UK defence change and the impact on supply relationships

The paper's aim is to evaluate the changing patterns of defence requirements and their implications on supply chains and relationships within the UK defence industry. The paper builds a case study on the UK defence industry comprising 22 face-to-face interviews with senior management from the Ministry of Defence (MoD) and major first tier suppliers, as well as senior officers in the British armed forces. The results suggest that there are major changes currently taking place that have major impacts on defence supply relationships. The authors find a consensus in the industry concerning a shift towards through-life management (TLM), where major equipment platforms are kept in service for several decades. TLM is widely acknowledged as requiring much closer partnerships in the defence supply chain, in which suppliers assume much greater responsibilities in areas such as in-service support and maintenance. Yet the findings with MoD and suppliers reveal different perceptions of the feasibility and practical implications of the proposed changes. Product-service specific capabilities need to be developed especially in areas such as accurate lifecycle costing. The development of integrated supply partnerships requires greater emphasis on openness, risk and reward sharing, trust and long-term commitment in supplier relationships. There is also a need for early supplier involvement to ensure not only design for manufacture, but design for maintainability and logistics, instigated and managed by the customer (i.e. MoD). The analysis demonstrates the importance of adopting a through-life perspective when considering industrial contexts characterised by very long product lifecycles. This study shows that a through-life perspective creates a blurring of the boundary between customers and suppliers, and increases long-term supplier responsibility. This gives rise to new considerations, such as sophisticated risk and rewards sharing mechanisms, design for maintainability, and technology insertion.