UK MoD Logistics: Support Chain Integration

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Introduction

• Take look at the process and system complexity within defence

• Explore a model for support chain integration

• A view of the Support Network

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Support Chain

• Support Chain Integration is complex • Support Chain Integration in Defence

− Geographic Spread with static & mobile locations − Range of equipment & material − Number of partners, processes, systems, people

• Defence Industrial Strategy

− Share more MoD business with industry − Dependency on Process, Data & Integration

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• £4.8 billion pure logistics costs

• 200 million demands per year

• 11k end user locations

• 150 Product Groups

• Local to Global delivery.

The MoD support chain

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The MoD support chain

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The Task

260+

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The Support Chain Challenge

260+

8000+

500+

1000+ 150+

430+

200+

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Business Model Complexity

• Capital Asset & Support Services − Greater Integration

− Control Shift • Asset Classes

− Marine – Infrastructure

− Air – Fleet Management • Motivation

− Military – Effect

− Industry – Shareholder Value

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Contractual Complexity

• Contracting for Availability − No template contract; inconsistent

boundary of responsibilities between the parties

− Variable partnering behaviours

− Does not optimise end to end processes

− Significant dependencies

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MoD View of SC

Support Chain Configuration

Buy Store Move Use

Purchase Store Move Provision

OEM 1 Commercial View of SC

Procure Stock Ship

OEM 1 Defence View of SC

Consume

B S M U

OEM 2 View of SC

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Abstract End–to-End Process Historically the End-to-End process owned & controlled by Defence

Industry Partner

Mod

Theatre

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Abstract End–to-End Process End-to-End process ‘shared’ with partners

Industry Partner

Mod

Theatre

The ISSUE Management

of cross boundary transactions

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Low Level - Cross Partner Transactions

Request for Quote

Quote

Order

Acknowledgement

Despatch Advice

Despatch Note

Invoice

Payment

Proc

ess

depe

nden

cies

Proc

ess

depe

nden

cies

Partner X Partner Y

Many process versions may exists to support

multiple partners.

Small changes to local MoD or partners

systems can have a significant impact to all

other processes & partners

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Low Level - Cross Partner Transactions

Request for Quote

Quote

Order

Acknowledgement

Despatch Advice

Despatch Note

Invoice

Payment

Proc

ess

depe

nden

cies

Proc

ess

depe

nden

cies

1

2

3

4

5

6

7

8

a

b

c

MoD Partner X

Public Process

Private Process

Need to understand

partner systems and process is

reduced or removed.

Partners need

only subscribe / agree to public orchestration

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Process Integration

Current Issues: • Poor “system-to-system” transaction

processing • Lack of process visibility • Poor coordination of inbound /

outbound data • Long cycle times / manual

intervention • Poor planning inputs /outputs • Unable to measure/Improve supplier

performance • Tie in to partner systems / process

• Support Chain : : Transactional view of End-to-End

processing : Improved planning/decision

making due to greater information accuracy

: Reduction in cycle time due to information latency, errors, manual

processing : Active supplier management due

to activity reporting/tracking : Removes dependencies of partner

systems & processes

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Is this possible? Generation Consumption

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What about supply chain? Commodities Transport

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Support Network?

Chain Long and slow Forecast-based Manufacturer-driven Designed from product

forward Cost-reduction

Network Fast and flexible Demand-based

User-driven Designed from frontline to the

back Improved effect

From To

supplier OEM MOD Theatre

Theatre

OEM

supplier

MOD

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Business Network Types

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What might this look like?

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System of Systems

Agree the Extended Enterprise information needs and the public processes i.e. the processes that cross boundaries [the public interface]. To define and agree the end to end process for multiple OEM’s and

multiple IPT’s is not feasible at this stage.

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Simple Steps

• Clear enterprise wide principles • Open standards for communication • Use of patterns & models • Governance but good practice first • 80 / 20 rule

Thanks

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