Anyone remember 'Smart Procurement'??

#1
'Money wasted' on MoD stockpiles

The NAO said the return of British troops from Afghanistan would increase pressure on storage
The Ministry of Defence is spending billions of pounds on storing "unnecessary" military supplies, according to the National Audit Office.

Among the stockpiles is a 54-year supply of bombing equipment for an old model of Nimrod aircraft that was retired from service in 2010, it says.

Some £4.2bn of non-explosive stock is also being held despite no demand for it in the last two years, the NAO said.

Defence Minister Peter Luff said assets "must be more efficiently managed".

In May, Defence Secretary Philip Hammond announced that the MoD had balanced its budget for the first time in a decade.

Withdrawal from Afghanistan

The NAO said storing "inventory" - everything from ammunition and missiles to clothing and medical supplies - costs £277m a year.

It said the MoD was failing to dispose of stock it did not need, citing the example of a 10-year supply, excluding war reserve contingencies, of a particular size of fire-resistant coveralls - even though fewer than 200 a year are being issued.

The MoD did stop buying the garment in 2008.

The NAO also said an estimated £12.5m was spent in 2010/11 on non-explosive inventory, even though central depots already held five years' worth of that stock.

Plans to bring UK troops - and all of their equipment - back from Afghanistan by 2015, and from Germany by 2020, will heap further pressure on storage, it warned.

Amyas Morse, head of the NAO, said: "In the current economic climate where the department is striving to make savings, it can ill-afford to use resources to buy and hold unnecessary levels of stock, and it clearly does so.

"The root cause of excess stock, which the department is seeking to address, is that management and accountability structures currently fail to provide the incentives for cost-effective inventory management."

'Long-standing issue'

Mr Luff said "appropriate reserves" were "essential to be able to deploy our armed forces at short notice and sustain them on operations across the world".

"The challenge of managing and maintaining vast amounts of equipment, including explosive materials, around the world should not be underestimated but I know that the MoD's assets must be more efficiently managed," he said.

"That is why we are undertaking a number of initiatives to address this long-standing issue.

"We are changing the way we buy, store and dispose of equipment stocks and investing in IT systems to help us record the hundreds of thousands of items in our inventory."

But shadow armed forces minister Kevan Jones said the NAO had uncovered "unacceptable waste at a time of deep defence cuts".

"This is yet another example of where ministers could be making real savings through reform of the MoD, but they are failing to do so due to the flawed, rushed defence review," he added.

Labour's Margaret Hodge, who chairs the public accounts committee, said: "Out of the £19.5bn of inventory the NAO reviewed, they found stock worth £6.6bn was either unused or over-ordered.

"With the planned return of armed forces and their inventory from Afghanistan by 2015, and from Germany by 2020, the ministry needs to act quickly to resolve its problems.

"But the ministry's strategy does not fully address the issues, and they lack suitably qualified staff."
 
#3
I once was involved in an inspection of stores held in Duelmen in the 1980s, they had dozens of engines on the shelf all press'd up, well tended and ready to rock. The cold war could warm up we were ready for them with spare engines.

The only problem was they were for the Austin champ!
 
#4
Problem is they didn't employ anyone smart enough to do it.

When went to war on both Iraq 1 & 2 and Afghanistan there were shortages of critical kit and it seems stockpiles of unnecessary kit.

But If you want it cheap buy in bulk and pay the storage, if you don't want the inventory you carry the risk of being short, or develop your supply chain effectively which may cost more than holding useless stock, you have paid for supplier readiness you never need.

Have to be smart to work that out. Nimrod was a bit of an unfair example, no one in saw it coming, you can't have smart procurement with dumb politicians, something's got to give.

You want the answer, a 50 year by 50 year strategy, r&d technology tree and a guaranteed war every 10 years planned with the enemy to meet their smart procurement needs
 
#5
I remember helping to slash tons and tons of brand new desert nbc suits and resi's, boots and desert combats in 1991 after GW1. This kit was fresh out of the factory. Roll on GW2 and no ****** had enough NBC kits, boots or desert combats. ****ing genius
 
#6
I once was involved in an inspection of stores held in Duelmen in the 1980s, they had dozens of engines on the shelf all press'd up, well tended and ready to rock. The cold war could warm up we were ready for them with spare engines.

