Lex Defence packages a unique range of skills, services, competences and capabilities...
Combining Forces Newsletter in the First Person
Category: Lex Defence Ltd Company News | 06/03/2006 - 12:04:14
We interviewed David for Combining Forces to find out more about his background, experience and his first impression of working within the RAC plc group - his view from an industry perspective.
Q: Can you tell us about your military service & MoD career?
A: I was born and educated in Zimbabwe and so began my military career by joining the Rhodesian Light Infantry during the civil war. Graduating from the Royal Military Academy, Sandhurst, in 1985 - the only officer in the Royal Army Ordnance Corp ever to win the Sword of Honour - I went on to complete most of my Regimental Duty with the Royal Marines; apart from when I commanded a NATO-assigned Battalion, prior to promotion to Colonel in 2001.
The majority of my staff appointments during my MoD career were predominantly operational in both combat and logistics fields. These included the 1990 Gulf War, Bosnia, Rwanda, Angola and Kosovo/Albania. Other deployments included Hungary, Italy, France, Greece, Germany and Norway; 11 winters in the latter, which definitely hardens the constitution!
I particularly enjoyed my role as an IPT leader in the Defence Logistics Organisation (DLO), which included driving the formation of its first through-life Integrated Project Teams (IPTs). During this time I was also responsible for contracts such as the Heavy Equipment Transporter PFI, TriService Material Handling Service PFI and the White Fleet PFI. Latterly, I was assigned to the End-to-End Study, with McKinsey & Co*, a project which has now become the Defence Logistic Transformation Programme.
*McKinsey & Co is the highly respected global management consulting firm that advises leading companies on issues of strategy, organisation, technology and operations.
Q: What attracted you to join Lex Defence?
A: I was struck by the RAC's breadth of capabilities, many of which I felt could add real value to the MoD, as well as Lex Defence's proven track record in the Defence sector. As a taxpayer, I am also motivated by the MoD's self-proclaimed need to derive very best value for money; and Industry's complementary ability to assist in that endeavour. I also felt that Lex's corporate values - Integrity, Pioneering, Pace & Ambition, Hungry to Learn and Together We Make a Difference - match the MoD's own, very closely. Indeed, since joining Lex Defence I've definitely seen a synergy between both organisations, in terms of their culture, ethos and aspirations.
Q: What was you first priority upon joining?
A: I carried out a strategic review of the business that enabled me to work with the existing team to lay out a plan for developing the business, strengthening our relationships across the MoD, and creating the conditions for future mutual success with our Customer. My learnings from my time with McKinsey & Co came into their own in this project, enabling me to conduct an holistic review which has been endorsed at the highest levels in RAC plc. I am also Lex's Senior Relationship Owner and, as such, I have been health-checking our relationships - both with our MoD Customer, and with our B2B Partners - to ensure that we are delivering inspirational service, across the board.
Q: From your perspective, looking at Smart Acquisition from both ends of the telescope, what changes have you seen in the MoD relating to logistical outsourcing?
A: The first point to make is that we should not forget just how far the MoD has come, in a very short space of time. To begin with the MoD had single-Service logistic stovepipes that ran parallel with, but entirely disconnected from, the procurement function. Since then we have seen the formation of the DLO (and its ongoing transformation), the "Smartening" of MoD acquisition, and the virtual coming together of these entities, via a concerted focus on through-life management. We have also seen a shift from the dogma of "PFI is the answer, now what is the question", to a much more confident approach to procurement, as much intent on ensuring the UK's defence industrial base, as securing very best value for money.
Interestingly, whilst price remains a major factor - especially against the backdrop of an overheated Equipment Programme (EP), and a highly stretched Short Term Plan (STP) - we are thankfully returning to the imperative to support operations and assure Military Capability. Industry's challenge now, therefore, is to work with the MoD to improve effectiveness by streamlining processes and thus reduce operating costs.
It has been a period of intense focus for all concerned, exacerbated by regular media scrutiny of the Smart Acquisition process, as well as the performance of major projects.
As the MoD looks to the future, whether it be determining future capability requirements and structures; how to minimise logistic footprints; or to guarantee operational surge capability, the pressure to reform and to do better with less, will continue.
Having been involved in this challenge from the start, from both ends of the telescope, I firmly believe that the MoD is well down the path of establishing its acquisition and combat service support functions as global military best-in-class. In this endeavour, a number of programmes and projects will be formative, for example, Whole Fleet Management, Procurement Reform and the Defence Logistic Transformation Programme. Moreover, I am positive that the MoD will achieve its aim, and I am confident that best-in-class companies, such as Lex Defence, can make major contributions to strategic, operational and tactical success. This is why cultural fit, corporate empathy and shared ambition are as important as the quality of service.
Q: Going back to your previous point about the intense scrutiny of the MoD's Smart Acquisition process and PFIs, Lex Defence has proven to be extremely successful in this area, what is your opinion on why that is?
