Private Bidders Lose Out As UK Restructures Logistics Chain
The UK Ministry of Defence (MoD) has chosen an in-house option for the outcome of the 2002 Future Defence Supply Chain initiative, which was set up to improve the performance of the Defence Supply Chain. This will involve a major reorganisation of how equipment and supplies are stored and distributed. These efforts are part of a package of measures that include other defense support elements and facilities in the UK.
Alternative models of in-house provision were compared with a potential partnered solution, for which proposals were sought from industry. Two consortia: Defence Logistic Solutions (DLS: BAE Systems, AgustaWestland and TNT); and Defence Supply Chain Solutions (DSCS: Devonport Management Ltd and Exel) were invited to submit proposals, but in the end neither was accepted.
The Future Defence Supply Chain initiative was set up in 2002 to assess a range of options for managing and operating the non-deployed Defence Supply Chain to reduce costs of ownership, whilst maintaining or improving service levels and enhancing operational capability.
While Operation TELIC in Iraq was not instrumental in the creation of FDSCi, a number of lessons learnt from this operation in terms of stock holdings and movements and the ability of the supply chain to respond rapidly to changing circumstances have influenced the final decision.
The Defence Logistics Organisation, which is responsible for the UK element of the supply chain, will now enter detailed discussions with the trades unions, as today’s decision will streamline the structure of the existing storage and distribution network, resulting in an expected reduction of around 2,000 posts over the next five years. This new way of doing business is claimed to improve current levels of support, whilst also reducing costs by GBP 50 million a year by 2010, saving the taxpayer more than GBP 400 million over the next 10 years.
A list of depots impacted by this announcement is included in the official release.
- UK MoD (July 21/05) – MoD Strengthens Defence Supply Chain
- UK MoD (July 21/05) – Modernising Defence: John Reid announces a package of measures to better support the front line