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Defence Logistics: Enabling and Sustaining Successful Military Operations
 9780749478032, 9780749478049, 2016961398

Table of contents :
Cover
Contents
Contributors
01 Introduction
Structure
02 Defence logistics definitions and frameworks
Introduction
Defence logistics defined
National strategy
Global obligations: treaties, coalitions, and partnerships
Key concepts
Frameworks for defence logistics
The logistic functions in more detail
Summary
References
03 Defence logistics: an historical perspective
Introduction
The ancient world
The Middle Ages
The early modern era
The modern era
The World Wars
The Cold War
The post-Cold War world
References
04 Defence logistics in context
Introduction
Defence supply chains – push or pull?
Managing lead-times and demand
Defence supply chain dynamics
Shaping the operational logistic footprint
Contingent versus operation-specific systems procurement
Managing reverse logistics
Summary
References
05 Resilience in defence supply chains
Resilience as a concept
Supply chain disruptions
Architecting resilience into the supply chain
Summary
References
06 Integrating mission and support systems through the life cycle: Integrated logistic support and maintenance strategies
The mission system and the support system
Integrated logistic support (ILS) – analysis and integrated thinking
Maintenance of the mission system
Summary
Reference
07 Supportability analysis for supportable and supported mission systems
Supportability analysis: the fundamental enabler of a fit-for-purpose support system
Supportability analysis: the fusion of engineering and business logic
Fielding the mission and support systems: validating and verifying the supportability analysis
Summary
References
08 Achieving dependability in defence systems
Introduction
Availability
Reliability
Maintainability
Requirements
What is dependability?
Capability
Summary
Answers
References
09 Planning and executing defence operational logistics
Introduction
Planning support to operations – the operational estimate
Exercise – logistic input to the courses of action
Summary
References
10 Procurement for defence logistic support
Introduction
Definitions
Key principles of contracting
The purchasing cycle
Supplier management and development
Outsourcing
Logistic support contracting
Summary
References
11 Managing performance in defence logistics
Introduction
Performance management – definition
The defence logistic context
The performance management process
Performance management in defence logistics
Performance management in defence logistics contracting
Summary
References
12 Optimizing the defence inventory
Introduction
Commercial and defence supply chains
Inventory: the cost of ownership vs the impact of shortage
Solving a wicked problem
Data
Forecast
Plan
Example of the advantage of using back-orders compared to service level
The advantage of cost-optimizing back-orders
Inventory segmentation
Front line first
Codification
Summary
Notes
13 Accounting and finance in defence logistics
Introduction
Accounting vs finance
Financial transactions and accounting information
Supplier financial viability
Costing
Budgeting
Summary
Reference
14 Decision support in defence logistics
Introduction
Introduction to decision support and analysis methods and tools
The nature of analysis and modelling – the concepts
Methods review
Simulation
Force-level logistic representation – combat models, wargames
Summary
References
15 Defence logistics and crisis response
Introduction
Background
Humanitarian aid and crisis response supply chains
Military involvement in humanitarian aid and crisis response
The military support chain for expeditionary operations
Conclusion
References
16 Defence logistics information systems
Introduction
Demand predictability
Provisioning and the end-to-end pipeline
Codification of items
Condition and configuration management
Engineering management system
Convergence of legacy systems and shared data environments
Deployable systems
Summary
Reference
17 A look to the future
Introduction
Future defence environment
Future defence threats
Future defence opportunities
Summary
References
Index

Citation preview

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Defence Logistics

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THIS PAGE IS INTENTIONALLY LEFT BLANK

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Defence Logistics Enabling and sustaining successful military operations

Edited by Jeremy C D Smith

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Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors.

First published in Great Britain and the United States in 2018 by Kogan Page Limited Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 2nd Floor, 45 Gee Street London EC1V 3RS  United Kingdom

c/o Martin P Hill Consulting  4737/23 Ansari Road 122 W 27th Street Daryaganj New York, NY 10001 New Delhi 110002 USA India

www.koganpage.com © Jeremy C D Smith 2018 The right of Jeremy C D Smith and the individual contributors to this work to be identified as its authors has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 7803 2 E-ISBN 978 0 7494 7804 9 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Control Number 2016961398 Typeset by Integra Software Services, Pondicherry Print production managed by Jellyfish Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon CR0 4YY

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Co n t e n t s Contributors  xi

01 Introduction 1 Richard Fisher Structure 1

02

Defence logistics definitions and frameworks 8 Jeremy C D Smith Introduction 8 Defence logistics defined 9 National strategy 9 Global obligations: treaties, coalitions, and partnerships 11 Key concepts 16 Frameworks for defence logistics 20 The logistic functions in more detail 27 Summary 33 References 34

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Defence logistics: an historical perspective 35 Peter D Antill (edited by Richard Fisher) Introduction 35 The ancient world 36 The Middle Ages 42 The early modern era 46 The modern era 48 The World Wars 52 The Cold War 57 The post-Cold War world 61 References 61

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Contents

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Defence logistics in context 64 Jeremy C D Smith and Julieanna Powell-Turner Introduction 64 Defence supply chains – push or pull? 64 Managing lead-times and demand 71 Defence supply chain dynamics 73 Shaping the operational logistic footprint 76 Contingent versus operation-specific systems procurement 82 Managing reverse logistics 85 Summary 89 References 89

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Resilience in defence supply chains 91 Matthew Summers Resilience as a concept 91 Supply chain disruptions 98 Architecting resilience into the supply chain 104 Summary 112 References 113

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Integrating mission and support systems through the life cycle: Integrated logistic support and maintenance strategies 114 Jeremy C D Smith The mission system and the support system 114 Integrated logistic support (ILS) – analysis and integrated thinking 116 Maintenance of the mission system 126 Summary 134 Reference 134

07 Supportability analysis for supportable and supported

mission systems 135 Jeremy C D Smith Supportability analysis: the fundamental enabler of a fit-for-purpose support system 135

Contents

Supportability analysis: the fusion of engineering and business logic 144 Fielding the mission and support systems: validating and verifying the supportability analysis 157 Summary 160 References 161

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Achieving dependability in defence systems 162 Laura Lacey and Chris Hockley Introduction 162 Availability 163 Reliability 173 Maintainability 176 Requirements 177 What is dependability? 179 Capability 181 Summary 183 Answers 184 References 184

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Planning and executing defence operational logistics 186 Jeremy C D Smith Introduction 186 Planning support to operations – the operational estimate 186 Exercise – logistic input to the courses of action 189 Summary 202 References 203

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Procurement for defence logistic support 204 Stuart Young Introduction 204 Definitions 206 Key principles of contracting 206 The purchasing cycle 210 Supplier management and development 217 Outsourcing 220 Logistic support contracting 222

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Contents

Summary 226 References 227

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Managing performance in defence logistics 228 Stuart Young Introduction 228 Performance management – definition 230 The defence logistic context 230 The performance management process 231 Performance management in defence logistics 244 Performance management in defence logistics contracting 246 Summary 247 References 248

12 Optimizing the defence inventory 249 Shane Targett Introduction 249 Commercial and defence supply chains 249 Inventory: the cost of ownership vs the impact of shortage 250 Solving a wicked problem 251 Data 253 Forecast 254 Plan 256 Example of the advantage of using back-orders compared to service level 257 The advantage of cost-optimizing back-orders 258 Inventory segmentation 260 Front line first 263 Codification 264 Summary 265 Notes 265

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Accounting and finance in defence logistics 267 Irfan Ansari Introduction 267 Accounting vs finance 267 Financial transactions and accounting information 268

Contents

Supplier financial viability 274 Costing 276 Budgeting 280 Summary 284 Reference 285

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Decision support in defence logistics 286 Jeremy D Smith and John Salt Introduction 286 Introduction to decision support and analysis methods and tools 286 The nature of analysis and modelling – the concepts 287 Methods review 289 Simulation 312 Force-level logistic representation – combat models, wargames 318 Summary 323 References 323

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Defence logistics and crisis response 325 Peter D Antill Introduction 325 Background 325 Humanitarian aid and crisis response supply chains 326 Military involvement in humanitarian aid and crisis response 332 The military support chain for expeditionary operations 338 Conclusion 340 References 342

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Defence logistics information systems 345 Roger Crook and Matthew Summers Introduction 345 Demand predictability 347 Provisioning and the end-to-end pipeline 348 Codification of items 349 Condition and configuration management 350 Engineering management system 351 Convergence of legacy systems and shared data environments 352

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Contents

Deployable systems 353 Summary 355 Reference 356

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A look to the future 357 Richard Fisher Introduction 357 Future defence environment 357 Future defence threats 359 Future defence opportunities 360 Summary 362 References 362 Index 365

Online resources You can download material supporting this book – case studies, presentations, videos – at www.koganpage.com/deflog

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Co n t ri b u to r s Jeremy C D Smith (Editor) Immediately before joining Cranfield University in 2008, Jeremy project managed the development of an integrated logistic support (ILS) learning blend for the UK Ministry of Defence. Prior to that, he served 26 years as an army supply and logistic officer, completing a number of operational tours in command and on the staff. Since joining Cranfield he has taught a range of supply chain management, ILS, and through-life support MSc modules and short courses. His research interests lie primarily in supply chain management. He has an MSc in Logistics and Supply Chain Management from Cranfield University and he is a Fellow of the Chartered Institute of Logistics and Transport and of the Chartered Management Institute.

Matthew Summers (Assistant Editor) A Lecturer in System Resilience at Cranfield University, Matthew’s research interests focus on the procurement and support of complex capital-intensive defence systems that are designed to be resilient to external and self-g­enerated disruptions. In particular, he focuses on the development of quantitative methods and metrics for measuring resilience across the defence enterprise and the benefits this could deliver within a strategic procurement context. Prior to joining Cranfield University, Matthew spent 11 years working for the UK Ministry of Defence within the Defence Science and Technology Laboratory where he established and led the UK MOD Resilience Research Programme introducing concepts such as energy security, assured supply and improved decision making.

Dr Irfan Ansari With a background in accounting and finance, Irfan studied for the AMBA-accredited Masters in Defence Administration (MDA) at Cranfield University. His interest in defence finance led him to pursue a PhD in Defence Private Finance Initiatives and he continues to research in that field. Additionally, he lectures on defence finance for Cranfield University in the UK Defence Academy, on a number of courses including the MSc Defence Acquisition Management and the MBA (Defence) programmes, and at the Baltic Defence College, Estonia.

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Contributors

Peter Antill Peter rejoined Cranfield University at Shrivenham in June 2009 to create a defence acquisition body of knowledge and generate academic publications, having previously worked in a similar role from 1998 to 2002. He graduated from Staffordshire University in 1993 with a BA (Hons) International Relations, gained an MSc Strategic Studies from Aberystwyth in 1995, and a PGCE (Post-Compulsory Education) from Oxford Brookes in 2005. His interest lies in examining defence procurement and logistics within the realm of military history.

Roger Crook Roger is a lecturer in Defence Acquisition. He joined Cranfield University following a career in the British army, where he commanded equipment support units and served in brigade and divisional headquarters. He has also had appointments in Defence Equipment & Support and commanded the UK National Support Command on operations. Roger is a Fellow of the Institute of Mechanical Engineers and Fellow of the Chartered Management Institute.

Richard Fisher Richard is a Research Fellow in Global Defence Acquisition. After ten years in local government, Richard moved into the defence industry and worked as part of a multidisciplinary team managing logistics, facilities management and supply chain matters. While his previous academic study was focused on environmental subjects, he now researches the networks and relationships of the defence industry, how it is interconnected and the impact that these connections have. He also writes 20th-century military history related to small arms.

Chris Hockley Chris is a chartered engineer with over 36 years’ experience of maintenance and support of defence equipment in the Royal Air Force and 15 years in academia with Cranfield University. He has specialized in Availability, Reliability and Maintainability (AR&M) since 1991, completing a Defence Fellowship in the subject in 1993 and then delivering courses and postgraduate teaching in Logistic Engineering, Supportability and Systems Effectiveness for Cranfield University. He has led several major research projects dealing with AR&M. His most recent research has been to increase maintenance effectiveness and availability by improving root cause analysis

Contributors

of faults and reducing the occurrence of reported faults where no fault can be found, known generically as No Fault Found (NFF).

Laura Lacey Laura is a lecturer in acquisition and systems engineering, covering the topics of availability, reliability, maintainability and airworthiness. Her specific area of research is No Fault Found and the links to availability and airworthiness. She has a military aircraft engineering background and uses this experience to highlight the nuances of defence acquisition and availability. This has included providing technical expertise and acting as an engineering assessor for Ministry of Defence maintenance contracts and managing critical aspects of these contracts. She has written book chapters on the topic of availability and NFF and presented at conferences. Her lecturing has taken her to Australia, Chile, India and America.

Dr Julieanna Powell-Turner Julieanna is an experienced academic and researcher with over 17 years’ UK and overseas experience in environmental sustainability. Her research focuses on the sustainability, security, and criticality of resources, and related risks and vulnerabilities in the supply chain. She has been an academic since 2006, working mainly in the realms of environmental defence. Prior to this she worked for a large UK environmental consultancy in the areas of renewables, nuclear, energy security, and waste policy and strategy.

Dr John Salt John is an Operations Research lecturer. For some 25 years he has enjoyed making a living from stochastic discrete-event simulation in the transport, oil, space, and defence industries. As well as simulation modelling, he has extensive expertise and experience in software development. His knowledge of military affairs means that he has recently spent most of his time working in the defence industry, including General Dynamics, DERA and Hunting Engineering. He has also worked for Eurotunnel and Saudi Aramco.

Jeremy D Smith Jeremy is Head of Centre for Simulation and Analytics at Cranfield University. He has 17 years’ experience in academia with Cranfield University at the UK Defence Academy, undertaking teaching and research in applied operations analysis, systems engineering, and technology management. Previously he worked in industry for some 16 years at MOD establishments and within

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Contributors

BAE Systems in a systems engineering and systems analysis role. He has additional experience in defence systems analysis using a range of tools including combat simulations and wargames.

Shane Targett Shane Targett has been a staff lecturer at Cranfield University since 2007, focusing on defence inventory optimization. In addition to presenting at the UK Defence Academy, he has taught and consulted internationally on many military projects using advanced optimizations methods (including his costweighted back-order). He has provided academic advice to The UK National Audit Office and the International Technical Cooperation Program, and was highly commended in 2015 for optimizing UK navy inventory.

Stuart Young After a career in the Royal Navy as an Engineer Officer, including operational appointments at sea, a period as a liaison officer with the US Department of Defence in Washington, and various programme management roles in procurement and logistics, Stuart Young joined Cranfield University in 2008. He is now head of Cranfield’s Centre for Defence Acquisition, collocated with the Defence Academy of the United Kingdom at Shrivenham. He is responsible for the delivery of a range of acquisition-related courses and MSc modules. His research interests include the MOD-Industry relationship across the supply chain, and the management of complex programmes and decision making. He is a regular speaker at defence conferences.

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Introduction

01

Richard Fisher There are books available on logistic management, and the principles that exist in the commercial and non-defence environments will be useful in the defence logistics context; however, as this book will show, there are many circumstances where the unique requirements of defence situations need specific knowledge, skills and experience to ensure that logistics can be deployed efficiently and effectively. It also requires different elements of commercial logistic management to be combined in a way that is suitable only for defence purposes. In the context of this book, both military and defence are used to describe the same capability. Offensive operations, often carried out as a means of proactive defence, require logistics that include supporting the military (as in the armed forces of the country concerned), yet defence as an entity may also include, along with others, contractors and civilian support to operations.

Structure As an academic textbook, Defence Logistics can be read from cover to cover or piecemeal on any particular topic; however, the chapters are written as part of the book and it is not a compendium of related papers or a selection of monographs. While academic theory will progress, it’s expected that the principles covered, and their application to defence logistics, will remain extant. It contains factual and statistical information, providing in-depth descriptions of defence logistic concepts and commercial concepts in the defence context. It analyses those concepts and provides not only the information but also the tools for the reader to analyse situations themselves. Many of these concepts are fully described theories. What makes this book readable, and therefore valuable, is that these theories are also described in application, making them realizable. The variety of backgrounds and experiences from which the authors can draw provides a blend of practical and academic solutions. These are illustrated through both defence and commercial illustrations and case studies.

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The chapters each contain a brief introduction and summary for the reader to quickly identify whether the subject may be relevant or not; however, there is a thematic structure to the book as well and this chapter will help the reader understand where they may wish to find information relating to each theme (Figure 1.1). From an academic perspective, understanding that logistics is a science helps frame both the style and the content of the book. In the first instance, ‘Defence logistics definitions and frameworks’ (Chapter 2) provides some of the fundamentals of this science that help the reader understand what’s required and ensure that everything coming afterwards fits into place. The historical analysis (Chapter 3) builds on this, detailing how that science has grown from the earliest days of warfare. The etymology of the word ‘logistics’ is from the Greek for ‘art of calculations’ and, even today, logisticians are seen as technical specialists and the related academic qualifications are awarded in the sciences. The chapters on resilience (Chapter 5) and supportability (Chapters 6 and 7) discuss how supply chains are engineered and that there needs to be engineering considerations built into logistic planning. The dependability of our equipment, which identifies the logistic requirements (Chapter 8), is calculated and the relevant equations are included and explained. Managing the performance of logistics contracts, plans and practices (Chapters 10 and 11) requires more calculations and considers the inputs, processes and outputs, with the metrics and measurements that are required to manage them effectively. This allows forecasting inventory requirements as part of inventory management (Chapter 12). All of this is dependent upon secure financing (Chapter 13), and managing economics is a specific science with its own theories and rules. This mix of specialisms has sound scientific bases, and defence logistics is an example of the practical application of scientific principles picked from across a range of disciplines. It will become clear when reading this book that the value of logistics is the ability of a military organization to project its force. Historically (Chapter 3), this developed when larger societal groups began to form and move locations and they exhausted the natural resources of their original home. Battlefields were defined by the size of the supply chains and the logistic support that could be provided, and local acquisition was essential to be able to sustain longer-term deployments. The current context (Chapter 4) helps identify the value of force projection but also how and why defence logistics, in ensuring such force projection and the sustainment of forces in the deployed battlespace, presents very particular and specific challenges which may force a peculiarly defence-focused interpretation and application of established supply chain paradigms and ways of working. Supply risk

Introduction

Figure 1.1  Theme identification Logistics wins wars

Contractor support

Risk

Infrastructure

Doctrine

Inventory

Technology

Force projection

Logistics is a science

Topics by chapter

1 Introduction

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2 Defence logistics definitions and frameworks

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3 Defence logistics: an historical perspective

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4 Defence logistics in context

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5 Resilience in defence supply chains

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6 Integrating mission and support systems through the life cycle

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7 Supportability analysis: mission systems

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8 Achieving dependability in defence systems

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9 Planning and executing defence operational logistics

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10 Procurement for defence logistic support 11 Managing performance in defence logistics

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12 Optimizing the defence inventory

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13 Accounting and finance in defence logistics

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14 Decision support in defence logistics

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15 Defence logistics and crisis response

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16 Defence logistics information systems

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17 Defence logistics: a look to the future

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must be managed. Supporting operations (Chapter 9) and providing stockpiles of inventory (Chapter 12) forward enables greater force projection, but a balance must be struck between holding sufficient stock to be able to sustain operations in the face of uncertainty, variability and volatility, and being fixed in place because the logistic footprint has become too big to be operationally responsive. Then there is a need to support these lines of supply, also called lines of communication, along their routes, with multiechelon supply chains being determined by looking back from the demand ‘at the foxhole’. Supported by local acquisition, you have a predecessor to the global supply chains that now requires specific resilience approaches (Chapter 5). A continuous theme in this book is the reliance of logistics upon technology and technology’s reliance upon logistics – a circular problem! The developments in technology have historically (Chapter 3) constrained the pace at which logistic solutions can be deployed to operations, impacting the force projection identified previously. Logistics has transitioned from the soldier carrying all his personal supplies transported via his own two feet, to the use of the horse and cart (for several thousand years), to the mechanization of the 20th century. The lines of supply and the reliance on local acquisition are directly linked, as demonstrated in the cases studied, to the technology available. The different domains (land, sea and air) have different influences on logistics and the technology varies over time. To minimize the reliance of technology on logistics, and taking it away from the military capability, there are principles to design-in that improve dependability (Chapter 8) and supportability (Chapters 6 and 7), including standardization, which aids inventory management (Chapter 12) as well. The technological complexity of the larger systems that are in place creates specific requirements, and it is important to understand these when making decisions around dependability and supportability. Understanding this will require performance management (Chapter 11) of the data sets that can be produced, but to help there will be technology that can help make decisions drawing on those data (Chapter 14), using modelling and simulation, which in turn improves the transparency, and thus the sustainability (Chapter 4), of technology. Technology will continue to develop and may improve how logistic support is provided to defence, but it will also place some burden upon logistics to support it (Chapter 16). Although a specific chapter is devoted to the management of inventory (Chapter 12), it is a recurring factor throughout the book and to logistic management in the round. The need to stockpile supplies, fund them through taxation and deal with issues of corruption are rooted in history

Introduction

(Chapter  3). The dependability (Chapter 8) of logistic capability relies upon the availability and readiness of that inventory, and there is a need for performance management data (Chapter 11) on levels of stock and the usage information on it to then understand the support required (Chapters 6 and 7). Taxation funds defence logistics but this cost doesn’t directly relate to the benefits, so it’s necessary to understand benefits realization through financial analysis (Chapter 13). This will then improve the availability of inventory items in the future. At a strategic level, there are links between logistic management and doctrine. The impact of logistics upon the ability of decision makers has dictated the timing of battles and the flexibility with which wars can be fought, with it even being possible to suggest that world wars would not have been global if the supply lines and logistics had not enabled them to be so (Chapter 3). To make suitable strategic decisions, and inform the doctrine of defence, it is necessary to understand the resilience of defence logistics and how effective logistics, including procurement and contracting for desired outcomes (Chapter 10), can improve the resilience of defence capability (Chapter 5). A recognized element of defence capability – the disciplined, structured, self-reliant, trained, responsive and generally well-quipped units and formations – makes the defence contribution to humanitarian assistance and crisis response inevitable, generally positive, but also occasionally controversial (Chapter 15). Governments are increasingly recognizing that they need to develop appropriate doctrine for such commitments. The resilience of inventory and equipment items is partly based upon the supportability (Chapters 6 and 7) and the dependability (Chapter 8) of defence systems wherever, and for whatever tasks, they are deployed. Understanding these then builds to supporting decision making (Chapter 14) and smarter procurement and contracting (Chapter 10), and decisions can be made on a whole-life basis (Chapter 4). Infrastructure, in a similar way to technology, is inherently linked to logistics and, as the historical analysis (Chapter 3) identifies, the earliest need for roads to move supplies and for identifying the routes needed for supply. Once inventory had been moved forward, the infrastructure had to be in place to store and maintain whatever was needed. These storage places then started to dictate strategic aims and doctrine through the use of sieges. With the development of the railways, battles would be fought dependent upon the location of the railhead and where supplies could be brought to. This influenced the axes of advance, to a high degree irrespective of the tactical consideration of the ground to be fought across. Supporting the infrastructure requires maintenance support to achieve dependability

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Defence Logistics

(Chapter 8), and infrastructure becomes part of the support mechanism for other capability (Chapter 7). These are often indirect costs to operations, and specific financial appraisal tools are shown to calculate the indirect costs of logistic storage (Chapter 13). Where infrastructure is physical, this has a footprint that needs to be considered to understand its sustainability (Chapter 4) and longer-term impact on the wider environment (Chapter 5). As with any operation, be it commercial or defence, logistics is susceptible to risks that need to be managed. The historical perspective (Chapter 3) provides some classic examples of where risks to logistics can inhibit an operation and determine its success or failure. The availability of resources is a problem for the supply chain, right down to the raw materials (Chapter 4), and for the equipment once in service (Chapter 8). The disruptions that these risks cause can be managed to improve resilience (Chapter 5) but they do vary depending on the environment in which anything is happening and the support it has received, so evaluating alternative options and evolving those options is part of supportability engineering (Chapters 6 and 7). By assessing and analysing risks, decisions are supported (Chapter 14) and the financial strength (Chapter 13) can be improved so that the overall sustainability of the logistic management increases. The motivations of a defence department and its parent government which commit to humanitarian relief and crisis management can be called into question by other agencies which may question their motives. Nonetheless, when the military engages in disaster relief it is usually with its logistic capabilities that it achieves results for the greater good (Chapter 15). Although it might be thought of as a modern development, contractor support has been part of defence logistics throughout history (Chapter 3). The non-combatant roles and specialists employed as part of the Commissariat and the ‘baggage train’ were close to the military force but largely civilian. There were then those who needed to identify supplies ahead of the fighting element to ensure that they could be sustained once they arrived on location. Contractors are often constrained by the requirements they are set (Chapter 10), particularly on their dependability (Chapter 8) and with the performance measures with which they are expected to comply (Chapter 11). The financial strength (Chapter 13) of the contractors is part of what makes their sustainability intrinsically linked to the overall supply chain and effectiveness of the force for which the logistics are being supported. With all of the above themes understood and with the knowledge, skills and experience coming together effectively, it’s important to realize, as is evidenced in the historical narrative (Chapter 3), that logistics wins wars. Charlemagne understood the value of effective logistics and prioritized it as

Introduction

part of the military force; this resulted in victory. The Crusades showed on several occasions how extended lines of supply and the inability to support the military force appropriately would result in defeat, sometimes setting back strategic plans for many years. Improving the resilience (Chapter 5) of logistic management can minimize the risk of failure and enhance the possibility of success. This applies to both the strategic and the tactical but also down to specific items of equipment, inventory and infrastructure where their supportability (Chapters 6 and 7) and dependability (Chapter 8) are often determinants of whether success has been achieved. Increasingly, ‘value for money’ (Chapter 13) is seen as a success criterion, and measuring the performance (Chapter 11) identifies this along with other factors. With the right information (Chapter 16) and appropriate resilience, is it possible to predict success through our decision-support tools (Chapter 14)?

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Defence logistics 02 definitions and frameworks J e r e my C D S m i t h

Introduction The principal purpose of this chapter is to explain some of the definitions, concepts, frameworks and classifications that feature in defence logistics and which are, to varying extents, the foundations on which the other chapters will be built. The chapter will define defence logistics, explain some of the concepts and frameworks which are in common use in defence globally, and shed a little light on what might otherwise be somewhat baffling to a reader unfamiliar with the defence domain. National strategy is an important influence on how a defence department organizes its military forces, including the logistic units and resources required to support and sustain them, whatever the mission or task, and key to many nations’ defence strategies is membership of defensive alliances. This chapter will examine one of them, the North Atlantic Treaty Organization (NATO), in some detail, not because it is the only one worthy of such examination but more because its policies and procedures are easily accessible by the reader, and because it offers wider insights into how strategic alliances shape, enable, but also constrain, defence logistics operations. The chapter will discuss classifications, codification, doctrine, agreed ways of working, and what might be called ‘rules sets’ within which defence logistics is planned, resourced and delivered.

Defence logistics definitions and frameworks

Defence logistics defined It would be wise to begin this chapter with a succinct definition of the book’s subject. Given its status as a defensive alliance, NATO’s definition of logistics is the one this book selects as its definition of defence logistics: The science of planning and carrying out the movement and maintenance of forces. (NATO, 2012: 20)

The reasons for utilizing this NATO definition will be discussed shortly, and this definition will be expanded to encompass all that is required as a foundation on which to build the chapters that follow.

National strategy National governments will see the protection of their people and territory as a strategic priority, and establish defence and security forces to ensure it. National defence departments will usually hold different military force elements at varying states of readiness, ensuring that these elements are appropriately resourced for the types of task they may be called upon to perform.

The UK MOD states that ‘We protect the security, independence and interests of our country at home and abroad. We work with our allies and partners whenever possible.’ It also identifies seven military tasks, among which are: ‘defending the UK and its overseas territories; defending our interests by projecting power strategically and through expeditionary interventions; and providing a defence contribution to UK influence’ (UK MOD, 2017a).

In a book on defence logistics, the significant point is how national strategy, however it is articulated, is manifested in a nation’s defence ‘posture’ and how it prepares itself to act militarily in the interests of strategy. A nation whose government sees its strategic interest as including the preparedness to project its influence globally, using military force if necessary, would expect its armed forces to adopt an expeditionary posture in order to achieve this. An expeditionary posture creates a mindset of deployability and a general

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readiness to operate at a distance from the home nation, over extended lines of communication. This demands military force elements which are ready to respond, and this, in turn, demands that they be logistically prepared. Nations generally maintain force elements at varying levels of readiness with logistic capabilities to match. These logistic capabilities will have to be able to support force elements: ●● ●●

●●

while they are in their peacetime readiness states; during the force-generation process that will see them progressively reducing their readiness time to the point at which they are actually deployed; and while they are deployed on operations.

There has been a growing tendency in Western nations’ defence departments to outsource logistic capabilities to industry, to employ a mix of regular military manpower, reservists, civil servants and contractors to deliver defence logistics, and to reduce inventory stockpiles. The time required to mobilize contractors and reservists to provide necessary logistic support to a deployed force must be factored into readiness calculations. Generally speaking, a defence department would seek to ensure that organic logistic support, that provided by uniformed personnel and utilizing on-the-shelf materiel resources and inventory, is there for high-readiness force elements to utilize. This would then be replaced progressively by lower-readiness resources as time passes and they are mobilized, given appropriate theatreand operation-specific pre-deployment training, and deployed. In the case of enduring operations, it is normal to see military forces being rotated into and out of the theatre of operations. As time passes, it would be expected that the character of the logistic support evolves to become more stable, established, and robust for the longer term. The environment may develop from being wholly non-permissive to being rather more safe and secure, and logistic infrastructure will be developed to support what has become, to varying extent, normalized. It would be expected that the highreadiness force elements and their logistic support resources, which initially deployed and prosecuted early-stage operations, would be progressively withdrawn from the theatre of operations. This would be expected to follow some sort of periodic force-level review. These forces can then be rested, re-constituted, and brought back to high readiness in preparation for their next commitment to operations. Mobilized reservists and contractors will replace them progressively. Where national strategy envisages armed forces being engaged in long campaigns, as well as short interventions, call-off

Defence logistics definitions and frameworks

contracts will have been established with industry to enable surge production to be activated to replace on-the-shelf stocks as they are consumed and create stocks of materiel to sustain operations of long duration and high intensity.

Global obligations: treaties, coalitions, and partnerships Defensive alliances – general Many nations have committed themselves to defensive alliances, the two most prominent of such alliances being NATO and the Warsaw Pact. For our purposes here, where a nation is committed to a defensive alliance for the long term, what matters is the extent to which the stated aims of the particular alliance have shaped the way in which its member nations plan for, deploy, and sustain logistic support to their armed forces. Membership of alliances can enable the development of standard ways of working, agreed protocols, and the sharing of resources and capabilities for greater efficiency and effectiveness, but committed member nations will have to comply with the alliance’s agreed ‘rules set’ in all the ways in which it manifests itself. Our aim here is not to examine how all the alliances function in this respect; this is not necessary. However, there is value in looking in some detail at NATO, as an enduring and growing defensive alliance, in order to see how it shapes and influences the logistic policies and practices of its member nations.

The prominent defensive alliances For millennia, nations and armed forces have formed alliances for the purposes of achieving their objectives, short, medium or long term, local, regional or global, and tactical, operational or strategic. Notable alliances of the post-Second World War period have included: the Western European Union (WEU), which formed in 1954 and merged in 2011 with the European Union; the South East Asia Treaty Organization (SEATO), which formed in 1954 and was dissolved in 1977, its members being Australia, New Zealand, Pakistan (including East Pakistan (now Bangladesh)), the Philippines, France, the United Kingdom, South Vietnam and the United States; the Central Treaty Organization (CENTO), originally known as the Baghdad Pact, which formed in 1955, was dissolved in 1979, and included

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Iran, Iraq, Pakistan, Turkey and the United Kingdom as its members; the Inter-American Treaty of Reciprocal Assistance (the Rio treaty), signed in 1947, which at one time or another during its history has included most of the Central and South American nations and the United States; and the Five Powers Defence Arrangements (FPDA), signed in 1971 by Australia, the United Kingdom, New Zealand, Malaysia and Singapore. Arguably the most significant defence alliances have been the Warsaw Pact, more formally known as the Treaty of Friendship, Cooperation, and Mutual Assistance, which included the Soviet Union and the Eastern European nations which it occupied at the end of the Second World War as its members, and NATO, currently with 29 member nations. The Warsaw Pact was formed in 1955 and dissolved in 1991. NATO was formed in 1949 and continues to grow its membership, attracting a number of the former members of the Warsaw Pact. Other military partnership programmes have been agreed, including the American, Britain, Canadian, and Australian (ABCA) Armies Program, to which was added New Zealand as a full member in 2006. Its aim was to promote interoperability and standardization. Another was the Australia, Canada, New Zealand, United Kingdom, and United States (AUSCANNZUKUS) Programme, also focused on interoperability and standardization, but specifically in the maritime environment. Of course, another significant alliance is the United Nations (UN), which engages in military operations but has a far wider remit, encompassing a wide range of global social, economic, humanitarian, cultural and scientific objectives.

The UN From its original membership of 51 states in 1945, the UN had grown to 193 member states when South Sudan joined in 2011 (United Nations, 2017a). Membership brings with it a range of obligations, including those associated with the committal of military forces, but also those associated with other activities and domains, including for example the manufacture, storage, movement and handling of hazardous goods. As will be seen later in this chapter, the UN is responsible for creating globally agreed and endorsed standards governing the safe handling of such items, with which member states are effectively obliged to comply as they conduct business on an international stage. Much national legislation reflects UN standards and, indeed, those of other multinational alliances and cooperative ventures.

Defence logistics definitions and frameworks

Chapter VI of the UN Charter (United Nations, 2017b), entitled ‘Pacific Settlement of Disputes’, puts in place measures to enable the peaceful resolution of quarrels between states. However, the Charter also embodies, in its Chapter VII, entitled ‘Action with Respect to Threats to the Peace, Breaches of the Peace, and Acts of Aggression’, the means by which member nations might act to enforce the peace, including by the use of military forces. Under Article 43, all member states are expected to undertake to make available to the Security Council armed forces and other assistance and facilities considered necessary for the maintenance of peace and security internationally. Article 45 requires that member states hold elements of air forces immediately available for committal to enforcement action. The UN Military Staff Committee (MSC) has a key role in advising on the establishment, structure, deployment and use of such forces. Article 47 directs that the chiefs of staff of the permanent members of the UN Security Council are members of the MSC. For these permanent member states, the United States, United Kingdom, France, China and the Russian Federation, Chapter VII therefore presents, arguably, a strong insistence that they have air-force elements at high readiness, with the required logistic sustainability, and the preparedness to commit other forces, combat, combat support, combat service support, or combinations of all three force types (these force types are explained later in this chapter).

NATO NATO’s purpose In his annual report for 2016, the NATO Secretary General refers to NATO member states’ common endeavour as ‘the preservation of peace and security’ (Stoltenberg, 2017: 7). In doing so, he reminds the reader of NATO’s purpose, which NATO articulates as ‘to guarantee the freedom and security of its members through political and military means’ (NATO, 2017). NATO has been, particularly to its longest-serving member states, significant to the way in which they have established and structured their defence forces, ensured that they are held at required states of readiness and sustainability, deployed them, commanded and controlled them during operational deployments, and generally managed them in accordance with agreed and endorsed NATO doctrine and procedures.

Readiness and sustainability of forces NATO does not have independent military forces; it relies on forces contributed to operations by member states. It is essential, therefore, that when

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the North Atlantic Council (NAC), the highest authority in NATO, makes the decision to commit military forces, they are made available via a properly structured force-generation process which provides the responsiveness, flexibility, and planning certainty the Alliance requires. NATO terms these military resources Graduated Readiness Forces (GRF). They comprise High Readiness Forces (HRF), whose readiness should range from 0 to 90 days, and Forces of Lower Readiness (FLR), whose readiness ranges from 90 to 180 days (NATO, 2012: 12). The latter will normally be used for the longerterm sustainment of deployed headquarters and forces.

The term ‘readiness’ refers to the time an HQ or unit requires from receiving an activation order to being ready for deployment or ready to perform its task from its peacetime location.

Shared doctrine, standards, policies and procedures act as important enablers of readiness and sustainability, and the Alliance has developed and published a wide array of them. It will be valuable to examine how and where these agreed ways of working, and the obligations that membership of NATO places on states, are reflected in their logistic practices.

Logistic doctrine, policy and practice within NATO NATO logistic policies and doctrine fit within a hierarchical structure. At the top are strategic-level documents published by the NAC, for example Council Memoranda (CM) such as C-M (2001) 44, NATO Policy on Cooperation in Logistics. Next come further strategic-level documents produced by NATO’s Military Committee (MC), such as MC 0326/3, NATO Principles and Policies of Medical Support. At the next level are Joint Logistics Doctrine publications, termed Allied Joint Publications (AJP), which provide fundamental logistic doctrine. Two examples are AJP-4, Allied Joint Logistics Doctrine and AJP-4.7, Allied Joint Petroleum Doctrine. Logistic doctrine at the next level down, at Component (ie maritime, land, air etc) or Service (ie navy, marines, army, air force) level, is covered in the form of Allied Logistics Publications (ALP), an example being ALP 4.1, Multinational Maritime Force Logistics. Next come publications which set out logistic tactics, techniques and procedures (TTP), and procedural Standardization Agreements (which NATO terms STANAGs). Included here are Allied Fuels Logistic Publications (AFLP), for example AFLP-7, Deployable Fuels Handling Equipment (NATO, 2012).

Defence logistics definitions and frameworks

Acting on behalf of the NAC is the NATO Logistics Committee (LC). This body has responsibility for coordinating issues across the whole logistic spectrum with other NATO logistic bodies, of which there are many. Among them is the NATO Support and Procurement Organisation (NSPO) whose mission is to ‘provide responsive, effective and cost-efficient acquisition, including armaments procurement; logistics; operational and systems support and services to the Allies, NATO Military Authorities and partner nations, individually and collectively, in time of peace, crisis and war, in order to maximize the ability and flexibility of their armed forces, contingents, and other relevant organisations, within the guidance provided by the NAC, to execute their core missions’ (NATO, 2015). A particularly important body within the logistic domain is the NATO Standardization Agency (NSA), which has responsibility for managing standardization across the Alliance.

Standardization in NATO NATO defines the aim of standardization as being ‘to enhance the Alliance’s operational effectiveness through interoperability… thereby improving efficiency in the use of available resources’ (NATO, 2012: 14). Standardization is reflected in the concepts, doctrines and procedures that NATO develops. It is generally accepted that there are different levels of standardization, these going from compatibility, through interoperability, to interchangeability and, finally, to commonality. Simply stated, the higher the level of standardization across the Alliance, the easier it is for it to achieve the enhanced operational effectiveness and efficiency in the use of resources referred to above. Standardization in logistics is of particular significance in this respect. NATO doctrine asserts that for logistic cooperation to be a reality in NATO, it is essential to achieve interoperability, and interoperability requires, as a minimum, common concepts, doctrines and procedures, as well as compatibility of equipment and interchangeability of combat supplies (NATO, 2012). Key combat supplies here are ammunition and fuel, and much work has been done, and continues to be done, to maximize the extent of standardization within these commodities, and their management.

Logistic strategy and principles, and the vision of collective logistics The NATO Logistics Handbook (NATO, 2012) defines what it calls an ‘Organisational Framework for Logistics’ (p 32), and specifies four strategic goals. These reinforce a fundamental NATO logistic principle, that of collective responsibility. This principle lies at the heart of NATO doctrine but has become reinforced in the logistic domain by recent NATO operational experience:

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Defence Logistics As a result of their experiences in NATO‑led operations in the Balkans, Afghanistan, the Mediterranean and Libya, nations have gained an appreciation of the value of a collective approach to logistic support and have lent their full support to the implementation of this vision. (NATO, 2012: 19)

Only a few allies are capable of deploying and sustaining their forces independently, so a collective approach is key to NATO’s operational success. The first of NATO’s logistic principles is collective responsibility, but the others are: ●●

●●

authority, principally the need for a NATO commander to have authority over logistic capabilities when required; the primacy of operational requirements, this being the commitment of logistic effort to support the operational mission as a priority;

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cooperation among the nations;

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coordination of logistic support at all levels;

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assured provision, meaning the guarantee that nations will provide the logistic capabilities NATO requires, individually or collectively; sufficiency, meaning the provision of logistic support in the quantities and of the quality required by NATO; efficiency, meaning the use of logistic resources as efficiently and economically as possible; flexibility, to ensure that logistic support is proactive, adaptable and responsive; and visibility and transparency of logistic resources, which NATO considers to be essential for effective logistic support.

NATO also recognizes that although nations have first call on their national logistic capabilities, where necessary a NATO commander must be able to redistribute a nation’s logistic resources for the wider good, if the operational situation demands it. NATO has a Transfer of Authority (TOA) process to facilitate this.

Key concepts Expanding the definition of defence logistics The NATO definition of logistics, which we adopted as the most useful definition of defence logistics at the start of this chapter, needs to be expanded, and NATO does this admirably for the purposes of this book: The science of planning and carrying out the movement and maintenance of forces.

Defence logistics definitions and frameworks

In its most comprehensive sense, the aspects of military operations which deal with: ●●

●● ●●

design and development, acquisition, storage, movement, distribution, maintenance, evacuation and disposal of materiel; transport of personnel; acquisition or construction, maintenance, operation and disposition of facilities;

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acquisition or furnishing of services; and

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medical and health service support. (NATO, 2012: 20).

The term ‘materiel’ here covers equipment in the widest sense of the term and therefore includes aircraft, ships, submarines, weapon systems, vehicles and communications equipment, as well as ammunition, fuel, foodstuffs, drugs and other medical supplies etc. Maintenance covers the tasks associated with stock management and basic husbandry, but it also covers the maintenance, repair and overhaul of systems. ‘Facilities’ include the hangars, workshops and garages within which such maintenance is carried out, as well as the cranes, lifting gantries and fixed materials handling equipment used to move and manipulate systems, their assemblies, subassemblies and components. Also covered by the term are the airport and seaport facilities, warehouses and other stock-holding and servicing structures which represent nodes along a supply chain. Among ‘services’ may be counted the provision of specialist knowledge and expertise to the operational planning process, including the provision of logistic intelligence which covers the assessment of an enemy’s capability to sustain its own operations.

The logistic functions The NATO Logistics Handbook (NATO, 2012) identifies a number of what it refers to as the ‘logistic functions’. These are: supply; materiel; services; logistic information management; equipment maintenance and repair; movement and transportation;

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reception, staging and onward movement; infrastructure engineering for logistics; medical support; contractor support; and host nation support. (p 22) There will be further discussion of these functions in this chapter and several other chapters in this book.

The defence supply chain Materiel in the NATO definition also covers what logisticians in the commercial world would call inventory. The same term is used in the defence domain, and more will be said about it shortly because of its great significance to defence logistics. The concept of the supply chain is also valid in the defence domain: in a defence supply chain, inventory typically flows downstream, but some inventory also flows upstream. Explaining these forward and reverse flows of inventory will help to define a further term of particular significance in the defence domain, that of the support chain.

The defence support chain Many of the diverse systems which the military employs are developed specifically for military use, fast jet combat aircraft for example; others the military procurement system buys off-the-shelf, utility wheeled trucks for example. However procured, they are all required to be available to the military user when and where they are needed, and in an operating condition appropriate to the tasks required of them. This demands that they are subjected to preventive maintenance work, the basic purpose of which is to stop the system failing, thereby keeping it operable, and corrective maintenance work, the basic purpose of which is to repair the system once it has been damaged or has degraded. To deliver this maintenance successfully engineers will require maintenance instructions, diagnostic systems, tools and equipment, the necessary skills, and possibly also the formal recognition of their skills and authority to certify that maintenance work has been done correctly. They will require the hangars and workshops in which to do the work. They will require the inventory to effect the specified maintenance. The inventory will only reach the location at which the maintenance will be carried out if it is procured and transported to that location to be

Defence logistics definitions and frameworks

there when required. It needs to be the right inventory and it needs to be in the right quantity. The military equipment – the ship, the main battle tank, the transport aircraft – also needs to be in location at the time required. For all of these resources to be made available when and where required demands that the maintenance of the relevant systems is accorded the priority that will ensure that it happens. In the defence domain priorities can switch rapidly, for example to take advantage of a favourable tactical situation, or to respond to political pressure. It can be seen that to keep military systems in the users’ hands demands a whole-system approach. The defence support chain is this whole system. It is all of the people and other resources required to keep military systems operable, and all the processes which ensure that they work together harmoniously, or as much as military realities will permit. The defence supply chain, which concerns the forward (downstream) and reverse (upstream) flows of inventory, is thus a sub-set of the wider defence support chain.

The supply chain – forward and reverse flows and the supply pipeline Many scheduled preventive maintenance tasks require the removal and replacement of a sub-system or assembly, for example the gearbox from a helicopter, or the auxiliary power system from an armoured reconnaissance car, to be dispatched back to a maintenance facility upstream to undergo maintenance, repair or overhaul (MRO). Some corrective maintenance tasks may necessitate the same thing. This facility might be military or it might be civilian, or it might be a combination of the two. It might be the original equipment manufacturer (OEM) or perhaps a third-party systems integrator, either or both of which may be located in the home base. Once the sub-system or assembly has undergone the required MRO, it will be put back into store or held as a pool or reserve ready to be used to replace one that has just been removed and sent back as described. This upstream flow represents the reverse flow of inventory described above. It can be seen that the metaphor of the supply pipeline is as valid for a defence supply chain as it is for a commercial one. Materiel flows downstream from echelon to echelon, from supplier’s supplier to customer’s customer. As has been seen, materiel also flows upstream in the form of repairables going to depth MRO. These reverse flows become very significant when a defence department, having engaged in and completed an expeditionary operation, recovers back to its home base, bringing its ­materiel with it.

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Frameworks for defence logistics The staff branches and their responsibilities Having defined defence logistics, it is necessary to explain the frameworks within which the discipline is planned, resourced, delivered, and reviewed and adjusted as changing circumstances demand. Within NATO, and among many non-NATO states, the military staff branches are structured along broadly the same lines, with some variations of detail. Depending on whether the headquarters is navy, army, or air force led, each branch will be prefixed with ‘N’ for naval staff, ‘G’ for the army staff or ‘A’ for the air staff. In a joint headquarters, so called because its staff is an integrated team of navy, army, air force, and probably civil servant and contractor personnel too, the prefix will be ‘J’. Using this prefix for simplicity, the staff branches are: J1 branch, responsible for personnel matters including manning, discipline and personnel services. In some armed forces, medical support falls within this staff branch; for most NATO member states, it is led by N/G/A/J 4 branch. J2 branch, responsible for intelligence and security matters. J3 branch, responsible for current operations, including exercise planning, training, operational requirements, combat development and tactical doctrine. J4 branch, responsible for logistics and quartering. In most NATO countries, medical support is also led by this branch. J5 branch responsible for crisis and deliberate planning. J6 branch, responsible for communication and information systems. J7 branch, responsible for training. J8 branch, responsible for resource management (finance and contracts). J9 branch, responsible for legal, media operations, and civil/military cooperation and civil affairs. The lead for planning logistics, including the resources and processes which together make an effective and efficient defence support chain, therefore lies in the number 4 Branch, be it N, G, A or J. However, the staff branches do not work in isolation. Indeed, it is essential that their work is carefully coordinated, integrated and orchestrated within an established ‘battle rhythm’ to maintain the momentum of planning and operations. To illustrate: the planning in an amphibious task group headquarters for how a logistic information system will be deployed and operated for a particular combat mission

Defence logistics definitions and frameworks

might, therefore, be led by the N6 Branch, but it will have a member of the N4 logistic staff on the planning team, or it will be able to call upon N4 expertise. For military operations in general, it is the N/G/A/J3 Branch which sets the planning rhythm for a headquarters. The orchestration and synchronization of a military headquarters engaged in the planning and execution of military operations lies with the N/G/A/J3 staff. In this way, in an army brigade headquarters, it will be the Chief of Staff (COS) – the lead G3 staff officer – who will lead in the ‘control’ of the operation, ensuring that all staff branches are cooperating, contributing their expert input to the planning and execution of the operation, complying with key coordinating instructions, meeting deadlines and, critically, ensuring that any risks, shortcomings or failures are brought to the attention of both the COS and the brigade commander. The COS will have a G1/G4 opposite number – often called the Deputy Chief of Staff (DCOS) – who will manage the personnel, logistic and administrative elements of the operation. COS and DCOS ensure the control of the operation but it is the brigade commander who commands and leads it. It is the commander’s mission and intent which the COS, DCOS and all other staff members are charged with delivering. Although the job titles accorded to military staffs might vary across nations, these functions of command and control are replicated at all levels in the military. A distinction should be made between those who plan for operations or training and those who execute the operations or training. However, this is not to suggest that the two areas of responsibility are distinct and separate: critically, they are not. Most defence departments rotate their personnel between appointments on the staff of headquarters and appointments ‘at sea’, ‘in the field’, ‘with a squadron’ or ‘on an air station’. The formations and units that do the war fighting, peace enforcement, peace keeping, humanitarian relief or other engagement will themselves have headquarters elements containing some, or all, of the staff branch responsibilities. Key to success is that static headquarters, deployable headquarters, fighting formations and units all cooperate in an integrated, coherent fashion, the staff branches providing the framework of responsibilities around which this can be built and remain robust and efficient.

Lines of support Routinely, the defence logistic support lexicon features words like lines, levels, depth, forward and reverse. These terms suggest a degree of stratification in the organization of logistic support units and resources, and the delivery of maintenance, supply and other logistic functions. This is not to suggest that defence logistics is inflexible or overly bureaucratic but, rather,

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that defence logisticians recognize the inherent benefits of a recognized structure, standardized ways of working, familiar allocation of responsibilities and operating boundaries, and well-rehearsed and proven operating methods. For illustration, it is common to talk of first, second, third and fourth line logistics, but what is the significance of this? First line is typically support delivered at unit level. For the navy, this will be on board a ship or submarine; for the army, it will be at platoon, company or battalion level; and for the air force, it will be at the flight or squadron of fast jets, transport aircraft or helicopters. Because these units and sub-units operate at the front line, they are required to be agile, responsive and mobile. This is particularly so in an era of asymmetric warfare, where enemy forces might be capable of striking from any direction, and when military forces are expected to be able to carry out manoeuvres in combination with firepower to establish and retain the initiative. It is logical that any maintenance or other support carried out at first line must be comparatively straightforward, quick to complete, and require tools and techniques that do not constrain manoeuvrability or fix in place otherwise agile and responsive forces. It will normally, but not always (see below), be delivered by uniformed personnel because they may be completing their work in contact with the enemy or in other extreme circumstances. Supply will focus on combat supplies (ammunition, fuel, water, food) and the range of spares needed to keep the weapons and systems required for immediate use functioning. Medical support will be quickly administered to save life and prevent the casualty’s condition worsening before evacuation. Second line support is provided at greater depth to first line units and subunits. This means, for instance, that the providers of second line maintenance support will typically be a tactical bound behind the units and sub-units in combat, have a greater range of maintenance skills and be equipped with a greater range of capabilities. The work they carry out will include preventive maintenance, more interventionist diagnostic and repair tasks, and maintenance that requires more time to complete. The range (variety) and scale (quantity) of inventory that supply units carry will be greater because they have to service the needs of a greater variety and number of first line units, and their ships, aircraft, artillery systems and so on. Medical units at second line will be able to deploy forward increased capability to first line units, for example to speed up casualty evacuation during a period of intensive combat. They will be able to provide more time-consuming, resource-intensive treatment to casualties, including surgery. Third line support is provided at further depth still. In the maritime domain, it may be delivered wholly, or in large part, by shore-based units and facilities.

Defence logistics definitions and frameworks

A front-line ship may dock periodically in order for deeper maintenance on its sub-systems to be carried out at third line, to disembark major assemblies and systems which can only be removed from the vessel by shore-based lifting gear, so that they can be despatched for deep MRO. They might also re-stock with all the supplies they are likely to require for their next period at sea. Army supply, transport, and maintenance units may be clustered together at a seaport or an airport, where they inload materiel delivered by ship or by aircraft and load ships and aircraft with items returning to fourth line in the home base for deeper MRO operations. Third line units may base themselves alongside established infrastructure such as oil refineries, food supply depots, warehouses or major transport hubs. They tend to be large-scale, static, and have a sizeable geographical ‘footprint’ (see below). Air-force third line units will be located at the deployed operating base (in the theatre of operations) or main operating base (in the home base or elsewhere out of theatre) and will be similarly capable of deeper, more time and resource-intensive, interventionist maintenance. Medical support at third line is likely to encapsulate a large range of diagnostic and surgical capabilities. It may also deal with the application of long-term preventive medicine for deployed forces. Fourth line support is usually provided by industry and, as such, has traditionally been home based. Recent conflicts have, however, seen a blurring of the traditional demarcation lines between the home base and the theatre of operations. Defence departments have increasingly come to rely on industry to provide not just the depth support traditionally delivered at fourth line, but also to take on support functions further forward, in the theatre of operations, at third, second and even first line. An interesting outcome of this has been the development of the concept of forward depth, where industry provides the depth of maintenance support found at fourth line (usually in the factory), but in the theatre of operations. This requires civilian contractors to serve in close proximity to their uniformed military colleagues.

Stockpile planning metrics In the interests of standardization, and the planning and interoperability benefits it brings, alliance members will employ standard quantity metrics for materiel, informed by predicted consumption rates. NATO, for example, applies stockpile planning guidance (SPG) rates to its ammunition logistic planning. To simplify the planning of fuel, ammunition, food and water – items referred to as combat supplies – the UK MOD has, in past years, calculated days of supply, daily combat supplies rates, daily ammunition expenditure rates, daily fuel consumption rates, and others.

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To add further complexity to the concept of lines of support, medical staffs refer to medical treatment facilities (MTFs) in terms of their role: Role 0 is a first response capability. This may be as basic as the ‘buddy-buddy’ system whereby one person applies a wounded or injured colleague’s first field dressing, or administers one of their issued morphine syrettes to slow bleeding or relieve pain. Role 1 is a medical response capability. This is mobile pre-hospital treatment. Role 2  is an initial surgery response capability. Role 3  is a hospital response capability. This is likely to be deployable. Role 4  is a definitive hospital response capability. This will be static. Care should be taken not to over-compartmentalize medical treatment by mapping it directly to lines of support. Role 0 and Role 1 are likely to feature at unit level and therefore at first line, and Role 4 maps logically to fourth line. Roles 2 and 3 can in some nations’ forces map directly to second and third line, but what matters is that the right level of medical treatment is delivered where and when it is needed. As will be seen in Chapter 4, time is critical to medical response. For medical staffs, roles may be more meaningful than lines.

Levels of support Defence departments also categorize support, primarily maintenance, by levels, these normally indicating the depth of intervention the maintenance requires: the higher the level, the greater the depth.

The British army traditionally categorizes the maintenance and repair of its equipment in four levels. Level 1 covers servicing and day-to-day preparation. Level 2 covers maintenance by replacement, adjustment or minor repair, including fault diagnosis and minor authorized modifications, within specified times, using generally provisioned resources. Level 3 covers maintenance in greater depth, such as repair, partial reconditioning and modification requiring special skills or special equipment. Finally, Level 4 covers full reconditioning, major conversions or base overhauls and is commonly referred to as depth repair. Historically, the Army delivered

Defence logistics definitions and frameworks

Levels 1 and 2 forward repair while civilian workshops delivered Levels 3 and 4 depth repair (UK MOD, 2017b). In recent years, industry has increasingly taken on Level 1 and Level 2 repairs.

Task organizing for military operations Military forces will generally task organize for an operation. On receipt of a mission, a task, or some form of statement of intent, a headquarters will organize its force elements to best suit what the commander and his staffs consider they are going to have to do to achieve success. They will create manoeuvre formations or units, often termed battle groups, task forces, or similar, which comprise the different combat, combat support, and combat service support capabilities required. To illustrate how this works: a naval carrier battle group will be formed around an aircraft carrier and will include a carrier air wing with a variety of aircraft at its disposal, probably also at least one cruiser, and destroyers or frigates. A larger task-organized combat group might include submarines and attached logistic ships of different types. An example army battlegroup might be commanded by the commanding officer of an armoured regiment and have under command: his headquarters; one or two squadrons of tanks; one or two companies of infantry in armoured, tracked, infantry fighting vehicles; a combat engineer reconnaissance section; a medical section in tracked ambulances attached from a second line medical battalion; a logistic support detachment attached from a second line logistic support regiment; and a flight of helicopters assigned for a reconnaissance role for a defined period of time. The key point is that units, and the capabilities they deliver, are grouped in order to deliver the operational effect required of them. They will always be subject to a clearly defined and agreed command and control status, and often only for a specified period of time and/or a defined mission or task. Logistic units are accustomed to being task organized and are structured and organized to enable this to happen routinely.

A common, though not globally agreed, classification of military units is that of combat, combat support, and combat service support. In NATO: Combat units are those which engage in close action and consist of the armoured corps (including cavalry if so designated), infantry, special forces, and air corps.

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Combat support units are those which provide fire support and operational assistance to the combat arms, typically combat engineers, artillery, signals, and intelligence. Combat service support units are those which provide logistics as NATO defines it, and comprise maintenance, supply, transport, medical, provost, and other administrative units.

Task organizing for multinational logistic support NATO doctrine allows for several multinational logistic constructs, or modes, to enhance an individual nation’s capabilities, ease its logistic burden, and achieve efficiencies and economies of scale: A Logistic Lead Nation (LLN) assumes the responsibility for organizing and coordinating a broad spread of logistic support within a defined area and for a defined period of time, and will also usually take responsibility for one or more full logistic functions, for example transport. It might also act as an LRSN (see below). A Logistic Role Specialist Nation (LRSN) assumes the responsibility for providing or procuring a specific logistic capability and/or service within a defined area and for a defined period of time. This might be a specific part of a logistic function, for example the provision of a particular commodity within a particular class of supply. A Multinational Integrated Logistic Unit (MILU) is formed by two or more nations which agree to provide logistic support to a multinational force, under the operational control of a NATO Commander, at joint force or component (ie maritime, land, air) level. One nation may provide the core command and control elements of the unit, with the other nation(s) providing contingents. A Multinational Logistic Unit (MLU) is formed when two or more nations agree to provide logistic support to a multinational force – but at joint force or tactical level. An MLU normally remains under national command and control. Contractor Support to Operations is recognized by NATO as becoming increasingly important as nations reduce their armed forces, outsource logistic functions, and procure and deploy technically complex weapons and other systems. NATO does not see contracting as a replacement for military capability but does see it augmenting military support

Defence logistics definitions and frameworks

capabilities, being utilized when it makes economic sense, and when it releases military assets for higher-priority tasks. (NATO, 2012: 88)

Defence logisticians often use the terms logistic footprint and logistic laydown. They mean the same thing: the physical presence of the supply, transport, maintenance, engineering and administrative units, facilities and resources in a particular area. As a generalization, the footprint or laydown – the terrain they occupy – is likely to grow as the lines of support deepen from first to fourth.

The logistic functions in more detail Some of the logistic functions which NATO has identified, and which were referred to briefly above, deserve further examination, starting with supply. NATO employs two notable supply-related methods for enabling multinational collective responsibility for logistics, for creating a shared understanding and a common supply ‘language’, and for promoting efficiency and effectiveness in logistic operations. These are the NATO Supply Classification System and the NATO Codification System. Both deserve brief examination.

The NATO Supply Classification System The NATO Supply Classification System puts all materiel into classes: Class I – items of subsistence, such as food, drink and forage, which will be consumed by people and animals. Class II – materiel items, the type and quantity of which are set out in establishment tables or other scaling documents. They include, for example, spare parts, tools, vehicles, weapons and clothing. Class III – petroleum, oils, lubricants, greases and solid fuels. Exceptions are those products used for operating aircraft, which are covered by a sub-classification Class IIIa – aviation fuels and lubricants, and items for use in weapons, such as flame-throwers.

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Class IV – those items which are not scaled according to establishment tables and include, for example, construction and fortification materials. Class V – ammunition natures, explosives and chemical agents.

The NATO Codification System The NATO Codification System is essentially a system for the identification, classification, and stock numbering of supply items which was designed to promote more effective supply management across the Alliance. It facilitates the more efficient and accurate management of item of supply data. It is significant that in addition to all the NATO nations, a further 35 nonNATO nations have adopted it, recognizing the value in a common and uniform way of managing materiel items globally. Every user nation implements the system through its own National Codification Bureau (NCB). In theory, the system promotes standardization and interchangeability, enables more efficient supply operations by giving visibility of its users’ inventories and enabling the sharing of resources, and promotes improved equipment availability because it enables users to identify substitute parts, or alternative sources of parts, when there are shortages. Because it uses a common supply language and promotes the fast and efficient transmittal of data, it should enable users to understand the technical character of items of supply, minimize the risk of duplicate procurement of an item of supply that already exists in the inventory, and benefit from economies of scale. It should also promote more efficient planning and budgeting for inventory purchases, reduce the costs of disposal by enabling nations to pass excess or obsolete inventory to other nations, and provide visibility of sources of supply. In general, it should promote altogether more efficient supply management.

In the NATO Codification System each item of supply will be given a single unique NATO Stock Number (NSN). This satisfies a fundamental principle: One Item, One Number. The NCB of the nation that produces the item is responsible for its codification, regardless of which nation or nations use the item subsequently. An item will be codified according to its Form, Fit, and Function characteristics: Form: the item’s shape, dimensions, size, weight etc, which give it its unique character;

Defence logistics definitions and frameworks

Fit: the item’s ability to link to, connect to, or interface with another product; and Function: the things the item is designed to do. For an NCB to codify an item, the supplier needs to furnish it with appropriate information about the item and its form, fit and function; essentially the item’s data set. This will include: the name, address and contact details of the Design Control Authority (DCA); the name it uses to identify the item; identifying references, such as barcode, drawing number or part number; the materials from which it is constructed; and its dimensions, pressure and/or temperature ratings, electrical characteristics etc. Where necessary, an NCB can create, at short notice (ie within 24 hours), an emergency NSN for an item. This might be appropriate, for example, when a nation needs to bring a new item onto a supply database during operations but cannot delay this while it waits to receive a complete data set from the supplier. It would be expected that in due course the full item data set would be provided. Each NSN consists of 13 digits, divided into three parts: the first part (4 digits): the Group and Class to which the item belongs; the second part (2 digits): the identifying number of the NCB that created the NSN (the NCB code); and the third part (7 digits): a non-significant number which, together with the NCB, uniquely identifies the item. This seven-figure number is assigned to one and to only one item of supply within the codifying country. Using an illustrative item, in this case a petrol injector nozzle, but with a fictitious NSN (2910-99-1324756), the structure of the NSN can be illustrated (Table 2.1). Table 2.1  The structure of the NATO Stock Number (NSN) First part 29

10

Group: Engine Accessories

Class: Engine Fuel System Components, non-aircraft

Second part

Third part

99

1324756

NCB Code: 99 = United Kingdom

Non-significant number. Together with the NCB code, this number uniquely identifies the item.

A Guide to the NATO Codification System is available online at: http://www. nato.int/structur/ac/135/ncs_guide/english/e_1-6-5.htm

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Supply: inventory classification Different national defence departments will employ different methods for classifying their inventory. Such classification will assist in maintaining management control of the item and may also have accounting significance. For clarity, it would be useful to consider some illustrative classes of inventory being utilized for maintenance, repair and overhaul (MRO) in the navy, army and air force of a given nation. We can put this inventory into three categories: those items which are intended to be fixed when they fail, and are therefore classed as ‘repairable’; those items which are classed as ‘non-repairable’ and which are therefore removed, replaced and discarded when they fail; and those items which are classed as ‘consumable’ and are expended in the process of executing MRO activities. Here the word ‘fail’ means the actual failure of an item, in the sense that it breaks or ceases to function as required. However, for our purposes, we should also bear in mind that while defence systems are subject to such conventional failures, they may also suffer damage as a result of enemy action – what is often referred to as battle damage or attrition damage. Because such failures are the result of enemy action, they are inherently less predictable. Furthermore, rather like a family car which is subjected to scheduled servicing, defence systems are subject to scheduled maintenance, during which all three classes of inventory are utilized: ‘repairable’, ‘nonrepairable’ and ‘consumable’. Ideally, for the main battle tank, as much as for the family car, items classed as repairable will hopefully not actually have failed, one purpose behind scheduled maintenance being to prevent such failure. Items classed as non-repairable may, similarly, be degraded but still functioning; they may nonetheless be removed, replaced and discarded. More will be said later in the book about this scheduled maintenance as a means of preventing actual failure, as well as the maintenance activities that deal with putting right the item once it has actually failed. An example of an item in the ‘repairable’ category is a rotor head assembly from a helicopter. It will experience a variety of stresses in operation and will be removed from the helicopter, inspected, put through an assessment of its condition and, dependent on its assessed condition, undergo appropriate maintenance actions. These items, as well as being complex in design, are generally expensive and require careful husbandry. They will often be classed as assets for accounting purposes and will be subject to depreciation, following national government accounting guidelines. They are also likely to be serially numbered to enable them to be tracked as they are

Defence logistics definitions and frameworks

moved through the support chain. In the case of aviation repairables, and those associated with nuclear propulsion or weapon systems, their safetycriticality may demand that they are subject to more complex, auditable management systems. An example of an item in the ‘non-repairable’ category might be the solenoid from a road vehicle’s starter motor. A vehicle electrician might consider it to be technically viable to repair a broken solenoid, depending on its assessed condition, but a business assessment might conclude that the technical challenge, the time and the expense of doing so will be too great for such a repair to make sense. In this case the cost–benefit analysis points to a maintenance action consisting of remove, replace and discard as being most appropriate. However, in the defence context, the resource implications of classifying the solenoid as ‘non-repairable’ might have to come second to an assessment of the operational availability implications. A backlog in supply, a significant change in the cost of removing and discarding the failed item, or a physical threat to the smooth operation of the supply chain in the future might justify a reclassification of the solenoid to ‘repairable’, the decision being, essentially, a trade-off. Items typically found in the ‘consumable’ category are oils, lubricants and cleaning materials. Their classification reflects the fact that they are consumed as they are utilized during MRO activities. It would be overly simplistic to assume that items in this category are unsophisticated and of low value: some consumables, for example specialist lubricants for weapon systems and inert gases for weapon sights and other optical systems, can be very expensive and present particular packaging, handling, storage and transportation challenges. They may be procured and supplied in very small quantities and packed in sophisticated protective storage media, and they may justify very careful management control. Different national defence departments, and different services within them, will employ classifications that suit their purposes. For example, some air forces refer to ‘P’, ‘L’ and ‘C’ class inventory, these being permanent items, classed as capital spares (assets on the balance sheet), limited, or lifed, items which are subjected to limited repair, and consumable items. Another important classification of inventory is that of combat supplies. They are, essentially, the items critical to the immediate battle or operation. Core among them are ammunition, fuel, food and water. As will be seen in Chapter 4, combat supplies are routinely ‘pushed’ forward to military units, recognizing their enduring criticality to successful operations.

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For accounting purposes, the UK MOD classes inventory as: Guided Weapons, Missiles, and Bombs (GWMB); Capital Spares (CS); and Raw Materials and Consumables (RMC).

The UN Hazard Classification System The NATO definition of materiel, as explained above, includes a variety of hazardous items which defence logisticians have to manage in the course of their business, among them ammunition and fuels. A final classification system worthy of inclusion in this chapter is the UN’s Hazard Classification System. As will be seen, it establishes a globally agreed reference framework around which defence, and indeed commercial, logisticians can plan and implement safe methods for storing, transporting and handling hazardous items. The system is codified in the UN publication: Recommendations on the Transport of Dangerous Goods Model Regulations, Volumes I and II, currently in its seventeenth revised edition, prepared by the United Nations Economic Commission for Europe (UNECE, 2011). Known as the UN Orange Book, it defines nine classes of hazardous goods.

United Nations International System of Classification: Class 1: Explosive Substances and Articles. These are assigned to one of six hazard divisions according to the hazard they present: 1.1: Substances and articles that have a mass explosion hazard. A mass explosion is one that affects almost the entire load virtually instantaneously. 1.2: Substances and articles that have a projection hazard but not a mass explosion hazard. Within NATO, HD 1.2 is further subdivided into 1.21, 1.22 and 1.23, based on the distance which fragments and lobbed explosives items may be projected. HD 1.21 is more hazardous than 1.22 and 1.23, and 1.22 more hazardous than 1.23. 1.3: Substances and articles that have a fire hazard and either a minor blast hazard or a minor projection hazard or both, but not a mass explosion hazard.

Defence logistics definitions and frameworks

HD 1.3 is also further sub-divided. HD 1.33 covers the more hazardous items in HD 1.3. They will produce a fireball and project firebrands and some fragments, with intense thermal output. HD 1.34 covers the less hazardous items in HD 1.3. They will burn sporadically with limited thermal output. They will project minor firebrands and fragments. NB: These sub-divisions in HDs 1.2 and 1.3 are not recognized in the UN System of Classification and must only be used as the basis for informing safe storage calculations. 1.4: Substances and articles that present no significant hazard. 1.5: Very insensitive substances that have a mass explosion hazard. 1.6: Extremely insensitive articles that do not have a mass explosion hazard. Class 2: Gases Class 3: Flammable Liquids Class 4: Flammable Solids Class 5: Oxidising Substances and Organic Peroxides Class 6: Toxic and Infectious Substances Class 7: Radioactive Material Class 8: Corrosive Substances Class 9: Miscellaneous Dangerous Substances and Articles, Including Environmentally Hazardous Substances (NB: When items which have been assigned to one of the other UN hazardous goods classes (2 to 9) are made up into items that also contain explosives in Class 1, it is this class that dominates). (UNECE, 2011)

More will be said about how Class 1 (ammunition) and Class 3 (fuels) items are managed in defence supply chains in Chapter 4.

Summary Hopefully, having read this chapter, a reader with little or no prior knowledge or experience of defence would recognize that military forces are hierarchical in character, structured along broadly similar lines regardless

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of country of origin, and have the inherent flexibility to be task organized to best deliver the effects expected of them. Hopefully it will have become apparent that defence logisticians can benefit from the standardized ways of working, the common language of logistics, and the sharing of resources and responsibilities that accompany Alliance membership and operating to globally agreed standards and classifications. Where they are constrained by ‘rules sets’ it is generally in the interests of greater safety, efficiency and effectiveness. Although the other chapters in this book can be read in isolation, it is hoped that the concepts discussed in this chapter will be a useful reference framework for the reader.

References NATO (2012) NATO Logistics Handbook, 1533-12 NATO Graphics & Printing [Online] http://www.nato.int/docu/logi-en/logistics_hndbk_2012-en.pdf [accessed 7 September 2017] NATO (2015) What is NSPO? NATO Support and Procurement Organisation (NSPO) [Online] http://www.nspa.nato.int/en/NSPO/nspo.htm [accessed 16 November 2017] NATO (2017) What is NATO? [Online] https://www.nato.int/nato-welcome/index. html [accessed 5 September 2017] Stoltenberg, J (2017) The Secretary General’s Annual Report 2016, NATO Public Diplomacy Division [Online] http://www.nato.int/nato_static_fl2014/assets/pdf/ pdf_2017_03/20170313_SG_AnnualReport_2016_en.pdf#page=7 [accessed 5 September 2017] UK Ministry of Defence (2017a) About Us [Online] https://www.gov.uk/government/organisations/ministry-of-defence/about [accessed 30 August 2017] UK Ministry of Defence (2017b) Defence Support Group: maintaining military strength, Defence Contracts Online [Online] https://www.contracts.mod. uk/blog/defence-support-group-maintaining-military-strength/ [accessed 7 September 2017] United Nations (2017a) Growth in United Nations membership, 1945–present [Online] http://www.un.org/en/sections/member-states/growth-united-nationsmembership-1945-present/index.html [accessed 30 August 2017] United Nations (2017b) Charter of the United Nations, Chapter VII [Online] http://www.un.org/en/sections/un-charter/chapter-vii/index.html [accessed 30 August 2017] UNECE (2011) Recommendations on the Transport of Dangerous Goods Model Regulations, Volumes I and II, 17th rev edn [Online] https://www.unece.org/ fileadmin/DAM/trans/danger/publi/unrec/rev17/English/Rev17_Volume1.pdf [accessed 7 September 2017]

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Defence logistics:

03

An historical perspective P e t e r D A n t i l l ( e d i t e d by R i c h a r d F i s h e r )

Introduction The term logistics, as we use it today, comes from the French word loger (to lodge) and hence logistique, with Maréchal de logis meaning Quartermaster General, who was in charge of camps, billets and marches and later for all administration. But although the term is relatively modern, it is something that countries, states and civilizations have been doing for centuries, regardless of how they describe it. The Greek word for it, logistikê, meant the ‘art of calculations’, but in a military context was used to refer to those aspects of both strategic and tactical operations that were connected to quantitative methods of calculation, whether related to organization, equipment, movement or combat. Sun Tzu also recognized the importance of logistics: ‘if the army does not have baggage and heavy equipment it will be lost; if it does not have provisions it will be lost; if it does not have stores it will be lost’ (Sawyer, 1994: 197). The aim of this chapter is to place the rest of the book into its proper context and give historical depth to the discussion and analysis of the logistic concepts that are to follow. It will seek to examine the scale and scope of logistics, as well as how it has been practised, through the ages, in order to highlight both what has changed and what has stayed the same, including how logistics has impacted the development of military strategy and doctrine (and vice versa).

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The ancient world For much of human history, people tended to be found gathered together in relatively small numbers, such as in family groups or small tribal communities. However, after the Neolithic Revolution in about 7500 bc, they started to concentrate in larger and larger groups (and therefore larger and larger settlements) owing to the spread of organized agriculture. These groups, though, were still fragile and tended to be based on some sort of federal system. Up until that point, any armed forces that existed were small and their logistic requirements modest. They were mainly concerned with protecting their local area from marauders and barbarians or kept in reserve by the monarch or emperor because it was generally recognized that few rulers could organize, control, deploy and supply troops over anything more than around 90 kilometres: The king or emperor used his professional army in reserve to dominate, to cow. But everyone knew that it would take a formidable logistic exercise to employ it. As long as local elites handed over tax or tribute, their own local control would not be interfered with. (Mann, 1986: 174–5)

As time passed and civilizations arose and increasingly came into contact with each other (thus establishing political relationships and rivalries), armed forces became a means to project ‘power’ and dominate other civilizations and a means to resist domination. Such ancient armies managed to project military power, often more efficiently than the armies of the 19th century. By 700 bc the Assyrians had formed the earliest-known standing army, which was equipped with chariots, weapons and armour all made from iron. At about the same time, city defences and fortifications had improved to the point at which actually besieging and capturing a city had become a major undertaking. Such a projection of military power had complex logistic requirements, for not only did the army itself have to be moved and supplied, but it needed specialist equipment to undertake a siege, some of which were large, heavy items. This could include battering rams, siege towers and catapults as well as a secure supply of arrows and other missiles. All armies of this period and beyond, up until the invention of the railway, were familiar with a simple problem that arose once the army was out of its own country or empire, where it could draw supplies from bases, depots or forts. Unless a commander had had the foresight to stockpile supplies and arrange for its transportation, or arrange for supplies to be acquired from friendly (often ex-patriot) communities along the route, once an army stopped for any length of time the available food in that area would quickly be consumed. It would thus be forced to move on,

Defence logistics: an historical perspective

whether it wanted to or not. Such a problem was exacerbated by the growing numbers of animals used in warfare during this period – horses, mules, oxen, camels and elephants. The best time to arrive anywhere would be just after the harvest, when the entire crop would be available for requisitioning. In some cases, special logistic units were set up to obtain and train horses as cavalry mounts. For example, the musarkisus, the logistic branch of the Assyrian army, procured and processed 3,000 horses a month, something not repeated until the Napoleonic Wars (Thompson, 1991; Gabriel, 2007).

Ancient armies – logistic requirements In the Iron Age, the logistic requirements of armies grew in both volume and complexity, primarily due to the use of new technology, the size of armies fielded, the increased use of animals, and their willingness to project military power away from their home base. For example: an army of 65,000 troops (roughly the size of force Alexander the Great initially fielded) needed 195,000 lb (88,450 kg) per day to meet the soldiers’ minimum nutritional requirements and 375,000 lb (170,097 kg) of forage a day for the animals; a Roman army of around eight legions (approximately 40,000 troops) required 1,600 blacksmiths and craftsmen to maintain its equipment, as well as 21,000 gallons of water per day for the soldiers, while the animals required another 158,000 gallons of water; an Indian army from the Mahabharata era (around 400 bc) had 6,561 chariot horses and 19,683 cavalry horses to feed and water, while Darius III had 40,000 cavalry at Arbela and Alexander had 31,500 Macedonian and mercenary cavalry at Hydaspes (Gabriel, 2007).

Logistics in classical Greek warfare was very much like that encountered in other parts of the ancient world. Both Philip of Macedon and his son, Alexander, advanced the art of logistics in this period. Philip realized that large numbers of pack animals and carts to carry baggage for both the troops and their dependants actually limited mobility and restricted the army to moving across terrain that would provide suitable fodder for the number of animals it had. He made his soldiers carry their own equipment, as well as some rations, and banned dependants. Alexander followed his example. Other armies during this period still used large baggage trains to ease their soldiers’ loads. The load carried by the Macedonians only slightly reduced the range of their daily marches, and the reduced number

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Table 3.1  The Macedonian army’s daily grain, forage and water requirements Number

Daily ration Total weight Daily ration Total weight Daily ration (grain, lb) (grain, lb) (forage, lb) (forage, lb) (water)

Total weight (water, lb)

Personnel

65,000

3

195,000

N/A

N/A

0.5 gal (5 lb)

325,000

Horses (cavalry)

6,100

10

61,000

10

61,000

8 gal (80 lb)

488,000

Animals carrying baggage

1,300

10

13,000

10

13,000

8 gal (80 lb)

104,000

Animals carrying provisions

1,121 (G) 1,492 (G+F) 8,400 (G+F+W) (G) (G+F) (G+F+W)

10

11,210 14,920 84,000

10

14,920 84,000

8 gal (80 lb)

672,000

Total Weight (lb)

280,210 372,840 2,100,000

Note  The table attempts to show daily requirements in terms of weight of supplies needed for three different availability scenarios. The first is where the army just needs to transport grain (G), the second is where the army needs to transport grain and forage (G+F) and the third is where the army needs to transport grain, forage and water (G+F+W). Each additional item that must be transported adds to the daily requirement, not only in terms of the item itself but also in terms of the additional animals that are required to transport it. So, for example, if the army has to transport both grain and forage, its daily requirement goes up from 280,210 lb (195,000 + 61,000 + 13,000 + 11,210) to 372,840 lb (195,000 + 61,000 + 61,000 + 13,000 + 13,000 + 14,920 + 14,920), not only because of the forage needing to be transported but also the army needing 1,492 animals to carry provisions, instead of the 1,121 that were needed if it just had to transport grain. (Engels, 1978)

Defence logistics: an historical perspective

of animals and carts meant a reduction in the fodder they had to find, and a reduction in the number of people involved with caring for the animals and cart drivers (Table 3.1). Fewer carts lessened the difficulty in getting them over rough terrain and the need for wood (to make spare parts). Alexander was, however, ‘more lenient than his father over the question of women accompanying his army; which was sensible in view of the length of time his soldiers were away from home’ (Thompson, 1991: 12). Alexander also made extensive use of his fleet to provide logistic support. A ship of that time could carry around 400 tons (406,419 kg) of supplies, whereas a pack animal, for example, could carry around 250 lb (113 kg) but would eat 20 lb (9 kg) of fodder a day, thus consuming its own load in just over 10 days (Engels, 1992: 20, 26). This, then, was the primary limitation on overland transportation. Alexander was aware of this: when deciding to winter with his army, he would choose a location with plenty of land available to be cultivated, and close to a navigable river or ocean harbour.

