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Fujitsu 2018 Future of Logistics Challenge If you became the Head of Defence Logistics what initiatives would you invoke, and why?

 

 

Major Nik Krykunivsky RLC MSc(IMT) MBCS MCMI CMgr is the Staff Officer Grade 2 (SO2) for Logistic Information Exploitation at Army Headquarters. He started his military career as a Reservist in the Royal Marines before being commissioned into the Royal Navy in 1995, eventually joining the Fleet Air Arm after a training deployment to the Arabian Gulf.  Following a short stint on HMS HURWORTH he switched to the British Army and attended the Royal Military Academy, Sandhurst.  After commissioning in 1998 he joined 9 Supply Regiment Royal Logistic Corps (RLC) as a Troop Commander during which he deployed to Sipovo in Bosnia on Op PALATINE as the Regimental Signals Officer (RSO).  Subsequently completing the Officers’ Food Services Course, he was posted to the Falkland Islands as the Ration Troop Command and then to 7 Armoured Brigade as SO3 Logistic Support where he participated in Exercise UHLAN EAGLE.  Following deployment to Iraq on Op TELIC in 2003, he completed Army Junior Division course 57 prior to returning to Regimental duty at 4 General Support Regiment RLC where he deployed on Ex JOINT VENTURE and also went back to Bosnia on Op OCULUS in Banja Luka, this time as an individual augmentee managing Logistic Operations.

Following a further RSO appointment to 12 Logistic Support Regiment RLC, and a second tour of duty in Iraq, Major Krykunivsky was promoted to his current rank and attended the Intermediate Command and Staff College, remaining briefly to join the Directing Staff and assist with the rewrite of the course before moving on to the Information Management and Technology Masters course.  His initial SO2 appointment was to the Logistic Network Enabled Capability team in Defence Equipment and Support as a Technical and Business Architect after which he deployed to Afghanistan as a NATO logistic planner and theatre fuel contract manager in the ISAF Joint Command Headquarters.  Major Krykunivsky assumed command of 77 (Headquarters) Squadron in July 2013 where commanded the Regiment’s Aldershot Rear Operations Group, deployed to Germany in support of a Battlegroup Firing exercise in Zagan, Poland, and supported the first Divisional TRACTABLE exercise on Salisbury Plain. In 2015 Major Krykunivsky was selected to join the Command, Control and Operations Systems team in Joint Forces Command where he was an assistant manager on the New Style of IT (Deployed) Programme, the UK desk lead for NATO Federated Mission Networking and the capability lead for a classified IT system.  During this time he completed the Defence Logistic Staff Course before being assigned to the Army Headquarters in 2017 where he works for Head of Logistics (Army) as the Logistic Information Exploitation plans lead.

Major Krykunivsky has produced a logical, well-researched essay that combined a deep understanding of the subject area with a high-level appraisal that resulted in a suitably challenging and compelling argument. It was notable for its breadth of ambition yet still established clear touch points with which the markers could identify. The author’s SWOT analysis of the current state of Defence Logistics linked current strategy and vision to perceived weaknesses and then on to 7 potential initiatives in response, ranging in detail from specific data exploitation suggestions up to what one marker described as a ‘visionary programme’. With a clear understanding of key factors such as the Defence Support Network (Transformation) work and the need to place NATO at the heart of what UK Defence Logistics does, this submission was described as being on a “different intellectual plain”, and is a worthy winner of this year’s competition.

 

The content and any views expressed in this essay are a personal perspective, reflect the personal views of the author, and may not necessarily reflect that of UK Defence.

 

 

The “Kodak Moment”: What strategy could Defence

Logistics enact to forestall losing the next fight?

 

Introduction

 

In financially straitened times the Service Commands (Navy, Army and Air Commands) are becoming entrenched within their own Service silos.  Financial pressures are driving behaviours towards protecting single Service budgets and concentrating on cutting costs, creating efficiencies and saving money when they should arguably be focusing on delivering affordable capability that supports policy but also represents good value for money.  In theory, disaggregated budgets allow each of the Service Chiefs to make their own decisions but in practice, that decision-making is constrained by pressure from political stakeholders.  The House of Commons Defence Committee (2017) reported that:

 

“At least where ‘big ticket’ equipment items are concerned, such as the F-35 and the carriers, it is questionable to what extent real responsibility resides with the individual Service Chiefs, rather than remaining under central MoD control. Under such circumstances, the Service Chiefs risk taking the blame for equipment acquisition delays and cost overruns primarily caused by Ministerial or MoD miscalculation.”

