Case study

Ministry of Defence 

Defence Logistics Organisation: Revitalising the design of the supply chain for the 'Future Defence Supply Chain' project

The Defence Logistics Organisation (DLO) business units are responsible for managing the non-deployed storage and distribution activities in support of the three UK armed forces, and  make up the Defence Supply Chain (Def SC). Multiple Ministry of Defence (MOD) supply chain rationalisation projects were making gradual, incremental progress towards improved responsiveness and cost savings, but were predicted to fall short of achieving the 20% reduction in output costs required by DLO’s strategic goal. Without a credible internal plan to achieve these savings alternative solutions were sought.

The Partnered Defence Supply Chain Initiative (PDSCi) was therefore established to reduce costs by £34 million from a £300 million cost base. As PDSCi moved towards inviting expressions of interest pressure mounted to consider an in-house alternative to partnering and the initiative was restyled in July 2003 as the Future Defence Supply Chain Initiative (FDSCi).

PA was invited to support the in-house option (IHOT) bid team who were tasked with assessing the in-house opportunity to restructure, streamline and rationalise the Def SC to reduce costs of ownership while maintaining or improving service levels and enhancing operational capability.