Sea-based logistics: a force multiplier In the ancient world, the lack of endurance of fighting ships was inherent in their design, meaning that they were more difficult to sustain than land forces. The broader-beamed, more seaworthy, merchant vessels could carry enough provisions to support their crews but were unsuitable for the tactics of the time. It wasn’t until the Europeans put artillery aboard the ‘stout, broad-beamed, deep-bottomed merchantmen of the early sixteenth century AD, thus combining fighting and logistic capability in one vessel, that ships became instruments of remarkable endurance and hitting power. They reached the pinnacle of their logistical potential in the Napoleonic Wars’ (Thompson, 1991: 17). In the mid-19th century, navies started to adopt steam power and coal as fuel, which limited their endurance, but despite the need for coaling stations, warships could still carry food, water, fuel and ammunition for great distances and at a greater speed than a horse (the main motive power for land forces), and so had greater logistic independence than armies. The move to oil increased range by around 40 per cent, due to its being a better energy source. The Second World War saw the emergence of the fleet train and underway replenishment, meaning that ships could stay at sea for (literally) years, with steadily longer intervals between scheduled maintenance periods (Thompson, 1991).

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Broadly, the logistics practised by the legions of Rome did not differ greatly from that of their predecessors. Strategically, during the early Republic, Roman forces were not as dependent on an organized logistic system, as they were small and usually deployed in areas close to Rome itself or in allied territory. Supplies could be requisitioned from the local population and shipped the relatively short distances overland, or the small numbers of troops involved permitted to forage extensively. Eventually, however, Rome found itself having to conduct campaigns further and further afield from its home base, and so it was with the Second Punic War (218–202 bc) that they developed a sophisticated logistic system. On top of that, the number of soldiers under arms continued to expand until by the end of the Republican period, armies of around 100,000 were common, thus making it difficult for those armies to stay in one area for more than a short time and be able to supply themselves, either by requisition or foraging. Added to the problems of distance and troop numbers was the problem that campaigns often took place in theatres that were less than ideally suited to providing logistic support to a large armed force, such as Greece, which was poor in terms of the availability of food. In addition, while the Republic’s early wars were national in character (the aim being to crush an enemy of the state), many of the later wars were civil wars and so the strategic objective (and the operational doctrines that followed) became one of trying to force the enemy to surrender rather than destroying them, thereby leaving their forces intact and able to be ‘recruited’. This tended to emphasize wars of strategic movement and positioning, rather than direct frontal assaults, requiring an armed force that was highly mobile and able to supply itself at a distance, without being overly dependent on land-based supply routes which could be cut by enemy cavalry. Civil war generals also had to take account of the possibility that they would have to come back and secure their recruitment areas again once the campaign was over. Therefore, over time, the sea, as a medium by which Rome could both deploy a large armed force at great distance from the home base (ie project military power) and keep that force supplied, gained in importance (Roth, 1999; Rabaut, 1962). The ‘Romans were well aware that moving supplies by ship was far less expensive and much faster than conveying them by land’ (Roth, 1999: 190). As the Republic transitioned to the Empire, the practice of raising armies specifically for each campaign and supporting them from a central location proved unsustainable, and so, with the establishment of a (widely dispersed) standing army, each province became responsible for the support of its garrison. If an expeditionary operation needed to be undertaken, the nearest provinces would

Defence logistics: an historical perspective

be made responsible for collecting the required supplies and then an operational base (stativa) would be chosen (the Romans preferred to use cities, but would create one from scratch if necessary), which would link the army in the field with its strategic base, or even the homeland. Tactically, the length and speed of an army moving in column depended partly on its size and composition, but also on the size of its baggage train (Latin: impedimenta) and the amount of supplies carried. There were four kinds: a troop train (attached to an individual unit), an army train (carrying supplies and equipment common to the entire force), an officers’ train (carrying their personal equipment) and a siege train. The estimates on the number of pack animals accompanying a legion vary widely. Most realistic estimates place the number of pack animals between 1,000 and 1,500. Assuming two per squad, this would equal 20 per century for a total of 1,200 for the legion. Adding another 60 for the cavalry, a similar number for the centurions and 70 spares equates to a total of 1,400 animals, or one animal per 3.4 men (Roth, 1999). A large, heavy baggage train would slow the army down, owing to the number of animals and wagons used and the requirement to find large amounts of fodder for them on a regular basis. Wagons (plaustra), while being able to carry more, also limited the army to certain types of terrain. Roman commanders regularly tried to limit the baggage train in order to speed the army’s movement, much like Alexander. There were, however, some differences in Roman army logistic practice when compared to other armies of the time, the main one being that each squad of eight men (Latin: contubernium) was expected to prepare and cook their meals from issued rations, rather than relying on a central kitchen (as many modern armies do) or the individual soldier purchasing food, as practised by the Greek hoplites. They would also, on occasion, use prepared rations when the tactical situation meant that stopping to forage for wood and light camp fires was impractical. Whatever the exact makeup of the Roman ration, it is clear that it was perfectly adequate in terms of both quantity and quality to enable the legionary to remain well fed, by historical standards (Roth, 1999). A general would sometimes partially abandon the baggage train in order to speed up operations. Metellus left part of his baggage train behind and loaded the pack animals with water so that his army could cross 50 miles of desert quickly, to capture the town of Thala by surprise during the Jugurthine War (112–106 bc). His son used the same tactic when he marched an army with only five days’ supplies to take the Spanish town of Langbrigae during the Sertorian War (80–72 bc). Cestius Gallus abandoned his baggage train altogether to move more quickly

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during his retreat at the start of the Jewish revolt in AD 66. Of course, while abandoning your baggage train, at least temporarily, could confer tactical advantages, there were also risks involved, especially those associated with being separated from your main line of supply. Writers of the time, including Vegetius, drew attention to the importance of supply and of making preparations before a campaign started, including requisitioning fodder, grain and other provisions from the local area and storing them in well-fortified bases or depots.

The Middle Ages Charlemagne, in establishing a system of calling men to arms under local nobles, encouraged the creation of feudalism in Western Europe. He understood very well the limitations of using pack animals, as well as horse- or ox-driven wagons and carts while on campaign. The poor logistics of Frankish armies up to that time meant they could not project military force very far and usually dispersed after only a short period. Charlemagne developed a logistic system that included a supply train that held enough supplies and equipment for several weeks campaigning, fortified depots along the line of march, and lines of supply that were protected by strongholds in frontier areas (burgs). This enabled him to campaign for extended periods of time up to 1,000 miles from the centre of France, and maintain armies in the field or in a siege during the winter, a feat almost unknown since the end of the Western Roman Empire (Thompson, 1991; Bachrach, 1993). The same could be said for the Saxons. King Henry I, however, made a concerted effort to protect Saxony from the Magyars with ‘a defense in depth based upon strategically located strongholds and reinforced with a mobile field force’ (Bachrach, 1993: 64). His attempts to ‘build a coherent system of fortifications in Saxony, which had both regular garrisons and an efficient system of supply based upon service by landholders and a tax on their produce, has more than a passing resemblance to the efforts made in contemporary Anglo-Saxon England by Alfred the Great and Edward the Elder’ (Bachrach, 1993: 64). An example of the projection of military force away from the home base during the Middle Ages is the Norman conquest of England. William of Normandy commanded an army with around 14,000 men and between 2,000 and 3,000 high-quality horses. For the invasion, it was encamped on a 280-acre site on the shores of the Gulf of Dives. During the month of August 1066, the force required around 4,000 tons of foodstuffs. Each

Defence logistics: an historical perspective

day, the men required 28 tons of unmilled wheat grain and 14,000 gallons of clean water, assuming they had only cold mush and water. The horses required between 12 and 18 tons of grain, between 13 and 20 tons of hay, between 4 and 5 tons of straw and between 20,000 and 30,000 gallons of fresh water. There were, however, additional requirements to encamp such a force, including 36,000 calf skins for tents, 8,000 to 12,000 horseshoes and at least 75,000 nails (around 8 tons of worked iron), along with at least 10 blacksmiths (assuming each worked 10 hours a day, every day). Finally, someone had to clear between 2 and 3 million pounds of horse manure from the site during the army’s stay. For the actual invasion, William would need a fleet of ships able to carry a large number of valuable warhorses in battle-ready condition across the English Channel, something unseen since the invasion of Britain by Julius Caesar in 54 bc. With the aid of contacts in southern Italy and Sicily, William obtained the designs for Byzantine transports capable of moving warhorses, and commissioned naval architects to begin building. In all, William built around 700 ships, including 200 horse transports, in around eight months. He also recruited, paid, and provisioned the army, moved it to Saint-Valery-sur-Somme where it encamped, made the crossing itself and conducted operations on English soil, including the Battle of Hastings on 14 October 1066 (Bachrach, 1993). Another example is the Crusades. An appeal by Emperor Alexius of the Byzantine Empire to the Pope in 1095 for help in clearing Anatolia of Turks was made in the hope that a force of a few thousand mercenaries might be sent. Instead, things quickly escalated and the result was a series of military expeditions to the Middle East which led, eventually, to a massive leap forward in the military art practised in Western Europe. Although the First Crusade (1096–1099) resulted in the capture of Jerusalem, it still holds many lessons about the conduct of a campaign on foreign shores. The main contingents of the force of around 50,000 personnel came from Normandy, France, England, Sicily, Germany and Flanders, all of whom had a variety of different motivations for going. Grouped under 10 leaders, it was undisciplined, and at times no better than a rabble, with friction between the different factions and distrust of the Byzantines, a feeling that was mutual. The Crusaders were not interested in fighting to regain Byzantine lands, and the Byzantines were not interested in retaking Jerusalem. The lack of an organized supply system almost caused it to fail twice. While trying to capture Antioch, the Crusaders almost starved, only being saved by the unexpected arrival of small English and Pisan fleets. After taking the city, they were besieged in their turn and cut off from the ports, almost starving a second time. However, the discovery of a holy relic inspired them; they

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sortied from the city and defeated the enemy force. The following year saw a reduced army move to retake Jerusalem. Initially, it seemed as if they had learnt the logistic lessons of the previous year. There was far less friction in the army and much better cooperation between the national contingents. They also kept close to the coast and had the Pisan fleet close by to give logistic support until, of course, they turned inland towards Jerusalem. They found that they were too few in number to besiege the city properly. The Governor of Jerusalem had moved all the livestock in the local area into the city and poisoned many of the wells, while the supply lines to Jaffa were 30 miles in length and so could not be kept secure continuously. With time not on their side, they mounted an assault without siege weapons, and although they overran the outer walls they could not breach the inner ones and had to withdraw. Things started to look up with the arrival of the English and Genoese fleets at Jaffa. The Crusaders advanced towards Jerusalem once again, but moving the army and its now large baggage train took time, as did trying to source suitable timber with which to build siege engines, with the nearest source being some wooded hills near Nablus some 50 miles away. Eventually, three large siege towers and a quantity of scaling ladders were built, but things were looking desperate once again. The Crusaders were sending parties as far as the River Jordan to find water but they seldom brought back enough to satisfy all their requirements and so animals started to die. They then received word that a large Egyptian force was on the way to relieve the city. Desperation obviously bred courage and conviction. After a sustained assault, beginning at night on 13 July 1099, they eventually took Jerusalem two days later (Thompson, 1991). The second Crusade (1147–1149) is perhaps a prime example of how not to conduct a campaign, especially from a logistic point of view. Two armies were involved, a German army under Emperor Conrad III and a French army under King Louis VII, which set out to recover Edessa. The German army arrived first and upset the local inhabitants by pillaging. The French army arrived second, and while it behaved much better, it found that the locals had been so alienated that they hid what little food was left. When they arrived in Constantinople, relations between the two armies failed to improve, especially when the Germans refused to sell any of the food they had collected to the French. Both armies, and the Byzantines, disliked and distrusted each other. This hostility caused Conrad to march across Anatolia first. Not only did he split from Louis but he also split his army in two, one group going through Central Anatolia, the other via the coast. Both groups were individually routed by the Turks, with few survivors (which included Conrad) making it back. Louis initially made good progress but his army

Defence logistics: an historical perspective

too was badly mauled by the Turks at Laodicea. Now desperately short of food, Louis retreated to Attalia but found that the local population too was short of food and resented the Crusaders’ presence, understandably as the Turks had followed them and then besieged the city. Louis was forced to evacuate the city, with him and his cavalry being transported in two successive lifts. His infantry, however, were left to make their own way overland back to Antioch, and few survived this example of poor leadership and administrative decision making. The final phase of the second Crusade was no better, in terms of both tactics and logistics, than what had gone before. Conrad and Louis, now joined by Baldwin of Jerusalem, decided to lay siege to Damascus, against advice. Not only did they set their siege lines against the strongest part of the city’s defences, but they placed their camp in an area with little water. Unsurprisingly, the siege failed (Thompson, 1991). The third Crusade occurred 40 years later (1189–1192), after the defeat of the Christian armies at Hattin and the capture of Jerusalem by Saladin. This expedition was far better managed than its predecessors and led by three kings, two of whom were experienced and able solders – King Richard I (England) and King Frederick I (Germany). The other monarch was King Philip II of France. Frederick was first in theatre and, leading his force through Anatolia, managed to rout the Turks and capture Iconium. Disaster then struck. Frederick drowned, and his son, not being of the same ability as his father, was defeated by a Turkish counterattack and lost most of his men. A year later, Philip, and then Richard, arrived at Acre, where the Christian armies had been besieging the city for almost two years. Assuming command of the entire force, Richard managed to quickly boost morale and after successfully beating off relief attempts by Saladin, the city surrendered. After Philip left for France, Richard set out for Jerusalem. Logistic arrangements were far superior to what had gone before, with Richard marching along the coast to maintain contact with his fleet. He kept his marches short to conserve the strength of his men, and even organized a laundry service to provide clean clothes. After defeating Saladin at Arsuf, he set out for Jerusalem, pausing at Jaffa. Unfortunately the winter rains caught up with them and his men suffered. Recognizing this, he turned around and marched back to Ascalon on the coast. The following spring he set out once again, but this time Saladin employed ‘scorched earth’ tactics as he retreated, destroying crops and grazing areas and poisoning wells. Because of the difficulty in foraging for supplies, Richard eventually halted at Beit-Nuba, concluding that he could not risk his army by besieging Jerusalem, and even if he did, and captured it, it was unlikely that the Christian army would have been able to hold it after his return to England, a move becoming ever more

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urgent given his brother John’s actions in his absence. With his logistic situation improved by the capture of a large resupply caravan (which he led personally), he withdrew to Acre, only to find out that Saladin had captured Jaffa with a surprise attack. Reacting quickly, he dispatched most of his army overland, while taking a small force by sea. Although initially thinking it was a lost cause, a priest swam out to Richard’s ship and explained that there were defenders still in the Citadel but who could not hold out for long. Richard led his small force (54 knights, a few hundred infantrymen and around 2,000 Genoese and Pisan crossbowmen) straight into the city and routed Saladin’s men, helped by a large number of prisoners who seized their weapons upon seeing the Turks’ disarray. He even managed to beat off a hastily arranged counterattack by Saladin (Thompson, 1991). The Crusades show both the best and worst of the Western military art during the Middle Ages. It has been shown that, despite the commonly held belief that Western Europe descended into an era of anarchy and barbarism after the fall of the Western Roman Empire, there were campaigns fought and projects undertaken that point to rulers being able to utilize sophisticated logistic systems. It also has been shown that in some cases, lessons needed to be re-learnt from the time of Alexander. This was first the importance of logistics in general, and second the need to plan logistics properly, or fail.

The early modern era There seems to be a relative continuity between the logistic problems of the 16th and 17th centuries and the Middle Ages. While the increased use of guns (both artillery and small arms) might be thought to have made a substantial difference, the evidence suggests otherwise. Artillery was not expected to fire more than five or six rounds a day and so there was little need for a huge supply of ammunition. While the size of armies did increase, it wasn’t out of all proportion to those found in the Middle Ages. The main cause for concern tended to be how to keep the army in the field and support it, rather than fighting the enemy. The difficulties that were caused by inadequate logistics were the same, regardless of whether it was: Henry III’s failure to ensure adequate provisions for his army in North Wales in 1245; the failure of Edward II’s expedition to Scotland in 1322 owing to Flemish pirates preventing his supply ships from reaching him; having too few cooks and bakers during the Angevin invasion of Normandy in 1136; the inability of Spain to put down the revolt of the Low Countries (1567–1659); the British

Defence logistics: an historical perspective

defeat in the American War of Independence (1775–1783); or Napoleon’s disastrous invasion of Russia in 1812 (Prestwich, 1996; Thompson, 1991). The British defeat in the American War of Independence highlighted many problems within the logistic system of the army at that time, such as its inability to obtain a dependable source of provisions within the colonies, which fostered a continuing level of dependence on supply from the home base, the lack of cooperation across departments and services, and the lack of specialists. That the British were able to correct many of the problems before the end of the war is to their credit, but what was done came too late to affect the outcome. The system’s internal problems emanated from having three separate bureaucracies supporting the army abroad. These were the Treasury Department, the Navy Board and the Ordnance Board. While there was a division of responsibility, it was not rigidly enforced and a certain amount of duplication of effort occurred. In theory, the Treasury Department had overall responsibility for supplying the army in North America, as well as responsibility for food supplies. The Navy Board was responsible for transportation, clothing, medical supplies, tents and other camping equipment. The Ordnance Board was responsible for artillery, small arms, ammunition and engineers (Tokar, 1999). At the outset of hostilities, a major issue was that the British army in North America was a colonial garrison force and there was no general staff in Britain to serve in overall command. Indeed ‘there were no army officers in the chain of command above the regimental level before the Revolutionary War. The result was a sharp learning curve for those appointed to staff positions in the various boards and departments created to support the army in the field’ (Tokar, 1999: 42). In addition, there was the Quartermaster General’s Department, which had existed since 1689 and was the army’s senior service department. However, in those days, the Quartermaster General had a range of duties, not all of them related to logistics. He acted as a ‘chief of staff’ to the commanding general, was responsible for coordinating the rest of the general staff, and could also serve as a troop commander, none of which left him much time to concentrate on matters of supply. The next largest department in the service corps was the Army Commissary. The Commissary General was a civilian post and the staff in the colonies gradually expanded to around 300 personnel. The supply of fresh food became a serious problem for the British as the first Commissary General (Daniel Chamier) was both dishonest and inept. He consistently failed to accurately report the total number of individuals in the colonies that required feeding to the Treasury, usually being short by around 4,000 rations. The Barracks Master General was responsible for ensuring the troops had proper quarters while stationed in

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the colony, as well as providing the equipment they needed to live while in the field, and firewood (later coal) (Tokar, 1999). Under normal circumstances, the logistic system was capable of supporting a force in the colonies over a 3,000-mile supply line that stretched back to Britain, a major feat in and of itself. However, when the operational tempo started to rise, the problems started to make themselves felt increasingly. Both corruption and profiteering were serious issues within the British logistic system. Many practices that would be defined as corrupt and therefore illegal today were not crimes under British military law at the time. As an example, Commissaries regularly kept a small amount of the butchered livestock for themselves, usually the head, hide and tallow, which would be sold for personal profit. Many issues of profiteering were subsequently resolved but caused a significant diversion of resources and effort.

The modern era Although military action took place in the Baltic, Caucasus and Balkans as well as in the Crimean Peninsula, it is the last of these that has given its name to the conflict that erupted in July 1853. In the UK, the Crimean War is ‘principally remembered for three reasons: the Charge of the Light Brigade, maladministration in the British army, and Florence Nightingale. However, this war, fought by an alliance of Britain, France, Turkey and Sardinia against Russia, is far more complex’ (The National Archives, nd). Indeed it was, being a product of not only Great Power rivalry in the Middle East and Eastern Mediterranean, but also of religious tensions between Russia (Orthodox), France (Catholic) and Turkey (Islamic) as well as the control of access to religious sites in the Holy Land (Williamson, 2016). Both the British and French quickly found that logistically supporting the projection of military power into the Black Sea in the 1850s was a very different proposition from when they fought in both the Iberian Peninsula and the Low Countries some 40 years before. First, the latest muzzleloading rifled muskets had a higher rate of fire than smoothbore muskets and therefore put additional pressure on the logistic system as regards ammunition resupply. In addition, this situation was complicated, as far as the British were concerned, by having more than one small arm in widespread use, exacerbating the problems of ammunition supply. Second, modern artillery fired shells that burst and therefore, unlike cannon balls, could not be salvaged for reuse. Third, the armed forces of both the UK and France had steam-powered ships and railways at their disposal,

Defence logistics: an historical perspective . . . which not only carried men, horse, artillery and supplies at high speed in great quantity but also hastened the dispatch of information and orders – the latter function supplemented by simplex (one way working) telegraph networks as they spread across Europe, rendering semaphore stations obsolete. (Macksey, 1989: 9)

The problems facing the logistic support to operations in the Crimean Peninsula took time to put right as ‘there could be no systematic and organized rectification of what was wrong until the Commissariat was properly staffed and what became known as the Land Transport Corps was formed and sent out’ (Macksey, 1989: 12). For one thing, bureaucratic rules and inter-agency rivalry hindered the Commissariat and Land Transport Corps from cooperating efficiently. Staffing remained a problem as many of the personnel drafted in were rarely expert, energetic, competent or even trained. However, the situation was rescued by another individual, Colonel William McMurdo, who arranged for agencies to be opened throughout the Middle East in order to purchase mules, and after sufficient officers had arrived, McMurdo took command of the Commissariat transport and absorbed the Hospital Conveyance Corps. The Corps also supervised the clearing of the port of Balaclava and construction of a light railway to the front lines, with the help of both civilian contractors and military engineers. This pointed to the development of military engineering as an important logistic service, with the engineers also taking responsibility for running the 340-mile cable link installed in early 1855 by the English Electric Telegraph Company between Balaclava and the siege lines at Sebastopol. By the end of the war, the final capacity of the Land Transport Corps was three days’ rations for the 58,000 troops and 30,000 horses, 200 rounds of ammunition per man for 36,000 men, and 2,500 men in ambulances. It is a tribute to those individuals who struggled to overturn the decay of the past that the British army (after a terrible winter) was able to resume offensive operations in mid-1855 and, with French help, eventually capture Sebastopol in September, with an armistice being signed in February 1856. By that time, the logistic system supporting British forces in the Black Sea theatre had surpassed that of the French (Macksey, 1989; Sutton, 1998). British forces were well fed, had adequate shelter and plenty of clothing – no one could have taken the smart, clean troops seen on the Uplands in January, 1856, for the same careworn, overworked and sickly soldiers of the trenches of January, 1855. That this changed situation was clearly related to properly organized, well-balanced logistic support was not in doubt. (Sutton, 1998: 12–13)

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The American Civil War (also known as the War Between the States) was one of the most important wars in US history. There is still debate as to exactly how many casualties were suffered, with some modern estimates suggesting that actual figures might be as much as 20 per cent higher than the generally accepted figure of 620,000 (Cohen, 2011). If so, that would still mean that more casualties were suffered during the Civil War than all of the other wars combined. The death rate suffered by the Confederacy was three times that suffered by the UK during the First World War and the states of the Confederacy were fought over, decimated and occupied in a way not seen in the UK since the Norman Conquest (Kirkpatrick, 2013). The American Civil War is interesting for several reasons, all of which gave pointers to the future of warfare and would culminate in the experience of the First World War. These were: ●●

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Technology: The war saw the widespread use of emergent battlefield technology such as small arms that were capable of increasingly rapid fire (such as the rifled muskets used in the Crimean War) but also machineguns, trenches, wire obstacles, fortifications and airpower (in the form of observation balloons). In addition, advances had been made in the last few decades related to the storage of food and drink, including the bottling of heat-sterilized preserved food by Nicolas Appert in 1809, the development of tin-plate canisters by Peter Durand in 1839, the culmination of Louis Pasteur’s research into fermentation in 1864 (‘pasteurization’) and the advances in dehydration techniques making possible the issue of ‘dried’ eggs, fish and vegetables. Context: The war featured two determined opponents, space for large armies to manoeuvre, reasonably competent generals, sizeable populations from which to draw troops and, being well into the post-Industrial-Revolution era, the means to equip them. In this scenario, each side may lose more than one battle (or even campaign) but the war itself will end only when one side perceives the ability to sustain its war-fighting capability and continue the struggle (either in terms of materiel or the will of the armed forces and civilian population) has been compromised beyond a reasonable chance of recovery. In addition, the lack of preparedness at the outset (of both the armed forces in general and in their logistics in particular) contributed to the length of the war. Cost: As a corollary to the above point, combat between two such opponents featured heavy casualties in personnel, horses and equipment. Any sort of system designed to replace losses on this scale (not only the recruitment, training and equipping of new personnel, breaking in and training

Defence logistics: an historical perspective

new horses and mules and the production of war materiel, but caring for the wounded and the repair of damaged equipment as well) needs time to be set up and become effective (Thompson, 1991). ●●

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Strategy: The war showed the importance of having a strategy that not only takes into account your side’s logistics, but also the opponent’s. Robert E. Lee and Thomas ‘Stonewall’ Jackson were masters of the operational art, but it is logistics that enabled the North to field large enough forces and sustain them in the field to allow Grant to pin Lee in Virginia, preventing him from dispatching troops to reinforce the Confederate forces facing Sherman in Tennessee and Georgia. Sherman was therefore able to attack and demolish the South’s vital supply and communications centre in Atlanta and then march from Atlanta to Savannah, supplying his army by foraging, fighting only skirmishes along the way, an example of what many describe as the ‘Indirect Approach’. His less well-known march from Savannah, Georgia to Goldsboro, North Carolina, was far more arduous, due to the heavy rain rather than Confederate resistance, as Johnston’s efforts at concentrating his forces by rail were frustrated as the lines also supplied Lee (Thompson, 1991). Communications (Railway): Both sides found that, although the railway could speed up the movement of troops and supplies, the lines did not always run in the direction in which they wanted to conduct their campaign. If the armies moved away from the railheads then supplies would have to be transported as in centuries past, by wagon to the ‘consumer’, and the speed of that would depend on distance, the road system (or lack of it) and the availability of lift (ie wagons and animals). Communications (Shipping) – Looming over everything the Confederacy did was the Union’s naval blockade, implemented on the eve of war and controlled by General Winfield Scott. It was a weapon that they could not hope to defeat, not because of lack of manpower, but because of a lack of warships. The best they could do was to rely on fast ships that could outrun the blockade and occasionally hit back with commerce raiding. Communications (Road) – Harking back to the Napoleonic Wars (and even to the wars of antiquity), if the army had moved away from the railhead or port, then the only way to keep it supplied was to use wagons, with the standard army wagon measuring 10 ft × 3.5 ft (roughly 3  m × 1  m), drawn by four horses or six mules and capable of transporting between 1,800 lb and 4,500 lb (816 kg to 2,041 kg) depending on the condition of the roads and the weather, with an average in good

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weather of around 3,000  lb (1,361  kg). An army of around 80,000 men with 35,000 horses would need grain and fodder amounting to 1,150,000 lb (522 tonnes) per day, which would need to be transported by 380 wagons.

The World Wars Was the First World War really that different? Like the wars of antiquity, the First World War saw a large number of animals play a leading part in providing logistic support to armies in the field. While the British shipped 5,253,538 tons of ammunition including 170 million shells to the Western Front, by far the largest commodity that was shipped across to Europe was oats and hay – 5,438,602 tons (Thompson, 1991).

The First World War saw a massive increase in the demand for war mat­eriel, especially ammunition of all types. There were three reasons for this. First, the numbers of troops many countries now fielded, not only in the regular force but in the reserve as well, had increased. Even as late as the Franco-Prussian War, most armies were similar in size to that found in the Napoleonic Wars; for example, the French mobilized only around 570,000 troops for that conflict. The First World War saw troop strengths that were an order of magnitude larger. For example, on the Western Front alone, the British army reached a peak strength of just over 2 million troops (Baker, 2017), while in August 1916, the Germans had some 4.85 million troops in the field (Simkin, 2015) and France called up over 3 million soldiers at the start of hostilities. Such an expansion of numbers that armed forces could call upon, as a consequence of having a reservist system and the growth in populations right across Europe, would put most countries’ supply systems under pressure like never before. An additional layer of complexity was that the fighting occurred in a number of theatres outside Europe, such as the Middle East, East Africa and the Pacific, as several of the major combatants had empires, such as France, the UK, Germany and Turkey. Second, in the century after the Industrial Revolution, technological change had continued apace and even accelerated, changing the character and composition of the equipment that had to be supplied and maintained. The late 19th/early 20th century had seen the introduction of magazine-fed bolt-action rifles

Defence logistics: an historical perspective

which had far higher rates of fire than weapons that had been in widespread use only a few years before. It had also seen the widespread introduction of machineguns capable of fully automatic fire, and quick-firing artillery. While there were differences in the relative size, structure, doctrine and tactics between the armed forces of each of the major powers, the one thing that united them all was a complete underestimation of the consumption of ammunition, which on the Western Front grew worse as the war entered its static phase, and in some cases caused political uproar.

The shell scandal The ‘shell crisis’, or ‘shell scandal’ as it became known, was a political crisis that occurred in the UK after the publication in May 1915 of an interview given by Field Marshal Sir John French – at that time the Commander-in-Chief (CinC) of the British Expeditionary Force (BEF) in France – to The Times correspondent Colonel Charles Repington. That the British army was facing a shortage of artillery ammunition was not in doubt, with many countries underestimating the ammunition usage rates that the First World War would generate. Many considered it a major factor in the inability of the British to achieve a breakthrough at the Battle of Neuve Chappelle in March that year. The Chancellor, David Lloyd George MP, believed that British munitions production had to be expanded on a massive scale in order to fight what could turn out to be a long war with the Central Powers (see below). He also believed that the current Secretary of State for War, Lord Kitchener, was not up to the task of overhauling the system as it stood. Lloyd George therefore encouraged Lord Northcliffe (proprietor of both The Daily Mail and The Times newspapers) to publish the details of the interview, with both newspapers attacking the War Office and in particular Lord Kitchener. The political upheaval brought about a change of government to one of coalition (but still under the existing Prime Minister, Herbert Asquith) as well as the creation of a new government department, the Ministry of Munitions, headed by Lloyd George. As a consequence of his interview, French was replaced in December 1915 as CinC BEF by Field Marshal Sir Douglas Haig, while Kitchener, because of his popularity within the country as a whole, remained Secretary of State for War (Duffy, 2009; Fraser, 1983). While it would be easy to ascribe the munitions scandal to a single cause, the causes included: the nation’s unwillingness to become fully committed to the war until it had raged for almost three years; the control and over-regulation of

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industry by Civil Service mandarins; the censorship of the national media which was forced to portray success, despite the huge casualty lists that told the true story; and the political manoeuvrings in both Government and military circles, bordering on the Machiavellian. (Harding, 2015: 7)

Equipping and supporting a massively expanded BEF was no inconsequential task. Whereas France and Germany already had armed forces numbering in the millions and a defence industry large enough to support the scale of expansion necessary to facilitate large-scale mobilization, the UK did not. The size of Britain’s defence industry was commensurate with the maintenance and support of what amounted to an Imperial garrison force, and the UK would have to take what was, essentially, a cottage industry and turn it into one of the world’s largest in less than 18 months. The conversion of current civilian industry would not be enough – there would have to be new factories, which in turn would require land, materials, machinery, construction work and labour. On top of that there would have to be new infrastructure to support these new factories, such as roads, railways, warehouses, trains, motor vehicles, engines, telephone and telegraph facilities along with the ability to connect them to the national infrastructure, which itself would need expanding and upgrading, including additional shipping and port facilities to move the equipment, troops and supplies over to the continent. Even when all that had been done, there would still be a delay as rifles, machineguns and artillery are complex pieces of machinery which take time to manufacture and finish. It would also require a massive change in social structures, relationships and outlook. To fill out the expanding BEF, as well as replace the casualties that were being inflicted daily, required huge numbers of men, even skilled men who had been labelled as doing vital war work. In the move towards the total mobilization of society, conscription was introduced in the UK, first in January 1916 for single men and then in May 1916 for married men, although at the point at which the Battle of the Somme started, such a move had yet to have an impact on the BEF which still consisted predominantly of volunteers. Many of the new units were known as ‘Pals’ battalions and were highly localized in character, as were many of the Territorial Army units. To keep the factories working, it would have to be women (and in some cases children) who filled the positions in an expanding defence industry. This caused something of an uproar, as many men feared that skills dilution would lead to the erosion of many hard-won rights regarding pay, conditions and privileges.

Defence logistics: an historical perspective

It was also seen to challenge the social and cultural perceptions of what constituted the ‘proper’ roles for men and women. Despite initial resistance, however, practical considerations eventually won out. The Ministry of Munitions, in producing a minor miracle in organizing the expansion of British industry to fulfil the demands of modern war, changed the very fabric of British society. By 1918, 1,148,500 women had been employed in jobs, directly replacing men. This doesn’t include the 1,536,000 women who were employed directly on government munitions work, over half of the total so employed. It was still not enough – the demand for workers was so great that employers turned to children (aged between 14 and 16) to fill it, with over 590,000 children being employed during the war (374,000 of them girls) (Thompson, 2016). In many ways, the First World War was a milestone for military logistics. It was no longer true to say that supply was easier when armies kept on the move due to the fact that when they stopped they consumed all the food, fuel and fodder in the local area and having done so would be forced to move on, regardless of how prepared they were. From 1914, the reverse applied, because of the huge expenditure of ammunition and the consequent expansion of transport to lift it forward to the consumers. It was now far more difficult to resupply an army on the move, while the industrial nations could produce huge amounts of war materiel; the difficulty was in keeping the supplies moving forward to the consumer, especially after the start of an offensive, when the armies were moving away from their main supply bases and supply routes would have to go across no-man’s land (Moore and Antill, 2011). After the armistice of November 1918, the Treaty of Versailles and the end of the ‘war to end all wars’, defence budgets naturally contracted. For example, UK defence spending went from a little over 3 per cent in 1913 to a high of 47 per cent in 1918 and then quickly reduced to just under 3 per cent from 1923 onwards (Chantrill, 2017). The economic cost to the UK would, however, last much longer. The Second World War saw the much wider use of vehicles powered by the internal combustion engine, from tanks and self-propelled guns (SPGs) to cars, trucks and motorcycles. The age of the fully mechanized army was dawning, although during the war it was only really the British and Americans who achieved this accolade, with many armies still relying on other means of transport. For example, the German army (Heer) began the war with 103 divisions, only 16 of which were armoured (panzer) or mechanized infantry (panzergrenadier). The remaining divisions had to march, and although there were some 942 vehicles in each infantry division’s

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establishment, they relied on around 1,200 horse-drawn wagons to move supplies, much as the Roman legions had done. As part of the plans for Operation Sealion (the German invasion of the UK), the Army required that 4,500 horses be included in the first wave of landings. All these were organic to the division for use in its operational area, but behind that there were only three transport regiments per army, with a capacity of 19,500 tons. As a comparison, Allied forces in Northwest Europe had a motor transport capability to lift 69,400 tons to support 47 divisions and were still short of lift. Although the Germans massively expanded the number of armoured and mechanized infantry divisions, as well as the overall transport assets of the entire army, they still relied on horse-drawn transport to the very end (Thompson, 1991). This meant that, effectively, they always had two separate forces, one fast and mobile, the other restricted to the marching pace of the infantry, and it required strict control to ensure that the infantry did not impede the supply convoys of the fast-moving armoured spearheads (Van Creveld, 1977). That the German army was so dependent on horsedrawn transport is not widely known; it was one of the main reasons that the German attack on the USSR failed. Time and again the panzer divisions rapidly outstripped the supporting infantry and had to wait for them to catch up, plus when winter came, thousands of horses were lost to the cold, all of which had to be replaced. The problems of providing the necessary forage under those conditions, so far from the home base, and having to cope with a limited amount of railway infrastructure, are hard to imagine but would have been all too familiar to those in Napoleon’s army.

Logistic specialization For much of history, the soldier was just that, a soldier. He depended upon civilians to provide the supplies and services that enabled him to deploy and fight. After the mid-19th century, warfare began to become technically more complex and the military was forced to consider introducing a range of technical services and skills. Examples include the British army’s Transport Corps (later the Royal Army Service Corps), Hospital Corps and Ordnance Corps. During the American Civil War, the Union Army formed a railway construction corps, which was predominantly civilian but under military control. A few years later, Prussia did the same, and even created a railway section within the General Staff. But it wasn’t until the 20th century that large numbers of military units specializing in logistic support actually took to the field. By the end of the Second World War, what was termed ‘service

Defence logistics: an historical perspective

support’ comprised some 45 per cent of the personnel of the US Army. Only three in ten soldiers had a combat function and even within the combat divisions, one out of every four soldiers had a non-combatant role. Even with this growth of logistic functions within the armed forces themselves, they represent only a small fraction of the totality of support services that are required for a military force to function in both peace and wartime. Either behind the front line or back in the home base, a huge administrative, procurement and support infrastructure exists, employing civilian personnel in depots, arsenals, factories, air bases, naval bases, garrisons, scientific laboratories, testing grounds, training facilities and communication centres to enable functioning armed forces (Leighton, 2010).

The final point to be made about the Second World War is the degree to which it differed from other wars in the resources that the major combatants invested in scientific and technological research and development. Not only did such investment have an impact during the conflict but it has had an impact right up to the present day: For all the role of science, mathematics, and new inventions in earlier wars, no war had as profound an effect on the technologies of our current lives than World War II (1939–45). And no war was as profoundly affected by science, math, and technology than WWII. (Mindell, 2009)

The Second World War was the first ‘high-tech war’ if we define that term to mean a war fought with new technologies that were specifically invented for that war. It was a conflict that started with some participants still using cavalry (the myth of Polish cavalry charging German tanks has been part of the popular consciousness since the war) and biplanes (such as the Fairey Swordfish), and finished with jet aircraft and the dropping of two atomic bombs on Japan. Not only that, but science and technology were also used to make already existing weapons, such as aircraft and tanks, more effective.

The Cold War The main change to warfare during the Cold War was that it became much more capital intensive, a trend that had already emerged during the Second World War. For example, the amount of equipment held by a US infantry regiment (which was already rather lavishly equipped to begin with)

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increased between 1943 and 1971 by 74 per cent in machine guns, 102 per cent in vehicles, 159 per cent in anti-tank weapons and 565 per cent in radios. A Soviet rifle division increased its equipment holdings between 1939 and 1973 by even greater amounts. While the number of personnel decreased by around 25 per cent, the number of radios increased fivefold, the number of tanks increased 16-fold, the number of APCs increased 37-fold and the amount of horsepower per man increased tenfold. Between 1967 and 1976, rifle divisions undergoing modernization (becoming motor rifle divisions) increased the number of artillery tubes by 60 per cent and multiple rocket launchers by 400 per cent, many of which were of the self-propelled variety. To that must be added such technological items as helicopters, missiles, precision-guided weapons and electronics. This increase in the use of technology has had two consequences for logistic support, one being increasing complexity and the other being the requirement for an ever-increasing volume of supplies. Complexity is seen most directly in the sheer number of spare parts, specialized consumables and different types of ammunition (to name just three) that is needed by a modern piece of military hardware. For example, a modern jet engine can consist of over 4,000 separate parts. These parts could range from tiny electronic components to items that weigh several tons. Many of these items will have prolonged shelf lives and can be kept in normal conditions, but there are some that will need specific environmental conditions or others that have a limited shelf life. On top of that, there needs to be a system that keeps track of all these items and where they are, and one that can move the requisite item to where it’s needed in a timely manner. The second consequence of the increased use of hardware is the increased amount of supplies needed to keep that hardware operational. For example, a well-equipped German panzer division, with its support, required roughly 350 tons of supplies a day when on active operations. Allied tank divisions in 1944–45, which were more lavishly equipped, required as much as 650–700 tons of supplies a day. During the Korean War, this figure had risen to around 1,000 tons a day and a confrontation in Central Europe could have seen that figure rise to around 1,500 tons a day (van Creveld, 1989). From a logistic point of view, this new global confrontation was demanding for the Superpowers for two reasons. First, they both had to be able to project political and military power to any part of the world while, second, maintaining substantial forces in, and committed to, Europe in order to maintain the balance of forces in that theatre. As far as the USSR was concerned, moving to a position where it could project military power globally was a major undertaking. Historically,

Defence logistics: an historical perspective

Russia had always focused on being a Great Power within the wider Eurasian landmass, with an emphasis on Continental Europe as that was where it interacted with the other Great Powers, such as the UK, France, Prussia/Germany, Austria-Hungary and the Ottoman Empire. The early part of the Cold War era saw extensive decolonization and an end of empire for a number of Western countries, including the UK and France, which began focusing more on their roles within Europe and NATO. However, both countries still managed to keep some capability for operating outside of the NATO area, and in the early 1980s both countries, along with Italy (Spain followed suit in the early 1990s), established formal command structures for their out-of-area capabilities (Rossi, 1986; Miller, 1994). For the UK, this move was underlined by the Healey Review of 1965, which sought to bring defence spending into line with what the UK could realistically afford and also sought to reduce its overseas commitments in order to relieve overstretch of the armed forces. It was given added impetus by a financial crisis and the devaluation of sterling. It resulted in successive defence cuts by the Labour Government, which cancelled programmes such as the TSR-2 and CVA-01, as well as a withdrawal from Aden and an acceleration of the withdrawal from Singapore, Malaysia and the Persian Gulf. This was followed by the Mason Review of 1974–75 which identified for cuts those forces not related to NATO, home defence and the nuclear deterrent. This included the Army’s strategic reserve division (see below) and airborne capability, the RAF’s transport fleet, and amphibious forces. The Nott Review of 1981 was again a move to realign the defence programme with available resources, and saw major reductions to the Royal Navy’s surface fleet (although the strategic deterrent would be replaced) and a gradual running down of the remaining air and amphibious transport capability (Willox, 1989; Taylor, 2010). The assumptions of both reviews were called into question with the Falklands War of 1982, where the remaining UK capability to act in an outof-area contingency was mobilized to retake the Falkland Islands after they had been occupied by Argentine forces. As already mentioned, the two Superpowers and their allies did not engage in a direct military conflict, and so while this necessitated them employing military force all around the globe, the one advantage they had was that they did not have to deploy forces at a distance using lines of communication (either sea or air) that were exposed to interdiction by enemy action. For example, the USSR managed to deploy and support a force of around 25,000 troops in Cuba until the nature of the bases there was discovered by the United States. The United States deployed and sustained large

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conventional forces in Korea, Vietnam and the Gulf, as well as deploying smaller forces to Lebanon, the Taiwanese Straits, the Dominican Republic, Panama and Grenada, while the UK deployed forces to the Falklands, Suez, Aden, Malaya, Kuwait and Cyprus, with France intervening in Chad on several occasions. The most suitable units for these sorts of operations have been small, highly mobile, well-trained and well-equipped task forces that could move quickly by air or sea. Airlift can provide a certain amount of support to forces in theatre, and some support may be available from local sources, but for long-term sustainment the only viable option is movement by sea. There is also the question of overseas bases and pre-positioning supplies and equipment near to potential trouble spots. It has therefore been a continuing dilemma for defence departments as to where to invest the limited defence budget across airlift, sealift, and foreign bases and pre-positioning. In contrast, the situation in Europe saw both Superpowers, as well as their allies in both the NATO and Warsaw Pact alliances, amass an enormous amount of combat power, both conventional and nuclear. In a continent locked between two alliances, any sort of major crisis in Europe itself or emanating from elsewhere in the world had the potential to ignite a firestorm engulfing the whole of Europe, a situation reminiscent of the summer of 1914. Indeed, such a situation nearly occurred in 1983 with the NATO command-post exercise codenamed Able Archer, where miscalculations and misperceptions on both sides brought the United States and the USSR closer to a nuclear confrontation than has generally been acknowledged (Akhtar, 2017). A major confrontation between the two alliances, even without nuclear weapons, would have been a staggeringly violent and destructive conflict, conducted on land, sea and in the air (as well as space) on a 24-hour non-stop basis, not only in Europe but in other parts of the world as well. Such a conflict would have continued the mid-to-late 20th century trend of being highly capital intensive and logistically very demanding in its requirements. While both alliances were equipped with broadly similar types of conventional weapon systems (main battle tanks, armoured personnel carriers (APCs), self-propelled artillery, specialized and multi-role combat aircraft, warships of different sizes and capabilities), the Warsaw Pact had clear numerical advantages, and the two sides were organized very differently at the tactical, operational and strategic levels. This reflected the way they were both going to fight the war and the way they were going to provide logistic support (Martin, 1985; IISS, 1986).

Defence logistics: an historical perspective

The post-Cold War world The Cold War finally came to an end, following the remarkable events of 1989–91. Growing disillusionment with the Communist system in Eastern Europe, coupled with the reforms of Perestroika (reform) and Glasnost (transparency) enacted by General Secretary Mikhail Gorbachev, led to a weakening of Communist Party control, eventually sparking a (mainly) peaceful revolution, including, most memorably, the fall of the Berlin Wall in November 1989. It was quickly followed by the re-unification of Germany (1990), the dissolution of the Warsaw Pact (1991) and the collapse of the USSR (1991). In the years since that enormous change, several trends have become clear, which have led to a number of concepts intended to facilitate such logistic support (including some borrowed from the commercial logistic sector), such as ‘just in time’, ‘focused logistics’, ‘directed logistics’, ‘performance-based logistics’, ‘contracting for availability’, ‘contracting for capability’ and ‘urgent operational requirements’, as well as a greater emphasis on cooperation with allies and the increased use of contractor logistic support. As far as contractor logistic support (CLS) is concerned, the practice is not new – even a cursory glance at the history of contractor involvement in military campaigns will highlight that they have been utilized to ensure the efficacy of logistic support to deployed forces. Such support was utilized in conflicts such as the Wars of the Spanish Succession (in the age of Marlborough), the Napoleonic Wars and the Crimean War for there ‘were Master Generals and Boards of Ordnance before there were Secretaries for War or Commanders-in-Chief’ (Fernyhough, 1980: 7). It was only really in the 20th century that militaries moved away from this model towards one of self-sufficiency, leading one to conclude that the wheel has indeed now turned full circle.

References Akhtar, F (2017) The most dangerous Soviet–American confrontation since the Cuban missile crisis? An analysis of the origins, nature and impact of the Able Archer 83 incident, MA Dissertation (unpublished), University College London Bachrach, B (1993) ‘Logistics in pre-Crusade Europe’, in Feeding Mars: Logistics in western warfare from the Middle Ages to the present, ed J Lynn, pp 57–78, Westview Press, Oxford

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Defence Logistics Baker, C (2017) The Long, Long Trail: The British Army in the Great War of 1914–1918 [Online] http://www.longlongtrail.co.uk/ [accessed 14 July 2017] Chantrill, C (2017) UK public spending since 1900, UK Public Spending [Online] http://www.ukpublicspending.co.uk/past_spending [accessed 19 July 2017] Cohen, J (2011) Civil War deadlier than previously thought? History Stories, 6 June [Online] http://www.history.com/news/civil-war-deadlier-than-previouslythought [accessed 12 July 2017] Duffy, M (2009) The shell scandal, 1915, 22 August [Online] http://www.firstworldwar.com/atoz/shellscandal.htm [accessed 26 July 202017] Engels, D (1978) Alexander the Great and the Logistics of the Macedonian Army, University of California Press, Berkeley, CA Engels, D (1992) Alexander the Great and the Logistics of the Macedonian Army, new edn, University of California Press, Berkeley, CA Fernyhough, A (1980) A Short History of the RAOC, Europrint, London Fraser, P (1983) The British ‘shells scandal’ of 1915, Canadian Journal of History, 18 (1), pp 69–86 Gabriel, R (2007) Soldiers’ Lives through History: The ancient world, Greenwood Press, Westport, CT Harding, P (2015) The British Shell Shortage of the First World War, Fonthill Media, Oxford International Institute for Strategic Studies (IISS) (1986) The Military Balance 1986–1987, IISS, London Kirkpatrick, D (2013) ‘Supplying Johnny Reb and Billy Yank: Logistics in the war between the states’, in Case Studies in Defence Procurement and Logistics – Vol II: From Ancient Rome to the Astute-class submarine, ed D Moore and P Antill, pp 61–78, Cambridge Academic Press, Cambridge Leighton, R (2010) Military Logistics [Online] http://universalium.academic. ru/143054/logistics [accessed 24 September 2017] Macksey, K (1989) For Want of a Nail: The impact on war of logistics and communications, Brassey’s, London Mann, M (1986) The Sources of Social Power, Vol 1: A history of power from the beginning to AD 1760, Cambridge University Press, New York Martin, L (1985) Before the Day After: Can NATO defend Europe? Newnes Books, Feltham Miller, D (1994) Anytime, Anywhere: Rapid-deployment forces and their future, International Defence Review Special Report, October, Jane’s Information Group Mindell, D (2009) The science and technology of World War II, LEARN NC [Online] http://www.learnnc.org/lp/editions/nchist-worldwar/6002 [accessed 21.08.17] Moore, D and Antill, P (2011) ‘A short history of military logistics’, in Case Studies in Defence Procurement and Logistics – Vol I: From World War II to the postCold War world, ed D Moore, pp 3–22, Cambridge Academic Press, Cambridge

Defence logistics: an historical perspective Prestwich, M (1996) Armies and Warfare in the Middle Ages: The English experience, Yale University Press, London Rabaut, D (1962) Logistics and the Roman Army of the Late Republic, MA Thesis (Unpublished), University of Illinois Roth, J (1999) The Logistics of the Roman Army at War (264 B.C.–A.D. 235), Brill Books, Boston, MA Rossi, S (1986) Rapid deployment forces in Italy and in the major western countries, Defence Today, June, pp 217–21 Sawyer, R (1994) Sun-Tzu: The art of war, Barnes & Noble Books, New York Simkin, J (2015) First World War: The German Army, Spartacus Educational [Online] http://spartacus-educational.com/FWWgermanA.htm [accessed 13 July 2017] Sutton, J (1998) Wait for the Waggon: The story of the Royal Corps of Transport and its predecessors 1794–1993, Pen & Sword Books, Barnsley Taylor, C (2010) A Brief Guide to Previous British Defence Reviews, Standard Note SN/IA/5714, 19 October, House of Commons Library, International Affairs and Defence Section [Online] file:///C:/Users/14-01411/Downloads/ SN05714.pdf [accessed 15 September 2017] The National Archives (nd) Crimea, 1854, National Archives[Online] http://www.nationalarchives.gov.uk/battles/crimea/ [accessed 4 July 2017] Thompson, J (1991) Lifeblood of War: Logistics in armed conflict, Brassey’s, London Thompson, R (2016) Somme preparations: the superhumanely possible, Stand To!, The Western Front Association, No 106, pp 47–50 Tokar, J (1999) Logistics and the British defeat in the Revolutionary War, Army Logistician, September–October, pp 42–47 Van Creveld, M (1977) Supplying War: Logistics from Wallenstein to Patton, Cambridge University Press, Cambridge (1995 reprint) Van Creveld, M (1989) Logistics after 1945, Defence Systems International, pp 325–29 Williamson, M (2016) The Crimean War, Weapons and Warfare, posted 10 May [Online] https://weaponsandwarfare.com/2016/05/10/the-crimean-war/ [accessed 4 July 2017] Willox, R (1989) The Military Three Step: Trends in rapid deployment, Defense & Foreign Affairs, September, pp 34–37

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Defence logistics 04 in context J e r e my C D S m i t h a n d J u l i e a n n a P ow e l l-T u r n e r

Introduction The principal purpose of this chapter is to examine aspects of defence logistics, principally operational logistics, in order to shed light on some of the realities that give it its particular character, or at least some of its character. One possible approach is to analyse the defence supply chain and support chain using an analytical framework built around established through-life support and supply chain paradigms, concepts and ideas, drawn from the commercial sector. Another approach is to examine some specific characteristics of defence supply chains and support chains, some of their attributes and some of their practical realities, and while doing so refer to the established paradigms, concepts and ideas for comparison, but only where it seems appropriate to do so, in the hope that they might to some extent act as reference points by which defence logistics can be better understood by somebody not directly involved in its planning and delivery. One aim of this chapter is to examine the freedoms that defence departments and defence logisticians have in shaping their business, and the factors, or ‘realities’, that constrain them.

Defence supply chains – push or pull? A useful framework for supply chain analysis is the concept of push and pull. The very term ‘supply chain’ might be considered to imply push, and proponents of ‘pull’ might prefer to talk instead of the ‘demand chain’. This push versus pull debate should be expanded beyond the flow of materiel along the supply/demand chain to incorporate all the aspects of defence

Defence logistics in context

logistics as we defined the term in Chapter 2. The question of whether the defence supply chain should be classified as push or pull provides a useful basis for analysis of many of the particular characteristics, or unique circumstances within which it operates, which differentiate it from supply chains in other sectors.

Political and social influences, efficiency and effectiveness Political and social factors, alone or in combination, can be a powerful force in shaping a nation’s military doctrine and how it is enacted in an operational context. The media, and the broad reach of the internet, have made many aspects of military operations highly visible, and the general public of a given nation may react powerfully to anything it perceives as being wrong in the way its government and defence department are meeting the material and other needs of its armed forces in an operational theatre. A general public may develop a strong moral obligation towards its nation’s armed forces, and this can be a powerful force: in mature democracies, few politicians would welcome the prospect of potentially damaging revelations regarding the material support to their nation’s military personnel, civil servants and contractors getting into the public domain. They would wish to take measures, either to ensure that within reason they want for nothing, or that where there are shortfalls they are put right rapidly. Defence departments may have to manage conflicting priorities: ●●

●●

efficiency in times of peace; driving out waste, achieving economic efficiencies and saving taxpayers’ money; and effectiveness in times of war or other operational commitment, ensuring certainty of delivery and not allowing armed forces to experience shortfalls which might cost lives, reputations and international credibility.

The philosophy and techniques of Lean focus on driving out waste, but are very much about efficiency. Defence department will strive to be Lean in peace but must, for the reasons discussed above, guarantee certainty of supply in war, a philosophy and approach to business that is about effectiveness. To achieve this certainty of supply encourages push logistics, with the expense and resource-intensity that accompanies it. In short, defence may have to prioritize effectiveness and certainty of delivery over efficiency. This demands that much is pushed to, or forward-loaded onto, military forces and that expensive long- and short-haul aircraft sorties are used to expedite delivery of critical or high-priority items.

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In the UK, the sense of obligation, on behalf of the general population, to the Armed Forces has become known as the ‘Armed Forces Covenant’. Successive governments have passed some legislation to add substance to it, but generally speaking it is promoted as a moral, rather than a legal, obligation.

Legislative pressures National and international legislation has reflected the growing awareness of the vulnerability of the natural environment and social pressures to manage it in a more sustainable way. Environmental factors increasingly influence defence logistics and seem likely to do so for the foreseeable future. As an illustration, the International Standard on Phytosanitary Measures (ISPM) 15 legislation, which is designed to reduce the threat to indigenous tree and plant species posed by damaging organisms which are imported into a country on untreated timber, have forced nations to heat or chemically treat logistic packaging, including pallets, crates, and dunnage and chocking for securing freight in trucks, rail cars and ships. The task of recovering from an operational deployment can be complicated by the need to comply with international agreements which the host nation may not have signed up to, therefore making it challenging for the defence logistician to source compliant timber or other materials.

The influence of doctrine As discussed in Chapter 2, any nation which is a member of a defence alliance must expect to adopt its ‘rules set’, and where these apply to logistics, they will often be push in character. The Warsaw Pact’s doctrine for offensive operations relied to a large extent on mass, battle drills and pre-rehearsed tactical manoeuvres, and the reinforcement of success, in other words pushing logistic support to where combat formations and units were making most progress. NATO doctrine espouses collective responsibility and with it comes not only an expectation that member nations will share logistic resources where operationally necessary and technically feasible, but will bring real substance to supporting a shared view of operational risk, what it entails, and what should be done to mitigate and manage it. Push strategies feature in this doctrine.

Defence logistics in context

NATO forces in Central Europe were supported by a supply system that was essentially linear in character. Assuming that any major confrontation with the Warsaw Pact forces based in East Germany and Eastern Europe ran as predicted, NATO forces would expect to consume supplies and other resources as they fought to impose delay on the enemy and to buy time for the political cogs to turn. They would replenish from sizeable materiel stockpiles pre-positioned for them. NATO expected its member nations to sustain their operational needs via lines of support, as described in Chapter 2. Combat, combat support, and combat service support units were expected to hold a mandated number of days of supply at first line, so many at second line, so many at third, and so on, this ensuring that fighting formations were able to sustain the operations that the Alliance expected to have to fight. Logistics was thus largely push in character, with armed forces carrying mandated stock levels, forward-loaded to the manoeuvre units and formations, carried on the backs of mobile logistic units, and held grounded in field supply areas and static depots. NATO nations used a variety of calculations to determine what a day of supply actually represented in materiel. Stock levels were described using agreed metrics such as days of supply (DOS), daily combat supplies rates (DCSR) and stockpile planning guidelines (SPG), these metrics being associated, in the main part, with combat supplies: the essentials for the man and for the immediate battle – ammunition, fuel, food and water.

NATO: managing ammunition and fuel supply risk by forward positioning NATO’s attitude to supply risk and collective responsibility for logistics can be illustrated by how it ensured a degree of supply certainty of two combat supplies: ammunition and fuel. The Alliance maintained a network of what were termed ammunition forward storage sites widely distributed through West Germany, ready to be drawn upon by Alliance units and formations. It sees fuel as ‘a commodity that is essential to NATO’s defence planning and also for sustaining social and economic life. Its availability cannot be taken for granted’ (NATO, 2012: 95). To help ensure certainty of fuel supply it established the NATO Pipeline System (NPS). The NPS is not strictly speaking a single system but, rather, a set of nine distinct and separate systems. Seven of these

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are located in Turkey (two systems), Greece, Italy, Portugal, Norway and the United Kingdom. A further system, known as the North European Pipeline System (NEPS), is situated in Denmark and Germany, and the ninth system, known as the Central European Pipeline System (CEPS), is situated in Belgium, the Netherlands, Germany, France and Luxembourg. In total the NPS accounts for 14,500 km of pipeline, with storage depots and tanks, pumping stations and offtake points. It connects to refineries and it feeds a range of military air bases and civil airports. Much of the pipework is buried for protection.

Enabling high readiness and responsiveness Nowadays, the extent to which materiel is pushed to, or forward-loaded on, ships, army formations and units, and air forces depends to a large extent on their readiness states, which are, in turn, linked to required levels of responsiveness or speed of reaction. High-readiness force elements might be expected to hold the full range of inventory they would be expected to require when committed to operations. A problem arises when a nation’s expeditionary posture results in it committing its forces to a theatre of operations at the end of a long physical supply chain, and into a location which may well be non-permissive, with little or no infrastructure, and with no established supply chain flowing to and from it. In defence logistics, as much as in any other sector, a geographically long supply chain equals a long supply pipeline, which results in long lead-times for materiel flowing along it, both downstream and upstream. Time and inventory are linked: typically, the longer the lead-time, the bigger the volume of inventory in the pipeline. High-readiness force elements may deploy rapidly to a theatre of operations and be rapidly combat effective once there. However, a key enabler of their agility and responsiveness is their small inherent logistic footprint, which promotes their physical mobility. The challenge comes in ensuring they have sufficient materiel to prosecute operations until the supply chain becomes established and working, the pipeline fills with inventory flowing downstream (and later upstream too), and their needs can be sustained into the future without any reduction in operational tempo forced by materiel shortages. They will be consuming combat supplies, but they will also be consuming the inventory required to maintain their combat and other systems through corrective maintenance and basic preventive maintenance. Combat ships, submarines, helicopters, armoured vehicles and fast

Defence logistics in context

jets are of little practical utility to a commander if they are not available when required, where required, and in the operable state required. To enable units to operate until the supply chain is established requires that they deploy with some sort of ‘get-you-in pack’, a range and scale of inventory appropriate to their military tasks, the equipment they are operating and the expected duration of need. Range and scale can be difficult to predict for a defence department which may receive little warning of a forthcoming deployment. Combat ships and submarines will normally carry an on-board range and scale of key repairables, non-repairables and consumables to be used while at sea and to be drawn upon until logistic shipping can reach them for resupply, or they can reach a port. The UK’s Royal Navy refers to this as the Consolidated Allowance List (CAL). Army and air forces will deploy with some sort of deployable spares pack (DSP). The term priming equipment pack (PEP) describes any such range and scale of materiel taken with deploying units until the supply chain is ‘primed’ with inventory. This is inherently a push strategy at work but one which is fundamental to readiness, responsiveness and, ultimately, military operational credibility.

Demand planning to improve the pull of defence logistics Deciding the range and the scale of inventory that makes up the CAL, DSP or PEP is essentially a matter of demand planning. They will normally be informed by historical consumption, but this may not say much about future requirements, the specifics of the next operation, wherever it may be fought or conducted, and whatever the supply chain looks like. Combat supplies will always be pushed to deployed units because they are critical to immediate needs, but which defence materiel can be pulled? What can be dispatched downstream in response to a demand raised by the end user? To get a flavour of the extent to which the ideal of the demand chain can be realized in the defence context it is worth considering maintenance. Beforehand, it is worth considering the vision of a just-in-time supply chain, where a demand signal from the user is the stimulus for the flow of the demanded materiel downstream. To what extent can this ideal become reality? To a large extent, preventive maintenance (PM) offers more prospect than corrective maintenance (CM) (PM and CM are discussed in more detail in Chapter 6). This is because PM is scheduled, and therefore gives the inventory planner some predictability of when its associated inventory will be required. Theoretically, if the range and scale are both known, the required inventory

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can be demanded just-in-time to effect the maintenance. CM, on the other hand, represents a response to a failure, breakage or loss that has already occurred. An inventory planner may be able to benefit from some degree of predictability in the maintenance, but planning against the damage caused to a ship, armoured vehicle or aircraft by enemy activity, for example, is going to be generic at best. CM may best be resourced through push.

In Afghanistan, UK maintainers faced a daily challenge of repairing protected mobility vehicles, such as the Mastiff, which had been damaged by roadside improvised explosive devices (IED). The required corrective maintenance varied according to where the vehicle was hit, the size and makeup of the IED and the damage it inflicted. The first stages in the process of repair were to assess the damage, decide on the repair tasks required and, therefore, the inventory required. Each inventory item was then demanded; if codified, this was by NATO Stock Number (NSN), if not codified it was via the OEM’s parts catalogue. The task was somewhat laborious, and depended on every item being available to the maintainer at the same time and on a technical damage and repair assessment which had to be correct. To simplify the task, in the UK home base, battle damage repair packs were created for all the different types of damage, and their associated repair tasks, encountered up to that point, which contained all the inventory items (commonly referred to in the UK Armed Forces as ‘line items’), united under one single unifying NSN. To obtain all the inventory required for the repair, all the maintainer had to do was demand one single NSN. These repair packs were pushed into theatre in quantity, the ultimate aim being to get protected mobility vehicles back in the hands of the user. These packs speeded up maintenance, thereby contributing directly to improving the operational availability of what were critical systems. However, they were also quite wasteful because many inventory items proved not to be required when it came to the repair, and had effectively lost their identity, and therefore their visibility, in the supply chain.

In reality, if the supply chain lead-time is long, and once the pipeline is full and inventory is flowing downstream, if the scheduling of PM is known far enough in advance its associated inventory can be demanded to arrive at the repair location in a synchronized fashion, just-in-time. Developing

Defence logistics in context

condition monitoring capability and condition-based maintenance, which monitor the actual physical status of systems and their levels and rates of degradation, and enable engineers to programme PM with more precision, should further contribute to demand pull. This does, however, rather assume reasonably stable conditions, and this is an assumption that few defence logisticians would make readily.

Managing lead-times and demand Lead-times and demand times – closing the gap Any organization would be wise to consider the volatility and variability encountered in the world in general, never mind in the supply chain to and from an operational theatre where ‘the enemy has a vote’. Returning to the theme of the extended physical supply chain and the long pipeline, it is necessary to focus on lead-time – the time it takes between the placing of a demand and the receipt of the demanded materiel in the demander’s hands. It is also necessary to consider the concept of the P Time / D Time Gap, this being essentially the total logistic lead-time (or production time) versus the time the customer is prepared to wait to have their demand fulfilled (demand time) (Harrison, Van Hoek and Skipworth, 2014). The idea of defence logisticians having a time for which they are prepared to wait for an inventory item is somewhat inappropriate; they are not purchasing a product but, rather, waiting for an item so that they can complete an essential maintenance task or carry out some other operationally necessary logistic function. They won’t ‘walk away from the sale’ but the imperative to get the item into their hands as fast as can be achieved is still there. The idea of a quantifiable P Time is also an ideal which is unlikely in expeditionary operations; one need only consider the chaos which the eruption of the Eyjafjallajökullj volcano in 2010 created for organizations, including the UK MOD, that were trying to schedule air freight operations. Where the lead-time (P Time) is long, and demand time (D Time) shorter than the lead-time, defence logistic planners will embrace supply chain strategies which consume as much of the P Time as can be achieved in order to bring the item closer to the demander, thereby reducing the P Time / D Time Gap. Typically, defence logisticians will seek to push inventory as far forward as is practicable or achievable. The use of a staging post, or forward mounting base (FMB), is commonplace. Stocks can be pushed here in anticipation of being demanded, usually working from a forecast based on

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prior experience, modelling and simulation, military judgement and so on. Combat supplies and many general stores, such as boots, clothing, tentage, camouflage nets and the like, are held in defence storage depots and warehouses in their bulk form, usually in palletized loads. They can be shipped to an FMB in this undifferentiated and ‘strategic’ form and held until a specific demand for them is received, or logisticians push them forward in anticipation of there being a demand. This strategy is essentially one of postponement, another strategy relatively commonplace in commercial supply chains.

Postponement theory and the defence supply chain It is common for combat supplies and many general stores to be held in a form that represents their final design and manufacture, but not their final logistic form. Artillery ammunition, for example, will be stored, and transported along the supply chain, in bulk form: projectiles (shell) will be packed in a single pallet or in a shell unit load (SUL) which is actually a half-pallet-sized container; propelling charges will be packed similarly, in charge unit loads (CUL); primers (which are basically cartridges used to initiate the propelling charge) will be in their own container; as will the fuzes which cause the projectile to function at the target. They will remain in this logistically undifferentiated form until the point at which they are distributed forward to the artillery units which fire them. Even then, unit quartermaster staff may wait until they are pushed forward to the guns themselves before they finally unite them logistically. A SUL and a CUL will be latched together and the right number of primers and fuzes will be inserted in containers affixed to the side of the SUL/CUL, thereby making up a finally differentiated, fully capable artillery load. Historically, artillery units have been able to choose from a number of different fuzes, further complicating this final logistic differentiation process and adding an element of form postponement into the mix, the point being that choice of fuze reflected desired target effect. Such a postponement strategy reflects a pragmatic approach which: ●● ●●

●●

uses critical inventory wisely, while nonetheless pushing it forward; pushes strategic stocks as far downstream as required and achievable to get them as close to the ‘customer’, while keeping them in strategic form and closing the P Time / D Time Gap to some extent; uses only what is required as far as can be achieved in inventory of this sort, eg the fuzes; and

Defence logistics in context

●●

makes best use of an FMB, or similar, to derive most benefit from the strategy, by shortening the physical supply chain and consuming lead-time.

Ammunition and explosives are subject to stringent controls to ensure that they remain as safe as possible during storage, movement and handling. There is thus a safety reason for maintaining them in their strategic form for as long as practicable, as well as a pure supply management one. The point at which inventory is converted logistically from its strategic state, that is to say the point up to which conversion to its final logistic form is postponed, is often referred to by defence logisticians as the ‘break bulk’ point. This point is likely to be geographically significant, but may also be temporally significant. At this point the identity of inventory by NSN, or by other markings relating to, for example, batch or lot number, may be permanently lost. This is not an issue if the inventory is consumed. However, if it is not consumed it may well have to be written off and will generally present a challenge to the logistician charged with recovering it once the operation has concluded. Temporally, it may mark the time at which units breaking bulk begin to manoeuvre, the smaller, differentiated loads enabling them to be mobile and agile.

Defence supply chain dynamics It can hopefully be seen that defence logisticians, in trying to achieve a balance between efficiency and effectiveness, manage to do both to varying extents, but face many constraints along the way. It is worth considering more of these constraints, and their consequences, in the next section.

Demand amplification – the bullwhip effect Many a defence logistician will be heard to say, at some stage, that they cannot allow ‘just-in-time’ to become ‘just-too-late’. Competent defence logisticians will be cognizant of supply risk and consequent operational risk and they will act accordingly. One legacy of the past practice of defence logistics being controlled at single service (ie navy, army, air force) level, as it used to be in the UK, and still is in many nations, is the plethora of logistic information systems (LogIS), many of them outdated, unsupported, and lacking in wider connectivity. Where there is a lack of connectivity there is a lack of visibility, and where there is a lack of visibility there may be a lack of trust, a suspicion that the supply chain might not satisfy the demand

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on time and in full. This can drive behaviour that leads to many of the symptoms of bullwhip, or demand amplification. ‘“Bullwhip” describes the general tendency for small changes in end-customer demand to be amplified within a production-distribution system’ (McCullen and Towill, 2002). Most nations will employ some sort of demand prioritization system, one benefit of which should be that the most critical items will be moved through the supply chain as a priority, if necessary using whatever means is available to expedite delivery. As the UK Armed Forces have discovered during recent conflicts, a logistician charged with doing the very best he or she can to meet the user’s demand, recognizing the potentially severe consequences of failing to do so, may well decide to submit repeat demands for the same NSN ‘just in case’, the root of this behaviour lying in a lack of trust in the supply chain to deliver. This is reminiscent of the supply chain rationing and shortage gaming that is a contributor to the bullwhip effect. A prioritization system, by definition, demands that some demands are accorded a higher priority than others. A logistician under pressure to meet demand, but with insufficient visibility of the supply chain and the progress of his or her demand, may well choose to ‘game’ the system, raising the priority, or submitting repeated demands for an item of any priority to increase his or her chances of success. The actual result is a number of spurious demands: they will be processed in due course, but are actually surplus to requirement. While being processed they will add a significant movement and handling burden to what may be an already stressed supply chain. It is, arguably, a matter of honour to defence logisticians that they make best use of logistic resources, especially at the front line or in the deployed theatre of operations. Freight and utility trucks, for example, will be used to capacity whenever possible and empty running will be minimized. There is a tendency to ‘batch’ inventory, particularly in depth, further back from the front line, and this can lead to the holding of excessive stocks at different lines of support. Indeed, the idea of delaying the point at which breaking bulk takes place, to keep stocks in strategic form, can contribute to excessive bulk stocks being held at different supply chain echelons. The creation of the battle attrition packs discussed earlier is another illustration of a batching strategy, in this case of spares to effect maintenance as fast as possible, but one that is nonetheless wasteful. Logisticians may have no practical alternative but to batch demands, for example where the routine transportation and distribution of inventory to satisfy demand is not tactically feasible because enemy activity prevents it, forcing less frequent, more planned and resource-intensive distribution. See below for an illustration of this.

Defence logistics in context

Today the threat is more asymmetric, resulting in the traditional delineation between fighting elements and those in support roles becoming blurred. In Afghanistan, what would have been considered to be a task to be carried out exclusively by logistic troops – the routine resupply of combat troops – became a truly all-arms operation, involving identification of potential roadside IEDs on supply routes by combat engineers, clearance of IEDs by bomb disposal operators, force protection by infantry and combat aviation, and standby medical support from air treatment and evacuation helicopters and crews. In essence, a task that used to be classed as mostly administrative became a meticulously planned and judiciously orchestrated operation of significant scale. The routine, frequent, delivery of inventory to meet demand became non-routine and infrequent, thus creating a batching effect. The term the British army used to describe this profound change in the profile of defence operational logistics was ‘fighting logistics through’. The resources ‘bill’ for the planning and execution of routine resupply was considerable.

Another commonly accepted cause of bullwhip also bears examination, that of the effect of promotions. There is no suggestion here that defence ‘promotes’ its materiel in the way that a supermarket does. However, the tendency to push stocks forward, coupled with the instinctive desire to reduce supply risk for sound operational reasons, can encourage a tendency for combat, combat support, and combat service support units to hold unofficial stocks of inventory for ease of access and quick response, these items typically being those which are consumed in keeping a unit’s equipment establishment vehicles, weapons and general utility systems functioning. It also encourages (‘promotes’) consumption simply because the stocks are there, to hand. If there is no particular accounting for such inventory usage, there will be no incentive to take control of such hoarding and consumption. In many defence departments, at the time at which inventory is issued to ‘front line’ ships, submarines, army units and air-force squadrons, it is charged to the operating cost statement of the project team that procures it, and from that point on has no financial value. It is deemed to have been consumed, a fact that does not encourage responsible behaviour at the front line and that can distort demand, giving inaccurate demand signals further upstream, which will be acted upon: the logistic units at second, third and fourth lines will submit demands which reflect this uncontrolled

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consumption and the project team will procure more stocks to replenish depot holdings.

Shaping the operational logistic footprint It was said at the start of this chapter that one of its aims was to examine the freedoms that defence logisticians have in conducting their business, and the constraints they have to work within.

Planning yardsticks and frameworks An experienced defence logistician will normally be able to turn to wellestablished planning yardsticks to inform the deployment, and general operating characteristics, of the military and other agencies and units that deliver operational logistic support. Data are available, for example, to tell the defence logistic planner the operating weights of freight and utility vehicles, tanker capacities, the linear meterage of wheeled and tracked vehicles for the purpose of planning ship loading, the drafts of ships and their berthing requirements, the bridging limits for vehicles, particularly those which are heavily armoured and tracked, the safe working distances from helicopters with rotors turning and safe approach arcs for helicopter refuellers, handlers and passengers, the all-up weights of air load platforms for air freighting, and so on. All of this provides logisticians with a high degree of planning certainty, and therefore confidence in the plans they make. It also constrains their planning freedoms to varying extents, a fact made all the more real when planning yardsticks, benchmarks and guidelines reflect compliance with legislation, both national and international. It is worth considering two very different aspects of defence logistics to illustrate how legislation, guidelines and hard-won practical experience in past conflicts or crises can shape and constrain operational logistic ‘laydown’. They are medical logistics and ammunition and explosives logistics.

Medical logistics In defence medical logistics, continuity of care for the casualty is critically important. This means ‘uninterrupted and appropriate medical attention and response to the needs of casualties throughout the chain of their medical treatment and evacuation’ (UK MOD, 2015: 1-11). This demands that clinical care is provided in medical treatment facilities (MTFs) which are static

Defence logistics in context

and mobile to ensure that clinical care is maintained even during evacuation. MTFs, and the materiel medical staff require to deliver uninterrupted care to the casualty, including medical supplies, must be deployed and sustained accordingly. Probably the most significant shaper of defence medical practice, and therefore medical logistic laydown, is the need to adhere to clinical timelines. ‘Clinical evidence shows that the risk of death or permanent impairment is significantly reduced if injured or wounded personnel are treated as soon as possible after injury or wounding’ (UK MOD, 2015: 1-17). This fact has led to what is known in defence medicine as the 10-1-2 timeline: immediate life-saving measures are applied by personnel capable of delivering combat casualty care, and bleeding and airway control must be achieved within 10 minutes of wounding; within one hour of wounding, damage control resuscitation measures must be commenced; and damage control surgery must be applied within one hour, but no later than two hours, of wounding. The siting and supply of MTFs must support this 10-1-2 timeline. Where it is challenging to achieve, additional resources may have to be dedicated to the task, helicopters being a prime example. Medical materiel has some characteristics which set it apart and which must be considered in its management. The Geneva Conventions confer a protected status on medical supplies. However, this applies only if they are correctly marked and are stored and handled separately from other defence materiel, which can, therefore, require the provision of additional storage, handling and transportation capacity. It may also add a layer of complexity to its stock accounting requirements, this coming from the need to be able to segregate it and manage it as a distinct materiel category. Accounting is further complicated by the regulatory requirements attached to some medical materiel. Controlled drugs, for example, are subject to national and international regulations governing their accounting, administration and use. Their consumption, and disposal under controlled conditions, may have to be recorded. NATO states, explicitly, that the supply of blood and blood products is a critical function in medical logistics, including ‘maintaining continuity of records from donor to recipient and vice versa’ (NSO, 2015: 1–21). Blood, blood products, vaccines and other medical supplies that have a particular technical profile, or which are perishable and shelf-lifed, can require particular physical supply chain regimes. These may incorporate the provision of temperature-controlled storage and movement as they transit through the supply chain, the demonstrable proof, probably via some sort of data-logging capability, that they have been kept within required temperature

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limits on a continuous basis, the disposition of specific item variants, for example blood packs in specified groups, and the managed consumption of stocks to ensure that the oldest are consumed first. Temperature is, of course, not the only environmental variable that may shape aspects of the medical supply system. Extensive use is made of radioactive materials in medicine, and these will require specific storage, handling, movement, accounting, disposal and protection measures. The provision of medical support will routinely create volumes of medical waste, including radiological materiel and regulated materiel, and this will have to be disposed of in a manner that will ‘prevent pollution, protect the environment, comply with regulatory guidance/policy, protect the deployed force and be in compliance with host nation laws’ (NSO, 2015: 1–21).

Ammunition and explosives logistics Given the obvious significance of ammunition to military operations, NATO has always placed great emphasis on promoting its interchangeability. The NATO Supply and Procurement Agency (NSPA) hosts and maintains the Electronic NATO Ammunition DataBase (eNADB), a dedicated ammunition search tool containing extensive information about ammunition, covering more than 435,000 ammunition or ammunition-related items held in the NATO inventories (NSPA, 2016). With their inherently hazardous character, ammunition and explosives require very particular storage and handling, informed by quantitative data and their analysis. As discussed in Chapter 2, internationally agreed processes for the safe transportation of explosives are set out in the UN Orange Book (UNECE, 2011). The contents of this publication are reflected in NATO doctrine and procedures and in those of individual NATO member nations, as well as non-NATO nations which are members of the UN and which agree to comply with the regulations to enable the safe transportation of explosives intra- and inter-nationally. Ultimately, the character of ammunition and explosives logistics is shaped by the need to manage the risk inherent in items and systems, many of which are specifically designed to inflict harm when initiated as intended. Nations accept that operational imperatives may require that the rules that govern the safe handling of ammunition and explosives during peacetime be relaxed to some extent during conflict. However, such relaxation of established safe practice will nonetheless only be permitted to the extent considered absolutely necessary to enable essential military operations to proceed, and will be reviewed with the intent of reverting back to ‘peacetime’ safe practices

Defence logistics in context

as soon as practicable. NATO has developed its Guidelines for the Storage, Maintenance and Transport of Ammunition on Deployed Missions or Operations (NSO, 2016), which represent a pragmatic approach to managing the safe storage of ammunition and explosives in a military operational environment.

