How far should the core services of the military be contracted out? Dr D M Moore Centre for Defence Acquisition Cranfield University

Size: px

Start display at page:

Download "How far should the core services of the military be contracted out? Dr D M Moore Centre for Defence Acquisition Cranfield University"

Shanon Armstrong
7 years ago
Views:

1 How far should the core services of the military be contracted out? Dr D M Moore Centre for Defence Acquisition Cranfield University

2 CONTENT Context Background Complexities Challenge Importance of Knowledge Professionalism in Outsourcing Summary

3 CONTEXT: Concept of Operations UK BASE COUPLING BRIDGE The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again. Advanced Logistic Support Site Forward Mounting Base Forward Logistic Site SPOD Deployed Operating Base 2 THEATRE APOD Staging Area Deployed Operating Base 1 Theatre Reception Centre Assembly Area Brigade Support Group

Restart your computer, and then open the file again.

4 Business Awareness Domains The Defence Outsourcing Environment Defence Battle-space Defence Business-space PJHQ Operations Front Line Commands Capability UK Government and MOD HQ PT DE & S International Defence Industry UK Defence Industry Increasing Commercialism

Line Commands Capability UK Government and MOD HQ PT DE & S

5 COMPLEXITY: SUPPLY/SUPPORT CHAIN RELATIONSHIPS INDUSTRIAL CAPACITY Tier 3 to Initial Suppliers Unipart Cobham Engineering Tier 2 Suppliers Tier 1 Suppliers GD UK VT Managed Process Links Monitor Process Links Not-Managed Process Links Non-Member Process Links n 1 n n 1 n BAES Thales 3 n 1 n 1 n PT 1 Tier 1 Customers Land Air Sea Source: Adapted from Douglas M Lambert, Martha C Cooper and Janus D Pagh, Supply Chain Management: Implementation Issues and Research Opportunities, The International Journal of Logistics Management, Vol 9, No 2 (1998) p7 Tier 2 Customers PJHQ 1 Div n 1 PJHQ Focal Organisation Tier 3 to Consumers/ End-Customers Battlegroup Individual Unit/Sub-unit Members of the Focal Organisation s Supply Chain MILITARY CAPABILITY Non-Members of the Focal Organisation s Supply Chain

and Janus D Pagh, Supply Chain Management: Implementation Issues and Research Opportunities, The International Journal of Logistics Management, Vol 9, No 2 (1998) p7 Tier 2 Customers PJHQ 1 Div n 1

6 COMPLEX: CAPABILITY = INTEGRATION Personnel Information Training Equipment Infrastructure Organisation Logistics Doctrine and Concepts

7 CHALLENGE PRESSURES FOR PERFORMANCE COST EFFICIENCY PERFORMANCE OPERATIONAL COMMITMENTS OPERATIONAL EFFECTIVENESS UK ARMED FORCES

8 Background Contracting out Conceptually Focus upon core activities but Size of UK armed forces (and what are allies doing?) UK Industry? Political influence PFI / PPP Nature of Core Activities in defence environment Nature of services outsourced & the extent of support activities e. g. Benign & Hostile CONDO & CLS Specifying & Contracting Importance of optimising Supplier Selection in Public Sector environment Building effective relationships Partnering & Competition - Initiatives, Initiatives, DIS; DACP; DARP etc etc Cranfield University

9 So how far can the core services of the be contracted out? Answer as far as possible except actual war fighting Therefore primary focus on support activities but what is support? military And where does military activity in defence and security start and end?

primary focus on support activities but what is support?

10 PEACE v WAR War 1. Certainty of Support is paramount. 2. Cost is a Secondary Consideration. Peace 1. Minimise Cost 2. Failure to deliver On Time & In Full is (within reason) acceptable Efficient (?Lean?) Effective (?Agile?)

11 Performance Issues Defence Support Chain is complicated It crosses both internal and external organisational boundaries It is multi-disciplinary It involves management of materiel, information and relationships The customer is very demanding Drivers of individual and organisational behaviour across the Support Chain / Acquisition are not always consistent or coherent The consequences of getting it wrong can be catastrophic Everyone has a view as to how it can/should be improved Measuring and managing performance of the Support Chain / Acquisition can, therefore, be very difficult

behaviour across the Support Chain / Acquisition are not always consistent or coherent The consequences of getting it wrong can be catastrophic

12 Total Support Force Real Challenge Rhetoric & Reality! Conceptually sound - but huge cultural behavioural issues in practice Historical evidence International evidence Risks Strategy to Operations Assurance and Confidence People and Knowledge

practice Historical evidence International evidence Risks

13 Questions Is OUTSOURCING (i.e. contracting out ) knowledge being created? Is it being retained, refined and utilised? Retaining and utilising corporate and individual knowledge is not just a matter of filing and keeping data

Retaining and utilising corporate and individual

14 Intelligent Customer Contracting for Availability Contracting for Capability Spares Inclusive Traditional Provider Decider

15 Challenge: Being an Intelligent Customer to ensure effective Outsourcing performance Three elements: Aspirations include: A Knowledge Management issue Through Life Capability Management Support and cost reduction A Cultural issue People and their decision making abilities Closer relationships with flexible industry Organise & manage optimal performance especially on operations

Support and cost reduction A Cultural issue People and their decision making abilities Closer

16 Developing an Outsourcing Strategy Awareness Knowledge Internal Assessment Supplier Selection Working Together Value Creation Staying Together Exit Strategy

17 Linking Strategy to Operations People as Professionals Derivatives of Profession Noun / Adjective / Adverb Elements of a Professional Training Education Experience Exercising judgement (with / from supporting systems)

Elements of a Professional Training Education

18 PROFESSIONALISM Propositional Knowledge Considered with Personal Knowledge Filtered Process Knowledge Cognitive Growth Informing practice to enable Intelligent Customer decision making for effective Acquisition / Outsourcing Performance

Growth Informing practice to enable Intelligent Customer

19 MEETING THE CHALLENGE : DECISION MAKING IN THE CONTRACTING OUT / OUTSOURCING ENVIRONMENT Communication Knowledge Understand Risk Intelligent Customer Relationships Capability

20 Future for Outsourcing in Defence assuming an Age of Austerity Contracting Out must cover the interaction of social and technical systems T E C Complex Need for new Body of Knowledge to meet rapidly changing environmental challenges H N Simple I C Unitary SOCIAL Conflicting

systems T E C Complex Need for new Body of Knowledge to meet rapidly

21 QUESTIONS & DISCUSSION?

22 Relationships, Power & Dependence Customer Strength Risk Exploit Exploit Balance Bottleneck Develop new suppliers Medium term contracts Detailed market knowledge Strategic Direct negotiations Supplier quality management process Prepare contingency plans Competitor analysis Exploit Balance Diversify Routine Automate (EDI) E-commerce Simplified ordering Stockless procurement Rationalise supplier base Consider contracting out Leverage Maintain flexibility Competitive bidding Procurement Coordination Standardisation Balance Diversify Diversify Value for Money Supplier Strength

THE BENEFITS. Facts/Figures

THE BENEFITS. Facts/Figures PERFORMANCE BASED LOGISTICS TRACK RECORD OF SUCCESS BAE Systems Large Aircraft Mr Tim Deacon, Nimrod Project Engineering Manager says of the IFS solution: Integrated Asset Management is an innovative solution