The only problem was they were for the Austin champ!
Nice story, but bollocks I'm afraid..

Duelmen held the main stock of Engines & Major Assemblies for many years, and was extremely well run. The stock was controlled by an RO in Rheindahlen who was the world authority on Leyland parts..

Because we had been consistent in buying equipment for many years from a limited range of suppliers, there was a very large amount of common parts across the vehicle fleet. Even when new models came out, most of the spares still fitted the new models. Stuff like brake shoes, hydraulics, gear boxes and bearings could be used across a wide range of vehicles and marks, provided you knew which part fitted which. This cross reference index was maintained by a couple of clerks in Viersen and Rheindalhen and must have saved us millions in making best use of spares..

It all got mostly ignored when REME took over responsibility for B vehicle spares management from RAOC .. and then finally got trashed when SMART:

Specific Measurable Attainable Relevent Timely

procurement scheme was introduced as an MOD initiative to replace qualified, experienced and knowledgeable people with "managers", civil servents and other sundry idiots...

.. although we did store Saddles made in 1916 in Donnington up to very recently - saving us a fortune in keeping the arrses of the Household Cavalry off horseflesh for the past 90 years!
 
E

EScotia

Guest
#9
I was involved in a project at Bicester dealing with all the returning major assys from GW1. We had loads of complete wheel stations for HMLC Stalwart and the worlds supply of final drives for Centurion amongst 2 trials pwer packs for CR2!

During the frequent burning of desert boots (one day they'd burn the left ones another day they'd burn the right ones), a WO1 involved got me a brand spanking new combat jacket of the old green variety!

We also had a rail wagon brought into our shed that contained back up stores for the Marines that contained spare parts for SLR.
 
#10
I can remember when they had a tidy out at Gib in the 80's and found piles of cannon balls carefully stored for a rainy day.
They were probably put aside for burials at sea, I mean lobbing your mucker over the side weighed down with a Harpoon missile will probably attract bad press as well as the ferrets of the treasury.
 
#11
Nice story, but bollocks I'm afraid..

Duelmen held the main stock of Engines & Major Assemblies for many years, and was extremely well run. The stock was controlled by an RO in Rheindahlen who was the world authority on Leyland parts..

Because we had been consistent in buying equipment for many years from a limited range of suppliers, there was a very large amount of common parts across the vehicle fleet. Even when new models came out, most of the spares still fitted the new models. Stuff like brake shoes, hydraulics, gear boxes and bearings could be used across a wide range of vehicles and marks, provided you knew which part fitted which. This cross reference index was maintained by a couple of clerks in Viersen and Rheindalhen and must have saved us millions in making best use of spares..

It all got mostly ignored when REME took over responsibility for B vehicle spares management from RAOC .. and then finally got trashed when SMART:

Specific Measurable Attainable Relevent Timely

procurement scheme was introduced as an MOD initiative to replace qualified, experienced and knowledgeable people with "managers", civil servents and other sundry idiots...

.. although we did store Saddles made in 1916 in Donnington up to very recently - saving us a fortune in keeping the arrses of the Household Cavalry off horseflesh for the past 90 years!
I can only tell it as it was, the only Austin engines then in use would have been the auxilliary gennies on Centurion and Cheiftain, fondly referred to as Moggie minor engines, the engines I saw were 2.8 litre petrol jobs and quite different. I've never seen a 2.8 litre moggie, although it would have been fun!
 
#12
Its always more complicated than reported. A combination of needing to put spare parts into service, expected usage, need for spares for contingency, and also just contracts means that its not a case of just buying blindly. There is always a reason why things are purchased and stored - did the depot / end user state no further needs? Are the spares being bought because it is cheaper to do a recurring small buy than a couple of big one off buys involving opening production lines? What assumptions are in place for operations, and does this need more kit than might be required?

I am a big believer in the policy of good intentions - in other words people in the system, civilian and military are doing what they think is the right thing, even when its not necessarily the case.
 