 

The uncoordinated activism of well-intentioned but contradictory policy-makers over successive tenures does not help Defence’s cause, a trend which is unlikely to diminish in the foreseeable future.  Volatility and risk are the new norms, and Defence Logistics should have an approach that seeks to embrace this uncertainty, but provide surety at the same time.  Rumelt (2011) posits that the most important responsibility for a leader is to identify the greatest challenges to progress and devise a coherent approach to overcoming them.  In other words, having a good strategy.  In this paper the author will attempt to describe this in terms of the Why (an honest appraisal of the issues), the How (the guidance or handrail), and the What (the initiatives to be invoked).  A strategy for Defence Logistics.

 

Diagnosis of Defence Logistics

 

This assessment of the current state of Defence Logistics is not meant to include every possible factor, but attempts to convey where I believe the most significant factor will have an impact.  There is a slight focus towards legacy logistics information systems, as they have become practically unmaintainable and there is a real impact on Support in Defence as it can no longer manoeuvre to meet the demand whilst countering the threat.

 

Strengths

 

Defence Logistics, as a key component within the Joint Forces Command[1], has access to a huge amount of resources, including personnel, financials and the shared goal of enabling military operations.  Whilst the Joint Forces Command is relatively new in historical terms, it has been well established and is growing a multitude of strong interfaces and relationships across MOD, industry and other Government Departments.  Across this network, the workforce includes personnel embedded with the primary delivery agent of Logistics Information Services, and direct access to Defence’s information systems and services delivery agent, Information Systems and Services (ISS). [2]

 

Another key strength is the good working relationship with allies, including NATO, EU and Affiliated nations.  The ability to share development knowledge, systems, processes, procedures and intellectual property is critical to capability development and capacity building.

 

Weaknesses

 

The culture across Defence Logistics suffers from a disparate mishmash of complex relationships, clashing management goals, incoherent organisational structures and inefficient business processes.  The problem is compounded by groups of long-serving employees who, whilst offering experience and subject knowledge, are often little more than a repository of legacy skills and attitudes that are increasingly less relevant to the future skillsets that Defence needs.  It is in this context that the main logistics functions, such as supply chain, engineering, medical and transportation, continue to operate in silos without the means to link them together for increased effect.

 

Despite regular participation in major international exercises, the most important functions of Logistics are seldom exercised with the apparent assumption that somehow Logistics will just work.  It is difficult to imagine how this approach would provide the assurances that, were a future major conflict to escalate, deployed forces could have the confidence that they would be sustained and maintained.  The alternative hypothesis is that there is no need to exercise logistics at scale, because each different operation or deployment is essentially a unique self-evolving prototype, although at this stage, there is no evidence to suggest that this approach is in any way deliberate.

 

Defence has (what some would call) an unhealthy obsession with external consultants.  In some ways this is an approach that counters the detrimental effects of legacy attitudes and skills, in effect buying the required outputs to achieve quicker results.  But those results come at a massive cost, and often has deleterious effects on the organisation where cultural integration becomes nigh on impossible, rendering the investment in the existing workforce nugatory.  Defence often overlooks the fact that it has already hired some of the best and brightest graduates, both in the military and Civil Service, whose intellectual capital is often misemployed on the completion of mundane tasks.  In terms of the outputs generated by external consultants, there is often a tendency to over-hype the abilities of Defence to be able to deliver the results expected, in part due to a lack of appreciation of the complexity and investment needed to achieve the results predicted by the consultants.

 

Cultural changes brought about by the adoption of good business practice have also had an unanticipated effect.  Defence has adopted Project, Programme and Portfolio Management (P3M) techniques to better manage the implementation of change initiatives.  To date, it has not been made clear whether legacy custom and practice has been replaced; rather it has been incorporated into Defence’s Acquisition System Guidance methodology.  This has left a muddle that combines old Requirements Management methodology with P3M, with little guidance on how to bridge between and manage those differing techniques.  Further complexity is added by the creation of separate portfolio offices in each of the Service Commands, apparently without central control of change initiatives.  This allows similar change initiatives to proliferate in separate business areas and project staff are often unaware that similar work is happening in an adjacent department.