Explosives are sensitive to different stimuli such as shock, heat, friction or impact, this sensitiveness varying between items of different design and intended function. They differ in stability under varying climatic conditions and they deteriorate at varying rates, usually becoming more sensitive, rather than less, as they do so. Their deterioration is likely to be accelerated through poor or inadequate storage or handling. For the logistic planner and the practitioner alike, a failure to appreciate the complexity in storing, transporting and handling ammunition and explosives safely, or to choose to ignore it, could have catastrophic consequences.

Environmental Influences The environment factor deserves further attention. NATO member nations, and other national governments and their defence departments, which engage, or have engaged, in expeditionary operations must consider carefully the environment into which they are deploying. Where the intended theatre of operations is austere, with comparatively little established infrastructure, it stands to reason that military forces will have to bring with them much that is absent. This makes a call on logistic engineering expertise for establishing and maintaining deployment and supply routes, and keeping open intra-theatre lines of communication, for example by placing combat and logistics bridging across water courses. It demands the establishment of logistic nodal points for the tracking of logistic movements to provide visibility of materiel in transit, and to establish command and control of forces undergoing reception, staging and onward movement, and forces deploying to, or recovering from, operations. It might require that engineers in artisan trades build both basic shelters and more sophisticated infrastructure for accommodating people, vehicles, equipment, inventory stocks and other materiel. Materiel items, and indeed services, which might otherwise have been available on the local economy may have to be brought into theatre by deploying forces, or held outside its borders ready to be brought forward when required. Where the environment is non-permissive, in other words it

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is hostile to the military forces, civil servants or contractors deploying into and operating in it, or it is at best neutral towards them, logistic functions become more challenging in their planning and more resource intensive in their execution.

Managing the environmental variables Any consideration of the environment should also address its effects on materiel and on people. It is worth considering the environmental variables and illustrating how they can shape defence logistics and supply chain operations. The principal variables of concern are: temperature; vibration; shock; humidity; pressure; and the radio frequency (RF) hazard. Extremes of temperature can be deleterious to vaccines and other medicinal inventory, to foodstuffs, and to energetic compounds in guided weapons and other munitions. The Hazard Analysis and Critical Control Point (HACCP) principles, which have been widely adopted internationally in the food sector, and which originated in the United States when NASA, the Pillsbury Company, and the US Army Laboratories worked together to make food safe for space flight, are of significance here. HACCP aims to: identify hazards that must be avoided, removed or reduced; identify the critical control points (CCP) at which such hazards will be prevented, removed or reduced; set limits for the CCPs and monitor them; correct problems that manifest themselves at a CCP; and validate and verify the system, ensuring that records which can be audited are kept (FSA, 2017). HACCP recognizes that it is not sufficient to store and transport temperature-sensitive materiel in temperature-controlled conditions; it is also necessary to be able to prove that such materiel has been stored, moved and handled within what is deemed to be an acceptable temperature range. Without this certainty, end-to-end along the supply pipeline, no logistician can make accurately informed management decisions. Temperature data must therefore be captured at CCPs, downloaded to suitable storage media and made available to those with the access permissions to act upon them. Medicines and munitions can benefit from the same principles. During the early stages of the UK Armed Forces’ operations in Iraq, reserve stocks of ammunition were turned over and disposed of well in advance of their shelf life because they had been subjected to extremes of temperature cycling, and these extremes had not been logged and recorded. Nobody could state with confidence what conditions they had experienced and, therefore, what their condition was likely to be. Ammunition technical officers were faced with three options: assume they were safe and continue to use them in service;

Defence logistics in context

backload them to the UK and pay for their condition to be assessed via breakdown, test and chemical evaluation, then decide whether they were safe to continue in service; or assume they were unsafe, backload them to the UK for write-off and disposal (typically through open burning or open detonation), and replace them with serviceable stocks. Option one presented an unacceptable risk and option two was too expensive and might have resulted in them being declared unsafe and written off for disposal anyway. The only viable option was the third one. However, once a degree of stability had been achieved in military operations, and a degree of reorganization and rationalization of logistic support implemented, the decision was made to build six temperature-controlled storage ‘barns’ within the ammunition depot at Shaibah Logistics Base, within which all reserve stocks of guided missiles and munitions were stored. This ensured that they remained comfortably within defined limits and could remain in theatre in a serviceable condition for the remainder of the campaign. Vibration can affect electronic components, causing soldered joints to break, and it can, over time, lead to other fixings and fasteners working loose. It can cause equipment to go out of calibration. It can also cause energetic compounds, such as rocket motors, to fracture. The MILAN anti-tank missile, in service in France and the UK in the 1980s and early 1990s, was subjected to ‘trundling limits’. The missile was sensitive to particular bands of frequencies associated with the vibration of various tracked armoured vehicles. Missiles transported in such vehicles were deemed to be in an unsafe condition and disposed of once they had been transported to a mileage limit – wasteful, resource-intensive, bad logistic practice on the face of it, but also militarily necessary. Shock can generally be controlled through mandating safe handling practices and ensuring that materials handling equipment is used appropriately for moving pallets and containers. Sensitive items will normally be packaged in a way that offers protection from shock within limits, but once items have been removed from their containers they can be expected to be more vulnerable to the effects of rough handling. For the logistician, the question of where to ‘break bulk’ and remove layers of protection can therefore be an important one. Items sensitive to pressure may have to be protected while being transported via long-haul strategic or short-haul tactical air transport, such items often having to be moved in the pressurized cabin rather than in the aircraft hold. Defence departments have become increasingly engaged in understanding and managing the adverse effects of humidity on systems, both complex and simple. The US Department of Defense, for example, maintains significant

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volumes of equipment, stored as pre-positioned assets, in a variety of countries presenting a variety of climatic conditions. The use of humiditycontrolled storage facilities has been its primary measure to reduce corrosion of Army and Marine Corps assets. ‘Army and Marine Corps officials told us that the use of humidity-controlled facilities is effective at minimizing equipment corrosion and maintaining high readiness levels’ (US GAO, 2016: 7). The UK has also employed controlled-humidity environment (CHE) storage in enabling its ‘whole fleet management’ concept. In essence, this sees larger fleets of vehicles divided into two components: the training and operations fleet, which is utilized for routine training activity, field training exercises, and operations; and the stored fleet, which is put to store in CHE storage. These two components are rotated to ensure equal wear and tear across the complete fleet. For both the US DOD and the UK MOD, the use of humidity control is thus a key enabler of operational readiness and logistic sustainability. The RF hazard can be a significant influence on both how and where RF-sensitive ammunition items can be stored, transported and handled. Logisticians planning to conduct the organized de-stocking (sometimes referred to as ‘de-bombing’) of ammunition from combat vehicles, and particularly where it involves the removal and collection of ‘turret stocks’ which have been removed from their protective packaging and stowed on board fighting vehicles, would be unwise to site this activity close to electricity pylons, mobile telephone transmitters or relays. As for items that are shock sensitive, the field logistician must decide very carefully where and when it is best to ‘break bulk’ for RF-sensitive items, removing them from their protective packaging. Indeed, this decision applies to any item the outer packaging for which affords the item protection from the environmental variables discussed above.

Contingent versus operation-specific systems procurement It is now worth considering another source of differentiation between defence logistics and that in pure commercial enterprises: the influence of procurement practice and the support implications of the differing strategies that defence departments adopt. What follows links directly back to the discussion about a defence department being efficient in peace and effective in war, and balancing the two.

Defence logistics in context

Preparing for ‘a’ war and fighting ‘the’ war In order to be prepared for whatever the future might hold, defence departments must procure materiel, recruit and train personnel, develop doctrine and policies, and prepare generally for ‘a’ war, with the emphasis on the indefinite article ‘a’ and the non-specificity and uncertainty that it implies. They have to prepare on the basis of prediction and forecast, trying to gauge whether, to what extent, and when developments will lead to a decision to deploy military forces, and if they do, what capabilities will be required of those forces, and therefore what combat, combat support, and combat service support systems and other resources will be needed. If actually engaged in military operations they will also, concurrently, be fighting ‘the’ war, with the emphasis on the definite article ‘the’ and the specificity and ‘here and now’ reality it implies. Managing these demands can be challenging. As stated earlier in this chapter, when fighting ‘the’ war, no national government would wish to see its military forces defeated or suffer high levels of attrition, or see their freedom of manoeuvre constrained at sea, on the battlefield or in the air, and it will likely strive to ensure that they get what they need within reason. In peacetime, the same government will have different priorities for spending taxpayers’ money. A defence department will have to accommodate the need to justify its expenditure to the taxpayer, strive for more efficient and cost-effective ways of doing business, and generally accept that in the public’s eye there are likely to be more pressing cases for investment. Defence departments procure what might best be termed contingent capability to prepare for ‘a’ war as deliberate acquisitions. Developing the maintenance, supply, and other support resources for the ships, submarines, aircraft, armoured vehicles, fighter jets and helicopters that represent this contingent capability is generally a deliberate, structured, deeply analytical discipline, commonly referred to as integrated logistic support (ILS). This is discussed in Chapters 6 and 7. If properly carried out, ILS should result in such platforms or systems being effectively and efficiently supported through life. Defence departments engaged in fighting ‘the’ war may find that the contingent capabilities which they have procured are not fully suited to the mission or task at hand; some of them may be entirely inappropriate. A capable and determined enemy may develop and retain the initiative in terms of tactics and the weapons it employs, forcing the defence department to react as they evolve. It may be sufficient to design and implement new or revised tactics, techniques and procedures (TTP), but where ‘the’

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war is of any intensity, duration or complexity, it is probably going to have to procure new systems or upgrade existing ones. These systems will be procured to plug the capability gap manifested in the ways in which the contingent capability falls short of dealing effectively with the enemy’s own evolving TTPs. To plug the capability gap, a defence department will often go to the marketplace to source systems which are already available as either commercial-off-the-shelf (COTS) products or military-off-the-shelf (MOTS) products. Alternatively, it might be able to take its own existing systems and upgrade them to the point at which they do the job the specific operational situation requires, or initiate full development of an item, especially if it is likely to be technically straightforward. In some cases, a defence department will choose deliberately not to procure a known capability in peacetime if it believes it will be able to procure it rapidly as and when it needs it for ‘the’ war. Whether procuring off the shelf, upgrading existing systems or developing new ones from the drawing board to plug the capability gaps identified, defence departments have to act fast. The solution will be evaluated in terms of its time, cost and performance, but it is likely that time will dominate on the grounds that operational necessity demands a speedy response. If procuring an off-the-shelf solution, the performance will already have been designed-in and is likely to be beyond negotiation, at least in the short term. Given that the defence department is prosecuting ‘the’ war on behalf of the nation, and that unplugged capability gaps may already have resulted in the deaths and injuries of armed forces personnel, cost is not likely to be an issue, at least within reasonable bounds.

The challenge of supporting urgent procurements An enduring problem with an urgent off-the-shelf procurement is that the defence department has no influence over its supportability and may have to accept a support package that is not best suited to the nation’s ways of executing its logistic support operationally. Defence logisticians working in the project teams which have procured the system will work to improve things in the longer term, but those working at sea, in the field or in the deployed operating base may have to accept a sub-optimal solution. The ILS discipline makes provision for review, validation and verification of support arrangements during the in-service life of a system and this should be done if the benefits are likely to outweigh the costs. Another significant challenge with this type of procurement is deciding what to do with the system at the end of the operation. Defence departments

Defence logistics in context

The UK MOD manages the procurement of these systems under what it calls Urgent Operational Requirements (UOR) procedures. They enable fast-track procurements. ‘However, the speed at which Urgent Operational Requirements are delivered means this equipment is often introduced before full support in terms of trained personnel and logistics can be put into place and with limited time to consider full interoperability’ (UK NAO, 2011: 4).

have a number of options, including taking the system ‘into core’, meaning accepting it into its inventory as contingent capability. This will normally require that its support arrangements, probably sub-optimal, are formalized with enduring contractual arrangements, provisioning systems, maintenance strategies, training, and obsolescence management strategies being put in place. Another option is to dispose of the system abruptly, through removing it rapidly from service. This will usually result in logisticians having to dispose of whatever inventory and other support resources were in place. Another option is to run the system on until its support resources have been consumed and then remove it from service. This will require logisticians to manage the expectations of users so that they are aware that the systems concerned will reduce incrementally, and are able to plan for this reduction, replacing the no longer supported systems, as they fail, with alternatives. These alternatives may not be as capable or as popular with the user.

Managing reverse logistics Forward and reverse flows – a distinguishing reality of defence supply chains? Arguably, one fundamental truth about the defence supply chain, and the wider defence support chain, is that when hostilities cease, or the humanitarian or crisis response operation has concluded, deployed force elements will be withdrawn and recovered back to home base, to an FMB or to some other location. Put simply, everything the force has brought into theatre must be taken out again. On the face of it, setting aside what has been consumed during the operation, everything that flowed downstream must now flow upstream, a fact that distinguishes defence supply chains from those which are purely commercial.

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Prioritizing the reverse flows to enable the support chain Several chapters, notably 2, 7 and 12, discuss the reverse flows along the defence supply chain. During current operations, while logistic support is geared to sustaining the combat power of force elements so that the required direction and tempo of operations can be maintained, reverse flows of particular significance are those of the repairables flowing upstream to undergo MRO operations. As is discussed in Chapter 6, in many cases whole systems will be dispatched back to upstream echelons for MRO. This may be a deliberate process of rotation designed to enable major overhauls of battle-fatigued systems to be undertaken, and to spread wear across the whole fleet. To achieve an efficient reverse flow of such repairables can be demanding; it requires that their upstream movement be afforded the priority it deserves. As is discussed in Chapter 10, defence departments are committing increasingly to output-based contracts for logistic support, which place the onus, to varying extents, on the contractor for delivering systems to specified levels and types of availability (eg so many flying hours, over a specified time period, available to fast jet training from a fleet of a specified type and configuration). The performance of contractors is measured against delivery of this required availability, and the reverse flows of repairables back to their factory or depth maintenance facility can be critical to whether they deliver. A problem arises when their performance is degraded by failure in the reverse flows along a supply chain the command and control of which lies in military hands, and over which they have little if any influence. Cultural issues can feature here: logisticians supporting the current operation tend to focus on the downstream, forward, flows of materiel because it is that which they need to support the battle being fought now. Therefore, they may not be inclined to endow the repairables flowing back to the home base, or to an MRO facility in depth in the theatre of operations or at an FMB, the priority that is essential to the long-term viability of the support chain and therefore to military capability.

End of operations and reverse flows At the end of an operation it would be unusual, and possibly a sign of strategic failure, if a nation’s defence forces were withdrawn without a progressive reduction of force levels and a staged drawing down of equipment, inventory and other materiel, infrastructure and people. However, that is not to say that logistic planners are likely to have all the freedoms they desire to

Defence logistics in context

achieve a carefully phased and managed drawdown and withdrawal from theatre; for example, the withdrawal of UK, US and other coalition forces at the conclusion of the 1991 Gulf War was to a large extent shaped and influenced by cultural sensitivities and the need to have completed the bulk of the task before Ramadan. Defence departments engaged in drawing down their resources may have to contend with ongoing enemy activity or the hostility or intransigence of the local population. The need to ensure the physical security of militarily sensitive equipment may force them to fly it out of theatre, with all the expense and coordination that implies. Governments may instruct their defence forces to dispose of surplus materiel in theatre by gifting it or selling it to the host nation or to other coalition partners. This will add a degree of complexity to planning for road, rail, sea and air lift, the segregation of those stocks which are being disposed of in theatre, and decisions around whether the inventory, infrastructure and other resources associated with the systems being disposed of is also gifted or sold with main systems.

Sustainability and reverse flows A developing challenge for defence is that of managing its supply and support chains in a sustainable fashion, and the reverse flows of materiel are potentially an important contributor to sustainable practice. The principles of sustainability are usually described as comprising three pillars (the three Es): ●●

economic development;

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social equity; and

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environmental protection.

Organizations have to balance the three pillars. The interpretation of what being ‘sustainable’ means to a specific organization will facilitate the identification and prioritization of improvements aligned with the three pillars. The interactions between the three pillars have yet to be fully appreciated or understood by many organizations, including, arguably, defence. The United Nations (2015) defines supply chain sustainability as‘the management of environmental, social and economic impacts, and the encouragement of good governance practices throughout the lifecycles of goods and services’. The Sustainable Chain Foundation (SSCF) (2017) states that this includes the integration of environmental and financial practices into the complete supply chain life cycle, from product design and development to material

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selection (including raw material extraction or agricultural production), manufacturing, packaging, transportation, warehousing, distribution, consumption, return and disposal. This whole-life-cycle approach, including return and disposal, is therefore important in a discussion about the reverse flows of a defence supply chain. In 2012, the UK MOD, for example, made initial steps to adopting a sustainable supply chain through a commercial policy, by applying sustainable procurement principles to all MOD contracts, regardless of size or scope. However, one of the characteristics of expeditionary operations is that they are carried out at distance from the eyes of the general public, who may, therefore, be largely unable to assess whether a defence department, in concluding its operations, has put into practice its stated intent to promote and encourage sustainability. The term ‘disposal’ deserves some examination. At tactical level the defence logistician should be at least aware of the broad potential in defence materiel for it to be reused, remanufactured or recycled, because this could be significant not only to how reverse flows from theatre, and disposals in theatre, are carried out in the present, but how they should be planned to be more sustainable in the future. Supply security should always feature in a defence logistician’s planning for sustaining operations. A developing issue is how supply security relates to sustainability as defined above. Defence technology makes particular use of Rare Earth Elements (REE) to deliver, for example, the miniaturization of surveillance and target acquisition systems. REE are a group of 17 metallic elements whose chemical and physical properties make them indispensable for a range of defence applications. Whether the challenge lies with the security of supply of REEs, or of other metals and substances which are in short supply, it is becoming increasingly necessary for logisticians to plan and manage the reverse flows with a mind on the strategic significance of some materials. Disposal should, therefore, not just be tactical in its focus but should also perhaps be strategically informed where appropriate. Moss et al (2013) looked at critical metals based on an analysis of market dynamics, global supply and demand forecasts. They identified 14 important metals based on the level of supply required between 2020 and 2030, five of which were considered to be at high risk of shortage: neodymium, dysprosium, indium, tellurium and gallium – with indium, neodymium and dysprosium being important for permanent magnets, important components in head-up displays, ballistic missiles etc.

Defence logistics in context

Items attractive to criminal and terrorist organizations (ACTO) A defence logistician should be aware that some ‘spent’ materiel items, which might, in the past, have been discarded as waste, have value to the ill-disposed and must be disposed of very carefully. Some ammunition items are also inherently attractive to the ill-disposed and will require particular handling and security. These items are classed as ACTO. There is a clear logic to classifying some natures as ACTO; ready-use ammunition natures are good examples, these items being classed this way because they do not need to be initiated by, or fired from, a parent weapon system. Other items may be less obvious, for example spent batteries which actually retain some residual power, or ammunition containers, both of which might serve as useful components in an IED.

Summary A variety – or perhaps what might be better termed an eclectic mix – of subjects has been examined in this chapter, but with a unifying aim of, broadly, setting defence logistics into some kind of context. It is dangerous to generalize about many things, and defence logistics is no exception. Nonetheless, there are many realities about the support to military operations which justify discussion because they illustrate some of the distinguishing characteristics of the defence support business. The need to achieve a balance between efficiency and effectiveness is a key theme, which features in most of this chapter’s content. So too is the need to manage supply risk, because supply failure may lead to operational disaster. It seems fair to assert that every sector has to manage the potentially adverse effects of the environment and the variables that can shape logistic practice, but a failure to recognize their influence, and to manage it, could be catastrophic in the defence domain. Perhaps the key contextual reality about defence logistics is that it can be complex and challenging.

References FSA (2017) HACCP (Hazard Analysis and Critical Control Point) [Online] https://www.food.gov.uk/business-industry/food-hygiene/haccp [accessed 28 September 2017]

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Defence Logistics Harrison, A, van Hoek, R and Skipworth, H (2014) Logistics Management and Strategy: Competing through the supply chain, 5th edn, Pearson, Harlow McCullen, P and Towill, D R (2002). Diagnosis and reduction of bullwhip in supply chains, Supply Chain Management: An International Journal, 7 (3), 164–79 Moss, R L, Tzimas, E, Willis, P, Arendorf, J and Tercero Espinoza, L (2013) Critical Metals in the Path Towards the Decarbonisation of the EU Energy Sector: Assessing Rare Metals as Supply-Chain Bottlenecks in Low-Carbon Energy Technologies, JRC Scientific and Policy Reports [Online] http://www. oakdenehollins.com/media/308/Critical_Metals_Decarbonisation.pdf [accessed 10 July 2017] NSO (2015) NATO Standardization Office, NATO Standard Allied Joint Publication AJP-4.10: Allied Joint Doctrine for Medical Support, Edition B, Version 1 NSO (2016) NATO Standardization Office, NATO Standard AASTP-5: NATO Guidelines for the Storage, Maintenance and Transport of Ammunition on Deployed Missions or Operations, Edition 1, Version 3 NSPA (2016) electronic NATO Ammunition DataBase (eNADB), NATO Support and Procurement Agency [Online] http://www.nspa.nato.int/leaflets/docs/ eNADB.pdf [accessed 15 September 2017] Sustainable Supply Chain Foundation (SSCF) (2017) What is sustainable supply chain management? [Online] http://www.sustainable-scf.org/ [accessed: 15 August 2017] UK Ministry of Defence (MOD) (2015) Allied Joint Doctrine for Medical Support, Allied Joint Publication-4.10(B), Development, Concepts and Doctrine Centre, Ministry of Defence [Online] https://www.gov.uk/government/uploads/system/ uploads/attachment_data/file/457142/20150824-AJP_4_10_med_spt_uk.pdf UK NAO (2011) Report by the Comptroller and Auditor General HC 1029 Session 2010–2012: Ministry of Defence: The Cost-Effective Delivery of an Armoured Vehicle Capability, National Audit Office [Online] https://www.nao.org.uk/ wp-content/uploads/2011/05/10121029es.pdf [accessed 15 September 2017] United Nations Economic Commission for Europe (UNECE) (2011) Recommendations on the Transport of Dangerous Goods Model Regulations, Volumes I and II, 17th rev edn, United Nations [Online] available at: https:// www.unece.org/fileadmin/DAM/trans/danger/publi/unrec/rev17/English/ Rev17_Volume1.pdf [accessed 7 September 2017] United Nations Global Compact (2015) Supply Chain Sustainability: A Practical Guide for Continuous Improvement, 2nd edn, United Nations Global Compact and BSR [Online] https://www.unglobalcompact.org/library/205 [accessed 01 September 2017] US GAO (2006) Report to Congressional Committees, Defense Management: Additional Measures to Reduce Corrosion of Prepositioned Military Assets Could Achieve Cost Savings, United States Government Accountability Office [Online] http://www.gao.gov/assets/260/250435.pdf [accessed 1 September 2017]

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Mat t h e w S u mm e r s

Resilience as a concept Introduction Modern defence systems are significantly complex entities, with a typical military platform containing vast numbers of individual components and sub-systems that require sourcing and supporting activity to ensure equipment availability through life. As we have seen, this has resulted in modern defence supply chains that are highly complex, often with many tiers of suppliers and sub-suppliers. These suppliers form a global marketplace, embracing the concepts of globalization and outsourcing to access specific technical and manufacturing expertise wherever it is found. This results in supply chains that are truly global in reach, with manufacturing, storage and distribution pathways located anywhere across the planet. While such global supply chains provide many benefits to supplier and purchaser (for example, through lower costs and access to specific specialist skills), one result of their implementation is an increased level of exposure to uncertainty and risk. This is due to properties such as increased geographical footprint, higher numbers of nodes and links, and a more volatile global environment within which the supply chain is expected to exist and operate. As Barry (2004) states, ‘An enterprise may have the lowest overall costs in a stable world environment, but may also have the highest level of risk – if any one of the multiple [risk] factors [promulgate] up an elongated global supply chain.’ The long planned lifetimes of modern defence systems exacerbate this risk and uncertainty exposure, since the world will change over the course of

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the systems’ operational life, often beyond that expected or assumed when supply chain or support chain planning was contemplated and implemented. It therefore means that any risk and uncertainty in the supply chain is clearly undesirable. Realization of risks or a failure to plan for accommodating uncertainty can have direct implications on the ability of the supply chain to continue to function as intended, either through a partial reduction in performance or a complete failure. This presents obvious issues to the organization/user who demands and expects reliable and effective supply chain functionality to enable operational delivery. Acquisition of new equipment, infrastructure and services is entirely dependent upon contracted suppliers to provide required quantities and quality of components and sub-assemblies in a timely manner. Failure to do so often leads to delays in projects entering service, with consequent increases in costs and media criticism of defence procurement organizations and governments. Where supply chains are providing necessary elements required for support of in-service equipment or services, any disruption to the supply chain’s ability to deliver the required items to time and quality may directly impact military capability and operational effectiveness, with any number of resultant consequences to mission success and campaign outcomes. It is therefore critical that supply chains are engineered with an ability to minimize risk and uncertainty, and continue to deliver their functional output whenever needed. The property of a supply chain’s ability to continue to function in the face of disruptions is termed ‘resilience’. Resilience as a concept isn’t particularly new. The idea of stability and resistance to change as properties within systems was first considered within ecology in the early 1970s when considering ecosystem responses to temporary external disturbances such as pollution. The concept was quick to spread, evolve and be applied within the biological and psychological disciplines in the 1970s, and into other social sciences such as economics and organizational management in the late 1980s. With the rise and formal recognition of systems engineering as a technical discipline by the early 1990s, the concept of engineered resilience – where design and architecture activities actively consider and embed resilience – began to take off. As global supply chains became very much the norm towards the end of the 20th century, the importance of continuity of supply and criticality of supply chains in delivering operational effect generated a new impetus in the study of supply chain risk management and supply chain resilience as management concepts. In the early 2000s, supply chain resilience was still considered a technical discipline in its ascendancy, with studies and

Resilience in defence supply chains

definitions at that point still extremely limited in number. Since then, as supply chain management and logistic management have matured as disciplines, supply chain resilience has continued to mature. It is now accepted as a critical component of the wider discipline of supply chain risk management through its ability to protect organizations and users by preserving the viability of the supply chain throughout the many possible disruptions and events that may occur throughout the lifetime of a defence system.

The key characteristics of resilience As would be expected from a concept that has been adopted and adapted by a great many technical disciplines, resilience means many things to many people and has a wide variety of definitions to accompany it. There are, however, several unifying themes that are present in the majority of the accepted concepts of resilience across the disciplines: ●● ●●

●●

Resilience is an emergent property. Resilience is judged against a single disruptive event – different levels of resilience are exhibited to different disruptions. Resilience performance evolves during a system’s life as internal and external conditions change.

Such concepts are deceptively simple when viewed in a list, but the realities of their application to real-world systems such as supply chains are far more complex. This is entirely down to the contextual specificity of resilience as a property. Resilience is termed an emergent property of a system, meaning that its ‘value’ is dependent not only on the composition of elements within the system – in supply chain terms, who or what is within the tiers – but also how and where they have relationships with each other across the system (supply chain). This extends to how the supply chain interacts with its external environments. Simply speaking, a supply chain system has as many ‘values’ of resilience as there are environmental conditions within which it is located and for as many different configurations as it can exhibit.

In this theoretical example, the global nature of the supply chain is clearly evident (Figure 5.1), with suppliers located across the world to supply the UK. Figure 5.2 shows the same supply chain as Figure 5.1, but having relocated the Japanese and Korean suppliers in Figure 5.1 to Chinese and Taiwanese suppliers in Figure 5.2, and the US supplier site to Florida in Figure 5.2.

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Figure 5.1  A global supply chain – supplying to the United Kingdom

Figure 5.2  As Figure 5.1, but with some suppliers relocated

The supply chain, while structured exactly the same in terms of processes and flows in both figures, will have significantly different resilience properties due to a change of geographical location of three of its elements. As discussed later in this chapter, although the end user in the UK may not see a difference in the product or service received, the supply chain itself is now exposed to different disruptions and potential events, swapping some disruptions for others, which could impact the final end user.

Resilience in defence supply chains

In establishing that resilience is indeed a complex, contextual and highly variable property of any supply chain, it is likely that many organizations or people ask the question ‘What can we do about it?’ One approach would be to accept that it is indeed too difficult and just let nature take its course, hoping for the best. Such an approach would make for a very short chapter and, of course, be poor supply chain management practice. However, that is what happens in many defence projects and, indeed, many non-defence projects relying on complex supply chains. Rather than being proactive in considering and engineering resilience into the supply and support chains, many organizations consider the contractual mechanism of agreeing a transactional relationship between themselves and their Tier 1 suppliers to be sufficient to generate a resilient supply chain. While mitigating risk in some quarters, primarily from financial exposure and the ability to impose penalties for failing to meet delivery targets, this actually does little to create a resilient supply chain. Risk is still prevalent in the supply chain, with the ultimate risk remaining with the procuring organization or end user since a failure to supply – irrespective of whether funds are spent or refunded – equates to a lack of demanded product or service, which, as discussed in Chapter 4, is likely to generate availability or supportability impacts on operational capability, with a consequent risk to mission success. Despite such difficulties when considering resilience as a system property, considering resilience engineering as an applied technical discipline has simplified the debate and uncertainty significantly. Like many supply chain concepts based on multidisciplinary considerations (the so-called ‘ilities’ such as reliability, maintainability, supportability and sustainability to name a few), defining what resilience actually is and aims to achieve from a supply chain management perspective enables us to then bound and refine the concept. Like many of the ‘ilities’, the view taken towards to implementing resilience is to base the development and application of the subject matter using engineering principles. As a result, the practical consideration and practice of resilience thinking and principles is often termed ‘resilience engineering’, and it is this perspective that will be applied throughout the remainder of this chapter.

Defining supply chain resilience Having an understanding of the key characteristics of resilience takes the concept only so far. As already stated in this chapter, the practical application of resilience as a concept is termed resilience engineering. But, what is supply chain resilience? This is a question that has been the subject of

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a number of studies since 2003 as the idea of, and desire for, supply chain resilience became more prominent. Ponis and Koronis (2012), in their aim to conceptualize supply chain resilience, conducted a systematic and structured literature review examining definitions of supply chain resilience. They found a number of different definitions for supply chain resilience within the academic literature spanning the period between 2003 and 2012. Despite each definition being different from the others, all contain the same underpinning philosophy and broad topics. This is unsurprising given the origin and ancestry of supply chain resilience within the systems engineering domain, which also exhibits the same broad philosophy and content. All definitions of resilience, therefore, refer to three key concepts in relation to a disruptive event: ●●

adapt;

●●

respond; and

●●

recover.

These concepts tend to suggest that resilience action is reactionary, that is, only occurs once a disruption to operation has manifested itself. The origin of resilience plays a part in explaining this viewpoint, since resilience actions were traditionally only developed and implemented when a disruptive event occurred. However, as the concept has evolved and resilience professionals now consider proactive resilience action in addition to reactive action, a more contemporary set of the three concepts is: ●●

absorb;

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adapt; and

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restore.

This broadly corresponds to actions and initiatives that are undertaken to ensure the system can continue to operate (ie the supply chain can continue to deliver) before, during and after an event (Figure 5.3). Each provides different challenges, focus and options for the resilience engineer when working within the logistic environment. The ability of a supply chain to absorb disruptions is vested in its capability to withstand change and continue to operate as intended. Simply put, absorption allows the supply chain to prevent events actually becoming a disruption, and can be equated to risk avoidance. All supply chains have an intrinsic level of absorption capacity, as it is a static property built into the supply chain when it is established. Absorption within a supply chain has, at some level, been a long-standing consideration due to the requirement

Resilience in defence supply chains

Figure 5.3  Resilience illustrated

Resilience

=

Absorb

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In relation to... Disruptions

of supply chains to be able to deliver as intended under defined conditions. As such, absorption is the intrinsic resilience property of the supply chain exhibited during the ‘business as usual’ state and is proactive to events that may evolve into disruptions. Effective absorption prevents events from becoming disruptions. Where disruptions do occur, a resilient supply chain will look to respond to the disruption and continue working through changing itself to maintain performance, or delivering a reduction in one or more of the expected performance outputs – whether timeliness, quantity or quality – from the supply chain. This ability to adjust to undesirable situations and change accordingly is called the adaptive capacity and its effects are seen in response to an event but during the event itself. As will be discussed later in this chapter, many options are available to the resilience engineer and supply chain manager in implementing adaptation during a disruption. However, unlike absorption where supply chain performance remains at the expected level, adaptation can result in reduced performance. Often, adaptation is implemented to balance operational delivery, criticality of output and longer-term survival of the supply chain itself. The final resilience concept that a supply chain may possess is the restorative capacity. This is the ability of the supply chain to return to business as usual following the end of the disruptive event. Restoration to business as usual consists of two aspects – performance and time – that are both important factors that must be considered. Performance is the level at which the supply chain operates during the recovery phase of operations following the disruption, while time is the rapidity of returning to business as usual. Clearly, it is optimal for the supply chain to return to full performance immediately upon the conclusion of the disruption, but real-world supply chains often have to compromise and accept both a performance reduction and time lag before returning to business as usual.

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Figure 5.4  Restorative capacity

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As an emergent property, all three capacities should be considered across the supply chain as a whole, although actions to improve capacities are often conducted at a local level. Information and relationships across the supply chain can significantly influence the ability to understand and implement change of the whole supply chain resilience, as will be seen later in this chapter. Ultimately, this leads to a definition for supply chain resilience – very simple in content yet powerful in application – that is fit for the contemporary defence logistic environment: Supply chain resilience is the capacity of a supply chain to absorb, adapt and recover from disruptions while maintaining an appropriate level of performance.

Supply chain disruptions Introduction Disruptions to the successful operation of a supply chain are the reason resilience is a required supply chain property. Fundamentally, if there is no

Resilience in defence supply chains

possibility of disruptions there is no need for resilience, since the operational environment of the supply chain is fully understood and shows no risks. Of course, this is a fictional nonsense in the real world as it is impossible to eliminate every possible risk that a supply chain could encounter.

There is a philosophical question as to whether the intrinsic resilience that is naturally created by a supply chain from its structure and composition is the reason why there is an observed lack of disruptions, or whether there are truly no disruptions acting upon the supply chain. In the modern environment, as has been discussed in this chapter and others, a lack of potential disruptions in today’s complex environments and organizations would be highly unusual and extremely unlikely.

Disruptions occur from events that interact with the supply chain and change its performance from that planned and expected. While the change in performance is most often negative, it is not exclusively so. Disruptions can also occur where elements of the supply chain increase their performance unexpectedly, such as increased production rates in one area of the supply chain that cannot be managed, creating inventory and downstream product flow issues. A supply chain disruption can be defined as ‘an event or situation that interacts with the supply chain and has the potential to modify the supply chain’s ability to deliver to expected time and quality conditions’.

Because of the wide plethora of events that are possible, disruptions come in many forms and from many sources. Attempting to list every potential disruption to every kind of supply chain would be impossible due to the contextual specificity of disruption vs supply chain. However, it is possible to group disruption sources into broad families that consist of disruptions driven by similar types of event.

Categorizing disruption sources Although disruptions are unique events, contextually linked to an individual supply chain, their sources can be categorized. Since supply chains are constructed entities, they have internal structure and they sit within one

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Figure 5.5  Internal and external disruption to a supply chain Tiers of Suppliers Second Tier

Tiers of Customers First Tier

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or more environments. Complexity therefore exists within and without the supply chain, and events can occur in both areas too. This leads to the idea of disruption ‘type’, which categorizes disruptions by where they originate in relation to the supply chain and its boundary (Figure 5.5): ●●

●●

external disruptions – disruptions that originate outside the supply chain, and impact upon it. internal disruptions – disruptions that originate inside the supply chain, and impact within it.

External disruptions Of the two types, external disruptions are the most widely considered and accounted for within supply chain management. This is due to a combination of human nature being more comfortable with, and aware of, its physical environment and how it impacts on our activities, and the background of resilience as a technical discipline examining change from external environmental perturbations. As such, there are a number of different categorization regimes for external disruptions, although, as with defining supply chain resilience as a concept discussed earlier in this chapter, most are variations on a theme with common elements.

Resilience in defence supply chains

The most accepted and widely used categorization is based on the PESTLE approach, which groups disruption sources into Political, Economic, Social, Technological, Legislative and Environmental groupings. Any possible external disruptions that may impact a supply chain can be placed into at least one of the PESTLE groupings. PESTLE analysis is well understood and utilized within both civilian and defence business environments as a way of analysing and accounting for business and organizational risks. Consequently, it is ideally suited to categorize potential sources of disruption to supply chains.

Political disruptions Political disruptions are far more common within defence supply chains than in civilian equivalents. Such disruptions most often occur when policy places demands upon the supply chain or purchaser that usually result in enforced constraints or a lack of options. Common political disruptions within defence supply chains relate to enforced use of companies that are ‘home grown’ within the supply chain, despite them not being the optimum choice for the particular project, or a prevention from using companies located within certain foreign countries for political or security reasons. Often, political decisions can also result in the generation of disruptions within the other categories, especially the economic, social and legal groups. Economic disruptions  Economic disruptions can directly impact supply chains in a number of ways. At a simple level, defence budget cuts or financial insolvency of suppliers within the supply chain can have a degrading or immediate impact on the viability and performance of the supply chain. More complex can be instability and variability in the economic environment(s) within which the supply chain is located. With increased global reach and locations within the supply chain, currency fluctuations can have a significant impact on supply chain performance, since the pricing of items throughout the supply chain may be in currency other than that between purchaser and Tier 1 suppliers (or the currency between purchaser and a Tier 1 supplier may not be the purchaser’s national currency eg the UK purchasing equipment in US$). Variability in the currency markets (and similarly for the materials markets for the raw material suppliers) can present significant disruption to the supply chain through pricing volatility. Within the defence environment, this is seen across both bespoke and offthe-shelf products and services, since the supplied item is not the issue, but the currency within which transactions between supplier tiers are conducted. Economic disruptions can sometimes perturbate into political and social disruptions.

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Social disruptions  Changing culture and social expectations drive disruptions within this group. Of the six groups, social disruptions are often the most difficult to identify, predict or account for within the supply chain. Traditionally, social disruptions were often limited to safety concerns such as production methods and general working conditions. However, over time this has evolved to encapsulate cultural differences and methods of working, and general expectations for conducting business. With the rise and pervasion of social media, increased media reporting and increased public knowledge of and interest in defence issues, social disruptions can result not only from actual actions upon the supply chain, such as strikes, but on perceptions that may or may not have foundation. The phenomenon of ‘fake news’ encapsulates this concept with rapid promulgation of stories that have no foundation, but are quickly accepted by users of social media and shared widely, ultimately going viral and then permeating into mainstream media. This then generates disruptions that, while based on rumour and speculation, nonetheless require action to resolve. Social disruptions often generate further disruptions from the economic, political and legislative groups. Technology disruptions Technological disruptions are generated where advances are made within science, technology or knowledge that render existing practices obsolete, inefficient or expensive. Often, the disruption doesn’t come from the technology itself, but so-called second- and third-order impacts of the technology, for example a lack of supportability affecting the supply chain’s competitiveness. A current example within supply chain and logistics is the rapid evolution and adoption of additive manufacturing technology and its impact on traditional fabrication methods, costs and production timescales. Technology disruptions can generate disruptions from any of the other five groups, depending upon the nature and utilization of the technology concerned. Legal disruptions  Legislation and regulation can generate disruptions when they are implemented or existing articles change. Legislation often changes in response to change in any of the other five groups, and usually occurs some time after the initial disruption has manifested itself given the legislative drafting process. Contractual issues also fall within the legal disruptions grouping and can cause disruptions through a lack of supply chain agility where contracts are not flexible, or where intellectual property rights (IPR) generate single points of failure.

Resilience in defence supply chains

Legal disruptions are most often generated by change within other disruption groups, but can generate disruptions themselves, usually where legislation or regulation is not fit for purpose and requires action (often with government). Typically, this would be through the political, economic and social groupings.

Environmental disruptions  Traditionally the most considered and mitigated of the possible supply chain disruption groups, environmental disruptions occur when the physical environmental conditions extend beyond those within which the supply chain was designed to operate. Typical disruptions within this group include traditional extreme weather events such as flooding and storms, but low-probability but high-impact events such as earthquakes and volcanic activity also fall within this group. More unique and applicable to defence supply chains, especially in the operational environment, are disruptions to the supply chain caused by physical attack. These are also considered to be environmental disruptions. Typically, environmental disruptions rarely create disruptions in other groupings. However, disruptions generated by physical attack, seen in recent conflicts, have increasingly generated political and social disruptions through public and political demand for mitigating action.

Internal disruptions In contrast to external disruptions, those that are internal to the supply chain cannot be easily categorized according to the generation source of the disruption. Instead, the location of disruption manifestation within the supply chain is used to categorize those disruptions that appear within it. When viewed in a simple diagram, supply chains can be considered to be composed of nodes and links, where the nodes represent production/storage/ user organizations or locations, and the links represent the flow of product/ service/information between the nodes. This disambiguation forms the core for the categorization of internal disruptions: nodal failure and chain failure.

Nodal failure  Nodal failure disruptions occur when a node within the supply chain ceases to perform as expected. While this is also a usual result from external disruptions, in that an external disruption often impacts a single or small number of nodes, nodal failure is directly linked to reliability of output. These disruptions are generally considered random and often short term in nature, and most often occur from reliability failures within the particular production or transportation process which the node is tasked to conduct. However, regular nodal failures of the same node within

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a supply chain may indicate an underlying root cause that could be managerial or process based in nature, such as insufficient inspection or quality control regimes. They are typically ‘point’ failures that manifest quickly, and are straightforward to diagnose.

Chain failure  Chain failures occur when two or more elements of the supply chain interact and result in a negative outcome in some way. The interaction may be direct or indirect, with the failure emerging as a property of how elements are centrally contracted, managed or generally behave with each other. Typically, chain failures arise between individuals or organizations for behavioural reasons. These failures are more common where competitors or suppliers with very different ethos or working practices (eg multinational and SME) are integrated into the same supply chain and are required to work closely within it. Chain failures are usually difficult to diagnose or mitigate early and can become a serious issue for the long-term viability of the supply chain. Effective relationship management and openness across the supply chain significantly reduce the possibility of chain failure through a willingness to work in a collegiate manner, rather than being part of a supply chain that is linked only by transactional relationships where many players have a cunning plan to enhance their position and interests, steal a march on their competitors and unbalance the supply chain.

Architecting resilience into the supply chain Having defined the properties that a resilient supply chain should exhibit, and where disruptions that generate the need for resilience are likely to emerge, the final part of this chapter takes these concepts and demonstrates how they should be architected and integrated into the defence supply chain. The overall aim of architecting resilience into the defence supply chain is to develop and integrate an appropriate level of absorptive, adaptive and restorative capacity within the supply chain (Figure 5.6). The term ‘appropriate level’ is an important consideration, since any action to improve resilience performance of the supply chain should be considered along cost– benefit lines, whether formally or informally, to provide confidence on the requirement for resilience in relation to the possibility of a disruption. In this way, resilience architecting is no different from standard risk assessment and mitigation processes. However, this is where resilience mitigation and risk assessment and mitigation begin to diverge. There remain close linkages, since resilience architecting

Resilience in defence supply chains

Figure 5.6  Architecting resilience into the supply chain Planned Supply Chain

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Evolve Supply Chain

Improve Adaptation Measures Improve Restorative Capacity

is a critical component of risk management, but the overall approach and perspective taken when architecting resilience differs. This is driven by the primary aim of resilience, which is to prevent loss of performance across the supply chain during disruptions. Loss of performance directly relates to supply chain function, which means that the majority of resilience architecting is undertaken within the functional architectural environment.

Functional architecture views the supply chain not as a ‘how’ or ‘where’ but as ‘what’. In simple terms, the entire supply chain or network is converted into a series of linked functions. A function is defined as a process that takes inputs and transforms them into outputs, and is often a verb. This

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also means that single nodes within the supply chain may have more than a single function (and often do). For example, a warehouse when viewed functionally could be seen as ‘categorize product’, ‘quality control’, ‘store’ and ‘prepare for transport’. Because a functional architecture defines what the supply chain must logically do from end-to-end to successfully meet the end user’s requirements, they can also be called ‘logical architectures’.

The first task in the architecting process is to identify and understand the supply chain under consideration. At this point, a supply chain may be extant and already in operation, and the purpose of the architecting is to examine and, if necessary, improve the resilience capacity of the supply chain. Resilience architecting may be required as part of a modification to an existing supply chain to support a new product or service being introduced, or it may involve a whole new supply chain that is planned to deliver and support a new procurement or operation. Irrespective of the rationale for the activity, the key is to map the supply chain of interest as a functional architecture, with additional relevant information such as supplier, cost and location if available. Through conducting this exercise, it will be possible to identify any knowledge gaps in the overall supply chain at the defence procurement organization/operational headquarters level, but also at lower levels of the supply chain. Limited knowledge of the lower tiers of the supply chain is not unusual, and this often means that chain failures are unable to be prevented due to incomplete information. Often, the lower tiers of the supply chain have particular challenges owing to their location or the bespoke and specialist nature of their role in the wider supply chain. A prevailing view within many defence procurement organizations is that the lower tiers of the supply chain have increased redundancy within them because of the perception of supplies being less specialized and more easily acquired from elsewhere. Whereas this was once a reasonable stance for many procurement projects, modern suppliers such as SMEs at Tiers 4+ provide bespoke and very niche components and skills to the supply chain, often covered by extensive IPR and patent protection. This means that a lot of procurements have single points of failure and vulnerabilities at lower tiers of the supply chain without it being realized until a disruption from their absence occurs. Once the supply chain has been mapped functionally, geographically and financially, identification of disruptions of relevance to the supply chain

Resilience in defence supply chains

is the next step in the process. Here, there are many options and methods available to the resilience engineer to identify likely disruptions. The most useful to begin with is prior experience. This can be through individual experience and knowledge, and/or organizational ‘corporate memory’. Defence supply chains at the higher tiers typically involve the same suppliers and sites for many projects and programmes, both contemporarily and historically. Such long-standing relationships can provide much information regarding historical disruptions – especially in the economic, social and environmental disruption categories – and previous actions that have been implemented to overcome them with an understanding of success (or not). Many defence organizations keep much data and information, but utilize them poorly when applied to learning from experience. This then leads to the same errors perpetuating across projects, or funding unnecessarily spent on scoping studies that have already been conducted and recommendations made. Formal identification and utilization of prior experience has the additional advantage of providing real-world data and knowledge of what happens when resilience is, or is not, implemented within the supply chain. This is useful when preparing cost–benefit analyses and providing evidence of the need to be resilient, and the impact (materially and financially) of failing to do so. The use of both prior experience and learning from experience data sets and information can be enhanced through the use of multidisciplinary teams. Good practice is to include as many supplier representatives as possible/feasible in this activity to enhance relationships and provide reassurance that resilience can be embedded across the supply chain, rather than just between the procuring defence organization and prime suppliers. A workshopping activity within such a group enables a wide view and identification of the potential disruptions to be conducted. This works well in preventing disruptions from being missed but also, more importantly, reduces the possibility of over-, or under-, estimating the likelihood and impact of disruptions on the supply chain, something that can happen in a knowledge vacuum or when a single individual is providing estimation. The use of modelling, simulation and other analysis to provide information is also of crucial importance at this stage. There are a wide number of sources of data available to support resilience activities at this stage. National and international natural environment data are available from many organizations, including national meteorological and oceanographic offices and academia, while global environmental, social and economic data sets are obtainable from sources such as the United Nations and reinsurance organizations such as Munich Re. Many defence organizations have

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existing data exchange mechanisms and areas within them that examine such data to develop and propose ‘futures’ against which military planning can be conducted. These are also extremely useful sources of information. Finally, analysis and outcome modelling such as those discussed in Chapter  14 can also be used to supplement and enhance the information available at this stage. At this stage, the resilience engineer will have a set of possible disruptions and a mapped supply chain. The disruptions are then applied to the architecture to generate a ‘disrupted architecture’. There are a number of ways this can be undertaken, from a table-top qualitative examination through to detailed quantitative modelling and simulation of the supply chain. The appropriate method to take at this juncture is selected based on the circumstances in which the resilience engineers find themselves, the required exploitation of the architecting process and the options available for implementing/evolving the supply chain. If no subsequent action is taken, the exercise will, at the very least, provide an assessment of the risks to the supply chain operation and an indication of the likelihood of such risks occurring. The ‘disrupted architecture’ is then compared with the required supply chain performance – usually through the perspective of one or more of quantity, quality, timeliness and cost – to quantify where the vulnerabilities and issues, if any, could impact the functional performance of the supply chain should disruptions occur. In the majority of situations, this will be a number of different possible disruptions impacting at different parts of the supply chain. Good practice is to log these disruptions, along with their predicted impact, in a simple master matrix. Many defence projects hold such documents but under a variety of different names. In the UK MOD, for example, it is likely that this information would be entered into the project risk register. This supports effective communication of the identified disruptions and their likely impact to relevant stakeholders as required, and facilitates consistency where project posts are staffed by military personnel on rotation. At this stage, resilience engineering and risk management reconvene as disciplines, since the disruptions and their effects identified are now assessed for possible mitigation action. The matrix of disruptions and effects is then considered on a case-by-case basis and assessed for action. There are typically three possible decisions to be made for each identified disruption: ●●

no impact;

●●

tolerate;

●●

mitigate.

Resilience in defence supply chains

For the first two decisions, the subsequent action is simple. Simplistically, there is no action taken. In the case of no impact, the result of the analysis and performance comparison may suggest that there is no disruption to the supply chain performance as a whole resulting from what was originally thought to be a disruption. This may be because any disruption at a local level is automatically mitigated through a process that requires inventory, or an ability to switch production to an alternative site. Where there is a performance impact, the decision may be taken to tolerate the possibility of the disruption occurring or its proposed impact on the supply chain. This decision is often taken where the likelihood of a disruption occurring is low, or where the impact is considered tolerable. In some cases, the decision to tolerate is taken because the cost of implementing resilience measures to mitigate the disruption is too high. Finally, tolerance of disruptions may be an enforced outcome where it is impossible to prevent the disruption through resilience engineering options. In all of these cases, a record of the decisions and their underpinning reasons should be made and reviewed on a regular basis to ensure that the supply chain remains understood and any assumptions or decisions remain current and appropriate. Mitigation within resilience architecting means changing the absorption, adaptation or restoration capacities of the extant or current planned supply chain. Of the three, increasing absorption capacity is often the most costly, but also the most effective since it removes the possibility of the interacting event becoming a disruption. Enhancing the absorption capacity of the supply chain focuses on proactive actions to prevent the event becoming a disruption. In this regard, efforts should initially focus on event avoidance, since not experiencing an event means it can never become a disruption. The geographical location of suppliers and selecting those that are less exposed to disruptions is a key action to maximize absorption capacity. Location can make a significant difference to the exposure of parts of the supply chain to a wide range of external disruptions beyond just the environmental group. Political, social and economic disruptions are all heavily influenced by where the supplier is physically located. While this is well understood for the higher-tier suppliers, those in the mid and lower tiers of the supply chain will be less so. It is not unusual for component-level and raw-material-level suppliers to be located in countries that are not closely aligned to Western countries, and this represents a significant disruption risk of which defence procurers may be unaware. Events which are considered distant and of no impact to the supply chain can in fact impact the lower tiers. For example, the 2011 Tohoku earthquake and subsequent tsunami in Japan generated a total global production shortfall of

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automotive vehicles by 16 per cent, even though most of the non-Japanese manufacturers in the automotive sector did not consider Japan to be a part of the supply chain (Canis, 2011). Where avoiding disruptions is not a realistic proposition, absorption can be engineered into the supply chain in many other ways. At the node level, protection from physical impacts, either from natural causes such as climate change, extreme weather events or geological impacts or from physical attack, should be considered. Cost–benefit assessments based on likelihood of disruption, criticality of supply node and operational impacts will be the likely considerations for implementing measures. However, reputational and financial impact should also feature in this consideration as both are increasingly important within the business environment. Further increases to the absorption capacity of the supply chain can be implemented through nodal redundancy. This is where the supply chain has multiple locations and/or suppliers providing a single nodal function. This provides advantages to the resilience of the supply chain, since entire production or storage facilities that are geographically dispersed are unlikely to be disrupted simultaneously, providing reduced, but not zero, functionality. However, within the defence supply chain multiple suppliers are possible, but unlikely to be prevalent at all levels due to a lack of suitable suppliers, IPR constraints and a restricted marketplace. When considering nodal redundancy, therefore, it is important to examine the supply chain as a whole, since while individual paths or even tiers can be made resilient through the redundancy approach, it is possible that there will be single points of failure either above or below the resilient tier that renders the redundancy efforts nugatory. In contrast to absorption, adaptation measures are implemented once an event has occurred and a disruption has resulted from the event. This reactionary nature means that only planned adaptation can be developed when architecting. Options for adaptation vary, but moving production to a secondary site is common. Creating temporary inventory through stockpiling, if an event and subsequent disruption are known to occur (such as a hurricane or cultural event), also offers the ability for the supply chain to exhibit resilience for a set period of time. A further option is to accept reduced performance of the supply chain during a period of disruption, but such an option is entirely dependent on the criticality of the product or service being supplied. Where such items are critical, absorption would be the more appropriate capacity to improve. A final option would be to accept the total shutdown of elements of, or the total, supply chain during a disruptive event where the overarching imperative is supply chain survival. As with

Resilience in defence supply chains

the absorption measures, each action to improve the adaptation capacity is considered in relation to the overall context and associated impacts that the supply chain and procuring organization/operational command will face. Adaptation is often less costly than absorption, but with reduced cost comes reduced performance, since the disruption will occur when relying on adaptation and it is reacting to it and surviving that becomes the focus. Planned versus unplanned adaptation is less clear when costs and effectiveness are considered, although planned adaptation offers more certain outcomes and often reduced costs, since plans are prepared and resources implemented in a more streamlined fashion. In many cases, a combination of both planned and unplanned adaptation is required when facing a disruption for the first time and the planned measures have not been fully tested. Efforts to improve the restorative capacity of a supply chain are generally limited in scope when architecting the supply chain. The ability of a supply chain to return to business as usual is dependent on the effectiveness of the adaptation capacity and measures – planned or unplanned – implemented to ensure the supply chain survived the disruption in some way. Essentially, the speed and ability to return to business as usual are dominated by the provision of resource. These resources depend on the nature of the disruption, but funding is usually a key requirement. Activities such as insurance are beyond the remit of defence procurers and operators but are key factors within the supplier organizations for providing restorative capacity through the provision of funding. Some disruptions require human capital to rectify and return to business as usual through the provision of suitably qualified and experienced personnel being made available to reset financial issues, support a reconfiguration of the supply chain through provision of contracting expertise and legal advice, or the implementation of a positive media campaign to rectify a social disruption. All of these are unlikely to be declared or considered during the architecting process, but awareness should be maintained by those in positions with responsibility for supply chain resilience. Once the options for increasing the resilience capacity have been explored and proposed, they can be implemented on the ‘disrupted architecture’ and the comparison exercise repeated. This iterative process is continued for as long as is required or appropriate (typically until a cost-effective and acceptable solution state is reached). Once the proposed supply chain architecture is accepted, actions to implement it are undertaken. This will be conducted by the suppliers themselves, but under the review of the relevant area of the defence department. The information and actions implemented should be recorded not only on

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the disruptions matrix, but also as part of a learning from experience exercise to help inform future projects and programmes. The performance of the supply chain in operation should then be monitored and its performance, both during business as usual and in response to disruptions, recorded to supplement learning from experience and facilitate future evolutions of the supply chain or similar supply chains. This provides direct enhancement of the prior experience of the resilience engineer. This means that through this process, resilience of all supply chains within the organization should improve through the accumulation of knowledge and experience.

Summary As this chapter has discussed, resilience enables the supply chain to continue to function in an era of highly complex, interconnected and globally spread supply chains and networks that are ever more exposed to potential disruptions. The discipline is still relatively immature and yet to be fully incorporated into routine business as usual within the logistic and supply chain management profession. However, this continues to change rapidly through an increased recognition of its contribution to supply chain risk mitigation efforts and resultant improvements in performance. Integrating resilience into the supply chain is best achieved when information about the nature and composition of the whole supply chain is available. This is a weakness in many supply chains, especially within the defence sector, where knowledge of the supply chain beyond immediate suppliers is nebulous or often non-existent. Information and knowledge enable informed decisions to be made to implement appropriate levels of resilience within the supply chain rather than over- or under-engineering resilience into the supply chain, with the financial and operational implications this brings. The three components of resilience – absorption, adaptation and restoration – all differ in terms of their implementation costs and their resultant performance, but all share the common factor of being concepts that impact or influence many of the topics and aspects of defence logistics covered within this book. As such, resilience is a broad theme that cuts across many of the individual disciplines found within defence logistics as a subject matter and should be viewed as such. This chapter outlines the nature of resilience and disruptions, categorizing both and providing a process for architecting resilience into the supply chain. Whether examining a procurement or operational supply chain, the

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process remains the same, although the disruptions, information available and timings will undoubtedly differ. This scalability of the approaches and application to any supply chain or network based on a set of principles and concepts is an important benefit of the resilience approach over other risk assessment and mitigation techniques and represents a key reason why resilience will become de rigueur as a performance management discipline in the future.

References Barry, J (2004) Perspectives: supply chain risk in an uncertain global supply chain environment, International Journal of Physical Distribution & Logistics Management, 34 (9), pp 695–97 Canis, B (2011) The motor vehicle supply chain: effects of the Japanese earthquake and tsunami, Congressional Research Service, R41831, Washington, DC Ponis, S T and Koronis, E (2012) Supply chain resilience: definition of concept and its formative elements, The Journal of Applied Business Research, 28 (5), pp 921–29

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Integrating 06 mission and support systems through the life cycle Integrated logistic support and maintenance strategies J e r e my C D S m i t h

The mission system and the support system Introduction A book on defence logistics must address the support which is provided to defence systems: the ships, submarines, tracked and wheeled vehicles, fixed- and rotary-winged aircraft, artillery guns and guided missile systems, surveillance and target acquisition systems, information systems, and others, which national governments procure and support through life. As has been discussed in Chapter 4, these systems are more often than not expensive to procure and expensive to maintain through their operating lives. These lives may be very long, reflecting the imperative facing national governments to secure as much value as practicable from the high capital investment costs charged to the taxpayer, and the challenges associated with procuring what are often complex and highly specialized assets with typically long procurement lead-times. As is explained in Chapters 4 and 8, these assets are often

Integrating systems through the life cycle

critical to defence capability, and if their availability for use by military forces is poor, that capability will suffer, with a concomitant increase in operational risk. The purpose of this chapter is therefore to examine how defence departments go about designing, developing, deploying and sustaining the integrated logistic resources, processes and activities that will enable these defence systems to function as required, when required and where required.

A note on terminology For clarity we will, henceforth, refer to the system being supported as the mission system, and the integrated logistic resources, processes and activities as the support system. A significant element of the support system is the maintenance, repair and overhaul (MRO) which the mission system requires through life, and MRO will feature significantly in this chapter. In Chapter 2 the distinction was made between the supply chain and the support chain, and the support system is effectively the support chain for a specific mission system.

The key characteristics of a support system What follows will reveal that support systems have three key characteristics: ●●

they are underpinned by analysis;

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they are ultimately the result of trade-off; and

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they evolve during the mission system’s life.

The decisions about their design, development, deployment and sustainment are informed by a combination of quantitative reckoning and qualitative judgement. These decisions reflect the reality that perfection in a support system is unlikely to be achievable, and if it were achievable it would be unaffordable, so that ultimately it represents a compromise, or to put a more positive spin on it, an optimization of variables. A support system with any longevity will evolve because the wider context in which it functions evolves; nothing stands still, especially for a mission system with a long in-service life.

The Vickers VC10 was a British airliner, designed and built by VickersArmstrongs (Aircraft) Ltd. Its last flight in British Royal Air Force livery was in September 2013, bringing to a close 47 years of military service. The support system in place when it first flew as a passenger and freight carrier evolved significantly over its long in-service life. It had to accommodate

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a variety of updates and upgrades, one of the more significant being its conversion to the air-to-air refuelling tanker role. It also evolved to keep pace with new maintenance and support technologies and approaches, and the dynamics of a changing industrial base and contractual relationships between the Ministry of Defence and its suppliers.

Integrated logistic support (ILS) – analysis and integrated thinking ILS: what it is and what it does Most Western democracies employ an analytical process to the design, development and delivery through life of a support system which they term integrated logistic support. ILS might best be considered as a management discipline, its principal purpose being to ensure that a support system represents the integration of logistic resources, processes and activities, this integration being the outcome of a structured, logical, analytical process. We will look in some detail at this analysis – what is generally referred to as supportability analysis – in this chapter, but before doing so it is worth stating what a defence department is trying to achieve in doing the analysis: supportable mission systems that are supported A mission system that is supportable is, by the characteristics inherent in its design, and by the resources, processes and activities procured, developed and in place ready for it, theoretically able to be supported. A mission system that is supported is, in reality, benefiting from these design characteristics and from the resources available for its support; in other words, that the support is actually being delivered to the mission system through its life to final disposal or termination. At this stage we should clarify what exactly is meant by the logistic resources, processes and activities which comprise the support system and which will have been subjected to the supportability analysis just mentioned. They are: ●●

the supportability analysis itself;

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reliability and maintainability;

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maintenance planning and provision;

Integrating systems through the life cycle

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supply support and the provisioning of inventory;

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technical publications and documentation;

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support and test equipment;

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facilities and infrastructure;

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personnel and human factors;

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training and training equipment;

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packaging, handling, storage, and transportation;

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computer support;

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costs;

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obsolescence management;

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configuration management;

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disposal; and

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data.

Defence departments typically refer to these as ILS elements and disciplines. These elements and disciplines are fundamental to achieving a mission system that is supportable and supported. The supportability analysis which enables this will have been planned and executed for best effect, and been validated and verified. Analysis of the system’s design and its reliability will inform identification of the ways in which it will fail: its failure modes. Designing the system for maintainability – ease of maintenance – will have been a key input to identifying the preventive and corrective maintenance actions which will be required either to prevent these failures occurring or to correct them once they have occurred. The inventory required to enable maintenance to succeed, and for other support tasks, will have been identified, provisioned and managed. The specific items required to effect maintenance will have been identified in a process known as ranging, and the quantities of each item required will have been calculated in a process known as scaling. Technical publications will have been developed to instruct operators and maintenance staff in how to use the system and carry out maintenance activities correctly, and to document many other resources, processes and activities. Support and test equipment, including, for example, calibration and diagnostic systems and the other tools required to effect corrective and preventive maintenance tasks, will have been procured and deployed to where they are required, this equipment ideally being general purpose, but with some special-purpose equipment no doubt also being required. Facilities and infrastructure will have been procured, built, or

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adapted for purpose, including, for example, dry docks, garages, hangars, workshops, inspection pits and lifting gear. The operators, maintainers, and other support personnel, and the skills and competences they will require, will have been identified, together with any training they require for initial and continuation skills development. Relevant training equipment will have been procured and distributed to where training is delivered. Appropriate packaging should have been developed for the system, and for the inventory items associated with its support, and any particular requirements for their handling and transportation developed, for example tie-down schemes for when they are transported on military freight vehicles. Computer support, including hardware, firmware and software, will have been developed and deployed to where it is required. It is inevitable that the cost of support will feature highly in any supportability analysis and in shaping the support system. Realistically, any judgement on whether a defence system is deemed to be supportable and supported must be informed by considerations of cost, and optimum cost implies trade-off.

Ultimately, any support arrangement will represent a compromise; a balancing of what can be done within the bounds of what is affordable.

The requirement to manage obsolescence is another key variable, all the more so the longer the mission system remains in service. Where the mission system is subjected to an update or upgrade during its service life, or where it is procured in different variants or marks, the result can be a significant configuration management challenge. The final disposal or termination of a mission system at the end of its life or usage can present particular challenges for the support system and will require careful planning and management. Running all the way through the supportability analysis, and the support of the mission system through life, is the need to collect, store, interpret and act upon relevant data.

The US Department of Defense codified the ILS discipline and logistic support analysis in 1973 with publication of its Military Standard 1388. The UK Ministry of Defence followed this with its equivalent Defence Standard 00-60, now updated to 00-600 (DStan, 2016). Other nations have developed their own standards or utilize those produced by the United

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States or UK. The purpose of a defence or military standard is, essentially, to support more effective procurement and support of defence systems and increased interoperability.

ILS: when it is applied If the full benefits of taking an integrated approach to the design, development and delivery of a support system are to be realized, the ILS process, and the supportability analysis which underpins it, should be applied from the outset of the procurement of any defence system, and should continue to be applied throughout its life cycle to completion of the final disposal or termination phase. Recognizing that many defence systems experience long in-service lives, it is essential that their maintenance and support arrangements are able to evolve and remain dynamic, for example to take advantage of developments in technology or to deal with the problem of obsolescence. The supportability analysis techniques applied within the ILS process enable this dynamic approach. They provide for the ongoing review of the support system put in place for when the mission system was first fielded, the gathering of support-related data and their interpretation in order to inform change to that system, and the implementation of any such changes. The ILS process emphasizes consultation between stakeholders throughout the life cycle. These stakeholders will typically be: the agencies that set the requirements for the mission and support systems; the users who operate the mission system in the field and who will provide any organic elements of the support system; and the project team which leads in the procurement and through-life management of the mission and support systems, which might include any system updates or upgrades during their in-service lives. The project team will be engaged with the commercial organizations that manufacture the mission system and elements of its support system, such as spare parts inventory and support and test equipment. If applied properly, ILS should influence the setting of maintenance and support requirements, to ensure that they are realistic, affordable and sufficiently comprehensive. It will influence the design of the system to promote its inherent supportability. This requires that due consideration is given to the mission system’s reliability and maintainability, ensuring that subassemblies and components are accessible, that the system employs open architectures, modularity and scalability, and that it is designed to be updateable and upgradeable.

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During its in-service life, a mission system will routinely be subjected to upkeep, which is the process of maintaining and otherwise supporting the system to ensure that it continues to operate as it was intended to operate when procured. During a long in-service life it may benefit from an update (sometimes referred to as a mid-life update or improvement), which is typically where new technology or other technical improvements are deliberately incorporated in the system, and which also delivers an improvement to the system’s capability, that is, it does more than it was originally procured to do. An example would be the conversion from analogue to digital instrumentation, which would be expected to bring performance improvements with it. It might be subject to an upgrade (sometimes known as a mid-life upgrade), which is where a deliberate decision is made to improve the system’s capability performance, possibly driven by a need to expand its role and utility to the user. Update will probably require adjustment to the support system, for instance a change to its range of inventory and to some of its maintenance procedures, and upgrade almost certainly will.

The timely completion of the engineering analysis, which identifies failure modes and the maintenance actions required to prevent them occurring or to fix them once they have occurred, should be managed as part of the ILS discipline. ILS encapsulates the procurement of all of the resources discussed above and their deployment to ensure that they’re in place ready to support the system when it is fielded. The consultation discussed above should ensure that the user is fully aware of the implications of accepting the system into service, and is ready to do so, ensuring that it can be fully integrated into existing organizations and ways of working. ILS should ensure the continuation of maintenance and support to the system throughout its life cycle, ensuring that desired levels of system operational availability are achieved, at optimum cost. It should also ensure that any updates or upgrades to the system are reflected in the support arrangements. As the system nears end of life and its disposal, ILS should ensure that levels of support reflect its drawdown and final withdrawal from service. If the system is subject to a phased drawdown, ILS should ensure that support resources reduce correspondingly but remain at a level that ensures continuity of support when and where it is needed. As the in-service system is progressively reduced, it may be the case that a replacement system is deployed in increments to replace it, creating a mixed fleet, which will

Integrating systems through the life cycle

require care to ensure that system-specific resources are directed only to the correct system. Where a system is withdrawn from service over a short time period, it may be desirable that the re-provisioning of inventory is stopped some time ahead of the event, so that inventory currently on the shelf can be consumed at a rate that ensures that there is sufficient to support maintenance activity out to end of life, but without leaving unconsumed stocks that will have to be disposed of at a cost to the organization.

ILS: how it is implemented and managed through the life cycle A national defence department will represent the life cycle of a mission system in a manner that suits its purposes, and there are a number of variants in use, all of which are broadly similar. The UK MOD employs the CADMID cycle illustrated in Figure 6.1. It is worth examining how ILS is applied to each of the CADMID cycle phases, and in particular the supportability analysis processes it employs.

ILS and the Concept phase In the Concept phase a statement of what the user will require of the mission system in service will be agreed. These outputs will be articulated as user requirements and captured in a document. In the UK MOD this is referred to as the User Requirement Document (URD). Having documented what the mission system should be capable of, there will also be an initial examination of technological options and procurement options – what, in terms of technology, the system might employ, and how it might be procured. This will require initial engagement with industry. ILS will focus on influencing the design of the system for supportability and on establishing its broad supportability requirements. These will also be documented. In reality some requirements will be technically too challenging to achieve, or will be unaffordable, and will be subjected to trade-off. Those which are deemed to be critical, and therefore non-negotiable, will be classed as Key User Requirements (KUR). It is common to see non-negotiable support Figure 6.1  The life cycle for a defence mission system – the CADMID cycle Concept

Assessment

Demonstration Manufacture

In-Service

Disposal

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requirements described as Key Support Requirements (KSR). ILS will also consider alternative support concepts, essentially broad options for how the system might be best supported in service through to final disposal at end of life, and it will quantify and articulate support-readiness targets for the system. For many defence departments the completion of the Concept phase is marked by a key decision point at which the time, cost, and performance boundaries identified during the phase are noted, and authority, and funding, are given for the project team to move on to the next phase of the acquisition life cycle, that of assessment. In the UK MOD, this decision point is known as Initial Gate.

ILS and the Assessment phase In the Assessment phase work will focus on specifying what the system must do in order to ensure that it meets the requirements set out in the URD. These system requirements will be documented in the same way that user requirements were and the result will be some sort of System Requirements Document (SRD). The project team and other stakeholders will also identify the most cost-effective technological option and procurement approach to follow. An important objective of ILS supportability analysis will be to influence this selection decision, ensuring that supportability factors, including support cost drivers, are included in the deliberations, and that any apparent support problems are identified, quantified and reduced or eliminated as far as is achievable. This is an important input to the assessment of risk in the decision process, and a significant objective of the Assessment phase is to reduce the risks associated with procuring a particular technological solution. In assessment, and during the early stages of the next life-cycle phase (Demonstration), broad support strategies and outline support plans will be developed, including probable support infrastructure, with outline costs. For particularly complex or technologically advanced mission systems, it may prove difficult, if not impossible, for all the user’s requirements to be met in full while staying within the bounds of what is technically achievable and affordable. Therefore, work within the Assessment phase will develop the SRD by trading-off time, cost and performance variables, in order to reach a technological solution that lies within the time, cost and performance boundaries agreed and funded in the Concept phase. A second key decision point, what is known in the UK MOD as Main Gate, will authorize continued funding of the system’s acquisition and approve progress on to

Integrating systems through the life cycle

the next acquisition life-cycle phase, or will direct that more work be done before this can occur.

ILS and the Demonstration phase During the Demonstration phase the system design will become more established and stable, thus enabling the identification of support requirements in more detail and with greater granularity of costs. It may still be possible to influence the design for better or more cost-effective supportability, but the scope is likely to be limited. During demonstration, the necessary support resources will be identified, with the intention of ensuring that they are in keeping with the overall support concept for the mission system, that they have been minimized, that they can be absorbed into existing support infrastructure and ways of working, and that they can be procured and made available on time to support the system in service. As a principle, the procurement of specialist or bespoke support resources will be minimized, in favour of general-use resources which have utility to a range of systems. Work will be done to progressively eliminate development risk associated with the project, thereby enabling performance targets to be set for the actual manufacture of the system. Success in the Demonstration phase will to a significant extent be predicated on the demonstration that a fully integrated capability can be procured and supported through life. The development of more granular and detailed plans for the support of the system, and the greater substance and precision which can be brought to the estimation of support costs, will help in achieving this. The ILS team will also have to identify the data required to enable efficient and effective support through life to occur.

ILS and the Manufacture phase In the Manufacture phase the mission system will be produced to the requirements defined in the SRD (and thereby in the URD), and delivered to the user. Stakeholders will wish to be assured that specified requirements have indeed been met, for example reliability and maintainability targets, and this is usually achieved via planned testing and evaluation processes of some sort. If satisfied with what has been delivered, the mission and support systems will be accepted into service. It is generally accepted that to provide the assurance required, these processes must integrate both mission and support system requirements. They include the tests and demonstrations to which the mission system and its support system

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will be subjected in order to prove that they have met the specified requirements or, where they fall short of meeting them, to show how they will be progressively developed to ensure that they do meet them in due course to defined deadlines.

A project team will normally develop some sort of Integrated Test, Evaluation and Acceptance Plan (ITEAP). This will, typically, contain delivery milestones by which the supplier will be required to have demonstrated that the requirements the user specified have been met, or are in the process of being met incrementally as the project matures. Demonstrations must be conducted realistically: when a supplier sets out to demonstrate that the time it takes for uniformed maintainers to carry out a defined maintenance task is within the limits the user demanded, it must do so, not on the factory floor, but where the maintenance will actually be conducted once the system is in the user’s hands and, ideally, in conditions which are realistic – on board the ship during rough seas, in a damp, dripping wood in darkness, or in a hardened aircraft shelter on a deployed operating base! Furthermore, only the approved maintenance manuals, tools and inventory should be used, and the task should be carried out by people with only the skills and training they would be expected to have for real.

During the Manufacture phase maintenance and logistic support plans should be finalized, infrastructure installed, and support and test equipment, technical documentation and inventory procured, to enable the system to be fielded and supported. Sufficient maintenance and logistic support resources should be available to ensure that the system can be accepted into service and supported satisfactorily. The mission system may be fielded to an Initial Operating Capability (IOC), following which its numbers, and possibly also the range of capability functions it can perform, will be progressively increased until it reaches Full Operating Capability (FOC). Deployment of the support system may also follow this incremental approach. It is common for national defence departments to confirm that the minimum resources are ready to support the mission system on first deployment, before commencing the transfer of the system into the user’s hands. Ideally, this logistic readiness date will normally precede the mission system’s In-Service Date (ISD) by several months.

Integrating systems through the life cycle

The UK Ministry of Defence refers to the time at which these minimum resources are considered to be in place as the Logistic Support Date (LSD). Typically, the LSD precedes the ISD by approximately six months.

ILS and the In-Service phase It is normally the responsibility of the user to declare the mission system’s ISD, and this can occur at the start of the In-Service phase, or occasionally during late Manufacture. During the In-Service phase data will be collected and the performance of the mission system, and of its support system, will be measured and monitored to ensure that they remain within agreed parameters and the levels contracted for. Performance criteria will include system availability, reliability, maintainability and supportability. It has been seen that the In-Service phase for defence systems is typically long, sometimes lasting for several decades, and the support system must evolve as the mission system is updated or upgraded, as the national defence department works to drive down the annual cost of ownership of the system, and as the system is deployed and operated, sometimes in operational scenarios, and in environmental conditions, that were never envisaged when the original user and system requirements were defined. The ILS focus during the In-Service phase will therefore change to reflect the changing priorities of the user, the project team or the national defence department. Key to maintaining the efficiency and effectiveness of the support system through a long in-service life, and to informing system acquisitions and the development of maintenance and support strategies in the future, will be relevant data, collected, interpreted and acted upon expeditiously.

ILS and the Disposal phase Early planning for disposal at end of life will be essential if it is to be carried out efficiently, effectively and safely. The ILS focus will not be just on disposal of the mission system but also on what to do with the support system’s facilities and infrastructure, support and test equipment, inventory, technical publications, training equipment, packaging, handling, storage, transportation media and computer support resources. If these are bespoke, and have no further use following disposal of the mission system, they will also have to be disposed of. If they have wider utility, they will be retained but may still be reduced and re-deployed.

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Disposal may involve a progressive drawing down of mission system numbers and of support resources, and potentially a concurrent fielding and support of a replacement system, requiring ILS to address two fundamentally differing support scenarios: one of shrinkage, one of growth. ILS will have to address the potential impact of these scenarios on other systems, both in-service and planned. Where a national defence department elects to dispose of its mission system by gifting or selling it to another nation, its support system’s resources may have to be carefully identified, gathered, prepared for handover and physically transferred to the new user. It is increasingly the case that disposal plans must take account of possible impacts on the environment and the demands of increasingly stringent legislation. The costs associated with disposal can be considerable, but, because it is inherently difficult to predict the direction of legislation over a long in-service life, it can be very challenging to predict costs with any certainty early in the system’s life cycle.

One way of getting greater predictability of the cost and complexity of disposal is to adopt a ‘design-for-disposal’ philosophy at the very start of the life cycle. There are many potential aspects to such a philosophy. One of them is to design the system to be modular and easy to separate into its component parts. This should make it easier to reuse, remanufacture or recycle the components that can be dealt with in this way.

Maintenance of the mission system Maintenance: what, when and where? The corrective and preventive maintenance activities to which a mission system is subjected are critical to sustaining military capability through life. They are also significant cost drivers. As such, the tasks they encompass, the resources they consume, their scheduling, and the levels and therefore locations at which they are executed demand careful consideration and planning. The following section exposes some of the quantitative reckoning and qualitative judgement required for the design of a maintenance strategy and the development and implementation of efficient and effective maintenance plans. Most car owners will be familiar with the concept of preventive maintenance: when they leave their car at a garage to be serviced, it undergoes

Integrating systems through the life cycle

such preventive maintenance, normally in keeping with a servicing s­ chedule, the purpose being to keep the car functioning as required. A key aim is to prevent failure or degradation to a point at which the car’s safe and efficient handling is jeopardized. The car owner may also be familiar with the other key maintenance type, that being corrective maintenance. As its name suggests, the purpose of this type of maintenance is to put right – to correct – a failure that has taken place. A cracked windscreen will require such maintenance. In common with privately owned cars, defence systems are subject to both preventive and corrective maintenance. Any organization that seeks to bring a degree of predictability and planning to the process of resourcing and carrying out both preventive and corrective maintenance needs to answer several questions: ●●

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Which parts of the system (its assemblies, sub-assemblies, components etc) will degrade and fail, and how will they do so? What maintenance activity will be required to prevent or correct that degradation and/or failure? Should these degraded or failed items be subjected to preventive or corrective maintenance?

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When should they undergo preventive or corrective maintenance?

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At what level, and therefore where, should they undergo that maintenance?

The remainder of this chapter will consider how these questions are answered. They will also feature again in the next chapter.

