The Use of Information to Manage the Logistics Supply Chain

LOGISTICS INFORMATION HEARING – SUPPLEMENTARY NOTES

Q9. Stock Deterioration in Op HERRICK.

There are multiple causal factors for the degradation of stock on Op HERRICK, either by 'life expiry' or by environmentally induced physical degradation.  High ambient temperatures and harsh operating conditions, particularly in forward locations, has resulted in some degradation of stock in the past. Until late 2010, some Theatre Force level stocks held in Camp Bastion were kept in sub-optimal storage facilities. Storage of supplies in Theatre has been addressed as part of the HERRICK Campaign Support Plan (HCSP), established as a recommendation of the HERRICK Campaign Support Review in June 2009 initiated by the Defence Logistic Board in January 2009. 

Since 2010, the Bastion Supply Solution has improved the storage of General Stores, Equipment Support materiel and aviation stores with the provision of purpose built storage facilities in Camp Bastion.   These facilities have enabled the move of stock that was previously stored in ~1000 ISO containers.  The Force Primary Depot build commenced in October 2010 and this will eventually hold all Theatre Force General Service stocks, less some commercial stocks such as bottled water and rations (held under commercial arrangements in Afghanistan).  Further improvements in temperature controlled storage within the Force Primary Depot are planned in 2011 which will further improve the lifespan of specified stocks. Additionally, the establishment of Logistic Support Teams with each Theatre Force battle-group in 2010 has enabled logistic specialists to deploy forward to improve logistic arrangements in forward locations. Management of stock has improved, enabling the backload of surplus stock to Camp Bastion and better rotation of stock subject to degradation including ammunition and rations. 

The level of deterioration of stock in theatre has improved by these measures. Within the next 12 months the Department will take further action to establish a system to derive reliable cost data across all the materiel accounts to enable more accurate tracking of materiel written off.

Q32. What is the cost of the Supply Chain for UK operations over Libya, Op ELLAMY, and the overall cost of Op ELLAMY?

Op ELLAMY Supply Chain Costs [1] :

Total (to date 13 Mar – 13 Jun): £3.3M.

The current estimate of the total net additional costs of military operations for six months in support of Operation ELLAMY - the United Kingdom 's contribution to coalition operations in support of United Nations Security Council Resolution 1973 - is in the region of £120m. This excludes costs associated wit h capital munitions expended.

Based upon current consumption rates we estimate the cost of replenishing munitions may be up to £140m.

The Treasury has agreed to meet these costs from the Reserve.

Q’s 104,111,174. Which IT systems are currently at Critical and what actions are the department taking to reduce the severity. How much money we are investing in these systems, who are the SRO’s accountable for the projects by individual name and project, and what is going to be delivered by what date (key milestone points)?

The major Logistics Information Systems projects to replace key systems are all being delivered within the Joint Support Chain, with Major General Ian Copeland, Director Joint Support Chain, as the senior officer responsible.

The key systems to be replaced are the base inventory and warehousing systems, which are at risk of catastrophic failure due to the age and obsolescence of these systems and the associated infrastructure on which they are hosted. These systems are:

o SCCS, WTMS (Air)

o CRISP, WITS (Maritime).

o Stores System 3, BODMS, AMANDA (Land).

The projects to introduce new Logistics Information capabilities are:

o Management of the Joint Defence Inventory (MJDI) - £183M investment (2008-2018).

o Joint Asset Management and Engineering Solution (JAMES) - £83M investment (2008-2015).

o Air Movements Operations (AMO) - £65M investment (2008-2018) [2] .

o Base Inventory and Warehouse Management Service (BIMS), to replace the key systems listed above:

§ BIMS A. Costs for BIMS-A are embedded within the Delivery Partnership contract with Boeing Defence UK. This £803M Delivery Partner contract has been funded through the brigading of existing funding, with the efficiencies achieved from this exercise funding the new BIMS-A capability.

§ BIMS-B. Additional funding of £75M has been agreed in the 2011 department budget for the remaining critical systems to be replaced via the Delivery Partnership arrangements.

