader in storage, distribution and freight management) TVS Supply Chain Solutions (inventory management of clothing, medical supplies, food, general supplies including oil, lubrication and gases) Leidos Supply Ltd (all commodities based procurement and vendor agreements) and Agility Defense and Government Services Inc (removals and specialist movements).

It is very many decades (yes, I meant what I said) since I last visited the MOD’s storage facilities on the outskirts of Bicester although I plan to do so again shortly. Bicester has been an important part of MOD logistics base operation for the past near eighty years and while it continues to function in the role, the lack of investment over the years reflects part of the problem that Team Leidos has been employed to solve. Bicester lacks modern infrastructure, its power sources are more than likely pre-war as of course are most of the 31 buildings/facilities across the site. Still a huge receipt facility for MOD equipment such as clothing and general stores, engineering spares, bridging spares, its importance within the military supply system cannot be ignored.

The Donnington storage facility may perhaps be described as being is in slightly better position in respect of issues than Bicester although others might argue differently. It too does have infrastructure issues though although suffice to say that much work to remedy issues and efficiency has already been done by Team Leidos. Amongst the list of specialist activities conducted at Donnington include specialist storage, weapons, valuable and Attractive, protectively marked material, pharmaceutical, medical and dental equipment and other highly sensitive requirements. Again, the base comprises of 32 buildings including warehouses, offices and rub shelters and while probably not quite as bad as Bicester in respect of ageing infrastructure issues, it has likewise lacked investment in infrastructure and systems over the years.

Adjacent to the historic Donnington operation a state of the art 850,000 square foot greenfield facility known as the Defence Fulfilment Centre (DFC) and that has been designed to consolidate fast moving items onto one location, optimise storage whilst at the same time streamline distribution is now fast taking shape. The new facility, when fully operational in 2018, will enable visibility of near real time data and the intention is that 75% of all NSN’s will be available from the DFC and it will fulfil 80% of all demands. Complex of necessity due to the nature of military based procurement requirement, DFC has from the start of the project in late 2015 been designed for absolute purpose. This is a major investment within the overall Team Leidos LCTS award and it is part of the overall process designed to provide substantial efficiency gains. This will be fast moving inventory with more than 1,000 picks available per hour and a required pick up availability of one hour. With automatic storage processes and retrieval from over 300,000 internal locations, the intention is that 68% of despatches from DFC will be generated by mini-load.

I will follow up on both Bicester and at Donnington/DFC operations following planned future visits to both locations over the next six month.

Concluding Comment  

While Leidos may well be a fairly new name on the bloc for some in the UK it is one that is increasingly making itself known through achievement. As a specialist company operating in a highly complex area and one that has built a reputation of success, Leidos is a name that we will be hearing a lot more about in the years to come. The opportunities to improve military based procurement logistics are not reserved for the UK alone and I guess that across the NATO piece there are others that require just what Leidos Europe is now doing for the MOD. Definitely an interesting company to observe and one that I expect to see achieving what it has set out to do and also growing fast in the years ahead.

CHW (London – 31st July 2017)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon

hwheeldon@wheeldonstrategic.com

@AirSeaRescue

 

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