Select Committee on Defence Minutes of Evidence

Examination of Witness (Questions 420 - 439)



Mr Howarth

  420. I apologise for not being here at the beginning as I was detained elsewhere in the House. Can you confirm that what you were saying in answer to James Cran was that your customer, the Ministry of Defence, has charged you with producing in respect of certain key assets a level of spares which they know to be insufficient and which leads to the cannibalisation of that equipment? Is that a deliberate act of policy by the Ministry of Defence to allow a situation to persist in which, in respect of these key front-line assets, cannibalisation is an established part of the process?
  (Air Chief Marshal Sir Malcolm Pledger) Again, I think you give us greater credit for sophistication than might be the case. What I am describing here is a relationship between my organisation and my many customers that is not as sophisticated as you describe. It is very blunt and again I think McKinsey was particularly accurate when they said the baseline for this is indistinct and therefore what transpires from that is what I will call a perspective of yesterday's practices and indeed current practices from the shop floor which shows today's arrangements not to be what they necessarily expect individually, but that does not reflect the arrangements that have been put in place between the DLO and the customer. We have agreed as to how to do this. As I say, we can do it better by looking end-to-end, not just in horizontal slices and we have then performed against those objectives. So this is not deliberate at all, it is a lack of sophistication and what I would call sharing of the objectives that are placed between my customer and my organisation.

  421. So if this is not deliberate, how are you going to make the savings and yet repair what quite clearly is a deficiency in the system whereby front-line equipment is having to be cannibalised?
  (Air Chief Marshal Sir Malcolm Pledger) Providing the evidence of what goes on today and this approach does that to an extent by looking end-to-end and then by using all that information better to create the CSAs and this contract between these different parts of the Ministry of Defence to give optimum support to that military capability.

  Chairman: This is not a question, but I would certainly like assurances to my last question. If you are charged with providing sufficient spares to sustain the two concurrent operations, I would like to know if those concurrent operations are likely to be protracted or a level of intensity that we have not properly calculated. I want to be absolutely certain, whatever the MoD says, which I will pour a degree of scepticism on anyway, (a) whether we fight, or (b) the strategy and tactics of the fighting are determined by military and political judgment and not by the supply of ammunition and equipment that we may or may not have or may be or may not be able to acquire. That might require a lot of shelves being filled with a lot of equipment at high cost, but one thing is absolutely certain in this life that you would know, Air Chief Marshal, and that is whatever you expect to happen will not happen and the absolute opposite will in effect take place and you are the one who will be left holding the empty shelves up, and that cannot be a career enhancing situation to be in. So whatever the MoD tells you, you have to be certain in your own mind, if I might be so bold, and certainly you would need to reassure us that you are not going to be left holding up a lot of empty shelves. I have another question not to be answered now. There was a catastrophe in Donnington where vast amounts of supplies were destroyed in a fire. I would like assurances from you that we have learned a lesson from that, not just in fire brigades but in having supplies of the same items and products sufficiently dispersed so that if there is another fire we do not all have an Atlantic conveyer-type situation, we are not left with a depleted line because of a disaster. Please do not answer that now because it will take a little time.

Syd Rapson

  422. We have had robberies in aircraft for 40 years to my knowledge and Christmas Trees all over the place, but I am concerned about someone in your position saying to the Treasury enough is enough on percentage savings when combat effectiveness is under duress. I worry about Saif Sareea. We had an operation there which was planned for over two years and we ran out of aircraft rotor blades, and I just worry that the Treasury-driven efficiencies are forcing people like yourself to comply and then pressing the pressure down further onto the other people under you without someone at your position saying enough is enough, we are undermining the efficiency, this has got to stop, and that will take a very brave person. I am not doubting your braveness. There does not seem to be someone high enough up to say to the Treasury that they cannot have any more savings because we are undermining the capacity to fight if we are called on to fight. When will that position be reached?
  (Air Chief Marshal Sir Malcolm Pledger) As I say, at the moment my perspective on that is that there are huge improvements available to us in my mission statements in here which is sustaining that operational capability; that is the raison d'être for this organisation. I think I would have to say that if I felt what you describe as an efficiency process but which I describe as a strategic step change to support my mission and vision were the case then I believe I should not be sitting here.

