MoD criticised for poor supply management

1 April 2011

1 April 2011 | Angeline Albert

The Ministry of Defence's (MoD) poor supply chain management is damaging its ability to get essential supplies to soldiers on time, a National Audit Office report has said.

The report, out yesterday, said the MoD is facing “considerable challenges” in its supply chain and is failing to hit its own performance targets – making deliveries on time in only 54 per cent of cases. The highest priority items sent by air are expected to arrive in military theatre within five days but this was only achieved in around a third of cases. The report also found a large variation in the time it takes similar items to move through the supply chain.

Failure to deliver the right item on time is chiefly the result of items being unavailable for transport. The report said this means either the department is not forecasting usage and repair rates of items to hold the right amount of stocks, or suppliers cannot respond to demand. Procurement should address this problem, it said.

“The department urgently needs better supply chain information systems with the appropriate skills and processes to match,” says Amyas Morse, head of the NAO.

He said one consequence of a lack of information is the MoD stockpiling more than necessary and sending too many routine items by air which “ties-up precious resources”. Some 90 per cent of the department’s total transport costs to Afghanistan come from air deliveries. The report said that transferring 10 per cent of these items to land and sea delivery routes would save £15 million annually.

The NAO report said not enough financial performance data exists to evaluate additional costs incurred. “The department is unable to reconcile coherently the information it does possess on the location of its assets and its inventory and supply chain costs,” it said.

Defence minister Peter Luff said: “Operations in Afghanistan are our top priority and the NAO notes the improvements in the supply chain including to our armed forces on the front-line. We are constantly working to improve our performance and we are currently implementing an £800 million contract with Boeing Defence for a more streamlined, agile, and effective logistics support chain.”

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