 

Another important cultural weakness of MOD Project Management is the trend towards excessive optimism and the deeply-held view that multiple major change and transformation initiatives can be successfully managed concurrently.  The UK Regular Armed Forces Continuous Attitude Survey Results (2017) rreported that only one in four Service personnel agree that change is managed well in their Services, and the trend is downwards.  Many initiatives are stifled by a lack of available key personnel, rampant cost growth and delays, which has become the norm rather than the exception.  The House of Commons Defence Select Committee (ibid.) reported that:

 

“… in the past, the MoD has proven incapable of making savings on the scale it is predicting and, even if all the ‘efficiencies’ are realised, there will be little room for manoeuvre in the absence of sufficient financial ‘headroom’ and contingency funding. This is not an adequate basis for delivering major projects at the heart of the UK’s defence capability.”

 

There’s little evidence to suggest that situation will change, and the current prediction is that as long as this attitude prevails, MOD initiatives will fail to deliver against performance, cost and time thresholds.

 

Threats

 

Innovation in the industrial sector is accelerating, and Defence is not keeping pace.  There has been a shift towards exploitation of data, algorithms and analytics, but in its current configuration the MOD is unable to make use of many of the techniques that are employed in industry.  This is particularly acute in terms of intellectual property, where clever start-up businesses are wholly acquired in order to gain access to a particular technology type.  This approach is not employed in the MOD, where successive contracting failures have left suppliers in control of Defence’s intellectual property and the cost to the MOD of being able to exploit that data effectively has already become unaffordable.

 

The MOD has traditionally employed long-winded formal methods to acquire and deliver military capability.  The timely approval and release of money is a particular issue, especially in major projects where approval to proceed can be delayed by months or even years, which destroys any initiative or momentum gained at the initial stages.  Volatility and risk is the new normal, and by failing to adapt to this new operating environment, the MOD risks being set back behind industrial partners and potential adversaries even further.  In addition, it is becoming readily apparent that the MOD is approaching a tipping point in terms of its relationship with industry.  Long delays and protracted payment schedules, complicated by bureaucratic red tape, makes it increasingly commercially unattractive for small and medium enterprises to enter into contracts with the MOD, making it less likely that the innovative technology components produced by these suppliers can be brought into service, or worse still, may be exploited by commercially agile adversaries.

 

Perhaps the greatest threat lies in the Cyber realm, and it is a certainty that the MOD does not currently understand its data responsibilities in respect of mission-relevant Cyber terrain.  The logistics information architectures currently employed in the MOD are largely a legacy assortment of bespoke systems designed well before the turn of the Millennium, which means that the Service Commands have little hope of being able to understand the nature of the logistics problems facing them.  The increasingly digitised battlefield means that major fighting platforms are effectively software hubs built on a series of enabling architectures.  The ability to manoeuvre these platforms to achieve military effect is solely dependent on the ability of the enabling architectures to provide that freedom, although at this point the organisation of the MOD is not correctly configured to build, support, sustain and dynamically adapt to create the necessary enabling architecture.

 

Opportunities

 

In 2018, there is a prime opportunity to begin to invoke initiatives that will make significant improvements in Defence Logistics.  Arguably, this is probably the best opportunity for over thirty years, because of number of critical enabling concepts are beginning to mature sufficiently.  The overarching information services methodology, Defence-as-a-Platform (DaaP) has provided the basis for information services platforms to make available the tools and techniques that can make a real difference to capability, both in the ‘Home Base’, through MOD Net and Microsoft Office 365 technologies, and in the ‘deployed’ environment, through implementation of the New Style of Information Technology (NSoIT(D)) and Programme MORPHEUS.  In terms of Logistics, that means that there are three key areas for exploitation, all underpinned by Information Technology and Services.

 

Firstly, and most importantly, by leveraging the nascent business analytics capability, Defence can more accurately attribute where much of the annual £12.8 Bn (and rising) spend on Defence Support is actually being spent.  Likewise, more accurate forecasting techniques can provide better predictions upon which to base investments in commodities, thus potentially reducing wastage from unnecessary purchasing, obsolescence and disposal costs.  This has apparently generated sufficient momentum to provide a fertile ground for senior executives to consider the importance of Defence’s support costs and the will to do something about it.  This single unifying concept is mature enough to be effectively harnessed across all key business areas in Defence.  It is the key opportunity to reset Defence Logistics in terms of getting rid of the wasteful and inefficient systems, processes and attitudes, and instead deliberately design business components, technology and organisations to work in harmony with one another.

