The inventory management systems used by the Ministry of Defence to supply troops in Afghanistan and elsewhere are over 20 years old and could fail because the suppliers no longer support them.
That is the verdict of a damning National Audit Office report that found the MoD would be advised to drastically improve its logistics supply chain through a modern information system supported by appropriate skills and procedures.
The MoD faces "considerable challenges” ensuring front line personnel get the materials they need in combat zones, the National Audit Office said, even though it had “begun to develop” a new approach to managing the supply chain.
“Some of the MoD’s inventory management systems pre-date the fall of the Berlin Wall, and are no longer supported by the manufacturers,” warned Richard Bacon MP, a member of the Commons Public Accounts Committee that will hold question sessions and produce a follow-up report.
“If these systems fail, the consequences at the front line could be severe."
As a result of information problems and a lack of good business intelligence or performance management, the MoD is missing most of its own supply targets, the National Audit Office stated. Additionally, it lacked proper career progression opportunities for supply chain experts, who often leave the job after working there for less than two years.
Highest priority items sent by air are intended to arrive on site within five days, but this was achieved in only around a third of cases last year.
Failure to deliver the right item on time is primarily due to goods being unavailable for transport, the report said. This meant that either the MoD was not accurately forecasting usage and repair rates to ensure the right amount of stocks are held, or that suppliers were unable to respond to demand.
The MoD "is unable to reconcile coherently the information it does possess on the location of its assets and its inventory and supply chain costs. The department’s use of information to manage its supply chain falls short of general logistics industry best practice", said the report.
Bacon added: “Too much of the MoD’s supply chain is operating on a wing and a prayer and the Ministry needs to do more to drag its logistics operations into the 21st century."
Defence Minister Peter Luff said the MoD was taking action to rectify the problem. "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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