Military manoeuvres

As pressure mounts on the defence sector to improve their operational efficiencies, could the logistics industry play a role in boosting the military supply chain?
Smooth operations: The success of logistical operations within the defence sector is reliant on flexibility and remaining responsive in the face of un
Smooth operations: The success of logistical operations within the defence sector is reliant on flexibility and remaining responsive in the face of un

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The continued dominance of security issues in global politics has highlighted the importance of smooth operations within the defence sector, where nothing is left to chance. At present, one of the greatest challenges in sustaining a military campaign is the maintenance of uninterrupted supply chains, regardless of fluctuations in the political climate. Despite the obvious difficulties this scenario presents, who better to advise on well-organised and implemented supply chains than the logistics industry itself?

"Essentially, efficient defence logistics relies on flexibility and remaining responsive in the face of a turbulent world," says Hugh James, director of defence logistics at IQPC, a global business intelligence company. "Like other government sectors looking to iron out inefficiencies, the defence industry has found a place for the commercial world in its military operations. Contracting out logistical support is fast gaining popularity and luring the big players into the defence logistics market.

 

Contracting out logistical support is fast gaining popularity and luring the big players into the defence logistics market

In particular, the prevailing security situation in the Middle East has increased the urgency of rapid response in defence operations. By building a closer relationship with the private sector, the region has been progressively adopting the joint-service logistics concept.

"As the requirements of the modern military change, particularly those peace time reactive forces such as the UAE, there will be a greater need to rely on industry to ensure increased operational capability," agrees James. "This involves ensuring all the logistics functions are operating seamlessly in terms of information management and ensuring there is increased supply chain visibility to providing effective distribution and support.

A boom in regional defence spending has been the driving factor behind increased military-industry partnerships in the GCC countries. "Although there is a lot of spending money in this region, these countries understand the importance of spending as wisely as possible and are reluctant to invest in anything that will not provide a comprehensive solution," James remarks.

As governments continue to recognise the benefits of outsourcing military logistical operations, James expects there will be a windfall for the private sector. "I feel that as awareness of what solutions are out there grows, the regional military and defence forces will be looking to develop new partnerships and alliances," he says. "This will provide a unique opportunity for both local and international defence contractors.

One of the first major logistics players in the region to capitalise on this lucrative niche is Agility. "With billions allocated annually to private contractors, the Middle East defence logistics market is exhibiting tremendous potential for contractors," concurs Tarek Al Mousa, the company's regional executive director in the Middle East. "The potential of new cost-saving logistics practices has resulted in the increased outsourcing of operations by governments and military forces," he adds.

With the military recognising the importance of contracting out many of its core activities to large and experienced contractors, Al Mousa believes the sector has been pleasantly surprised by improvements in operations. Indeed, Agility's positive experience to date has led to the establishment of its defence and government services (DGS) division. With access to more than 450 offices in 100 countries, Agility DGS combines a vast networkof warehousing facilities with risk-tolerant global land, sea and air transportation capabilities.

"In the Middle East, Agility provides regional governments with supply chain and logistics capabilities to rapidly support and augment the logistical requirements of their armed forces," explains Al Mousa. "These global services include transportation, freight management and warehousing services, catering and food service solutions, in addition to bulk fuels and liquid distribution.

Additionally, Agility procures, manages, stores and distributes every consumable item the armed forces need to operate, including food, clothing, medical supplies, general and industrial supplies, power and aviation support.
 

The company's defence contracts include the high-profile Subsistence Prime Vendor Programme, which handles procurement, shipping, warehousing and distribution of food and supplies to US military facilities throughout Iraq. It also handles many smaller, highly-specialised defence logistics solutions, such as Heavy Lift, a transportation solution for general cargo, heavy machinery and equipment, and DDKS, a regional spare parts distribution centre in Kuwait.

Al Mousa strongly agrees that awareness is increasing as to how the private sector can bring proven logistics experience and unique capabilities to the global defence industry. "Governments around the world must constantly ensure that their armed forces can accomplish their intended missions and are ready to meet whatever need arises," he observes. "The same challenge exists for Agility's defence and government services and we accomplish this by employing the latest technology to offer logistics management tools that help keep the forces well supplied with critical items.