 

Secondly, there is an opportunity to bring to bear a powerful disruptive force.  According to Braithwaite (2018), a mix of disruptive scenarios could be exploited by Defence.  A mix of techniques aimed towards discrete channel segmentation, mastering complexity and making optimal use of algorithms and automation could, if implemented appropriately, revolutionise Defence Support by facilitating better service at lower costs, resetting affordability and delivery capacity, making better use of existing technology and releasing cash to keep pace with technology developments.

 

Lastly, there is the extrapolation of the use of technology into the wider sense.  Defence has struggled with innovation in recent years because it has failed to identify emergent technologies and positioned the organisation to be able to make best use of them.  The Defence Logistics information infrastructure has now grown so large and so complex that even making small changes is prohibitively expensive due to the enormous complexity of interconnected or contradictory policies, business processes and compatible technologies.  New attitudes emerging in Defence mean that cash is slowly becoming available for experimentation and many initiatives are open to the ideas of being able to exploit technology that has already proven itself in the commercial sector.  Some technologies can now be implemented in a way that does not fundamentally change existing or legacy systems, which neatly sidesteps some of the issues around complexity and allows legacy technology components to be upgraded or made obsolescent safely and without expensive knock-on effects.

 

The Guiding Policy

 

A key part of good strategy is a guiding policy for dealing with the challenges (Rumelt, ibid.), an overall approach that is chosen to overcome or leverage the points identified in the diagnosis.  Allardice (2018) proposes that there are key elements that should be considered, which shall form the core guiding policy for this Logistic Strategy.  The elements are the presence of a strategy, clear horizons, an enterprise perspective, a sustainable architecture and leveraging industry best practice.

 

Taking each in turn, the most important point is to have a strategy.  That is not to say that Defence doesn’t have a strategy.  On the contrary, Defence has possibly too much strategy.  Nearly every programme and project has its own strategy or sub-strategy resulting in too many competing and therefore incoherent strategies in Defence.  Outside of the Defence Information Strategy, and the Defence Logistic Strategy, there is little else that should be needed.  Strategy should be the preserve of only the highest levels of thinking and planning, and make it easier for organisations to align with that highest direction.

 

Next, Defence must establish clear horizons.  That is simply the development of clear and strategic outcomes, and a clear pathway to achieving them.  Of course, this is only possible once the overall strategy is clear, and is dependent in part on clearing away the incoherent strategies that have proliferated over time.

 

Taking an enterprise perspective is the next policy element.  This means understanding what is happening across the Defence Enterprise (taking the meaning of Enterprise to be those people processes and organisations upon which we are interdependent) and coordinating change initiatives in such a way that they complement one another, do not draw upon the same resources, or clash with other objectives.  Managing this in a disaggregated Command structure will be difficult.

 

Fourthly, Defence should build a sustainable enabling architecture.  Not only will this position the organisation to rapidly receive and implement emergent technologies, but will also facilitate the retirement of unneeded legacy services so as to not clog up business processes.  With regards to the ability to counter Cyber threats, the adoption of this approach is paramount to the ability to operate.

 

Lastly, Defence must begin to practice the attributes of a successful digital age organisation.  This involves not only modifying organisational behaviours, but in quickly adopting appropriate modern business practice that helps negate the disadvantages exposed by the misalignment in development speed with industry[3].  Defence must do this if it is to make it worthwhile for industry to be able to do business with the MOD.

 

Initiatives to be Invoked

 

The final element of this approach is to outline a series of seven initiatives that should be invoked to carry out the guiding policy.  This a set of coherent actions that must provide mutually supporting outcomes that work together to achieve the desired effects.  In invoking these seven initiatives, as Head of Defence Logistics, I need to ensure that the actions overcome inertia, make use of existing advantages and most importantly, are built on an understanding of what has been known to work.

 

Initiative 1 – Data Exploitation.  This is my most important initiative as I recognise that data is one of Defence’s strategic assets.  Good investment decisions (including military operational and tactical decisions) are improved by the enabling effect of good master data.  Whilst Defence employs a rapidly developing information exploitation capability, it is being held back by inconsistencies in data quality and the coordinated availability of all that data that Defence needs.  This might mean that I need to reshape or renegotiate current commercial agreements to release the required data.  I have an eye on the future, and I don’t yet know all the ways that my data can be exploited, so I need to make sure that those firm foundations are in place.  This initiative seeks to coordinate and cohere all logistics data across Defence, including industry, in such a way that it can be exploited by tactical force elements, business decision-makers, industry and Allies.

