The Armed Forces of the future demand agility and the ability to strike at operational ranges, beyond secure lines of communication, with a reduced logistic footprint. This level of complexity is not seen in the commercial sector, but there are synergies which can be exploited to deliver the essential requirements of the military supply chain.
Historically, commercial and military supply chains have been viewed and managed in separate ways resulting in differences in service levels and cost. However, in the last 5 years, there has been a significant move by Government Defence departments to integrate the military’s logistics experience with the private sector’s expertise in data management, demand forecast planning, procurement, supply, maintenance, and distribution times. This means military supply chain management integrating commercial best practice.
Defence and commercial supply chains have similar drivers; getting the right part, to the right place, at the right time, at the lowest cost. Whilst recognising that there are different challenges attributed to military and Commercial requirements – both in terms of equipment and environment – the following fundamentals of supply chain management apply to both: –
- Data management – creating, maintaining and analysing key master data
- Order management – acceptance, processing and exception management of either inbound component orders or outbound from end clients
- Inventory management – forecasting, planning and managing of inventories of component, spare parts or end finished products
- Global Strategic purchasing – sourcing and purchasing of raw materials, component parts and products from around the world, which comply with specified standards in supplier capacity, financial stability, quality, performance, organisational structure and ethics
- Manufacturing support – planning and managing the flow of inventory in the manufacturing process
- Storage/Warehousing – storage and management of inventory in strategic locations throughout a distribution network
- Transport – planning and optimising of transportation of inbound and outbound orders including the overall transportation network on behalf of an enterprise client
- Aftermarket support – administration of, and planning for, the management of warranties, returns, repairs and other ‘post purchase’ requirements on a product or item
Visibility and Control
The benefit of adopting a seamless approach to the end to end management of a military supply chain is that it provides clear visibility and thereby maximizes certainty of supply. It also enables tighter control to reduce cost through sophisticated demand forecast planning and strategic purchasing with economies of scale. All too often the picture is not clear enough, due to different organizations with different systems attempting to do their ‘bit’ in the chain and restricting the realisation of the potential efficiencies that are available.
In a military context, visibility is as important as communication. Having real-time information on the current supply status is a key attribute in achieving a military’s readiness, including the management of platform maintenance regimes. Integrated information about procurement actions, repair parts, stock and transport status is not only a military advantage but also a way of reducing costs i.e. stocks in warehouses being kept at a minimum through continuous resource reduction. Some supply chain providers have become information management firms through the adoption of the Internet for electronic commerce. Customers have come to expect ready access to real-time inventory procurement, ordering, and tracking. The Information Revolution is leading the changes in supply chain management and whilst supply chain management is a fundamental and critical component to most organisations, it is often not core business. As a consequence, there is often less focus, reduced investment and limited expertise; this makes efficiencies less accessible and puts competitive or military advantage at risk.
Acquiring an end-to-end supply chain service, typically through an outsourced solution, allows organizations to focus on their core business and, in a military sense, this means protecting the security, independence and interests of a nation at home and abroad.
The Armed Forces are starting to realise the benefits of entrusting the management of its supply chain to proven commercial organisations whose core business is planning, sourcing, procuring and managing Defence inventory. The stakes are high, but supply chain organisations such as TVS have proven their ability to deliver on the challenge.
DVD 2016 will see TVS Supply Chain Solutions display its approach to Defence supply chain management and the benefits that can ensue for both commodity items and military platforms.