08 May 2003 | David Arminas
The Defence Logistics Organisation (DLO) is looking for more manufacturers to include delivery and logistics when they tender for defence contracts.
Major General Malcolm Wood, director of general defence supply chains at the DLO, told delegates that closer relationships with original equipment manufacturers (OEMs) was one of his priorities as part of a major DLO business strategy announced last year.
The organisation wants to save £77 million by 2005-06, but ruled out major staff reductions in the business plan.
Instead, nearly half of the savings will come from the Partnered Defence Supply Chain Initiative, which includes the closer OEM and logistics deals.
Wood said he was seeking "radical" solutions, including outsourcing of logistics. "As we move more towards contracted logistics in general, why can't we deliver directly to customers?"
The DLO also wants to hold less stock and be more just-in-time where it can, without jeopardising operational readiness.
Wood told SM: "So far, OEMs have been enthusiastic about the initiative. We are urging them when making a competitive bid to include part of the supply chain. But their partnership with a logistics provider will have to offer as good as or a better service than we were supplying."
But he acknowledged that there was a limit to how far an OEM's logistics provider could deliver straight to the customer in places such as a theatre of war, because of the risks.
Wood added: "I also have sympathy with front-line command in that they don't want 60 white vans showing up delivering all sorts of material. Command needs a single point of contact."