 

Initiative 2 – Tackling Complexity.  This is a particularly difficult challenge and consists of a series of activities.  Reducing complexity inevitably requires the number of interacting nodes to reduce, so priority will be given towards retiring legacy systems and rapidly replacing them where necessary with simpler commercially available components that are designed to work together under open standards.  Business processes redesigned in this way, under a common sustainable enabling architecture, will be simpler and allow better exploitation of fewer data feeds.

 

Initiative 3 – Change the Organisation.  Digital age organisations employ the workers with a mindset that is open to new ideas and comfortable working with uncertainty, and I need to do the same.  The harsh reality is that employees that cannot, or will not, move beyond process-driven attitudes because that is the way it’s always been done will need to be offered new opportunities.  To achieve this, I will need to be able to offer compensation and responsibilities that are different to those currently employed in Defence.  Pay and responsibility would be appropriate to skills and contribution, rather than rank and time served.

 

Initiative 4 – Leverage the Intellectual Capital in Logistics.  I get the distinct impression that I don’t need expensive consultants to tell me what I should know, as my employees are often best-placed to be able to do this.  When I need to employ consultants, I will do so sparingly and ensure that it is to conduct work that cannot be achieved because my employees don’t already have the skills or knowledge, or to perform routine tasks and free-up my skilled employees to perform higher cognitive functions that are crucial to the business.

 

Initiative 5 – Control the Portfolio.  Looking across the programme landscape it is evident that there are far too many concurrent change initiatives.  They are either incorrectly identified as programmes, duplicating similar work in other areas of the business, or created as a result of an overly optimistic appraisal of the ability of Defence to be able to deliver.  My programme controls must be every bit as rigorous as my financial controls, and carefully structured to make best advantage of my organisational strengths including Joint Forces Command resources, strong interfaces with other Government departments, and of course industry.

 

Initiative 6 – Innovation.  I recognise that innovation is not simply new technology, rather it is the careful structuring and positioning of my organisation to be able receive emergent technology and processes.  Taking advantage of the organisational changes, better use of my employee’s ideas, less complexity and better sustainable architecture will help me to position the business to be able to exploit innovation.  Part of innovation is in understanding the threats posed by adversaries in the Cyber environment and being able to respond to them, which I cannot ignore or leave to others.  Cyber resilience will be a key component in my exploitation of emerging technologies and I will ensure my employees are recruited and trained accordingly.

 

Initiative 7 – Provide Mission Assurance.  The final link in the chain brings together all the previous initiatives to enable and underpin the key outputs of Defence.  Combatant Commanders will benefit from the assurance that the Support and Enabling components of the mission are guaranteed in terms of process resilience and ability to operate; that is to say the assured ability to be able to deploy and recover an affordable, resilient support ecosystem at a desired time and place, all within an acceptable timeframe.  The effects of this will be magnified across not only the MOD Service Commands, but also in the overall capabilities envisaged by our international Allies.  The deterrent effect of this capability is strategically significant and underpins the trust and confidence between the Services, Government and Allies.

 

Concluding Remarks

 

UK Defence Logistics is at an important crossroads in history.  The financial constraints that will persist in the foreseeable future will make changing the business difficult.  Defence can only recover the initiative and focus on delivering affordable capability if it is armed with a clear strategy.  In this paper, the kernel of a possible clear strategy has been discussed, and whether this is the foundation of a clearer approach or inspiration for future leadership decisions remains to be seen.  What should be evident is that, without better collaboration between industry, allies and the MOD, Defence Logistics will struggle to provide the support necessary to deliver the Nation’s National Security objectives.  In short, we may lose the next fight.

 

 

 

 

 

 

 

 

 

This essay was edited for publication by Chris Markey FCILT, Chairman CILT Defence Forum.

 

 

[1] The United Kingdom Joint Forces Command (JFC) manages allocated joint capabilities from the three armed services.

[2] Information Systems and Services (or ISS) is a Cluster within the Joint Forces Command (JFC) Top Level Budget of the MOD.  With its headquarters at Corsham, Wiltshire, and satellite sites elsewhere, it employs around 5,000 people. The ISS organisation is led by the Chief Digital and Information Officer (CDIO), who is responsible for information strategy and policy across the MOD and also the delivery of information technology systems across both the MOD’s corporate and military elements.

[3] Editor’s note: It could be argued that defence industry is itself a ‘laggard’ with respect to adopting new technology and innovative practices.  The authors remarks do, however, resonate with more enlightened industries such as retail and financial services.

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