Identifying and quantifying failure modes and required maintenance actions The process of identifying which items in a system are likely to degrade and fail, and how they will do so – what are generally referred to as failure modes – is essentially the domain of the engineer. The assessment of what needs to be done to prevent these failure modes from occurring, or to correct them once they have occurred, is also essentially the business of the engineer. The engineer’s focus will be on the mechanical, electrical and/or electronic features of the system, how they have been designed, manufactured and assembled, and how they fit together and interact with each other. Engineers will understand the physics and chemistry of degradation and failure, for example how the vibration of an engine might cause mechanical couplings to loosen. Logically, if an engineer understands what might degrade and fail, and how it will do so, an engineer is also likely to be best placed to advise on

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what needs to be done to prevent that failure from occurring, or to correct it once it has occurred. From this engineering assessment should come an identification of maintenance tasks and the associated resources required to complete those tasks successfully. To answer the next question: whether it is a preventive or a corrective maintenance task that is required, generally hinges on an assessment of whether the failure is deemed to be critical in one or more ways. This is also the engineer’s business, but not exclusively so. An engineer might conclude that a failure has little or no significance for the continued operation of the system: it continues to function satisfactorily despite the component or sub-assembly failing. However, the business- or operations-focused analysis, carried out by somebody other than the engineer, might override pure engineering considerations. An assessment of criticality, or significance, can be influenced by a number of variables. These may, for example, reflect the organization’s finance and economics needs, its political affiliations, its business ethics, or the profile it attaches to corporate social responsibility. A defence department will almost certainly define a failure as critical if it has operational significance and presents a risk to the combat readiness or sustainability of the mission system. It might also consider critical a failure that simply presents a potential risk to future system availability that military staffs are not prepared to accept. Put simplistically: if the failure is deemed to have critical consequences it will normally not be permitted to occur and will be subjected to preventive maintenance activity designed to ensure that it does not occur. If the failure is deemed to have no critical consequences, or has consequences which the organization considers to be acceptable, it will normally be permitted to occur – ‘to run to failure’ – and will then be put right through a corrective maintenance task. A failure that is deemed to be non-critical early in a mission system’s service may be redefined as critical later on. We should now consider how the next question is answered: when should the system undergo maintenance?

When corrective maintenance is completed Logically, corrective maintenance is inherently less predictable than preventive maintenance, and therefore more challenging to plan for. After all, although military forces will deploy battlefield intelligence capabilities in order to predict, as best they can, what their enemy’s next moves will be, that enemy may nonetheless retain the initiative, and inflict battle damage on their enemy’s combat systems. Operator error or poor maintenance

Integrating systems through the life cycle

may also lead to unexpected failures, as may unforeseen weather events or extreme physical and environmental conditions. A defence user may apply a corrective maintenance policy that requires repairs to be carried out whenever the opportunity presents itself, as long as it is tactically sound and technically feasible to do so, or expedient for some other reason. Where tactical considerations don’t feature in the decision, and for nondefence organizations, this expediency might be determined on financial criteria (eg does it make financial sense to effect the repairs at this time?) or the availability of necessary resources (eg time, maintainer skills, inventory, infrastructure, support and test equipment, technical publications). However, for some organizations, the uncertainty that such a policy entails might be unacceptable and they might attempt to bring a greater degree of predictability and planning certainty to the process, for example by scheduling blocks of time to complete whatever corrective maintenance tasks have arisen, and allocating resources in readiness. If time is tight or resources scarce, an organization may choose to put the required tasks into a priority order, possibly resulting in some of them having to be postponed until the next scheduled repair time. While these failure modes have been identified as non-critical and have been left to run to failure, it seems logical that an organization will seek to correct them in a manner that reflects its priorities and makes optimum use of the resources required.

Scheduling preventive maintenance: engineering influences Preventive maintenance, because it is deliberately scheduled, brings with it a greater degree of predictability and planning certainty. Motorists will recognize that, typically, a car’s servicing plan will require that it be subjected to a range of maintenance actions, these actions being grouped to create a servicing ‘menu’ and scheduled according to mileage consumed or time elapsed, usually whichever is reached first. The servicing department of the car dealership should know, with some precision, which inventory items, diagnostic and calibration equipment, tools and manuals, as well as servicing engineer skills and time, they will need to have ready to hand in order to carry out the service according to its ‘menu’ of maintenance tasks. The grouping of the maintenance actions to create a servicing ‘menu’, and their scheduling, should reflect engineering logic, meaning that analysis has demonstrated that it makes engineering sense for certain maintenance actions to be carried out together, and at a defined periodicity. For illustration, car manufacturers

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might specify an interim service at every 10,000 miles driven or 12 months elapsed, and a full service at every 20,000 miles driven or 24 months elapsed. Defence systems are also subject to preventive maintenance plans such as these, and the same planning rationale will apply to a large extent. However, while car owners will generally be required to book their cars in for a scheduled service according to mileage driven or time elapsed, a wider set of metrics may be more appropriate in other environments and operational circumstances. To be fair, some defence systems will be subjected to scheduled preventive maintenance actions according to elapsed time, or to mileage driven, or to a combination of both, typically basic wheeled utility vehicles, but these metrics (which the average car owner might be familiar with) may be overly simplistic for many other defence systems. Engineers or equipment managers, responsible for scheduling preventive maintenance, may have to make finely balanced judgements about when best to undertake it, and on which systems or sub-systems to do it. Consider the following: ●●

●●

The main propulsion system for a fixed-wing combat aircraft may undergo preventive maintenance scheduled according to operating hours. On the assumption that the propulsion system can be removed from the aircraft, following removal it can be sent back to a depth MRO facility to be maintained. It will then be replaced by another propulsion system already maintained and held in a pool of such operable units. The same metric – operating hours – may be of little relevance to the same aircraft’s undercarriage. This may experience relatively minor mechanical stresses during flight and during the time the aircraft is stationary on the ground or manoeuvring on the runway apron. However, it will experience more substantial stresses during landing, these varying according to the payload the aircraft is carrying at the time. Logic would say that any preventive maintenance actions to which it would be subjected would be scheduled according to the number of landings it has experienced, with the aircraft’s payload factored in, rather than the number of hours for which the complete aircraft has been operating. Maintenance engineers or equipment managers may consider it most appropriate for a tracked, self-propelled artillery system, or for a main battle tank, to undergo scheduled maintenance according to the number of miles it has driven. Engineering judgement may conclude that this is a suitable indicator of degradation in the performance of its principal propulsion sub-systems (main engine, gearbox, transmission, wheels, suspension systems etc) and apply preventive maintenance actions to prevent such degradation resulting in actual failure. This metric is often

Integrating systems through the life cycle

termed ‘track miles’. However, vehicle track mileage may have little relevance to the gun barrel, its breech mechanism and its recoil system. These experience their most significant stresses when firing, these stresses varying according to the energy imparted by the propelling charge and weight of projectile. Artillery system propellants conventionally come in increments of different sizes. Gunners will select the increments that will impart the energy required to fire the projectile the distance they require, allowing for the gun’s elevation, meteorological conditions and so on, but without needlessly over-stressing the gun system. In this way the stresses to which the artillery system’s recoil mechanisms, as well as its gun barrel and breech mechanism, are subjected will be minimized and the most use derived from them before they undergo maintenance. A tank may fire chemical energy projectiles that achieve their target effects through their high explosive content, and kinetic energy projectiles that achieve their target effect through their mass and their velocity. The former travels at a lower velocity than the latter and thus requires a less energetic propelling charge: a reduced charge. The stresses imparted to the barrel, breech and recoil systems are greater when the kinetic energy projectile is fired because it requires a full charge. The maintenance periodicity for barrel, breech and recoil systems can thus be defined by the number of Equivalent Full Charges (EFC) that have been fired, noting that this has no direct relationship with track miles consumed. From these two examples, it can be seen that preventive maintenance should, ideally, be tailored to the usage characteristics of the particular system or subsystem, and the ways in which it is affected by such usage. To achieve such a tailored approach requires consideration of levels of indenture. By this is meant the level within the system, and the sub-systems, assemblies, components and parts of which it is made, at which maintenance requirements are defined. Considering the example of the self-propelled artillery system above, it would be sub-optimal in maintenance terms to schedule preventive maintenance for the whole system based on a single metric of track miles, and to plan for the whole system to be removed from front-line operations and sent back to an MRO facility somewhere in depth. During military operations this may well prove to be deleterious to the operational availability of a critical combat system, logistically resource-intensive, wasteful of hard-pressed resources generally, and expensive to manage and execute. Viewed simplistically, it would make more sense to define metrics that are appropriate at different levels of system indenture, for example: track miles driven for the running gear, main engine, transmission, suspension systems

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and wheels; and EFCs fired for the gun barrel, breach mechanism and recoil mechanism. Coupled with this would be a preventive maintenance strategy that sees these sub-systems being removed from the vehicle and transported to the location at which the maintenance takes place, rather than the whole system being taken out of the front line. Scheduling preventive maintenance in this way is complex, challenging to manage, and expensive. The private motorist who drives his or her car to the garage every year or 20,000 miles driven, and accepts a courtesy car in the meantime, faces a rather simpler challenge!

Scheduling preventive maintenance: the influence of variability in usage An enduring problem an ILS team faces in scheduling preventive maintenance is that of reconciling planned system usage with actual usage. Engineering analysis might conclude that a self-propelled gun’s recoil dampers will require preventive maintenance after 5,000 rounds have been fired at full charge. As the end user of the system, the field army might predict that, through a combination of training firings and firings during anticipated operational deployments, this limit will be reached within 36 to 40 months: a reasonable planning window. However, this combination of anticipated usage rates the system is expected to encounter during a defined period in the future, and the characteristics of that usage, can be a hostage to fortune. To illustrate why: in anticipation of an operational deployment, a defence department might choose to increase training activity levels; and the artillery units might be required to fight and fire their guns at a more intensive rate once deployed and fighting. The net result of this will be a compression of the predicted 36 to 40 months, as each gun’s recoil dampers reach their stress limits more rapidly. This example can perhaps best be considered as a change to predicted activity levels, which affects the speed at which degradation and failure occurs. Another aspect to the problem is the character of system usage beyond activity rates, for example the way in which a system is operated, driven, flown, sailed or fired. Engineers might calculate how a tank’s running gear will degrade during motion, and combine this with a prediction made by the user about the type of terrain the tank will be travelling over, for example the green and reasonably soft terrain found in the central region of Europe. When the tank is deployed on operations in the Middle East, and travels over hard, rock-strewn, dry and dusty desert terrain, these predictions are

Integrating systems through the life cycle

proven to be inaccurate and optimistic: the running gear degrades at a faster rate than predicted, thus compressing the time between scheduled maintenance activities. As discussed in this and other chapters, defence systems are procured to satisfy a range of requirements specified by the user, and the user will draw on a vision for system usage which might reflect how similar systems have been used in the past; in essence this is a defined envelope within which the system is expected to be operated. In theory at least, maintenance plans, and support arrangements in general, will be developed and resourced in the light of this operating envelope. However, when the envelope is stretched, preventive maintenance scheduling may prove to be inappropriate. Initial assumptions about usage, and preventive maintenance planning, will have to be revised. Importantly, a significant change of usage, and operating beyond the system’s original operating envelope, might not only compress preventive maintenance schedules but also change the nature of the failure modes the occurrence of which the maintenance is intended to prevent. Environmental factors may cause new or unexpected failure modes to manifest themselves, or cause variations in those that are recognized. So, whether contracting for industry to carry out preventive maintenance, or keeping it in-house, the customer needs to be able to predict activity levels and the character of this activity. Making such predictions can be much easier in times of peace and relative stability. The problem comes when armed forces are committed to operations: the predictions of activity levels against which they planned the use of their own in-house resources, or against which they contracted with industry for desired output levels, may prove to be significantly understated. The forecasts of inventory, and of all the other materiel and other components of a preventive maintenance plan, can be rendered inaccurate, potentially quite significantly so. The same applies to the predictions of cost.

The maintenance location decision The final question to be answered in the planning and execution of maintenance, both corrective and preventive, is where it takes place. As has been described in Chapter 2, defence logistic support is resourced and executed at different lines. The units or sub-units that operate at the lower, or more forward, lines of support are generally more mobile than those at higher levels, which are likely to be more geographically distant from where the mission systems are being operated, as well as less mobile. The decision as to the level at which a maintenance task takes place, and hence by implication

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its location, draws on a supportability analysis discipline called the Level of Repair Analysis (LORA). The LORA is critically important to the resourcing of the support system and hence to its costs. It will be examined in more detail in the next chapter.

Summary It has been seen that the integrated logistic support discipline gives defence departments the world over a structured approach to carrying out the analysis, and making the trade-off decisions, that will ultimately result in a successful support system that remains effective and efficient over an extended service life. The support system must evolve as the mission system and its usage evolve, and the ILS discipline, if applied effectively, enables this. The efficient and effective planning and execution of preventive and corrective maintenance is fundamental to achieving the supported and supportable mission system that is the desired result of implementing the ILS discipline optimally. Optimal application demands quantitative and qualitative analysis, and this will be examined in more detail in the next chapter.

Reference DStan (2016) Defence Standard 00-600, Issue 4, Integrated logistic support: Requirements for MOD projects, Defence Equipment and Support, UK Defence Standardization, Glasgow

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Supportability 07 analysis for supportable and supported mission systems J e r e my C D S m i t h

Supportability analysis: the fundamental enabler of a fit-for-purpose support system Introduction This chapter builds on the coverage of ILS and maintenance strategies in the last chapter. Its focus is on the analytical processes by which the ideal of a supported and supportable mission system is made a reality. Its purpose is to describe and explain the logic of the supportability analysis process and to illustrate some of the concepts, ideas and practical realities of designing, delivering and sustaining a support system. It is descriptive of the analytical processes but is not intended to be too doctrinaire in any way; the ILS discipline, and the supportability analysis tasks which enable it to work, is ultimately about doing only what adds value. Hopefully, what follows will be grounded in practical application and will be illustrated in a way with which the reader can identify.

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The structure and objectives of ILS supportability analysis The essence of the ILS discipline is the intelligent and discerning application of supportability analysis in a structured and logical fashion: the support system is underpinned by analysis. Supportability analysis is critical to enabling informed and intelligent trade-offs, and to the evolution of the support system during the mission system’s life, these being the key characteristics referred to at the start of the last chapter. It must be tailored to ensure that what is done is only what adds value, and it must be timely to ensure that it can influence the design of the mission system where it is appropriate to do so. As discussed in Chapter 6, most Western defence departments employ ILS standards, generally derived from the US Military Standard 1388, the UK Defence Standard 00-60 (replaced by 00-600) (DStan, 2016), or a combination of the two. For our purposes here, what matters is how ILS supportability analysis is structured, what it aims to achieve, and how it is applied during a typical mission system life cycle, rather than how it is tasknumbered and labelled in published defence and military standards. We will therefore examine these aspects of the analysis but, for reference purposes, will also identify the task numbers and task descriptions Western defence departments utilize. They specify 15 supportability analysis tasks, which are divided into five distinct groups. We will consider each of these in turn.

The supportability analysis tasks defined in US and UK standards are: ●

the 100 Series, which deal with programme planning and control;



the 200 Series, which cover mission and support systems definition;

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the 300 Series, which deal with the preparation and evaluation of alternatives; the 400 Series, which address the determination of logistic support resource requirements; and the 500 Series, which address supportability assessment.

Supportability analysis and data Every supportability analysis task will generate data. These data must be collected and held in a central data repository (or database) from where they can

Supportability analysis for mission systems

be downloaded, analysed and acted upon in order to inform the design, development, delivery, review and adjustment of the support system through the life of the mission system. The data repository should represent ‘one version of the truth’, and the access permissions of all stakeholders should be clearly defined and controlled. It is important that configuration control is carefully managed to ensure that multiple stakeholders are all accessing and utilizing the same, current, data set. Most defence departments insist on the data repository utilizing a standardized architecture which ensures that the same ‘types’ of data are held the same way, whatever the project (ship, submarine, aeroplane, main battle tank etc), for example that of ISO 10303, AP239 (ISO, 2017). The principle of ‘collect once; use many times’ is fundamental to the efficient and effective use of the supportability analysis data repository.

Programme planning and control It is important that supportability analysis is done cost-effectively, so one task is aimed at developing an early strategy for it, including identifying the tasks and sub-tasks which are likely to give the best return on investment. The defence department standards refer to this as: Task 101: Development of an Early Logistic Support Analysis Strategy To be efficient and effective, supportability analysis must be properly planned, integrated, resourced, conducted and managed throughout. Defence department standards refer to this as: Task 102: The Logistic Support Analysis Plan Key to good management of the analysis will be monitoring, reviewing and directing, or redirecting, analysis activity, and the release of design information, remembering the remit of ILS to shape the design for supportability of a mission system. The aim is to provide assurance that supportability analysis is proceeding in accordance with contractual milestones, thereby ensuring that supportability and supportability-related design requirements will be achieved. Defence departments refer to this as: Task 103: Programme and Design Reviews

Mission and support systems definition The next series of tasks recognizes the importance of influencing the design for supportability of the mission system. They are completed mainly in

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the early acquisition life-cycle phases, principally Assessment and early Demonstration. The first of these is the means by which the customer organization tells the supplier how the new system will be deployed, operated and supported. By doing so, the customer will give the supplier a sense for ‘how things are done’ in the Armed Forces. This should enable the supplier to be able to visualize existing systems and their support arrangements, thereby enabling it to design the new mission system to be able to readily integrate into existing infrastructure and ways of working. Arguably, by taking this approach, the defence department is constraining the supplier’s thinking and thereby their freedom to develop genuinely innovative systems and support arrangements. A counter-argument to this is that this approach saves time and money by reducing the chances of the supplier developing options which would be inappropriate or impractical. This task is referred to as: Task 201: The Use Study The results of the use study will be an important input to the next task, the purpose of which is to further influence mission system design by defining supportability or supportability-related constraints on it. These constraints will reflect current and planned maintenance and logistic support resources which are beneficial to the customer Armed Forces in terms of military preparedness, sustainability, cost and personnel, or which reflect existing maintenance and support policy. This task informs efforts to standardize mission and support system hardware, software and firmware. Standardization is a common design goal because it generally makes support inherently easier and cheaper, and also simplifies technical updates and upgrades. Defence standards refer to this analysis as: Task 202: Mission Hardware, Software, Firmware and Support System Standardization As will be seen, it will be necessary in the analysis process to compare mission and support system alternatives, and this will require some sort of baseline reference model to be developed for this comparison. This model will have to represent the essential characteristics of the new mission system and will be used to assess how different options compare. This comparison will draw upon relevant criteria, one of which will be the support cost drivers in the mission system design options and in those of the potential support arrangements. This should enable better-informed trade-off decisions to be made,

Supportability analysis for mission systems

and add granularity to the estimates of whole-life costs. Defence standards refer to this task as: Task 203: Comparative Analysis New technology may be able to improve the supportability characteristics of a new mission system and make its support inherently more efficient and effective. The analysis of the opportunities for applying new technology is referred to in defence standards as: Task 204: Technological Opportunities Having completed these mission and support systems definition tasks (201 to 204), it makes sense that their outputs are captured in a report, the primary purpose of which is to inform the design of the mission system for supportability. It will record supportability characteristics, design objectives, goals and constraints for the new system and should, therefore, inform system specifications, project approval documents, and contracts. In defence standards this is referred to as: Task 205: Supportability and Supportability Related Design Factors

Preparation and evaluation of alternatives By late Assessment and early Demonstration, the mission system design will be reasonably well defined, although the customer organization may still be considering alternative design options. Another set of supportability tasks is now completed to identify any detailed trade-offs that can be made and to identify different, and viable, ways of supporting the mission system through life. One essential analysis task will be to identify and capture the functions that must be performed in order for the new system to be operated and supported in the operational scenarios (usage and environments) envisaged for it, both in peace and in war. This analysis must be performed for each design alternative under consideration. The outputs from this analysis will include a detailed list of the functions that will need to be carried out, any risks associated with them, and apparent design deficiencies that will have to be addressed through redesign or, at least, be recognized and managed. This list is essentially a ‘task inventory’. As the system design evolves, this analysis will have to be updated. Key inputs to this analysis will be the

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Failure Modes, Effects and Criticality Analysis (FMECA) and ReliabilityCentred Maintenance (RCM) analysis which will have been completed and which will have identified corrective and preventive maintenance plans for the system. Both FMECA and RCM will be explained in more detail later in this chapter. In defence standards this analysis is referred to as: Task 301: Functional Requirements Identification This analysis task having been completed, the next logical step is to identify and articulate viable support system alternatives for the new mission system, including the risks associated with each of them. These alternatives can then be evaluated and subjected to trade-off analysis, ultimately leading to selection of the best option. Among the support system alternatives are likely to be traditional approaches that rely entirely on uniformed military personnel, or a mix of uniformed personnel and defence department civil servants, and approaches that rely to varying extents on contractor support. Defence standards refer to this as: Task 302: Support System Alternatives The process of trade-off comes next, the aim being to determine, for each mission system alternative, the preferred support system alternative. This decision will represent an optimization of variables, of achieving an informed balance between cost, performance, readiness, and other variables considered relevant. It may be the case that one support system is equally appropriate for two or more mission system alternatives, or it may be that the support systems differ to varying extents. One of the key outputs from this analysis is the answer to the fifth question, posed in the previous chapter: where does the maintenance take place? As stated at the end of that chapter, this decision is reached through completion of the Level Of Repair Analysis (LORA), which will be examined in more detail later. Defence standards refer to this task as: Task 303: Evaluation of Alternatives and Trade-Off Analysis

Ultimately, every support system is the result of a series of trade-offs. It represents the optimization of variables for a specific time and set of circumstances. Neither time nor circumstances remain fixed, so the support system must evolve with them, the dynamics of supportability analysis enabling this to happen.

Supportability analysis for mission systems

Determination of logistic support resource requirements The purpose of the next series of tasks is to identify all the support requirements of the new system. This can be a very resource-intensive activity and, ideally, it is best carried out as late in the procurement process as is practicable, once the design of the mission system has been finalized. It should be noted, however, that some of the support system resources may have a long procurement lead-time associated with them, for example complex spare parts, and this may require that they are procured earlier in the acquisition process, with the associated risk that a design change, or a change of priorities in the trade-off process, may negate their procurement. Some support infrastructure, for example docking facilities, static mechanical handling equipment, or hangars, may require many months or even years to build or install.

When analysing the requirements for support infrastructure, the ILS teams working on the United Kingdom’s new Queen Elizabeth Class (QEC) aircraft carriers had to consider the requirement for dredging the approaches to the carriers’ home port, Portsmouth in Hampshire. The QEC carriers, the largest ships ever built for the Royal Navy, each displace up to 65,000 tonnes of water. To accommodate the two carriers, more than three million cubic metres of clay, sand and gravel have had to be removed from more than two miles of Portsmouth Harbour, an area equivalent to more than 200 football pitches (Gov.UK, 2015). Assuming Portsmouth remains their home port, its approaches will have to be dredged periodically for the duration of the carriers’ service life.

The functional requirements identification task (Task 301), discussed above, will have identified the operations and maintenance tasks required for the new system. These will now have to be analysed, the purpose being to identify the logistic support resources required for the execution of each of them, including any new or critical resource requirements and any resource requirements that exceed or are significantly different from agreed goals or constraints. The analysis will also identify handling and transportability requirements. Its outputs will inform any work being done to change the system design, for example to reduce operation and support costs or improve system sustainability and readiness. The logistic support resources identified in the analysis

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will be reflected in a range of documents, for example maintenance instructions, inventory provisioning lists and training manuals. It will also identify the inventory required to effect the corrective and preventive maintenance tasks identified in Task 301. Defence standards refer to this analysis as: Task 401: Task Analysis Any new system, on first fielding, is likely to have some impact on existing systems, processes and resources, and these need to be identified and quantified if they are to be managed. The analysis task that achieves this will, for example, identify changes to workshop and storage depot workloads and scheduling. It will assess probable impacts on personnel, their training and committal to maintenance and support tasks. It will assess the impact on the availability of test and calibration equipment, materials handling equipment, and transportation media. It will also assess the impact on provisioning and inventory, and on fuels, oils and lubricants. This analysis will enable support risks to be identified, quantified and mitigated, for example by adjusting provisioning quantities of certain inventory items, by procuring more test equipment or by changing management regimes associated with commonuse resources, such as general task transport vehicles. Another key aim of this analysis is to assess the specific impacts of the fielding of the new system and its support system when deployed in combat, and the essential resources it will require. It will therefore inform the planning for the operational deployment and support in combat of the new system. In defence standards this is referred to as: Task 402: Early Fielding Analysis The next analysis considers the support requirements of the new system and assesses the risk to availability of necessary resources over all of its forecasted in-service life. The aim is to identify items that are considered to be at risk, and to develop and appraise potential solutions to their possible shortage in future years. One such solution might be to commission an additional production run of key items before the production line is closed, and to place these items in storage until they are required. Logically, therefore, this analysis needs to be carried out before manufacture comes to an end. This risk to availability of key maintenance and logistic support resources is essentially the risk of obsolescence. The risk is likely to be greater where the maintenance and logistic support system depends upon unique-to-system items, and is one of the reasons why many defence departments apply a

Supportability analysis for mission systems

policy of insisting on the procurement of general-purpose items wherever feasible. A key output of this analysis is a plan to assure effective support to the new system for its forecasted remaining life, together with estimates of the cost of achieving this. Defence standards refer to this analysis as: Task 403: Post Production Support Analysis

The use of general-purpose, rather than unique-to-system, support and test equipment brings many advantages. Obsolescence is easier to manage because spares, or complete items, can be purchased or borrowed from other users, and because there will be more suppliers in the supply chain from whom spares or complete items can be bought. Being general purpose, it is more likely that they will employ common architectures and interfaces, and that alternative items that do the job just as effectively will be available in the marketplace.

Supportability assessment At an appropriate stage it is necessary to review the whole supportability analysis process to determine whether it achieved its objectives and where lessons could be learnt. It is also necessary to formulate a strategy for the test and evaluation of system supportability, which is incorporated into the wider Integrated Test, Evaluation and Acceptance Plan (ITEAP) for the system. A focus for the analysis done at this stage is on assessing whether specified supportability requirements for the system have been achieved, and if they have not been achieved, why not, and what should be done to correct the shortfalls. The formulation of the test and evaluation strategy will inform the conduct of logistic demonstrations to test and validate, for example: technical publications; inventory; unique-to-system and general-purpose tools and test equipment; diagnostic equipment; training systems; packaging, handling, storage and transportation; facilities and infrastructure; and hardware, software and firmware. It will define the objectives of each of the tests and identify the resources required to conduct them. The analysis will also identify the data required to validate and verify the ongoing support of the system, and the in-service supply, maintenance and readiness-reporting systems from which the data will be extracted. Where the

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data are not available from established reporting systems, other sources will be identified. Defence standards refer to this supportability analysis task as: Task 501: Supportability Test, Evaluation and Task Verification

Supportability analysis as a dynamic and continuous process As is hopefully apparent, the supportability analysis, which is so fundamental to the ILS discipline, has been presented by defence departments in a structured and logical fashion. It would be wrong, however, to assume that it is all done in sequence and that it is done once only. Logically, much of the analysis continues through several stages of the life cycle and there are feedback loops connecting later-stage analysis with analysis initiated, but not completed, in earlier stages. Design changes might force a re-analysis, as might influences that might be classed as ‘force-majeure’ such as politics, social pressure and environmental change. As will be seen shortly, a significant change of usage might change the nature of identified failure modes and how they will be dealt with: a change to maintenance and/or operator tasks. Every update or upgrade to which a mission system is subjected is likely to demand that some analysis is revisited and refreshed.

ILS is a through-life discipline and supportability analysis is the means by which that reality is enacted.

Supportability analysis: the fusion of engineering and business logic Engineering analysis and business analysis combined Reference has been made to three important analytical processes: the FMECA and the RCM analyses, both of which inform Task 301 (Functional Requirements Identification), which in turn informs Task 401 (Task Analysis); and the LORA, which is an output of Task 303 (Evaluation of Alternatives and Trade-Off Analysis). These three analyses deserve closer examination.

Supportability analysis for mission systems

The Failure Modes, Effects and Criticality Analysis (FMECA) ‘A failure mode is something that occurs, such as a part failing, that causes the system to not function properly’ (Jones, 2006: 4.36). The FMECA ‘is an analysis of the loss of function and the effect of that loss of function on the system when it is being used to perform its assigned missions’ (Jones, 2006: 4.40). When engineers conduct the FMECA they ask five questions: Q1 What functions is the system required to perform? Q2 How might these functions fail? Q3 What might cause these failures? Q4 What effects might these failures have on the system? Q5 Is there any criticality attached to these failures? The FMECA will identify failure modes that are considered to have a noncritical impact and can be allowed to occur, to be rectified later through an appropriate corrective maintenance task, and failure modes that are considered to have a criticality and cannot be permitted to fail. Where an identified failure mode is considered likely to be safety critical, that is, to have significant safety implications, the FMECA’s outputs should be captured in the system’s safety case. It will normally be the case that critical failure modes will be prevented from failing through application of an appropriate preventive maintenance task. A meaningful FMECA can only be carried out on a system design that has achieved a reasonable level of maturity, but must not be left so late that the design is frozen and cannot be influenced by the FMECA’s results. For optimum benefit, any design change influenced by the FMECA needs to be made early enough to minimize the cost of making the change. There may be occasions when the engineers identify a potential failure mode, which is deemed to be critical but which cannot, for technical reasons, be prevented from occurring through a preventive maintenance task. In this case, it will be necessary to change the design of the system to either design out the failure mode so that it will not happen or change the design sufficiently to enable a preventive maintenance task to be developed that will be able to prevent the failure mode occurring. There is an engineering judgement call to be made to achieve the optimum results from the FMECA. This judgement can be simplified where the engineers can call upon the knowledge already acquired about how similar systems perform, and if engineers are able to

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revisit the FMECA as the system is progressively developed. Designers and engineers become progressively more confident in the design and how it will perform as they follow this iterative process.

The greatest benefits for system safety and mission capability will be derived from carrying out the FMECA early in the design process.

As has been discussed earlier in this chapter, the assessment of whether a failure mode has critical consequences can be quite subjective. In answering question 4 of the FMECA, an engineer might be able to see that the failure of one sub-system causes another, connected, sub-system also to fail, in which case it might in engineering terms be deemed to be critical. Another failure might be considered, in engineering terms, to have no severe safety or operational consequences and be deemed, therefore, to be non-critical. However, a wider assessment of the consequences of the failure might identify that it has unacceptable environmental consequences, for example because it results in leakage of oil onto the ground, in which case it may well be deemed to be critical. The concept of criticality may have time sensitivity. Taking the oil leak as a case study, it may carry no particular significance at the time the FMECA is completed, but becomes critical years later when social pressures or more stringent legislation makes the environmental impact of an oil leak unacceptable. It can be seen, therefore, that the FMECA may have to be revisited as the design matures towards the system’s initial fielding, but also during its in-service phase.

Reliability-Centred Maintenance (RCM) analysis Completion of the FMECA will identify the failures which will require corrective and preventive maintenance tasks. As was discussed in the last chapter, the decisions about when to carry out preventive maintenance, and which tasks to carry out at the time scheduled, can be quite complex and require many variables to be considered. This is where RCM features in the analytical process. A useful explanation of the purpose of RCM has been provided by Jones (2006), as ‘… to identify maintenance which can be done on a scheduled basis to avoid unwanted and untimely failures and improve overall system reliability and, therefore, system availability. Or, in other words, fix an item within a system before it breaks and renders the system inoperable’ (p 8.1).

Supportability analysis for mission systems

The RCM analysis takes the FMECA as its start point. The same five questions asked in the FMECA apply to the RCM analysis and there should be no need for this analysis to be done twice: once by the FMECA engineers and once by the RCM engineers. RCM does, however, ask two further questions: What can be done to predict or prevent each failure? What should be done if a suitable proactive task cannot be found? An examination of the RCM analysis will reveal how these questions are answered. To look at RCM in more detail requires us to say a little more about what constitutes preventive maintenance (Figure 7.1). It is generally accepted that preventive maintenance tasks are those that are performed on a scheduled basis, while a system is being used, in order to prevent failures. However, as Jones (2006) explains, there are actually two different types of scheduled maintenance tasks, these being scheduled services and scheduled inspections or removals. Scheduled services are maintenance actions which are required because of the characteristics inherent in the system. They include such actions as ‘lubrication, alignment, calibration, and other maintenance actions which are required to sustain the operational capability of

Figure 7.1  Reliability-centred maintenance

Reliability-Centred Maintenance: Preventive Maintenance Tasks Scheduled Inspections On-Condition Tasks Failure Finding Tasks Scheduled Removals Rework Tasks Discard Tasks

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the system’ (p. 8.2). RCM can address these maintenance actions; they can be identified and scheduled by engineers. The bulk of the RCM analysis is focused on determining the scheduled inspections or removals to which the system should be subjected. Scheduled inspections are either on-condition tasks or failure-finding tasks. Scheduled removals are either rework tasks or discard tasks. These will now be explained. The purpose of an on-condition inspection is to determine if a failure is about to occur. Items subjected to such inspections are those that experience wear through use; a good example is a car tyre. The on-condition inspection is so called because the inspected item will generally be permitted to continue in use ‘on condition that it continues to satisfy specified performance criteria’. UK-based car owners will check their tyres periodically (in other words, carry out on-condition inspections) and continue to drive on them on condition that they satisfy UK law, which requires that ‘cars, light vans and light trailers must have a tread depth of at least 1.6 mm across the central three-quarters of the breadth of the tread and around the entire circumference’ (Gov.UK, 2017). Modern car tyres have depth indicators moulded into the tyre tread as an aid to this on-condition assessment. The on-condition inspection should enable an informed judgement to be made on whether the item being inspected is about to reach the point at which it is likely to fail, or can be left in service until the next scheduled inspection. If the rate at which the item wears out is known, and the item’s predicted use is also known, it should be possible to schedule the next inspection with a good degree of confidence that the item will not fail in the meantime. Where these variables are uncertain, RCM engineers are likely to minimize the risk of the failure occurring by scheduling an earlier inspection. If the item fails the inspection criterion, in this case the tread depth is at the legal minimum or is likely to reach it soon, the car driver would be expected to remove and replace the tyre. A failure-finding inspection scrutinizes hidden function items to find failures that have occurred since the last inspection but were not evident to the system’s operators. The inspection might, for example, be intended to detect corrosion that has occurred, but is hidden from view and will lead to system failure if not corrected. Scheduled removal tasks are either rework tasks or discard tasks. These tasks are completed on a regular basis against some defined time or usage. Some examples are the track miles for an armoured vehicle’s drive train, or equivalent full charges for a gun system, discussed in the last chapter. Where the task is a rework task, the item concerned will be removed from its parent system and subjected to refurbishment or overhaul. It is probable that on

Supportability analysis for mission systems

removal it will have been replaced immediately by an identical item that has already been through overhaul or refurbishment and has been held in a ‘pool’ of such items. In the case of the discard task, the item is subjected to a scheduled removal but, instead of being refurbished or overhauled, is discarded. In some circumstances it may be appropriate to carry out a combination of tasks. Jones (2006) describes how maintenance personnel will use a tyre tread depth gauge to do an on-condition inspection of an aircraft’s tyres to determine whether any unusual wear has taken place, but also remove and discard the tyre when they know it has experienced a set number of landings. In this case, even though the tread depth might theoretically be sufficient for the tyre to continue in service, in the interests of risk reduction in a safety-significant item – the aircraft’s undercarriage – and especially where there might be some uncertainty about the actual ­likelihood of failure as the tyre wears, the maintenance personnel remove the tyre and discard it. Combination tasks such as these are often used where there is uncertainty about how an item wears during use and the kind of usage conditions the item will experience. Such tasks can be expensive. Completion of the RCM analysis should identify the most cost-effective preventive maintenance methods to follow, but economy should not be the only consideration. Failure can have operational consequences, an important consideration in defence, and also safety consequences. As described above, some functions are hidden from the operators’ view and the occurrence of failure may not be apparent to them. The RCM analysis will therefore be based on four areas of scrutiny: safety, operational, economic and hidden failure detection. To answer the two further questions (ie the two additional to those asked in the FMECA – see above), those involved in conducting the RCM analysis will apply RCM decision logic. In essence they work through a decision tree, assessing whether the failure is hidden from view or apparent to the operators, and whether it has safety, operational or financial implications. They will then assess the suitability of the each of the maintenance actions: scheduled inspections, either on-condition or failure-finding; and scheduled removals, either rework or discard tasks. In so doing, they will hope to reach the best preventive maintenance action for the identified failure modes. A point worthy of emphasis here is that if, having worked through the decision tree, none of these options is acceptable, it is likely that a change will have to be made to the system’s design. The RCM analysis illustrates to varying extents the fact that so much supportability analysis requires a combination of broadly quantitative reckoning, informed by engineering considerations, and qualitative judgement, informed by a more situation- or organization-specific logic.

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An illustration of the application of RCM decision logic If the occurrence of failure is evident to the system’s operators (ie it will not require a failure-finding task), and it has operational consequences – in defence this would probably be classed as an adverse impact on military capability, preventive maintenance is likely to be desirable if the cost of carrying out this maintenance is lower than the cost of repairing the failure once it has occurred, combined with the cost of the operational or capability impact, something that is likely to be a qualitative judgement and difficult to attach a monetary value to. If it is decided that a preventive maintenance action is required, the applicability and utility of an on-condition task, a rework task or a discard task will be assessed, and if none of these is appropriate it might be necessary for a change to the design to be made.

It can be seen that the FMECA identifies the corrective maintenance tasks which must be carried out, and feeds the RCM analysis which then identifies appropriate preventive maintenance tasks. These tasks will be added to the task inventory which was created as supportability Task 301, discussed earlier in this chapter. As a reminder, this task inventory will be a key input to determining the potential support systems which may be appropriate for the new mission system, the articulation of these alternatives being the output of Task 302 (Support System Alternatives). Once these alternatives have been identified, they have to be evaluated in order to arrive at the most appropriate one: the purpose of Task 303 (Evaluation of Alternatives and Trade-Off Analysis). A critically important element of Task 303 is the LORA.

Level Of Repair Analysis (LORA) The basic purpose of the LORA is to determine the level at which a maintenance action should take place, and by implication the place. A secondary purpose is to determine the advisability, based generally on financial grounds, of repairing an item rather than removing and discarding it.

A framework for the LORA To examine the LORA we will utilize a framework of four levels of support used by Jones (2006: 14.4), interpreting them for our purposes:

Supportability analysis for mission systems

Organization – will refer to the end user unit, for example a warship afloat, an armoured reconnaissance squadron deployed in a theatre of operations or on field training exercise, or a fast jet flight operating from a deployed or main operating base, in the home nation or a theatre of operations. Depot – the next level, which might be a support ship afloat, an army logistic regiment or maintenance battalion operating in support of brigade or divisional troops, or an aircraft squadron or air wing operating at a deployed or main operating base. Intermediate – the next level up, which might be, for example, dockside facilities for supporting ships alongside but still under control of their fleet command headquarters, more static, concentrated army support resources possibly grouped around a port of disembarkation in a theatre of operations, or more concentrated and static aircraft maintenance resources at a main operating base. Contractor – essentially where support is industry led, for example portside facilities, including dry docks, where ships undergo major refit, depth maintenance facilities where industry provides strip-and-rebuild overhauls of army vehicles, or OEM aircraft factories with their own airstrips. NB: these levels of support map broadly to the first, second, third and fourth lines of support discussed in Chapter 2.

Economic and non-economic criteria inform the LORA A LORA is informed by a combination of economic and non-economic criteria. To illustrate how this works, it may make sense on purely economic grounds that a particular maintenance action is carried out at intermediate level, using civil service maintenance staff. It may also be the case that the maintenance action demands particular skills which are also found in the skills sets of uniformed maintainers at depot level. Concern over potential skills fade may mandate, as policy, that the particular maintenance action takes place at depot level, in order to prevent this skills fade in uniformed maintenance staff. Generally speaking, it is advisable to apply any noneconomic criteria as a first step in the LORA, on the grounds that it makes no sense wasting time and money doing an economic LORA if there are non-economic factors that render considerations of finance irrelevant. The non-economic LORA therefore serves as a useful filter, removing from further consideration maintenance activities deemed to be exempt from economic analysis.

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The British army’s Royal Electrical and Mechanical Engineers (REME), who are responsible for the maintenance and repair of the Army’s aircraft, vehicles, weapons and other systems, follow a long-established doctrine based on carrying out repairs as far forward on the battlefield as is technically feasible and tactically sound. This ensures that they provide the responsiveness that the combat and combat support units and formations require as they execute operations. Where a LORA is carried out for a maintenance task associated with an Army system, it may be that this doctrine rules out consideration of other factors that might suggest it makes more economic good sense to carry out the task further back on the battlefield.

The LORA as a fusion of engineering and business logic The start of the LORA is the identified failure mode. If the failed item can be repaired without removing it from the system, and if the organization has the skills, the tools and test equipment, the inventory and all other necessary resources, it will generally make sense that the maintenance action takes place at that level. If the item cannot be repaired while remaining on the system, a decision has to be made about whether to repair it or discard it. If it cannot be discarded, for economic or non-economic reasons, the next decision to be made is whether it can be repaired at the next level up – at depot level. It may be the case that at this level there are more technically sophisticated resources and skills available which the maintenance action might require. If the decision is made that the repair cannot take place at this level, the next level, intermediate, will be considered. Some items will require maintenance by the OEM or maybe a systems integrator, at ­contractor level. The really important point about the LORA is that it represents a fusion of engineering and business logic. Maintenance staff, and design and production engineers, should be able to make an assessment on the most logical level – in engineering terms – at which to execute the maintenance action. However, their engineering-focused decisions may have significant business and financial consequences. It is worth illustrating the point by considering a fictitious scenario.

Supportability analysis for mission systems

The business implications of the LORA – an illustration Imagine a mission system – a wheeled command and liaison vehicle – which is deployed in all of a national army’s combat and combat support units. A failure mode has been identified in a sizeable electro-mechanical assembly which is fitted to this system. The maintenance action required to put it right is as follows: 1 The assembly is removed from the system using common hand tools. 2 It is then disassembled, using the same tools, and two specific components that experience wear are removed and replaced by two new replacement components. 3 The assembly is re-assembled and subjected to a range of electrical continuity tests and mechanical movement tests. 4 If it passes the tests the assembly is re-fitted onto the system. The system operator then runs some built-in tests to check that the assembly has been fitted properly and is functioning correctly. If the LORA determines that this maintenance action is to be carried out at organization level, every combat and combat support sub-unit in which the system is deployed will have to have the skilled maintenance staff, the maintenance instructions, the hand tools, the inventory items (the replacement spares) and the test equipment(s) necessary to do the work. There may also be a need for some infrastructure, perhaps some tentage in which the work can be done. This represents a wide distribution of resources, with all the costs that go with it. Some of these costs will be obvious, for example the cost of the replacement spares and the test equipment. Some of them will be less obvious, for example the capitation costs of the maintenance staff and the cost of their training, the cost of procuring, storing and distributing the replacement spares, and the cost of the maintenance manuals and their upkeep. The test equipment, especially if technically sophisticated, may require calibration at set intervals, as well as maintenance. Where this equipment is unique-to-system rather than general purpose, maintenance and calibration might be particularly expensive, possibly requiring that it be backloaded to the OEM at contractor level. As a general observation, a LORA decision to push a maintenance action down a level or two may inevitably result in a multiplication of the

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resources required to effect the maintenance and, therefore, an increase in cost, potentially a significant one. This is usually the case in land forces because army maintenance tends to be manpower intensive and widely distributed. Of course, it may be the case that each combat and combat support unit and sub-unit already possesses the resources referred to above in order to carry out maintenance on other, already fielded systems, in which case it will almost certainly make sense to push this fictitious maintenance action forward as the LORA has suggested. If this is not the case, and the LORA determines that the maintenance action should be carried out at the next level upstream, say at intermediate level, then the costs of shipping the assembly back through the reverse support chain will have to be considered.

LORA summarized In summary, the results of the LORA determine the level, and therefore usually by implication the location, at which each maintenance task will be carried out, and this decision is a key determinant of the logistic support resources for a fielded defence system. The LORA is, therefore, a very significant analysis. It is hoped that it is as well informed as it can be, but it must be recognized that there are many unknowns associated with an assessment of economic and non-economic criteria, especially the latter. Where maintenance is more widely distributed by being pushed forward to lower levels, the resources it demands add to the logistic footprint of deployed force elements. From one viewpoint, this might be considered likely to improve the deployed units’ responsiveness and agility, that is, their ability to execute maintenance actions as rapidly as feasible, thereby assisting in achieving a higher level of system availability. From another viewpoint, it might be considered to hamper their agility because the increased resources of equipment, facilities, inventory, technical publications and so on require more transport and handling resources and therefore increase the units’ ‘logistic drag’. As with so much of the supportability analysis we have examined, the LORA involves trade-off. It is an important contributor to supportability analysis task 303, the purpose of which, as a reminder, is to evaluate the alternative maintenance and support systems identified in Task 302, and to make the necessary, but often highly significant, trade-off decisions. The LORA is very much about trade-off.

Supportability analysis for mission systems

Supportability analysis decisions: the resource implications Logically, the next stage in the supportability analysis is to determine its implications for logistic resources. As a reminder, this is Task 401 (Task Analysis), the purpose of which is to identify and quantify all the resources that will be required to enable the tasks to be completed successfully. This will include the following ILS elements listed at the start of the last chapter: ●●

supply support and the provisioning of inventory;

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technical publications and documentation;

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support and test equipment;

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facilities and infrastructure;

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personnel and human factors;

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training and training equipment;

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packaging, handling, storage, and transportation;

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computer support; and

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data.

It will identify any resources that are considered to require special management attention because, for example, they are in short supply or present an imminent obsolescence challenge, or they are particularly expensive to buy and to maintain. Having identified the skills sets required of the operators and maintainers, the analysis will inform an assessment of training needs (Figure 7.2).

Fielding the supported and supportable mission system Even when the supportability analysis has been completed in a thorough and well-informed manner, and when theoretically optimum trade-off decisions have been made, there will still be a degree of uncertainty around the resourcing of the support system. It is worth examining how this reality can reveal itself and how it can be managed. The individual inventory items required for the corrective and preventive maintenance tasks – the range of items – will have been identified, ideally by NATO Stock Number (NSN) or, if not yet NATO-codified, by the OEM’s own part numbering system. The number of these items required for each identified and analysed maintenance task will also have been calculated.

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Figure 7.2  The training needs analysis (TNA)

The Scoping Study assesses whether a training needs analysis (TNA) needs to be carried out. The study should assess whether the new mission system and its proposed support system differ significantly from legacy systems already fielded. If they do, it is worthwhile proceeding onto the next stage. If they don’t, there may be little point in continuing the TNA.

Having analysed the tasks for which system operators and support system personnel will require to be trained, the Training Gap Analysis sets out to establish whether, and to what extent, existing training addresses these operational and support tasks. If existing training covers the tasks identified, there is no ‘training gap’ to fill and there should be no requirement to continue the TNA. If existing training does not fully meet the requirements of the new mission system and its support system, the nature of this training gap must be identified.

The Training Needs Analysis (TNA)

Scoping Study

Operational and Support Task Analysis

On the grounds that it seems likely that there will be training implications for the new mission and support systems, the Operational and Support Task Analysis will be carried out. Its purpose is to establish what the new mission system’s operators are required to do to operate the system, and what maintenance and other support personnel are required to do to complete preventive and corrective maintenance tasks, and any other relevant tasks associated with its support system.

Training Gap Analysis

Training Options Analysis

Adoption of Recommended Training Solution

The Training Options Analysis examines possible ways of delivering the required training to ensure that the training gaps are filled. There may be many options, for example expanding existing training to fill the gaps, or developing a wholly new training solution.

Once the training ‘solution’ has been selected, work will progress to develop it, deliver it, review it, and refresh/update it as required.

Supportability analysis for mission systems

When multiplied by the number of times the maintenance actions are expected to be carried out on the fielded systems, this will give the scale of items. Inventory managers in the project teams managing the mission and support systems will use this range and scale calculation to inform the inventory provisioning processes they put in place. However, where a genuinely new mission system is being fielded, there is likely to be a degree of uncertainty about how it will actually perform once in the user’s hands, including whether the failure modes predicted by engineers actually manifest themselves as predicted during service. It may be that new failure modes occur, or that predicted failures take a form that differs to varying extents from what was predicted. The maintenance tasks identified as necessary, and developed, may require amendment accordingly and thus the scale, and possibly also the range, of inventory may have to be adjusted. This will in turn require an adjustment to the provisioning processes put in place. It can be seen that the ILS manager has to contend with varying degrees of uncertainty but must, regardless of this, ensure that the mission system can be supported on first fielding. It is also essential that where reality does indeed vary from what was predicted or expected, the support system can evolve – the third characteristic identified at the start of the last chapter. A useful enabler of this is the initial support period (ISP), which will be explained below.

Fielding the mission and support systems: validating and verifying the supportability analysis The initial support period (ISP) Defence departments generally implement an ISP for newly fielded systems. In the UK MOD it is usually two years. An initial provision (IP) of inventory will be calculated and recorded in an initial provisioning list (IPL). The IPL will reflect the range of inventory items, but the quantity of items, the scale, will reflect an assessment of how often, and over what periodicity, identified failure modes will occur. This calculation will draw on the judgement of design and maintenance engineers, possibly complemented by the results of modelling, simulation and wargaming, and also by comparison with similar systems already fielded and in service. Further input may come from the judgement of military users, fleet managers and inventory managers who

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will have taken account of mission profile, likely usage, and envisaged environmental factors. As a reminder, Task 201, the Use Study, will have enabled the user to tell the mission system designer and manufacturer, and other stakeholders, how the mission system will normally be expected to be operated and supported in service. During the ISP, the mission system will be operated and supported as envisaged. It will therefore sustain failures and be subjected to the corrective and preventive maintenance activities forecasted. Inventory will be consumed accordingly. Infrastructure and facilities, support and test equipment, technical publications and documentation, and computer support resources will be utilized. Materials handling equipment and transport media will be tasked with the movement and handling of the mission system and its support resources, and appropriate storage methods will be employed for holding it. It will be protected from environmental effects by its packaging. and this will be accounted for and managed as required. Operators, maintenance staff and other support personnel will be trained to acquire the skills they require, and plans will be developed for sustaining this training into the future, including the provision of training equipment where it is needed. Critically, data will be gathered throughout the ISP.

Data, data, data It will be recalled that the type of data to be gathered during the mission system’s service, and their sources, will have been identified in Task 501. These data must be interpreted to answer a range of questions: ●●

●● ●●

Did the failure modes predicted by engineers actually occur, and when they were expected to occur? This is essentially an assessment of actual versus predicted system reliability. Did any unexpected failure modes occur? Were the corrective and preventive maintenance tasks carried out when, where and how they were intended to be carried out?

Depending on the answers to these questions: ●●

Were the inventory items supplied on the IPL correct by range and by scale, and were all the other resources required by the support system also correct?

Assuming the data have been collected to enable these questions to be answered, it should be possible to make any adjustments considered

Supportability analysis for mission systems

necessary to improve support to the system and hence meet, or get closer to meeting, the performance goals its users require of it. In essence, as data are collected during the ISP, the initial engineering and business assumptions will be reviewed to establish whether they were correct or need to be adjusted. It should now be possible to adjust, if necessary, the range and scale of inventory procured as an IP. More enduring provisioning policies can now be put in place with the aim of ensuring that inventory items are procured in sufficient quantities to enable the continuing support of the system as it is deployed and operated. Due consideration should be given to procurement lead-times, and to potential obsolescence issues with some items.

Staged deployment of mission and support systems: initial, and final, operating capability It should be noted that an IP of inventory, and indeed of the other support resources required for the system, may be matched to an initial operating capability (IOC) of the mission system, which might involve an initial fielding of only limited numbers of the system, and/or its restricted use. The data gathered must be interpreted with this in mind. As the system nears full operating capability (FOC), the quantities of resources can be planned to increase accordingly.

How representative of future mission and support system usage was the ISP? If the ISP happens to fall during a period of relative peace and calm, during which military activity is of below-average intensity, maintenance activity, and therefore all the resources associated with it, will reflect this below-average intensity. It would be ill-advised, therefore, to adjust the support system’s resources downwards, to reduce them, if subsequent to the ISP, military activity and mission system usage would be likely to increase to a higher intensity.

Support system evolution As was stated in Chapter 6, any support system is underpinned by analysis, ultimately the result of trade-off, and evolves during the mission system’s life. This evolution can be shaped by numerous factors, among them: change

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of usage; environmental impact; advances in technology; politics; social pressure; changing commercial and contracting relationships and so on. Technology can be a significant driver of changing maintenance strategies. The development of Health and Usage Monitoring Systems (HUMS), for example, has enabled engineers to schedule maintenance more optimally because HUMS provide a more substantive indication of degradation and developing failure around which maintenance can be scheduled. ConditionBased Maintenance (CBM) has grown out of the technological developments which have given engineers a better-informed view of how a given system is performing. One increasingly popular technique is that of oil condition monitoring, whereby engine oil is sampled periodically and examined to measure particulates, and other traces, which indicate the rate and extent of wear that pistons and rotating parts are experiencing. If the wear appears to be excessive, or not what might have been predicted, an appropriate maintenance action can be implemented. Health and Usage Monitoring and CBM are changing the periodicity and the techniques of maintenance and giving logisticians an additional management tool by which they can evolve given support systems.

Summary It has been seen that ILS and the supportability analysis tasks are covered by standards that defence departments use as frameworks within which the work can be done by both customer and supplier. The supportability analysis tasks are defined, not to be overly prescriptive, but to help to ensure that there is analytical logic to the process of designing, developing, deploying, reviewing and evolving the support system. Only those analysis tasks that add value should be done, and they should involve all relevant stakeholders. Where appropriate, engineering logic must be combined with business logic, and either or both may have to accept a degree of compromise if they are to achieve a support system that ensures the ongoing viability of the mission system over a potentially long service life. Hopefully this chapter, and the one that preceded it, will have demonstrated the key characteristics of a support system: that it is founded on analysis; that it represents the result of a trade-off of a variety of variables; and that it evolves over the lifetime of the mission system. Defence systems are usually complex and expensive, and to enable them to be supported and supportable through life is challenging. The ILS discipline, and the supportability analysis that underpins it, should be seen as the logic framework via which the challenge can best be met.

Supportability analysis for mission systems

References DStan (2016) Defence Standard 00-600, Issue 4, Integrated logistic support. Requirements for MOD projects, Defence Equipment and Support, UK Defence Standardization. Glasgow Gov.UK (2015) News story: Dredging project paves way for new QEC Carriers to make their home in Portsmouth. [online] available at: https://www.gov.uk/ government/news/dredging-project-paves-way-for-new-qec-carriers-to-maketheir-home-in-portsmouth [accessed 7 July 2017] Gov.UK (2017) The Highway Code, Annex 6. Vehicle maintenance, safety and security. Information and rules about vehicle maintenance, safety and security. [online] https://www.gov.uk/guidance/the-highway-code/annex-6-vehicle-­ maintenance-safety-and-security [accessed 17 September 2017] ISO (2017) International Organization for Standardization, ISO 10303-233:2012, Industrial automation systems and integration. Product data representation and exchange – Part 23: Application protocol systems engineering [online] https://www.iso.org/standard/55257.html [accessed 27 September 2017] Jones, J V (2006) Integrated Logistics Support Handbook, 3rd edn, McGraw-Hill Sole Press, New York

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08 Achieving dependability in defence systems Laura Lacey and Chris Hockley

Introduction As an introduction to this chapter, it is worth asking whether a defence department would procure expensive systems that may prove to be not fit for purpose due to inadequate consideration of their reliability, maintainability and availability. The question leads to consideration of how a capability could be achieved if it were not possible to guarantee that a system’s availability had been considered from the outset. A review of reports published by the UK National Audit Office on the Ministry of Defence’s Major Projects and its Equipment Plan, for example that for 2015 (UK NAO, 2015), reveals that frequently many of the top ten key user requirements for a system procurement do not apparently include the requirement for the system to meet meaningful availability targets. This chapter will explain the terms availability, reliability and maintainability, and the importance of logistics to delivering availability and capability. It will then examine how properly articulated requirements can ensure that availability, reliability and maintainability are all achieved. Once these have been established, the link to dependability will be made and then to capability. Examples will be used to demonstrate the importance of reliability, maintainability and particularly logistics, in achieving availability and capability.

Achieving dependability in defence systems

Availability Availability in general There are different definitions of availability and equations for how it can be calculated. As a start point, in essence users of equipment want that equipment to work when required. Availability is effectively all the time during which the equipment has not failed, so, for illustration: the washing machine is plumbed in and ready to work when needed; the main battle tank is in the armoured squadron’s assembly area, serviceable, fuelled, and ready for use when the commander needs it; the aircraft is on the flight line ready to be tasked for operations. Some authors write about the system functioning (Kumar, 2000) or about its functionability (Knezevic, 1997), but however availability is expressed, the system is where it’s required, ready to perform the functions that the users demanded of it when they articulated their requirements (see discussion of user requirements and system requirements in Chapter 6). There are three main types of availability within procurement and support, and each has a different meaning and is calculated in a different way. Hence, their use is different. The three types are: intrinsic availability (Ai ), which is also known as inherent availability; achieved availability (Aa  ); and operational availability (Ao  ). For the user of the equipment operational availability is the most important, but is also the most difficult to calculate. In very general terms, availability is calculated as shown in Equation 8.1. From this point forward, this general expression of availability will be referred to as classic availability. Classic availability =

Uptime Uptime + Downtime

In simple terms, the uptime is when the equipment is performing its designed function. The downtime is any other time during which it is not working, for example while it is undergoing replenishment, maintenance, or transportation from one location to another. However, it is not that straightforward, as will be explained shortly.

Inherent availability Inherent availability (Ai) is usually calculated early in the system’s design phase. Limited data are available and, therefore, there are limits to its utility. Moreover, it only considers corrective maintenance (also known as

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unscheduled maintenance) and it is assumed that all the tools, spares, engineers (trained and competent) and facilities are available and in the same location as the equipment when it fails. Furthermore, the system or equipment can be repaired in the specified time. To reflect these ideal conditions, this is often referred to as corrective active maintenance. Using a vehicle as an illustration, it would experience a blown headlight bulb or a flat tyre right outside a fully equipped maintenance facility which is ready and able to do the repair with no delays. For a petrol-fuelled generator or a washing machine the failure might be a blocked filter, but the new filter, and the person trained to replace it, are both to hand, ready and waiting to carry out the repair. So, a random failure has occurred but can be rectified with no delays. Inherent availability assumes ideal conditions. Remember that this is not reality, and therefore the concept of inherent or intrinsic availability must be treated with caution. It has more appeal to a system designer who is designing maintainability (ease of maintenance) into the system to ensure that in such ideal conditions the speed of maintenance is as fast as can be achieved. However, its limitations are exposed by the fact that the designer cannot possibly know whether, at time of failure, the system will be close to a maintenance facility, or that the maintenance engineer will be at hand equipped with the right tools for the job, or that any number of other ideals can be met and the repair will not therefore be delayed. Inherent availability can be calculated as shown in Equation 8.2: Inherent availability ( Ai ) =

Uptime Uptime − Corrective active maintenance time

We can think of uptime as the mean time between failure (MTBF), and downtime as the mean time to repair (MTTR). Inherent availability can then be calculated if we know the MTBF and the MTTR, as shown in Equation 8.3. Ai =

MTBF MTBF + MTTRC

The subscript c has been used to denote that only corrective maintenance is being conducted. A consideration of how frequently, and for what duration, corrective maintenance is carried out will help illustrate the effect on inherent availability. Consider Figure 8.1: it represents maintenance on a car, where the blocks with diagonal lines represent some corrective maintenance interventions, for example changing a tyre or replacing a bulb, and the solid black blocks represent the times during which the car is working.

Achieving dependability in defence systems

Figure 8.1  Inherent availability for equipment working and having corrective maintenance 60

140 1

163 1

Using Equation 8.3 the Ai for Figure 8.1 can be calculated as follows: Inherent Availability ( Ai ) =

(60 + 140 + 163) (60 + 140 + 163) + 2

= 99%

Exercise 1: Calculate the inherent availability for a vehicle Assume your vehicle is available 365 days a year and you change one bulb in the year, which takes 20 minutes, and you have one flat tyre, which takes 40 minutes to replace as your car carries a spare (arguably an unusual occurrence in modern cars!). What is the inherent availability? Note: The option of repairing the spare tyre has not been considered.

From a logistics perspective, ideal conditions would demand trained and competent engineers, a storage facility on site which is fully stocked with the range and scale of inventory required to complete all potential maintenance tasks, all the required tools, technical manuals, support and test equipment, and the facilities, for example a garage, available 24 hours a day, 365 days a year, and probably more.

Achieved availability Achieved availability also considers the ideal working conditions described above. However, as well as considering corrective maintenance it also includes preventive maintenance, for example a car’s scheduled major service every 20,000 miles, or removal and replacement of its timing belt every 80,000 miles. For an aircraft it might be the manufacturer’s recommended maintenance every 100 flying hours. Achieved availability is calculated by using the mean time between maintenance (MTBM) rather than between failures. This is because the

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downtime now includes corrective and preventive maintenance, the former dealing with random failures and the latter delivering scheduled maintenance. Like inherent availability, it assumes ideal conditions. Furthermore, it is best used in the early part of a system’s life cycle, and especially for equipment or components that require regular preventive maintenance. A vision for achieved availability should help designers to determine the likelihood of there being any problems with the design that would prevent the equipment delivering the achieved availability required of it. In this case, changes could be made to the design early in the life cycle, before such change becomes prohibitively expensive. Alternatively, discussions could be held with the customer to ascertain whether there is any room for negotiation with regard to the availability requirements they have specified. The user may be able to accept more, or fewer, periods of scheduled maintenance and the designer may be able to negotiate for shorter, more frequent, periods or longer, less frequent, periods of scheduled maintenance. However, any such negotiation must involve the specific person(s) who articulated the requirement in the first place, because it may be there for a very particular reason. Consider, for example, the case of a fire engine: very short periods of scheduled maintenance may be less likely to compromise the overall availability of the fire engine fleet. If the amount of preventive maintenance required for the system is low, the calculated achieved availability value will be very similar to the calculated inherent availability value. Using the example in Figure 8.2, where the solid black blocks represent the time the equipment is working as required, the chequered blocks represent preventive maintenance and the blocks with diagonal lines represent corrective maintenance, the achieved availability can be calculated using Equations 8.4 and 8.5. Achieved availability =

MTBM MTBM + MTTRc + MTTRp

Achieved availability =

MTBM MTBM + MCMT + MPMT

Figure 8.2  Achieved availability for a system operating and undergoing periods of corrective and preventive maintenance 60

2 1

57 1

60 1

18 1

41 1

603 1

60 1

Achieving dependability in defence systems

Different authors represent Mcmt and Mpmt in different ways, such as — Mcmt or Mpmt (Jones, 2006), or AMT (Kumar, 2000) or M (Blanchard, 2004), where the preventive and corrective time have been combined into the ‘active maintenance time’, but note that Blanchard uses the mean. The important thing is to ensure that all stakeholders use the same equations and terms, or that there is a common understanding of how the terms are being calculated and used. For illustration, consider a combat jet aircraft which is subjected to preventive maintenance every 60 days, this maintenance taking 1 day to complete, with the clock being reset for the next 60 days: the achieved availability (Aa ) would be calculated using Equation 8.5 as follows: Achieved availability = =

(60 + 2 + 57 + 60 + 18 + 41 + 60 + 60 ) / 8

(60 + 2 + 57 + 600 + 18 + 41 + 60 + 60 ) / 8 + (1 + 1) / 2 + (1 + 1 + 1 + 1 + 1) / 5 44.75 = 0.957 = 96% 44.75 + 1 + 1

Note that the clock does not stop when corrective maintenance is being carried out. Note also that we are considering mean time between maintenance, and mean time between corrective and preventive maintenance, and not uptime and downtime. If there was no corrective maintenance then Aa would be about 98%. If the preventive maintenance took three days then Aa would drop to 91%.

Exercise 2: Calculate the achieved availability for a military logistics vehicle Assume your vehicle is available 365 days a year and you change 1 bulb in the year, which takes 20 minutes, and you have 1 flat tyre, which takes 40 minutes to replace, as you carry a spare. You also have a garage undertake an annual service, which takes 2 days. Oil replenishment weekly = 20 minutes, and tyre checks weekly = 10 minutes. What is the achieved availability? Note: The option of repairing the spare tyre has not been considered. From a logistics perspective, ideal conditions will demand an excellent spares replenishment programme, accurate and comprehensive spares data capture and analysis, accurate initial spares provisioning and appropriately skilled personnel, with the right tools and manuals, present and ready to do the work.

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Operational availability Operational availability is the most useful availability to calculate but also the most difficult, as it has to address the additional variable of administrative and logistic delay time (ALDT). This relates to delay, often outside of the operator’s control, contributors to which might be anything from time spent checking stocks, ascertaining if required inventory is available, placing an order with another supplier, waiting for an international delivery to arrive, waiting for a qualified engineer to do the work, waiting for another maintainer to finish using a piece of diagnostic or test equipment, and so on. It is, in essence, any delay that is not part of the preventive or corrective maintenance activities. It takes account of real conditions and not ideal conditions. However, when calculating operational availability, it is necessary to consider whether it is being calculated for one single piece of equipment such as a submarine, an aircraft or an armoured car, or for a fleet of such systems. A calculation for a single system will give a reasonably definite availability outcome, for instance that the system is unavailable for the mission planned for it. However, if calculated for a fleet of systems, the planned mission may be able to go ahead, with the unavailability of one system having less impact on overall operational availability. The operational availability equation is shown in Equation 8.6, with the mean ALDT being represented by MALDT. Operational availability =

MTBM MTBM + MCMT + MPMT + MALDT

Equation 8.7 is another way of calculating the operational availability. Operational availability Operational time + Standby time = Operational time + Standby time + MCMT + MPMT + MALDT However, caution and common sense need to be exercised. Operational time is the time during which the system is being used, that is, the ship is at sea, the vehicle is on the road or the aircraft is flying. The standby time is when it is serviceable and available to be used, that is, when the ship is alongside ready to sail, the vehicle is parked ready for its next journey or the aircraft is on the flight line. The analyst needs to fully understand the parameters and to understand the maximum value possible within the denominator. If the system’s operational availability is calculated over a period of one year and in hours, then the denominator can be no more than 8760 hours

Achieving dependability in defence systems

(365 days × 24 hours). Thus, Equation 8.8 is perhaps easier to understand, as total times are considered for corrective maintenance (TCMT), preventive maintenance (TPMT) and administrative and logistic delay times (TALDT). Operational availability Operational time + Standby time = Operational time + Standby time + TCMT + TPMT + TALDT The complication arises when other contributing factors have to be considered, such as time taken towing an aircraft to the flight line or transporting the aircraft, via ship, to another location. The aircraft is not undergoing maintenance, and it is not available. So maybe another element has to be added to the denominator to account for these factors. However, caution has to be taken to ensure that there is no double accounting of time. This might therefore be a good time to draw attention to sequential and concurrent recording of hours. If Ao is being calculated over a calendar period, clock time is used, not the number of man-hours accrued on the maintenance activity. In simple terms, if two engineers change a wheel on an aircraft, the total clock time may be one hour but their accrued hours may be two hours (ie two men × one hour). For MCMT the actual clock time should be used. The maintenance man-hours (MMHs) would be used to determine the number of engineers required, and this is a logistics consideration. Double accounting should also be avoided when calculating the corrective and preventive maintenance hours. Corrective maintenance can be conducted at the same time as preventive maintenance. However, for calendar-based Ao calculations, only the actual clock hours should be used to calculate the maintenance time. Some authors would recommend combining the maintenance time into one element of the denominator, such as mean maintenance time (MMT). There are occasions when corrective maintenance can be deferred until a more opportune time is available to conduct it. For example, a cracked light cover in a vehicle is unlikely to stop the vehicle being used on a mission; it is operable and available to drive. There may be a delay in supplying the new light cover, and if so this corrective maintenance can be delayed until a scheduled service is booked or a suitable opportunity arises. So imagine the maintenance depot working on one vehicle at a time. While waiting for a component to be delivered, engineers may be sitting around doing nothing else, or they could be working on other aspects of the maintenance schedule. If they can work on other maintenance tasks then the unavailability is not necessarily impacted or prolonged. The problem arises when there is no further maintenance work to be conducted until the

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component arrives. This now means that the logistics delay time is having an impact on the availability of the vehicle: it is increasing the ALDT. Consideration needs to be given to when the operational availability is calculated. It is wrong to calculate this only once, and Jones (2006) recommends that it is calculated at least annually, or before a mission. Additionally, it would need to be reviewed following a major modification to the equipment, where the original requirement has changed, or if operating in a new environment. Jones (2006) considers that some preventive maintenance tasks may not be included in the MPMT. However, it would need to be established whether the equipment can still be used when the preventive maintenance is being carried out, or whether it is just a component or one aspect of the system that cannot be used. For example, the regular virus scanning of a desktop computer does not necessarily stop the operator from doing certain types of work on it while the scan is running. The question is whether the system is unavailable. Does the scan represent a period of downtime for it? To be able to calculate the ALDT accurately requires accurate record keeping. Some form of logistic information repository (LIR) should be established (see Chapter 7). Additionally, during the early days of a system’s in-service life, for example during the initial support period of a newly developed system, inventory scaling (and therefore stock levels) may still be in a state of flux, which can adversely affect operational availability. This issue is further explained in Chapter 7. It should be fully acknowledged that it may be costly to gather, store and analyse all the data required to calculate operational availability accurately. This is going to be an even greater challenge in a theatre of war or during high-tempo combat operations. A further complication comes from trying to understand the operational availability profile that is required. Consider a user with a fleet of vehicles requiring an average fleet Ao of 80%. This is represented in Figure 8.3 as plot Line A. On examination, it can be seen that every line in Figure 8.3 – A to E inclusive – actually represents an operational availability (Ao ) of 80% over a period of one year. For example, the whole fleet may be used extensively during the first six months and then undergo some preventive maintenance (Line E), during which period only 25% Ao is required. Lines B, C and D also provide varying times when availability may be below the average 80% required, and any one of these options may be acceptable. Nevertheless, none would be acceptable if the user requires a constant level of 80% with no drop below that percentage, even for short periods. This illustrates the

Achieving dependability in defence systems

Figure 8.3  Achieving 80% operational availability 100 90 80 70

A B C D E

60 50 40 30 20 10 0

0

1

2

3

4

5

6

7

8

9

10

11

12

importance of the system designer being clear on precisely what the system user requires of the system. Having an understanding of the equations, what they enable the designer and the user to calculate, the utility of their results in the form of the different types of availability, and when they offer that utility in the life cycle, will help the definition and achievement of reliability goals for the system and those of system maintainability. It will help focus supportability analysis on the wider support chain and logistics factors. Figure 8.4 represents an Ao block diagram for the periods of operation, maintenance and ALDT. As before, the solid black blocks represent the time the equipment is working as required, the chequered blocks represent preventive maintenance, the blocks with diagonal lines represent corrective maintenance and the additional grey blocks represent the time spent on ALDT. It is important to remember that when the equipment is undergoing corrective maintenance or awaiting spares for corrective maintenance, the calendar time continues running. As a consequence, the operating time reduces accordingly.

Figure 8.4 Operational availability – equipment working and undergoing maintenance and awaiting spares 60

2 1

56 1 1

60 1

18 1

38 1 3

60 1

57 3 1

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Using Equation 8.6 the operational availability can be calculated as follows: Operational availability =

(60 + 2 + 56 + 60 + 18 + 38 + 60 + 57 )

60 + 2 + 56 + 60 + 18 + 38 + 60 + 57 1 + 1 + 1 + 1 + 1 1 + 1 1 + 3 + 3 + + + 8 5 2 3 = 62%

It should be noted that the result is much less than that for Ai or Aa. The aim of a good operator or commander would be to aim for ALDT to be as low as possible through good spares provisioning and anticipation, having good engineers and reducing any logistic delay. This will move Ao as close to Aa or Ai as possible, but in many cases such efforts are outside the commander’s control. The availability of equipment can be improved by the use of conditionbased maintenance using condition monitoring techniques, including Health and Usage Monitoring Systems (HUMS). These techniques can help reduce the MTTR and delay the maintenance until it is actually required rather than conducting it based upon a notional life of, say, annual maintenance or the amount of track mileage undertaken. Examples of condition monitoring include spectrometric oil analysis, magnetic chip detectors, colour indicating paint and so on, and the recording of the condition monitoring results can be trended and analysed to predict when maintenance can be conducted based upon the condition of the component. This requires good analytical diagnostic skills. Table 8.1 summarizes the key features of the availability equations. In summary, Ao is what the customer is interested in yet is the most difficult to contract for, a challenging reality which defence departments and suppliers have to manage with an increasing number of output-based contracts that require that the supplier meets specified availability outputs. For small equipment and a single system, it is easier, but as the numbers of equipment Table 8.1  Summary of availability equation key features Availability type

Inherent

Achieved

Operational

Conditions

Ideal

Ideal

Reality

Maintenance conducted

Corrective

Corrective and preventive

Corrective and preventive

Logistic delays included

No

No

Yes

Administrative delays included

No

No

Yes

Achieving dependability in defence systems

increase and complexity increases, achieving good operational availability becomes more and more difficult. The designer can design-in good maintainability and minimize downtime for scheduled servicing, but cannot control or design for the many factors that will affect administrative and logistics delay. Having established the importance of the availability terms and how they are calculated, attention should now be given to the importance of reliability and its contribution to availability.

Reliability Reliability is a probability and there are many different definitions offered. However, the following definition is succinct and covers the main ­contributing parts: Reliability is the ability of a product or system to perform as intended (i.e., without failure and within specified performance limits) for a specified time, in its life cycle conditions. (Kapur and Pecht, 2014: 4)

In terms of the equipment requirement, the function needs to be stated (to perform as intended), as well as the environmental conditions (geographic, meteorological, the other platforms the system might be mounted or used on, storage conditions, maintenance conducted, handling, transportation etc) to cover the specified performance limits and, finally, over what period (specified time). Reliability of components directly contributes to the preventive and corrective maintenance times and, thus, the system’s availability. Designers need to understand the required availability, from which the reliability can be established, and the maintainability, which defines how easy or quick it is to maintain. Often the reliability is prescribed and not the availability. This can at times be unhelpful. A reliability of 90% can be requested, but if no maintainability value is provided then the time to complete the maintenance may be excessive and negatively affect the availability. In very simple terms reliability can be calculated as shown in Equation 8.9:  −

R ( t ) = e

t   MTBF 

or R ( t ) = e − λt

Where t = time and λ = the failure rate, and MTBF =

Total operating time Number of failures

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and

λ=

1 MTBF

Specific reliability textbooks will explain how to use a constant or a nonconstant failure rate. However, as a start point for understanding the effect on availability, Equations 8.9 to 8.11 should suffice. System reliability can be improved through redesign, if testing is completed early enough in the design cycle. A designer would wish to establish the modes of failure and the faults. Caution should be taken when amalgamating all the failure modes into one in order to establish an overall component or equipment MTBF, because items can fail in different ways throughout a life cycle. A tyre puncture is not the same as a blowout or tread being worn away. The contributing factors to the failure modes will be different. Further information can be found in Knezevic’s book Systems Maintainability (1997). Knowing the reliability of a component can be used to establish how many items are required to achieve and maintain a specific availability. There are three options: do no repair, repair, or provide a redundancy strategy. They can be calculated as shown below.

Example ●●

You own a fleet of 20 vehicles to be operated for a 30-day period.

●●

To achieve your mission, 18 vehicles must be always operational.

●●

The MTBF of the vehicles is 25 days.

●●

Assuming a constant failure rate, what options exist for achieving this aim?

Do not repair The reliability must be 0.9 at 30 days so R = 18/20. The required MTBF for this reliability is calculated as follows: R (t ) = e

t   −   MTBF 

 −

0 .9 = e 

30   MTBF 

Achieving dependability in defence systems

MTBF = −

30 ln 0.9

MTBF = −

30 = 285 days ln 0.9

This calculated MTBF is greater than the stipulated 25 days, so this option is not viable.

Repair The required MTTR for this reliability is calculated as follows: AI =

MTBF MTBF + MTTR

25 25 + MTTR MTTR = 2.8 0 .9 =

Therefore, the person using the equipment would need a repair strategy that could complete the maintenance within 2.8 days. Note that this is in ideal conditions without any ALDT being considered.

Redundancy strategy This option requires more vehicles to be purchased to achieve the MTBF of the vehicles over the 30-day period. If the number of vehicles available is increased by 20, to 60, the reliability is now 18/60 over 30 days. 

30



−  18 = e  MTBF  60 30 MTBF = − = 25 18 ln 60

(

)

Knowing the possible options will enable the procurers of equipment to understand whether the availability is achievable or if they need a good maintenance strategy or if more vehicles are required. The system reliability can be addressed using design tools such as Fault Tree Analysis (FTA) and Failure Modes, Effects and Criticality Analysis (FMECA) (see Chapter 7). The reliability can be improved by using better

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components, different materials, or by increasing the preventive maintenance. This is an aspect of the process known as Reliability-Centred Maintenance, described in Chapter 7, which is used to adjust the scheduled maintenance activity once in-service data and experience are gained.

Maintainability There is often confusion between maintainability and maintenance. For this analysis the distinction will be as follows: maintenance is the actual physical act of conducting some engineering activity, such as changing a tyre or replacing an aircraft engine. Maintainability is how the vehicle has been designed such that the maintenance can be carried out as easily as possible. On a domestic washing machine the filter is a component that can become blocked and is therefore normally located on the front of the washing machine. Additionally, if a panel is placed over the filter, to make the washing machine aesthetically pleasing, the panel can usually be opened by rotating two plastic screws 90 degrees. The filter is then easily accessible. There is no requirement to drag the washing machine out of the cupboard space, nor dismantle the machine to get access to the filter. Similarly, to put fuel into a vehicle’s petrol tank, the petrol cap is usually located behind a flip panel on the side of the vehicle that is easily opened. The cap may require a key to unlock it (the same as the ignition key) and the cap will probably be anchored to the car by a plastic lead. It has been designed to make the maintenance task easy. There are no screws to undo or additional equipment needed.

How does the consideration of maintainability impact upon availability? By designing equipment with maintainability in mind, the time to conduct the corrective or preventive maintenance (MTTR) can be reduced. Some simple design considerations are: quick-release fasteners, colour-coded wiring, using the same bolts throughout an engine build, which reduces the number of different tools required and the need for different test equipment. From Equations 8.2 to Equations 8.8 it can be seen that the impact of poor maintainability would be to reduce the availability, no matter which type, as the MTTR would increase. Additionally, the system should be designed so that components that are likely to fail more frequently, or require regular preventive maintenance (eg replacing or cleaning filters), should be located

Achieving dependability in defence systems

with ease of access in mind, such as behind easily accessed panels or with a simple quick-release catch or fasteners.