Mr Crausby

  423. In the strategic plan your stated aim is to create a lean and agile supply chain and you promise in the medium and longer term to provide near "real-time end-to-end materiel management and visibility", and obviously visibility of stores is incredibly important. Why did you terminate work on the Defence Stores Management Solution IT programme? What will you replace it with, and when? How much did it cost to terminate the programme?
  (Air Chief Marshal Sir Malcolm Pledger) Thank you for reading back what the vision and the future is going to be. That again supports my earlier statements about an effective logistics solution, which is what this is about as well as efficiency. Of course, as part and parcel of that, we are going to need the information to create that real time and that risk management solution effectively. I do not think it was I necessarily that suspended the DSMS proposed solution and I would stress at the moment that it is suspended, but of course what we are now doing—

  424. But why?
  (Air Chief Marshal Sir Malcolm Pledger) I was going to say what we are now doing, of course, is transforming the way by which we are going to reach the goal I have described. What we had in the past was a regime of convergence from three inheritances in spares inventory management—SECS, SS3 and CRISP—and the idea was to put them together in one solution. I have to say that the answer to this will almost certainly mean that that is not necessarily the best way of moving into the future. The staircase described in here will almost certainly move the provider regime more into industry and what might be a better solution is to exploit current industry solutions for in-transit visibility rather than create our own. So this opens up new means of supporting what I have described in the vision. There is no doubt, however, that we are going to need better in-transit visibility both in the UK and through the coupling bridge and subsequently into whatever theatre, and the extent and capacity of that again we are currently reviewing such that we have a solution that is consistent with this outcome and not simply with a state of convergence.

  425. So you will deliver it with another IT programme, will you?
  (Air Chief Marshal Sir Malcolm Pledger) We will have to have another means of providing that visibility and what I call the management of some very expensive commodities.

  426. Is there no view as to when that will be?
  (Air Chief Marshal Sir Malcolm Pledger) What I now have to do of course is having created this transformation is to create the IS strategy that will support it, but I think it is broader than just stores management.

  427. And what happened to the Defence Stores Management Solution, was it a disaster?
  (Air Chief Marshal Sir Malcolm Pledger) No, as I understand it, some of the deliverables, and we were only in what I would call the assessment and technical demonstration phase—

  428. Did it cost much?
  (Air Chief Marshal Sir Malcolm Pledger) It was constrained within the approvals that had been made for those particular phases. There is no doubt there is a great deal of intelligence and intellectual property we got from those technical demonstrators that will inform whatever the final solution might be.

  429. Can I ask one question on Network-Centric Warfare which seems to be the buzz word. Does it make a difference to your thinking in the sense that Network-Centric Warfare will demand something different than what has been traditional in that we may be called on to do things very quickly? Is this really the time, when we are moving into Network-Centric Warfare, to be cutting back on spares?
  (Air Chief Marshal Sir Malcolm Pledger) I do not think I said we were cutting back on spares per se; I said we were going to have a better material flow solution. We are trying to get to the right number of spares in the right place at the right time.

  430. Less spares than before.
  (Air Chief Marshal Sir Malcolm Pledger) But available in the right time.

  431. Is this the right time to be doing that as we think about Network-Centric Warfare?
  (Air Chief Marshal Sir Malcolm Pledger) I suppose the answer to that is there is never a right time in today's international situation. If you had said that 10 years ago, we would have said, "Life will not be quite as busy for the next 10 years"; is that the right time? If you do not face up to the realities now, I will not be able to prosecute what is in here and try to give you the assurance that what we are doing will become effective. I still stand by my statement that the realities of today are going to be for a Network Enabled Capability which will require agile and flexible logistics solutions, not necessary in just two lines of communication but potentially more, and that therefore we have to prosecute this route if we are going to be effective against those operational risks.

Jim Knight

  432. I will come back to Network Enabled Capability in a minute. I want to talk about the implications of the New Chapter but first I just want to ask a very short and basic question which has just occurred to me as we have been talking this morning. Why is your position held by a serving military officer, given that your Strategic Plan is informed by the McKinsey management consultants' report, and it seems increasingly that you are required to speak in management consultant speak, and that is something we get used to, and I just wonder if we are reaching a point where the talk of the customer and so on means that this will become a civilianised job and it is no longer needed to be a uniformed officer?
  (Air Chief Marshal Sir Malcolm Pledger) I suppose I am rather disappointed you think that I speak in management consultant speak.

Mr Cran

  433. You do to me!
  (Air Chief Marshal Sir Malcolm Pledger) I have spent the last couple of weeks, having launched this, deliberately going round my organisation and others rebutting that suggestion and making the point that I believe that this has to remain a military job because of the risks associated to our armed forces' first choice, both in terms of their own well-being but our succeeding in employing the capability that they represent. So I am rather disappointed in your perspective, I have to say.

