Innovation in Limited Markets: Managing PCP Projects in the UK Defence Industry

This chapter will outline guidelines developed to both support and enhance innovation within the context of procuring complex performance (PCP) contracts. Such contracts are currently being employed across a range of sectors where limited market conditions exist. Such contracts and market conditions are set to remain the dominant form of defence procurement strategy for the foreseeable future. The case of the Typhoon combat aircraft programme is presented as an example of a typical, large-scale, complex procurement programme for the defence industry. This is of great relevance with national defence budgets reducing over time as a result of environmental changes and continued economic uncertainty [1]. The MoD and the UK defence industry have developed new, contractual models for procuring complex equipment, such as aircraft and naval ships. These models involve the contracting for complex performance which has changed the paradigm in the relationship between the customer(s) (MoD, UK Armed Forces) and the supplier (UK Defence Industry). Outcome-based contracts for procuring complex performance (PCP) have been employed widely by the defence industry and other sectors in limited or oligopolistic markets. Ten theoretical propositions are presented in this chapter, to help us discuss PCP contracts the literature review will include, Servitisation, Complex Performance Models and discuss Innovation Strategies in the context of limited markets. This chapter will allow the reader to understand the level of influence that contracting for complex performance has had on the innovation strategies of UK defence companies and offer some lessons learnt from the case that moves us to towards some guidelines for enhancing innovation in limited markets

The British Army in Transition: from army 2020 to the Strike Brigades and the logistics of future operations

The financial crisis of 2008 and the economic recession that followed forced the UK Government to adopt measures to reduce public spending in order to deal with a growing budgetary deficit and the UK's spiralling sovereign debt. Like most other departments, the Ministry of Defence (MOD) had to play its part, as well as tackling a massive funding gap in its equipment plan. While 2010's Strategic Defence and Security Review (SDSR)[i] and the National Security Strategy (NSS)[ii] have been criticised as lacking any real strategic intent[iii], they did at least attempt to tackle the MOD's budgetary problems. It also set in motion an ongoing programme of structural change, for both the MOD and the UK Armed Forces, that has continued after the publication of SDSR 2015[iv] and meant that the MOD has faced a difficult period – having to juggle the need to conduct major transformation, change the way it acquires defence capability, and restructure the armed forces while continuing to conduct operations in both Iraq and Afghanistan. This paper aims to examine the impact of both SDSRs on the British Army, and takes a broadly chronological approach in doing so. It analyses the new 'Strike Brigade' concept and what that might mean for defence acquisition and the logistic support to future operations, while highlighting the questions still surrounding the outcome of the latest review

The UK Ministry of Defence Project Orientated Environmental Management System (POEMS)

The Project Orientated Environmental Management System (POEMS) is the UK Ministry of Defence (MoD) bespoke environmental management system for the acquisition and use of equipment. The full implementation of a site-specific environmental management system is challenging for the MoD because there are many permanent MoD sites with transient populations, frequently changing site activities and diverse types of equipment. Nevertheless, MoD policy requires that all sites are covered by an environmental management system. POEMS is based on international standards ISO14001 and ISO14040, which focus on environmental management systems and life cycle assessment, respectively. The primary aim of POEMS is to identify and manage any environmental aspects (causes) and impacts (effects) by scrutinising MoD equipment and activities during acquisition, operation and disposal. This is achieved by drawing up a priority list of activities associated with the equipment based on anticipated environmental impact scores, resulting in an environmental management plan that spans the life cycle of the equipment and any corresponding activities. This article describes the POEMS procedure for both experts and non-experts, and demonstrates the implementation of POEMS using a 105-mm artillery round as a theoretical case study. The results anticipated at each stage of the POEMS procedure are discussed in detail, and the documentation necessary to verify the correct application of POEMS is demonstrated

Composites and the industry/university interface

Advanced materials and structures are key priorities in both the Defence Technology Strategy and the UK aerospace strategy. Development and exploitation of advanced materials and composite technology underpins many aspects of the design, development and manufacture of the civil and military platforms and equipment, and the MoD has stated that it will ensure its capability to exploit new materials and approaches to structural design. This presentation focused on composites and the industry/university interface

The United Kingdom Ministry of Defence and the European Union's electrical and electronic equipment directives

The growth of the generation of Electrical and Electronic Equipment (EEE), and the use of hazardous substances in the production of these items, has required legislation to minimise the harm to the environment that their existing use, ultimate disposal and continued growth of the sector may pose. The European Union (EU) started to tackle this problem with the passing of two Directives in 2002, which focused on restricting the use of hazardous substances (RoHS - 2002/95/EC) and organising the recycling or disposal of discarded electronic and electrical equipment (WEEE - 2002/96/EC). These Directives have been recently recast and their scope widened; however, one exception to them remains items specifically designed for defence and military purposes. This paper looks at how and why these European Directives were passed, the impact they have had on defence in the United Kingdom (UK) up to the present moment, what impact the further extension of those directives might have on UK defence policy and how the UK Ministry of Defence (MOD) has begun to prepare for any extension, including the use of alternative products from the commercial market, and substituting less harmful materials. The paper reviews the information available to carry out future decision making and what level of decision making it can support. Where the data is insufficient, it makes recommendations on actions to take for improvement

