2/25/20 Crown copyright 2014 Dstl Making MOD a

2/25/20  Crown copyright 2014 Dstl Making MOD a

2/25/20 Crown copyright 2014 Dstl Making MOD a smarter customer for service delivery arrangements Alan Lawrence Principle Analyst 2/25/20 Crown copyright 2014 Dstl Service Delivery .the use of agile, flexible processes by supplier (frequently skilled technical) personnel, interacting with customer personnel, via a contract, providing variable outputs, both tangible and intangible, to create value for the customer for the achievement of their outcomes NB: for the MOD, service delivery is executed through

initiatives such as CLS, CforA & CforC.. 2/25/20 Crown copyright 2014 Dstl What (is the issue)? Government Policy, ongoing Defence reform and future capability development require that MOD integrates with industry for the delivery of support & services. The result is an increasing reliance on outsourcing that is delivered through one to one contractual relationships between PTs and their Service Providers. 2/25/20 Crown copyright 2014 Dstl Why (is action necessary)? The reliance on contracted support can present risk to Defence Outputs Front Line Commands find themselves having to manage a one

to many relationship with contractors E.g. where ship = system of systems yet the CLS is for individual system MOD seems to have an incoherent approach to the outsourcing of support (ie CLS) and there have been criticisms of it (DIA). No comprehensive work has ever been commissioned to ensure that the MOD fully understands the complexities of entering into the Service Delivery space. 2/25/20 Crown copyright 2014 Dstl How (to address)? It is proposed to establish a comprehensive programme of targeted research, structured to deliver quick wins between now and SDSR 2020 The overall aim is to identify the best means to mitigate long term risk to outputs arising from CLS The Programme will be managed through Dstl 2/25/20

Crown copyright 2014 Dstl When (can this be achieved)? Understanding Service Delivery is a complex problem that does not lend itself to rapid solutioneering Need clear articulation of the dynamics of the problem The complexity of the interrelated issues suggest resolution will require long term cultural shift Building on the opportunity presented by Material Strategy and Defence Reform 2/25/20 Crown copyright 2014 Dstl The Problem Space Limited overall visibility of cumulative CLS activity CLS solutions considered/issued in isolation and primarily designed for peacetime support Risk reporting structure does not include CLS issues MOD is unaware of actual impact(s) of CLS proliferation (ie on

skills, SQEP etc). Suggest that primary weakness is the inability of MOD to fully understand business to business service delivery contracting and, to ensure that SD contracting is able to is able to meet the UK Governments intentions for both Industry and Defence. 2/25/20 Crown copyright 2014 Dstl Key drivers CM 8278 National Security Through Technology: Policy underpinning off the shelf procurement; support services provided by industry to be integrated; assured availability to ops; benefits to industry & defence. DE&S Material Strategy: Maintaining an enduring relationship with Industry and contracting for the future Defence Support Network the requirement for E2E (2 way) network with direct contract support Audit reports (NAO and DIA) recent criticism of MODs lack of [CLS] control and lack of VfM; CLS aspects of inventory management. NATO at the heart of UK Defence NATO wants to involve industry sooner and more closely; use of 3rd Party Log Support Services (TPLSS); encouraging partnering

Carrier Enabled Power Projection (CEPP) with QEC, F35, Type 45, etc will be the most complex CLS laydown ever seen 2/25/20 Crown copyright 2014 Dstl Research Based Approach Believe we need to address CLS in the context of Service Delivery and this can only be achieved by commissioning a major Research Programme that will position MOD to fully understand all aspects of Service Delivery. This will include: Outcomes, factors & variability People (inc skills consequences, training and Whole Force/TSF implications etc) Commercial & Contracting and Performance Indicators, metrics and measurement Customer/client relationships, Integration & culture 2/25/20

Crown copyright 2014 Dstl 1: Outcomes & factors 12: Culture 2: Contracting for service delivery 11: Optimisation and implementation A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against

Uncertain Outcomes in the Context of the Ministry of Defence 10: Integration 9: Logistics implications (Service types) 8: Effective risk management 3: Performance measurement & predictive performance management of outcomes 4: Customer/client Relationships

5: Drivers & conditions for the Total Support Force 7: Business intelligence & management information requirements 2/25/20 Crown copyright 2014 Dstl 6: Skills consequences Range of variability Significance of variability How to

predict outcomes How to define outcomes 1: Outcomes & factors A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 2/25/20 Crown copyright 2014 Dstl How to measure

outcomes How to Measure variability Demand, Distance, Duration, Destination Temperature, Altitude, Humidity, Environmental Harshness Infrastructure, Threat Number of significant variable factors Innovative Service Delivery Traditional

Existing Contracts Potential Future Contracts CfA forms Potential Commercial /Contractual Structures 2: Contracting for service delivery A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to

Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 2/25/20 Crown copyright 2014 Dstl WiP Contracts Contract methods How to predict How to assure Service Delivery How to measure How to manage risk

How to align Enterprise Measures 3: Performance measurement & predictive performance management of outcomes A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 2/25/20 Crown copyright 2014 Dstl 4:

Customer/client Relationship A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 2/25/20 Crown copyright 2014 Dstl A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 5: Drivers &

conditions for the Total Support Force Who should undertake? Under what Op risk? 2/25/20 Crown copyright 2014 Dstl Who should train for? A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain

Outcomes in the Context of the Ministry of Defence 6: Skills consequences Skills Required of Contractors; Service personnel; Commercial officers Legal changes in form/use of Reserves 2/25/20 Crown copyright 2014 Dstl Division of Skills between Inhouse and contract staff A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to

Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 7: Business intelligence & management information requirements Enterprise Information Alignment Information Cost Information Availability Information Quality 2/25/20 Crown copyright 2014 Dstl

8: Effective risk management A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence Acceptability of Risk (Threshold) How to predict Risk How to Measure Risk Reputational Risk

Commercial Risk 2/25/20 Crown copyright 2014 Dstl Financial Risk Operational Risk 9: Logistics implications (Service types) A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value.

Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence Repair Equipment Availability Location of Service Consumables/Spares And Service Spares Availability Consumables 2/25/20 Crown copyright 2014 Dstl 10: Integration To what level should

Services be integrated? Equipment? Who should integrate? Deliverer? A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence Is there a single framework? How to manage

How to measure Capability? Platform? 2/25/20 Crown copyright 2014 Dstl Risk of financial consequences Risk of Operational consequences 11 OPTIMISATION AND IMPLEMENTATION A Programme to devise improvements in Service

Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 2/25/20 Crown copyright 2014 Dstl How to change Cultures to meet requirement Motivations: People Organisations How to identify correct culture for Service Delivery 12 - CULTURE

A Programme to devise improvements in Service Delivery/Contractor Logistic Support/Contracting for Availability performance and value. Or, ways of Improving the Value Proposition in Business to Business Service Delivery Contracting against Uncertain Outcomes in the Context of the Ministry of Defence 2/25/20 Crown copyright 2014 Dstl What will Programme Success look like? Contracts that deliver services will be configured (factor aware) to deliver better outcomes and VfM for MOD and Industry Contract arrangement will be more adaptable, flexible and useable MOD ability to understanding predictive risk to current/contingent ops (from CLS perspective) will be improved Service Delivery against uncertain outcomes (ie operations) will be substantially better managed and integrated It will be possible to assure delivery of services better and align outcome & metrics throughout the support network

2/25/20 Crown copyright 2014 Dstl Academia rather than Consultancy Service Delivery horse has bolted but MOD does not understand how to tackle it While consultancy is dynamic, dont want quick wins we want holistic outcome Expertise in understanding Service Delivery lies in academia, hence academic timeframe Expertise in advising/implementing change(s) lie with consultants (later in prog) Need to aim for paradigm shift to address behavioural, cultural & organisation challenges which consultancy has not yet fully addressed despite previous investment. Sequential packages of academic research with deliverables 2/25/20 Crown copyright 2014 Dstl Other work: Policy Degradation

Background Logistic policy requirements are often traded out for greater capability, No cost to the capability for introducing the inefficiency to the supply chain But currently there is an unquantifiable cost to defence. Taking codification for an example does everything need to be codified? If not, then how much and how is this determined? To what extent is current policy complied with and does it make a difference (in terms of cost and effectiveness). In terms of policy being generated in the future where should the concentration be? Requirement To define the amount of deviation from policy that can be introduced to the supply chain before it reaches a point where the degradation is such that the Supply Chain fails to function correctly Devise a methodology, performance indicators and baseline measures to calculate the non compliance from Policy 2/25/20 Crown copyright 2014 Dstl Other work: Modelling engineers

Presently have a model that measures stock levels and logistics supply to a maritime task group Can also to a degree model availability, maintainability, reliability and battle damage repair And the associated demands on PAX and spares moves Question arises: To assess the impact of CLS/CfA on the supply/support chain and ultimately on the military effect itself What is the resultant impact on military Personnel and Training requirements 2/25/20 Crown copyright 2014 Dstl Summary At the start of a 6 year programme of research Service Delivery, making MOD a smarter customer Will be drawing on academia through sponsoring PhDs and Masters dissertations

Coupled with applied research and consultancy Multiple spin-offs including considering of numerous Defence Lines of Development (DLOD) including Personnel, Training, Concepts & Doctrine 2/25/20 Crown copyright 2014 Dstl 2/25/20 Crown copyright 2014 Dstl

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