Jim Knight

  434. I like to ask basic questions and I do not know if I have had an answer that I am confident about but I am happy to move on because we have not got much time. In terms of the New Chapter the original SDR talked about developing logistics capability as being able to support two concurrent operations with separate lines of communication. The New Chapter talks about the trend towards expeditionary operations becoming even more pronounced. With that prospect of perhaps several expeditionary operations under way at once, what lessons for logistics support have you drawn as part of the SDR New Chapter work?
  (Air Chief Marshal Sir Malcolm Pledger) I think there are several. I want to say we have progressed a long way to creating those two concurrent lines of communication—strategic lift, Ro-Ro ferries and so on and so forth—but I think I would also say that your observations about the future have also been proven to be our lessons of the past. This is not just about two concurrent medium-scale operations, the realities have been something different. This is called managing within that real world. Many of the pressures therefore have actually focused on what I will call the agility and the competence of the logistics chain then to react to those particular locations, and we have been developing that deliberately and I think successfully if you look back at recent operations. Of course, we are not yet perfect but we are trying to learn those lessons. In terms of lines of communication, our means of taking up from trade or the hiring of things like heavy lift, Antonov, and so on and so forth is still shown to be an effective remedy in those operational circumstances. So, yes, we have got to be more agile, we have got to have people with better competencies, better understanding because that actually is where the pinch points have come to fruition over time, not just in the equipment availability and strategic lift aspect.

  435. David Crausby touched earlier on the question that Network Enabled Capability will require a sharper response and less of a build-up in logistics terms. I am interested in how you are going to achieve the mission which you identify in your strategy that the role the Defence Logistics Organisation seeks to deliver is effective and integrated logistics support and information services. Obviously with Network Enabled Capability that information services end is increasingly critical. Am I right to understand those services are mainly looked after by the Defence Communication Services Agency and is the provision of logistics and information services increasingly being integrated and how are you achieving that?
  (Air Chief Marshal Sir Malcolm Pledger) I suppose the immediate answer is it is not just the DCSA, albeit they play a large and increasing role as we do integrate and take into the centre more responsibility across the panoply of information services in the Ministry of Defence. Of course there are other information services that are directly responsive to the logistics process. We were talking earlier about in-transit visibility, so there are those aspects that we also have to develop. Again, one of my organisation's very new initiatives is to try to develop the doctrinal and conceptual solutions to the new challenges that we face. It does not currently exist and we are developing that as I become the process owner end-to-end for logistics (a situation that similarly did not exist in the past) such that we can try then to put in place the right solutions for these challenges given the agility and the flexibility that you have described.

  436. So is any Network Enabled Capability going to fundamentally and radically change things? Is this potentially the driver for the culture shifts that we have been talking for the substantive change that you need to undergo in logistics?
  (Air Chief Marshal Sir Malcolm Pledger) I think it has to be a new driver, not only in my organisation, I have to say, but as far as the front-line commands are concerned because if they are going to have that military capability and the means of translating it into what I call operational capability ready for a particular conflict, then we are going to have to develop their sophistication in the way they approach this in the application then of the new equipment as it comes into being, but more importantly the modification and support of the legacy systems that will still represent our capability for some time to come.

  437. So you will need to be able to react sharper, faster and more flexibly despite the constraints of 20% efficiency gains and despite the constraints of a leaner spares line, potentially making you more brittle as an organisation and less flexible?
  (Air Chief Marshal Sir Malcolm Pledger) Even, may I say, potentially slower deliberately whilst sending the right signals about capability.

  438. Finally, Saif Sareea did not test your ability to react quickly to logistics support because you had a three-year build up to that exercise. When are you going to be able to exercise that capability?
  (Air Chief Marshal Sir Malcolm Pledger) I think all I can say to that is for the next of those exercises we are going to have to demonstrate the progress we have made against the challenges that you have described. I am not actually sure as to when that next exercise would be.

  Jim Knight: It may be—

  Chairman:—A real-time exercise!

Patrick Mercer

  439. No exercise!
  (Air Chief Marshal Sir Malcolm Pledger) Indeed it may, but, of course, we are taking the opportunities of time if that were to be the case.

  Jim Knight: Thank you.

  Chairman: You are very delicate in your remarks. Kevan Jones—who is rarely delicate in his remarks!

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