#13
'Money wasted' on MoD stockpiles

The NAO said the return of British troops from Afghanistan would increase pressure on storage
The Ministry of Defence is spending billions of pounds on storing "unnecessary" military supplies, according to the National Audit Office.

Among the stockpiles is a 54-year supply of bombing equipment for an old model of Nimrod aircraft that was retired from service in 2010, it says.

Some £4.2bn of non-explosive stock is also being held despite no demand for it in the last two years, the NAO said.

Defence Minister Peter Luff said assets "must be more efficiently managed".

In May, Defence Secretary Philip Hammond announced that the MoD had balanced its budget for the first time in a decade.

Withdrawal from Afghanistan

The NAO said storing "inventory" - everything from ammunition and missiles to clothing and medical supplies - costs £277m a year.

It said the MoD was failing to dispose of stock it did not need, citing the example of a 10-year supply, excluding war reserve contingencies, of a particular size of fire-resistant coveralls - even though fewer than 200 a year are being issued.

The MoD did stop buying the garment in 2008.

The NAO also said an estimated £12.5m was spent in 2010/11 on non-explosive inventory, even though central depots already held five years' worth of that stock.

Plans to bring UK troops - and all of their equipment - back from Afghanistan by 2015, and from Germany by 2020, will heap further pressure on storage, it warned.

Amyas Morse, head of the NAO, said: "In the current economic climate where the department is striving to make savings, it can ill-afford to use resources to buy and hold unnecessary levels of stock, and it clearly does so.

"The root cause of excess stock, which the department is seeking to address, is that management and accountability structures currently fail to provide the incentives for cost-effective inventory management."

'Long-standing issue'

Mr Luff said "appropriate reserves" were "essential to be able to deploy our armed forces at short notice and sustain them on operations across the world".

"The challenge of managing and maintaining vast amounts of equipment, including explosive materials, around the world should not be underestimated but I know that the MoD's assets must be more efficiently managed," he said.

"That is why we are undertaking a number of initiatives to address this long-standing issue.

"We are changing the way we buy, store and dispose of equipment stocks and investing in IT systems to help us record the hundreds of thousands of items in our inventory."
But shadow armed forces minister Kevan Jones said the NAO had uncovered "unacceptable waste at a time of deep defence cuts".

"This is yet another example of where ministers could be making real savings through reform of the MoD, but they are failing to do so due to the flawed, rushed defence review," he added.

Labour's Margaret Hodge, who chairs the public accounts committee, said: "Out of the £19.5bn of inventory the NAO reviewed, they found stock worth £6.6bn was either unused or over-ordered.

"With the planned return of armed forces and their inventory from Afghanistan by 2015, and from Germany by 2020, the ministry needs to act quickly to resolve its problems.

"But the ministry's strategy does not fully address the issues, and they lack suitably qualified staff."
ha ha. as soon as i heard this on the radio this morning my first thought was how long it would take them to spunk loads of money on a new IT system
 
#14
Nothing new.

On my Global Provision Managers course in the 90's, we had story after story about the volume of inventory held in Donny & Bicester. On particular point was a common theme to hold up to seven years of Land Rover spares. Condsidering the fact that LR is a UK firm with a good supply chain itself, why were we holding so much?

How ironic it always was that the emphasis at Deepcut was always placed on the Field Force Coy's/CS Sqns* to provision correctly and manage their stocks-holdings, yet the depots were spunking money up the wall by over-procuring and storing inventory on an eye-watering level.

*- Delete dependant on how old & crusty you are
 
#16
When the stores a BAC were computerised it caused no end of trouble.

Before then you could go to the stores and ask for a component. The store man would look on the shelf and if it was you could have it (except when the item was critical to a job and had a long lead time).

After then if the item wasn't marked on the computer for free use or for your job then you couldn't have it - even when there were dozens on the shelf and they were a 'next day' delivery.
 
#17
The "investment" that is missing here has been in the people that are needed to run the system..