Requirements Stakeholders in the development of a new system, or a legacy system undergoing update or upgrade, should carefully articulate what they require of it in performance terms. Good requirements are essential for any programme and they should be carefully constructed and clearly expressed. They should not be rushed! They should encompass the stakeholders’ needs and constraints. For example, an electrical system might need 240 V but be constrained to 220 V. Problems occur when requirements are tailored or modified based primarily on the criterion of cost, and there is a failure to trace the requirement back to the originator to understand the reason for the requirement in the first place, and what the implications are likely to be if the requirement is changed. Changing from 240 V to 220 V will impact the current and resistance requirements and the power being provided. For instance, a kettle will take longer to boil if the supply is 220 V rather than 240 V. A vehicle whose specified requirements reflect the intent to operate it in conditions typical of desert regions may not perform satisfactorily if it is subsequently operated in cold mountainous regions. Requirements impart the detail of what needs to be built, or in the case of a support contract, the services that need to be provided. In simple terms, the elements of a requirement should include: a viewpoint (eg what is the system definition?); its conformance (shall, will, must); an action (a verb, activity, task); a subject (eg a soldier, sailor, pilot, an electrical system); an effectiveness measure (eg what range, what time of day, how many); and a condition (eg whereabouts, over what period, interoperating with whom). For example, ‘The logistic system shall be able to store computers at a constant temperature between 5 and 25 degrees C for a minimum of 12 months anywhere in the UK all year round.’ The stated conditions are the constant temperature range, 12 months and within the UK. If any of these are required to be changed, the stated conditions have changed. To use a military example, if the original requirement was for a vehicle to be operated in Western Europe, and due to changing political and military strategy the vehicle now needs to operate in the desert region, the stated conditions have changed. The temperature and humidity range are now different and the terrain is different. Some of the original tests and trials may be invalidated and the tests should be redone under the new conditions and effectiveness measures.

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Without the additional testing, the assumptions that informed previous design activities, such as FMECA, RCM, LORA (see Chapter 7), design for maintainability and so on, and their conduct and results, may all be flawed to varying extents. For example, the temperature of the vehicle may be too hot to touch, requiring that gloves need to be worn by operators and/or maintainers. If the vehicle was designed without the need for gloves to be worn, the access panels that promote maintainability may now prove to be too small for a gloved hand. The maintainer may not be able to get a hand around a quick-release coupling. The MTTR will increase and will thus have a negative impact on system availability. Similarly, operating in the new climate may cause the vehicle to overheat and consequently incur additional corrective maintenance. The preventive maintenance may also be somewhat inappropriate for the conditions. The oil may need replenishing more frequently. The air conditioning system may need coolant levels checking and replenishing more frequently. All of these will have an impact on the Ao. In essence, the operational time (OT) and standby time (ST) may reduce as the total preventive maintenance (TPM), total corrective maintenance (TCM) and ALDT all increase. As well as more inventory, more engineers, more accommodation and so on will be required. The Ao will decrease. As a consequence, the options of do no repair, repair, or provide a redundancy strategy may all change. A knock-on effect will be that the cost of the operation will almost certainly increase. As Jones (2006) recommends, the importance of calculating the operational availability before a mission is important, but it must address stated conditions and any changes! In simple terms, if a stated condition under which the platform was originally developed and tested is changed, the results of the original tests and trials need to be re-examined to ensure that they are still valid. If they’re not, retesting should be undertaken. The verification of the requirement is no longer valid and the validation of the platform is incomplete. The inherent, achieved and especially the operational availability need to be recalculated. In bigger terms the safety of the crew, maintainers and operators may be at risk. Without carefully considered, succinct, insightful and complete requirements there will be no exact criteria against which to test the solution and to prove that it meets the needs of the user. During the different life-cycle stages, before a solution is handed over to the purchaser (eg the military), the different indenture levels of the system will have been tested, from component to whole system. Testing can take many different forms, from bench testing, to simulation, to full-scale trials involving the system’s ultimate users, operators, and maintainers. This testing verifies at the different

Achieving dependability in defence systems

stages that specified requirements have been met, or are in the process of being met. The Integrated Test, Evaluation and Acceptance Plan (ITEAP), described in Chapter 6, is the means by which this demonstration of achievement is planned, resourced and coordinated. The elements of the ITEAP that deal with reliability and maintainability, and the demonstrations, trials and tests of the achievement of reliability and maintenance requirements, all form part of a given system’s Reliability and Maintainability Case – the R&M Case. The R&M Case is, essentially, the record of the system’s reliability and maintainability requirements, how its design and engineering have been directed towards meeting those requirements, and how this has been progressively achieved as design and development have matured, this achievement being demonstrated via appropriate trials, tests and demonstrations. The R&M Case represents, therefore, an audit trail of engineering and management decisions leading to delivery of a system that does what the user asked for. As time passes, the user’s confidence in the system, in terms of its reliability and maintainability performance, should grow progressively. When the system has been handed over to the user, it will need to be validated for all the different operating conditions and other stated conditions that were specified for it while it is in service. The validations can only be conducted by the user within the different stated environments. This may take years for a complex system such as an aircraft carrier or combat jet. It may also require some complex contractual arrangements to ensure that processes and responsibilities for the continuing verification and validation of the system’s requirements, and their achievement, are properly dealt with. The principle of verifying and validating against the original requirements is valid whatever the complexity of the system and it should only be validated or verified against the original requirements.

What is dependability? A dictionary search for the word depend will provide a definition that includes the words reliance, trust and reliable. In simple terms, something that is dependable will do what is required, when it is required. Looking specifically at dependability, engineering-focused sources will include aspects of being able to perform the function for which it was designed and may include the terms reliable and stated conditions, as per the availability and reliability definitions. A dependable system will include more

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Figure 8.5  Components of Dependability

HFI Legal and Regulatory

ARM

ILS

Integrity

Dependability Safety

Confidentiality

Training

Survivability Security

than just being designed for availability, reliability and maintainability. It will also include attributes of safety, integrity, security, survivability, human factors integration, training confidentiality and legal and regulatory aspects. Figure 8.5 illustrates the components of dependability. Much depends on the system being designed and the need to keep all these components in mind throughout. Different sources will include training and human factors integration (HFI) within ILS (see Chapter 6). Systems involving software will focus on the security and integrity attributes as well as ensuring the system is reliable. Another prime condition of a dependable system is that it does not produce any emergent properties, either negative or positive. Each has the possibility of disrupting the balance of the designed system. Care must be applied when discussing dependability to ensure there is a common understanding between all those involved. When designing for dependability, an understanding of fault, error and failure is required. Each of these will have an impact on a system’s dependability attributes and thus its availability. A fault does not necessarily lead

Achieving dependability in defence systems

to an error, and likewise an error does not always lead to a failure. They can be stopped along the chain. A system certainly needs to be designed for dependability. As an example, when designing for reliability the designer will look for ways to achieve the specified reliability from the requirement. This will start from FTA, FMECA and tests and trials. Through analysis of the data, faults can be removed; the system can be designed to be tolerant of faults and still function, albeit at a lower level. An example would be the non-functioning of elements within a phased array radar or light-emitting diodes (LEDs) within a traffic light. Even if some elements of the LEDs in the traffic light are not working, they will still work sufficiently well for the user. Graceful degradation might be incorporated into the design to allow it to be fault tolerant. Faults can be prevented by corrective and preventive maintenance, and possible faults can be forecasted with the use of condition monitoring and condition-based maintenance. Dependability is more obvious perhaps in the domestic environment, where the heating needs to work dependably, and the fridge, freezer, electric lights and power all need to be dependable. For defence procurement and support, the inclusion of dependability should enhance a system, albeit maybe at some cost. However, this leads into the required capability and the actual need for the system. Trade-offs may be required between the different dependability components or attributes. For example, a military vehicle that is made safer by the addition of extra armour plating may no longer be reliable due to the additional weight it has to carry; its engine may not have been designed to move this weight. Similarly, its maintainability may be compromised as access panels may now be hidden behind the armour. These outcomes will have a direct impact on availability. Designers and military commanders will need to understand the consequences of the modification and consider and accept the resulting trade-offs. The attributes of dependability will all contribute to, and possibly downgrade, the required capability. How does this impact on military capability, and what does this mean for a military commander or a defence logistician?

Capability The MOD Acquisition System Guidance website (MOD, 2017) defines capability as ‘A service, function or operation that enables an organisation to exploit opportunities’. A link can be seen to the requirement for the

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system, as discussed previously. The action is the service, function or operation. However, it is not specific about stated conditions but focuses on being able to exploit opportunities. From the outset of this chapter the contribution of availability to capability was highlighted. However, National Audit Office reports on the UK MOD highlight that few new systems are designed with availability in mind. How can a system or a combination of systems be designed to be a military capability if there is little or no clearly articulated requirement for the system to be available? As is discussed in Chapter 10, public sector organizations, and in particular defence departments, are increasingly committing to output-based contracts with industry, such contracts tending to be focused on the industry partner making systems, or the capability that they provide, available to the customer at a specified rate, usually against a defined period, often with gain-share arrangements to cover exceptional performance. Classically, in the air domain it is by no means unusual to find such availability-type contracts requiring that the supplier makes available to the customer so many ‘flying hours’ over a set period. The availability of numbers of ‘aircraft on the flight line’ is not necessarily what matters; it is the capability which having numbers of flying hours provides that offers more utility to the defence department. The growth in contracting for availability, performance-based logistics, and similar, has forced a greater concentration on the concept of capability and of how availability contributes to it. The link between capability and dependability is a strong one. A capability will only be delivered if all the various dependability components have been addressed, and if any are weak or fail the capability will be downgraded. Therefore, it appears apparent that when designing or planning for capability, the consideration of availability – for equipment, services and people – should be paramount. If a system is not designed for availability from the outset, but designed just for reliability, then a commander cannot guarantee that sufficient systems will be available to deliver the desired capability. Even taking into consideration the reliability options and calculations shown previously, a capability planned without availability in mind will probably fail. It is the mindful consideration of the reliability, maintenance and logistic support, combined to achieve the availability, that will provide a positive contribution to the capability, and thus the exploitation of opportunities. In an era of contracting for availability, the users of defence systems must be clear on the capability they require, even more clear on the availability they require of their systems, and ensure that they specify system availability with real insight into how it contributes to dependability and capability.

Achieving dependability in defence systems

Summary This chapter has addressed the importance of reliability, maintainability and availability to capability. Attention should also be given to dependability and the faults, errors and failures that may occur. Consideration of these during the design stage can help eliminate faults and failures, or ensure that the design incorporates measures such that a fault can be present but not have an impact upon system reliability, and thus its availability. While reliability and maintainability are engineering design considerations, the bigger problem for achieving required operational availability is the impact of administrative and logistic delays. Not everything can be planned for. Time spent waiting for spares can have a dramatic effect upon a system’s availability, especially if it is the only system available for a mission. While there are options to provide redundancy (eg more vehicles or by reducing the mean time to repair as much as possible), these may not be sufficient to achieve the required Ao. A high level of reliability in complex designs may come at too high a cost and actually necessitate too much preventive maintenance. In a military system a fine balance must be achieved between the design for reliability and maintainability to achieve availability, and that which can be achieved by thoughtful consideration of how to plan for the logistic support required. Dependability includes many components, but all will need to be combined to achieve the desired capability. It is incumbent upon those who write requirements to ensure that the system’s availability is considered from the outset. There is a time, early on in the life cycle, when only inherent and achieved availability can be calculated. However, these need to be constantly reviewed when new and more realistic data from testing become available. From these data, and with an understanding of the system’s operating environment and the logistic support available to it, the Ao can be determined. However, any change to the stated conditions may invalidate the FMECA, RCM and testing and so on, and they may have to be revisited. The growth in availability-type contracts is obliging defence departments to consider very carefully just how system availability contributes to delivering the capability they require, and how it should be contracted for. Finally, communication between stakeholders is very important. A common understanding of the terms and how they are calculated must be established from the outset. Otherwise confusion and conflict may occur. Only clear agreement on definitions and using the right calculations will avoid this. Gaining a common understanding of the requirements and underlying elements is essential if successful and reliable equipment is to be a reality.

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Answers Exercise 1 The vehicle is inherently available for 365 days or 365 × 24 hours = 8,760 hours. The downtime, though, is 20 minutes plus 40 minutes or 1 hour. Thus: Inherent Availability ( Ai ) =

8760 = 99.9886 = 99.99% 8760 + 1

Exercise 2 The military vehicle is inherently available for 365 days or 8,760 hours. The downtime for corrective maintenance is 20 minutes + 40 minutes = 1 hour. The scheduled servicing means the downtime is two days (48 hours) in the garage plus 30 minutes every week. Thus: Achieved availability ( Aa ) =

8760 = 98.88% 8760 + 1 + 48 + ½ × 52

References Blanchard, B S (2004) Logistics Engineering and Management, international edn, 6th edn, Pearson Education, Upper Saddle River, NJ Jones, J V (2006) Integrated Logistics Support Handbook, McGraw-Hill, New York Kapur, C K and Pecht, M (2014) Reliability Engineering, John Wiley & Sons, Hoboken, NJ Knezevic, J (1997) Systems Maintainability, Chapman & Hall, London Kumar, D U (2000) Reliability, Maintenance and Logistic Support: A life cycle approach, Springer, New York

Achieving dependability in defence systems MOD (2017) Acquisition System Guidance: Common terms used in acquisition [online] https://www.aof.mod.uk/aofcontent/general/commonterms.htm?zoom_ highlight=A+service+function+or+operation+that+enables+an+organisation+to+ exploit+opportunities [accessed 16. October 2017] UK NAO (2015) Report by the Comptroller and Auditor General, Ministry of Defence major projects report 2015 and the equipment plan 2015 to 2025, The Stationery Office, London

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09 Planning and executing defence operational logistics J e r e my C D S m i t h

Introduction This chapter has two purposes: to bring to life some of the defence logistic principles covered elsewhere in the book; and to enable you to integrate, and hopefully develop further, your knowledge of defence logistics. This will hopefully be achieved by encouraging you to think about some of the logistic implications of a fictitious operational scenario that will be described. You will be invited to participate in the process that takes the articulation of an operational mission through to its development into a concept of operations and a plan for achieving it successfully.

Planning support to operations – the operational estimate Estimate format The planning of operations typically follows a prescribed format, the level of detail given to particular elements reflecting the particular circumstances of the operation being planned for. The NATO standard format for the planning of operations at all levels (ie strategic, operational and tactical), and for all types of operations, is: initiation; mission analysis; development of potential courses of action (COA); courses of action analysis; validation

Planning and executing defence operational logistics

and comparison of courses of action; and selection of the approved course. This is then developed into a concept of operations and into an operations plan (NSO, 2017). The process from mission analysis through to selection of a course of action and its approval by the commander is known as the operational estimate.

Initiation The planning process will usually be initiated by a directive. This may be issued by a national government or defence department, or for a NATOsponsored operation, by its North Atlantic Council (NAC). The directive may be clear and precise but it may also be couched in rather ill-defined terms. The purpose of the next stage, mission analysis, is to analyse the mission, if one has been given in such terms, or the less precisely worded statement of intent or objectives if that is what the military headquarters has received.

Mission analysis The mission analysis is led by the commander and its prime purpose is to determine what is being asked of the military and other force elements. This will enable the commander to articulate his intent, and this will enable planning staff, including logisticians, to begin to evaluate the many and varied factors they will have to consider in order to come up with potential courses of action to meet it. The mission analysis stage clarifies the ultimate purpose of the mission, the roles of force elements likely to be involved in achieving it, and any constraints on their freedom of action. It allows logistic planners to get early indicators of its logistic implications. These implications will differ significantly, depending on the mission and the commander’s intent. For example, a humanitarian assistance mission will present logistic support challenges that may differ markedly from those associated with a peace enforcement or war-fighting mission.

Developing potential courses of action Having analysed the mission, a commander will issue direction to his planning staffs to begin the work of developing potential courses of action. Depending on the level of commitment and the complexity of the problem, a number of teams are likely to be formed to do this work. A member of the logistic staff should be represented in each team. The UK MOD summarizes

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the role of the logistician in this work quite succinctly: ‘the logistics subject matter experts provide the logistic conscience to the COA development teams. They ensure that the initial idea is, and remains, logistically feasible as it is developed’ (UK MOD, 2015: 88). As potential COAs are developed further, it will be essential to understand the logistic implications of each, and to articulate them in a way that will be understood by all other staff members. Each COA should be logistically staff-checked, which means, essentially, that its logistic implications are assessed and quantified as comprehensively as can be achieved, to confirm that it lies within the bounds of what is logistically achievable.

Validating and comparing courses of action Each COA should be validated by being stress-tested against the logistic functions, to gauge likely outcomes, potential strengths and weakness, and risks in general. A logistic staff planner who can articulate the logistic risks in COAs in an insightful fashion will make a valuable contribution to the task of comparing them and assist the commander in reaching a selection decision.

Selecting the course of action Once the commander has selected the best COA, the decision will initiate the development of a concept of operations and a plan. The concept of operations is essentially the commander’s vision for the operation and how it will be orchestrated – based on the selected COA. The operations plan provides the detail on how it will be done. Logisticians will bring their expert logistic focus to the work to develop the courses of action, and to their validation and comparison. There are many ways of doing this, one of the more popular ones being to consider the ‘4 Ds’ of: Destination Distance Demand Duration. It would be worth examining the COA development, analysis, and validation and comparison stages in more detail, through the medium of a fictitious operational scenario which you can think through. Assume the guise of a logistic staff officer working in a senior military headquarters as you do so.

Planning and executing defence operational logistics

Exercise – logistic input to the courses of action The operational scenario Consider the following fictitious operational scenario: The NAC has initiated a NATO mission to which your national government has committed its Armed Forces, its purpose being to bring peace and stability to a country that is classed as a ‘failed state’ and riven by political and social factionalism and disputes, many of which have been violent and destructive to life and property. It has become a breeding ground for terrorism and criminality, which is affecting nations globally. NATO expects assigned forces to be engaged in kinetic operations against a disparate collection of enemy forces, well equipped and determined, but lacking formal structure and command and control capability. Your military headquarters has commenced planning for the operation. A number of other NATO nations will be taking part in it. NATO forces will be deploying over extended distances into the theatre of operations. Its terrain is a mixture of desert plains surrounded by mountains, some of which are very high. What little infrastructure this failed state used to have has been destroyed, damaged or seriously neglected. It has a weak and corrupt central government and regional governing bodies that disregard any central government policies they consider to be against their region’s interests. They are also corrupt. You know that from the mission analysis, your nation will be employing armoured forces, battlefield helicopters and fixed-wing aircraft. NATO is assuming that operations will endure for at least two years. You begin to think about the ‘4 Ds’ in turn.

Exercise requirement As the logistic staff officer, consider each of the 4 Ds, starting with Destination, then work through Distance, Demand and finally Duration. Follow a three-step process and make notes as you proceed: 1 List some of the factors which you think might be significant under each ‘D’. 2 Consider why and how they matter and write down these considerations. 3 Draw deductions which will shape the logistic support to the mission.

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Some notes concerning each of the 4 Ds are provided to help you. When you feel you’ve made some progress, compare your thoughts with some of those which have been provided in the lists below. Note: these are just a few ideas to illustrate the process; they are by no means complete!

Destination An evaluation of Destination should focus, primarily, on the country or region in which the mission will be conducted. However, it may also be necessary to broaden the area of reference to encompass bordering states or geographical features that cross borders. An example from mountaineering illustrates the point: to ascend Everest, climbers have a choice of two main climbing routes, one of which approaches the summit from the southeast in Nepal, and the other from the north in Tibet, China. The objective is the same, but the routes to it may present different logistic challenges. The logistic planner should consider the area of interest in terms of its physical characteristics, its geography in general and its terrain in specific regions or at potentially significant points. These targets of interest may be significant for a number of reasons, for example because they encompass axes of advance, supply routes, or defiles and bottlenecks. The target areas’ meteorology may also be important to the logistic planner. The weather can enable or disable vehicle movement, restrict helicopter and fixed-wing-aircraft flying ability, and have a deleterious effect on stocks, and on people, all of which may have logistic implications. If there is a seasonal pattern to it, it may result in predictable periods of intensive activity, followed by periods of relative calm. Logically, the demand on logistic resources is likely to be greater during the busier periods than the quieter ones. Destination should also encompass the general fabric and infrastructure of the areas of interest. This should include roads and railway lines, airports and seaports, power generation and distribution capacity and reach, water supplies and drainage, as well as agriculture, manufacturing capability and service industries. In some countries or regions they may be highly developed, in others basic to non-existent. The defence logistic planner will wish to assess the extent to which logistic resources and capabilities can be sourced in theatre, if at all, and the extent to which they will have to be brought in. The cultural characteristics, political inclinations and general attitudes of the population will also be worthy of consideration. Will they be a source of locally employed civilian labour? Will they be cooperative in the supply of goods and services or are they likely to obstruct it?

Planning and executing defence operational logistics

Destination Some suggested considerations under the ‘D’ of Destination: Environmental conditions Considerations ●●

Pronounced seasonality: very high summer temperatures; dry and dusty conditions; night-time temperatures can drop to below zero; mountainous regions can experience heavy snowfall.

Deductions ●●

●●

Likely requirement for protected storage for energetics (ammunition), medicines and food. Some specialist materiel items will also require protection. Need for data-logging to provide end-to-end data on temperature, humidity etc experienced by sensitive items moving along the supply chain.

Available infrastructure Considerations ●●

●●

●●

Little established infrastructure – buildings few in number and road network limited in spread and capacity. Port infrastructure of low quality and not capable of handling large volumes of materiel. Airports/airfields of limited capacity.

Deductions ●●

●●

Existing infrastructure unlikely to provide protected storage, so early deployment of logistic engineering capabilities may be necessary, in advance of despatch of inventory. If protected storage is tradedoff in the interests of rapid build-up of materiel to commence kinetic operations, it may be necessary to write-off and dispose of some materiel and accept reduced shelf-life of some items. Roads may have to be improved by logistic engineers. In the meantime, movement delays will have to be factored into readiness and sustainability planning for combat elements. Logistics and administrative movements may be lower priority than operational troop movements; this must be factored into operational planning.

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●●

●●

●●

Be prepared to move people and materiel by rotary wing intra-theatre until roads improved or built. Port and maritime capabilities will be required over extensive period, until port capabilities improved. Initial build-up of forces likely to put airport capacity under stress. Pending improvement, military control of air traffic may be necessary. A lead nation will be required to control an agreed prioritization system across contributing nations.

Industry Considerations ●●

●●

No in-country fuel refinery capability; low-grade fuels are procured and brought into country in road tankers. Limited food production capability.

Deductions ●●

●●

●●

Build-up of fuel to minimum stock levels will demand use of military tankers through-running from refinery outside national borders. Quality inspection capability will be required, and force protection of tankers in transit. Network of tactical bulk fuel installations required for supply security. Deployable capability, using modular fuel system, will be required to cover shortfalls as combat forces manoeuvre. All food will have to be brought in, at least initially.

Population Considerations ●●

Sparsely populated.

●●

Non-permissive to an undetermined extent.

Deductions ●●

●●

Limited availability of locally employed civilians, but with potential to attract and retain them if accommodation and life support are provided. This will increase demand for food, water, deployable accommodation etc. Security clearance, and ongoing review of security status, required for locally employed civilians hired for work within operating bases.

Now turn your attention to Distance.

Planning and executing defence operational logistics

Distance In your consideration of Distance, think about the distances both external to the theatre of operations and internal to it. To the defence logistician, distance has broadly the same significance as it does to the logistician in the commercial world. To both it should prompt thoughts of the supply ‘pipeline’, and of both forward and reverse flows of materiel (or ‘goods’) and information. As was discussed in Chapter 4, the defence supply chain may take some time to become established – for the pipeline to be filled with inventory – and this may delay military operations. The typical solution is to cover the period while the pipeline is becoming established with some kind of deployable inventory pack. This may be termed a ‘deployable spares pack’, a ‘priming equipment pack’, a ‘get-you-in pack’ or similar. Its composition will normally reflect what inventory managers consider to be the required range of items and the scale, or quantity, likely to be required while the supply pipeline is being ‘primed’. To do its job, this temporary inventory solution may have to be flown into theatre, thus limiting its range to what can be moved by air. Other items may follow by surface means but take longer to reach their destination. In simple terms, the greater the external distance from point of origin (the home base) to theatre, the longer it takes to establish the pipeline. Once it is established, the longer it is, the greater the volume of inventory that will be moving along it, in transit. A key consideration for the logistician is the lead-time: the time it will take for an item to reach the unit that has demanded it. Where the distance is greater, the lead-time is longer, and the greater the likelihood of the logistician having to expedite delivery of critical items by other means. Reverse flows of the repairables (engines, gearboxes, auxiliary power units etc), which will be moving back to the home base or to another location upstream, will also be affected by distance. Simplistically stated, the greater the distance these items have to travel upstream to reach a depth maintenance, repair and overhaul (MRO) facility, the more of them will be necessary to maintain required levels of availability of the military forces’ vehicles, helicopters and other systems. Where the inter-theatre distance is great, it may make sense to establish a staging post en route. Defence departments often refer to this as a forward mounting base (FMB). It can be used as a marshalling area for people, vehicles, weapon systems and other inventory deploying into theatre, and a staging post for their recovery back to the home base. It may be expedient to carry out any engineering work required for aircraft, vehicles

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and weapon systems here, rather than in theatre. In extreme heat or cold, personnel may be held at the staging post to enable them to acclimatize before they’re committed into theatre. It might be prudent to carry out predeployment training here as well. Follow the same three-step process as you consider Distance, and see what you come up with. Compare your ideas with the suggestions below.

Distance Strategic lines of communication inter-theatre Consideration ●●

Extended distance from home nation to theatre of operations.

Deductions ●●

●●

●●

●●

●●

Possible necessity to establish an FMB close to the theatre of operations. This will enable staged movement of vehicles, equipment, weapon systems and personnel into and out of theatre. It may be prudent to establish a level 3 medical treatment capability at the FMB. Given low capacity (in early stages) of airport, an FMB will assist in careful control of allocated usage ‘windows’ for flights into/out of theatre. Flow of materiel can be continuous as far as FMB, regardless of capacity at airport and seaport. When their capacity has been increased, these stocks can complete the final leg of the journey much quicker than if they were coming all the way from the home base. The length, and therefore lead-time, is significant. Consequently, a greater volume of inventory to sustain operations through the campaign will be required. Repairables will take a long time to transit back to the MRO facility if in home base. For critical systems this may require careful prioritization. It is essential to establish priorities for reverse flows of such ‘repairables’ from fleet managers, and to be prepared to expedite movement of specific items if they become critical. As operational tempo decreases, leading to ultimate cessation, it will take an extended time period to empty the supply pipeline. This must be factored into planning for recovery at the end of operations.

Planning and executing defence operational logistics

Intra-theatre / in-country lines of communication Consideration ●●

Are operations to be prosecuted over extended distances, and with high intensity of manoeuvre?

Deductions ●●

●●

Broad requirement for high volumes of mobile stocks ready to be deployed as operational phases determine. Requirement for reserves of all key logistic capabilities, but especially fuels, logistic engineering, vehicle and systems recovery, battledamage repair, helicopter under-slung loading and logistic lift. Such reserves may need to be held in pre-packaged ‘earmarks’ scaled according to combat element composition (armoured and wheeled vehicles; artillery systems; guided weapon systems etc).

Now address Demand.

Demand As you consider Demand you might focus on the demand for both goods and services, where that demand is positioned in the supply/support chain (for example specific locations within theatre, at the FMB etc), when it manifests itself, and why. Demand covers all the NATO classes of supply. You might consider combat supplies, which, in defence, are typically ‘pushed’ into theatre and forward to users, rather than demanded on an as-required basis, and consist of food, water, fuel and ammunition, all critical to the continued prosecution of operations and sustainment of people engaged in combat. Among the services being demanded will be MRO, recognizing that some of this will be done in theatre and some of it in the home base or at some intermediate point in the support chain. Maintenance requires repairables, non-repairables and consumables, the demand for these being more easily forecasted for preventive maintenance, because it is scheduled, than for corrective maintenance, because it is inherently less predictable. Demand for clothing, body armour and personal weapons must also be calculated and planned for. Demand for all levels of medical support need to be catered for. The ‘population’ from which casualties will be drawn is unlikely to be composed solely of serving personnel; it will also encompass contractors, wounded enemy personnel, and civilians caught up in the conflict. Casualties will comprise not just those who have been wounded but also those affected by disease and non-battle injury. Demand for all classes of supply, and for all

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relevant services, may be significantly affected by the environment in which operations are being conducted. Logistic planners should therefore consider how Demand is affected by their consideration of Destination, for example the extent to which the terrain might accelerate wear on systems, compressing their time between scheduled maintenance activities, or the extent to which heat or cold will affect water and fuel consumption. An important reality of recent military campaigns has been the seasonal nature of enemy operations, this reflecting the key weather characteristics. The Taliban in Afghanistan were more active during ‘campaign season’, the warmer spring and summer months. What matters to the logistician are the implications of this seasonal activity for demand. What do you think they might be?

Demand Environment Considerations ●●

Extremes of temperature; dry, dusty, hot on plateaus but snow and ice conditions in mountainous regions.

Deductions ●●

●●

High temperatures will necessitate high consumption of water, which will demand regular and large-scale resupply. Water available in volume from snow and ice but will require fuel for melting and heating it.

Seasonality Considerations ●●

Seasonality in weather encouraging seasonality in enemy activities.

Deductions ●●

If there is a recognized ‘campaign season’ during summer months, greater levels of attrition to personnel, vehicles and systems in general must be expected. This will lead to distinct increases in activity levels, materiel consumption etc, followed by reductions as weather turns. Periods of reduced activity will enable stockpiling to be achieved in preparation for campaign season.

Planning and executing defence operational logistics

●●

If friendly forces’ activity is planned to disregard such seasonality logistics plans must recognize both dynamics: consistent levels of friendly forces’ activity and spikes of enemy forces’ activity.

Force elements and other personnel – numbers Considerations ●●

Life support requirements for: own deployed troops; other nations’ troops under command or administered by own forces; civil service personnel; civilians providing contractor support to operations; locally employed civilians.

Deductions ●●

●●

Demand for food and water, including: likelihood of capturing prisoners of war who must also be catered for; special dietary requirements, for example halal. Requirements for other nations’ troops transiting through our areas of responsibility and who may require our administrative support, for example during Reception, Staging and Onward Movement (RSOM).

Vehicles, weapon systems, other systems: consumables Considerations ●●

●●

●● ●●

Demand for fuel, oils and lubricants in what is intended to be an operation of manoeuvre over extended distances, across varying terrain, and in potentially extreme weather conditions. Operational movement of combat vehicles, support vehicles, fixed and rotary wing aircraft while prosecuting operations. Administrative vehicle movements. Refuelling for RSOM of own forces and those of other nations for whom we have administrative support responsibility.

Deductions ●●

●●

Need to plan for varying consumption over different phases of operations. There may be specialist products, for example to propel unmanned aerial vehicles which don’t run on NATO Standard Fuel Policy F34.

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●●

●●

In desert conditions, conventional oils and lubricants attract dust. In moving parts, this can create a grinding-paste effect. In helicopters, this can accelerate wear in rotating assemblies and sub-systems. In small arms systems, this can cause working parts to seize. Specialist graphite and other greases may be required. Difficult terrain (hilly, rocky, wet, icy etc) can adversely affect vehicle traction and lead to fuel consumption in excess of what would normally apply.

Vehicles, weapon systems, other systems: maintenance requirements Considerations ●●

●●

Consumables and non-repairable technical spares, to effect preventive and corrective maintenance across the whole range of systems wherever that maintenance is carried out. Repairables to carry out the maintenance activities, both PM and CM, for platforms and equipments in theatre.

Deductions ●●

●●

●●

●●

What is the likely intensity of preventive maintenance and where will it be conducted? If intent is to carry out much PM in theatre, the support chain will have to be established to meet demand. What will be the flow volumes of repairables going back to the home nation for overhaul, reconditioning etc? Will they move by surface (slower, cheaper) means or by strategic air (faster, more expensive) means? May be a need for prioritization for movement. Some repairables likely to become in critically short supply for systems that suffer high attrition, with operational availability implications. Prioritization will be necessary. Are original equipment manufacturers (OEM) or other contractors likely to deploy to theatre to carry out PM? If so, who is responsible for the infrastructure they require, how will it be built or brought into theatre, and is there any administrative support or force protection requirement for it? Availability of force components’ (maritime, land, air) historical consumption analysis? Will they deploy priming equipment packs (PEP), deployable spares packs etc to enable them to function satisfactorily until the supply chain pipeline is established and working?

Planning and executing defence operational logistics

●●

Storage (warehousing) capability likely to be required given high range, as well as scale, of inventory likely to be required. Probable engineer construction task given lack of infrastructure in theatre.

Ammunition Considerations ●●

All weapon systems, including all armed personnel engaged in operations and for self-defence or force protection purposes.

Deductions ●●

●●

●●

High-intensity operations may involve high ammunition consumption. Initial inloading may have to be substantial and regular resupply to theatre will be necessary to sustain operations. Ammunition may require careful prioritization for movement inter- and intra-theatre to match operational phases. Need to protect ammunition stocks against extremes of temperature and adverse conditions, including high levels of dust. May require conditioned storage media and an inspection and disposal capability deployable across the breadth and depth of operations. Need to resupply other nations’ troops or weapon systems? May have to plan for ammunition interchangeability across NATO allies in the event of excessive consumption, enemy attrition of stocks, or supply chain disruption.

Movement – inter- and intra-theatre Considerations ●●

Vehicles, weapon systems, other materiel, personnel for deployment and redeployment.

●●

As above (except personnel), for sustainment throughout operations.

●●

Long-haul air; short-haul air; surface shipping; surface rail and road.

Deductions ●●

Establish availability and potential need to charter additional air and sealift assets, bearing in mind: – Demand informed by scale and scope of maintenance activity (see above).

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– Demand for strategic movement of personnel into and out of theatre will peak during rotation (roulement) of troops. – Flows of materiel for force build-up likely to be greater than subsequent sustainment. ●●

If force elements deploy with PEPs, DSPs etc, this will allow for steady build-up of inventory in theatre and establishment of supply chain pipeline

Finally, turn your thoughts to Duration.

Duration A consideration of Duration raises some basic but highly significant questions. A mission that is planned to be of short duration may only be considered a transitory affair. This may encourage a reluctance to invest in infrastructure, a reliance on temporary arrangements, a possible diversion of resources to other tasks deemed to be more pressing or of longer duration, and indeed a lack of attention on the part of those charged with resourcing the mission. Short-term solutions, for example the use of strategic air transport to expedite delivery of critical spares, rather than investing in more deliberate stockage support systems in theatre, will be expensive. Where the mission is expected to be longer term and enduring, there is likely to be more investment in solutions that have longevity, deliver economies of scale and ‘normalize’ processes to be as efficient as they can be. A longer-duration mission will deliver the payback and justify the investment. A longer-duration mission will involve rotation of troops and units. This presents logistic challenges associated with the RSOM of those arriving in theatre, and the reverse for those departing. Troop numbers, and therefore the demand for the food, water, ammunition, accommodation, transport and personal services that accompany them, will increase if departing units and arriving units overlap. This is often desirable to ensure that force levels do not drop to an unacceptably low level during rotation. It is often the case that for short-duration missions, units will deploy with all their unit establishment table of vehicles, weapons, generators, tentage and clothing, and take it back with them when they recover back to the home base. Where the

Planning and executing defence operational logistics

mission is planned to be of longer duration, it might make more sense for all such materiel to be held in theatre as a theatre equipment table, enabling units to deploy carrying only light scales. It makes for a logistically simpler rotation but demands storage space and the resources for maintaining such equipment for the duration of the mission. Arguably, units that deploy with their own equipment table will look after it more conscientiously because they’ll be taking it home with them and will benefit in the long run from its careful husbandry. They may not treat theatre-based equipment with the same degree of care.

Duration Anticipated duration of the NATO mission Considerations ●●

Operations are expected to endure for at least 2 years.

Deductions ●●

●●

●●

●●

MOD/DOD policy is that troops committed to operations will serve a maximum of 6 months, with a minimum period of 12 months before they can be recommitted to the same operation. It will therefore be necessary to rotate all force elements, conducting a ‘relief-in-place’ every 6 months. Decisions need to be made about whether units deploy to theatre complete with their own vehicles, weapon systems and other equipment, or whether this is all retained in theatre for the duration of operations. Establishing a ‘theatre equipment table’ will place additional demands on in-theatre maintenance capabilities, requiring that they can complete major overhauls of the full range of systems deployed. Pre-deployment training will have to be resourced, probably requiring a dedicated equipment table, infrastructure etc. Strategic movement capability will have to be planned to deal with the ‘spikes’ as units recover back to home base and are replaced. If this is a staged, progressive, activity (most likely option), force numbers will periodically rise as old and new units are both engaged in handover/ takeover, creating spikes of demand.

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NATO mission will span at least two complete annual cycles of ­operations and seasonality Considerations ●●

●● ●●

Enemy forces may increase activities during summer ‘campaign season’ and reduce activity levels in winter months. This may require surge of NATO military force elements to deal with it. NATO anticipates surges to enable periods of high-intensity operations outside of enemy ‘timetable’. Such surges may be at short notice. They will be for defined periods of time.

Deductions ●●

●●

●●

●●

General expectation and preparedness for enemy’s ‘campaign season’ – being logistically prepared. Within the constraints of maintaining operational security, the logistic system must be able to support potential surges of NATO forces. This will place additional demands on RSOM capabilities, as well as combat supplies in general. Assuming surge forces will deploy equipped only with light scales, a theatre reserve of weapon systems, combat vehicles, communications systems etc will have to be established. This will demand real estate, protected storage, and equipment husbandry in general. At completion of surge, all systems will have to be accounted for, repaired and put back into reserve ready for further surges in future. Surges may be at short notice, requiring that all in-theatre reserves are at high readiness.

Summary Hopefully this chapter, and the exercise in particular, will have demonstrated how a structured approach can be brought to assessing the likely logistic implications of a mission, and of the potential courses of action as they are developed, analysed, validated and compared. The identification, quantification and clear articulation of logistic risk are fundamental to properly testing and comparing them and to enabling a military commander to select a course of action that is logistically feasible.

Planning and executing defence operational logistics

References NATO Standardization Office (NSO) (2017) NATO Standard: AJP-01 Allied Joint Doctrine, Edition E, Version 1 UK Ministry of Defence (MOD) (2015) Joint Doctrine Publication 4-00, Logistics for joint operations, 4th edn, Developments, Concepts and Doctrine Centre [Online] https://www.gov.uk/government/uploads/system/uploads/attachment_ data/file/458596/20150721-DCDC_JDP_4_00_Ed_4_Logistics_Secured.pdf [accessed 26 September 2017]

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Procurement for 10 defence logistic support S t u a r t Yo u n g In this chapter we will: ●●

define purchasing and procurement;

●●

identify the key principles of contracting;

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discuss the purchasing cycle;

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analyse a range of procurement strategies and discuss their selection;

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discuss supplier selection and supplier management and development;

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discuss outsourcing and its applicability, benefits and risks;

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introduce a range of logistic support contracting strategies.

Introduction Procurement is a key logistic activity and, in defence, will include the buying of a wide range of goods and services, including: ●●

capital equipment

●●

spares

●●

fuel and lubricants

●●

maintenance

●●

design support

●●

utilities

●●

infrastructure and support services

●●

and so on.

Procurement for defence logistic support

Typically, any organization will need to make decisions regarding whether to undertake an activity itself (‘Make’) or to buy in that service from an external supplier (‘Buy’). The trend over many years has been to reduce the scope of the ‘Make’ activities and to increase the ‘Buy’ element. This industrial trend is shown in Figure 10.1 and is mirrored in many militaries across the world where industry is undertaking many tasks that were previously undertaken by military and government personnel and facilities. (Note: Direct Procurement, sometimes known as ‘Goods for Resale’, covers the procurement of materiel (eg raw materials, components, etc) that is directly utilized in the product being produced. Indirect Procurement describes the procurement of other goods and services that support the ­ associated business activities (eg marketing, IT, facilities, utilities, ­maintenance, etc)). This trend means that the procurement activity of any organization is becoming strategically more important. Organizations are becoming increasingly reliant on their suppliers and it is becoming vital that correct decisions regarding what is purchased, how much it costs, who it is purchased from and the type of procurement strategy are made. Poor procurement decisions can have a severe impact on an organization’s operational activities and its financial viability, whether in the military or the commercial sector. Figure 10.1 also shows that organizations are increasingly buying-in finished products and services, rather than raw materials, and, as a result, the percentage of an organization’s revenue (whether derived from sales or from a government-allocated budget) allocated to wages and salaries is decreasing. Therefore, ‘Procurement’ is becoming an increasingly important activity and there is increasing investment in professionalizing procurement personnel through training and education.

Figure 10.1  The changing face of procurement 1950s

Today

40% of total revenue spent on indirect and direct procurement, the majority on raw materials and components

Over 70% of total revenue spent on indirect and direct procurement, including outsourced production, logistics services and other outsourced activities

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To illustrate the importance of procurement in the military context, the UK Ministry of Defence (2016), in its Finance and Economics Annual Bulletin, states that in 2016/17 the MOD paid a total of £17.7 billion to industry through competitive and non-competitive contracts. Fifty companies were paid more than £50 million and three companies more than £500 million during this period. This business was transacted through a total of 1,950 new contracts. With this level of business it is readily apparent that small changes in procurement efficiency can have a significant positive or negative financial benefit and that commercial issues can have a direct impact on operational activities. Procurement is therefore a strategic activity for all agencies that directly support the delivery of military capability to the front line.

Definitions The term ‘purchasing’, although still in common use, is being superseded in many areas by ‘procurement’. Purchasing describes a transactional activity where goods and services are bought when required, probably at the cheapest price that meets the specification and delivery requirements. Procurement is wider in scope and is a more strategic activity aligned with delivering the organization’s outcomes. In addition to the actual purchasing process (see later) it will also include forecasting demand, supplier selection, selection of the appropriate contracting strategy, management of the customer–supplier relationship and supplier development. It is therefore a transactional activity which, if undertaken professionally, will improve overall logistic performance.

Key principles of contracting A contract is a formal means for establishing a relationship between the supplier and the customer for the provision of specified goods and services in exchange for a payment. At one extreme, for low-value items that require only a minimal description, the contract may take the form of a purchase order. A purchase order will be generated by the customer and will include a brief description of the product, quantity, price and delivery details. It will normally have a purchase order number, which will facilitate payment

Procurement for defence logistic support

once the order is delivered. Acceptance of the order by the supplier will then constitute a contract. The purchase order will normally include or reference a standard set of terms and conditions which will specify any additional legal conditions of the contract beyond standard contract law. A purchase order is therefore a simple form of contract. At the other extreme, high-value and complex purchases will require far more detailed contract documentation to specify and formalize the provision of the goods or service, covering all aspects of the rights and obligations of both the customer and supplier. The degree of complexity will probably require some form of negotiation in order to agree these rights and obligations; these negotiations can take many months to complete for highly complex defence procurements. It is vital that time and effort are put into the negotiation to get the optimum contract, as a poor contract can lead to increased costs, delays and inadequate performance in the longer term. A contract can take a number of forms. Normally contracts are written, especially for high-value or complex procurements, but can also be established verbally or by conduct (eg bidding in an auction or by the provision of a regular service in exchange for money). Care must obviously be taken to prevent inadvertent placing of a verbal contract. It is always advised that when entering into any form of discussion between the customer and supplier related to the provision of goods and services, the discussion is prefixed by the words ‘without commitment’. If only two parties are present in a negotiation, any subsequent disagreement about the establishment of a contract would be difficult to attribute correctly. It is therefore highly recommended that clear contemporaneous notes are taken during any such discussions. A number of basic conditions must be met before a contract can be established. These are listed in Table 10.1.

Table 10.1  Conditions required to establish a legal contract Condition

Description

Intention

Both parties must intend to enter into a contract in cognizance that there would be legal consequences if either party defaulted.

Offer and acceptance

If one party makes an offer, the other party must accept the offer to establish a contract. If the other party makes a counter offer, then this would then have to be accepted by the first party.

(continued)

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Table 10.1 (Continued) Condition

Description

Consideration

The goods or services are provided in exchange for a consideration. This consideration must have economic value (normally money, but could also be goods or services). The economic value being exchanged does not have to represent the full value of the goods or services being provided.

Contractual capacity

Normally, any person or company can enter into a contract. However, minors, those suffering from some form of mental disability and other vulnerable people are protected by special rules to prevent them being taken advantage of.

Genuineness of consent

Agreement to enter into a contract must not have been obtained from the other party by fraud, deceit, duress or misinterpretation, irrespective of deliberate intent or not.

Legality

A contract must not be entered into for illegal or immoral purposes.

In addition to a detailed description of the goods and/or services to be provided, price and delivery details, many contracts will include a range of additional clauses in their terms and conditions. The most common clauses are listed in Table 10.2. Table 10.2  Main contract clauses Clause

Description

Liability

An obligation that legally binds an individual or company to settle a debt or wrongful act they may have committed in relationship to delivery of the contract. For example, this might be damage caused at a customer’s site as a result of work being undertaken, or the financial impact on a customer’s business as a result of late delivery. Negotiations may arise regarding what each party is liable for and whether there should be a limit of liability. The level of liability paid should reflect the financial impact caused by the wrongful act.

Warranty

An agreement in respect of the performance of the goods or services that results in a claim for damages, but not a right to reject the goods and treat the contract as repudiated. The customer will have statutory rights, so the customer should be careful that these rights are not adversely impacted by the warranty. The warranty will have an additional cost. The customer should satisfy themselves that the cost reflects the level of risk and benefits it provides.

(continued)

Procurement for defence logistic support

Table 10.2 (Continued) Clause

Description

Insurance

A clause, for a specified consideration, where one party undertakes to compensate the other party for losses incurred as a result of a particular hazard occurring. The nature of these hazards, and their impact, can be particularly severe within the defence environment and therefore the associated premiums are correspondingly high. Therefore, Ministries of Defence may decide to self-insure rather than pay these high premiums and provide the supplier with an indemnity in respect of the consequences if incurred.

Indemnity

A clause that sets out an agreement where one party takes on responsibility for the other party’s losses. This could create a contingent liability and therefore the Ministry customer must ensure that it represents value for money. Industry would naturally prefer that the customer indemnifies them.

Parent company guarantee

Many contracts are placed with companies that are subsidiaries of a parent company. Often that parent company may be overseas. A parent company guarantee will underwrite the performance of the contractor in respect of the contract. The Ministry of Defence would normally want an unbounded guarantee covering the entire cost of rectifying the problem. Industry would wish to limit their liability. Parent company guarantees can add additional cost and may take some time to negotiate and approve.

Intellectual property rights

Intellectual property rights (IPR) are granted to the creators and owners of work that is the result of intellectual creativity. IPR includes copyright, patents, trademarks, design rights and the protection of confidential information. Normally, IPR would be retained by industry, who are best placed to exploit it. However, the customer may wish to hold some IPR in order to increase their future negotiating strength. IPR is a complex subject and it is recommended that expert advice is obtained in respect of any IPR issues.

Force majeure

The force majeure clause will set out that, when certain unexpected circumstances outside of either party’s control arise, the parties will be excused from performing their contractual obligations with no liability. This will normally apply to such things as ‘acts of God’ or civil unrest.

Exit

The exit clause will lay out the strategy for the planned end of the contract. It is particularly important for long-duration service provision contracts where the activities undertaken by the contractor may need to be brought back in-house or transferred to a new contractor.

(continued)

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Table 10.2 (Continued) Clause

Description

Termination/ A termination or break clause will establish the process Break of bringing the contract to a premature end, because of a significant breach of contract, a significant event that prevents the contract delivering or by mutual consent of the parties. This clause would be of particular importance to the defence customer in longer-term contracts where government policy may change during its duration, requiring the contract to be terminated.

The purchasing cycle While the contract formally establishes the relationship between the customer and supplier, and specifies what is to be delivered, much work is required prior to contract placement to ensure that the best contract is agreed, and then further activities are required afterwards to make sure the contract delivers what is required. These additional activities constitute the purchasing or procurement cycle within the overall scope of a contract management activity. A typical purchasing cycle is shown in Figure 10.2. The elements in the procurement cycle will now be discussed in more detail.

Identify need The cycle will be initiated by identifying a need for a particular good or service. This may result for a number of reasons. There may be a new requirement and a contract for its provision would have to be put in place for the first time. Alternatively, an existing contract may be coming to its end, either because it has reached the end of its specified life or because it has been terminated for a variety of reasons. Before progressing further, the customer also needs to verify, through an internal approval process, that the requirement is valid and that the appropriate funds are available in the

Procurement for defence logistic support

Figure 10.2  A typical purchasing or procurement cycle Identify need

Check and pay

Receive delivery and invoice

Need met

Ordering cycle

Specify requirement

Identify potential suppliers

Order Manage contract Form contract

Select procurement strategy

Negotiate contract

Select preferred supplier

budget. It would not be ethical to proceed to later stages in the cycle, with industry incurring bidding costs, if the customer did not have the budget to continue.

Select procurement strategy Once the need or requirement has been established, the first decision to be made is whether to undertake the activity themselves or to contract out to an external supplier, typically known as the ‘Make or Buy’ decision. In many cases this decision is obvious, as the customer will not have the capacity or capability of carrying out the task. In other cases, it may be an activity that the customer is currently undertaking themselves and outsourcing is being considered for a variety of reasons – these are discussed later in this chapter. Assuming that the decision is made to buy the goods or services from an external contractor, an appropriate procurement strategy must be selected. The traditional procurement strategy in the public sector is competition. The process of competition, whereby the potential suppliers produce costed proposals against a specification (the Invitation to Tender (ITT)) and the winning supplier is normally the lowest-priced compliant bid, is expected to deliver the best value for money. However, this is not always the case,

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particularly for high-value, complex, long-term or novel requirements. To achieve an effective completion the requirement must first be written in clear and concise terms against which the bids can be assessed. This is a major, resource-intensive activity but can result in an inflexible requirement that does not reflect opportunities for significant cost savings through relatively minor relaxations in the requirement. The competition will be successful only if there are sufficient potential suppliers prepared to bid. Often this is not the case, due to factors such as the specialist nature of the work required or the high risk level associated with the activity and the lack of adequate financial reward. Without sufficient competition, value for money is unlikely to be achieved. Preparation of a proposal in response to a complex ITT is also a lengthy and complex business. A company may decline to invest significant resources in preparing their response unless they perceive that they have a reasonable chance of winning the competition, otherwise they will decline to participate. The competition process is also inflexible. Once the specification in the ITT has been issued and suppliers have responded, opportunities for changing the requirement, due to experience or changing circumstances, are limited, without having to re-run the competition or introduce contract changes after the contract has been placed. Both options are likely to result in increased costs and delays. Procurement strategies other than competition should therefore be considered. Kraljic (1983) first introduced the concept of a strategic approach to procurement through categorization of the product or service being procured. This categorization took into account the following factors: ●●

the cost or profit impact of the product;

●●

the availability risk;

●●

market analysis, and the relative bargaining power of the customer and supplier.

Analysis of these factors can lead to the selection of an appropriate procurement strategy, as shown in Figure 10.3. For routine items, there are likely to be a number of suppliers and little differentiation, in price, quality or performance, of the goods or services provided across the suppliers. Supplier selection decisions are therefore likely to be based on such things as ease of purchasing (such as through an electronic catalogue) and speed and reliability of delivery. Once a supplier is selected, it is likely that an enabling contract would be put in place which would allow orders to be placed when required, knowing that the price is fair, and on-time, right place and right quantity delivery is guaranteed.

Procurement for defence logistic support

Figure 10.3  Procurement categorization matrix High

Risk to the Customer’s Operations

Bottleneck Unique products with restricted suppliers and/or IPR constraints, eg proprietary spare parts, specialist IT, specialist manufacturing techniques

Critical High-value, long-life systems, eg ship or aircraft platforms, propulsion engines

Routine Readily available, lowvalue or commodity items, eg stationery, fasteners, cleaning products

Leverage Higher-value items, competitive market place with a number of potential suppliers, eg catering services, transport vehicles

Low Low

High Cost Impact for Customer

With leverage items, there are likely to be a number of potential suppliers but their products will be differentiated by a number of factors across price, quality and performance. It is therefore a competitive marketplace (Porter’s Five Forces describe the factors that will influence competition in the marketplace (Porter, 2008)), which puts the customer in a strong position to negotiate a ‘value-for-money’ deal. In this position it is vital that the customer identifies the factors that could leverage their buying power in order to improve the deal. This could include buying in increased quantities, agreeing an exclusivity deal (although this carries risks) or identifying areas where the requirement could be relaxed in order to generate more competition. Maintaining competition, and therefore buying power, in these circumstances is important. Bottleneck items pose a different set of issues. Due to their restricted supply they pose a significant risk to operations irrespective of value. Reduction of this risk therefore requires expenditure of resources. This may mean a requirement to modify the design of an equipment to eliminate an obsolete or proprietary part. Purchase of a lifetime supply of spares, if available, would be another option. In the extreme the company producing the item could be purchased. This brings the supply chain under the customer’s direct control and has the added advantage of controlling the supply to a competing customer. Critical systems will be complex, with a high development cost and a long life. For these, a close customer–supplier relationship is key. A collaborative

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relationship will enable information to be shared, risks to be manged jointly, and issues to be manged and resolved jointly. Often the relationship will be underpinned by a gain-sharing arrangement, which will allow the benefits of improved performance through life to be shared. Often the supplier of a critical system will be selected through competition but with the intention of moving to a collaborative arrangement once the contract has been placed. The potential for a successful collaborative customer–supplier relationship will therefore be a major consideration in the supplier selection process.

Specify requirement At this stage the requirement will also be developed. The requirement can take a number of forms. For relatively simple requirements, for which the customer has a good understanding and where there is limited scope for the supplier to add value, the requirement may be written in specific terms. This could specify a particular product, if available ‘on the shelf’, or it could detail technical specifications against which the product could be produced with little or no scope for variation. For more complex requirements, or for services, the requirement could be written in performance terms. This gives the supplier greater scope to develop a proposal, provided that it can be demonstrated to meet the performance targets – this approach will be discussed in greater depth later in this chapter.

Identify potential suppliers, select preferred supplier The level of competition in the marketplace will have already been assessed as part of the procurement strategy selection process. Assuming that there is a number of potential suppliers, it is inefficient to engage with all the suppliers during the selection process. A process is therefore required to reduce the number of potential suppliers to a manageable level. The first step is to issue a request for Expressions of Interest (EoI). Interested companies can respond accordingly and will subsequently be sent further information about the forthcoming requirement. A further filter can be applied by issuing a Pre-Qualification Questionnaire (PQQ) to potential bidders. This will ask for information about the company’s capability, capacity and experience and will allow the customer to assess whether the company is capable of the sort of work that is required at an appropriate level of risk. Companies that meet the required threshold will then be invited to tender through the issuing of an ITT or Request for Proposals (RfP). This will specify the requirement, the information that the bidder will be expected to include in

Procurement for defence logistic support

its response, and the means by which the bids will be assessed. It is vital that this document is prepared thoroughly to ensure that what is being asked for fully meets the customer’s intended requirement and to minimize any future litigation from bidders if, for example, the bid assessment criteria subsequently used did not match those laid down in the tender documents. In order to run an effective competition there obviously has to be a minimum of two bidders. However, if there are more than five or six bidders, the assessment process can be long, complex and resource intensive. It is therefore recommended that the PQQ process is used to filter the number of bidders down to this number. Often, in defence-related contracts, it is not possible to run a competition as there may be only a single supplier. This may be because of IPR issues, with only a single company owning the appropriate intellectual knowledge required to undertake the work. In other cases, there may be only a single company with the capability or capacity to undertake the work. In these cases, additional care must be taken when placing the contract to ensure it delivers value for money, as the supplier is likely to hold the balance of power in the relationship (see bottleneck category in Figure 10.3). Once the bids have been received, it is important that the customer assesses them in a fair and timely manner. The assessment should be undertaken against a clear assessment matrix where scores are weighted to reflect the relative importance of the assessment criteria. Assessment criteria will reflect all aspects of the requirement and the company’s ability to meet them. As well as technical aspects they will include quality, skills and experience, project management, performance management, price, risk, and so on, as appropriate to the scope and complexity of the work required. Normally, the final selection decision will be made on the balance of the quality of the bid against the associated cost and risk. An impressive bid with a low cost may have unacceptable levels of risk and would therefore be rejected in favour of a higher-price, lower-risk bid, provided that the essential elements of the requirement are met. Full and detailed records of the assessment process need to be kept in case of any future issues and to provide feedback to unsuccessful bidders.

Negotiate and form contract For simple requirements, it may be possible to place the contract immediately the winning bidder has been selected. However, for more complex requirements, a preferred supplier will be selected and further negotiation will be required to refine details of the contract, its delivery and the

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requirement. These should be matters of detail. If there are major changes to the requirement as a result of the negotiation, the bidding process may have to be re-opened, as the unsuccessful companies could claim that they were unfairly disadvantaged. Once all issues have been resolved, the contract can then be formally placed.

Manage contract Once the contract is placed, this is not the end of the matter. The contract then has to be managed throughout its duration until final delivery and exit. The term ‘contract management’ is deemed to cover all related contract activities across the procurement cycle, albeit with a focus on post-award activities, and is defined by Elsey (2007) as: ‘the process of systematically and efficiently managing contract creation, execution and analysis for maximizing operational and financial performance and minimizing risk’.

Ordering cycle Many contracts may have only a single defined deliverable. However, many logistic contracts, for example for the supply of spare parts or consumables, will constitute a large number of orders over an extended period, often years. The process of ordering, receiving, invoicing and paying for these items is known as the order cycle. An efficient order cycle is important, especially in the case of low-value items where the cost of administration activities in respect of the order is high compared to the value of the order. A key part of this is the checking of the three-way match between the order, what is actually received, and the invoice that is required before payment is authorized. Introduction of online-based systems, supported by bar coding and radio-frequency identification (RFID) tagging, can significantly improve the efficiency of the ordering cycle and should be considered when justified by the associated business case.

Need met Once all aspects of the contract have been met, the contract can be considered complete and contract ‘exit’ can occur. This should be planned for well in advance. It may be intended to extend the contract further with the existing supplier, in which case a new contract needs to be negotiated well in advance in order to prevent any gaps in the service provided. The opportunity can

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also be taken to optimize the new contract to deliver improved performance and benefits to both parties. Alternatively, it may be intended to transfer the service provided by the existing contract back in-house or to a new supplier. In this case, advanced preparation needs to take place to ensure proper transfer of information, data, supplies and equipment to the new supplier. This obviously has difficulties as it may be dependent on the goodwill of the current supplier whose contract is now coming to an end.

Supplier management and development For a long-term and complex contract, it is highly unlikely that optimum performance is achieved from day one of the contract. Furthermore, the environment in which the contract is being delivered is also likely to change with time, and activities being carried out in support of the contract will need to change accordingly. To achieve this, it is important that the customer and supplier work together to resolve problems and issues to deliver improved performance throughout the life of the contract; this is known as supplier management and development. Supplier management is a resource-intensive activity and therefore it should be applied where the benefits are going to be significant. Simple, short-term contracts are unlikely to benefit from a structured supplier development activity. However, longer-duration contracts where there is a high degree of complexity, and also uncertainty, regarding the nature and performance of the deliverables are likely to gain considerable benefit from such a programme. Furthermore, supplier management and development is likely to be more appropriate and successful when the relationship is of roughly equal strategic importance to both customer and supplier. Traditionally, supplier development would most likely have been applied when the performance of a supplier was deficient. However, today, it is applied to all relationships where there are benefits resulting from the customer and the supplier working together to deliver improved performance, which benefits all parties. If supplier development is required, there are three options that can be taken: ●●

Switch supplier, if the performance of the current supplier is inadequate. This has a number of issues. The current contract would need to be terminated, which could incur legal costs. An alternative supplier would also need to be engaged, again incurring additional costs and an unacceptable gap in delivery as the service is transferred from one supplier to another. This approach could therefore be seen as a last resort after other options have failed.

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●●

●●

Take closer control by acquiring the supplier or bringing the capability back in-house. Again, this is a costly option, but it may be appropriate if the activity is of strategic importance to the customer’s operations and there are few, if any, alternative suppliers. Work with the supplier to bring performance up to an acceptable level. This can take two forms; indirect supplier development and direct supplier development (Wagner, 2010).

Indirect supplier development With indirect supplier development, the customer commits little or no resources to developing a specific supplier. Instead, improved performance is sought by offering incentives for good performance, applying penalties for poor performance, and simply requesting that suppliers improve their performance. This can be done by: ●●

assessing suppliers;

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communicating supplier evaluation reports;

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setting and increasing performance targets;

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increasing level of competition by use of multiple suppliers;

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incentivizing by promising future business.

Through communication and external market forces, the customer is incentivizing improved performance. However, it is up to the supplier to formulate plans and take appropriate action. Thus the majority of the cost is borne by the supplier and the willingness of the supplier to undertake these actions depends on the strategic importance of the business. The customer may try to influence the supplier through the application of escalating pressure in stages (Frazier and Summers, 1984): ●●

●●

●●

●●

Information provision. Performance information is provided by the customer without any specific actions identified. Recommendation. The customer recommends a specific action be taken to improve performance. Request. The customer requests a specific action to be undertaken but does not indicate any subsequent positive or negative sanctions. Promise. The customer provides a specific incentive if the supplier implements the recommendation and performance improves.

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●●

●●

Threat. The customer indicates that failure to comply, or degraded performance, will result in a penalty. Legalistic plea. Failure to comply will result in legal action being taken.

Direct supplier development With direct supplier development, the customer will invest in the improvement process. In this case, the customer takes a more active role and will invest money and/or human resources to improve the performance of the supplier. Typical actions may include: ●●

investing directly to improve the supplier’s facilities;

●●

providing onsite consultation and advice;

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implementing education and training programmes;

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temporary personnel transfer between both organizations.

This approach suggests a much closer relationship between the customer and the supplier, moving beyond a traditional arm’s-length, transactional relationship to much more of a collaborative working relationship. The spectrum of relationships, showing the increased level of cooperation between the customer and supplier as we move towards the right of the spectrum, is shown in Figure 10.4. Figure 10.4  The customer–supplier relationship spectrum

Strategic Partnerships & Joint Ventures

Increasing Collaboration and Integration

Internal Contracts – Mergers, Acquisitions

Single Sourcing Preferred Supplier Traditional Transactional

Arm’s Length Collaborative Business Relationships

Core Competences

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At the left-hand end of the spectrum, the relationship is transactional in nature and there is very little collaboration. With preferred suppliers, singlesource suppliers and strategic partnerships, the degree of investment in the relationship by both parties increases, and the benefits to be obtained from increased collaboration and integration also increase. Finally, through acquisition or mergers, the two companies become fully integrated and their success is interdependent.

Outsourcing Having just discussed greater integration between customers and suppliers, the opposite approach, outsourcing, must now be highlighted. Outsourcing is where an activity that has previously been undertaken in-house is contracted out to an external provider. This is normally done for economic and performance reasons. However, outsourcing has resulted in varying degrees of success and there are many issues associated with its implementation. The concept of the ‘value chain’ within an organization was introduced by Porter (1985). The value chain is constituted from all the activities undertaken by an organization in order to produce its products or services (ie its value outcomes). These include both primary activities, which are directly associated with the manufacture and delivery of the end product, and support activities. Support activities are the other activities that a company or organization must undertake to facilitate its outputs, including procurement, facilities, personnel, and so on. Some activities that the organization undertakes help to differentiate it from its competitors and result in a competitive advantage. These activities are known as core activities and should be retained by the organization and nurtured and developed in order to maintain or improve its products. Other activities are equally essential in order to deliver the final product. However, the organization does not have sufficient capability in these areas to differentiate itself. These are non-core activities. Non-core activities are those activities that an organization may consider outsourcing to another provider who excels at these activities. For instance, a company may have core design and manufacturing capabilities but be less efficient and effective at logistics. It may therefore consider outsourcing its logistic activities to a specialist third-party logistic provider in order to improve overall logistic performance. This concept can be applied both to private companies and to government-run activities in defence. The value chain analysis is just a first step in the decision-making process to outsource; many other factors need to be considered.

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Some activities are more easily outsourced than others. Discrete activities, where inputs and outputs to the processes are relatively few and easily identified, can be more easily specified in contract terms and are therefore easier to outsource. Activities that have fluctuating load patterns can result in inefficiencies when undertaken in-house. By outsourcing to a specialist organization, these fluctuations can be balanced off against a larger base of work and thus be undertaken more efficiently. If a business process or manufacturing activity needs significant new investment in technology or equipment, it may be financially advantageous to outsource this to a company that has already made that investment and is amortized across a wider production base. An outsourced activity may also be one that requires specialist staff and the investment required in recruiting and training these staff does not warrant retaining the capability in-house. For each of these circumstances an investment appraisal and risk analysis should be undertaken before making a final decision to outsource. Outsourcing can be categorized as ‘strategic’ or ‘tactical’. Strategic outsourcing is where: ●●

The organization is focusing on its core activities.

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A significant level of investment is needed in the activity.

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A whole ‘capability’ is being outsourced, which comprises infrastructure, knowledge and skills.

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There are significant performance benefits.

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Risk is reduced.

Tactical outsourcing is where work is outsourced because: ●●

●●

Fluctuating demand makes it impossible to undertake everything in-house even if this is the preferred option. Temporary non-availability of in-house resources results in work being contracted out.

The key thing to note is that tactical outsourcing is normally temporary, whereas strategic outsourcing is permanent and long term. The risks associated with strategic outsourcing must therefore be considered in the decision-making process.

Risks associated with outsourcing The risks associated with outsourcing can be categorized as performance risks, associated with delivery of the organization’s products and services,

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Table 10.3  Risks associated with outsourcing Performance risks

Organizational risks

Short term

Short term

Increased operational costs

Loss of business knowledge

Lower quality of services, particularly during changeover phase

Loss of loyal and capable staff

Increased customer complaints

Lower employee morale Reduced productivity

Potential shutdown in operations during changeover Long term

Long term

Contract creep – scope of contract increases

Operational dependency on outsourced service provider

Price creep – particularly as a result of contract changes

Loss of assets and/or loss of control of strategic assets

Reduced innovation, due to lack of incentives in contract for performance improvement

Process lock-in Adoption of enterprise architecture of supplier Gives wrong signals to competitors about long-term engagement in the market Loss of innovation capability Loss of strategic flexibility

and organizational risks, which have the potential to impact on the longerterm viability of the organization. Short-term and long-term risks are listed in Table 10.3. The risks associated with outsourcing are significant and any decision to outsource must be accompanied by a thorough risk analysis. It is essential that the increased management overhead associated with outsourcing is fully recognized. By outsourcing, the organization is losing direct control over activities that are essential components of its operation. The supplier must be managed and a performance improvement regime implemented, as discussed earlier in this chapter, if outsourcing is to be a success.

Logistic support contracting A range of contracting strategies is available to deliver logistic and support services in the defence environment. The choice of strategy will depend on the level of complexity of the requirement, the degree of understanding

Procurement for defence logistic support

Figure 10.5 

Range of support contract options

Increasing level of Requirement Complexity – Intelligent Customer

Contracting for Capability Contracting for Availabillity Spares Inclusive

Traditional

Internal Provision

External Provision

Increasing level of Contractor Provision

that the customer must have of the requirement, and the degree to which the customer is prepared to rely on external provision, acknowledging the benefits and risks of outsourcing. The range of strategies is shown in Figure 10.5. As the complexity and scope of the support requirement increases, there are opportunities for increased levels of contractor involvement and responsibility aligned with a performance-based contracting strategy. This implies the need for an intelligent customer who fully understands the support requirement and can set appropriate performance targets, working collaboratively with the supplier to meet these targets. The key features and applicability of the strategies will now be discussed.

Traditional support arrangements Traditionally, the procurement of capital equipment and its subsequent support were separately managed activities, often with little consideration of support requirements being undertaken during the initial procurement phases. Support was managed and often physically undertaken by the military operators of the equipment and systems. Spares and consumable items were purchased and managed ‘as required’ by the military in order to meet operational requirements. Under this type of arrangement there is little incentive for the original equipment manufacturer (OEM) to focus on improving the reliability, availability and maintainability of the equipment it produces. In order to win the procurement contract, support considerations

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are neglected in order to cut costs in anticipation that this will be compensated for by the profits made on selling spares once the equipment is in service. Thus, this support contracting strategy has the negative impact of both increasing support costs and driving down the in-service availability of the equipment. Nevertheless, it is still an appropriate strategy in certain circumstances. For instance, when procuring equipment to meet relatively short-term urgent operational requirements (UORs, see Chapter 4), it is not economic to put in place expensive longer-term support arrangements. In these circumstances it can then be appropriate to purchase spares ‘when required’. It may also be appropriate when purchasing innovative new technologies from smaller companies with limited experience in the defence field and without the capacity to provide in-service support. Therefore support can better be managed directly by the military, purchasing spares as necessary to meet availability requirements.

Spares-inclusive contracts In order to overcome some of the issues associated with traditional support arrangements, a spares-inclusive arrangement transfers some of the risk and responsibility to industry. The initial procurement arrangements will also include the provision of spares at a fixed price for a period of time, perhaps with the option to extend for a further period. This has the intended incentive for industry of increasing profits by reducing the consumption of spares by increasing the reliability of the equipment. However, spares consumption can also be reduced through other approaches, which have a negative operational impact. For example, by reducing maintainability, repairs take longer, the equipment availability is reduced and running hours are reduced, which, in turn, reduces spares consumption. This approach may be appropriate for relatively simple systems, where spares and inventory consumption rates are well known and little benefit is gained through having a performance-based approach. In most other circumstances, a spares-inclusive approach is best linked to performance targets to prevent performance being sacrificed.

Contracting for Availability (CfA) This strategy is also commonly known as performance-based contracting (PBC). Targets are set for the performance criteria that are most valued by the customer. These are normally associated with equipment, system or

Procurement for defence logistic support

platform availability, as this is directly linked to the ability to be available for mission tasking, and to complete the mission (see Chapter 8). These targets are then specified in the contract and the contractor is paid a fixed sum to meet the targets, often with penalties if a target is not met, and incentives to deliver improved performance in excess of the targets. As a result, the supplier is incentivized to optimize both the design of the equipment and its support arrangements through life in order to meet the targets in the most efficient way, giving both operational and cost benefits. In order to deliver these benefits, the contractor must have control of most of the support arrangements and needs to work closely with the customer in respect of those elements which are not under the direct control of the contractor but which still contribute to the performance targets. Thus a collaborative working arrangement is key to the success of the strategy. In order to set realistic performance targets, the customer must have a good understanding of current performance and current support arrangements, and the associated data. It must also be willing to share this information with the supplier. Without this mutual understanding, the contractor will either be unwilling to bid or will add a significant risk premium onto the estimated support costs. It is also impossible to transfer all responsibility and risk to the supplier. The customer must also acknowledge their responsibilities in respect of the contract. For example, if the contractor is required to provide an onsite response on a 24-hour, 7 days per week basis, the customer must allow them access to the site on the same basis. This requires a close working relationship, where risks are shared and problems and issues are resolved on a collaborative basis. This can be particularly difficult when transitioning from a more traditional support arrangement where this level of sharing and collaboration between customer and supplier is often actively discouraged. Therefore shared culture and behaviours play an important part in the success of this strategy.

Contracting for capability The next step is contracting for capability, where the provision of a complete service is transferred to industry and targets are set in respect of the highlevel outcomes required. For example, in the UK, industry is contracted to supply a Military Flying Training Service (MFTS) where the performance is specified in terms of trained pilots per year (to specified standards). Within this broad scope, the contractor will specify its own performance targets in

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respect of the equipment and systems it needs to deliver the service, either managing them itself directly or sub-contracting. To be successful, the contractor must be able to demonstrate the ability to manage a complex programme over an extended period of time. Again, the customer needs to understand the requirement clearly and may also have to transfer responsibility for the operation of some existing infrastructure and equipment to the supplier. This approach is best suited to areas where the level of supply is expected to remain relatively constant, so that the contractor can optimize the service and associated processes accordingly. If demand is expected to vary significantly, the contractor will need to make allowances for any excess capacity requirements in their costings. Any subsequent changes to demand outside that originally required are also likely to be costed. This approach is easiest where the requirement is relatively discrete, allowing it to be specified in contractual terms. As the number of external interactions increases, so does the complexity and risk, making the management of a capability-based contract much more difficult, and costly.

Summary Over recent years, procurement has become a more strategic activity and is now critical to delivering operational success. This chapter has identified the key characteristics of a contract and discussed some of the terms and conditions that will be applicable to support contracts in the defence environment. The procurement cycle has been analysed in more detail, focusing on some of the factors that influence key decisions, such as the selection of a procurement strategy and subsequent supplier selection. The importance, particularly for complex contracts, of working closely with suppliers to deliver performance improvement over the life of the contract must be recognized. Many procurement strategies now involve the transfer of increased responsibility to suppliers through outsourcing arrangements. The types of activities which can best be outsourced have been discussed and some of the major risks associated with outsourcing identified. Finally, a range of support strategies has been analysed and placed on a spectrum which demonstrates that as the level of supplier involvement increases, it becomes increasingly important for an intelligent customer to fully understand the requirement, and to work closely with the supplier to deliver value in a collaborative fashion.

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References Elsey, R D (2007) Contract Management Guide, Chartered Institute of Procurement and Supply [Online] https://www.cips.org/documents/CIPS_KI_ Contract Management Guidev2.pdf Frazier, G L and Summers, J O (1984) Interfirm influence strategies and their applications within distribution channels, Journal of Marketing, 48 (3), pp 43–55 Kraljic, P (1983) Purchasing must become supply management, Harvard Business Review, 61 (5), pp 109–17 Ministry of Defence (2016) Finance & Economics Annual Bulletin: Trade, Industry & Contracts [Online] https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/607707/20161026-NS_Commentary_­ relating_to_Finance—Economics_Annual_Statistical_Bulletin— Trade_Industry—Contracts—2016_-_Apr_update.pdf [accessed 14 November 2017] Porter, M E (1985) Competitive Advantage: Creating and sustaining superior performance, Simon & Schuster, New York Porter, M E (2008) The five competitive forces that shape strategy, Harvard Business Review, 86 (1), pp 78–93 Wagner, S M (2010) Indirect and direct supplier development: performance implications of individual and combined effects, IEEE Transactions on Engineering Management, 57 (4), pp 536–46

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11 Managing performance in defence logistics S t u a r t Yo u n g

Introduction In this chapter we will: ●●

define performance management and why we need it;

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discuss the benefits of good performance management;

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outline the performance management process;

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discuss the issues with implementing a performance management system;

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highlight specific issues with performance management in defence;

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identify the links with procurement and contract management activities.

Performance management, and its constituent activity of performance measurement, started to achieve prominence in the late 1990s with the focus by the United Kingdom’s Labour Government on improving public services. However, performance management of individuals had been around for many years, providing a means by which an individual’s performance could be measured against a set of targets with the intention of incentivizing performance by rewarding an individual (through financial incentives, promotion or other recognition) to meet or exceed targets. This approach is of limited value as, unless there is alignment of individual targets with business objectives, people could be rewarded without any measurable impact on overall business performance. In fact, as will be discussed in more detail later, often overall performance would be negatively impacted as individuals sought to maximize their personal gain. It also implies that performance

Managing performance in defence logistics

management of business activities, such as logistics, must be linked to performance management of individuals. The Labour Government of 1997 set out with a clear goal of improving public services. In its 1998 Comprehensive Spending Review (HM Treasury and Cabinet Office, 1998: 28), it clearly identified the need to ensure that resources were used both effectively and efficiently and started a process of cascading down from the Treasury to departments, through public service agreements, objectives and measurable efficiency and effectiveness targets. Examples of these top-level targets included: ●●

●●

●●

the National Health Service (NHS): value for money improvements of some 3% per year; personal social services: efficiency targets of 2–3% per year over three years; Ministry of Defence: raising efficiency by 3% per year in operating costs.

These targets introduce the concepts of efficiency and effectiveness, and also the term ‘value for money’; these will be discussed, together with their implications, later in the chapter. Performance management has subsequently developed into a key business tool, vital to maintaining and improving defence logistic performance. It underpins the operations and processes that are needed in order for an organization to achieve its strategic aims, and if properly designed and implemented, provides the necessary alignment through the organization. Targets, and the levers needed to achieve the targets, will continually evolve to meet the dynamic environment in which the logistic function operates. Good performance management is also dependent on contributions at all levels in an organization. This is also related to organizational culture. A learning organization, which focuses on identifying opportunities for improving organizational performance at all levels, will always achieve far better results compared to other organizations where performance management is seen as an add-on and a low-value-adding activity which only provides a distraction from the day-to-day operation of the logistic business. Today the situation in the field of defence logistics is complicated further. Complex organizational structures within the military and defence ministries, together with the increasing prevalence of joint and combined operations, mean that performance management systems have to cross many boundaries. Furthermore, the increasing reliance on third-party logistic providers means that the systems also need to cross commercial and contractual boundaries.

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This chapter will therefore start by defining performance management and performance measurement before identifying some of the key attributes and features of a performance management system. The issues associated with implementing a performance management system across commercial boundaries will then be discussed in further detail. Performance management systems also need to be designed properly if they are to work effectively, so the design process will be considered before implementation issues are investigated further. Specific defence contextual issues will then be evaluated before concluding with a discussion of the success factors that contribute to an effective performance management system.

Performance management – definition Many definitions of performance management tend to focus on the management of individuals and teams. The Chartered Institute of Personnel and Development (Armstrong and Baron, 2004) defines performance management as ‘a process which contributes to the effective management of individuals and teams high levels of organizational performance. As such it establishes shared understanding about what is to be achieved, and an approach to leading and developing people which will ensure that it is achieved.’ This is a useful definition in that it recognizes that targets can only be achieved if the leadership and development are in place to improve the processes, skills and behaviours necessary to achieve the target. Without this balance, performance management becomes performance measurement – deficiencies against targets can be identified, but without the management aspects nothing can be done to improve performance. Essentially, performance management closes the loop and provides the learning and development necessary for success.

The defence logistic context The basic principles of performance management are common to delivering logistic performance in both the commercial and defence environments. However, the outcomes required are very different. Indeed, in the defence context the outcomes will change with each operational imperative, and success can only be measured retrospectively, often after an extended period of time. Therefore, traditional outcome-related measures used in the commercial sector, such as ‘customer satisfaction’, are of limited

Managing performance in defence logistics

relevance – in fact, often the nature of the customer is uncertain! Indeed, over the past few decades, UK military forces have been used in scenarios as diverse as disaster relief, foot and mouth disease, Ebola outbreak, refugee rescue, Afghanistan, 2012 Olympic security and more. Compare this to, say, an international airline where outcomes can be measured clearly in terms of customer satisfaction, on-time arrivals, repeat business and profit/cash flow. Furthermore, this consistency means that current performance can be more easily compared with previous performance to ascertain trends and take appropriate remedial actions. Therefore, in the defence context it is of primary importance to identify the enablers that need to be in place in order for the military to respond to operations as they arise.

The performance management process Setting targets A principal requirement of any performance system is that it must be able to demonstrate that the activities and operations undertaken by the organization managing them have achieved value for money. In other words, it is about the optimal use of resources in achieving the intended outcomes (National Audit Office, 2014). The National Audit Office (2014) also identifies the three components of value for money: ●●

●●

●●

economy: minimizing the cost of the resources (or inputs) used for an activity, having regard to the appropriate quality; efficiency: the relationship between outputs, in terms of goods, services or other results and the resources used to produce them; effectiveness: the extent to which objectives have been achieved (the outcomes).