With the biggest logistics players having such extensive facilities at their fingertips, by joining hands, defence services can immediately have these at their disposal. Its for these exact reasons, Laurance Langdon, group project logistics manager for GAC, points out, that defence customers are leaning on the private sector for assistance.

Creating a geographical network and physical presence in multiple regions cannot achieved overnight. Distribution companies tend to be welcomed more easily than foreign forces and they can avoid many of the security issues facing the military. "This local presence will have a major impact on the potential customer's decision on whether or not they see any risk in appointing you to handle their cargo," he argues. "This is not easy business to be involved in - everyone has to have the correct systems in place to ensure safety for everyone involved.

With its Middle East origins and strong presence throughout the region, GAC prides itself in having developed an indepth expertise in the field. The company has created a dedicated and experienced resource under ‘GAC Defence Logistics Services'. As Langdon points out, private logistics sector companies such as GAC can bring in specialised expertise and best practices in supply chain management and third party logistics developed over long period of time. "Getting equipment and supplies to the right place at the right time is paramount to all military operations," he insists. "Our overall approach, supplemented by our track and trace IT system, equipped with an instant update capability, ensures every shipment is delivered on time and within budget.

Langdon believes that whilst the number of logistics companies offering services in this niche area has now increased, the number of operators with the actual hands-on-experience and expertise, as well as on the ground infrastructure and personnel, required to execute this demanding role remains small. "Defence logistics is a highly specialised field that requires sound knowledge and expertise in all modes of transportation, as well as strong understanding of the local terrain, customs and political climate in the area of conflict," he argues.

Defence industry companies are acutely aware of the importance of having a robust logistics supply chain, and put in place stringent guidelines for logistics companies who work with them.

However, this does not mean defence logistics need remain the sole domain of just the biggest companies. More specialised segments of localised logistics services, for example, maybe in demand by both the defence sector and the big 3PL operators.

SSI Schaefer, the material handling specialist, is involved in providing storage and handling systems for strategic equipment including uniforms, general consumables, munitions, guns and spare parts. "We also provide services to 3PL logistics providers who are purchasing, holding and distributing foodstuffs and other non strategic consumables directly to the local and foreign forces based in the Middle East," explains Geoff Wheatley, regional director of SSI Schaefer in the Middle East and Africa.

In terms of the future, Agility's Al Mousa believes that military spending patterns in the GCC indicate a desire to continue with the modernisation of its armed forces. "In the coming years, we will see a renewed emphasis on technology upgrades, new spare parts and maintenance facilities and the establishment of quicker reaction units for national and global disasters," he predicts.

Likewise, Langdon agrees that the need for global defence logistics capabilities will grow with continuing worldwide sourcing and procurement. "More and more countries are investing in defence with global perspective, where in previous years they have been restricted by regional ties and alliance," he emphasises. "This will of course directly boost the growth of the defence logistics sector. The Middle East will continue to be an important part of this growth, especially as a global hub and a strategic transit point to other destinations.

On the defence

With defence logistics becoming such a hot topic in the region, the forthcoming seminar Defence Logistics Middle East 2008 is perfectly timed to take place in Abu Dhabi this month.

Hosted by IQPC's Defence IQ division, the event is expected to bring together expertise from NATO, as well as the US and UK military.

"In the current political climate we feel it is timely to be able to share best-practice in defence, dealing with the region's critical challenges and bringing global expertise to contribute to the security of the GCC countries and wider MENA region," elaborates Hugh James, director of defence logistics at IQPC.

The event will centre on how to create a joint logistics process and increase supply chain visibility to improve strategic reaction time.

It has already attracted a considerable amount of interest from the regional logistics industry, and James believes this reflects the significant role that the private sector will play in the development and transformation of operations within the defence sector.

"The scope is huge for regional development and growth in the defence logistics sector at this point in time. This event has received a tremendous response and we are definitely running it again next year," he concludes confidently.

Defence Logistics Middle East 2008 is taking place at the Armed Forces Officer's Club in Abu Dhabi between 21st-23rd January 2008.
 

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