The logistic system depends to a great extent on understanding and managing the problem. The number of reorganisations and changes in direction ove the past couple of decades has done some serious damage to what used to be quite a robust and workable system.

I give you:

1. Depot closure programmes - Why did we close Chilwell as the major MT spares depot..? The depot stood empty for years and most of the sheds are still there - lucky for RTMC, but at what cost? The move caused HUGE disruption in the supply of MT spares which took years to resolve (some say it never did..) and must have cost millions in cock up and opportunity costs..

2. Breakup of equiment & supply managment staffs and the hiving off of procurement. Most log problems start (and never finish) becuse of cock ups at the time of introduction of an equipment. Users get the kit too early and break it before the spares stock has been provisioned, and the bean counters play games with the "spares pack" either not buying enough or buying too much...

3. Use of UOR and SMART provisioning leading to low population equipments and insufficient spares. Constantly going to new suppliers means that the inventory mushrooms as each new procurement is different..

It it interesting and instructive to look at how the Sovs did their weapons procurement. They had a set of design agencies which produced families of weapon systems, with long service lives and frequent updates. Their weapon systems may not have looked particulary pretty, but they actually did what it said on the tin.. Their factories had long production runs and became expert at what they were producing.

It's a pity we don't seem to be able to strike the balance between short and long term objectives. We used to be good at this, but seem to have lost the plot in recent years. I suspect it is something to do with winding down.. all the experienced and capable folk leave first, because they can, and the field is left to generalists and bluffers...
 
#18
If only brilliant minds like Kevan Jones' and Margaret Hodge's had been in charge for a decade or so. We could have sorted all this out!

NAO out to justify their own existence again. Bunch of bean counters who have never done anything useful in their own lives but are blessed with absolute 20/20 hindsight. Strange how they were never able to see all the dodgy behaviour of their own boss a few years back!

If the MoD is expected to hold enough stock to cover an infinite number of contingency Ops then there is bound to be wastage. Unless of course all the worse case scenarios happen to occur - in which case we'd be well****ed!
 
#19
Another interesting take I heard from a well informed person was that NAO isnt taking into account drawdown of assets. For instance, take Widget X - we plan on using say 20 widgets every 3 months, for a total aircraft fleet of 20 aircraft. (So 80 per year (or 2 per airframe) We know the part will be used in this number to support the airframe, and our contracts, spares and system is designed to ensure we have constant stocks of 80 widgets per year, plus a few spare, to ensure the aircraft remains flying. Lets assume at any one time we have a years worth of kit in store.
Then lets assume that an in year politically driven cost saving measure means we cut that air craft fleet down to just 2 serviceable airframes, and suddenly our widget procurement means we only need 4 per year, but we have 80 widgets in stock. By a miracle, the MOD suddenly has 40 years worth of stock for the serviceable aircraft - nothing extra has been ordered, and in fact we had the right amount until this time.

My point is that its easy to say 'you've got X years in stock' (cough Nimrod), but you have to look at the reasons why you may have that much in stock too...
 
#20
Another interesting take I heard from a well informed person was that NAO isnt taking into account drawdown of assets. For instance, take Widget X - we plan on using say 20 widgets every 3 months, for a total aircraft fleet of 20 aircraft. (So 80 per year (or 2 per airframe) We know the part will be used in this number to support the airframe, and our contracts, spares and system is designed to ensure we have constant stocks of 80 widgets per year, plus a few spare, to ensure the aircraft remains flying. Lets assume at any one time we have a years worth of kit in store.
Then lets assume that an in year politically driven cost saving measure means we cut that air craft fleet down to just 2 serviceable airframes, and suddenly our widget procurement means we only need 4 per year, but we have 80 widgets in stock. By a miracle, the MOD suddenly has 40 years worth of stock for the serviceable aircraft - nothing extra has been ordered, and in fact we had the right amount until this time.

My point is that its easy to say 'you've got X years in stock' (cough Nimrod), but you have to look at the reasons why you may have that much in stock too...
But 'MoD had enough parts for 'X' and ordered well when it did, but then things changed' does not a good outrage story make.

We're after selling newspapers, man; truth is secondary.
 

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