Another way of putting this is that economy is about minimizing the resources used, efficiency is about maximizing the outputs, and effectiveness is about achieving the desired impacts or outcomes. Further analysis of this value-for-money model is needed as it helps us in designing an effective performance management system which actually drives improved performance (Figure 11.1). If, in a performance management context, the focus is on economy, then resources, such as money, people and materiel, will be measured and managed. This can have two effects. In the interests of achieving economy,

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Figure 11.1 Value for money: the economy, efficiency and effectiveness relationship

ECONOMY Measuring inputs enables economy to be assessed.

INPUTS The resources (money, people, materiel, facilities etc) that are utilised.

EFFICIENCY Measuring the relationship between inputs and outputs enables process efficiency to be assessed.

OUTPUTS The specific products or services provided.

EFFECTIVENESS Measuring outcomes enables effectiveness to be assessed.

OUTCOMES What the customer or end user ultimately wants. Often long-term and influenced by the context.

Together, these determine value for money

the resources are driven down to result in the minimal acceptable performance standard, or quality. Often this means that spare capacity is removed, risk increases, resilience decreases and the desired outcomes may not always be delivered. Conversely, in response to poor performance, the resultant management response is often an increase in the resources being utilized without due regard to efficiency and effectiveness. As a result, economy suffers and value for money actually decreases. However, resources are easy to measure and can be controlled. Hence they are a favourite metric in performance management systems, despite their limitations. They also provide a highly visible, short-term response without having to wait for the long time delay between changing resources and the impact on the quality of service being delivered. If the relationship between the resources (or inputs) being consumed and service outputs are measured, the focus moves to process efficiency. This is useful when managing the performance of one element of the end-to-end logistic process, such as a manufacturing activity or a warehousing activity, but it does not relate this to the effectiveness of the end-to-end activity. For example, the manufacturing process may be highly efficient, but if it does not have the flexibility to quickly change the product it produces to meet

Managing performance in defence logistics

a change in demand, value for money is not being achieved. Moreover, a performance management system with such a narrow focus might not even recognize the failure to achieve the desired outcomes for the end user. Again, though, it is relatively easy to compare the input resources and the outputs, hence efficiency metrics are very popular.

Outcomes Therefore, it appears highly desirable to measure outcomes in order to assess whether the end user’s needs are being met and the desired impact is being achieved. However, this has a number of problems. Outcomes are often subjective and difficult to measure. Moreover, outcomes are often delayed in relationship to the resources consumed and the processes preceding their delivery. Therefore, if outcomes are being measured in isolation, there is little or no opportunity to take remedial action in sufficient time to rectify problems before they impact on outcomes. Therefore constant feedback (the learning loop) is needed so that metrics are measured earlier in the process to provide an early heads-up of problems so that appropriate management remedial action can be taken, minimizing the impact on outcomes. Therefore, a balanced approach is required, which includes a range of metrics, including resources/inputs, outputs and outcomes, in order to assess the cost of resources, the efficiency of the processes within the logistic cycle, and the effectiveness of the end-to-end logistic activity. The chosen measures for each element must not be selected in isolation, but should be selected in relationship to each other and the overall aims of the performance management activity. Often the metrics in a performance measurement system are selected on the basis of their availability and ease of measurement. This has the advantage of low cost and the rapid set-up of the performance measurement system, thus meeting the requirement by senior management to have a system in place quickly and cheaply. However, the result is often no measurable improvement in overall performance. Indeed, in many cases, performance suffers as a result of a focus on delivering performance targets with metrics that have little association with the desired outcomes. A balanced and effective performance management system must therefore place equal emphasis on the three key elements of identifying what matters (the objectives), collecting the right information and then using this information to learn and improve performance. This process is iterative and feedback is critical to improving the effectiveness of the system (Figure 11.2).

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Figure 11.2  Top-level performance management process Identify the key objectives and outcomes

Collect and analyse relevant data

Use the analysis to take corrective action and improve performance

Use the knowledge gained to refine the objectives and improve data collection

Therefore, the design of a performance management system must start with a clear focus on the desired outcomes; what are the aims and objectives of the activity or process we are managing in terms that are meaningful to the end user. As a first step, this means engaging with the key stakeholders to find out from them what they expect the logistic and support activity to deliver and the benefits it will bring. These can be expressed in top-level and general terms and should align with the strategic objectives of the organization (for more information on organizational performance management see Marr (2009)). They must reflect the outcomes that the customer values. Examples include such things as: ●● ●●

Minimize the logistic footprint. Achieve 10% year-on-year cost reductions in real terms, while maintaining delivery performance.

●●

Provide an efficient and effective logistic operation.

●●

Achieve 95% mission availability.

Although engagement with stakeholders is essential, this can also cause problems. Often the customer or end-user space is represented by a number of stakeholders, all of whom may have differing expectations in terms of outcomes. This could result in multiple outcomes, which, if all utilized, could result in a highly complex performance measurement and management system, with restricted utility. Multiple objectives could also conflict and be mutually incompatible, subsequently leading to management issues. For example, performance improvement and cost savings may well be incompatible, at least in the short term. Efforts to reduce the multiplicity

Managing performance in defence logistics

through the use of higher-level outcomes (eg ‘Provide a world-class logistic service’) are equally meaningless, as will become apparent as the performance management system is further developed. Therefore, after engagement with the stakeholders, the designer of the performance management system will need to select a small number (three of four at a maximum) of top-level outcomes, which are focused on the objectives that are valued most and which are aligned to the organization’s objectives.

Key performance questions Having selected the outcomes, it will immediately become apparent that they cannot be easily measured, and, indeed, may take some time to achieve. Thus, they are of limited day-to-day management use, as any control mechanisms will have little impact. Therefore, further steps are needed in order to identify the key metrics aligned to the longer achievement of the outcomes. The next step in this process is to develop an associated set of Key Performance Questions™ (KPQs™), the purpose of which is to assist in identifying the information needs and lead to the identification of relevant key performance indicators. The use of KPQs was developed by Marr (2010) for use in the field of corporate performance management but can be applied equally in logistic performance management. KPQs help to define the key information that is required to assess the attainment of the outcomes and therefore assist in the identification of relevant and meaningful performance indicators. KPQs also help to contextualize the performance indicators and so assist in supporting their analysis, communication and associated ­decision-making activities. It is worth reminding ourselves at this point that the rationale for performance management is to take performance information, identify shortfalls and then take actions and decisions to improve performance. KPQs therefore have a key role in identifying the right information that needs to be collected in order to drive improved performance. There are a number of steps involved in identifying appropriate KPQs. First, they must be linked to the outcomes we have already identified. Their number should be restricted, as each KPQ will subsequently lead to a multiplicity of indicators. If there are too many KPQs, the number of indicators will increase, they become difficult and costly to manage and many will be of little or no relevance to the outcomes that it is hoped to achieve. Internal and external stakeholders should be involved in the selection process. This is an opportunity to test potential KPQs for relevance and utility. Of particular

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importance is the development of KPQs within a multidisciplinary environment, crossing through traditional departmental boundaries. This helps to identify what really matters and gain a greater understanding across the organization of what it is intended to achieve. KPQs should be phrased as ‘open questions’. Open questions demand more information in response, as opposed to ‘closed questions’, which can often be answered with a simple yes/no response. KPQs phrased as open questions will therefore lead to indicators that will provide a more detailed and nuanced response. An open question will generally be prefaced by words such as ‘what’, ‘why’, ‘how’ or ‘describe’ in order to encourage a more comprehensive and useful response. Returning to our previous examples of outcomes, it is worth examining potential KPQs associated with ‘Achieve 95% mission availability’. Table 11.1 shows potential KPQs that could be associated with this objective, the possible responses and the utility of the information generated in supporting appropriate remedial action.

Table 11.1  Key Performance Questions and possible responses Strategic objective: Achieve 95% mission availability Potential KPQ

Possible responses

Was 95% mission availability achieved?

Yes/No

Comment This is a closed question; it tells us very little, and might also lead to perverse interventions. For example, it is difficult to define ‘mission availability’ and thus the definition could be manipulated to achieve the target. It also masks trends. Mission availability could have fallen from 99% to 95.1%, a worrying trend, but with this metric the target is achieved and no action is taken.

Action/Decision support value Of little value. No evidence is provided to support any action to improve performance.

(continued)

Managing performance in defence logistics

Table 11.1  (Continued) Strategic objective: Achieve 95% mission availability Potential KPQ

Possible responses

Is mission availability increasing or decreasing?

Increasing/ Decreasing

Almost a closed question. This gives an indication of a good or bad trend, but not its magnitude. Furthermore, it can give only a coarse comparison with previous reports.

Of limited value. Action may be implemented based on minor variations. Forms the basis of a valid decisionmaking process.

How much has mission availability changed from the baseline in the reporting period?

% change relative to the last baseline

A more open question. Results in a better understanding of the trend, the rate of change and the magnitude of the change.

Provides valid evidence for taking appropriate action. More investigation required in order to identify causes and develop appropriate action plans. Needs to be monitored in cognizance of other KPQs.

Comment

Action/Decision support value

This example demonstrates that closed questions are of limited value at best, and in many cases could lead to inappropriate or perverse action or decisions being taken. Open questions, which ask for more information, provide a richer picture and underpin more appropriate action or decisions. However, just one KPQ is probably insufficient by itself. A small number of KPQs are therefore needed in order to ascertain progress and give sufficient information in order to take appropriate actions. Too many KPQs will result in a complex performance management system, possibly too much conflicting information and potential nugatory work in capturing and analysing data that adds little or no relevant information. Therefore, taking our example objective again, a suitable range of KPQs is listed in Table 11.2.

Key performance indicators Having agreed the Key Performance Questions that will enable us to assess how well we are achieving the desired outcomes, the next step in the process

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Table 11.2 Suitable Key Performance Questions to support ‘95% mission availability’ objective Value-for-money element assessed

Objective

Associated KPQ

Achieve 95% mission availability

How much has achieved mission availability changed from the baseline in the reporting period?

Output – efficiency (when related to the resources consumed).

How satisfied are the operators/end users that the achieved mission availability has enabled them to achieve operational success?

Outcome – effectiveness. This is a key issue. Even if 95% availability was achieved, the 5% shortfall might have impacted on key operations.

How well did inventory availability meet the user’s demands?

Output – efficiency. Inventory is closely linked to availability.

What was the actual cost of logistic support compared to the budget allocation?

Input – economy. This is a crude financial metric and has little relevance unless linked to an output metric.

is to obtain the information that will allow us to answer those questions. This is done by identifying the key performance indicators (KPIs) or metrics that provide us with the answers. There are a huge number of metrics that could be used to answer the KPQs. Some are readily available and are cheap and easy to measure. Others are more difficult and costly to obtain. Some are highly relevant to the KPQ; others are less so. It is therefore important to select the right measure. Key factors that impact on selection are: ●●

relevance to the KPQ;

●●

ease of measurement;

●●

cost of measurement;

●●

accuracy and reliability;

●●

timeliness (does data measurement periodicity match the performance reporting periodicity?).

Unfortunately, it is often the case that the data that are easy to collect are collected, irrespective of their relevance, while data associated with more relevant metrics are ignored. The result is that the performance management system becomes overwhelmed by impressive quantities of irrelevant

Managing performance in defence logistics

data while the key information that enables the system to identify key issues at an early stage and enable appropriate decisions to be taken is ignored. Table 11.3 lists a number of potential KPI metrics categorized into internal activities (warehousing and distribution), external (the wider supply chain), financial and customer focused. Within these categories the metrics have been grouped according to their strategic relevance of interest to senior management, their operational relevance or their functional relevance. These groupings are important. Senior management are obviously concerned about overall customer satisfaction but do not need to know the details of the operational and functional level. However, customer satisfaction may only be measured infrequently and is retrospective in nature. The associated customer-satisfaction-related functional and operational metrics provide an opportunity to identify and rectify problems and issues before they can snowball over time to impact significantly on overall customer satisfaction. These metrics focus on the internal processes and are related to economy and efficiency, in value-for-money terms, but ultimately will lead to the outcome we want in terms of customer ­satisfaction, or effectiveness. Although generally used as a strategic performance management tool, the balanced scorecard (Kaplan and Norton, 1992) can also be applied at the Table 11.3  Typical logistics-related key performance indicators Warehousing Supply and distribution chain Strategic

Warehouse utilization Weeks of stock Value of stock

Operational System downtime picking efficiency Aged stock reporting

Functional

Number of receipts processed same day Order backlog Time in storage

Financial

Customer satisfaction

Supplier management effectiveness improvement

Profitability/ Customer net revenue satisfaction Expenditure survey

Supplier lead-time

Resources employed

vs budget

Forecast accuracy – actual/ forecast demand per SKU

Customer order fulfilment – ontime/in full Quality nonconformance

Cost per order processed

Receipt of order to despatched/ delivered

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operational and functional levels. Used alongside the performance management process described, it ensures that the indicators or metrics utilized give a balanced picture of the performance of the logistic activity. The four elements measured by the typical balanced scorecard are: ●●

●●

●●

●●

The financial perspective: Typically, financial measures will be focused on the costs, profit and profit margin (for commercial organizations) and the effective use of financial resources. These measures normally give a narrow view of the organization’s performance, but by including them in the balanced scorecard they can be related to broader strategic objectives. The internal perspective: This element is focused on the performance of the functions and processes within the organization and is therefore related to efficiency objectives. Again, however, inclusion within the balanced scorecard ensures that the measures utilized are related to the organization’s strategic objectives. The customer perspective: This is a key element of the balanced scorecard as it focuses on customer requirements and customer satisfaction, and therefore how well the activity meets the outcomes. It is therefore a measure of the effectiveness of the logistic activity. The innovation and learning perspective: This element focuses on how well the organization is preparing itself for the future and will include staff development goals, technical and commercial innovation and the broader development goals.

Table 11.4 lists the components of a typical supply chain balanced scorecard. In essence, the balanced scorecard does little that cannot be undertaken by more traditional approaches to performance management. However, its design forces the organization to take a balanced approach to its Table 11.4 Components of a typical supply chain balanced scorecard Perspective

Objectives

Typical measures

Financial

Profit or cost savings

Profit per unit produced or stored

Cash flow

Days of credit

Return

Return on invested capital

Quality Time Flexibility Cost

Reject rate Process/cycle time Change-over time to new product Unit production cost, storage cost per unit per week, inventory held

Internal

(continued)

Managing performance in defence logistics

Table 11.4 (Continued) Perspective

Objectives

Typical measures

Customer

Quality

Inoperative on delivery

Reliability

Product failures

Timeliness

On-time delivery

Flexibility

Customer satisfaction

Cost

Landed cost per unit

Process/Product

Technical innovation

Partnership

System integration

Information

IT developments, data quality

Threats/Substitutes

Learning, market intelligence

Innovation and Learning

performance management and prevents a narrow approach which could well have a negative impact on overall performance.

Data quality and collection In today’s current business and operational environment, data are all around us and are often freely available. However, the structured process that has been described so far in this chapter will enable us to focus on the key data that we need to collect in order to manage and improve the logistic performance. Some of the data required will already be available. If so, then these should be utilized preferentially. In other cases, the available data may not fully match our requirements. In this case, we have to make a decision about the impact on the quality of our performance data in relationship to the additional cost of collecting data that exactly match our requirements. In the final case, suitable data may not be readily available at all, in which case a system to collect appropriate data will need to be implemented from scratch. Again, however, a decision will need to be made regarding the cost of data collection in respect of the performance improvements that could be obtained if these data were used. Before making a final decision on which data to collect, it is important that the proposed data are assessed for viability, quality and practicality of collection. It is therefore recommended that the following data attributes are considered: ●●

Availability: Are the data readily available, perhaps through existing monitoring systems, or will additional data collection systems need to be set up to collect the data?

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●●

●●

●●

●●

●●

●●

●●

Cost of data collection: Once the performance management system is set up, the major ongoing cost will be that associated with data collection. An accurate assessment is required in order to ensure that the benefits outweigh the cost of implementing and running the system. Confidence and reliability: This is an indication of how well the data represent the indicator being measured and the reliability, accuracy and consistency of the data being recorded. Possible dysfunctions: For example, could the data be falsified through cheating? If so, additional checking of data may be required. Data collection process: How the data are measured and collected (see below for further discussion of this issue). Source of data: Where the data are derived or come from. This may give an indication that the availability of the data is reliant on a third party, which could result in additional risk and cost. Frequency of collection: This will be related to the type of data being collected and whether they are related to the strategic, operational or functional levels. Financial data related to strategic performance may only need to be collected monthly or quarterly, whereas functional data related to a warehousing operation may need to be recorded daily, or even hourly. Key Performance Question: The KPQ to which the particular data indicator is related. Often data are collected because they are easily and cheaply available. However, they are of little practical value unless they are related to a relevant KPQ.

Data are available from a number of different sources and this will impact on the means by which the data are collected. Many data are generated automatically through the use of technologies such as RFID (radio-frequency identification) tagging and performance data recorded directly from equipment (such as health usage and monitoring systems on vehicles and other equipment). These data can then be transmitted directly to performance monitoring software without any external interference. In some cases, manual data recording (eg from observation) and inputting may be required when automated systems are not available. However, in many cases, the information may be more subjective, particularly if it is related to customer satisfaction. In these circumstances the data may need to be gathered using surveys and questionnaires, either online or paper based. Survey and questionnaire design is a complex issue due to the need to ensure responses are representative of the target population. Check

Managing performance in defence logistics

questions may therefore be needed to ensure consistency of data and to avoid any possible biases in the survey responses. Responses may also be graded on a Likert scale or similar. Further guidance on the design of survey questionnaires can be found in Sue and Ritter (2012).

Communicating results Once the data have been collated and analysed, they now need to be presented to the relevant stakeholders. Before deciding on the presentational format, the needs of the individual stakeholders need to be considered. The most important stakeholders are those who will be making decisions as a result of the performance information that is being presented; these groups are the primary audience. If the performance management system has been designed around a structure of Key Performance Questions answered by related KPIs, the performance information should be presented in the same format. Where the indicators have been derived from lowerlevel data, the primary audience should also have the facility to drill down into the detail in order to fully understand what is happening in order to support their decision making. Reporting frequency will also be determined by the decision-making needs of the stakeholders and their need for timely information. However, the reporting frequency can be different from the measurement frequency. For example, quality information may be collected daily but senior management may make related strategic decisions on a quarterly basis. In addition to the primary audience there will be many other people within an organization or across the supply chain who could also benefit from having access to performance information; these people are the secondary audience. In general, the secondary audience will require less detail than the primary audience and will require the information less frequently. It is particularly important that this audience is not overwhelmed by information that is of little relevance to them. However, it is important at the same time to keep them engaged; assessing their needs correctly and tailoring the provision of information accordingly is vital. The final group to be considered is the tertiary audience, which comprises external stakeholders (eg industry, company shareholders, the general public, other nations and so on). These stakeholders may need careful management, as they may be supportive of the activity being undertaken, or they may oppose it. Furthermore, they will have different degrees of power, influence, legitimacy and interest (Mitchell et al 1997), and this will determine the presentation and timing of any information that is provided.

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Today there are many channels of communication by which performance management information can be distributed, and different channels will be appropriate for differing audience members. For example, a supervisor within a distribution centre would probably receive information in near real-time via a dedicated app on a smart phone or tablet. On the other hand, a senior executive may receive a monthly performance report in hard copy or via e-mail, whereas shareholders could access summary information on demand from a company website. Although a dedicated performance management team may be needed to collate, process and present the performance information, their task can be streamlined by the many software tools available today.

Management action The primary reason for collecting performance data is in order to identify problems and issues in good time and take the appropriate action to resolve these problems in the short term and deliver improved performance in the longer term. Therefore it is important that issues are flagged up in good time to the person who is best placed to take the necessary action. For the supervisor in the distribution centre, this could be a visual, audio or vibrating alarm which draws attention to a problem that demands immediate action. For less urgent issues, the performance management system may generate an automated e-mail to the relevant person, drawing attention to a particular problem. Strategic issues may be brought to senior management attention through briefing papers. In all these cases, sufficient information must be made available to enable the decision maker to take appropriate action, in good time.

Performance management in defence logistics Defence departments have accepted the need to utilize the private sector to an increasing degree to address the challenges of defence acquisition. Specifically with regard to logistic support, there is a compelling case for appropriate arrangements so that private firms can handle this complex task. In many instances, this is the most cost-effective option for defence departments, and excessive attempts to generate ‘in-house’ capabilities appear to be of questionable value.

Managing performance in defence logistics

However, there are numerous obstacles that can prevent defence departments from receiving the anticipated outputs, outcomes and benefits from these contractual arrangements. Some of these obstacles arise from the inherent complexity of logistic support, others from the constant pressure to reduce costs in light of overall competing demands on defence departments for scarce financial resources, and still others from a shrinking pool of skilled human resources qualified to handle these tasks. In addition to all these factors, many of the problems faced by defence departments to properly manage performance under a contract arise from the fact that they do not address the practical requirements for an effective framework to conduct performance management. Baselines for performance must be set, careful consideration must be undertaken to determine the specific data needed to properly assess performance, provisions must be put in place to ensure that these data are gathered and analysed, and specific areas of responsibility for the department and the firm regarding performance management must be clearly set forth in the contract. Should the MOD also seek to incentivize business to improve performance, provide savings or generate efficiencies, the metrics by which such improvements are measured and the specific reward to business for undertaking such efforts must be clearly set forth in the contract. Moreover, gain-share arrangements, between defence departments and business, that modify the contract to capture and encourage improvements in performance should also be considered. Finally, data gathering and analysis are of minimal value on their own. There is a need for regular and effective meetings with business to discuss the findings in order to generate necessary changes, clarify ambiguities with regard to responsibilities, promote good behaviour in both parties and (perhaps most important) discourage or remove bad behaviour from both parties. If any of these prerequisites is not present, it should be no surprise to defence departments that they will not receive the anticipated performance. In that regard, the case can be made that the key elements of performance management concern culture, behaviours and, in general, attitude. Recognition that properly assessing performance is important for logistic support, or indeed for any aspect of defence acquisition, ensures that MOD officials working in the business space will keep any number of the issues addressed below in mind as the contract is negotiated and then implemented. Such behaviour is essential to performance management and maximizes the opportunities to improve performance to the benefit of both defence departments and business.

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Performance management in defence logistics contracting The critical requirements for performance management of logistic support arrangements must be embedded in the contract between the defence department and the industry supplier. This is a necessary, but not sufficient, condition for effective performance management. While a checklist of metrics to be addressed in the contract may seem pedestrian, it is essential to minimize the chance of a fatal omission of a key metric in monitoring performance under the logistic contract. However, as many performancebased logistic and support contracts are long term, there must be flexibility in the contract to change and improve the metrics with experience. Just as important is the fact that production of such a checklist should assist defence departments in generating the required intellectual rigour to prepare for negotiations with business. At a minimum, it should compel departments to think seriously and in detail about the overall goals and the specific outputs and outcomes they desire from the contract. Is it simply addressing an immediate support need? Is it also to drive down costs? Is it an arrangement that hopes to incentivize industry to generate new and innovative ways to provide logistic support? At a minimum, it would appear reasonable for defence departments to include specific provisions with regard to: ●●

the metrics for performance by business;

●●

the data that must be gathered by business and provided to the department;

●●

the data that must be provided by the department;

●●

●● ●●

identification of the specific points of contact in the department and business concerning performance under the contract; provisions on periodic meetings to assess contract performance; provisions for ad hoc meetings as needed to address any concerns that arise;

●●

dispute resolution mechanisms and processes;

●●

potential fines and/or penalties.

Once again, while such a process of delineating specific metrics is necessary, it alone will not ensure that defence departments receive the performance for which they are contracting. The issue of practical implementation and the significance

Managing performance in defence logistics

of the defence department–business relationship are addressed later. It is also worth noting that in light of the various changes that can occur (unexpected developments regarding policy, funding or processes) after the contract is signed, it is important for defence departments to assess how much flexibility they may need in the contract to address unanticipated events so that they can modify or make amendments to the performance criteria. A defence department should anticipate that industry would also desire to have flexibility with regard to the data by which their performance can be assessed in the event of unexpected circumstances and demands from the department. The general point is that including specific performance metrics is part of the overarching challenge for defence departments of constructing a suitable logistic support contract. There is nothing unique about the performance management aspect, and the same level of due diligence is required for clauses regarding issues such as payment, amendment or termination. In that respect, the extent to which defence departments address performance management is merely a reflection of the attention to detail that should be apparent in the overall contracting effort.

Summary In this chapter we have shown the importance of performance management in contributing to efficient and effective logistic services. Through a process of linking outcomes to Key Performance Questions and KPIs, a performance management system can be developed which focuses on the key data that need to be measured in order to monitor performance and identify opportunities for improvement. The balanced scorecard is introduced as a means of ensuring that four key performance perspectives are given equal prominence. The attributes of the data being collected are discussed, highlighting the importance of balancing ease of collection, confidence in the data and other factors against the value of the potential performance improvement that can be accrued. Finally, the importance of distributing the right information to the stakeholders who can take appropriate action is highlighted. Specific issues in regard to performance management in defence logistics have also been discussed, together with the importance of having an effective performance management system when key aspects of logistic services have been outsourced.

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References Armstrong, M and Baron, A (2004) Managing Performance: Performance management in action, Chartered Institute of Personnel and Development, London HM Treasury and Cabinet Office (1998) Modern Public Services for Britain: Investing in reform, Cm 4011. TSO, London Kaplan, R S. and Norton, D P (1992) The balanced scorecard – measures that drive performance, Harvard Business Review, 70 (1), pp 71–79 Marr, B (2009) Managing and Delivering Performance, Butterworth-Heinemann, Oxford Marr, B. (2010) What are Key Performance Questions? API Management White Paper [Online] http://www.ap-institute.com/media/3973/what_are_key_­ performance_questions.pdf [accessed 14 November, 2017] Mitchell, R K, Wood, D J and Agle, B (1997) Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts, Academy of Management Review, 22 (4), pp 853–86 National Audit Office (2014) Assessing Value for Money: General Principles [Online] https://www.nao.org.uk/successful-commissioning/general-principles/ value-for-money/assessing-value-for-money/ [accessed 14 November, 2017] Sue, V and Ritter, L (2012). Conducting Online Surveys, 2nd edn, SAGE Publications, Thousand Oaks, CA

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Optimizing the 12 defence inventory S h a n e Ta rg e t t

Introduction Chapter 4 of this book discusses the requirement for, and role of, optimization in achieving a balance between efficiency and effectiveness in defence logistic support. The fact that the support system for any given mission system is ultimately an optimization of many variables is asserted in Chapters 6 and 7. In this chapter, the role of inventory optimization in the defence supply chain, and in the wider defence support chain, is examined and recommendations are made on how to manage the complexity of the support chain by employing the best data, forecasts and plan, while highlighting the need for codification. This chapter also explains how to optimize defence inventory by balancing the cost of inventory ownership against the operational impact of shortages and delays, and offers a perspective on inventory segmentation using multidimensional Pareto analysis to identify and manage high-cost/risk items.

Commercial and defence supply chains The use of the term support chain in preference to supply chain implies that the extended value chain should be perceived, and optimized, in terms of its contribution to the support of an organization’s wider objectives and operations rather than solely in meeting a materiel demand. But what of the supply chain as a sub-set of the support chain? Commonly, commercial supply chains are primarily unidirectional, delivering a one-way flow of raw materials downstream, through stages of processing and conversion to become finished goods in the hands of the end customer. Defence supply chains are typically bidirectional (two-way), with serviceable materiel flowing downstream and

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repairable items flowing in reverse, going upstream to maintenance, repair and overhaul (MRO). Of course, commercial supply chains (or value chains) often also include reverse flows, for example when faulty or superseded items are returned upstream to wholesalers, distributors and manufacturers. However, defence supply chains are seldom, if ever, unidirectional and invariably include significant volumes of materiel moving upstream back to higher echelons for MRO, modification or disposal, this two-way flow of repairables being a fundamental element of the wider defence support chain as defined in Chapter 2. Indeed, the subsequent flow of repaired and serviceable components may be directly dependent on the expeditious input of unserviceable items into the repair loop. A further complexity of this multi-echelon repair loop is that of the sub-loops repeated at each echelon of the support chain for multi-indenture systems. Multi-indenture systems contain line replacement units (LRUs) which may contain sub/shop replacement units (SRUs), which can themselves consist of repairable components which, in turn, could contain repairable sub-component elements.

Inventory: the cost of ownership vs the impact of shortage The cost of owning inventory (buying and holding it) represents a financial burden to an organization. However, this cost can frequently be exceeded by the cost and risk of unavailability through inventory shortage, a reality discussed in Chapter 8. When demand for an item is not immediately satisfied by stock available in the store, the unsatisfied demand generates a back-order1 which remains outstanding until the demand for that item is eventually satisfied. Although a replacement/repair order may be raised immediately, until a suitable replacement arrives, a back-order will remain outstanding. Crucially, it is the time that these back-orders remain outstanding that has most impact on availability. A shortage of a single item lasting several weeks will commonly have a greater impact on availability than briefer shortages of several items. Accordingly, the number of outstanding back-orders, and the logistic delay time (time awaiting delivery of the item), are better measures of inventory performance than demand satisfaction. The best measures, however, are those which are aligned to the operational objective. As such, system availability is a useful objective function, but mission success is a preferred measure. This is because a successful mission may be achievable with a capability that is only partially available and mission-capable if a concession can be made which enables the system

Optimizing the defence inventory

to continue in operation. In any case, identifying the true cause of demand, and calculating future requirements based on projected activity, can help to reduce both waste and shortage; however, this requires comprehensive, accurate and current data. Even when the requirement is well understood, the resultant plan must be optimized using target objectives aligned to operational success.

Solving a wicked problem Supply chain management is recognized as a ‘wicked problem’,2 that is, a problem with incomplete, contradictory and changing requirements that are difficult to recognize and so complex to resolve that it defies any conventional solution. Recommended strategies for addressing wicked problems include: ●●

●●

●●

The authoritative approach. When a single owner or robust consensus exists, reducing the number of stakeholders responsible for addressing the problem can reduce complexity. If total responsibility for resolution of a wicked problem is given to a single individual, organization or team, competing interests and needs can immediately be reconciled. However, even where this is possible, a disadvantage of the authoritative approach is the limitation of authorized experts charged with solving the problem. These experts may not fully understand all of the complex issues that need to be addressed to resolve the problem successfully. The competitive approach. In contrast to the authoritative approach, a competitive strategy seeks to solve wicked problems by pitting opposing points of view against each other. Stakeholders must propose and champion their preferred solutions, which are then evaluated for their respective suitability across the entire enterprise. This approach has the advantage of creating alternative viable solutions which can be assessed against the prevailing priorities, providing a range of credible alternatives. However, this adversarial approach risks engendering a confrontational environment prejudicial to a culture of collaboration, cooperation and shared ownership of problems and information. The collaborative approach. A collaborative strategy seeks to engage all stakeholders in determining the optimum enterprise solution and addressing any disadvantages that some stakeholders may face by apportioning, fairly, benefits made throughout the enterprise. This approach often includes a forum where issues and ideas are discussed and an optimal

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consensual solution agreed to the benefit of all stakeholders. This strategy engenders a culture of shared ownership of data, problems and benefits. However, collaborative strategies can be difficult to implement in a military support chain when data are considered sensitive, stakeholders may be competitors, and operational benefits cannot always be quantified in financial terms. Successful strategies for the optimization of support chains can include the best of each of the above approaches by contracting for availability (CfA) or via performance-based contracts (PBC). In these circumstances, the defence department acts as the authority for deciding what is optimal, defines clear governance rules, strategy, and performance criteria, and uses accurate shared data (and optimization models) to determine and refine the optimum support chain. Where possible, elements of that optimum support chain are competitively selected, and duly rewarded, based on both performance and behaviours. Data are accurately captured, maintained and shared, and efficiency and effectiveness benefits are collaboratively identified and exploited to the advantage of all stakeholders.

Optimization The term to optimize3 is often misinterpreted as to minimize, when achieving an optimal solution can in fact frequently entail the input of additional resources. An expression often heard in military circles, which conveys the essence of optimization quite succinctly, is: ‘getting the most bang for the buck’. Optimization entails a balance (of military effect against financial efficiency), with a fulcrum, pivotal to equilibrium, resting on three, equally important, elements: data, forecast and plan (Figure 12.1).

Figure 12.1  Optimum solution

Data

rec

n Pla

ast

Optimum Solution

Fo

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Optimizing the defence inventory

Data Data are of fundamental importance in defence logistics. The supportability analysis, which is discussed in Chapter 7, generates data which are critical to the informed decision making that delivers the optimized support system. This chapter will also reinforce the value of data. When an organization takes those data, and analyses and evaluates them to become useful information, it can substitute that information for inventory.4 Any forecasts, projections or plans based on inaccurate, incomplete or unmaintained data are unlikely to be optimal. Many studies indicate that investment in data frequently yields ‘bang for buck’ returns that can equal or exceed other aspects of support chain improvement. Where comprehensive, current and accurate data are available, activity-based planning may be employed to excellent effect. An activity-based plan requires data on: ●●

The nature of the capability: the quantity and variants of systems.

●●

The past (and projected) operations, including: – the number, frequency, and duration of each mission; – the system’s role in each mission and the environmental conditions that will pertain to each.

●●

Configuration / bill of materials (BOM) for each system, to include: – the range of components (LRUs/SRUs etc) fitted to the system; – the quantity (fit) of each component installed on the system; – the duty cycle of each component (in each role and environment); – the reliability of each component (in each role and environment); – the criticality of each component (for each role or mission).

●●

The preventive and corrective maintenance policy for each component, including: – repair location; – repair times/duration; – repair percentages, discard/scrap rate; – ‘100-off’ list of repair components with probability of use; – any No Fault Found (NFF) rate. (An NFF occurs when an operator reports a fault but diagnosis and maintenance effort fails to find it.)

●●

Transportation times between echelons, repair location, and depots.

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These data are aggregated to produce a demand plan, correlated to future operations, with a schedule of planned maintenance events (and a forecast of unplanned maintenance events) which include: ●●

frequency

●●

volumes

●●

duration

●●

locations

●●

costs

●●

dependencies.

In practice, a single authoritative source of comprehensive, accurate, data is seldom collated, maintained and available for cogent activity-based forecasting. Frequently, the required data do exist but are fragmented across the extended enterprise and distributed throughout the support chain, because many events, and their related support activities, occur outside the scope of control of any single entity or authority. In such cases, where possible, a shared data environment should be established where data are captured once (and used many times) with single, clearly identified, data owners responsible for maintaining the integrity of their data and making them available for all interested stakeholders. When insufficient or incomplete data are available, historic demand analysis is commonly used for forecasting, as this is easier to implement unilaterally with minimal data. However, all other things being equal, better data produce better forecasts, and investment in data yields financial and operational benefits far beyond the cost of the investment.

Forecast It’s a popular maxim that there are two types of forecast: those that are inaccurate and those that are lucky. There are, however, steps that can be taken to improve both accuracy and luck. There is such a diverse variety of forecasting methods that textbooks exist devoted entirely to that subject. In this chapter, two distinct forecasting approaches will be addressed: activitybased schedules and historic demand analysis. Activity-based schedules seek to understand the cause of demand, while historic demand analysis may only reflect the effect of activity on demand so may be usefully employed without any real knowledge of the underlying reason for the demand.

Optimizing the defence inventory

As discussed in other chapters, preventive, or scheduled, maintenance activities are more predictable than unscheduled corrective maintenance events which may be dictated by unforeseen failure, breakdown, interruption, or other cause which may be forecastable or predictable to a degree, but with much less certainty of timing than a scheduled event. From the perspective of demand planning, scheduled preventive events are more readily managed as pull demands than corrective, unscheduled events, which are better managed as push demands. A pull system of supply planning is driven by actual requirements. Repairs and/or procurement actions can be triggered just in time (JIT) by an immediate need. A push system, by contrast, relies on forecast-based predictions of possible future demand and is used when lead-times are insufficiently short to implement a pull system. A pull system is more efficient, as only the required quantities of items are repaired or procured. Conversely, a push system depends on potentially unreliable forecasts of possible future need which causes wasteful procurement of excess inventory (and superfluous scheduling of unnecessary repairs) or leads to shortage and delays from inventory availability shortfalls and/or timely repairs. Planning corrective maintenance is analogous to predicting earthquakes: it is certain that earthquakes will occur along tectonic fault lines; such events are not unexpected. However, exactly where and when these quakes will occur or with what magnitude cannot yet be predetermined with certainty. Responses can be planned, but precisely when, and to what extent, these responses will be required is uncertain. To be effective, resources must either be pre-positioned or response times shortened, whereas scheduled/planned maintenance typically enables planning horizons to be longer than the repair/procurement lead-time. Accordingly, timely orders for inventory may be placed using a JIT strategy, thereby minimizing waste and shortage. However, for unscheduled/ unplanned events, forecasts must be relied upon and either inventory prepositioned, where it’s cost-effective, or lead-times reduced via greater agility. Increasing safety stocks and reducing lead-times can minimize waste and shortage, but a truly optimum solution must determine the extent to which more inventory or greater agility is the most cost-­effective and resilient strategy. A method of multidimensional Pareto5 analysis is explained later in this chapter; this type of analysis can assist in this process by identifying which items would be more cost-effective candidates for increased inventory levels, and which items might be candidates for greater agility.

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Plan Traditional inventory planning methods typically set objective functions for inventory performance targets in terms of service level, known also as fill rate or Demand Satisfaction (DemSat) Rate (DSR). So, if a required item is stocked, the warehouse issues it and the demand is satisfied or filled. If sufficient stock is not available, the demand remains partially or completely unsatisfied or unfilled and the item is on back-order. A delay is incurred until the item is either procured or repaired and the back-order cleared. The service level/fill rate/DemSat is the percentage of demands satisfied from available stock on hand (SOH). Many organizations that seek to achieve 100% service level (DemSat) are inevitably unsuccessful because of budget and forecasting limitations and fluctuations in demand and repair/resupply times. Such a target is practically unachievable, and unnecessarily costly. Moreover, achieving, say, a 99% DemSat/service level for every item is unlikely to be the most cost-efficient method of satisfying 99% of total demand. By slightly reducing performance on some items, while increasing it on others, an overall 99% service level can more cost-effectively be achieved by allowing some expensive/low-risk items to under-shoot the target but compensate by ensuring that other inexpensive/high-risk items over-perform. An item’s price is not the only cost/risk to operation success; frequently the cost of holding inventory can be vastly exceeded by the true cost/risk of operational unavailability or lack of mission success caused by delays as a result of item shortages. As explained above, when demand for an item is not immediately satisfied by available stock on hand, this unsatisfied demand creates a back-order which remains in place until the demand for the item is satisfied. So, for example, if SOH for an item is three, but there is demand for five, the three SOH are issued and two back-orders are created. A repair or purchase order is raised but, until the replacements arrive and are issued, two back-orders remain outstanding. As discussed, being short of an item once, with the back-order remaining outstanding for several weeks or months, frequently has a greater operational impact than running short of an item two or three times but for just a single day on each occasion. There is another counter-intuitive effect of prolonged back-orders which is often overlooked. Being short of two of the same item for one month (or 30 days) may impact availability far more than being short of three items for two days. In the first case, two systems may be unavailable for 30 days. However, in the second case, as little as only one system may be unavailable

Optimizing the defence inventory

for just two days (if, for example, the three shortages were consolidated into one single system by robbing or cannibalization).

Example of the advantage of using back-orders compared to service level Consider an aircraft with a list of parts essential for it to fly and one hundred of these parts are replaced in a year. By using a 99% service level method, 99 of these items can be made available for replacement immediately. The aircraft would be grounded only once until a replacement part was sourced for the single remaining/outstanding item. By using a back-order method, 98 of the required items are replaced immediately from stock. The two outstanding (different) items would ground (at least) one aircraft until replacements were sourced. A service-level-based performance measure would judge the 99% (99 of 100 demands satisfied immediately) to be a superior solution to the 98% (98 out of 100) back-order solution. However, if the single unsatisfied item in the 99% solution took three months to replace, but that same item was included in the 98% solution (where each of the two excluded parts took just one month to obtain), then a back-order measure would judge the three-month delay to be inferior to the combined two-month delay. Moreover, a system availability-based performance measure would judge the 99% service level solution inferior to the 98% back-order solution. This is due to the aircraft being available for only nine months of the year (and grounded for the other three months waiting for the outstanding/remaining part). A 98% back-order solution results in the aircraft being available for 10 months of the year (or even 11 months – if the two demands and delays coincided). So, although the service level performance was higher in the 99% solution, the aircraft availability was actually higher in the 98% solution! Service level is inferior to the backorder method for support of military systems because back-orders relate directly to system availability, whereas service level has an indirect relationship with availability. To understand why a back-order plan satisfied just 98 demands, first calculate the impact of a 99% service level solution of three months of one back-order and nine months without. So, monthly, back-orders were: 1+1+1+0+0+0+0+0+0+0+0+0, three in twelve months = 3/12 = 0.25 back-orders annually. The back-order solution has two months of one back-order, and 10 months without,

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so monthly back-orders are: 1+1+0+0+0+0+0+0+0+0+0+0 = 2/12 months = 0.166 annually – fewer back-orders. A service level method counts the proportion of shortages against demand, not the duration (or operational impact) of each shortage. A backorder method factors in the delay incurred waiting for replacement (the lead-time) and so favours stocking items whose shortage results in relatively long delays which would adversely impact availability.

The advantage of cost-optimizing back-orders Including the item price in the inventory planning equation further increases the cost-effectiveness of the solution. By choosing optimum targets on an item-by-item basis, return on investment is maximized while sustaining (or increasing) overall inventory performance. The cost-optimized back-order method identifies which items are highest (and lowest) cost/risk relative to the entire range. By increasing the stock of the cheaper item, and commensurately reducing the stock of the expensive item, financial resources are focused on satisfying demands for inexpensive items instead of costly ones. An example of how this can be achieved is provided below. An average overall service level for a range of three different items (with identical lead-times and the same demand pattern) each costing $1, $2 and $10 respectively may be achieved in more than one way. Firstly, by holding all items at exactly the same service level or, secondly, by increasing holdings of the cheaper items to an above-average service level but reducing holdings of the costly items to a below-average service level. A simplified example of this process is shown in Table 12.1.

Table 12.1  A simplified example of the cost-optimized back-order method

Item

Demand

Repair/ Purchase lead-time

1

1 per day

2 3

 

Cost/ % of total Risk cost

Pipeline

Price

365 days

365

$1

$365

51%

10 per day

10 days

100

$2

$200

28%

15 per day

1 day

 15

$10

$150

21%

Total

$715

 

Optimizing the defence inventory

In Table 12.1, the most costly item (3) has the lowest relative cost/risk. Yet, the cheapest item (1) accounts for over half of total cost/risk in the entire range yet has the lowest demand. This counter-intuitive result is explained by Item 1’s pipeline, caused by a disproportionate lead-time. Here, it is potentially more efficient to reduce the lead-time for Item 1 than to increase inventory. Conversely, holding inventory of Item 3 may be more efficient than reducing its lead-time. The answer is not always to increase inventory, or always to reduce lead-times; it depends! In fact, as shall be seen, the cost/risk profile of a range of military inventory is typically highly asymmetrical, with cost/risk following a Pareto distribution. This phenomenon significantly enhances the opportunity for cost-optimization, as a tiny (but significant) minority of items account for the (overwhelming) majority of cost/risk. A further important contribution to the Pareto distribution of cost/risk across an inventory range is variability. Fluctuations in demand and/or lead-times are inevitable in real life, and because such volatility increases risk, variability must also be considered. By looking at the variability of past demand, calculations can be made, with varying degrees of confidence, of the maximum number of demands likely to be received in any given period. For example, in Table 12.2, the maximum number of demands likely to occur in the example scenario is shown in the ‘99%’ column. The risk of volatility can thus be quantified and used to optimize inventory level recommendations. Inexpensive items with high (and volatile demand) and long (unreliable) lead-times may be stocked at higher levels of confidence than costly items with stable demand and short, reliable lead-times. In Table 12.2, the most costly Item (3) is now a medium cost/risk, yet the cheapest and lowest demand, Item (1), still has the highest cost/ risk. This variability is included to provide indicative costs of inventory holdings at a 99% confidence level6 (service level) for each item in the range. This provides a useful tool for calculating optimum inventory levels based on historic demand.

Table 12.2  A modified version of the cost-optimized back-order method Item

Demand

Lead-time Pipeline 99% Price

4D

% of total

1

1 per day

365 days

365

410

$1

$410

45%

3

15 per day

1 day

 15

 25

$10

$250

28%

2

10 per day

10 days

100

124

$2

$248

27%

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Inventory segmentation Inventory classification (segmentation) sub-divides an inventory range into classes, ideally based on criteria that ensure a management or procurement policy tailored to the item’s class. The traditional ABC classification of inventory7 was devised by GE in the 1950s. It divides inventory into three classes based on the realization that: the minority of an organization’s inventory range (‘A’ class items), typically the most expensive, account for the majority of total sales value; whereas the majority of items are cheap and account for a minority of sales value (‘C’ class items). The rest (‘B’ class items) account for the remaining sales value. This phenomenon is illustrated graphically in Figure 12.2. ABC classification is still used to apply ‘efficient’ inventory policies that typically set lowest protection levels for expensive ‘A’ class items, medium levels for ‘B’ class and highest for cheap ‘C’ class items . Item price and average annual demand may be used for ABC classification of systems inventory to identify the minority of items that account for the majority of annual inventory expenditure. However, ABC is two-dimensional, and so inadequate, because both delay and variance are ignored. Long lead-time items can cause prolonged shortages when stock-outs (or back-orders) occur and, in real life, demands and lead-times fluctuate, thereby increasing risk. Frequency, duration, cost and variability (or Demand, Delay, Dollars and Deviation) affect most defence organizations. These key variables can easily be used to conduct Pareto analyses of inventory ranges to identify the ‘significant few in the insignificant many’. Management resources may then be focused on resolving supply chain issues for high-cost/risk items,

Figure 12.2  The ABC classification of inventory

A Class 5–25% of range 5%–20% of value

B Class 20%–40% of range 20%–40% of value C Class 50%–75% of range 5%–25% of value

Optimizing the defence inventory

Figure 12.3  Asymmetry revealed by multidimensional analysis 0.1% of range 25%–33% of cost 1% of range 50%–67% of cost 4% of range 10%–15% of cost 95% of range 25%–33% of cost 50% of range 1%–5% of cost

and optimizing inventory levels of others. The benefit of a Pareto multidimensional view is not just to determine the order in which one item has more cost/risk than another, but also to focus attention on the tiny minority of items responsible for the vast majority of cost/risk. On average, the top 1% of a range accounts for over half (up to two-thirds) of the total cost. Conversely, 95% of the range accounts for below one-third, down to a quarter of the total cost. At the extreme ends of the range, the top 0.1% accounts for up to one-third of total cost and the bottom 50% can account for as little as 1% of total cost. The asymmetry revealed by multidimensional analysis is illustrated in Figure 12.3. By recognizing the Pareto distribution of cost/risk across a range of inventory, multidimensional classification identifies high-cost/high-risk items for which supply chain management interventions (lead-time reductions, reliability improvements etc), may be more appropriate than holding costly high levels of inventory. As we have seen, inventory ranges are typically classified by their repair characteristics. As discussed in Chapter 2, another commonly used categorization is to divide inventory into three classes: repairable (or ‘permanent’) items, ‘lifed’ items and consumable items (‘P’, ‘L’ and ‘C’ classes), with a different data and inventory management policy for each class. A 4D classification of an inventory range can reveal overlaps between these classes and identify candidates for reclassification. Potentially, the top 0.1–1% of consumables merit equal treatment to most L (and some P) class items. Conversely, many L, and some P, class items might arguably merit no greater management attention than some C class items. Accordingly, multidimensional assessment is a useful tool for inventory classification.

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To undertake multidimensional classification of inventory, ‘3D’ and ‘4D’ inventory classification is easy and requires the following data: ●●

Demand. Historic or forecast per item per day (or week etc).

●●

Dollars. The item’s price (or cost).

●●

Delay. The item’s repair and/or procurement lead-times in days (weeks etc).

●●

Deviation. The variance (or standard deviation) of demand, resupply/ repair time or the product of both (demand during the lead-time, the so-called pipeline).

A 3D assessment is most easily achieved with a spreadsheet. For each item: ●●

multiply demand by lead-time (ie delay) to get the pipeline8; then

●●

multiply this pipeline by the price (ie dollars) to obtain a 3D cost/risk result;

●●

●●

sort the 3D results (from largest to smallest) for the entire inventory range; and finally, calculate each item’s percentage contribution to total cost/risk by dividing its 3D result by the sum of all 3D results for the range.

This identifies which items are highest (and lowest) cost/risk relative to the entire range.

A 4D view of inventory An obvious shortcoming of 3D assessment is that it doesn’t include ­variability: fluctuations in demand and/or lead-times that are inevitable in real life. A more sophisticated 4D assessment, accommodating variability, may also be done on a spreadsheet.9 For each item: ●● ●●

●●

●●

calculate the pipeline (multiply demand by lead-time) – identical to 3D; quantify variability (ie get the fourth D) by taking the square root of the pipeline, or where a detailed demand history is available, calculate the standard deviation with the ‘StdDev’ spreadsheet function to determine the statistical distribution; use the ‘NormInv’ spreadsheet function to determine the 99% confidence level for the pipeline and multiply it by the item’s price to get the 4D cost/ risk result; and sort the 4D results and calculate each item’s percentage contribution to total cost/risk by dividing its 4D result by the sum of 4D results for the range – as in 3D.

Optimizing the defence inventory

Figure 12.4  A 4D view of inventory Low stock Greatest Cost/Risk Driver

Least stock

Zero stock? Dollar$

Most stock

ay

el

Demand

D

High stock

This process identifies which items, in relation to the whole range, are least and most costly to stock at 99% confidence levels. Using the example of the results in Table 12.2, we have already identified that the most expensive Item (3) is now medium cost/risk, yet the cheapest and lowest demand, Item (1) still has the highest cost/ risk. This is because including the fourth ­dimension of deviation (or variability) gives indicative costs of inventory holdings at a 99% confidence level for every item in the range. Variability increases risk – which drives increases in inventory holding – and cost (Figure 12.4).

Front line first In common with commercial supply chains, ideally defence supply chains should be demand driven and focused on the point of demand. The principles of Lean and Agile are useful methods for achieving optimization. However, defence supply chain optimization should be achieved: ●●

‘Factory to foxhole’ – starting with the foxhole (or, indeed, the foc’s’le or flight line)! Whether an activity-based plan, or historic demand-based forecast, is used, the supply chain should be optimized from front to back. That is, operational effect should normally take precedence over financial efficiency. Planned operations should be used to create a demand plan, and this should be communicated upstream through the supply chain in sufficient time for it to respond. Increasing agility will reduce the length of planning horizons, and by reducing response times deliver the added benefit of increasing resilience during periods of surge.

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●●

●●

End-to-end. It is most unlikely that even the most agile defence supply chain will be able to respond sufficiently quickly to support the dynamic conditions of military operations. Accordingly, some, at least contingency, planning is likely to be required. Side-by-side. Military history provides countless examples of armed conflict occurring between opposing coalitions of allies, and it seems probable that the modern battlefield will continue to see interoperating allies sharing military aims, strategies and equipment long into the future (see Chapter 2). Joint operations afford the opportunity to optimize the deployed footprint by sharing of resources: including information, materiel, and supply and support chains.

Codification As seen in Chapter 2, catalogue management (or codification) of inventory is well established globally. Codification is a process that uniformly examines items from original equipment manufacturers (OEMs) and compares the technical and functional characteristics of each item by form, fit and function. On the modern battlefield, the ability to identify component items by maintaining current and accurate catalogue and configuration data is vital to the successful support of front-line operations. Countless documented examples bear testimony to the adage that: ‘If you don’t know where it is, you don’t have it’. Frequently, a spare part (or a suitable alternative) is readily available somewhere within the support chain but may not be appropriately identified and visible. The absence of successful cataloguing when suitable alternatives are available but not identified leads to items that become superseded, but may still be suitable as either conditional or unconditional alternatives. Identical items (in terms of form, fit and function) may have different part numbers and/or be produced and supplied by different OEMs. Conversely, different or superseded items may not be applicable to existing systems but the catalogue information has not been updated to reflect the change. Suitable alternatives may be available, but superseded items which are still suitable as either conditional or unconditional alternatives may be disposed of, or discarded, if not identified, thereby impeding the opportunity to exchange. The following consequences result from inadequate item catalogue control: ●●

poor configuration control;

●●

overprovisioning of items;

●●

operational shortage of often critical items;

Optimizing the defence inventory ●● ●●

unnecessary robbing/cannibalization of critical parts; use of unsuitable alternatives forcing concession and/or impacting mission capability;

●●

sub-optimal procurement quantities/policies for replacement parts;

●●

unnecessary disposal of useful items; and

●●

avoidable interoperability problems.

By 2017, the NATO Codification System held over 17 million NATO Stock Numbers for items of supply relating to 35 million manufacturer’s references (part numbers).

Summary This chapter has highlighted how defence inventory optimization is employed to achieve the essential equilibrium of financial efficiency versus operational effectiveness. Strategies were suggested for the management of complex defence supply chains and the key constituents of a balanced solution (data, forecasts and plans) were identified. The enduring need for codification was discussed. Finally, a multidimensional method of segmenting inventory was described, using Pareto analysis to determine the relative cost/risk profile of each item.

Notes 1 The back-order method of inventory optimization was first developed at the US Government’s RAND Corporation in the 1960s and has been widely adopted by military and some commercial organizations to optimize equipment inventory. Typically, inventory levels calculated using a back-order method deliver equivalent levels of performance (measured as equipment availability) at 50% less inventory investment than demand satisfaction/service level methods – even if service levels are tailored to an item class. 2 A ‘wicked problem’ is a problem that is difficult, or even impossible, to solve. Further understanding of the term can be gleaned from a guest editorial to the journal Management Science, written in 1967 by C West Churchman, of the University of California, Berkeley (Management Science, 14 (4), B-141–B-142). In it, he developed the ideas of Professor Horst Rittel, for example that ‘the adjective “wicked” is supposed to describe the mischievous and even evil quality of these problems, where proposed “solutions” often turn out to be worse than the symptoms’ (p B-141). Rittel and Webber provide a fuller discussion of the concept of the

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Defence Logistics ‘wicked problem’ in the journal Policy Sciences (Rittel, H W J and Webber, M M (1973) Dilemmas in a general theory of planning, Policy Sciences, 4, 155–69). 3 To optimize: ‘To take full advantage of, to plan or carry out with maximum efficiency, determining the best compromise among several, often conflicting, requirements’ – Collins English Dictionary, 6th edn, 2003. 4 See Professor Christopher’s explanation of the idea of substituting information

and responsiveness for inventory, in Christopher, M (2011) Logistics and Supply Chain Management, 4th edn, ch 2, p 45, Pearson Education, Harlow, UK. 5 Vilfredo Pareto (1848–1923) was an Italian engineer, sociologist and economist who observed that 80% of Italy’s land was owned by 20% of its population. This 80/20 relationship – the ‘80/20 rule’, which became known as the ‘Pareto Principle’ – was found to apply in many different aspects of life, identifying, in essence, that in many cases roughly 80% of the consequences, or effects, originate in roughly 20% of the causes. In inventory, for example, it may be found that most turnover occurs in a small portion of the range of inventory items, or that a small proportion of the range accounts for the lion’s share of the sales income. Application of the Pareto Principle may enable an organization to concentrate the majority of its resources on the ‘vital few’ causes that will generate the greatest effect, rather than the ‘trivial many’. 6 The 99% confidence level calculated (in this example) using the 99th percentile cumulative probability function of a Poisson distribution with a mean (and variance) equal to the item’s pipeline. 7 ABC classification is a development of the Pareto Principle. ‘A’ class inventory

items are few in number and are the high-profit items, typically generating 80% of turnover. ‘B’ class items are more numerous but less important, accounting typically for 15% of turnover. ‘C’ class items are the least important, making a comparatively insignificant contribution to turnover (5%) but being more numerous still, accounting typically for half the range of inventory items. 8 The pipeline (or lead-time demand) is the total average quantity demand for an

item during its average (procurement and/or repair) lead-time. It is a useful risk measure because stock-out (dues-out) of items with larger pipelines is likely to have greater impact on equipment production, maintenance and operation; the quantity and/or duration of shortage correlates to its pipeline. 9 Further ‘D’s (ie dimensions), including Distribution, Depot storage, can be included if data are available to either modify the price variable or be added as other, discrete, variables. Increasing the number of variables requires more complex calculations and data. Also, it reduces the asymmetric polarizing effect (and the utility) of classification, as statistical regression causes more items to tend towards the mean.

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13 Accounting and finance in defence logistics Irfa n A n s a r i

Introduction The proportion of public sector expenditure incurred on defence may be small in percentage terms, but does represent significant sums of money. The unique nature of military procurement and military systems results in annual price increases above the rate of inflation for normal goods. As such, this ‘defence inflation’ exacerbates the challenge of keeping defence costs within limits since government budgets often each grow only by national rates of inflation. This makes it all the more important to understand defence costs. As a critical component of defence business, understanding the financial environment and its implications upon defence logistics enables the logistician to better plan, implement and manage logistic and supply chain management activities and initiatives. This chapter provides a brief exploration and consideration of some of the financial perspectives and approaches that may be encountered within a defence logistics context to enable better understanding of how costs within defence logistics can be controlled and how the financial strength and viability of defence contractors, who are critical components within supply chains, are not compromised.

Accounting vs finance At the very outset, it is necessary to distinguish between two terms that are commonplace in the financial world – accounting and finance. Accounting (sometimes called financial accounting) involves the recording, analysis and

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communication of financial transactions of an organization to users. In essence, it is about assimilating an organization’s financial transactions into financial statements. On the other hand, finance or financial management has to do with helping decision makers in making financial decisions about how funds should be raised by a business and then how they should be invested so that the return from the investment increases the wealth of the owners. In government departments, although the issue of raising funds may not be relevant since they are given the money from a finance or treasury function, utilizing the funds in the best possible way so that the objectives are met is crucial. This underscores the importance of finance to such notfor-profit organizations. One difference between accounting and finance is that financial accounting comes into action once a financial transaction has taken place. Conversely, the study of finance comes into play before a ­financial transaction has taken place.

Financial transactions and accounting information Financial transactions can be classified either as income or expenditure. Whereas income represents the inflow of economic benefits, the purpose of expenditures is to spend money to enable the inflow of benefits in the future. In other words, expenditures represent the cost of benefits to be received and thus expenditures are deemed to be incurred as soon as the receipt of the benefits from them starts flowing in. Expenditures can be divided into two categories: current and capital expenditure. Current expenditure is one where a good/service is completely consumed (ie the complete set of benefits from it are received) within a period of 12 months. For instance, expenditure on commodities (eg fuel and food) or wages is counted as current expenditure. On the other hand, capital expenditure occurs when a good is consumed (ie the benefits from it are received) over a period exceeding 12 months. Expenditures on warships, main battle tanks and buildings are examples of capital expenditures. Given the breadth and pervasive nature of the role of logistics and supply chains across the defence enterprise, defence logistics can, and does, deliver goods or services that are expended as either current or capital expenditure. The collection, analysis and communication of financial transactions results in accounting information; the latter is used by both internal and

Accounting and finance in defence logistics

external stakeholders for financial decision making. It can be reasonably inferred that the quality of accounting information relates directly to the excellence of financial decision making. Accounting information is relevant if it has the ability to influence decision making, for instance in deciding the cheapest option for moving military equipment from one place to another. The timeliness of accounting information further boosts its relevance as it allows information to be available when decisions are being made. The reliability of accounting information requires that financial transactions of an entity are reported without serious error or bias. For instance, if the financial statements of a defence logistics company contain material errors, it would be difficult to ascertain its financial performance and position with a view to determining its viability in the provision of defence, thus generating uncertainty and potential for economic disruption to the supply chain as discussed in Chapter 5. Comparable information is generated when consistent accounting concepts and practices are used so that similar accounting information can be evaluated over time and between entities. Finally, accounting information should be in a format that helps its users to understand it. Accounting information could be relevant, reliable and comparable, but if it is presented using inappropriate terminology, classification or structure, it is difficult to imagine how it could help in decision making. There are essentially two main approaches to reporting accounting information: cash-based and accruals-based accounting.

Cash-based accounting The cash-based accounting system is based on the premise that financial transactions are recorded only when cash changes hands. Thus when a service is consumed, it is recorded as an expense only when the payments for it are made; not when the benefits from it start to be received.

13.1 Cash-based accounting illustrated A defence logistics company (whose financial year runs from January to December) negotiates a 12-month contract for the provision of training to air-force pilots using simulators for £5 million. The contract was initiated on 1 July 2015 and it is fully paid for on 31 March 2016 (Figure 13.1).

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Figure 13.1  Cash-based accounting – illustrative example

Accounting year 2015

1 Jan 2015

1 Jul 2015

Accounting year 2016

31 Dec 31 Mar 2015 2016

30 Jun 2016

Contract

Half the service is provided in 2015

The other half of the service is provided in 2016

£5 million paid

Although half of the service is provided in 2015 and the other half in 2016, using cash-based accounting the entire expenditure on the pilots training contract of £5 million is recorded in 2016; none is recorded in 2015.

This inherent simplicity of cash accounting facilitates an easy recording of transactions and makes it simple to understand. Additionally, auditing cash-based accounts is straightforward since the focus is exclusively on the movements of cash – thus making it a more objective exercise. Because of these benefits, cash accounting has been used by both private and public sectors across the world for centuries. Under cash accounting, since the focus is only on cash movements, cash payments for current expenditures may not necessarily synchronize with the fashion in which the benefits are being received. In other words, a time lag may exist between the incurrence of expenditure and its payment. Thus, using the example above, the timing of the payment could be moved backwards or forwards (depending on the terms of sale negotiated) and resultantly, expenditure on the contract would move likewise, irrespective of when the benefits from the services are received. This means that under the cash regime, recognizing current expenditure is vulnerable to inaccuracies due to the time lag. In the case of capital expenditures (which can be referred to as longterm investment expenditures/assets), the time lag between the payments for the expenditure and the related receipt of benefits (from its use) may be even greater. Under cash accounting, the expenditure will be recognized in the year of purchase only; none will be recorded in the years in which the

Accounting and finance in defence logistics

benefit from its use continues to be received. The purchase of, for example, a main battle tank is akin to the purchase of future benefits delivered through its operational use. Its purchase price reflects the cost of receipt of those benefits, but cash-based accounting erroneously recognizes that all the benefits from the use of the tank are fully received in the year of its purchase, ignoring its actual in-service life. As a result, under the cash regime, the cost of receiving benefits from the use of the tank would be overstated in the year of its purchase and understated in the subsequent years of its use. This can be further compounded by the production time of the tank itself, since modern defence equipment can take years from order through to in-service declaration and the delivery of the associated benefits. Here, the time lag is driven by the supply chain and manufacturing process. The failure of the cash regime to distinguish between current and capital defence expenditures means that long-term investment expenditures in any year, under cash accounting, would erroneously but significantly hit the defence budget for that year, since they would involve significant upfront payments. As a result, long-term defence investment expenditures (crucial for ensuring that defence continues to successfully deliver on its objectives) are perceived to be more expensive because they require huge amounts of cash upfront as compared to current expenditures. In the most extreme cases, it may be considered unaffordable. This perception creates a bias against capital expenditures but in favour of current expenditures in defence departments. Another flaw of cash accounting becomes manifest in situations when benefits are received in advance of their payment, for instance when services provided by a defence logistics contractor are paid in arrears. In such cases, amounts owed to defence logistics contractors are not recognized as liabilities. Similarly, committed payments such as compensation payments or lease payments are not recognized as liabilities under the cash accounting system since these expenses are recorded only when they are paid for, even though the benefits from them are received in advance. The absence of recognition of liabilities under cash-based accounting means that the financial obligations of a defence department are not fairly represented and therefore could present a risk to the logistics contractor and thus, by extension, to the supply chain. Cash-based accounting information may be simple to understand and audit, but because expenditures can be moved from one financial year to another, comparability of accounting information within defence departments over time becomes a challenge. Additionally, the failure of this accounting system to recognize liabilities and distinguish between current

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and capital expenditures results in it scoring poorly against reliability (since it generates inaccurate and incomplete accounting information). Because of these weaknesses in the cash regime, it is not difficult to see how it might result in poor financial decision making.

Accruals-based accounting Accruals accounting was developed to provide more accurate and complete accounting information. As a result, it has been used in the private sector for several centuries. However, the absence of the profit motive in public sectors inhibited the public sector from reacting to the weaknesses of cash accounting. Resultantly, it was not until the end of the 20th century that governments began to realize the inadequacy of cash-based accounting for managing modern public services. The accruals-based accounting system is one wherein the full consequences of economic activities are accounted for; not just the cash flows. The basic tenet of accruals accounting is that expenditure is recognized when benefits from the expenditure are received, and income is recorded when the economic benefits from it are expected to flow into an entity. Under accruals accounting, income and expenditure are recorded as they occur, irrespective of movements in cash. Using the example shown in Box 13.1, irrespective of the date of payment for the contract, expenditure on the training of the pilots is recognized as and when benefits from the training are received, that is, as the training takes place. As a result, under the accruals regime, expenditure recognition is not based on the terms of sale negotiated with a seller; rather it is deemed to occur in the fashion in which benefits from the expenditure are received. Thus, unlike cash-based accounting, accruals-based accounting information is independent of the timing mismatches between receipt of benefits from expenditures and their payments, and therefore provides more accurate/complete accounting/costing information. Furthermore, expenditure, using the accruals system, is recognized when the related benefits are received, and thus, unlike the cash regime, the accruals regime makes a distinction between current and capital expenditures; the latter is also referred to as non-current assets. Unlike cash-based accounting, the purchase price of a non-current asset is not fully charged in the year of purchase. Instead it is spread over several years of the asset’s economic life (by means of depreciation) to reflect the cost of the benefits received from the asset in each of those years. With accruals-based accounting, non-current assets are subject to holding costs (in the form of depreciation charges) over their lives, and therefore

Accounting and finance in defence logistics

idle non-current assets in defence departments will unnecessarily be burdening defence budgets. The repairables, such as aircraft engines, ships’ water cooler units and main battle tank power packs (accounted for as capital spares in the UK MOD), which are fundamental to effective MRO and therefore systems availability and defence capability, are non-current assets which are depreciated. Where such assets are held in excessive quantities, they might be argued to represent a mitigation strategy for supply risk, but will also represent a cost to the defence department on whose asset register they sit and on whose balance sheet they are recorded. The accruals regime, therefore, prompts defence departments to continuously look to dispose of idle assets so that resources released can be used to fund other defence activities. The recognition of holding costs in accruals-based accounting is a double-edged sword – it could result in short-term financial gains and long-term loss. For instance, in situations of intense financial constraints, inventory could be disposed of (to save depreciation charges) only to be replenished later (when the need arises) at a price greater than the initial purchase price. This represents a significant challenge when attempting to optimize the supply chain in terms of inventory holdings, since it becomes a trade-off between inventory and operational unpredictability, requiring agility and inventory to smooth demand peaks.

13.2  Valuation of military assets in the UK One of the issues with accounting for non-current assets in the accrualsbased accounting system that the UK Ministry of Defence uses is with respect to their valuation/revaluation. In the commercial sector, noncurrent assets are carried at their depreciated historical cost, depreciated replacement cost or market value. The accounting policy of the MOD states that non-current assets are initially recognized at cost and then revalued to their fair values. In the case of non-specialist assets such as land and buildings (for which a market exists), their fair values would simply be their market values or appraisal values (which are based on the future cash flows arising from them). However, where the fair value of a non-current asset cannot be determined using these two bases, such as in the case of specialist military assets, the accounting policy of the MOD states that it can be approximated to its depreciated replacement cost, that is, the cost of replacing an existing non-current asset with a modern equivalent less any deductions for the cost of physical deterioration and

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all relevant forms of obsolescence. The accuracy of such an estimate is dependent on the soundness of the assumptions on which it is based; hence there will be a degree of subjectivity incorporated in the value of such assets. It could be argued that since estimating the value of military assets is challenging, the MOD should simply do away with this estimation exercise and just concentrate on the maintenance of military assets, because ultimately the defence capabilities of the MOD depend on the state of the military assets and not on their values. However, stating such assets at their fair values (even if these are estimates) enables the relevant depreciation/amortization charge to be computed, which reflects a truer picture of the cost of the benefits received from their use. Though it may not be possible to accurately determine this cost, the knowledge of its estimate could be used to compare with the cost of providing the same benefits/defence capabilities through other options and thereby enable better allocation of the scare resources of the MOD.

Supplier financial viability The provision of defence is usually shouldered by both private and public sectors. Defence departments do not necessarily build all that is needed in-house. Indeed, the majority of supply chains are composed of the private sector, with the overall purpose being to deliver military capabilities or operational mission success. One of the purposes of financial statements is to allow a user, such as a defence department, to examine in detail the financial statements of its suppliers/contractors to find out how well or poorly (in financial terms) they have been doing and whether they are financially strong or vulnerable. If a defence logistics company ceases trading, the financial consequences could be dampened through, for instance, penalty clauses and insurance, but it could prove catastrophic in terms of the lack of, or reduction in, military capability (which would have otherwise been delivered by that company). Thus, there is a need to carry out checks on the financial health of suppliers so as to decide whether they are viable financially and thus able to deliver on their contractual obligations. The financial statements of companies may contain large numbers of monetary values; however, these do not by themselves paint a fuller picture of their financial position, performance and financial adaptability. Financial ratio analysis of defence companies offers a way to assess their financial

Accounting and finance in defence logistics

well-being. It involves the comparison of one figure against another to produce a ratio; it is then the examination of these ratios that indicates the financial strength or weakness of different areas of that company. Financial ratio analysis becomes more useful when comparing the ratios of one company with another in the same industry, that is, in the same line of business. A direct comparison of, say, the net profit of a larger company with that of a smaller company is misleading because of differences in the scale of the companies. Since ratios are calculated by dividing one figure by another, the issue of differences in scale, between companies, is eliminated and hence comparisons become possible. Ratios enable one to dig deeper into the financial statements of companies to build a more complete picture of their financial strengths and weaknesses. In doing so, it enables more informed decisions to be made if considering their selection within a supply chain. There is an absence of a definitive or comprehensive list of ratios that have to be calculated to find out how a business is doing. Additionally, there is no one way in which ratios are calculated in practice. In order for ratios to be meaningful, it is imperative that when comparing them with other ratios, there is consistency in their calculations. Financial ratios can be grouped into different categories, each of which gives insight into different aspects of the financial position or performance of an organization. Common ratio categories include profitability, liquidity and gearing. The profitability ratios reveal the success (or otherwise) of an organization in generating profits, or losses. It is quite possible for organizations to be making profits, at least on the books, but not be in a good state of health as far as cash is concerned. This is because financial statements are prepared using accruals-based accounting; under this accounting system, revenues are recognized as soon as there is an expectation of receiving payments from customers, even though there may be a (long) time lag between the recognition of revenues and the eventual payments in cash by credit customers. Due to this possibility, profitability ratios, as the only measure, cannot offer a full picture of what is going on within an organization, financially. Liquidity ratios have to be calculated to measure the state of liquidity of an entity. A business that makes profits (on the books) but has dwindling cash/liquid assets could go bankrupt. Thus it is important for businesses not only to make profits but to ensure that those profits are of high quality, that is, those profits are made when the business is liquid. Businesses may be financed from money from their owners (share capital) and/or money from lending institutions such as banks. A business may

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decide not to pay dividends even if it generates profits, but in the case of loans, a business will have to service them (by paying interest) even if the business makes a loss. The relative mix of funding sources is measured by the third category of ratios – called gearing ratios. These ratios not only examine the level of funding from owners versus that from banks but, more importantly, they measure the cost of funding from banks by comparing interest payments to profits made. Although the use of financial ratios offers a quick and useful way to analyse the financial position and performance of defence companies, they are subject to some limitations. The accuracy of the financial ratios is dependent on the quality of the financial statements of the company being studied. It is difficult to come up with an accurate financial analysis of a defence contractor whose accounts have been qualified by their auditors. This is because, by definition, a qualified audit report is an indication that some of the figures quoted in the financial statements are materially wrong. Additionally, where creative accounting has been used in the preparation of financial statements, a misleading picture of the financial health of a business is painted, that is, financial ratios cannot eliminate the effects of creative accounting. Ultimately, specific practice and approaches in terms of ratios will vary depending upon the organization and the preferred approach. The calculation of such ratios is typically undertaken outside of the logistician’s area of responsibility, but the implications will require logistic input to enable the supply chain to minimize its exposure to risk and to have sufficient mitigation planned if needed. This is where supply chain resilience thinking (see Chapter 5) comes to the fore should the ratio calculations show areas of concern.

Costing Costs are incurred with the anticipation that they will lead to benefits being realized. In the commercial sector, organizations have to ensure that costs within a given time period are less than revenues, so that they can generate profits. In the public sector, where profit making is not an objective, organizations try to manage their costs so that they do not breach budgetary limits. Therefore, managing costs is central to the financial success of organizations. An ideal position for an organization to be in would be one where they know the cost of each of the different activities their organization is engaged in with such precision that if they were to make changes to any of those activities, the cost implications would be known. This would place them in

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a situation of making better-informed decisions. In the real world, it is difficult to achieve this ideal. However, efforts can be made to reach as close as possible to this ideal state. The starting point to achieve this goal is computing full costs of operations and activities. This is called cost accounting. The output from cost accounting is used to decide which path to drive the organization along in order to achieve the best financial results – this exercise is termed management accounting. Without costing information, management accounting is handicapped, and implementing cost accounting but not using it to make financial decisions is fruitless. Hence cost and management accounting are interlinked. Cost and management accounting are important for defence departments in a number of ways. They can help departments assess their relative performance (in cost terms) over time and across different operations and sections of the organization. Weighing the financial merits of different defence logistics operations before committing vast sums of money to one particular choice, the feedforward system, and measuring financial performance of projects/operations, the feedback system, allows them to exercise control that could result in savings. This would be particularly helpful given that defence departments compete with other public sector departments for public finance. Furthermore, while financial accounting is backward looking, that is, it comes into action once financial transactions have taken place, cost and management accounting are forward looking. The latter force defence departments to revisit the past, by using historical costs of activities/ operations to plan a financially better future.

Classification of costs In order to explore the cost impact of defence logistics, it is vital to compute the full costs of the outputs/activities involved in logistic operations. Full costing is pivoted on the understanding of costs which can be grouped in several ways, one of which is direct and indirect costs. A direct cost is one that can be traced in full to the product, service or operation that is being costed. On the other hand, an indirect cost is such that although it has been incurred in the production of a product, service or operation, it cannot be traced in full to the outputs produced. For instance, the costs of the food that makes up army rations can be traced in full to each individual ration and therefore it is classed as a direct cost. The rent and insurance of the building where these rations are prepared cannot be traced in full to the rations – hence these costs are called indirect or overhead costs.

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The distinction between the two types of costs becomes important when working out the full cost of each unit of output (army rations in this case) when the indirect costs are shared with the production of other outputs, services or operations. Thus, if the army rations are prepared in the same building where, for instance, military inventory is stored, then in order to compute the full cost of each army ration, overhead costs will have to be split/apportioned between stores and army rations. This could be done using one of many variables, such as floor area, ratio of value of army rations to military inventory and so on. If floor area is used as the apportionment basis, and if the area of the building where army rations are prepared is bigger than where military inventory is stored, the former should be apportioned a greater share of the overhead costs than the latter. The apportioned overhead costs for army rations will then have to be absorbed in the army rations using some bases, which may include the cost of the food in each army ration, the number of army rations produced in a given timeframe and so on. Adding the direct cost of each army ration to the overhead cost element would give the full cost of each army ration. A degree of subjectivity will be involved when choosing one particular apportionment and absorption basis over others. Hence, each apportionment and absorption basis could eventually lead to a different full-cost figure for each army ration. This, therefore, means that the full cost of each army ration will not be an accurate figure – it will most likely be an estimate. The greater the proportion of indirect costs to direct costs associated with a product, service or operation, the lower will be the accuracy of its full-cost figure. A defence department would be interested in the full cost of army rations so that it understands the cost implications of changes to the demand for them.

Fixed and variable costs Another way in which costs can be grouped depends on their behaviour with respect to output, that is, whether they remain fixed or variable as output increases. Fixed costs remain static as output increases. An example of a fixed cost would be the cost of rent of a building (where army rations are packaged). This would remain the same regardless of the number of army rations being packaged. The cost of food that goes into these rations is an example of variable cost, because as more rations are prepared, more food is required and hence food costs rise. Graphical representation of fixed and variable costs is shown in Figures 13.2 and 13.3. Figure 13.3 shows the variable cost graph to be a line at a fixed angle to the horizontal axis, thereby indicating that there is a linear relationship between

Accounting and finance in defence logistics

Figure 13.2  Fixed costs

Cost Fixed Costs Volume

Figure 13.3  Variable costs

Cost Variable Costs

Volume

Figure 13.4  Stepped fixed costs

Cost Stepped fixed costs

Volume

variable costs and outputs. This may not necessarily be the case, because as output grows, variable costs per unit may decline due to economies of scale. If the number of army rations being prepared rises to such an extent that they cannot be fully accommodated in one building and a second building is needed, then total rent for buildings, which is a fixed cost, would have to be increased. In this way, a fixed cost would become a stepped fixed cost, as shown in Figure 13.4.

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This grouping of costs is invaluable when programming costs of operations of organizations. In commercial organizations, splitting costs into fixed and variable elements, coupled with sales revenues, allows a variable profit called contribution to be calculated. This allows such organizations to carry out ‘what-if’ analysis on expected profits in different scenarios. In defence departments, the fixed and variable elements of costs enable them to compute what-if analysis on costs of operations, using techniques such as those discussed in Chapter 14.

Budgeting One of the mandates of governments is to spend money on public services. These are financed, principally, through taxation. When taxes are insufficient, the hole in public finances is plugged by governments taking out loans. These loans will eventually be paid off from future tax receipts. Just like commercial organizations, governments, generally, have limited amounts of funds available for spending. Defence expenditures are one of the many expenses governments incur annually. Like any expenditures, defence expenditures are incurred with the anticipation that certain benefits (ie military objectives) will be realized as a result. Given the limited amount of funding available to defence departments and the challenges of defence inflation, expenditures have to be managed in such a way that maximum objectives realization is achieved. Management of defence expenses can be carried out through the implementation of effective budgeting. A budget is a financial plan, expressed in monetary terms, to enable defence departments to achieve their goals in the short and long terms. This helps defence departments to focus and prioritize their (often limited) financial resources to achieve their strategic objectives and mission.