The major milestones of these projects and further details are summarised at the Annex.

Q128. The committee requested to know when will we be in a position not to release stock without a Nato stock number. PUS’s statement was that operational requirements would mean that the possibility of un-numbered equipment being sent to operations would always remain.  Therefore what criteria determined when stock/assets were issued without Nato stock numbers .

Current policy is that all items entering the Supply Chain must be codified when an item is contracted, or the first time an item is demanded, prior to deployment. In agreement with Chief Joint Operations, no new item is to deploy to theatre un-codified without express authority. The codification of existing equipment already in theatre which had not been previously codified is currently being addressed. However, it is acknowledged that not all equipment components will be codified when fielded in theatre due to two main factors :

· T he urgency to field new battle-winning capability into theatre quickly, within budget, will limit the level of support solution and reduce the level of codification possible on that equipment.

· The level of parts to be codified will be based upon the anticipated repair and support arrangements for that equipment.  T he failure of some individual components will not have been predicted, especially for new UOR vehicles , which will necessitate new spares to be subsequently codified

In addition, the Theatre Temporary NATO Stock Number process enables previously un - codified materiel to be managed once in Theatre.  Recent DE&S activities have focussed on reducing the number of un - codified equipments being deployed.  These improvements have seen increasing numbers of UOR equipment items (such as Protected Mobility Vehicles) being suitably codified prior to deployment. In the past 12 months over 18,000 UOR equipment items have been codified.

Q178. How many consignments [3] went missing on operations in FY 10/11?

The question related to the amount and cost of materiel lost in transit, referring to the number of pallets lost during Operation Granby in 1991. The relevant metric used for current operations is the number of consignments, measured by the number of ISO containers transported and held in theatre, which indicate the amount and cost of materiel that has gone missing in the period quoted. In FY10/11, for Op HERRICK, the number of containers in the supply chain that were lost was 41, with a total value of materiel lost of £358k. The total value of these losses is therefore 0.7% of the total amount of materiel transported, and 1.4% of containers transported. These were due to a combination of theft, enemy action and damage in transit.

Q145. A comparison is to be made of the department’s logistics arrangements with international partners.

This work has been initiated by ACDS Log Ops, Air Vice-Marshal Graham Howard, and an update to this action will be reported in two months’ time.

LOGISTICS INFORMATION SYSTEMS – MAJOR CHANGE PROJECTS

Serial

(a)

Project

(b)

Description

(c)

Project Milestones

(d)

Costs

(e)

1

Management of the Joint Deployed Inventory (MJDI).

MJDI is the new system is being implemented in light of the operational shortcomings in the management of deployed assets and will contribute to improved materiel accounting in the deployed area across the three Services. MJDI is currently being rolled out incrementally, with the first variants already in service and delivering operational benefit, and will be fully rolled across Defence by March 2014.

MJDI is already in use on Op ELLAMY and is currently being rolled out to Op HERRICK. MJDI remains on track to deliver Initial Operating Capability in Oct 11.

· Jul 11 - Increment 1.

· Oct 11 - Initial Operating Capability.

· Feb 12 - Increment 3.

· Mar 12 - Full Operating Capability.

· Apr 12 - Increment 4.

· Mar 14 - Increment 5.

· £183M total through life. (FY 08/09-17/18).

· £101M invested between FY 08/09 – 10/11 to develop new capability.

2

Joint Asset Management Engineering Solution (JAMES).

JAMES is the Engineering and Asset Management application designed to provide equipment asset managers, engineers and commanders with the information needed to increase equipment availability and optimise asset usage and maintenance.

It is a tool for the three front line services, DE&S and Defence contractors involved in the through life engineering and support of land-based equipment. The first increment of JAMES is already in service. The second and final major increment of JAMES was introduced into service in Dec 10 and is being rolled out over the next two years. JAMES is on target to achieve its Full Operating Capability on 31 Mar 14.

· Mar 10 - JAMES(1) Full Operating Capability (achieved).

· Dec 10 - JAMES(2) Service Commencement Date (achieved).

· Mar 14 - JAMES(2) Full Operating Capability.

