Building supply chain resilience

On October 10, 2024, Yoong Solutions hosted its third roundtable event in collaboration with the Chartered Institute of Transport and Logistics (CILT). Keynote speaker Vice Admiral Andy Kyte, Chief of Defence Logistics and Support (CDLS) at the UK Ministry of Defence, addressed key challenges and opportunities in defence supply chain resilience. This article summarises the key takeaways from the roundtable.

Highlights

Defence spending could surge from 2.5 - 4.5% to 40% - 50% of GDP in wartime, increasing the need for resilience in logistics, and the increase expenditure that goes with that, during peacetime.
The shift from uncontested to contested logistics makes supply chains vulnerable at all levels
Resource scarcity, cyber security threats, integration across supply chain platforms, legacy systems and siloed organisational structures are the greatest challenges faced today
Workforce development is important. Technical upskilling and encouraging a culture of adaptability will be critical

Challenges in defence logistics

Vice Admiral Andy Kyte's keynote highlighted the critical challenges facing defence logistics in an increasingly complex and dangerous global environment. He emphasised the shift from uncontested to contested logistics, where supply chains are vulnerable at all levels. In particular, he mentioned resource scarcity, the need to rapidly reconfigure between peacetime and wartime operations, cyber security threats, and the challenges of integrating diverse supply chain elements across an estimated 100+ different platforms across the MoD. The Vice Admiral stressed the importance of resilience as a component of national security, noting the potential for defence spending to surge from 2.5%-4.5% to up to 50% of GDP in wartime.

He highlighted the problems of underinvestment, legacy IT systems, and inflexible contracts, while proposing solutions such as digital modernisation, improved industry collaboration, and the need to value supportability and availability in procurement decisions. He emphasised that doing nothing is not an option, calling for innovative approaches to overcome these challenges and prepare for future conflicts should they arise.

Top concerns of transport and logistics attendees

The roundtable discussion brought together a diverse array of industry leaders, logistics experts, and defence professionals to address the complexities of supply chain resilience in an increasingly volatile global landscape. Participants shared insights from various sectors, highlighting the interconnected nature of modern supply chains and the need for adaptive strategies.

An example of this was a participant from the eCommerce sector, who detailed the £multi-million impact of Russian sanctions on their operations, whilst retail experts described the challenges of forecasting in an era of erratic demand patterns. Others pointed out the potential for defence logistics to benefit from innovations in commercial distribution and last-mile delivery.

A key focus was the tension between peacetime efficiency and crisis readiness. Many advocated for a fundamental shift in contracting models, moving away from rigid, time-based agreements towards more flexible, outcome-oriented contracts that can accommodate surge capacity when needed. The concept of "always-on" contracts was proposed as a potential solution to enhance responsiveness during crises. It was however agreed that this would come with an associated cost.

Participants dived into the challenges posed by legacy IT systems and siloed organisational structures. They emphasised the critical need for real-time data visibility and advanced analytics to support decision-making, as well as the potential for automation to streamline warehouse operations and other supply chain functions.

The future of supply chain resilience

The discussion underscored the need to view supply chain resilience not merely as an aspiration, but as a critical investment in national security and long-term operational sustainability. Attendees agreed on the urgent need for concrete actions to create a more agile, integrated, and robust logistics ecosystem capable of withstanding future challenges and conflicts.

Innovative contracting models, real-time data visibility, enhanced collaboration between sectors, plus modernisation, sustainable practices and workforce development will play a defining role in building a more agile, integrated and robust defence supply chain. This will ensure that logistics systems are prepared to tackle challenges today and, in the future, safeguarding national security and operational sustainability.