Reviewing the UK’s Defence Supply Chain Strategy
COVID-19, Brexit, the energy crisis, and the shortage of key components such as semiconductors are to blame for the UK’s supply chain woes, according to GlobalData.
Defence supply chains have experienced unparalleled disruption over the past three years, with several unprecedented events taking place simultaneously. This co-occurrence of these events compounded their effect, leading defence departments to reassess their approach to supply chain management.
For the UK, this review has been undertaken through the Defence Supply Chain Strategy (DSCS), published in November 2022. COVID-19, Brexit, the energy crisis, and the shortage of key components such as semiconductors are to blame for the UK’s supply chain woes. The previous strategy was developed when high intensity warfare was not being waged in continental Europe, when this is coupled with the accumulation of various events a new approach to supply chain management is needed.
The policy accepts there is a need to shift from focusing heavily on efficiencies and cost reduction if supply chains are to be protected. This path of action has been implemented after years austerity in the UK have led to departments across the UK government being forced to reel in spending. The Strategic Command has been shrewd in its judgement to instead implement processes for reduction of shocks to the supply chain caused by external factors.
The cost of reacting to supply chain interruption is not small and so focusing on pre-emptive intervention will likely aid in overall cost reduction and greater levels of efficiencies. The DSCS outlines that supply chain shock reduction will be achieved by removing the existing reliance on the 30-day ‘just in time’ methodology, whilst collaborating with allies, and industry. For this method to be successful, the government must ensure that open and transparent channels of communication are upheld between all actors.
Bi-modal operating systems
The DSCS introduces a bi-modal operating system, which should allow the supply chain to switch between modes of operation more easily, thus mitigating the effect of external events. The proactive review of various supply chains, as part of mode 2 of the bi-modal system is particularly notable. It allows planners to seek out potential weak points in the chain, or those that may be at increased risk of disruption and address foreseen threats before they cause disruption.
This will be effective for problems that are easier to predict (for example, disruption at the end of the Brexit transition period was expected), however will not be able to foresee all disruptors.
Interactions between defence and commercial industries are increasingly enmeshed, both in what is being procured by the Ministry of Defence and the impact of commercial markets on defence supply chains. The defence industry is increasingly exposed to disruption from commercial sources, be that the unstable supply of semiconductors or the lack of cardboard boxes due to an online shopping boom, which disrupted the delivery of various military goods.
The DSCS fails to address this directly. Strategic planners must ensure ongoing engagement and engagement with civilian industries and those supplying both civil and military markets.
The DSCS has outlined plans to overhaul current management of defence supply chains in the UK. The proposed changes have the potential to greatly increase the resilience of the system, reducing the impact of unforeseen and compounded interruptions of the supply chain.
In order for the policy to be successfully implemented there must be continued, in-depth, and transparent conversation across all stages of the supply chain and with companies which have not traditionally supplied the defence industry but are increasingly involved in the supply chains.
According to GlobalData, 23% of MoD funds currently allocated for platform acquisitions for the period 2022-2032 have been awarded to US suppliers.
// Avon Protection’s MCM100 rebreather is intended to enable operators the ability to stay underwater for longer and at greater depths. Credit: Avon Protection
// Main image: The NLAW anti-tank missile has been in high demand due to the war in Ukraine, with new orders recently placed to replace used stock. Credit: UK MoD/Crown copyright