· £83M total through life (FY 07/08 – 14/15).

· £65M invested between FY 08/09 – 10/11 to develop new capability.

3

Air Movements Operations (AMO).

AMO will provide a passenger and freight management, capability to ensure the sustainable, safe and efficient operation of the Air Transport Fleet and MoD full air charter aircraft. It will deliver comprehensive air movements information enabling Commanders to make better informed and timely decisions based on an enhanced

shared view of the logistic situation.

· Jul 13 – AMO Initial Operating Capability.

· Dec 13 – Full Operating Capability.

· £65M total through life (FY 07/08 – 17/18)

· £33M invested between FY 07/08 – 10/11.

4

Base Inventory and Warehouse Information Management Service (BIMS).

To replace the following critical systems:

o SCCS, WTMS (Air) – BIMS-A

o CRISP, WITS (Maritime) – BIMS-B.

o Stores System 3, BODMS, AMANDA (Land) – BIMS-B.

The Base Inventory & Warehouse Management Service (BIMS) is the major IS-enabled transformation programme to produce a single modern inventory management & warehouse information service for the base areas.  It addresses the catastrophic risk, identified by the NAO, and will also be a significant contribution to achieving coherent materiel accounts. This project will be delivered incrementally:

· BIMS-A will replace the most fragile inventory systems and will de-risk the subsequent phases of the BIMS project

· BIMS-B will replace the remaining base inventory and warehousing systems in an incremental manner.

 

· Mar 13 – BIMS-A - first increment of the BIMS project replacing the Air base inventory systems at Full Operating Capability.

· 2014 tbc – BIMS-B. (Detail for BIMS-B milestones are subject to more detailed planning and formal project approval in autumn 2011).

· BIMS-A Costs £43M (FY 11/12-12/13) [1] .

· BIMS-B – (up to £75M). (FY 11 – 15).

5

Logistic Network Enabled Capability (Log NEC) Delivery Partner:

Boeing Defence UK (BDUK).

The Log NEC Delivery Partnership with BDUK is the major business change programme involving the rationalisation of the previously complex, cumbersome and inefficient information service provision arrangements into one which provides a continuity of service and can deliver the necessary transformation to support the increasing pace of wider Defence Logistics Transformation.

BDUK’s two new purpose-built data centres will provide a robust Business Continuity capability that mitigates the risk associated with the ageing data centres where the critical systems listed above (serial 4(b) are currently located.

BDUK is already contracted to deliver the first increment of the BIMS project (BIMS-A) which will see the replacement of the Air domain base inventory systems.

· Nov 10 - Contract Award (achieved).

· Mar 11 - Initial take-on of legacy service provision arrangements (achieved).

· Apr 11 Establishment of first new Data Centre (achieved).

· Mar 13 – Full Operating Capability - BIMS-A - first increment of the BIMS project replacing the Air base inventory systems.

· Total: £803M [1] .

· £43M [2] - new capability costs (BIMS-A).

· £760M through life (FY10/11 – 21/22) sustainment funding for delivery of logistics information.


[1] These costs are the cost of military air transport, civilian air charter and surface freight costs.

[2] MJ D I, JAMES and AMO were initiated prior to the Boeing D efence UK D elivery Partnership and are currently funded and separately contracted with Lockheed-Martin, HP(ES) and THALES.

[3] The question related to the amount of materiel lost in transit. It is considered that the number of consignments, measured by the number of ISO containers transported and held in theatre, provide the more relevant and significant measure to indicate the amount of materiel that has gone missing in the period quoted.

[1] BIMS-A is funded within the £803M B D UK D elivery Partnership arrangements.

[1] The new capabilities delivered by MJ D I, JAMES and AMO were established prior to the B D UK D elivery Partnership arrangements and are therefore currently funded and contracted separately with separate suppliers (Lockheed-Martin, HP(ES) and THALES UK respectively).

[2] An indicative figure –the £803M D elivery Partner contract has been funded through the brigading of existing funding, with the efficiencies achieved from this exercise funding the new BIMS-A capability.

Prepared 28th June 2011