Examination of Witness (Questions 351
WEDNESDAY 4 DECEMBER 2002
KCB OBE AFC
351. Air Chief Marshal, apologies for keeping
you waiting a little while. Thank you very much for coming. Please
give our best wishes to your predecessor who did the job very,
very effectively. You have been Chief of Defence Logistics now
for just a short time and almost upon arrival the MoD published
the new Strategic Plan for the DLO. Did you have any role in its
preparation or was it a fait accompli when you arrived
at your new desk?
(Air Chief Marshal Sir Malcolm Pledger)
First of all, thank you, on behalf of my predecessor, Sam Cowan,
to whom much is owed, for where the Defence Logistics Organisation
is currently. I think that is a point I have made as I have gone
around in my early timethe achievements since its relatively
recent inauguration. So far as the Strategic Plan is concerned,
I do not think you will be surprised to know that I started to
engage with the organisation a couple of months before I actually
took over, and that I would suggest that I and my board very much
own what is in this publication.
352. So there will be no tweaking or slight
amendments, or would you normally expect that in the course of
(Air Chief Marshal Sir Malcolm Pledger) Absolutely.
I think this is an essential means, shall we say, of taking what
we have described as the next step in the development of the DLO.
I would expect us to publish one of these each year, reflecting
progress that has been made, the challenges that remain and a
determination, really, to gain recognition for the people in the
organisation as to what they have achieved. I do not think anything
in today's uncertain worldcertainly in the militarywould
ever be seen as standing still. This will be an annual event,
353. The MoD kindly sent us a copy of the McKinsey
Report upon which much of the DLO Strategic Plan seems to have
been based. As the report is classified we will be very, very
careful in any questions we pose. The document, as it has been
sent to us, is a weighty document, too. I would like to ask: what
were the circumstances that led to the calling in of McKinsey?
Who decided to call in McKinsey? Can you give us an indication
of the reasons why that route was taken and not, perhaps, some
sort of in-house study being undertaken?
(Air Chief Marshal Sir Malcolm Pledger) I would suggest
McKinsey was very much the determination of the MoD to understand
exactly where the Defence Logistics Organisation was in its transformation;
how far it had got in what I call transforming the inheritance
from the three single services and in pursuit of its seven themesconvergence,
integration, et al. You will also know that the supporting business
change programme that the organisation already had in place was
in question in terms of its scope, substance and indeed its cost.
This was a means of providing information as to how far we had
got and, therefore, what the next steps might be across the MoD
and not just within the organisation itself.
354. How much did the study cost? Anyone behind
know? Perhaps you will let us know.
(Air Chief Marshal Sir Malcolm Pledger) I will let
you know, Chairman.
355. Are you generally satisfied with the report?
Was it a good piece of work?
(Air Chief Marshal Sir Malcolm Pledger) The Department
is very definitely satisfied with the content and with the findings
and, if I may support that, I would also suggestand the
product, as you say, at least in some parts is the Strategic Planit
reinforced that best practice was already being applied across
the department and in the organisation but, shall we say, not
as consistently as it might, in order to derive full value for
356. Could you elaborate slightly, perhaps,
the extent to which the Strategic Plan reflected the conclusions
of McKinseyjust to add to what you have said? As you have
only been in the job for a short while, if you wish to consult
any of your advisers or bring them forward, please feel free to
(Air Chief Marshal Sir Malcolm Pledger) Thank you
very much. I think the real value that we have taken from McKinsey
in terms of going forward rather than looking back is to be able
to apply what I will call a process regime across some disparate
environments, better to prosecute what was originally envisaged
in integration and convergence. This very much emphasises the
processes and the benefits that will accrue from those processes
in the regime, of course, that Smart Acquisition put in place
and the IPTs then delivering against our customers' requirements.
However, it is more than that. It is also what I referred to earlier
on the ability subsequently to measure the improvements that accrue
from those processes. One of the major findings was that we were
not good at actually being able to identify those and gain recognition
for them. So another part of this, deliberately, is to have a
change plan, a change regime of programme arrangements such that
we can identify what has happened and the benefits associated
357. When was the report made available to you?
When did you get the report?
(Air Chief Marshal Sir Malcolm Pledger) It was made
available formally to the Ministry of Defence, I think, about
two weeks after I took up my appointment.
358. When was that?
(Air Chief Marshal Sir Malcolm Pledger) 2nd September.
There had been various, what I will call, interim meetings with
the consultants to show their interim findings before that.
359. I have not had a chance to read it, unfortunately,
but the question that you raised yourself in answer to the Chairman's
first question was this thing about value for money. Did the report
have a chance to look at value for money if some of our European
partners no longer took up, for example, the number of Eurofighters
or missiles as we have heard today, and the cost to the UK defence
budget increases significantly? Is there not a judgment to be
made on whether or not you are still getting value for money for
that product in defence terms, rather than the social implications
for the country of making a different decision?
(Air Chief Marshal Sir Malcolm Pledger) No, the consultants
were not engaged on that basis. It was very much to look at the
current structure and progress of the DLO in fulfilling the objectives
it was given to start with. Therefore, a process analysis of how
we were doing business. The requirements, of course, are then
the area of other parts of the department; they were not invited
to challenge what I will call the relationship then between Customer
One and the DPA, and the product of that initial equipment procurement