Effective budgeting in defence Budgeting is not just about coming up with financial figures. Successful budgeting is more involved. It involves a number of activities, such as setting objectives, planning, organizing, controlling, coordinating, communicating and motivating. In generic terms, the budget objectives of a defence department are about achieving the department’s strategic objectives and mission using a given amount of funds. In practice, the realistic strategic objectives and mission of a defence department and the amount of funds available to

Accounting and finance in defence logistics

the department (provided from treasury) are two influences on its budget objectives. It is important to underscore the point that there may be internal and external non-financial limiting factors that restrict a defence department’s ability to achieve its strategic goals and mission. The latter would have to be dialled down to set realistic targets. Whereas a forecast is about what is likely to happen, a budget is a financial plan of what should happen. Planning is central to the budgeting process. It involves defining the outputs/activities of the various functions within a defence department (which together will achieve the strategic goals of the department), assigning financial figures to them and consolidating the individual budgets to form a master budget. Taking into account the constraints/limiting factors (for instance, shortage of human resources or fuel) that affect the outputs of areas within the department is essential to ensure that realistic budgets are prepared. The planning phase offers a defence department the opportunity to evaluate alternative courses of action by carrying out what-if analysis for different scenarios, as discussed in Chapter 14. Forecasting is a central pillar of building budgets. Statistical tools such as linear regression, time series, decision trees and probabilities could be used to develop better forecasts, which then form the basis on which suitable budgets for various cost centres (within a defence department) could be drafted. Defence budgets can be prepared using a top-down, bottom-up or a hybrid approach (which makes use of the first two types). A top-down approach is where budgets are prepared at a higher organizational hierarchical level and given to a department to implement. This has the advantage of speeding up the budgeting process but could suffer from creating unrealistic budgets. In a bottom-up approach, the reverse happens – staffs at the bottom levels of a department prepare budgets for their cost centres and these are aggregated at higher levels. While this type of budgeting could be time consuming, it could result in more achievable budgets being set. A hybrid approach would involve a mix of the two types. This is where provisional budgets are revised at higher and lower hierarchical levels in a department before being finalized. This has the advantage of ensuring that the final budget is more or less acceptable to all. A key aspect of organizing effective budgeting is to offer training to people within defence departments who will be tasked with preparing budgets. Coordinating the different budgets at various levels within a defence department allows proper sequencing of activities of the department and as such it cannot be ignored. Moreover, communicating budgets, their

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preparation, revisions and reports to all concerned within the department would not only keep them informed but could also help to motivate them to implement budgets.

Fixed and flexible defence budgets A fixed budget is one that remains unchanged at all levels of activity. Where levels of activity remain more or less constant, the use of fixed budgets to control expenditures would be the right thing to do. However, in situations where actual activity levels fluctuate, using a fixed budget will inevitably create variances – an analysis of such variances will be of little benefit when the volatility in activity level is caused by external factors. Defence departments operate in environments that could be less predictable in war situations and, therefore, controlling defence expenditures using fixed budgets would be less effective, if not meaningless. In order to make defence budgeting more effective, some elements of defence expenditures (those that are less predictable, such as war theatre expenditures) could be controlled using flexible budgeting – one where budgets are changed as activity level varies.

Defence budget cycles Annualized budget cycles for organizations (such as defence departments) where expenditures on projects span over a time greater than 12 months may lead to situations where there are (or are expected to be) unspent budgeted funds at the end of fiscal years – a positive variance. Where the prevalent budgeting culture is to strike out these unspent amounts from future budgets, it may force organizations to spend those amounts on unnecessary expenditures and thus ensure that at year ends, there are no unspent budgeted funds, thereby ensuring the protection of future budgets. This is an example of short-term thinking at the expense of long-term benefit for defence departments. This happens in the absence of arrangements for carrying forward unspent budgets into the future. One of the reasons why unspent funds are not automatically rolled over into future years is the lack of trust between parties. Unexpected delays in defence projects could push defence expenditures into the future and thereby result in unspent budgeted funds at year end, which if they are curtailed could increase the challenges for defence departments trying to plan over the medium to long term. The UK experience of working with defence budgets is shown in Box 13.3.

Accounting and finance in defence logistics

3.3 Defence budgeting in the UK The UK MOD uses resource budgeting to create its financial plans. It involves using accruals-based costing information for planning and controlling the expenditure of the MOD. The higher quality of costing information under accruals-based accounting provides the MOD with a better measure of the true cost of providing individual services, thereby assisting in better allocation of its resources among competing objectives. For instance, the MOD has used accruals-based costing information as part of a balanced scorecard to enable the Royal Navy Board to monitor performance. Under the cash regime, performance management was less accurate because the timing of cash payments may not be synchronous with the delivery of a service. Furthermore, costings of the different activities of the MOD are now prepared using a consistent set of principles and standards, which allows the merits of different courses of action to be compared on an equal footing. The Treasury prohibits the MOD from transferring resources from capital budgets to be used to cover current expenditure so that investments in the MOD are not compromised. A significant proportion of MOD budgetary items are such that they can be estimated with a reasonable degree of accuracy. These are referred to as the Departmental Expenditure Limit (DEL). The DEL is set, roughly, on a three-year basis, which gives the MOD a longer planning horizon. Other expenditures, which cannot be forecast with a reasonable amount of accuracy over a long term, are budgeted on an annual basis but reviewed biannually. These are referred to as Annually Managed Expenditure (AME) and include pension liabilities and provisions for nuclear decommission costs. Additionally, under the cash regime, there was a tendency to spend any surplus cash before the year end in order that it was not withdrawn in the subsequent year’s budget. Recent attempts to avoid this wasteful end-of-year surge in expenditures have focused on allowing the MOD (subject to the Treasury’s approval) to carry forward underspends from previous years. Each financial year, the MOD seeks authority from Parliament for its current and capital defence spending. During the course of a year, if the MOD estimates that its defence expenditure is likely to exceed the budgetary limits, it has the option of seeking authority from Parliament (once more) to spend additional amounts on defence. Unauthorized overspending on any of the defence budgets (even if the total spent on defence is less than the combined total of these budgets) would automatically result in the qualification of the MOD’s financial accounts.

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Nonetheless, even if perfectly accurate historical accounting/costing information were available (to create budgets), predicting the future can never be perfectly accurate, not even in the commercial sector, which has been using accruals-based accounting/costing for centuries. The worst that can happen to an organization in the commercial sector in setting the budget grossly inaccurately is having insufficient resources to carry out its activities, thereby incurring losses. The repercussions for the MOD in a similar situation are far more serious because national security is at stake. The challenging task of measuring defence inflation, and the constrained reaction of the MOD to stimuli due to industrial policies and commitment from international alliances, makes MOD budgeting more complicated than for organizations in the commercial sector (UK NAO, 2010). Therefore, to expect the MOD to create perfect budgets using better information is rather unrealistic. However, since accrual accounting offers better quality of information compared with the cash regime, it would be reasonable to expect the MOD to create better but not perfect budgets than those conducted historically under the cash regime.

Summary This chapter has explored various aspects relating to accounting and finance in defence logistics. It started by stating that all financial transactions can be grouped into two categories – income and expenditure. An ideal accounting system scores very highly in terms of relevance, reliability, comparability and communication of understanding of the accounting information it produces. An in-depth examination of the pros and cons of cash- and accruals-based accounting systems reveals that the newer accruals-based accounting system is more appropriate for modern defence procurement and support activities than the older cash-based one. It is very important that understanding the financial viability of potential supply chain contractors should play a part in understanding their ability to deliver within it for the short, medium and long term. Analysing financial statements using financial ratios could be used to ascertain the financial robustness of defence logistics companies – a vital exercise that should be carried out when defence departments engage such companies in the provision of defence. Although financial ratios enable multi-angular financial analysis of such companies, there are limitations of this technique that have

Accounting and finance in defence logistics

to be taken into account. Typically, this activity is outside the roles and responsibilities of the defence logistician but is an important component of logistic and supply chain management. The final parts of this chapter were devoted to the nature and classification of costs as well as the significance of budgeting in defence departments. Given that defence departments operate in a somewhat unique atmosphere, the chapter ends with an exploration of how effective budgeting in these departments could be carried out and describes the case of defence budgeting in the UK.

Reference UK NAO (2010) Strategic Financial Management of the Defence Budget, National Audit Office [Online] www.nao.org.uk/wp-content/uploads/2010/07/1011290. pdf [accessed 5 October 2017]

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Decision support 14 in defence logistics J e r e my D S m i t h a n d J o h n S a lt

Introduction This chapter exposes decision support and analysis methods related to defence logistics issues. It provides a brief introduction to decision support and analysis methods and tools, including a discussion on the nature of analysis and modelling, outlining the basic concepts. This includes an exposure to the modelling cycle. There is then a series of brief explanations and some examples across the spectrum of analysis methods, including judgemental analysis, Delphi, QFD, MCDA, graphical modelling, mathematical modelling, including linear programming, network analysis, queuing systems, reliability analysis, failure rate and so on, an introduction to simulation, and finally a discussion covering force-level logistic representation in such things as combat models and wargames.

Introduction to decision support and analysis methods and tools As in any other business domain, managers and practitioners in defence logistics and supply chain management need to make informed decisions in order to achieve optimum outcomes. There will, however, be additional, conflicting, priorities in defence which may set this domain apart from the civilian world. For example, during operations, priority will likely be put on operational availability and mission success ahead of profit and, indeed, other socially focused considerations. Managers need to be able to make informed decisions and can call upon a variety of techniques and tools associated with operational research (OR), modelling and simulation.

Decision support in defence logistics

The nature of analysis and modelling – the concepts The topics in this chapter may be collected under a number of different headings. The topic of OR is one that uses many of the techniques described here, and wider research will add detail to that provided here and will also augment the set of techniques by others. In the United States the topic is known as ‘operations research’ while in the UK the military refer to this domain as ‘operational analysis’ or sometimes ‘military operational analysis’. In the civilian world the techniques are used in management science and business analysis. In essence the domain is best described, not by a set of techniques, but rather as analysis using techniques. The definition of management science or operational research has been given as: ‘the scientific analysis of managed systems in order to improve their utility and operational effectiveness’ (Cranfield University) and another definition is ‘the application of modern science on complex problems arising in the direction and management of large systems in industry, business government and defence’ (UK OR Society). These are consistent with the idea that this topic is an application of scientific sets of both methods and thinking, which will be an aid to decision makers in providing them with the capability to make better, more informed, decisions. In brief, OR stemmed from the years before the Second World War. The principal example was the development of ideas for effective air defence in the UK, utilizing radar as part of an integrated system. A team of scientists from a number of disciplines supported this by working alongside serving military staff to add quantitative scientific analysis to the basic technology developments that were ongoing. So, for example, as radar was developed as a technology, the OR support developed ideas for where radars should be sited, how they should be used, how the information they generated should be disseminated and used, and how the control systems should be implemented to direct the interceptor aircraft in the most effective manner. This approach was so successful that the concept of scientific thought and skills to support other areas of operations was adopted by the UK and then the United States. This was applied to submarine warfare, including convoy systems. The approaches developed became so well regarded that they were also exploited outside defence in postwar Europe and the United States. Now the discipline is well established. There were OR departments in some large organizations such as health services and power and energy industries although now there are likely to be smaller groups dispersed within organizations.

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The tools and methods which are employed will be exemplarized over the next few pages in this book. They encompass: ●●

●● ●●

mathematical approaches, such as linear programming, network analysis, and queuing theory; soft methods, such as judgemental analysis/decision analysis; simulation methods, such as combat models, wargames, field trials and virtual reality.

The analysis approach The approach can be a series of stages (some of which may not be appropriate all the time), as follows: ●●

Problem definition: – Define the problem by analysing and assessing, sometimes by deep involvement.

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Data collection and analysis: –  As part of the problem definition there will be the identification of the type and amount of relevant data.

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Modelling – Formulation. Usually a model of some sort is produced as a method for exploring options and predicting potential outcomes.

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Problem solution: –  The model will be used and the better approach to a problem will be defined.

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Implementation of results.

A model The steps described above involve the development of a model, but what is meant by this? One might immediately consider a sophisticated software system as the answer, but the term includes other ideas that may be more useful. Remember, the idea is to understand a problem and then develop a solution for a decision maker to agree and implement – sometimes a highly sophisticated approach will be detrimental to this. A model

Decision support in defence logistics

is a physical, mathematical or otherwise logical representation of a system, entity, phenomenon or process (US DOD). In essence, a model is a tool for an analyst to help thinking – a tool for understanding and analysis.

A map is an example of a graphical model. It fits the definition as it clearly is not the real world but is an abstraction. It is also fit for some purposes and not for others. One map might be useful for measuring distances and finding routes but be of little or no use for predicting an area’s wildlife or vegetation, or for calculating population density. It might be of utility for addressing this last requirement if it were modified, for example to show housing areas.

General principles of models and their use are that they: ●●

must be developed and used in some context;

●●

may or may not be computerized;

●●

●●

may or may not attempt to represent the internal functioning of the real system; require data and assumptions.

Methods review This section describes and discusses various methods that are applicable. This is not an exhaustive list but rather coverage of the main and most relevant techniques.

BOGSAT A simple and very common analysis technique for many problems in business or defence is to have a meeting. This is (somewhat irreverently) sometimes referred to as the BOGSAT technique, where BOGSAT stands for Bunch Of Guys Sat Around a Table. This method is, of course, a powerful option as it brings decision makers and supporting personalities together to discuss and develop ideas and arrive at decisions. The drawbacks to relying on meetings to develop and make decisions include the risk of non-expert input, political or

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senior leader over-influence (to drive a decision which is unreasonably favoured by the ‘senior officer present’), lack of audit trails for decisions and lack of engagement or interest by important and/or useful staff, the risk of ‘group think’ and reinforcing poor decisions or inputs. However, there are techniques that can assist in improving these aspects of using meeting-based decision making.

Judgemental analysis (eg Delphi, quality function deployment and multi-criteria decision analysis) There is then a range of methods aimed at countering some of the deficiencies identified above. Largely this is through the use of structured methods for capturing and nurturing the findings and processes in a meeting or similar gathering so that, although they are still based upon expert judgement, they are captured and may be analysed in a structured way. Example methods are Delphi, quality function deployment (QFD) and multi-criteria decision analysis (MCDA). These are described below.

Delphi Delphi techniques were developed originally by the RAND Corporation in the United States. The approach is simply to break up decision making into stages, adding anonymity to the decision inputs. The technique, applied to a decision outside of a meeting structure, involves questionnaires being sent to participants who answer them, with the aggregated results of all participants then being analysed and reported. This reporting is provided to all the participants but without reference to who made any particular points; it is anonymized. The group is then asked to respond again. The technique thus exposes ideas from among a group without, at least initially, exposing the originators of the idea to the whole group, thus promoting the free exchange of ideas on decisions. The aim is for the group then to gradually coalesce to a consensus. The technique can be used in meeting support. The usual approach is to have an initial open forum exchange and then to capture decision opinions using a separate questionnaire or scoring method. This is done anonymously. The results are presented by a facilitator (clearly this needs a very rapid method of capturing information, so electronic means are useful here). These results are then discussed openly. Staff who input the decisions that are discussed (perhaps an outlier) may, if they wish, choose to identify themselves as the source of these. If the meeting reaches consensus then the discussion is complete; if not, further rounds of scoring of decision inputs may be used.

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Quality function deployment (QFD) QFD, which originated in the Japanese automotive industry, is now a widely accepted method of flowing requirements from the general to the specific. It is now widely understood, adopted and employed by governments and industry in the United States and Europe. QFD is a translation of the Japanese ideograms for ‘quality’, ‘function’ and ‘deployment’. Although not a clear translation, its title does sum up the elements and origins of the process quite well. It is aimed at identifying the requirements for a piece of equipment or other system to satisfy ‘customer’ needs, perceptions and goals, and then through a process of analysis identifying the correct and most effective and efficient responses to deploy to satisfy these requirements. It supports the planning of the allocation of resources to a requirement, analyses alternatives to identify the best options, identifies any areas of conflict in the responses to the requirements, and permits comparative evaluation of complete systems, sub-systems and even competitor systems. It is, however, a relatively simple and often judgemental process. QFD is frequently used as an initial tool for the analysis of options, and may be used to structure projects and provide easily assimilated summaries of situation and status as a function of time. QFD is a structured process for articulating requirements (in QFD terms, ‘WHAT’ you wish to do) and then identifying how they will be satisfied (in QFD terms, ‘HOW’ you will do it). The approach allows the quantification of the relationships between the WHATs and the HOWs. QFD was originally created to capture requirements flow from the general to the specific and, as such, is well suited to the STT (strategy to task technique) approach. The first step in the QFD process is to define the requirements, or WHATs. The next is to define the responses to these requirements, or HOW it is proposed to meet them. Usually this is completed by addressing each WHAT in turn, but might also simply be populated by a list of pre-generated options for consideration. The contribution by each HOW to meeting each WHAT is then scored and recorded in a matrix, or ‘QFD house’. This may be done symbolically or numerically, often with a threepoint (1, 3, 9) scale where 9 indicates a high contribution to meeting the requirement and 1 is some contribution. This scale is useful as a driver for completing the matrix and avoids the problem of over-population of the matrix, which might happen if a longer scale were used. In addition, it is possible to use (with care) negative as well as positive numbers in the matrix to indicate where a HOW might have a damaging effect on achieving a particular WHAT.

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Figure 14.1  Example of strategy-to-task analysis 9 3 1

Peacetime Security Security of Overseas Territories Defence Diplomacy Support to Wider Brit Interests Peace Support Regional Conflict outside NATO Regional Conflict Inside NATO Strategic Attack on NATO

0.125 0.125 0.125 0.125 0.125 0.125 0.125 0.125

1 1

3 9 3

3 9 3

1 3 3 1

1.4 0.0846 0.086

3 1 1

3 9 1

1 1 1

1 1

3 3 3 3 1 9

3 1 1 9 9 9

3

0.6 1.6 0.4 0.3 3.1 2.3 0.0385 0.1000 0.0231 0.0154 0.1923 0.1385 0.022 0.046 0.016 0.006 0.356 0.054

3

3

Sum of Correla

OOTW

OCA

Amphib Ops

Air Defence

Power Project

Withdrawal

Link up Ops

Meeting Eng

Advance to Contact

3

1

Raw Technical Importance 1.9 2.3 Normalized Technical Importance 0.1154 0.1385 Proportional Technical Importance 0.065 0.130 Sum of Initial Weights 1.0000

Delay

ADP Vol 1 Ops Types Defence

LEVEL 0: Strategy-toTask Analysis

Initial Weight

Percent Filled 41.7%

Offence

Very Important Contributor: Important Contributor: High Contributor: Low or Not a Contributor:

7 8 4 4 11 41 42 13

0.5 0.4 1.6 16.3 0.0308 0.0231 0.1000 1.0000 0.025 0.009 0.187 1.0000

Decision support in defence logistics

Figure 14.1 shows a simple matrix with a set of requirements or WHATS related to military strategic planning and the HOW related to different operations types from a British military doctrine publication (this example is a simple and historically derived one and all the course documents have now been revised). The example shows the WHATs along the left-hand column, the HOWs across the top row and the scores within the matrix. Simple score-summing gives an indication of the importance of each of the HOWs. If the WHATs are weighted, these weightings may also be used. Finally, the total scores for the HOWs may also be normalized using simple or proportionally modified schemes to give weights summing to 1 or 100. The example in Figure 14.1 shows this approach. The first row at the foot of the matrix (‘Raw…’) is the simple sum. The second row is the weighted score. A further potential element is a cross-contribution ‘roof’ of the QFD house, which permits comparison of the HOWs. Any responses that are incompatible or add to risk may easily be identified, and HOWs that are mutually beneficial may be spotted. Finally, the method permits evaluation of complete solutions or systems. For example, the HOWs might be grouped or combined into system solutions, and the overall effectiveness of these solutions in addressing the requirements may be assessed. Thus solution options may be quickly ‘designed’ by grouping promising HOWs and may be compared with each other and also with competitor systems, if appropriate.

Multi-criteria decision analysis (MCDA) MCDA is a method used for supporting decision making when there are multiple parameters or criteria which are important to the decision. There is actually a range of options for supporting MCDA but, in essence, they are all structuring the multiple-criteria problem into a solvable situation. One very common approach begins by establishing the criteria in a structured way and then determining the priorities in them. These prioritized criteria can then be used for evaluating decision options and for assessing those options. The method starts by gathering those factors which are to be used to evaluate options when making decisions. For example, when deciding between logistic utility vehicles, one might decide that speed, carrying capacity, fuel economy, crew equipment space, and equipment levels are all to be used to make the decision. However, these are probably not all equally important. They may all be comparable at one level, but some might contain lowerlevel sub-criteria. For example, the equipment criterion may be broken into

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air conditioning, cruise control, parking aids and so on. The end result is that the criteria may be arranged in a hierarchy. These criteria are then assessed in terms of their importance by determining relative weightings using a numerical scale. This might be done using relatively complex but mathematically rigorous methods such as pairwise comparison or, more usually, using simpler methods such as swing weights. Swing weights are generated by setting one criterion at a level in the hierarchy at some arbitrary value – usually 100. Then the importance of the other criteria is established relative to that baseline: higher or lower. Once all the criteria on a level are rated, these can be normalized so the sum of the weights is 100 or 1. These weights may be generated by individuals, by panels or by separate voting/assessment by individuals. The latter is useful as it allows variations to be identified. If there are variations between the experts, methods such as Delphi can be used to moderate and attempt to reach consensus. Once the criteria hierarchy is determined, solution options can be assessed against the criteria. So, using the logistic utility vehicle example, an Alpha Motor Corp Model X can be assessed against the lowest-level criteria – in our case speed, carrying capacity, fuel economy, crew equipment space, and then against the sub-levels of equipment options. Scoring methods vary, but some method that results in a consistent linear scale is a good option – so all the scores are converted into a 0–1 or 0–100 score. So, for example, the actual top speed of a Model X might be 120 mph. But this would best be converted into a score of 0–100 by setting a minimum acceptable speed (say 80 mph) and making that a score of 1, and then setting a maximum sensible speed (ie a speed above which there is no greater appeal); this could be 150 mph and would be set at a score of 100. The Model X then scores 120 − 80/150 − 80 × 100 = 57. All the other scores could be similarly ‘mapped’ from the actual values (mph, passenger number, mpg, cubic feet) to scores that lie on a common scale. These scores are then weighted through the criteria hierarchy to generate an overall measure of utility or goodness for each option (ie the Alpha Motor Corp Model X, the Zulu Automotive Model II) which arises from a common set of weighted criteria and a common scoring scale. It is therefore a very powerful method for identifying better options against multiple constraints and goals. There are some criteria that may be handled differently, the most significant being cost. This may be an element of the hierarchy with a weighting alongside speed, economy and so on, or it may be applied after the generation of the overall scores based on these technical criteria. This allows the cost–benefit of value for money to be studied. For example,

Decision support in defence logistics

the Alpha Motor Corp Model X might score a total of 53 against the criteria hierarchy, and it might cost 15k. The Victor Vehicles Supa-Haul might score 79 but cost 30k. An evaluation might then examine whether the extra money (double the cost of the Model X and of course if it is even available) is best spent on an increase in capability of some 50% (79 is 50% higher than the Model X’s score of 53). (NB, all vehicle manufacturers and models above are fictitious).

Mathematical modelling Mathematical modelling methods can be used to evaluate alternative options for delivery of a capability. These methods, which can appear to be complex, are often very time- and cost-effective to implement instead of alternatives such as the use of simulations. Their advantage is that they can be completed relatively quickly at low cost. A disadvantage is that they can be inappropriate for more complex problems. The mathematical methods that are most useful for decision support in the logistic arena are linear programming and the more specific transportation and transshipment problems. In essence these methods are characterized by a situation with a goal of achieving the best allocation of resources to activities in order to meet some objective. They are attempting to provide an optimal solution. They do this generally under conditions of certainty, that is, a known output will be produced for a certain input. The problem generally includes constraints or limitations, such as limited resources and/or competing or opposing activities, and a large number of alternative courses of action, which make the problem complex. The approach works by identifying the measures or outputs required (the goal) first. Then, in conjunction with this the decision variables are identified. These are the inputs that the manager or decision maker can control. The goal or aim needs to be set up as an equation in terms of the decision variables. The next step is to find the constraints, also as equations in terms of the decision variables. If all the equations are linear, this can be solved using linear programming – the linearity of equations and the algorithmic nature of the solution give rise to the name linear programming.

Example – linear programming There are 2 rocket propellant products for Sustainer motors and for Booster motors. Both have the same ingredients, A and B, but in different proportions:

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Sustainer Propellant has 2 parts A, 1 Part B; Booster Propellant has 1 Part A, 2 Parts B. The supply of A and B are limited to the following maxima: ●●

A

400 tonnes/week

●●

B

300 tonnes/week

There is a different profit level on each of the two products. These are: ●●

Sustainer

£4 / tonne

●●

Booster

£3 / tonne

Another constraint or dimension to the problem is that the demand is limited in each product. ●●

Booster never exceeds 350 tonnes/week.

●●

Booster never exceeds Sustainer by more than 100 tonnes / week.

So with all these factors: How many tonnes of Sustainer and Booster should be produced to maximize profit? The first step is to identify those things we can change – these are the decision variables and they are: x1 = Number of tonnes of Sustainer x2 = Number of tonnes of Booster The optimum solution, then, is those values of decision variables that best achieve the objective while staying within the constraints. The objective function is the function that generates the goal or key value we are comparing, in this case the profit. This is: 4x1 + 3x2 and we wish to maximize the value of this. Now we have the constraints. These are taken from the problem setting, but now in terms of the decision variables. They are: 1 Availability of ingredient A limited to 400 tonnes per week: 1/3 x1 + 2/3 x2 < 400 2 Availability of ingredient B limited to 300 tonnes per week: 2/3 x1 + 1/3 x2 < 300 3 Booster demand never exceeds Sustainer by more than 100 tonnes: x2 − x1 < 100

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4 Booster demand never exceeds 350 tonnes: x2 < 350 Also

x 1 , x2 > 0

Now, ANY values of x1 and x2 satisfying all these constraints give a feasible solution and the set of feasible solutions is called the solution space. However, we wish to identify the optimal solution within this space. This can be solved using various means. One is to use a graphical method. If a graph is used to visualize the constraints above, using x1 as the y-axis and x2 as the x-axis, we will get the graph shown in Figure 14.2. If the objective function (the profit) is now overlaid we see Figure 14.3. This indicates that the optimal solution is in the region indicated. Since whole numbers of x1 and x2 are needed, a simple evaluation within this region will home in on the optimum. This graphical approach clearly has its limits. With more than two variables the plots will be too difficult. A simple toolset is available which will do the same job, but automatically. The most available is the Solver tool within Microsoft Excel. This is usually part of any installation, but may need to be enabled within the File-Options-Add-Ins window. The tool

Figure 14.2  Linear programming: example 1

400

x2 < 350 1/3 x1 + 2/3 x2 < 400

2/3 x1, +1/3 x2 < 300 300

X1

200

x2 – x1 < 100

Feasible Solution Space

100

0

100

200

300 X2

400

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Figure 14.3 Linear programming: example 2 with the objective function (profit) overlaid

400 x2 < 350

Feasible Solution Space 2/3 x1 + 1/3 x2 < 300

300

X1

1/3 x1 + 2/3 x2 < 400

Optimum Solution Region 200

Profit = 1200

x2 – x1 < 100

Profit = 1000 100

Profit = 700 Profit = 350

0

100

200

300

400

X2

allows a problem to be set up exactly as in the example above. This will include an objective function, decision variables and constraints (which can be complex). It is a feature of Solver that algorithms other than linear programming can be used.

Transportation problem A certain type of linear programming problem, called a transportation problem, arises frequently in practical applications. Consider the following common type of problem: A certain commodity is available in known quantities at a number of different depots, or sources, and is required in known quantities at a set of different destinations. The cost of shipping between each depot and each destination is known. So, given this, determine how much of the commodity should be shipped from each of the different depots to the various destinations in order to minimize the total cost, while meeting (as far as possible) all the requirements.

This is an obvious example of a transportation problem, and many other problems not obviously associated with transportation can sometimes be formulated as transportation problems.

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Transportation problem In order to demonstrate the essential features of a transportation problem, a very simple example will be considered: ●● ●●

●●

If supply equals demand, the problem is said to be BALANCED. For the transportation solution method to work, the problem MUST be balanced. All problems can be made to balance as follows: – If supply exceeds demand, one or more sources of supply will have surplus.

●●

– To balance the problem, introduce a dummy destination with demand equal to excess. –  The same can be done with shortfalls. Transport costs from a dummy source or to a dummy destination are zero.

There now follows the example: ●●

●●

Three supply depots can deliver crates of ammunition to three forward storage locations each day. Costs and capacities are:

Depot

Max. crates per day

Unit delivery costs to fwd stores

A

B

C

Alpha

30

11

13

15

Bravo

70

12

14

16

Charlie

40

15

15

18

The requirements of the forward stores are, in crates per day: A 40 B 50 C 40 So, a typical problem set against this would be to find the least-cost transportation plan. To do this, follow the following steps:

Step 1  First, examine the problem to determine if it is in balance. The depots (Alpha, Bravo and Charlie) can supply 140 crates per day in total.

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However, the requirements of the stores amount only to 130. So, to balance the problem, introduce a dummy destination with a demand of 10 per day.

Step 2  Generate a first try at allocating supplies to the routes. This will take the form of a matrix which has the sources (Alpha, Bravo and Charlie) as rows and the destinations (A, B, C and the dummy) as columns. The suggested approach to start the problem analysis is the ‘north west corner’ method where you allocate the maximum supply/destination combination in the top left corner and work the rest out. For this starting solution, the costs are determined by simply calculating the total costs for this solution (the sum of the number moved × cost to move). Step 3  The next step is to introduce ‘partial costs’. There will be partial cost for each row and each column, which when added will generate the unit cost (in each cell) (ie the sum of column and row partial costs is the unit cost in the cell). However, these are determined only for the cells with entries. Step 4  Determine the benefit of moving some of our allocations to other cells. To do this, use the partial costs for columns and rows to calculate a benefit for using an empty cell – empty cells will have a benefit based on the sum of the partial costs less the unit cost for the cell. This provides an indication of the benefit of using the cell. Step 5  Reallocate the routes in the solution by using cells with greater benefit. This solution is then evaluated in the same way as before. This is continued until the benefits for the empty cells are negative or zero; you then have the optimum solution.

Transshipment summary The transshipment problem is a complex transportation problem where, as before, goods are sent from source to destination but there are transient movements. So goods are sent from source to other source, from source to destination, from source to warehouse/store, from warehouse to another warehouse and also from warehouse to destination. This is solvable using the transportation methods outlined above.

Network analysis Network methods have been evolved to study connected lines and points. The lines, termed branches, can represent roads, power lines, telephone wires,

Decision support in defence logistics

railway tracks, airline routes, water pipes or generalized channels through which commodities flow. The points, called nodes, can represent communities, road intersections, power stations, telephone exchanges, railway yards, airports and water reservoirs; in general, a node can represent any point where a flow originates, is relayed, or terminates. The natural limitations and capabilities of the network nodes and branches can be described by numbers. These numbers can be fixed or they can vary with time. They can even be random numbers whose values cannot be precisely predicted. A power system might be represented by a network in which the branches are transmission lines and the nodes are generator stations, substations and customers. Thus a node representing a power station might be characterized by numbers representing the maximum power output, the number of generators at the station, the reliability of each generator and the cost of electricity per kilowatt-hour. A typical branch might have three numbers, corresponding to its maximum power handling capacity, its reliability and its cost. Among the many areas in which network methods are proving of value are transportation, ground and satellite communications, the warehousing and distribution of goods, industrial scheduling and energy transmission.

Definitions The following definitions are relevant: Node A meeting point of two or more branches of a network. Arc

A branch or link between two nodes.

A network  Aggregation of nodes and branches (as in the example shown in Figure 14.4).

Figure 14.4 A network: an aggregation of nodes and branches B 17

E

F

16

20 26

11

C

H

8 5

4

16 30

10 A

15 D

11

G

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Specific problems The following paragraphs illustrate specific problems: a The shortest route through a network. Given a network in which each branch has a positive integer associated with it representing the length of the branch, find a route, starting from a specified node and finishing at another, such that the sum of the numerical values of the arcs along the route is a minimum. Alternatively, if each integer represents the time taken to traverse the branch, determine the shortest time between the two specified nodes. Similarly, solutions have been found as to the shortest connecting tree within a network; that is, the shortest path that links every node to every other node. b Max-flow theorem. Each branch of the network has a certain capacity associated with it, which will permit the flow of a commodity up to this restricting value. This leads to the fundamental problem in flownetwork theory: determination of the maximum amount of flow that can be transmitted through the network from a given source node to a given sink (terminal) node. The problem amounts to finding the capacity of a single branch between source and terminal that would be equivalent to the network; it can also be considered as the study of two-terminal flow networks. In networks consisting entirely of series-parallel combinations, this can be done quite simply. For networks having a more general structure, the answer is given by the max-flow min-cut theorem. c Max-flow, min-cut theorem. A close relation exists between the maxflow problem and the shortest-path problem in the case of some planar networks. (A planar network is one that can be mapped onto a plane, or a sphere, in such a fashion that branches touch only at nodes). For a planar net, the above max-flow and shortest-path problems are the ‘duals’ of one another. d Reliability and vulnerability. The max-flow min-cut and related rules enable network analysis to understand and solve many other important problems. One of these is the problem of reliability and vulnerability. The larger and more complex a network is, the less likely it is that all its components will operate perfectly at all times. Accordingly, one of the most important objectives in designing a large network is to guarantee that it will function effectively even after some of its elements fail. The study of the possible failure of network elements and the subsequent overall degradation of network performance is called vulnerability analysis or reliability analysis. When the term ‘reliability’ is used, element

Decision support in defence logistics

failures are the consequence of factors such as natural disturbances and ageing of equipment. ‘Vulnerability’ concerns the network’s resistance to major damage, for example damage to communications networks by enemy action. In the context of vulnerability and reliability studies, the max-flow min-cut theorem has been used for generating algorithms to find the minimum number of nodes and branches that must be removed in order to disconnect the networks. e Capacitated cost networks. In the network models mentioned so far, branches have been characterized by a single parameter: cost, capacity, length etc. Frequently, however, it is desirable to examine more than just one characteristic of a system. For these cases, multiple-parameter network models are required. Among the simplest of these are capacitated cost networks. These constitute generalization of pure cost and pure flow-network models. Each branch can be characterized by a capacity, by a figure of cost per unit, or by both. The cost figure represents cost of using a unit of capacity in the branch. Certain problems of this type are well known, for example the transportation of transshipment problems. In these cases, simple algorithms, derived from linear programming, exist for solving the problems directly (see relevant section). f Truck dispatching problems. These are network problems that concern the allocation of a truck fleet to a set of loads for various destinations. A truck may carry several loads for different destinations, and it can do a tour of them, unloading the appropriate load at each destination, finally returning to the depot. The objective is to minimize the total distance covered by all trucks; network algorithms exist for determining this. One of the main application areas for network analysis is project management. There are two variants applied in this domain, PERT and CPM: ●● ●●

CPM (critical path method) is used for scheduling of construction projects. PERT (project evaluation and review technique) was developed by the US Navy to assist in the management of the programme to produce Polaris submarine-launched missile systems (~1960).

There are three basic phases in PERT/CPM: ●●

planning

●●

scheduling

●●

controlling.

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Figure 14.5  Activity on arrow diagram (the activity network) Start Event

i

A (label) 3 (time duration)

j

End Event

In the planning phase, the project is broken down into component activities and then the order of the activities is defined to take account of the requirement that logically some activities must be completed before others may begin. From this, a network diagram is produced (Figure 14.5). A network diagram has only one initial event (node) and one final event (node). No two activities have the same head and tail event in a diagram. If this is needed, use a dummy activity, which is one with zero time duration. The project network diagram may be used for a variety of analyses, such as determination of the duration overall, and the critical path (the path through the project which drives the overall duration and where any slippage will result in a project slippage). The diagram may also be used in conjunction with effort or cost information for each activity to assess the overall cost and potential ways of mitigating cost by phasing activities, for example.

Example network analysis A project consists of eight activities: A, B, C, … , H which are related as follows: A must precede B and C. B must precede D, E, F and G. C must precede F and G. D must precede H. F must precede H. Figure 14.6 is a graphical representation of this situation. Note that an additional link has been generated as a dummy to allow both B and C to precede F and G as required. Now, the network will be analysed to find the critical path through the network. This critical path is actually the longest path through the network, from start to finish. This length of the critical path gives duration the of the project. There may be more than one critical path.

Decision support in defence logistics

Figure 14.6  Network analysis example 4 C 1

G

F A

Dummy

2

6 5

B

D

H

E

3

Once the critical path through the network is identified, any activity on a critical path is a critical activity, which means that any delay to these means a project delay. Note that all other activities are non-critical, so at least some delay may be acceptable. To identify the critical or longest path there are various techniques; one is just by inspection or by eye. However, for a complex path this is not feasible or reliable. So an algorithmic approach may be used as follows:

Step 1 Earliest event time Identify the earliest event time for each event (node) in the network, denoted by EETi, where i is the node number. This is the earliest time that any of the activities beginning at this node can start. To do this, carry out a forward pass through the network from initial node to final node: First, set EET1 = 0. Any other node will have one or more preceding nodes. Now consider each node in turn and look at each preceding node i. Define the earliest event time at this node j as: EETj = Max (EETi+ Dij) for all activities, where Dij is the duration of activity ij.

Step 2  Latest event time Now calculate the latest event time, LETi, for each node i in the network, this is the latest time by which all of the activities finishing at this node must be completed in order not to delay the completion of the project in the shortest possible time. This is done by completing a backward pass through the network from final node to initial node:

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First, set LETn = EETn, where n is final node in the network. Any other node will have one or more preceding nodes. Consider each node i in turn, look at each succeeding node j, and define the latest event time at this node i as LCi = Min (LETj−Dij), where Dij is the duration of activity ij. After completing these data, the network can be inspected. Any event i is critical if EETi = LETi. This then allows identification of the critical path. The resources that are required and can be employed can be analysed by first using the activity analysis, with each activity having its minimum possible duration (ie unlimited resources), and by drawing up a schedule for the project with all the activities starting at their earliest start time. The human resource usage over time can be plotted for this situation. Now prepare the schedule (by moving the activities left and right). This will change the resource usage plot over time. It may be possible to improve the resource plot, so that it has fewer and lower peaks, by delaying the start of some activities, but only within the constraints of earliest start, latest start and finish data generated above and of course the required sequencing of activities.

Queuing systems Queuing systems and associated methods for their analysis have wide application in logistics. Queues are formed when users request a service but the demand from users exceeds the service capability; a queue of people is formed at a post office when more arrive than can be serviced by the staff at the desks; a queue of cars forms at a junction when they can exit at a rate slower than that at which other cars arrive. In analysing queues there will need to be some goal function or objective determined – if a system is being analysed, it will, perhaps, be to try to minimize waiting duration on average through a day, or minimize staff costs or queue lengths. The other element of importance is the ‘arrival time’ or, more properly, the inter-arrival time of the subjects within the queue. This will likely be according to some distribution and will also likely have some random element. In theory, if the precise arrival times are known and can be predicted, the resources to serve them can be planned to match precisely and therefore no queue will form. In reality, there is uncertainty in the arrival rates and, further, limitations on the resources available to service the requirements.

Decision support in defence logistics

The elements of a queuing system (and therefore of any representation of this in a model of any sort) will be a customer and a server or resource. The customer arrives at a facility and the server or resource then interacts with the customer to achieve the required aims (serve at a bank desk, provide stamps at a post office desk…). The customers arrive at times driven by a distribution. The duration of the interactions between the customer and the server will be driven by a service time distribution. There are other parameters affecting this situation. The first is that customers may be serviced in numbers larger than one, for example at a restaurant, groups may be served rather than one by one. The other dimension is that of service provision. This may well be on a first come, first served basis, but other strategies are possible: a priority queue, for example, for higher-priority customers (eg in a first aid station, those with more serious injuries may be triaged to the front of a queue). Queuing systems may be solved mathematically, but the process is quite specialized and requires expertise. More usually, simulations are used to represent the queuing system.

Reliability modelling and analysis The commonly accepted technical definition of reliability in use within Cranfield University is: ‘The reliability of a product is its ability to perform its function to an acceptable standard for a specified continuous period of time, in a particular environment, measured as a probability.’ Consideration must be given to each part of this definition. For practical applications, this definition needs to be made much more specific. For example, what is ‘adequate performance’? A simple system might give rise to just two states – operational and failed, in which case it is obvious when the system is performing adequately. A more complex system, however, might have a wide range of performance levels. It is then necessary to specify threshold levels, below which performance is considered unacceptable and the system is deemed to have failed. Another complication is the fact that systems can usually fail in several different ways – these are called the failure modes of the system. The time dimension is important. This might not be calendar time but number of operational hours or number of operating cycles or number of times fired, and so on. There is often a mission time, which is relevant to the equipment or the situation, which helps to define an acceptable level of reliability. The failure rate, also known as the hazard rate, is a common way of measuring reliability. It is simply the proportion of good (unfailed) equipments that fail per hour, per day, per week, or whatever time period is

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appropriate. In the case of a single equipment, it is the conditional probability of failure per unit time given that the equipment has survived to this point. This is not to be confused with the failure time probability density function, although the two measures are related, as will be shown below. The Greek letter λ is often used for rates. In these notes, λ will mean the failure rate. The failure rate usually depends on the conditions of use. It is also often dependent on the ‘age’ of the equipment, where ‘age’ here refers to the extent the equipment has been used rather than calendar or clock time, since these are often not synonymous. Finally, the failure rate as described here is also often referred to as either the instantaneous failure rate or the hazard function. This mathematical construct can then be used to measure and predict lifetime and to derive sensible maintenance and replacement regimes.

Example 100 generators were run until failure. The number or frequency of failures, f, in each month are given in Table 14.1.

Table 14.1 The number or frequency of failures in each month Month 1

1

2

0

3

2

4

1

5

4

6

10

7

18

8

22

9

14

10

8

11

10

12

5

13

3

14

1

15

0

16

1

Decision support in defence logistics

Table 14.2 The cumulative number of failures, the number of survivors and the hazard rate at the end of month Month

Failures, f

Cumulative failures

Hazard rate Survivors

1

1

1

99

0.01

2

0

1

99

0

3

2

3

97

0.02

4

1

4

96

0.01

5

4

8

92

0.04

6

10

18

82

0.11

7

18

36

64

0.22

8

22

58

42

0.34

9

14

72

28

0.33

10

8

80

20

0.29

11

10

90

10

0.5

12

5

95

5

0.5

13

3

98

2

0.6

14

1

99

1

0.5

15

0

99

1

0

16

1

100

0

1

From the frequency data, we can calculate the cumulative number of ­failures, the number of survivors and the hazard rate at the end of month (Table 14.2). Note the definition of λ:

λi =

fi Ri −1

It is the number of items that fail in month i divided by the number of items that were working at the start of month i. In other words, it is the proportion of items that were working at the start of month i that fail during that month. So, for example, in month 11,

λ11 =

10 = 0. 5 20

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The failure rate, λ , also known as the hazard rate, is not to be confused with the failure time probability density function, f(t). It can take various timedependent functional forms. The simplest form is a constant, independent of time. Any equipment with this property is said not to age, since getting older does not make it any more or less likely to fail in the next unit interval of time. Such equipments do not generally fail as a result of wear and tear, but due to some sudden random shock to the system.

Bathtub curve The bathtub curve is another model for the failure or hazard rate. It shows the life of a system as consisting of three stages – debugging, useful life, and wear-out (Figure 14.7). Only in the middle stage is the failure rate constant. This is where the exponential distribution is appropriate. More complicated statistical distributions, known as Weibull distributions, can be used to model stages 1 and 3, where the failure rate is falling and rising, respectively. If the failure rate or hazard function is not constant, the next simplest model is to make it some power of time (or the reliability proxy for time). A family of probability distributions with this property is the Weibull family. These require two parameters, k and λ, to specify them. k is known as the shape parameter, while λ is the scale parameter, or characteristic life in reliability applications. The equation for a Weibull distribution is as follows:

f(x; λ,k) =

k  x λ  λ 

k −1

  x k  exp  −     λ   

Other mathematical parameters used within reliability modelling include mean time between failure (MTBF) and mean time to repair (MTTR). Figure 14.7  The bathtub curve λ(t)

Stage 1

Stage 3

(debugging)

Stage 2

(wear-out)

(useful life)

0

t

Decision support in defence logistics

Reliability block diagrams (RBDs) Reliability block diagrams are a method of analysing the reliability of a system comprising a number of components. If the system has one component of reliability R, that is a simple case. However, if it has three components of reliability R1, R2 and R3, what is the resulting system reliability? One method to analyse this is with an RBD. If all three components need to function together for the system to work, the representation is quite simple: 1, 2 and 3 must all be working, so the probability of them working is the combination of all three reliabilities. Overall system reliability = R1 × R2 × R3. An RBD would represent this system as a series of three components (Figure 14.8). This is a series system. However, for more complex systems this may not be the case. For example, what if components 1 and 2 were able to function one without the other – perhaps parallel computer control systems? This would be represented by Figure 14.9. The calculation of reliability of the combination must now take into account that 1 or 2 (but not both) can be in a failed state and the system will still work. The formula is therefore: Reliability = (1 − (1 − R1) × (1 − R2)) × R3 This is a mixed parallel and series combination. Real systems are invariably mixed complex systems.

Figure 14.8  A reliability block diagram – a series system 1

2

3

Figure 14.9 A more complex reliability block diagram – components 1 and 2 in parallel 1 3 2

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Maintainability Maintainability is the ease with which an item can be retained in, or restored to, a state in which it can perform a required function. This covers both preventive maintenance (retaining acceptable performance) and corrective maintenance or repair (restoring an item to a functioning state). Factors affecting maintainability include: ●●

ease of diagnosis of fault;

●●

ease of access to failed item;

●●

time to effect repair;

●●

modularity of system design;

●●

required skills mix of maintainers.

Availability is defined as the proportion of time that the equipment is available. If there are a large number of equipments, it is also the mean proportion of equipments available at any given time. If MTBF is the mean time between failures and MTTR is the mean time to repair over a large number of repair cycles, then a long-run estimate of availability is: A vailability =

M TB F M TB F + MT T R

Simulation Simulation modelling enables us to study a system by observing the results of experiments performed by executing a model that resembles the real system in all important respects. The obvious question this raises is – why not study the real system at first hand? If this is possible, it may well be the best thing to do. However, there are many cases where it is not desirable, or perhaps even possible, to study the real system directly. Mitrani has given a succinct description of the motivation for using simulation models, namely that they are used ‘because it is too difficult, too expensive or too dangerous to study the real system’ (1982: 3). A particular case where it is obviously too difficult to study the real system is where a proposed real system does not yet exist. In this case, simulation models might help to determine how the proposed system will work, and indeed whether it can be made to work satisfactorily at all. If it can’t, then clearly it is better not to waste money and effort in trying to create it. The same reasoning applies in the case of making

Decision support in defence logistics

changes to a real system currently operating – it is probably a better idea to make radical changes to operating policies in a simulation model first, and see what the likely effects of the changes are, in preference to interfering with the day-to-day running of the real system in order to conduct experiments. A good deal of breath can be wasted in trying to nail down precise definitions of the terms model and simulation. Banks et al (2014) define a simulation as ‘the imitation of the operation of a real-world process or system over time’ (p 1)’. This is not universally accepted, and some practitioners argue for the existence of static simulations, classifying those executed over time as dynamic. However, most practical simulation projects involve the consideration of both time and chance, two aspects of the world that the human brain seems poorly evolved to reason about. So what is a model? Mitrani provides useful practical insight here when he states that ‘To model a system is to replace it by something which is (a) simpler and/or easier to study, and (b) equivalent to the original in all important respects’ (1982: 1). Again, this raises an obvious question: which respects are the important ones? Therein lies the skill of the simulation modeller, whose job is largely to answer this question in terms of the specific system under study. The essential logic of the simulation modelling process is shown in Figure 14.10. The model (on the right) includes elements that correspond to elements that exist in the system under study in the real world (on the left). In principle, there should be no elements in the model that do not correspond to something in the real world. The converse is not necessarily true, because the model is inevitably a simplification of the real-world system; aspects judged not to be important may be left out or idealized. In general, the bolder the simplification, the better the model. Many simulation

Figure 14.10  The logic of the simulation modelling process

Correspondence

Simplification

Inference

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modelling projects have failed through excessive complexity, almost none through excessive simplification. Having created a suitable simplification in the form of a model, we then manipulate it in various ways to find out how it behaves under different circumstances. While manual simulation modelling has a long and distinguished history, and is not yet extinct, when one speaks of simulation models these days it almost invariably signifies a computer simulation. Simulation models generally address questions of a ‘what if?’ nature – what if the system had to deal with twice the current demand, what if we replaced two old, slow and unreliable machines with one newer, faster and more reliable one, what if we added more vehicles to the delivery fleet? Having observed the behaviour of the simulated system in a suitable number of situations, we then draw inferences about the consequences of the ‘what if?’ were it to be tried in the real world. Since most interesting simulations are stochastic, that is, contain (quasi-)random elements, our observations will be of a statistical nature, based on a sufficiently large sample of simulation results. The benefits of such an approach are numerous. Much of human learning is by trial and error, and experience is the wisdom we acquire the instant after we needed it. When we use a simulation to gain synthetic experience, we make our mistakes for play and for cheap in a safe environment, not for real and at high cost in a dangerous one. Computing power is cheap, so many replications of each experimental treatment (set of conditions) can be made to achieve the statistical confidence required. A simulation model might run hundreds of years of simulated operations to explore different possibilities, which would obviously be impractical in real life. As these operations are occurring in a synthetic world entirely under the control of the simulationist who created it, there need be no doubt as to the course of events or the exact values of any measures, as could occur in real life. The fact that a simulation contains an explicit representation of behaviour over time – it ‘makes the data dance’ – means that it can be used to explore the effects of transient behaviour in ways not possible by the use of static methods of analysis. As Peter Senge (2006) has said, business value usually lies in a better understanding of dynamic complexity than of detail complexity. These advantages of simulation are generally acknowledged, but others are often seen to arise serendipitously. The effort of collecting information on the way the real system works, and in gathering data to drive it, often produces insights into the real system’s operation before the simulation model has been constructed. Experienced simulationists (Robinson (2004), Madsen (2002)) have remarked that the process of building a simulation model tends to produce deeper insights than arise from its outputs when run. If it includes animated

Decision support in defence logistics

graphics (as most simulation models now do), a computer simulation can act as a very effective medium of communication between different parts of an organization; everybody probably has their own mental model of how the real system works, but a simulation takes the model out of people’s heads and puts it somewhere everyone can see it and interact with it. Computer simulation models cover an enormous variety of different purposes, styles and means of implementation. For the purpose of managing logistic systems, the kind of computer simulation we want is a decisionsupport simulation, as distinct from a training simulation or a physics-based engineering simulation. Logistic systems normally feature elements of random variation, so the (stochastic) simulation will be used to conduct reproducible statistical experiments. In order to produce random-seeming effects during model execution while maintaining reproducibility in the experiments, simulation modellers employ pseudo-random number generators (PRNGs). Given the same seed value, a PRNG will produce the same random-looking series of numbers every time. Whole books have been written on pseudo-random number generation, but in the current state of the art some version of the Mersenne Twister is best. In former times PRNGs and random probability distribution functions (exponential, normal, lognormal, triangular, uniform and so on) were a feature of specialist simulation programming tools, but now they are widely found in general-purpose programming environments. Logistic problems are usually appealingly concrete in form, as they largely concern getting physical things from one place to another in an orderly fashion. This is a good fit with the object-oriented approach to software development, invented by simulation modellers in Norway during the 1960s, which has now spread to become the dominant paradigm of general computing. Much simulation modelling these days is conducted by means of visual interactive simulation (VIS) tools, which permit the simulation program to be constructed from visual elements, and its execution to be observed by means of animated graphics. Currently available commercial VIS tools suitable for modelling logistic systems include those listed in Table 14.3. Most are American; Witness is British and Simul8 British in origin but translated to the United States; AnyLogic is Russian. Tools of this kind are often advertised as enabling users to construct working simulation models ‘with no programming’. This is not really true; rather, the simulationist performs high-level visual programming by connecting and parameterizing the elements of the model as represented visually. Animated graphical output is a capability of immense value, both for verifying that the simulation is executing as intended, and for presentation purposes to decision makers. Indeed, the persuasive power of animated

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Table 14.3 Currently available commercial visual interactive simulation tools suitable for modelling logistics systems Tool

Supplier

Web page

AnyLogic

The AnyLogic Company

http://www.anylogic.com/

Arena

Rockwell Automation

https://www.arenasimulation. com/

Enterprise Dynamics

InControl Simulation Solutions

http://www.incontrolsim.com/ product/enterprise-dynamics/

ExtendSim

Imagine That! Inc

http://www.extendsim.com/

FlexSim

FlexSim Software Products Inc

https://www.flexsim.com/

Simio

Simio LLC

https://www.simio.com/index.php

Simul8

Simul8 Corporation

https://www.simul8.com/

Supply Chain Guru

LLamasoft

http://www.llamasoft. com/products/design/ supply-chain-guru/

Witness

Lanner

https://www.lanner.com/ technology/witness-simulationsoftware.html

graphics can be so great that it imposes a duty on the conscientious simulationist to use this power only for good. A sound principle is that nothing should appear in the animation that does not represent the functioning of the underlying simulation. This precludes the use of ‘special effects’, added as additional decoration on top of the simulation-derived graphics. These may be acceptable in training simulations, but not for decision support. There are four essential skills a team needs for a successful simulation project: 1 project management (as for any project); 2 knowledge of the problem domain; 3 programming ability; 4 modelling ability. When using a VIS tool, expertise with the chosen tool might be substituted for programming ability. The point often comes where a certain amount of customization is necessary, and most such tools are extensible in the programming language they are implemented in (Visual Basic for Simul8, Java for AnyLogic, for example), so ability to program remains valuable.

Decision support in defence logistics

If computer programmers of reasonable competence are available, modern programming languages and graphics packages mean that it is still a reasonable choice to develop a simulation model without the assistance of a VIS tool, although time should be allowed to develop animated graphics. A common mistake is to assume that programming ability is all that is needed to develop a simulation program; that is not sufficient, and Russell (1983) was right to identify modelling ability as a distinct skill. Related to programming expertise is the ability to express aspects of a system’s structure or behaviour using executable diagramming methods. There are a variety of these. Activity-cycle diagrams have a long pedigree in the UK, event charts are more popular in the United States. The Unified Modeling Language (UML) offers a number of diagram types useful for capturing simulation behaviour, notably statecharts and activity diagrams. As David Harel (1988) and others have shown in papers on topovisual formalisms, there is no reason that a diagrammatic representation of a system should not be every bit as precise and formal as a concept expressed in any other way. Even if VIS is not used, diagramming methods such as these should not be neglected. A great deal of useful simulation design work can be done with pen and paper, and executing the finished diagram by the apparently childish method of pushing tokens (perhaps loose coins) around it should not be despised. Simplification is the essence of simulation modelling, and a simulationist’s skill lies largely in choosing appropriate abstractions to represent the system under study. A good simulationist must also be a good systems thinker, able to pick things up quickly, and not be embarrassed by making mistakes. This last is necessary because successful simulations are only built through a process of trial and error. Moreover, there is an understandable tendency to concentrate on those parts of the system that the modeller understands best, and for which the best data are available. This tendency should be resisted; the benefits of producing a crude model of something not previously modelled are probably much greater than those of adding a little refinement to a model of something already well understood. Good simulation modellers should always be exploring the frontiers of their own ignorance. The process of modelling does not, as some naively seem to believe, consist simply of observing phenomena in the real system and then transposing them into a representation in the model. Something is going to have to be left out, and it is the modeller’s job to decide what. But how can the simulationist know that something important has not been left out? Unfortunately, there is no certain way of telling. However, a good guide is John Sterman’s dictum that ‘the purpose of the model acts as the logical

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knife’ (p 3) when deciding what details to cut out. This highlights the importance of being clear what the purpose of the model is. A common beginner’s error is to try to include everything, either through the erroneous belief that this makes a ‘better model’, or lack of clarity about the model’s purpose making it impossible to decide what is dispensable. This brings us to the question of model validation, something not always treated separately from verification. Canonically, verification answers the question ‘are we building the model right?’, and validation asks ‘are we building the right model?’ In software development terms, it would be sufficient for a program to be considered of high quality if it complied with its specification without errors. However, a simulation program can match its specification faultlessly and still be quite useless, if the modeller has specified an inappropriate or misleading conceptual model. Ensuring the validity of a simulation (and the data that feeds it) requires a continuous effort of consultation between simulation modellers, decision makers and domain experts (membership of which groups may overlap). Modelling complications that render the operation or results of the simulation mysterious should be resisted with as much effort as it takes. The aim of decision-support modelling is not to usurp the decision maker’s authority through the provision of oracular answers; rather, it is to assist deeper and better-informed thinking. The decision maker is, therefore, entitled to full transparency as to the simplifications or even shortcomings of any model they use. In this connection, simulationists often cite the statistician George Box’s aphorism that ‘all models are wrong but some are useful’ (1979). Another slogan, from simulation pioneer Phil Kiviat (1991), is the abbreviation SINSFIT: Simulation Is No Substitute For Intelligent Thinking.

Force-level logistic representation – combat models, wargames Wargames and combat models (also referred to here as combat simulations) are key techniques and tools used for the representation of military engagements or combat situations. Their applications include military and operational analysis, and training, and they are used widely in government, military and also in industry facilities. There is a continuous spectrum of models with varying attributes that are regarded as wargames or combat simulations; there is not a neat distinction between the two. Conventional definitions have it that simulations are types of models and that, in turn, games are types of simulation. Military wargames and combat simulations are increasingly difficult to distinguish and differentiate.

Decision support in defence logistics

Scope Wargames and combat models are used across a wide scope of applications and levels. Figure 14.11 indicates the variety of levels of aggregation, levels of operation/engagement and general application areas to which military simulations are applied. Wargames and combat simulations are usually employed from the Engagement level, through the Mission/Battle level to the highest level (Theatre/Campaign), as indicated by the lighter shading. The diagram also gives examples (on the right) illustrating the level of the forces typically represented at these levels and also gives some indication of the applications. Also shown (to the left) is the trend and requirement for higher resolution at the lower levels of the hierarchy to lower levels of resolution and increasing aggregation at the higher levels – this will be discussed later.

Applications Wargames and combat simulations are applied within the areas of 1 training/education; 2 research, development and analysis; 3 planning. For analysis including, for example, logistic analysis, simulations are often used to permit the generation of more robust statistics on possible outcomes of battles with varying input conditions. For example, when one weapon Figure 14.11  Hierarchy of combat models Increasing Aggregation Training

Effectiveness OA Tactics Planning

Theatre/ Campaign

Joint/Combined Force

Mission/Battle Test & Evaluation

(Many-on-Many) Engagement (One-on-One)

R&D Production Design Cost High Resolution

(Weapons Assessment)

Operation Air Sortie Single Aircraft Fire control

Engineering Radar Performance

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option is to be compared with another, this requires the generation of statistically sound outputs to allow meaningful comparisons to be made. The simulation is often required to repeat the same battle many times and to gather statistics on the distribution of possible outcomes. Free-running simulations are more efficient for this purpose, rather than wargames, and examples here are SIMBAT, ATLAS and Caen in the UK. However, wargames or other more interactive simulations are often used in analysis applications in conjunction with these free-running simulations. The wargames provide the ability for expert players (military commanders at the appropriate level) to develop realistic situations, tactics, techniques and procedures (TTPs), and these may then be loaded into the free-running simulations for many repeats of the battle. This approach is particularly useful when employed in the analysis of novel systems or in new/unconventional situations. Figure 14.12 illustrates this common approach. Typical output measures generated from these force-level analyses are probability of a successful outcome, overall effectiveness of a force in terms of casualties caused to each side or time to achieve a particular level of success. However, they are also very often able to track usage of ammunition and other materials. It is worth pointing out that some of the most significant issues for wargames and simulations is in use for training in comparison with those in use for analysis. For training, the primary objective is to involve the participants and for them to learn. For analysis, the aim is to explore the system under assessment; the participants are only there as an enabling component to drive the tools. The principal outputs of the training exercise are knowledge and experience for the players, whereas the primary outputs in analysis are data, and understanding of the issues by Figure 14.12 Wargaming/combat modelling in OA studies: a typical study hierarchy TTPs Novel Uses Novel Systems

Wargame

Eg JANUS, CAEN(wargame) Indicative Effectiveness Scenarios/Vignettes

Automated Combat Simulation

Eg Simbat, CAEN(sim)

Statistical Validity in Outcomes Effectiveness Sensitivity Analysis

Decision support in defence logistics

the analysts. Another difference lies in the requirements for the processing or run speed of the tools; in training this is critical to allowing the required player interactions, whereas in analysis they are not explicitly stored. Run speed is very often less important.

Elements of wargames and combat simulations This section deals with the elements of combat models and wargames by illustrating issues such as processing methods, resolution and structures. The first issue concerns the elements or components within the models. Wargames and combat simulations require, to some degree, methods for representing the essential combat processes such as manoeuvre/movement, acquisition, engagement, indirect fire, and so on. However, in addition, the environment and its effects must be included (such as terrain, atmospheric conditions). Many applications require representation of combat service support (logistics, reliability, repair etc). Similarly, there will be a requirement for representation of Command, Control and Communications (C3) elements, in order to control the forces involved overall. This may be effected either directly by simulating these with software or by interaction by players/controllers. The modelling of the behaviour of individual elements within the simulation is required, including logic-driven or artificial-intelligence-driven elements that may be used to drive the actions of entities. Finally, there are the processes for executing and controlling the flow of the simulation itself, such as handling of time, storage of results, and so on. Driving these modelling processes will be data. Included here must be data defining and allowing representation of: ●●

characteristics and performance data for platforms, equipment, weapons, sensors etc;

●●

terrain and environmental data;

●●

orbat and command structure data;

●●

decision automation data (eg behaviours, reactions, standard operating procedures (SOPs), TTPs, drills etc).

These must of course support the modelling processes described above. The actual implementation of these two interconnected aspects – the modelling processes and the data to support them – will vary according to purpose, design and requirements. For example, the entities represented in a model may be at the level of individual combatants, such as infantrymen,

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or it may be at the platform level, such as tanks or infantry fighting vehicles (IFVs) (without separately representing crew or operators). Or it may be that the entities are aggregated units, for example platoons or companies (without separately representing their components explicitly). The resolution of modelling processes themselves will also vary. For example, a combat or engagement involving two tank troops may be resolved by assessing each individual shot from each weapon against each target. Alternatively, it may be resolved simply by evaluating the overall outcome of a complete engagement between two tank troops using data tables (which might calculate the number of casualties and outcomes when this type of encounter occurs). Finally, simulations and wargames require an executive infrastructure which is required to control the simulation as a whole, control sequencing of processes and interaction of processes, for example time processing, and to ensure data input/output is controlled (for example to and from players and data files). For these simulation control-level processes there are similarly alternatives. For example, time processing may be controlled by simply stepping through at some fixed interval, say one second, and assessing the state of the simulation at each of these points (ie locations of entities, detections, firing events and effects etc). This is known as the time-stepping method for time processing. In another time-processing method, known as discrete-event processing, the events occurring in the simulation are calculated, predicted and put into a list (which is continually updated). An executive routine then simply processes the events in this list in order. Thus time moves from event to event but in variable increments. Although there is an implication that some form of computer-based executive software and data files are required, the features are also required in manual models such as wargames in the form of physical controls, measures, rules and record sheets/record keeping. To use an example relevant to wargames, one type is referred to as an open wargame, where players are able to see all of their own forces and all enemy forces on a display. For some purposes, information about the whole of the enemy should be kept from players (providing them information only on enemy units with which they have contact). This form is a closed wargame in which limited information is supplied to players according to physical exercise or wargame controllers or by software.

Logistic elements and issues within combat simulations Combat models and wargames utilize a representation of aspects of the systems involved in a combat situation, such as their weapon systems and

Decision support in defence logistics

sensors and other aspects such as mobility. The method of representation is often as probability-based parameters. For a weapon, for example, this could be a probability of kill as a function of range. The weapon may well have a set of these data, one for each target type. The models are then able to represent systems with different types of equipment, for example a highly lethal gun and a less lethal gun (with different probability of kill vs range curves), or a long-range missile and a shorter-range missile. The model will therefore be run for each case and then the results compared; for example, one assessment might be to compare force with a tank with a highly lethal gun to a force where the tank is equipped with a less lethal gun. The simulation would determine the outcomes of a defined mission and would record appropriate results of engagement and the whole mission or battle. The simulation would also be capable of keeping track of ammunition usage, and other parameters such as fuel use and casualties caused. The data are inherent to the determination of a battle outcome, so somewhere in the simulation these parameters will be used. However, it may be that they are not explicitly stored. Very often these simulation systems do not have any representation of reliability or availability. The gun always works, as does the missile. Clearly it is entirely feasible to include reliability parameters into the simulation. This is often done as a calculation of whether the systems are still functioning after some time step or perhaps at a point of their being used. The model could draw a random number and compare it to a probability of that system functioning after that duration in operation using data such as MTBF. This will then result in a system breakdown or failure. The next step would be to simulate repair and recovery. There are some simulations that do include this. There are others, however, where this is not included, principally because the timescales of the engagements being simulated are too short to allow recovery and repair.

Summary In this chapter we have introduced the concept of decision analysis in support of defence logistics. We have included brief descriptions of several techniques which are in common use.

References Box, G E P (1979) Robustness in the strategy of scientific model building, in Robustness in Statistics, ed R L Launer and G N Wilkinson, pp. 201–36,  Academic Press, New York

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Defence logistics 15 and crisis response Peter D Antill

Introduction This chapter looks at the military involvement in humanitarian and crisis response operations, along with how they can provide logistic support and, in doing so, interact with the other actors involved in such operations and the benefits and challenges associated with their involvement. In addition, it will lay out the background to the current defence and security environment, the role of the United Nations and other relief agencies, and the challenges of working together, examine generic examples of both the humanitarian aid and military supply chains to highlight the similarities between the two, and finally summarize the problems that must be overcome for such ­provision of humanitarian aid to be improved.

Background The post-Cold War era has seen a massive increase in peace support, humanitarian aid and crisis response operations, including those organized by agencies other than the UN, which many see as still being the most important body for dealing with complex humanitarian aid and disaster relief emergencies (Ramsbottom and Woodhouse, 1996; Branczik, 2004). Many have seen the participation of the military from different countries and different continents. Such operations place additional pressures on commanders (such as highly restricted rules of engagement), are often multinational in character, involve a wide range of civilian agencies, and in the early years of the post-Cold War era necessitated a rethinking of how to provide assistance in complex humanitarian emergencies (Croft and Treacher, 1995). The end

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of the Cold War led to the end of the ideological struggle between Russia and the United States and a withdrawal of political support and much of the economic and military aid that went to client states, organizations or groups. It has also seen a proliferation of violence at the sub-state level, which has sometimes had consequences for wider regional stability (for example, the disintegration of both Syria and Iraq, leading to the rise of ISIL or Daesh). These conflicts have increasingly become longer and more violent – in the early post-Cold War era alone (1991–2004) they had caused over five million casualties, 95 per cent of whom were civilians (Branczik, 2004). Not only do these conflicts produce refugees who are fleeing for their lives, but climate change and variations in national wealth between countries (internationally, regionally or locally) can also cause the movement of people in large numbers who are looking for a better life and therefore have the potential to cause conflict (Snow, 1993; Brzoska and Fröhlich, 2016). Emergencies that now develop usually have a large media presence (also known as the ‘CNN’ factor), which increases the pressure on both national and international decision makers to respond with a large international aid effort and, increasingly, a significant military presence as part of the initial supply chain and, in some cases, to keep the peace. A situation has therefore developed where it is no longer a question as to whether the military should become involved in non-military activities (such as peace support, humanitarian aid and crisis response operations) but how they can undertake them better, as such an effort requires massive material support and the employment of large numbers of logistic assets (James, 1997; Poole, 2013).

Humanitarian aid and crisis response supply chains There are four main sets of actors that are involved in these sorts of operations (Branczik, 2004): ●●

International (IOs), regional (ROs) and inter-governmental organizations (IGOs): Probably the most important actor in the provision of aid and assistance is the UN with its various agencies, such as the OCHA (Office for the Coordination of Humanitarian Affairs), UNHCR (UN High Commissioner for Refugees), UNDP (UN Development Programme), UNICEF (UN Children’s Fund) and the WFP (World Food Programme), which is funded by the member countries. Other actors in this category

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include the World Bank, European Union, the Commonwealth and the Organization of African Unity (OAU). ●●

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Unilateral assistance: Many countries also provide aid unilaterally, directed through their internal foreign aid and development agencies. Non-governmental organizations (NGOs): These play an increasing role in providing humanitarian and disaster relief, whether directly or in partnership with other organizations such as the UN. Their independence sometimes gives them advantages over the UN or IGOs, such as fewer political restrictions and access to restricted areas. The military: Military forces, whether provided unilaterally or multilaterally, are deployed primarily to ensure a secure operating environment in which the relief agencies can work. Occasionally, when the relief agencies are particularly stretched or the operating environment is still hazardous, they will be asked to provide aid directly and can be used to coordinate the overall relief effort.

The provision of aid requires the setting up and operation of a supply chain, which itself can be seen as a systems exercise, involving the integration and coordination of a number of widely different agencies and organizations. Anyone who has been involved with multinational defence acquisition programmes knows only too well the complexities and challenges this can involve. While there are many different types of logistic programmes and activities that have to be planned for and implemented around a specific event or catastrophe, as each event is to a degree unique, some forward planning can be carried out using an accepted template, a generic example being shown in Figure 15.1. Most agencies and organizations that are involved with humanitarian aid and crisis response scenarios have their own specific internal structures that deal with new emergencies, after which specific teams are assembled to take over the medium-to-long-term aid and reconstruction work. Permanent staff within each organization strategically manage ongoing aid programmes, as well as help to raise funds, assess potential obstacles, maintain stock levels and manage their supply chains to meet their global programme requirements. Many of the larger organizations keep stock at a number of locations around the world, ensuring that aid is available to those in the area of the event as soon as possible, but requiring that donors undertake a certain level of cooperation, as in many cases their logistic infrastructure is not developed to the same extent as organizations in the private sector (Moore and Antill, 2000). The way humanitarian aid and disaster relief organizations

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Figure 15.1  A generic disaster management cycle

PREVENTION

MITIGATION

DEVELOPMENT

PREPAREDNESS

DISASTER MANAGEMENT CYCLE

DISASTER IMPACT

RECOVERY

RESPONSE

operate, as well as how the sector performs in general, has attracted some criticism, including from Branczik (2004): ●●

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There is little accountability in the humanitarian aid, disaster relief and crisis response industry. There are few barriers to forming an NGO, with no working practice or performance standards, and while codes of conduct, such as the Red Cross Code of Conduct (ICRC, 1994), have been formulated, compliance with them is voluntary. The high staff turnover within the industry, coupled with the overall operational environment (different disaster, different place, different time, different scale etc), means there is little opportunity to build an institutional memory to maximize efficiency and learn lessons for the future. Given that there is only a certain amount of money available for these sorts of operations, there is intense competition over ‘humanitarian market share’, with a need to maintain a (relatively) high profile in order

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to secure funding. This can distort NGOs’ decision making, a situation aggravated by uneven media coverage of events. ●●

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There is a dilemma over just how neutral aid can be. The 1994 Code of Conduct of the International Federation of the Red Cross is explicit in saying that agencies must work in a neutral manner. However, as Mary Anderson has said (see the quote below), while the provision of aid might be neutral, the effects of aid rarely are. The influx of large numbers of aid workers, military personnel and the aid itself can upset the local economy. A lot of the money involved in aid programmes, particularly for organizations such as the UN and its agencies, goes on staff salaries and solving technical issues, rather than the intended recipients. This can create tensions within relief programmes, but in the final analysis, the aid has to be moved to where it’s needed and then distributed, while agency staff often risk their lives in difficult and challenging circumstances.

To maximize effectiveness, one particular organization should take the lead in the overall management of the supply chain, taking responsibility for what happens (Moore and Antill, 2000). Such a move would be in line with the commercial practice in, and academic theory of, supply chain management. However, where there is a lack of ownership of the supply chain, it is often due to the complexities and difficulties inherent in such operations, which impair the smooth operation of the cycle. All the different NGOs involved will have their own management styles, along with their individual administrative structures and logistic systems. The complexities involved in the interaction of NGOs with different internal set-ups and procedures can sometimes act as an obstacle to the implementation of effective supply chain strategies, and in the rush to provide aid in an emergency situation, the contribution that supply chain management can make may sometimes be overlooked. In the main, humanitarian and crisis response operations are designed to deliver a one-way flow of goods, equipment and material into the theatre of operations, as the basis of these operations is usually donation, with said supplies, equipment and materials remaining within the country or countries affected. This one-way supply chain (see Figure 15.2) is complicated not only by the external relationships that exist between the different NGOs involved, but by the internal relations within each NGO. In the past, the acquisition function has been undervalued by many, and even where that is not the case, those involved in this function have been dissatisfied with the lack of consultation or communication during the original assessment

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Figure 15.2  A one-way crisis response supply chain Agency or NGO HQ

Donors

Equipment Manufacturers

UK

Suppliers

Logistics, Transport & Purchasing Departments Warehouse International Transportation (Land / Sea / Air)

Local Traders

Warehouse

Warehouse

Area of crisis

Warehouse

Warehouse

Warehouse

Main Theatre Warehouse

REGIONAL LEVEL

THEATRE LEVEL

Point of Entry into Theatre

Warehouse

LOCAL LEVEL

phase of the crisis. The reason for this varies, but could include a lack of understanding in the rest of the organization as to the value the acquisition function provides, or that, given logistics is the final link in the internal supply chain, it therefore receives the blame even if the response to a crisis is delayed by another function within the organization (Moore and Antill, 2011). Such problems are exacerbated in the area of NGO and IGO (usually the UN) coordination, many of which have been well documented, with issues around coordination versus control, competition, publicity, conflicts of interest (where NGOs act as the main implementers of the relief as well as the main advocates for such relief) and funding predominant (Moore and Antill, 2000; De Mello, 2001). There have, however, been instances of successful coordination throughout the logistic system and the supply chain, for example in Ethiopia where NGOs and UN agencies used WFP aircraft to move aid around. Some additional problems with the provision of humanitarian aid include (Moore and Antill, 2000; Branczik, 2004): ●●

●●

The aims and objectives of each organization or agency are not always conducive to an integrated and coordinated effort. Such an effort may be hindered by the number of agencies involved, the lack of accurate intelligence and the evolving nature of the crisis.

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●●

●●

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The situation on the ground, the geography and terrain involved and the lack of infrastructure may hinder the relief effort. The very act of giving humanitarian aid can alter the dynamics of the situation, especially if there is still armed conflict occurring, for although ‘aid agencies often seek to be neutral or non-partisan toward the winners and losers of a war, the impact of their aid is not neutral … in conflict settings, aid can reinforce, exacerbate, and prolong the conflict; it can also help to reduce the tensions and strengthen people’s capacities to disengage from fighting and find peaceful options for solving problems’ (Anderson, 1999: 1). There is a worry that such aid could be used as a ‘humanitarian alibi’, in other words, the ‘misuse of the humanitarian idea and humanitarian workers by governments eager to do as little as possible in economically unpromising regions like sub-Saharan Africa’ (Rieff, 1997: 137). On the other side of the coin, such an operation may be used as an excuse not to undertake an effort to solve any underlying complex political issues by the international community (being viewed as too intractable), as they have at least been seen to be doing something, and because it has ‘become apparent that humanitarian intervention in the absence of a political solution solves nothing’ (Rieff, 1997: 135). As a consequence, it can also give those receiving aid a false sense of security, as it will not bring an end to the violence that has caused the humanitarian crisis in the first place (if that is what has happened). Even when such an effort has achieved a degree of integration and coordination, objectives that have become politicized at the strategic level can hinder the progress made at the operational level. Until recently, logistic activities have been undertaken in a fragmented and sub-optimized manner, based upon outdated logistic philosophies.

Finally, the attitude of relief organizations (both IGOs and NGOs) towards the private sector is generally one of distrust, as well as suspicion of the profit motive, with any commercial transaction undertaken reluctantly. Commercial firms, usually keen on the publicity such involvement might bring them, may see such relief efforts as a chance to maximize their returns due to a lack of commercial experience on the part of the relief agencies. Such attitudes are changing, however, with the realization that the private sector has an increasing role to play in future operations, given its experience and expertise in the field of logistics, and may provide innovative solutions to some of the challenges encountered (Molinaro, 2000; Bansal, 2011).