A. Lex Defence has definitely provided an insight into what is possible and how a PFI should work. For example, the UK White Fleet PFI, a 10-year contract to supply the full range of non-combat vehicles to MoD establishments, is an example of a successful PFI, developed with quality of service, cost benefits and shared gains, in mind.
Rolled out by Lex Defence to 1,800 dispersed units of all three Services, on time, within cost parameters and to plan, this flagship PFI has delivered 10,635 items of new, modern and more reliable vehicles to its military customers; equating to a staggering 15 new vehicle deliveries every working day, since the contract began. The company's performance, in conjunction with its MoD Partner, SUV IPT, is equally impressive; fully-maintained vehicles provided for a total of 12,604,508 days, at an availability rate of 99.5%, as well as 98.1% of periodic hire vehicles delivered on time - despite 20% of bookings being made at less than the mandated 48 hours notice. More importantly, this contract has achieved industry-leading customer satisfaction ratings, in excess of 97% and its innovative 'gain-share' system has delivered cost reductions that benefit both parties.
Lex is also the groundbreaker in another area of Smart Acquisition, namely inventory management. The ChallengeR 2 Innovative Spares Provision (CRISP) contract was the first of its kind in the Land Environment, delivering Challenger II consumable spares at unprecedented levels of performance. For example, CRISP has achieved a 90% reduction in delivery time; an 89% reduction in inventory; and a 27% increase in availability - or, put another way, delivering a world-beating rolling quarterly average availability of 97.6% spares availability for the Challenger 2 tank.
How do we do this? Put simply, by putting together the industry-leading competences that make up RAC/Lex's portfolio; in bespoke solutions that both match our Customer's exacting requirements, and have the flexibility to adapt for the future.
Q: And the future?
A: The future is now. I have already alluded to the grim pressures on the EP and STP against a strategic backdrop of changing threat environments, and the need for UK plc to retain its place in global leadership. More than ever, our Defence Capability must be lean, responsive and effective. Whether in the home base or globally on operations, competition for resources in a social agenda that relegates expenditure on defence as a "nice-to-have", rather than an "essential", is a working environment that we cannot change or escape. Instead we must operate effectively within these confines by working together to manage costs better, shift responsibilities and risks to where they are best managed, and provide for Defence's prevailing needs, accurately and surely.
In short, MoD and Industry has to make the unprecedented move to combine skills, knowledge and resources in order to deliver and assure the availability of Capability, from Concept to Disposal; from point of manufacture, to point of discharge.
Our combination of class-leading skill sets, cutting edge experience and innate knowledge of the MoD's requirements enable Lex Defence to look ahead, to apply the competences that have put us at the top of the commercial sector, and to bring to our MoD Customer, the benefits of tomorrow - Today.
Q: Going back to the MoD's attainment of global best-in-class status for acquisition and combat service support, what do you believe Lex Defence can contribute to its realisation?
A: At the moment the emphasis must be on whole life costs (based on reliable, full costs data) and through-life management; migrating from a platform/fleet focus to a pan-fleet/Capability "View". This "View" must integrate obsolescent legacy fleets with new vehicle procurement, and their respective support solutions, so as to guarantee availability of military capabilities, now and in the future.
As balance of investment decisions are made, there will be a need to ensure these capabilities. In some areas, notably logistic vehicles, fleets are likely to need life extension, either wholly or partially. By this I mean not only the basic refurbishment of platforms, but also the management of their obsolescence, and their associated spares, consumables, tools, test equipments, and so on; concurrent with the incorporation of relevant technology, such as telematics, and health & usage monitoring systems.
Moreover, in the context of ensuring logistic capability in expeditionary effects-based operations of the future, this integration platforms, systems and support solutions - both legacy and novel - will be critical to mission-success.
And the mission-success of our Customers is at the core of Lex's ethos; why else would British Airways entrust its entire ground support operations at Heathrow and Gatwick to us? In an environment where performance is everything, with some key performance indicators being measured every 15 seconds, where costs are key and time, transactions and utilisation are critical, Lex delivers world-class service and support; in one of the harshest sectors of Industry.
The MoD needs fast-track access to this kind of Industry best-practice. Whole fleet management is one such key area where, across Industry, the Lex name is synonymous with high-performing delivery; removing the need for crippling up-front investment, placing risks where they are best managed, and integrating the obsolescent with the new - as demonstrated in CRISP and the C Vehicle PFI.
Lex offers the MoD a unique single source of accountability and delivery for significant and vital components needed for combat support, and to ensure logistical capability. We already have long-established relationships with key suppliers, such as the vast majority of vehicle manufacturers, which enable us to secure lower unit costs that we can pass on to the MoD. We also already deliver seamless end-to-end capability management solutions across the vehicle spectrum from within our organic capability. We have done the groundwork for what needs to be achieved in the future. That is why we say that we offer the MoD "the Benefits of Tomorrow...Today"