The Defence Sector and Supply Chain Management

Challenges in Defence Supply Chain

While the UK government alone spends £20 billion in the sector annually, there are still some big challenges amid its supply chain. The defence supply chain and logistics industry is currently focusing efforts on ongoing innovation and the improvement of engagement and diversification.

A lack of cross-sector collaboration and innovation

It’s known that the UK defence supply chain has, in previous years, lacked innovation, the Ministry of Defence has even cited a lack of cross-sector collaboration. This lack of collaboration can be put down to high barriers to entry. 

Companies who want to collaborate need to demonstrate ITAR compliance and implement processes that can be costly. Innovators may also be repelled with the time-consuming challenge of finding new strategies or technologies that are compliant with these regulations.

Difficulties accessing and engaging

There’s poor supply chain engagement within the industry with SMEs and mid-tier suppliers often encountering difficulties communicating with both top tier suppliers and the MoD. These barriers can prevent companies from marketing their businesses and product offerings to prime defence contractors, as they often manage lower-tier suppliers’ interactions with government customers.

Poor supply chain diversification

Defence contracting terms and processes can present companies with barriers to supply chain development and diversification. The bureaucratic processes that are associated with defence procurement contracts, along with the sub-contracts issued by top-tier companies, are yet to be calibrated to recognise and absorb innovation from lower-tier suppliers. This has caused the sector to fall behind in multi-tier supply chain mapping advancements.

UK defence supply chains have difficulty attracting non-traditional defence suppliers due to the rigid structure. This is limited opportunities for innovation within the market, despite the increasing prospects for cross-sectoral engagement. These are emerging through supply chain development initiatives, such as the High Value Manufacturing Catapult – a group of manufacturing research centres in the UK.

Why Valuechain for Defence?

Here at Valuechain, we root ourselves within connectivity and transparency. We aim to get our customers, suppliers and partners closer through collaboration to overcome challenges that are faced within the industry. We do this by providing control, security and simplicity.

Traceability and compliance

At Valuechain, we strive to provide innovation through defence supply management software. Our digital technologies provide traceability and compliance while minimising complexity for users. Although safety and security regulations remain critical to the defence sector and its supply chains, digital technologies can reduce any administrative overheads and reduce barriers to entry. 

Our partnerships with technology providers mean that Valuechain is able to support defence supply chains with fully traceable and ITAR compliant systems. These include CRM, MRP, Scheduling, SFDC, IoT and Quality Management systems for a range of companies.

Manage Supplier Quality, Cost & Delivery Performance

Gain tighter control over supplier QCD performance with our Supplier Portal. Linking with your ERP/MRP system, you can visualise supplier’s OTIF, PPM, NCRs and Spend performance so you can easily identify issues in your supply chain. The collaborative portal shares KPIs with each relevant supplier, so you can work together to improve performance and mitigate risks.

Communication and engagement

Our Supplier Portal product creates two-way communication and transparency, which gives you a flexible platform for streamlining compliance management and increased supply chain engagement. With an improved supply chain visibility, sharing news and information with suppliers is easier than ever before. In the Supplier Portal, you can also conduct supplier auditing and surveys, allowing more room for improvement and innovation.

Opens up diversification

With Valuechain supply chain solutions, you can expect more collaboration with suppliers, customers and partners, which in turn leads to improved diversification within the supply chain. Our Supplier Portal helps to share visibility with suppliers and open up one-to-one communication, while Network Portal encourages many-to-many collaborations. 

Working with the ACCESS Project, Valuechain can connect you with a platform High Value Manufacturing companies connect and collaborate with. This can facilitate collaboration between OEMs, Tier-1s, mid-tier suppliers and SME sub-contractors, to resolve issues and add value to your own supply chain.

How can we support your defence organisation?