Analysis of international experience of approaches to set and manage the defence procurement (acquisition) system (the example of the UK ministry of defence)

The article analyses the setting and functioning of the system of defence procurement (acquisition) for the United Kingdom's Ministry of Defenсe (MoD of the UK) by analysis of guidance documents regulating the activities of MoD of the UK and the defence procurement (acquisition) system. With the help of the structural-functional method, a hierarchy of governing documents, key participants of the public procurement system (acquisition) for the needs of MoD, their functional interconnections, roles and functions are established. By using a systematic approach, were identified strengths and weaknesses of the mentioned system and established that the formation and functioning of the system of state procurement (acquisition) of military equipment or services is a complex process, which is substantially affected by financial and time constraints, strategic vision and priorities for the development of the industry. The main principles for the most effective organization and functioning of the UK defence procurement system (acquisition) are: application of procedural framework, definition of rules and responsibilities, availability of competition and professional approach to evaluation and verification. Possible ways of efficient use of these principles in modern practice of implementation of the system of state procurement for the needs of the Ministry of Defenсe of Ukraine are suggested in article. For instance, such as: it is considered appropriate to introduce a culture of cost awareness (costing culture), which finds its application in global practice. This will make the process of managing financial resources an integral part of the process of making management decisions on the procurement (acquisitions) of military equipment (weapons, equipment (systems)), etc

Lessons from Iraq and Chilcot

The UK’s Chilcot Report into the 2003 invasion of Iraq, has some essential lessons for all Ministries of Defence to take on board when it comes to ensuring troops have the equipment and support they need, before the next major military operation starts

A conceptual framework to assess the impact of training on equipment cost and availability in the military context

Designing military support is challenging and current practices need to be reviewed and improved. This paper gives an overview of the Industry current practices in designing military support under Ministry of Defence/Industry agreements (in particular for Contracting for Availability (CfA)), and identifies challenges and opportunities for improvement. E.g. training delivery was identified as an important opportunity for improving the CfA in-service phase. Thus, an innovative conceptual framework is presented to assess the impact of training on the equipment availability and cost. Additionally, guidelines for improving the current training delivery strategies are presented, which can also be applied to other Industry contexts

Defining next-generation additive manufacturing applications for the Ministry of Defence (MoD)

“Additive Manufacturing” (AM) is an emerging, highly promising and disruptive technology which is catching the attention of the Defence sector due to the versatility it is offering. Through the combination of design freedom, technology compactness and high deposition rates, technology stakeholders can potentially exploit rapid, delocalized and flexible production. Having the capability to produce highly tailored, fully dense, potentially optimized products, on demand and next to the point of use makes this emerging and immature technology a game changer in the “Defence Support Service” (DS2) sector. Furthermore, if the technology is exploited for the Royal Navy, featured with extended and disrupted supply chains, the benefits are very promising. While most of the AM research and efforts are focusing on the manufacturing/process and design opportunities/topology optimization, this paper aims to provide a creative but educated and validated forecast on what AM can do for the Royal Navy in the future. This paper aims to define the most promising next generation Additive Manufacturing applications for the Royal Navy in the 2025 – 2035 decade. A multidisciplinary methodology has been developed to structure this exploratory applied research study. Moreover, different experts of the UK Defence Value Chain have been involved for primary research and for verification/validation purposes. While major concerns have been raised on process/product qualification and current AM capabilities, the results show that there is a strong confidence on the disruptive potential of AM to be applied in front-end of DS2 systems to support “Complex Engineering Systems” in the future. While this paper provides only next-generation AM applications for RN, substantial conceptual development work has to be carried out to define an AM based system which is able to, firstly satisfy the “spares demands” of a platform and secondly is able to perform in critical environments such as at sea

Implications for the U.S. of Anglo-French Defense Cooperation

The paper analyzes, from a predominantly UK perspective, the implications for the U.S. of the November 2, 2010, Anglo-French Defence Cooperation Treaty. The current pressures on British and French defence budgets were the primary driving force behind this cooperative effort. London and Paris have made steps toward improving joint efforts in a number of areas, with defence acquisition and industrial cooperation being prominent. In the UK, there appears to be strong political support at the highest levels, which has permeated to lower levels in the bureaucracy, while the UK defence industry appears to be cautiously optimistic about future business opportunities. The impact of enhanced Anglo-French cooperation on the U.S. would appear to be largely favourable for Washington. Rather than providing a basis for weakened UK attention to the U.S., as some fear, the efforts by London and Paris will potentially generate greater national military capability from scarce resources and could serve as a vehicle for broader European efforts to enhance their defence capabilities. While multinational European military development projects are viewed with scepticism in the UK, the Anglo-French arrangement could strengthen the prospects for bilateral projects in which other European states may elect to participate