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Military involvement in humanitarian aid and crisis response The provision of aid by military forces is not a new phenomenon and indeed goes back to the time of Alexander the Great, continuing through history until the 20th century with the two world wars right up to the present post-Cold War era, encompassing the Marshall Plan, the Berlin Airlift, the Congo, Bangladesh, Sudan, Ethiopia, Iraq, Syria, the former Yugoslavia, Rwanda and Mozambique. When disaster strikes, be it natural or caused by humans, governments often look to the military for help, as the military have certain attributes as well as certain resources to hand that can help with humanitarian aid and crisis response operations (Weiss and Campbell, 1991; Doel, 1995; Fisher, 2011). Between 2001 and 2011, the number of people annually affected by natural disasters increased by 232 per cent when compared to the period 1990 to 2000. This rise, which has meant that IGOs and NGOs are often stretched, with multiple ongoing events, has increased the expectation that military forces will be utilized during such operations. There have also been changes as to how the military view themselves and their mission, with military forces viewing such events as opportunities to improve their image with positive publicity, providing important training for the forces involved, as well as underlining the need to maintain certain levels of capability, especially in an era of budget austerity. This has led to a major growth in the number of personnel involved with such operations, with the rapid increase in the number of civil conflicts and emergencies in the 1990s. In 2000, there were 135,000 UN and non-UN peacekeeping personnel deployed. By 2009, this had increased to over 200,000. In addition, there has been greater pressure for regional organizations to become more involved in peacekeeping operations, so that regional solutions can be applied to regional conflicts. Not only has there been an expansion in the number of military personnel deployed on peacekeeping missions, but the scope of those operations has expanded, with many including a humanitarian dimension, with the introduction of the UN’s ‘integrated mission’ model whereby civilian and military staff are specifically expected to work together towards linked goals, such as providing humanitarian and development aid, peacekeeping, peace building and peace enforcement. Several large peacekeeping operations have incorporated a number of civilian-led responsibilities, including coordinating the return of refugees, those involved with protecting the operation, international support to conduct a census and even elections, as well as humanitarian activity. Military forces may also provide

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significant contributions to human resources and logistic support in areas that have suffered major disasters, whose infrastructure has been damaged and where security may become a problem (Hofmann and Hudson, 2009; Poole, 2013). In crisis response operations such as these, there is often a distinction drawn between those that are humanitarian aid (needed because of actions by humans) and disaster relief (natural) in nature. The difference usually lies in the degree of preparedness of the aid agencies and the response time to the actual event. Humanitarian crises (such as Kosovo, Bosnia, East Timor, Rwanda and more recently Syria and Sudan) rarely happen overnight, taking time to build up to the point where they actually become a crisis, and are monitored by the aid agencies, which try to give themselves time to prepare and issue an alert to the rest of the international community if a crisis is about to happen. Natural disasters (such as Mozambique, Ethiopia, Bangladesh, Turkey, Pakistan and Hurricanes Irma and Maria), on the other hand, can often strike unexpectedly (although predicting some of them is now becoming possible) and rely much more on the preparedness and resilience of those in the actual area that’s been affected, to hang on until help arrives. While this invariably takes time, military forces are often seen as a pool of disciplined, prepared and available resources that can swing into action quickly, while the rest of the international community mobilizes. As an aside, the use of military forces in crisis response operations is governed by a UN-approved set of principles (known as the Oslo Guidelines, which were agreed in 1994 and revised in 2006); these state that the use of the military should be a last resort, when no comparable civil capability exists, and only deployed to meet a critical humanitarian need. The guidelines also envisage that it is the affected state, and the UN civilian agencies involved, that will coordinate the request for military assistance and, ultimately, the deployment of military forces in the crisis zone. In practice, the most common form of assistance the military will render is logistic support to enable UN agency and NGO personnel to get to the affected area, followed by medical assistance and the provision of relief supplies (such as clean water, rations and shelter). In the ‘ideal’ UN scenario, military forces fill a clearly established capability gap in the international response to a crisis/disaster, with their involvement being under civilian control and closely coordinated with that of other relief actors in the area. In some cases, however, the military may pursue their own strategic mission objectives, particularly where they are engaged in active military operations. This additional factor could well colour the nature and targeting of the assistance they provide and is less likely to be coordinated with the civilian relief agencies. For example, in the

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case of the US Commander’s Emergency Response Program (CERP) fund, the priorities for funding assistance will be determined by the operational imperatives of the mission. Thus the military, as well providing assistance directly, may also donate aid to other third-party relief organizations (Hoff, 1999; Poole, 2013). However, military involvement in such operations is not without its challenges. A balance must be sought between the civilian agencies having enough freedom to undertake the relief effort and utilize the military resources that are available as they see fit, while realizing that military personnel are trained to fight and such forces are designed (primarily) to engage in combat operations. As such, there are wide cultural differences between the civilian aid agencies and a military force. In addition, there are differences between the two in terms of motivations, goals and approaches to the task at hand. What complicates it is the increased politicization and militarization of humanitarian assistance, the linking of humanitarian aid to counter-insurgency and stabilization operations, and challenges inherent within the humanitarian community itself (mentioned above) (Whitman, 2001; Metcalfe, Haysom and Gordon, 2012). Military forces need to be involved in Operations Other Than War (OOTW), such as conflict prevention, defence diplomacy, outreach programmes, training missions, humanitarian aid and disaster relief operations, as these can contribute to a more stable international environment. They also show that the military can undertake non-combat-orientated missions while not being involved in, or training for, combat operations and that the defence budget is being spent on activities that are promoting peace, stability and security. There is, however, a challenge in, on the one hand, training a soldier to participate in combat operations (be they low, medium or high intensity) where the mission usually involves eliminating the enemy as a fighting force and taking objectives, as opposed to those of a humanitarian nature where the objective is to save lives (Guthrie, 2001). Indeed, notwithstanding ‘the comparative advantages the military may have in certain contexts and in relation to certain capabilities… there remain serious concerns about the explicit linking of humanitarian and military or political objectives and the resulting expansion of the military into activities beyond their traditional mandates and areas of expertise’ (Metcalfe, Haysom and Gordon, 2012: 6). Furthermore, many of these operations involve a large number of actors, from both the civilian and military sides, for example the former Yugoslavia, East Timor, Rwanda and Afghanistan. All the different actors have different perspectives, agendas, objectives and procedures, and it is a difficult task to get them to operate smoothly, ensuring the effective management of the operation. Such difficulties go by various names, such as bureaucratic

Defence logistics and crisis response

inertia, ‘red tape’, ‘friction’ and ‘tempo drag’, but its effect is generally the same, and can best be explained by the natural time lag that occurs between a decision being taken or an order being given and something happening. The military forces sent by the IO, IGO or individual states can sometimes be seen as a problem by the aid agencies. It could be argued that there are fundamental differences between the very nature of the respective missions undertaken by the aid agencies on the one hand, and the military on the other, especially if a conflict is ongoing. The provision of humanitarian aid or disaster relief, as practised by the aid agencies, is generally done on an apolitical basis, while the deployment of military forces is usually in pursuit of a political objective. The involvement of the military can sometimes, therefore, impede the perceived independence (and therefore impartiality) of the aid agencies, increasing the threat from one or more of the belligerents. Such perceived independence is an important factor in the delivery of aid by the various organizations. Any association with military forces, even those deployed under UN auspices, increases the risk of the agency personnel becoming identified with one of the parties. Figure 15.3 shows the areas of potential mismatch between the various actors, when seeking to integrate them in a holistic manner. This is known as the ‘integration mismatch’ and identifies areas of weakness or deficiency within the system that are relevant to the operation and coordination of a humanitarian supply chain. (Doel, 1995; Skeats, 1998; Metcalfe, Haysom and Gordon, 2012). In some circumstances, the military aid provided by the armed forces that have deployed is not always equal to the task of both providing logistic support to the operations and of protecting themselves and the relief workers, especially if they are lightly armed and politically constrained, as was shown in the former Yugoslavia. As well as differences between the aid agencies and NGOs, not all military forces are trained to the same standard, employ the same technology, use the same procedures, speak the same language or have the same cultural background. It is therefore vital that the guidelines, standard operating procedures (SOPs) and rules of engagement (RoE) that will govern the operation of the military forces involved are drawn up beforehand, allowing the military to do what is expected of them, that is, protect and help the relief agencies in tackling the crisis at hand. Such rules will reflect, however, the legal and political constraints of the operation generally, but should not inhibit the military commander from taking any and all measures necessary to protect their force. Unfortunately, on occasion, these sorts of operations, as well as other OOTW, are not taken seriously by the military, who do not see such operations as ‘proper soldiering’ (Duncan, 1998; Tomlinson, 2000).

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Figure 15.3  Areas of potential mismatch between the various actors Challenges: Military

• Lack of a Civil-Military Cooperation (CIMIC) function, especially in non-operational headquarters • Lack of a doctrine for inter-agency work • No Standing Operating Procedures for inter-agency work • Lack of organizational awareness • Lack of a cultural acceptance of CIMIC • Cultural differences with civilian aid organizations

Made more difficult by:

• Lack of strategic-level liaison • Lack of coordination at the operational level • Lack of clarity as to the chain of command • No consistency of approach • Lack of clarity as regards mission and rules of engagement (RoE) • Lack of training and exercises outside of operations • Lack of a strategic multi-agency response

Challenges: NGOs

• Structurally mismatched to other actors • Cultural hostility to political/military involvement • Cultural suspicion of Private Sector • Strongly value their independence • Lack of security training • Lack of common standards • Lack of accountability • Difficult to coordinate

Challenges: UN

• Agency rivalry • Organizational complexity • Inter Agency Standing Committee (IASC) crisis management capability • Lead agency experience • No overarching UN doctrine or approach

Defence logistics and crisis response

Many of these issues are underpinned by the fact that for certain funding streams, the military and civilian aid organizations compete for the same funds, not only in terms of government spending more broadly, but also specific funding from individual government departments; for example when the UK Armed Forces are used in such operations, they are often reimbursed by either the Foreign and Commonwealth Office (FCO) or Department for International Development (DFID). It should therefore be incumbent on the military to try to ensure they offer value for money for the services they provide, for example non-emergency aid being transported by a cargo ship, train or lorry rather than a transport aircraft. In general, however, the use of military assets is more expensive than using the equivalent civilian ones, but the benefits of using the military are their superior logistic capabilities and the state of readiness in which they are held, which can often make the difference in terms of the timely arrival of life-saving aid. Plus, because such assets are kept in such a high state of readiness, in order to undertake military missions at short notice, their acquisition costs (procurement, operating, maintenance, upgrading, personnel and so on) are already taken into account as part of the defence budget and are rarely considered in assessing the cost of using the military in humanitarian and crisis response operations. If they were, the real costs of using military forces would be much greater. The use of military assets in such operations, therefore, is in effect subsidized by the individual state’s investments in its military capabilities, especially in comparison to the rates a relief agency might face when trying to procure similar capabilities from the private sector. The convention is to account only for the marginal or additional costs that were involved with the military forces undertaking the humanitarian or disaster relief operation, over and above what would have been incurred had the military forces remained on whatever duty they were performing at the time of re-tasking. Such costs would include the additional fuel used, the cost of preparing equipment for theatre-specific conditions and use of actual relief supplies from existing stockpiles. There is no common reporting standard, however, when estimating the financial contribution of military deployments, and so estimates will vary. Many contributions are made on an ‘in-kind’ basis and are therefore difficult to judge, or they may have already been written off against the defence budget and may not be included within the estimate of additional costs (Duncan, 1998; Poole, 2013). Of course, the requirement for the use of military forces in humanitarian aid and disaster relief operations is dependent on the situation and is determined by a number of parameters, including the type, scale and location of the disaster, its impact on the state in question, as well as the assessed

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shortfall between the aid that relief agencies can provide and victims’ needs. The frequency of military intervention in humanitarian relief operations (HROs) is expected to increase, since it has been estimated that the number of disasters (natural, human-made and complex) will increase over the next 50 years (Sebbah, Boukhtouta and Ghanmi, 2012). Despite the challenges highlighted above, there are many potential benefits and opportunities that can be derived from the use of military forces to provide, or assist in the provision of, logistic support to humanitarian aid, disaster relief and crisis response operations. Military forces can bring expertise and professionalism to bear in undertaking logistically challenging roles. They have a task focus that is inculcated in their modus operandi, which is rarely matched by civilian aid agencies. The essential capabilities that are needed for such operations, which would be expensive for aid agencies to acquire, is often readily available for the military, indeed it provides their raison d’être. Above all, there is within military forces a ready pool of experienced logistic personnel who can act swiftly and effectively when tasked.

The military support chain for expeditionary operations Since the end of the Cold War, the UK Government has become more involved in the provision of humanitarian aid and responding to crises around the world, not only through UN agencies, NGOs and with other allies, but also unilaterally through the tasking of the UK Armed Forces to undertake missions outside the NATO area. Even NATO itself has started to look outside its traditional area of responsibility, as crisis management is one of NATO’s fundamental security tasks. Such management can involve both military and non-military resources to address the full spectrum of crisis events, as outlined in the Strategic Concept of 2010, and covers all non-Article 5 military operations. ‘Crisis response’ and ‘peace support operations’ are generic terms that cover a wide variety of mission types, including conflict prevention, peacekeeping, peace-making, peace enforcement, peace building, humanitarian aid and disaster relief. These are often complex operations, conducted according to the ‘comprehensive approach’ under the auspices of an IO or IGO such as the UN or OSCE (Organization for Security and Co-operation in Europe), or sometimes at the invitation of a sovereign government. For example, NATO assisted Pakistan in 2005 when the country was hit by a major earthquake that killed around 80,000 people (NATO, 2010).

Figure 15.4  The generic model for the support of an expeditionary operation Military Base, Depot or Garrison

UK Home Base Point of Embarkation (Air or Sea)

Contractor Logistic Support

Forward Mounting Base Point of Disembarkation (Air or Sea)

II

Area of Operations

X II

II

Battlegroups

Support Group

Assembly or Staging Area Theatre Reception Centre / Deployed Operating Base

Force Rear Support Area 339

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The reason why the involvement of military forces has the potential to benefit humanitarian aid and crisis response operations is that the generic model for the support of an expeditionary operation is similar to the conceptual framework that is used by the aid agencies and NGOs for the supply of humanitarian aid (see Figure 15.4). The operation starts when the military force, its equipment and the materiel to support it are outloaded from the bases and depots in the home base, moved to the air and sea ports of embarkation (APOE or SPOE), loaded onto the transport that is awaiting them and moved through the coupling bridge to the air and sea ports of disembarkation (APOD or SPOD). The area that will house the logistic support elements for the deployed force in the theatre of operations is known as the force rear support area (FRSA), the size of which can vary quite considerably depending where in the world the operation is, what type of operation it is and what forces have been sent to conduct the operation, and will therefore contain a number of assembly areas, staging areas, deployed operating bases and possibly a theatre reception centre (Cross, 2000). While aspects of the logistic support afforded to the UK Armed Forces retains elements carried over from the Cold War, many have changed, a major one being the increased role of contractors in supporting deployed forces far from the home base, as was seen in both Iraq and Afghanistan. These new realities can bring challenges in respect of the role contractors play, their legal status in time of armed conflict, questions of ethics, medical support, degree of contractor commitment and their competency. All this, within an environment already complicated by the number of different actors involved. (Cross, 2000; Moore and Antill, 2000a; Moore and Antill, 2011a)

Conclusion There is no doubt that the conduct of a crisis response operation, be it humanitarian aid or disaster relief (or both), is a highly complicated undertaking, often involving a large number of actors, with a range of complexities (many highlighted in this chapter) that can cause problems and challenges to the effective distribution of aid. Many of these complexities can be categorized as being internal or external. Internal complexities are caused by the differences that exist, not only between the military forces that are increasingly deployed on such operations and the civilian aid agencies (as well as NGOs) that take part, but between the civilian aid agencies themselves, and if there is more than one nationality involved, between the military forces

Defence logistics and crisis response

as well. Each will have its own aims, objectives, administrative processes, logistic systems, SOPs and cultures – reconciling all these different actors being a major challenge. In addition, internal conflicts have limited the aid agencies’ and NGOs’ adoption of supply chain management strategies, while many militaries have done so (including the UK) due to post-Cold War defence budget constraints. Within the area of operations, aid agencies might be concerned about working with military forces, despite the benefits they can bring, as sometimes outside political agendas can threaten one of the aid agencies’ major strengths, their perceived neutrality. For the military, time and resources spent training, equipping for and deploying on OOTW are time and resources that cannot be spent preparing for their main role of conducting combat operations in defence of national security. External complexities that can affect such operations include the changing nature of warfare and changes in the international security environment. The conflicts that have erupted in recent years have been based on religion, ethnicity, race or access to resources, and are less amenable to Great Power control. Not only can these conflicts destabilize an entire region, but if a positive political settlement cannot be reached and a properly equipped peacekeeping force put in place, they also endanger the aid operations themselves. Even if the aid operation begins at a time of relative calm, the conflict could erupt again at any time, thus moving along the spectrum of conflict shown in Figure 15.5. Figure 15.5  The spectrum of conflict Operating Environment Benign Peace

Crisis Management Preventive Deployment / Gunboat Diplomacy

Peace Support Operations

Peacekeeping Humanitarian Intervention

Low Intensity Conflict

Counter Insurgency Warfare eg Malayan Emergency Peace Enforcement eg Grenada, Panama

Medium Intensity Conflict High Intensity Conflict Nuclear War

Area of Overlap

Local Conventional Conflict eg Iran-Iraq War Regional Conventional Conflict eg Gulf War Global Conventional Conflict eg World War I / II

Very Hostile

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There is also the impact of the media (and social media) to consider, which may put additional pressure on governments to act, the weather, terrain and geography in the area of operations, as well as the infrastructure (or lack of it) in the area of operations. While some of the issues identified here can be overcome relatively easily, through enhanced procedures, better communications, better data sharing and greater coordination between different actors, many will require a fundamental reappraisal of working cultures and ethos across all the organizations involved.

References Anderson, M (1999) Do No Harm: How aid can support peace – or war, Lynne Rienner, London Bansal, S (2011) Private sector has potential to aid development, but beware the pitfalls, The Guardian, 11 July [Online] https://www.theguardian.com/ global-development/poverty-matters/2011/jul/11/private-sector-aid-potentialand-pitfalls [accessed 12 October 2017] Branczik, A (2004) Humanitarian Aid and Development Assistance, Beyond Intractability Knowledge Base, February 2004 [Online] http://www.­ beyondintractability.org/essay/humanitarian-aid [accessed 11 October 2017] Brzoska, M and Fröhlich, C (2016) Climate change, migration and violent conflict: vulnerabilities, pathways and adaptation strategies, Migration and Development, 5 (2), pp 190–210 Croft, S and Treacher, T (1995) Aspects of Intervention in the South, in Military Intervention: From gunboat diplomacy to humanitarian intervention, ed A Dorman and T Otte, Dartmouth Publishing, Dartmouth Cross, T (2000) Logistic support for UK expeditionary operations, RUSI Journal, 145 (1), pp 71–75 De Mello, S (2001) The evolution of UN humanitarian operations, in Aspects of Peacekeeping, ed D Gordon and F Toase, pp 115–25, Frank Cass, London Doel, M (1995) Military assistance in humanitarian aid operations: impossible paradox or inevitable development? Royal United Services Institute Journal, 140 (5), pp 26–32 Duncan, A J (1998) Is the Use of the Military in Complex Humanitarian Aid Operations a Political Quick Fix or Can it be the Cornerstone that Leads to Long Term Solutions?, MA Military Studies No. 4 Dissertation, Cranfield University, RMCS, Shrivenham Fisher, E (2011) Disaster Response: The Role of a Humanitarian Military, Army Technology, 26 July [Online] http://www.army-technology.com/features/ feature125223/ [accessed 12 October 2017]

Defence logistics and crisis response Guthrie, Gen Sir Charles (2001) British Defence – Chief of the Defence Staff’s lecture 2000, RUSI Journal, 146 (1), pp. 1–7 Hoff, A (1999) An Analysis of Disaster Relief and Humanitarian Supply Chains, MSc Defence Logistics Management No. 1 Dissertation, Cranfield University, RMCS, Shrivenham Hofmann, C-A and Hudson, L (2009) Military Responses to Natural Disasters: Last Resort or Inevitable Trend? Humanitarian Practice Network, October [Online] http://odihpn.org/magazine/military-responses-to-natural-disasters-lastresort-or-inevitable-trend/ [accessed 12 October 2017] International Committee of the Red Cross (1994) Code of Conduct for the International Red Cross and Red Crescent Movement and Non-Governmental Organizations (NGOs) in Disaster Relief, 31 December, Publication Reference 1067, International Committee of the Red Cross [Online] https://www.icrc.org/ eng/resources/documents/publication/p1067.htm​[accessed 16 November 2017]  James, A (1997) Humanitarian aid operations and peacekeeping, in The Politics of International Humanitarian Aid Operations, ed E Belgrad and N Nachmias, Praeger, Westport, CT Metcalfe, V, Haysom, S and Gordon, S (2012) Trends and Challenges in Humanitarian Civil-Military Coordination, HPG Working Paper, Humanitarian Policy Group, May [Online] https://www.odi.org/sites/odi.org.uk/files/odi-assets/ publications-opinion-files/7679.pdf [accessed 17 October 2017] Molinaro, P (2000) An Examination of the Changing Face of Emergency Humanitarian Relief and the Role of the Strategic Supply Chain, MSc Defence Logistics Management No 2 Dissertation, Cranfield University, Royal Military College of Science Moore, D and Antill, P (2000) Humanitarian logistics: an examination of, and military involvement in, the supply chain for disaster relief operations, Global Logistics for the New Millennium, Proceedings of the ISL 2000 Conference, July, Iwate, Japan, pp 51–57 Moore, D and Antill, P (2000a) British army logistics and contractors on the battlefield, RUSI Journal, 145 (5), pp. 46–52 Moore, D and Antill, P (2011) Swords, ploughshares and supply chains: NGO and military integration in disaster relief operations, in Case Studies in Defence Procurement and Logistics – Vol I: From World War II to the post-Cold War world, ed D Moore, pp 315–33, Cambridge Academic Press, Cambridge Moore, D and Antill, P (2011a) The use of contractors on deployed operations (CONDO) in the age of austerity, RUSI Defence Systems, Autumn/Winter, pp 32–34 NATO (2010) Strategic Concept 2010, 19 November, NATO [Online] ­http:// www.nato.int/cps/ic/natohq/topics_82705.htm [accessed 18 October 2017] Poole, L (2013) Counting the Cost of Humanitarian Aid Delivered Through the Military, Development Initiatives, Bristol, March, Global Humanitarian Assistance [Online] https://docs.unocha.org/sites/dms/

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Defence Logistics Documents/130301_Counting_the_cost_of_humanitarian_aid_delivered_ through_the_mil.pdf [accessed 10 October 2017] Ramsbottom, O and Woodhouse, T (1996) Humanitarian Intervention in Contemporary Conflict, Polity Press, Cambridge

Rieff, D (1997) Charity on the rampage – the business of foreign aid, Foreign Affairs, 76 (1), pp 132–38 Sebbah, S, Boukhtouta, A and Ghanmi, A (2012) Humanitarian Relief Operations: A Military Logistics Perspective, DRDC CORA TM 2012-260, November, Defence R&D Canada, Centre for Operational Research and Analysis [Online] http://cradpdf.drdc-rddc.gc.ca/PDFS/unc120/p536715_A1b.pdf [accessed 10 October 2017] Skeats, S (1998) Operating in a Complex Environment: How can the British military improve interagency cooperation in peace support operations? MDA No. 12 Dissertation, Cranfield University, RMCS Shrivenham Snow, D (1993) Distant Thunder: Third World conflict and the new international order, St Martin’s Press, New York Tomlinson, R (2000) Reversing the Downward Spiral: Exploring cultural dissonance between the Military and NGOs on humanitarian operations, MSc Defence Logistics Management No. 2 Dissertation, Cranfield University, RMCS, Shrivenham Weiss, T and Campbell, K (1991) Military humanitarianism, Survival, XXXIII (5), pp 451–65 Whitman, J. (2001) ‘Those who have the power to hurt but would do none’: the military and the humanitarian, in Aspects of Peacekeeping, ed D Gordon and F Toase, pp 104–14, Frank Cass, London

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Defence logistics 16 information systems Ro g e r Cr o o k a n d M at t h e w S u mm e r s

Introduction All logistic systems aspire to be both efficient and effective, though as earlier chapters have shown, there are some fundamental differences between commercial and military requirements. From a global manufacturer with a complex supply network to a movement-focused organization moving customers’ items in a global transport network, all large, successful companies make significant investments in information systems to support their logistic activities. In this chapter, the key components of a military logistic information system are described, and the means of managing and maintaining high-quality data are explained. Finally, the expected benefits resulting from a successful logistic information system are presented. Information systems are critical to provide the required level of situational awareness and knowledge on the state and performance of an organization’s logistic elements and wider supply chain. Termed logistic information systems (LogIS), they can be independent systems or integrated as part of an organization’s wider management information system, but their key purpose is the same – the provision of timely and accurate information to support logistic decision making, communication and action. LogIS generate lots of data, which are translated into useful information so that requirements are met and efficiencies are exploited, with the ultimate goal of maximizing shareholder value.

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Modern LogIS are, typically: ●● ●●

●●

electronically based – comprising both hardware and software; networked – both internally within the organization and, increasingly, across the supply chain; and capable of providing real-time data and information.

While the concept of LogIS is traditionally seen as a modern initiative, resulting from the rise and pervasion of computer systems into business practice, their role and use in logistics and supply chain management have been a core component of the discipline since its initiation. It is the explosion of available and measurable data and analytical capabilities that technology and network-based modern LogIS provide that has delivered a step change in opportunities and the technical discipline as a whole that has enabled the opportunity for significant logistic and supply chain performance increases and optimization. As supply chains have become ever more dynamic, complex and global in nature, so too have the LogIS capabilities in order to provide effective support and management. Through the provision of information, complexity can be reduced and the unpredictability in demand, inventory or supply can be made that bit simpler. As the saying goes, ‘Forewarned is forearmed’. Of course, some military requirements, such as food, have predictable demand profiles, but when the next military operation is unknown there is uncertainty, and the support system must be prepared for variable demand. This unpredictability shifts the focus from efficiency to effectiveness. Nonetheless, military logistic systems have data and information requirements which are not dissimilar to commercial needs but, as government tax revenues must be spent with a focus on value for money, there is not the clear focus provided by shareholders demanding a return on their investment. Finite defence budgets require management of competing requirements, and spending to invest in the longer term is frequently traded out to meet annual funding limits. Because it can be difficult to demonstrate the operational impact of a new or upgraded support system, the business case can lack the compelling arguments required to compete successfully against other military capability requirements. Because of this lack of investment, many national defence organizations have poorly maintained infrastructure and inadequate investment in information systems. In the United Kingdom, many support systems and processes have their origin in the Cold War, when it was predominately a numbers game comparing red and blue columns in bar charts. In addition,

Defence logistics information systems

nations owned the whole process from design through to manufacture and lifetime support. Consequently, supply chains and logistic thinking tended to be linear. Fast forward to today and there is a huge contrast with the massive increases in contractorization, globalization and digitization, and resultant complexity of supply networks. The 21st-century operational experience of military organizations from many different countries includes the same difficult lessons learnt on the need to maintain visibility of assets: their quantity, location and condition. When a commander does not know ‘what is where’, they cannot access and employ resources that could make a decisive difference. In 2011, the UK National Audit Office observed: Many of the challenges facing the (the UK Defence) Department are different to those of a private organisation. The pace of military operations can be unpredictable and, as a consequence, the demands on the supply chain can ebb and flow. Moreover, the supply chain has to work in two directions, returning personnel and equipment from the front line for rest, repair and replacement. Unlike the private sector, financial profit cannot be used as an indicator of success, and if the military supply chain fails the impact is not reduced profits, but increased risks to personnel and military tasks. (UK National Audit Office, 2011)

This observation sets the context of the importance of LogIS in the defence environment succinctly and poignantly: in the civilian world, supply chain failure increases the potential for loss of livelihood; in defence, supply chain failure increases the potential for loss of life.

Demand predictability One of the biggest challenges facing military support systems is the predictability of demand. When the location, duration and distance of the next operational deployment is not known, the support solution inevitably carries risk. This challenge is not exclusive to the military; for example, it applies to disaster relief planning and execution as discussed in Chapter 15. No matter how many scenarios are prepared for, the complexity and unpredictability of a modern military operation mean it is highly unlikely that the planning will match reality. That is not to say that planning is a waste of time: even if the plan proves to be only 50 per cent accurate it is better than no plan at all! For an operation to be successful, the focus of support must be on effectiveness, often at the expense of efficiency. If an operation stabilizes and

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endures, there should be scope to deliver efficiencies, but that is in the context of ‘business as usual’, similar to the predictability of peacetime preparation and training. That said, it may be possible to make efficiencies satisfying the contingent capability requirement. Where military capability readiness and sustainability requirements are defined, some risk can be taken in the support network. For example, if a force element is at high readiness, it requires a full warehouse with rapid access to equipment and stores. Conversely, when there is lower readiness and longer preparation time, there is an opportunity to procure shorter lead-time items and the warehouse does not need to be fully stocked to meet the contingent sustainability requirement. However, for this concept to work, the supporting teams must have access to an information system that contains good usage and demand data about force element peacetime activity, and contingent requirements, so that the demand can be predicted and risk taken within readiness requirements when lead-times allow.

Provisioning and the end-to-end pipeline One of the legacies of Cold War national supply chains and the general lack of investments in LogIS is segmentation of the supply chain and performance measurement. In the United Kingdom, performance was, and in many cases still is, measured by ‘on the shelf’ availability and the velocity of materiel moving through the supply chain pipeline. There was little information flowing to the demander about availability and asset tracking, which produced a lack of confidence in the system and affected behaviour, for example encouraging hoarding and submission of repeat demands for inventory items, both contributing to the bullwhip effect (discussed in Chapter 4). Consequently, with more items being demanded than actually required, the person responsible for provisioning the item could acquire a distorted view of reality. Meanwhile, the lack of any tracking information in the operational theatre beyond the supply depots meant that information was not available for the most difficult and challenging sections of the physical supply chain. The result was that performance measurement focused on ‘on the shelf’ availability in the theatre depot or base warehouse, and on velocity through specific segments of the pipeline. It was perfectly possible for all measured segments to be performing well, but, with no in-theatre asset tracking, the system could fail. The outcome was numbers of confounded users in operational theatres dissatisfied with a system that was measured to be performing well.

Defence logistics information systems

Problems with provisioning and asset tracking mean that the expedient solution to support operations is to purchase more inventory and push it forward at pace. This might help meet the user need but it is expensive! After noting the large amounts being spent on inventory and air transport, in 2011 the UK National Audit Office reported: The NAO views the dominant cause to be provisioning failure rather than pipeline failure … and … improving forecasting ability is a key requirement to increased efficiency, by reducing stocks in theatre and through greater use of the slower but cheaper surface routes. (UK National Audit Office, 2011)

The message was clear: to provide better value for money there should be more pull and less push in the supply chain or, in other words, the substitution of information for inventory. This requires more accurate activity forecasting and developing confidence in the supply chain. In recent years, the United Kingdom has made progress, introducing the components of warehouse and asset tracking systems, but challenges still remain due to the myriad of legacy systems and resource constraints. In-transit and distribution visibility systems are now well established in many military organizations around the world. Typically using radio-frequency identification (RFID) technology, these systems provide real-time (or near real-time) visibility of the movement of key materiel throughout the supply chain, from the source of supply, possibly as far upstream as the manufacturer, and as far downstream as the end user. Providing commanders and decision makers in the supply chain with accurate and timely data enables collaborative planning and the dynamic prioritization of supply, and supplies that are en route. Perhaps most importantly, it increases confidence in the ability of the supply chain to deliver on time and in full, thereby obviating wasteful behaviours such as the placement of nugatory repeat demands when delivery forecasts do not meet expectations.

Codification of items Codification has been discussed in Chapters 2 and 12. Its importance is self-evident if a supply chain is to recognize and track an item. However, codification costs money because it requires more than a simple item description. The list of information required can be significant, especially for complex items or sub-systems, and the cost of acquiring all the underpinning data (the complete data set) can be high.

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Accurate codification is an essential requirement for any item entering the supply chain, because without it a warehouse operative cannot be expected to recognize an item and it cannot be tracked. The imperative to codify is widely accepted, but funding pressures influence decision making and it is not unusual for project teams to avoid codification, or defer it, perhaps only partially completing the task, rapidly securing an emergency NATO Stock Number (which the national codification bureaux can usually facilitate within 24 hours) but not completing its underpinning data set once the urgency of the requirement has passed. This presents challenges for the supply chain, and the pressures will only increase with more contractorization and the growing trend for defence departments to enter into long-term support arrangements, the contracts for availability (CfA) and performancebased contracts (PBC) discussed in Chapter 10 being examples. What is clear is that warehouse and tracking systems must have access to a reliable database of codified items.

Condition and configuration management So far, the focus has been on supply information systems, but there is one more piece of essential information required. It is good to deliver the right item, to the right place, at the right time, but it is even more useful to know its condition. One example is medical supplies, which often have strict storage requirements and shelf life restrictions. Another example is new or reconditioned items and how much useful life remains in them. For such items it is essential that there is a database of condition information for each item in the system and that it is compatible with other information systems. This applies equally to simple items in the supply chain and to complex systems that require a more comprehensive engineering management system (more of which later in this chapter). From condition monitoring, it follows that the configuration of equipment is tracked. Military systems, for example protected mobility vehicles, are often procured in batches, with modifications and changes introduced between batches or, in the case of the most complex and largest systems such as warships, between individual units. Configuration management is a systems engineering process for recording and maintaining the integrity of the composition, conformance, performance and function of a system (which can be a platform, equipment or a service). The configuration management system manages changes throughout the equipment life cycle of military systems and their associated support components. The actual configuration

Defence logistics information systems

management activity can be conducted by any one organization, or combination of different organizations, including a project team and/or contractors. It can be a rigorous process, especially in the air environment where safety is an over-riding consideration with an associated plethora of specific and legally derived airworthiness requirements. System evolution and configuration changes can be driven by many things, including a change of supplier (either voluntary or enforced), changing manufacturing techniques, evolving threats, or requirement growth. The impact can be significant. For example, what are the implications of multiple variants for the support system? How good are data collection and reporting systems for visibility of common and variant-specific parts and, crucially, how easy is it to identify and demand the correct part? Whatever the reason, it is important to keep track of the configuration changes in a fleet, because if this level of information is lost then operating, maintaining and subsequent changes to the fleet will be compromised. For example, if a contractor is given baseline equipment to plan for an equipment upgrade project and equipment is subsequently supplied with a different configuration, there will be cost and delay. Consequently, there must be a configuration management process in place, with information stored on a configuration database that is accessible to all those who need access.

Engineering management system Of course, logistics is about more than the supply chain. Even with the best supply chain, a modern military force requires an engineering support database and information system. The system requirements will reflect the fleet size and technical complexity, but typical information will include system identification, system usage data, major component serial numbers and usage data, serviceability, servicing schedule, modification state, fault log and a historical record of work. Access to the database needs to be controlled, because fleet condition information can be sensitive for reasons of operational security. Similarly, data should only be entered by authorized personnel and the system configured so that they cannot be changed retrospectively. Apart from useful functions such as planning scheduled maintenance and tracking fault trends, the database will provide useful information in case of serious incidents. The engineering support system will be focused on keeping fit equipment in the hands of the user, ensuring availability as outlined in Chapter 8. In addition to the skills of the operators and maintainers working with an

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efficient support chain to deliver equipment availability, the engineering system should be looking to analyse failure modes and trends, and seeking to improve reliability, typically through condition-based monitoring. While health and usage monitoring systems are standard in aircraft and large marine engines, their application is less common in the land environment. The aim of condition-based monitoring is to identify a fault before it occurs so that the necessary maintenance work can be scheduled to suit the user, rather than experiencing the disruption and operational impact of unplanned maintenance.

Convergence of legacy systems and shared data environments Much of the capability in current LogIS evolved from functionality developed in discrete and disparate legacy systems. Even when such stand-alone systems were interfaced, issues of data redundancy, accuracy and latency persisted. A major challenge faced by many national defence organizations is a plethora of information systems. Many will have a very specific purpose, and are likely to be old, presenting both hardware and software obsolescence issues. Other systems may be new and work well, or the project may have been an abject failure, which, instead of resolving compatibility issues, has created additional complexity. The convergence of these legacy systems is a goal worth pursuing, because it offers the prospect of performance improvements and efficiencies, although perspective must be maintained. The pace of technological change in the digital space is such that the utopian vision of a single, all-embracing, information system is probably not achievable. However, a single version of the truth (ie the same underpinning data and provision of the same ‘answer’ to queries) is achievable and is facilitated by adopting generic standards and architectures. This means that new processes and systems can be developed that should be compatible with existing systems built to the same standard. This is common in many areas of electronics such as the universal serial bus (USB) or high-definition multimedia interface (HDMI) connectors and interface standards. This generic approach is particularly relevant in the context of increasing levels of contractorization. For reasons of cost and simplicity, contractors may want to operate their own support information system. Such an approach presents potential risks to the defence support chain because there will be issues such as those around compatibility, intellectual property and constraints

Defence logistics information systems

for future support contracting arrangements, especially if defence wants to change contractors or bring the system back in-house. Convergence of information systems and increased support contracting require the implementation and maintenance of shared data environments, so that different applications can share data. Here, data architectural models and standards are crucial. These enable an enterprise-wide view of data flow, storage and interfaces across ownership boundaries (eg to and from a government LogIS to a contractor’s LogIS). The data architecture provides the blueprint and a framework for planning, building, implementing and evolving the required data systems and LogIS to support logistic and supply chain management activities. While such frameworks differ in look, feel, and accepted standards between nations, they all perform the same functional role. The model used by UK defence is called the Enterprise Data Model.

Deployable systems Notwithstanding the challenges for defence logistic systems caused by variable demand and the legacy of under-investment, the benefits of a world-class end-to-end LogIS will be lost if it is not deployable, since it would therefore mean it was not end-to-end. As discussed earlier in this chapter, there is little point in measuring the benign stages of the operational supply chain if the performances of the final, and most difficult, stages are not measured. However, producing a deployable LogIS presents an additional set of challenges for inventory management, asset tracking, and engineering management information. Assuming the peacetime system is capable of being deployed, the key requirement is connectivity through secure communication links with adequate bandwidth, both in theatre and to the home base. Increasing digitization and bandwidth-hungry systems mean that logistic information is competing with other operational information, such as real-time drone video which can be prioritized viewing. This means that even when the communication links are good, the logistic requirement can be ‘traded-out’ in response to more obvious or urgent operational priorities. Contractorization presents another issue. Personnel in the deployed space may not be the same contractors who use the system day to day and therefore there may be a lack of experience and competence. In Formula 1 racing, the pit crew does not see the car for the first time on race day; similarly, personnel in the deployed support chain need to be well trained and proficient so that they still perform in the uniquely stressful situations that can occur on operations.

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One solution to the challenge of implementing a LogIS that works well across both the national and deployed space could be based on an architecture spanning three tiers. Tier 1 is the foundation tier, a fixed system within the national base operating through permanent data links. The second tier uses mobile servers deployed in the operational space, with communications back to the foundation tier. The final tier is mobile (eg tablets and hand-held scanners) and can be detached from Tier 1 or Tier 2 and deployed in areas with no communications for limited periods: the data collected are saved and transmitted when a link is established. Of course, there are technical challenges, but this relatively simple concept is deliverable if there is a reliable communication link to the national base and sufficient connectivity at the tactical level for the mobile system.

The potential benefits of LogIS The provision of a coherent and comprehensive LogIS provides the ability to share, search, and identify real-time logistic information supporting operations across all levels of command. The need for data and information to optimize efficiency and effectiveness, as discussed in many of the chapters of this book, has been a consistent theme. As such, LogIS, when implemented well, delivers a significant swathe of benefits to the management of logistics, supply chains and the wider support chain. When implemented poorly, either through an absence of LogIS or where there is conflicting or inaccurate information, it can compromise the effectiveness of efforts to manage the logistic and supply chain components of defence procurement and support to operations. This is an important point, as LogIS can hinder as well as help. However, where implemented appropriately, the potential benefits of LogIS include: ●●

improved forecasting and plans;

●●

reduced waste;

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reduced spend on inventory;

●●

decreased storage requirement;

●●

●● ●●

increased visibility of assets, leading to greater confidence so demands are appropriately prioritized and re-demands reduced; greater use of slower surface routes and reduced need for strategic airlift; increased agility, by providing the commander with the ability to respond quickly to the unexpected and to remain flexible in overcoming the unforeseen by rapidly adjusting plans and actions;

Defence logistics information systems

●●

●●

●● ●●

●●

●● ●●

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optimized support planning by identification of bottlenecks and pressure points; facilitated changes to meet operational commanders’ needs in a dynamic battle space, by diversion of in-transit items between supply nodes and deployed units and the physical ability to cross-service items between units or supply nodes; collaborative elements of the support chain sharing data; disparate support chain elements across the defence enterprise being aligned; improved supply chain engagement by sharing information upstream and downstream; reduced logistic footprint; equipment maintainability and availability increases, enabling improved operational effect; generic data architectures leading to better data management and improved data sharing;

●●

improved configuration management;

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improved obsolescence management;

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better measurement of logistic performance and its impact on operational effect.

Summary In summary, LogIS are essential if efficient and effective support is to be delivered. However, the route to efficiency and value for defence is through focusing on provisioning, not the pipeline. The major challenge is that high-performing supply networks rely on good information systems, which require investment. Yet with finite resources, and with the difficulty of making the linkages with operational effect, the compelling business case may not be made and information systems may be traded out to satisfy other priorities. The key components and characteristics of a comprehensive logistic information system identified in this chapter are: ●●

warehouse system;

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asset tracking system;

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database of codified items;

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condition information;

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configuration database;

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engineering support database and information system;

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generic standards and architectures;

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shared data environments;

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deployability.

Reference UK National Audit Office (2011) The use of information to manage the logistics supply chain, National Audit Office [Online] www.nao.org.uk/wp-content/ uploads/2011/03/1011827.pdf [accessed 18 October 2017]

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A look to the future

17

Richard Fisher

Introduction This book has identified and discussed the key elements of defence logistics as it is currently managed. How this develops over the coming years is dependent upon many circumstances. These are largely unpredictable but there will be examples in history that we can learn from for many of the conventional situations in which defence will find itself, yet it’s the unconventional that needs to be prepared for. There is some foresight possible into near-term developments with regards to technology and the immediate challenges that face defence; in the longer term, it is necessary to consider the issues identified by the likes of the United Kingdom’s Development, Concepts and Doctrine Centre in their Strategic Trends reports (Development, Concepts and Doctrine Centre, 2014; Development, Concepts and Doctrine Centre, 2015). These broadly continue many of the themes already identified through this book with a few additions. This chapter discusses some of the expected and possible developments to be considered.

Future defence environment While force projection will continue to be a part of defence, it is now expected to operate in non-traditional domains outside of air, land and sea: the cyber, influence (also called information) and space domains have been identified as new areas of warfare. Supporting these domains with their requisite logistics needs will require new inventory, new information systems, new types of supportability and many more new approaches for the topics discussed in this book. The development of the cyber domain

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and the growing Internet of Things (IoT) presents challenges to existing thinking and technology. The consequential challenges to defence logistics are from both supporting the domain in which to conduct defence operations and the threats that cyber warfare poses to the management of defence logistics. While the latter could be considered as part of the resilience of the overall defence logistics system, the former issue requires a complete understanding of the requirements, and this may present a challenge to established thinking. Considering the IoT as a particular example: the opportunities to inform supportability and decision making with information are already shown in the commercial sector, with realtime inventory management and live feeds that not only give insight into the logistics elements but directly affect the military capability of the subject – it is not beyond our foresight that the individual soldier and vehicle may be considered part of the IoT in the near future, with on-thesoldier technology providing real-time information on ammunition usage to inform supply decisions and the vehicle providing live monitoring on usage, fuel levels and engine data (as happens currently with commercial aircraft engines). Furthermore, this could potentially change the economics of defence logistics by providing real-time information on expenditure of supplies which could change how costs are accrued and expenditure calculated. There is a desire within many defence departments to contract for outcomes and availability, with the risk transferred to industry wherever possible. With technological advances and a suitable risk appetite, the performance management information that can become available may make this achievable across a wider range of possibilities than is currently envisaged. The implications of the influence domain may well require a different understanding of what is actually being supplied and whether information becomes a commodity that should be considered within the supply chain rather than the current positioning of it as an enabler. The mechanisms for delivering that commodity and ensuring that the supply chain is robust and resilient to challenges can be treated in the same manner as other materiel; however, it’s unlikely to be logisticians that manage it. Space is a relatively new domain to be considered by defence organizations; however, there are many overlapping elements around communications, technology and industry. Logistics in this area are, as with influence, unlikely to be completed by defence logisticians for the foreseeable future, but it is possible that, should the space domain become an active military environment in the longer term, it will be necessary to consider the role that defence will inherit from the science community.

A look to the future

Future defence threats Strategically, the asymmetric nature of warfare poses some challenges for supplying the military. Without identifiable fronts or specified areas of engagement, the logistics supply and support chains are at risk from traditional threats as well as commercial resilience issues. Terrorist and guerrilla activities have been a threat to specifically identified defence infrastructure for many years; however, different acquisition and logistics solutions have different risks, and these are likely to become more diverse as the supply chain and how defence is supported continues to evolve. The companies involved in defence supply chains are numerous and some aren’t even aware that they are involved because of their degree of separation from the eventual customer. This poses additional challenges with regard to security of supply. Improving the transparency of the supply chain from end-to-end will encourage all to take protective measures to improve their resilience and minimize disruption. This is an approach that the UK Government has already identified through their Cyber Essentials programme (Department for Business, Energy and Industrial Strategy, 2017), which requires an assessment of cyber security to be cascaded throughout the supply chain. While some limitations and weaknesses will remain in some areas, this type of approach is typical where supply chains aren’t discretely bounded, such as those not particularly bounded by national borders. The continued globalization of both industry and defence challenges presents both problems and solutions for defence logistics. In many ways, continued efforts overseas, irrespective of location, will require further force projection, as we have seen discussed throughout this book; however, while supporting military action is the purpose of defence logistics, the demonstration of that capability can continue to be shown through contributions to crisis response and humanitarian issues, and the recognition that military action rarely exists in isolation of civilian crisis and its associated recovery efforts. While the traditional ‘mother country’ empires and colonies are historic, the legacy of those times still remains and the influence that can be exerted through the relationships is important to consider. One country’s ‘right’ to have another host its forces no longer exists, yet can form part of wider trade arrangements that do continue to exist. Therefore, defence logistics capability is increasingly, and will continue to be, reliant upon good commerce and trade alongside the more traditional strong and resilient political relationships. The reduction in overseas infrastructure available to a particular country is an example of the reducing footprint of defence globally. Defence-specific

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facilities are not financially viable for many governments to fund where they don’t have the quantity of equipment to ensure that their use is efficient. Naval-specific dockyards are reducing in footprint and airfields are seeing multiple uses put on them (the legacy of separate bomber and fighter airfields in the majority of countries is an example). While this reduces the overall economic and environmental footprint of defence, it does impact on the flexibility of the military to increase operations dramatically, and they need to consider where they are going to house the requisite logistics to a greater degree than previously. This becomes part of the agility requirements for defence scalability. The age of the infrastructure that is available to defence also needs considering when projecting future operations. It was designed with different equipment in mind and different logistics requirements. New defence facilities continue to being constructed and are comparable to commercial facilities, often on the basis of cost. Future adaptability and consideration of the points covered in this chapter need to happen.

Future defence opportunities Many of the future developments in defence logistics will be related to technology. In 2017, the British army sought proposals for autonomous last-mile resupply (Defence and Security Accelerator, 2017), and this is a good example of how the logistics challenge is developing in the future. It also provides an insight into how commercial technology, potentially off-the-shelf, will become more synonymous with defence applications. Autonomous delivery using unmanned aerial vehicles has become a populist subject for some of the most commercial organizations, including Amazon (Amazon, 2017); however, while defence applications are likely to be constrained by traditional procurement approaches, the commercial environment is constrained by the regulatory controls put in place by governments. Therefore, it is possible that the technology will develop in parallel between the commercial and defence industries. Where developments do take place, and commercial offthe-shelf (COTS) items are used, it is possible that training and equipment will also be commercial and not the expected bespoke defence training experience; this may challenge thinking and the experiences of those involved. Autonomous technology is likely to become more prevalent in the defence community, with the desire to reduce the numbers of personnel at risk and personnel numbers more generally. This reduction provides space for technology to minimize lethal risk to service personnel and potentially provide an opportunity for contractor support to provide the support package for

A look to the future

the logistics solution: outsourcing logistics capability already exists in some areas, sometimes for specialized tasks and others for capacity; notwithstanding the risks that outsourcing poses in a risk-averse environment, the Armed Forces will continue to focus on the capabilities that only they can provide. Strategic-level equipment and platforms will continue to be a part of the defence inventory; however, the reduced expenditure that many countries are facing on their defence activities is likely to minimize the quantity available but require similar levels of availability from the fleet as a whole. This will require maintenance, and the supply of maintenance items, not only as far forward as possible but as quickly as possible and, as part of the globalization of defence, in environments and with partners that may not have been part of traditional operations. Ensuring that defence logistics are agile and fit for many varied purposes is a key requirement of inventory management and resilience. It is feasible that a country’s defence logistics capability will be expected to integrate with that of other countries outside the usual partnerships and alliances. This will pose challenges that may not yet be considered at all levels of operation and decision making. Globalization will provide opportunities for technology developments and international cooperation; however, the sustainability of the supply chains poses global challenges as well. Technology developments require resources to produce. Increasing the military application of commercial products will mean that competition for the resources to manufacture those products will be with a wider customer base and one with greater agility and flexibility on decision making, which often makes them easier to work with. Those resources include the physical material resources, which may include strategically important materials, and the employees that manufacture and assemble the products. The international supply of these items, across geopolitical boundaries, poses ethical and legal challenges that need to be considered as part of the supply chain. Where COTS products are acquired, it may not be possible to satisfy the customer’s requirement for full supply chain transparency. It may be possible to manage some of the resource security issues with the development of additive manufacturing that minimizes material use and wastage. There may also be substitute materials that can be less hazardous and harmful than those used currently. This all needs development, though; while research is funded for defence activities, it is the commercial sector that will provide a stronger economic case where there is non-defence requirement (with few exceptions). This reduction in the numbers of personnel within the Armed Forces also poses a problem for area denial, occupation and security. Historically, lines

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of communication upon which the logistics run have required defending. Therefore, the contractor support role identified previously is not able to operate without security. This is perhaps similar to the requirements of crisis support in war-torn countries where aid requires security in transport and then assistance in distribution.

Summary Irrespective of the technology that becomes available and the domains in which defence logistics operates, there will continue to be a need for agility and flexibility to provide the capability at the right place and at the right time. The transfer of information between the commercial sector, defence sector and others will continue well into the future. There will be different rates of development and some approaches that don’t translate across industrial boundaries; however, concepts such as lean management, just-intime and just-in-sequence represent common-sense approaches to efficient and effective practices. The challenge that the lead-times and production runs face for adopting some of these will have to be overcome to remain competitive and economically sound through any economic uncertainty. There will always need to be a cross-over between the private and public sector to exchange information and resources. The extent to which this happens will vary depending on political will from all parties involved and will fluctuate. The topics covered in this book provide a suite of knowledge and skills that can be leveraged to ensure that this happens; however, this won’t happen in isolation of the people involved. As identified at the very start of the introduction to this book, logistics is a science but it’s not a natural one: it won’t happen without people to apply the knowledge and the skills that are within it.

References Amazon (2017) Amazon Prime Air [Online] www.amazon.com/Amazon-PrimeAir/b?node=8037720011[accessed 16 October 2017] Defence and Security Accelerator (2017) Accelerator competition: Autonomous last mile resupply. [Online] www.gov.uk/government/publications/ accelerator-competition-autonomous-last-mile-supply/accelerator-competitionautonomous-last-mile-resupply [accessed 14 October 2017]

A look to the future Department for Business, Energy and Industrial Strategy (2017) Cyber essentials scheme: Overview [Online] www.gov.uk/government/publications/cyber-­ essentials-scheme-overview [accessed 18 October 2017] Development, Concepts and Doctrine Centre (2014) Global strategic trends out to 2045, Ministry of Defence, London Development, Concepts and Doctrine Centre (2015) Future operating environment 2035, Ministry of Defence, London

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I NDEX Italics denote a figure or table. ABC inventory classification  260 ABCA Armies Program  12 Able Archer 60 absorption capacity  96–97, 104, 105, 109–10 acceptance, and offer (contract)  207 accounting 267–85 accounting information  268–74 accruals-based accounting  272–74, 283–84 achieved availability  165–67, 172, 178 ‘Action with Respect to Threats to the Peace, Breaches of Peace and Acts of Aggression’ (UN)  13 activity-based planning  253–54, 263 activity-cycle diagrams  317 activity diagrams  317 ACTO items  89 adaptive capacity  97, 104, 105, 110–11 additive manufacturing technology  102, 361 administrative and logistic delay (ALDT)  168, 170–72, 178 Afghanistan  16, 70, 75, 196, 231, 334, 340 agility  22, 68, 73, 255, 263–64, 273, 354, 360, 361 aid agencies  331, 333, 334, 335, 338, 340–41 air forces  13, 20–21, 22, 23, 31, 69, 75, 115–16 aircraft maintenance schedules  130 airlifts  60, 332, 354 ALDT  168, 170–72, 178 Alexander the Great  37–39 Alexius, Emperor of Byzantine Empire  43 Alfred the Great  42 Allied Joint Publications  14 Allied Logistics Publications  14 American, Britain, Canadian and Australian Armies Program  12 American Civil War  50–52 American War of Independence  47 ammunition  46, 48, 52–55, 58, 67–68, 72–73, 78–81, 89, 199 analysis 286–324, 319, 320–21 historic demand  254, 263 LORA  134, 140, 150–54



multi-criteria decision  293–95 Pareto  255, 259, 260–61 PESTLE 101–04 reliability 307–10 reliability-centred maintenance  140, 146–50 strategy-to-task 292–93 supportability  116–26, 135–61 animals 37, 38, 39, 41, 42, 44, 52 Annually Managed Expenditure  283 AnyLogic  316 Appert, Nicolas  50 architecting resilience  104–12 arcs  301, 302 Arena  316 Armed Forces Covenant  66 armies  20–21, 22, 23, 24–25, 36–40, 41, 42–61 see also British Army Army Commissary  47 army trains  41 arrival times, queuing systems  306–07 Articles 43/45/47 (UN)  13 artillery system maintenance  130–31, 132 Asquith, Herbert  53 assessment phase, ILS  122–23 assessments, criticality  128 Assyrian army  36, 37 attrition damage see battle damage audiences 243–44 see also stakeholders audit reports  270, 276 AUSCANNZUKUS Programme  12 authoritative approach, wicked problems 251 automotive industry  110, 291 autonomous delivery  360 autonomous technology  360–61 availability  163–73, 178, 224–25, 252, 312 back-orders  250, 256–59 baggage trains  37, 41–42, 44 Baghdad Pact  11–12 balanced scorecard  239–41, 283 Baldwin of Jerusalem  45 bar coding  216

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Index Barracks Master General  47–48 batching, inventory  74–75 bathub curve  310 battle damage  30, 128 battle damage repair packs (battle attrition packs)  70, 74 battle groups  25 Battle of Hastings  43 Berlin Wall, fall of  61 bills of materials  253 blood (blood products) supply  77–78 BOGSAT analysis  289–90 bottleneck items  213 bottom-up budgets  281 branches, network  300–01 break bulk point  73, 81, 82 British Army  24–25, 47–49, 52–56, 75, 152, 360 British Expeditionary Force (BEF)  53, 54–55 buddy-buddy system  24 budgeting (budget cycles)  280–84 bullwhip effect  73–76, 348 bureaucracy 334–35 burgs 42 buy items  205 Byzantine Empire  43, 44 CADMID cycle  121–26 Caesar, Julius  43 campaign season  196, 202 capability  124, 159, 181–82, 225–26 capacitated cost networks  303 capacity  96–98, 104, 105, 109–11 capital expenditure  268, 270–71, 272–74 capital spares  31, 32, 273 cash-based accounting  269–72 catalogue management (codification)  264–65, 349–50 CBM 160 Central European Pipeline System  68 Central Treaty Organization  11–12 CERP fund  334 CfA  224–25, 252 chain failure  104 Chamier, Daniel  47 charge unit loads  72 Charlemagne  6–7, 42 Chief of Staff  21 Class I hazard classification (UN)  32–33 classic availability  163 clinical timelines  77 closed questions  236 closed wargames  322 CM (corrective maintenance)  18, 19, 69–70, 127, 128–29, 169, 171–72, 253, 255

CNN factor  326 Code of Conduct of the International Federation of the Red Cross  328–29 codes of conduct  328 codification (catalogue management)  28–29, 264–65, 349–50 Cold War  57–60 collaborative approach, wicked problems 251–52 collective responsibility  15–16, 67–68 combat service support units  25, 26, 67 combat simulations (models)  318–23 combat supplies  15, 22, 23, 31, 67, 69, 72, 195 combat support units  25, 26, 67 combat units  25, 67 commercial-off-the-shelf (COTS) products  84–85, 360, 361 commercial supply chains  249, 250 Commissariat  6, 49 Commissary General  47 committed payments  271 communication  194, 195, 243–44 competitive approach, wicked problems 251 component level publications, NATO  14 Comprehensive Spending Review (1998) 229 computers  118, 125, 177, 314–15, 346 concept of operations  188 concept phase, ILS  121–22 condition-based maintenance (CBM)  160 condition monitoring  350, 352 configuration management  350–51 Conrad III  44, 45 conscription 54 consideration, contracting  208 consolidated allowance list  69 consumable items  30, 31, 69, 197–98 contingent procurement  82–83 contract clauses  208–10 contract management  216 contracting for availability (CfA)  224–25, 252 contracting for capability  225–26 contractor support  6, 26–27, 61, 151, 222–26, 246–47, 252, 353, 362 contracts  102, 206–10, 215–17, 224 contractual capacity  208 controlled drugs  77 controlled-humidity environment storage 82 core activities  220 corrective active maintenance  164 corrective maintenance (CM)  18, 19, 69–70, 127, 128–29, 169, 171–72, 253, 255

Index corruption  4–5, 48 cost accounting  277 cost-benefit assessments  110, 118 cost-optimized back-orders  258–59 costings  273, 276–80 COTS products  84–85, 360, 361 course of action development  187–88 Crimean War  48–49, 61 crisis response  325–44, 338 critical control points, temperature  80 critical path method (CPM)  303–04 criticality assessment  128 Crusades  7, 43–46 currency fluctuations  101 current expenditure  268, 271, 272, 283 customer satisfaction KPIs  239, 240, 241 customer-supplier relationship spectrum  219, 220 cyber domain  357–59 Cyber Essentials programme (UK)  359 D time/ P time gap  71, 72 Darius III  37 data  76, 107–08, 136–37, 158–59, 253–54 collection  241–43, 245 combat simulations  321 communication of  243–44 inventory classification  262 shared 352–53 de-stocking (de-bombing)  82 decision support and analysis  286–324 defence inflation  267, 284 defence logistics, defined  1, 5, 9 defence opportunities  360–62 Defence Standard 00-600 (MOD)  118 defence supply chains  249–50 defence threats  359–60 defensive alliances  11–16 Delphi techniques  290 demand 195–200 demand amplification  73–76 demand planning  69–71, 254, 255 demand predictability  347–48 demand satisfaction rate see service level demand time / production time gap  71, 72 demand times  71–73 demonstration phase, ILS  122, 123 Department of Defense (US)  81–82 departmental expenditure limit  283 dependability  179–81, 182 deployable spares packs see ‘get-you-in’ packs deployable systems  353–55 depot level support (LORA)  151 Deputy Chief of Staff  21 design-for-disposal 126

destination evaluation  190–92, 196 direct costs  278–79 direct supplier development  219–20 disaster management cycle  327, 328 discard tasks  147, 148, 149, 150 disciplines, integrated logistic support (ILS) 116–17 disposal  88, 126 disposal phase, ILS  125–26 disrupted architecture  105, 108, 111 disruptions 97–113 distance 193–95 distribution visibility systems  349 do not repair scenario  174–75 doctrine  5, 14–15, 66–68 downstream inventory flow see forward flow of inventory drinks storage  27, 50 drugs 77 Durand, Peter  50 dynamic simulations  313 earliest event times  305 earthquakes  109–10, 255, 338 economic disruptions  101, 109 economy 231, 232 Edward the Elder  42 Edward II  46 EFCs  131, 132 effectiveness  65, 231 efficiency  16, 65, 231, 232 Electronic NATO Ammunition DataBase 78 elements, integrated logistic support (ILS) 116–17 Emergency Response Program (US)  334 end of operations  86–89 end-to-end planning  264 engineered resilience  92 engineering management systems  351–52 Enterprise Data Model  353 Enterprise Dynamics  316 environmental disruptions  103 environmental factors  66, 79–82, 103, 191, 196 equivalent full charges (EFCs)  131, 132 estimates 186–87 Europe, and Cold War  60 European Union  11 event charts  317 executable diagramming models  317 exit, contract  209, 216–17 expeditionary operation, humanitarian aid  339, 340 expeditionary posture  9–10, 40–41

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Index expenditure  268, 270–71, 272–74, 283 explosive substances  32–33, 67–68, 73, 78–79 expressions of interest request  214 ExtendSim  316 external complexities, humanitarian aid 341 external disruptions  100–03 extreme weather events  103 facilities  17, 117–18 factory to foxhole planning  263 failure-finding inspections  148 failure modes  117, 127–28, 140, 145–146 failure rate  307–10 Falklands War  59 feedback 233–34 feudalism 42 fighting logistics through  75 fill rate see service level finance 267–85 financial accounting see accounting financial KPIs  239 financial management see finance financial ratio analysis  274–76 financial transactions  268 first line support  22 First World War  52–55 Five Powers Defence Arrangements  12 fixed budgets  282 fixed costs  278–80 flexible budgeting  282 FlexSim  316 FMECA  140, 145–46 food storage  50 force majeure  209 forces of lower readiness (FLR)  10, 14, 348 forecasting  254–55, 281, 348 fortifications  36, 42, 50 forward depth  23 forward flow of inventory  18, 19 forward mounting bases (FMBs)  71–72, 73, 193–94 forward storage sites  67 4D inventory classification  261–63 4 Ds  188 fourth line of support  23 France  11, 13, 48, 52, 54, 59, 60, 81 see also French army Frederick I  45 French, Field Marshal Sir John  53 French army  44–45, 48–49, 52, 54 fuel supplies  67–68 full operating capability  124, 159 functional architecture  105–06

functional KPIs  239, 240 funding, humanitarian aid  337 future developments  357–58 Gallus, Cestius  40–41 gaming, supply chain  74 gearing ratios  276 general purpose support equipment  143 Geneva Convention  77 genuineness of consent  208 Germany  61, 67–68 army  44–45, 52, 54, 55–56, 58 ‘get-you-in’ packs  69, 193 Glasnost  61 globalization  91, 359, 361 Gorbachev, Mikhail  61 graduated readiness force  14 Grant, General  51 Greek armies  37–39, 41 Guidelines for the Storage, Maintenance and Transport of Ammunition on Deployed Missions or Operations (NATO) 79 Gulf War (1991)  87 Haig, Field Marshal Sir Douglas  53 Hazard Analysis and Critical Control Point principle 80 hazard classification system (UN)  32–33 hazard function  308 hazard rate  307–10 headquarters  20–21, 25 Healey Review  59 health and usage monitoring systems  160, 172, 352 Henry I  42 Henry III  46 high-definition multimedia interface  352 high-impact events  103 see also natural disasters high readiness forces  10, 14, 68–69, 348 historic demand analysis  254, 263 holding costs  273 horses  37, 43, 56 humanitarian alibi  331 humanitarian crises  333 humanitarian relief  5, 6, 325–44 see also airlifts humidity  81–82, 177 HUMS (health and usage monitoring systems)  160, 172, 352 hybrid budgets  281 identify purchasing needs  210–11 IGOs  326–27, 330

Index ILS see integrated logistic support (ILS) in-service phase, ILS  125 in-transit visibility systems  349 income 268 indemnity  209 Indian armies  37 ‘indirect approach’  51 indirect costs  277–78 indirect supplier development  218–19 industry factors  192 information accounting 268–74 performance management  244 information (influence) domain  357, 358 information systems  345–56 infrastructure  5–6, 117–18, 190, 191–92, 322, 359–60 inherent availability  163–65, 172, 178 initial gate (MOD)  122 initial operating capability  124 initial provision (IP), of inventory  157, 159 initial provisioning list  157 initial support period (ISP)  157–58, 159 initiation 187 inspections 148 instantaneous failure rate  308 insurance 111, 209 integrated logistic support (ILS)  83, 84, 116–26, 135–61 integrated mission model (UN)  332–33 integrated test, evaluation and acceptance plan (ITEAP)  124, 179 integration mismatch  335, 336 intellectual property rights (IPR)  102, 209, 215 intention, contracting  207 Inter-American Treaty of Reciprocal Assistance 12 inter-governmental organizations (IGOs)  326–27, 330 interchangeability 15, 28, 78, 199 intermediate support level (LORA)  151 internal complexities, humanitarian aid 340–41 internal disruptions  100, 103–04 international organizations  326–27 International Standard on Phytosanitary Measures 66 Internet of Things  358 interoperability  12, 15, 23, 85, 119, 177, 264 intrinsic availability see inherent availability inventory  4–5, 18–19, 31, 74–75, 118, 157, 159, 250–51 classification (segmentation)  30–33, 260–63

planning 256–57 task  139, 150 temporary 110 invitation to tender (ITT)  211–12, 214–15 IP, inventory  157, 159 IPR (intellectual property rights)  102, 209, 215 Iraq  12, 80–81, 326, 332, 340 ISP  157–58, 159 items attractive to criminal and terrorist organizations 89 Jackson, General Thomas ‘Stonewall’  51 Jaffa  44, 45, 46 Jerusalem  43–44, 45 Johnston, General  51 joint headquarters  20–21 joint operations  264 judgemental analysis  290–95 Jugurthine War  41 just-in-time supply chain  69–70, 255 key performance indicators (KPIs)  237–41 key performance questions (KPQs)  235–38, 242 key support requirements  122 key user requirements  121 Kitchener, Lord  53 Labour government (UK)  59, 228, 229 Land Transport Corps  49 Langbrigae 40 latest event times  305–06 lead-times, reducing  71–73, 255 lean logistics  65 learning loop  233–34 learning organizations  229 Lee, General Robert E.  51 legacy systems  352–53 legal disruptions  102–03 legality of contract  208 legislation  66, 102 level of repair analysis (LORA)  134, 140, 150–54 leverage items  213 liability  208 limited items  31 line items see inventory line replacement units  250 linear programming  295–300 lines of support  21–23 liquidity ratios  275–76 Lloyd George, David  53 logical architectures see functional architecture

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Index logistic footprint  27 logistic functions  17–18, 27–33 logistic information systems (LogIS)  345–56 logistic laydown  27, 76, 77 logistic lead nation  26 logistic role specialist nation  26 logistic support date  125 logistics, defined  2, 4, 16–17, 35 Logistics Committee (NATO)  15 Logistics Handbook (NATO)  15, 17–18 long term missions  200–02 LORA (level of repair analysis)  134, 140, 150–54 Louis VII  44–45 lower-readiness force elements see forces of lower readiness (FLR) Macedonian army  37–39 McMurdo, Colonel William  49 main gate (MOD)  122–23 maintainability  176–77, 312 maintenance  17, 22–23, 133–34 corrective  18, 19, 69–70, 127, 128–29, 169, 171–72, 253, 255 corrective active  164 preventive (PM)  18, 19, 22, 69–71, 126–27, 129–33, 169, 253, 255 repair and overhaul (MRO)  19, 23, 31–32, 86, 195 vehicles  70, 130–31, 350 make activities  205 make or buy decision  211 management accounting  277 management science  287 manufacture phase, ILS  123–24 manufacturing technology  102, 361 mapping, supply chain  106 Mason Review  59 materiel  17, 18, 19, 67, 77, 78 mathematical modelling  295–98 max-flow, min-cut theorem  302 max-flow theorem  302 mean maintenance time  169 mean time between failure (MTBF)  164, 310, 323 mean time between maintenance (MTBM)  165–66, 168 mean time to repair (MTTR)  164, 166, 172, 176, 310 measures (metrics)  23–24, 67, 250 media influence  65, 326, 342 medical logistics  22, 23, 76–78, 195–96 medical treatment facilities (MTFs)  24, 76–77 medicine storage  80

Mersenne Twister  315 Metellus 41 meteorology  107, 131, 173, 190 see also weather factors mid-life updates (improvements)  120 mid-life upgrades  120 Middle Ages  42–46 see also Charlemagne MILAN anti-tank missile  81 military, defined  1, 2, 327 Military Flying Training Service  225–26 military-off-the-shelf products  84–85 military operational analysis see operations research (operational analysis) Military Staff Committee (UN)  13 Military Standard 1388 (US)  118 Ministry of Munitions  55 missiles  32, 81, 303, 323 mission analysis  187 mission duration  200–02 mission system  114–15, 116, 118, 120–21, 126–61 mitigation 109 MOD (Ministry of Defence)  9, 23, 32, 82, 85, 88, 108, 122–23 accruals-based accounting system  273–74 budget cycles  283–84 CADMID cycle  121–26 Defence Standard 00-600  118 logistic support dates  125 procurement 206 supportability standards  136 model, defined  288–89 model validation  318 modelling  107, 108, 295–98, 303, 307–10 monitoring condition  350, 352 supply chain performance  112 ‘mother country’ empires legacy  359 MRO (maintenance, repair and overhaul)  19, 23, 31–32, 86, 195 MTFs  24, 76–77 multi-criteria decision analysis  293–95 multimedia 352 multidisciplinary teams  107 multinational integrated logistic unit  26 multinational logistic unit  26 multiple-parameter network models  303 musarkisus 37 Napoleon 47 Napoleonic Wars  37, 39, 51, 52, 61 NASA 80 National Codification Bureau  28–29

Index national strategy  8, 9–11 NATO see North Atlantic Treaty Organization (NATO) natural disasters  332, 333 see also earthquakes; high-impact events naval blockade (1861)  51 navies  20–21, 22–23, 25, 39, 47, 51 Navy Board  47 network analysis  300–06 no impact disruptions  108–09 nodal failure  103–04 nodal redundancy  110 nodes  301, 304 non-core activities  220 non-current assets see capital expenditure non-governmental organizations (NGOs)  327, 328, 329–30, 332, 335, 336 non-repairable items  30, 31, 69, 198 Norman conquest  42–43 NormInv function  262 North Atlantic Council  14, 187 North Atlantic Treaty Organization (NATO)  8, 11, 12, 13–18, 66–68, 338 Able Archer 60 ammunitions/ explosives/fuel supply logistics  67–68, 78–79 Class I–III supply classification  27 Class IV–V supply classification  28 codification system  28–29, 265 medical materiel  77–78 staff branches  20–21 Stock Numbers (NSNs)  28–29, 70, 350 stockpile planning guidance  23–24 Supply Classification System  27–28 Supply and Procurement Agency  78 task organization  26–27 Northcliffe, Lord  53 Nott Review  59 object-orientation 315 off-the-shelf products  84–85, 360, 361 offer and acceptance (contracts)  207 officers’ trains  41 oil power  23, 27, 31, 39 on-condition inspections  148 on the shelf availability  10, 121, 214, 348 100-500 Series supportability analysis tasks 136 one-way crisis response supply chain  329–30 open questions  236, 237 open wargames  322 Operation Sealion  56 operation-specific systems procurement  82–85 operational availability  168–73, 178, 312

operational estimates  186–87 operational KPIs  239 operational time  168–69, 178 operations other than war (OOTW)  334, 335 operations plan  188 operations research (operational analysis) 286–88 optimization, supply chain  252, 263–64 Orange Book (UN)  32–33, 78 ordering cycle  216 Ordnance Board  47 organizations  151, 326–27, 328, 330, 332, 335, 336 KPIs  239, 240, 241 outsourcing risks  221–22 Oslo Guidelines (UN)  333 outsourcing  10, 220–22 overhead costs see indirect costs P time/ D time gap  71, 72 Pacific Settlement of Disputes (UN)  13 Pakistan earthquake (2005)  338 Pals battalions  54 parallel reliability block diagrams  311 parent company guarantees  209 Pareto analysis  255, 259, 260–61 Pasteur, Louis (‘pasteurization’)  50 payments in arrears  271 peace support operations  325, 338, 341 Perestroika 61 performance-based contracting  224–25, 252 performance inputs/ outputs  231–33 performance management  110–11, 221–22, 228–48 performance outcomes  231–35 performance reports  244 permanent items  31 permanent member states (UN)  13 permanent staff  327 personnel  111, 332, 361 see also staff PERT 303–04 PESTLE analysis  101–04 Philip II  45 Philip of Macedon  37–39 Pillsbury Company  80 Pipeline System (NATO)  67–68 planned adaptation  111 planning  69–71, 76, 137, 186–203, 253–54, 255, 263, 264, 281, 304 see also integrated test, evaluation and acceptance plan (ITEAP) planning yardsticks  76 Polaris 303 political disruptions  101, 109

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Index political factors  65–66, 101, 109 population factors  192 post-Cold War  61, 325–26 postponement theory  72–73 pre-qualification questionnaire (PQQ)  214, 215 preventive maintenance (PM)  18, 19, 22, 69–71, 126–27, 129–33, 169, 253, 255 see also scheduled maintenance primary activities  220 primary audience  243 priming equipment packs see ‘get-you-in’ packs private sector, and humanitarian relief  331 probability-based parameters  323 procurement  82–85, 204–27 procurement categorization matrix  212–13 production time/ demand time gap  71, 72 profitability ratios  275 profiteering 48 programme planning  137 programming, linear  295–300 project evaluation and review technique 303–04 project risk registers  108 promotions 75 protected mobility vehicles  70, 350 provisioning, and information systems 348–49 Prussian army  56 pseudo-random number generators  315 purchase orders  206–07 purchasing 206 purchasing cycle  210–17 push versus pull supply chain  64–71, 255 quality function deployment  291–93 Quartermaster General  47 Queen Elizabeth Class aircraft carriers  141 questions  235–38, 242 queuing systems  306–07 radio frequency (RF) hazard  82 radio-frequency identification (RFID) tags  216, 242, 349 radioactive materiel  33, 78 railways  51, 56, 301 RAND Corporation 290 ranging (range calculations)  117, 155, 157 rare earth elements (REE)  88 ratio analysis  274–76 readiness states  10–11, 13–14 Recommendations on the Transport of Dangerous Goods Model Regulations (UN)  32–33, 78

Red Cross  329 reduced performance  110, 111 redundancy strategy  175–76 regional organizations  326–27 reliability  173–76, 302–03 reliability and maintenance case  179 reliability block diagrams  311 reliability-centred maintenance analysis  140, 146–50 reliability-centred maintenance decision logic 149–50 reliability modelling and analysis  307–10 REME 152 repair scenario  175 repairable items  30–31, 69, 193, 273 Repington, Colonel Charles  53 reports, performance  244 request for proposals  214–15 requirements and dependability  177–79 procurement 214 resilience  5, 91–113 resilience engineering  95–113 resource requirements, supportability analysis 155 restorative capacity  97–98, 104, 105, 111 reverse flow of inventory  18, 19, 85–89 rework tasks  148–49 Richard I  45–46 Rio Treaty  12 risk  92, 95, 221–22 risk management  6, 67–68, 108 road transport  51–52 Roman armies  37, 40–42 see also Caesar, Julius routine items  212–13 Royal Air Force  13, 69, 115–16 Royal Electrical and Mechanical Engineers 152 Royal Navy  69 rules of engagement  335 run to failure  128, 129 safety stocks  255 Saladin 45–46 Saxony 42 scaling (scale calculations)  117, 155, 157 scheduled inspections  148 scheduled maintenance  30, 130, 147–48, 166, 176, 255 see also preventive maintenance (PM) scheduled removal tasks  148–49 scheduled services  147–48 scorecards  239–41, 283 Scott, General Winfield  51

Index sea transportation  39–40 see also navies; Queen Elizabeth Class aircraft carriers; ships SEATO 11 Sebastopol 49 second line support  22 Second Punic War  40 Second World War  39, 55–57 secondary audience  243 security  87, 88, 180, 192, 341, 359, 361–62 series reliability block diagrams  311 Sertorian War  41 service level  256–58 service level publications (NATO)  14 services, defined  17 Shaibah Logistics Base  81 shared data  254, 352–53 shell scandal, the  53–54 shell unit loads  72 Sherman, General  51 ships  39, 43, 48–49, 51, 141 shock 81 short duration missions  200 side-by-side planning  264 siege trains  41 Simio  316 Simul8  316 simulation modelling  312–18 simulations  313, 314–15, 318–23 social disruptions  102, 109 social influences  65–66 social media  102, 342 South East Asia Treaty Organization  11 Soviet army  58 space domain  357, 358 Spain  46, 59 spares-inclusive contracts  224 spectrum of conflict  341 staff  20–21, 327, 328, 329 see also personnel staff branches  20–21 stakeholders  119, 122, 123, 177, 183, 234, 243 standard operating procedures  335 Standardization Agency (NATO)  15 Standardization Agreements (NATO)  14 standby time  168–69, 178 statecharts 317 static simulations  313 steam power  39, 48 stepped fixed costs  279 stochastic simulations  314 stock  255, 327 stock on hand  256 stockpile planning metrics  23–24

storage  27, 50, 80 storage depots 72 see also forward mounting bases (FMBs); forward storage sites Strategic Concept (2010)  338 strategic KPIs  239 strategic-level documents (NATO)  14 strategic outsourcing  221 strategy  8, 9–11, 40, 51, 175–76, 211–12 see also strategic KPIs; strategic-level documents (NATO); strategic outsourcing; strategy-to-task analysis strategy-to-task analysis  292–93 sub/shop replacement units  250 Sun Tzu  35 suppliers  205, 274–76 management (development), of  217–20 selection 214–16 supplies, combat  15, 22, 23, 31, 67, 69, 72, 195 supply chain  17, 18–19, 64–76, 87–88, 97–113, 239, 249–66 Supply Chain Guru  316 Supply Classification System (NATO)  27–28 support activities  220 support chain  18–19, 223–24, 249 see also lines of support support equipment  117 Support and Procurement Organization (NATO) 15 support system  115–19, 137–39, 159–60 supportability analysis  116–26, 135–61, 143–44 tasks 101–103  137 task 201  138, 158 task 202  138 task 203  138–39 task 204–205  139 task 301  140, 141 tasks 302–303  140, 150 task 401  141–42, 155 task 402  142 task 403  142–43 task 501  143–44, 158–59 surveys 242–43 sustainability  87–88, 95 switching suppliers  217 system requirements documents  122 system usage, and preventive maintenance 132–33 tactical outsourcing  221 tactics, techniques and procedures (TTP) (NATO)  14, 83–84, 320

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Index target setting  231–33 task inventory  139, 150 task organization  25–27 taxation 280 technology  4, 50, 52–53, 57–58, 102, 360–61 see also cyber domain; information systems; Internet of Things; logistic information systems (LogIS) temperature control  77–78, 80–81, 177–78 temporary inventory  110 10-1-2 timeline  77 termination (break), contract  210 terrorism 359 tertiary audience  243 test equipment  117 Thala 41 third line support  22–23 3D inventory classification  262 time-processing methods  322 time-stepping 322 Tohoku earthquake  109–10 tolerable disruptions  109 top-down budgets  281 total corrective maintenance  178 total preventive maintenance  178 track miles  131–32 traditional support arrangements  223–24 training 118, 316, 320 training needs analysis  156 transfer of authority  16 transportation  39–40, 51–52, 118, 199–200, 298–300 see also air forces; navies; ships; vehicle maintenance transshipment summary  300 Treasury Department  47 Treaty of Friendship, Cooperation and Mutual Assistance see Warsaw Pact troop trains  41 trucks 303 UK see United Kingdom (UK) UN see United Nations (UN) unauthorized overspending  283 uncertainty  83, 91–92, 346 Unified Modeling Language  317 unilateral assistance  327 United Kingdom (UK)  59, 66, 70, 73–74, 80–82, 228, 229, 283, 338–40, 346–49 see also ABCA Armies Program; AUSCANNZUKUS Programme; British Army; MOD (Ministry

of Defence); Royal Air Force; Royal Navy United Nations (UN)  12–13, 32–33, 78, 326, 329, 332–33, 336 United States (US)  55, 57–60, 80, 81–82, 118, 136, 334 see also ABCA Armies Program; American Civil War; American War of Independence; AUSCANNZUKUS Programme universal serial bus  352 unmanned vehicles  197, 360 unplanned adaptation  111 unscheduled maintenance see corrective maintenance updates/ upgrades  120 upkeeping mission system  120 upstream inventory flow see reverse flow of inventory Urgent Operational Requirements (UOR) procedures  85, 224 US see United States (US) user requirement document  121 USSR  58–59, 60, 61 validation  179, 188, 318 value chain  220, 249, 250 value for money  231–33 variability 262 variable costs  278–80 vehicles  70, 130–31, 197, 350, 360 see also trucks; wagons vibration 81 Vickers VC10  115–16 visibility  16, 73–74 visual interactive simulation  315–17 vulnerability, network  303 wagons  41, 42, 51–52, 56 War Between the States see American Civil War warehousing KPIs  239 wargames 318–23 warranty  208 Warsaw Pact  11, 12, 60, 61, 66 weather factors  103, 196–97 see also meteorology Weibull distribution  310 Western European Union  11 wicked problems  251–52 William of Normandy  42–43 Witness  316 women, wartime roles  54–55

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