Commercial acumen – the missing link in the training of ADF logisticians: Part One

By Carney Elias.

[T]he procurement process itself is a weapon of war no less significant than the guns, the airplanes, and the rockets turned out by the arsenals of democracy.’

I.B. Holley[1]

The 2015 edition of the Macquarie Dictionary defines acumen as quickness of perception; mental acuteness; keen insight and commercial as ‘being engaged in commerce; capable of returning a profit’. Essentially, commercial acumen means having a deep understanding of how the private sector impacts Defence business. It is a vital component of the business of military logisticians as much of their work requires them to interact with, and manage services provided by, commercial organisations. Commercial acumen is vital for all logistics officers at all stages of their career, but is especially necessary in the senior appointments where logistics is intertwined with the activities of the commercial sector.  This means that understanding commercial procurement methods, how contracts work, and how to interact with contractors should form a part of every logisticians training and education.

The importance of commercial acumen has been recognised in Defence for many years. It is a subject I have found specifically relevant to my own service as an Army logistics officer in the Australian Defence Force (ADF). Fundamentally, the role of the Army logistician is to provide Combat Service Support (CSS) to organisations on the battlefield. Increasingly, this cannot be achieved without contracted support at a variety of points along the supply chain. This is recognised in employment requirements, such as the Combat Service Support Officer Employment Specification[2]. Among other tasks, this manual recognises that the CSS Captain is required to ‘establish, maintain, monitor, review and complete administrative contractual arrangements,’ and to ‘monitor the performance of CSS contracts in support of force elements’. Alternatively, the CSS Major is required to ‘liaise with external agencies,’ and to, ‘manage complex contracts’. While these tasks are general skills required in numerous appointments, they are especially relevant to appointments within the joint logistics environment and at the operational and strategic levels of Defence.

The CSS Officer Employment Specification and the Directorate of Officer Career Management  (DOCM) Corps Models Guidance (DOCM 2015) are unequivocal in describing the importance of commercial acumen in joint appointments and those at the strategic level of Defence. These include positions within the national logistics enterprise in Joint Logistics Command (JLC), and in the acquisition domain within the Capability Acquisition and Sustainment Group (CASG). CSS officers typically undertake these postings from the rank of Captain onwards, and are exposed to:

‘ ….. fourth line and national support base logistics, including contract management, tendering and fleet management …coordination of national and operational support base logistics, notably the design and implementation of logistics support chains … provisioning and contract management. The JLC also coordinates the operations of the joint logistics business units around the national support base, providing the interface between defence logistics and civilian industry.’

It is quite clear that as an institution we recognise the need to develop commercial acumen. However, I believe that we currently don’t do it well enough. In order to explain why I think this is the case I will first consider what training currently exists within my own Service, Army, and how this compares to training opportunities in Navy and Air Force, and within joint organisations. In a later post, I will propose a method of training that will develop commercial acumen as it applies to the ADF and will explain why elements of the proposed model should be applied jointly across the three services. While this post has an Australian focus, I am sure some of the questions it poses are relevant to situations in other militaries.

My own experience leads me to believe that Defence does the barest minimum to provide its logisticians with commercial acumen. I consider this in contrast to my actual employment; I have been involved with contracts and with commercial providers at every rank from Lieutenant to Major, in almost every posting, both within Australian and deployed on operations. But is this just my experience? My own observation, and accounts from others indicate that many Army logisticians are exposed to contracts and civilian agencies in many roles meaning I am not an isolated example. With this in mind, it is understandable to ask whether individual training is adequately meeting this requirement?

Across the suite of mandatory Army logistic courses delivered by the Army School of Logistic Operations (ASLO), there is almost no content focused on developing commercial acumen. From the current course training programs, it can be seen that there is no commercial acumen instruction on the Logistic Officer Basic Course attended by Lieutenants, two hours (0.1% of the total course duration) on the Logistic Officer Intermediate Course attended by senior Lieutenants and Captains, and approximately three hours (2.5% of the total course duration) on the Logistic Officer Advanced Course attended by senior Captains and junior Majors.

There are a range of other training opportunities which are available to Army logisticians throughout their career, but none are compulsory nor are they robust enough to make up for a noticeable training deficit. Online training and a number of courses offered in Defence may ensure a baseline competency is obtained by students, but such training merely scratches the surface. Long term schooling opportunities are available to give logisticians an opportunity to obtain a civilian university qualification. In the past these opportunities were available through a range of civilian universities and in most cases were an excellent source of exposure to commercial acumen in the logistics space. Army logisticians were given the opportunity to study a broad range of topics including business subjects, alongside civilians from a range of industries, both local and international.

More recently these opportunities have been reduced so that they are now almost exclusively delivered by a single provider, the University of New South Wales (UNSW), Canberra, at the Australian Defence Force Academy (ADFA). Attendance on these courses is heavily dominated by military personnel and civilian members of the Department of Defence, and many of the courses are delivered remotely. While some of the subjects still target some aspects of financial and business literacy, the depth that comes from studying with people from a range of industries has been lost[3].

The Capability and Technology Management College (CTMC) program is also delivered by UNSW, Canberra. It is purely focused on a military audience, both logisticians and other officers, and aims to provide training in the specific skill sets required to operate in the acquisition and sustainment fields within Defence.  The course has a heavy focus on the Systems Engineering and Project Management disciplines, and the limitations of this course in developing commercial acumen are similar to those of the other courses currently offered by UNSW, Canberra, previously discussed.

In terms of the acquisition domain, CASG provides training courses through the Capability Acquisition and Sustainment (CAS) Institute which are aligned to a variety of ‘job families’ of which Procurement and Contract Management is one. Of note, one of the courses offered by the Institute is a Business Acumen course. While the CAS Institute courses are open to all Defence staff there is little attendance on them from staff not currently working within CASG, and places are allocated to those with a critical skill need for their current job first (CASG 2015).

JLC has also developed its own training, including online courses aimed at providing exposure to Joint logistics[4], with a heavy focus on logistics support to operations. The Operational Contract Management Course (OCMC) specifically focuses on equipping logisticians and finance managers to manage contracts in a deployed setting. This course is mandatory for people deploying into specific roles on operations such as financial management roles and JLC Liaison Officers who double as the in-theatre contract managers.

The OCMC and the CAS Institute’s Business Acumen courses are the best examples of commercial acumen development available to Army logisticians. However, they are niche courses, run sporadically for a very limited number of people. Neither course is mandatory for logisticians. And in the case of OCMC, experience has shown that it is too little too late; you cannot develop commercial acumen overnight.

Opportunities exist within the Services to conduct outplacements and secondments within commercial organisations. For example, in Army these are governed under a number of schemes including the Chief of Army Scholarship program. In most cases, the onus for organising these outplacements rests with the individual or their chain of command, and while they provide invaluable experiences to members that serve to benefit Army, they can come at significant administrative, financial and capability costs to the member’s unit. They also tend to be offered at more senior levels (e.g. Lieutenant Colonel). Despite the limitations on their use, including the competitive nature by which the scholarships are awarded, they do provide a very effective vehicle for developing commercial acumen in Army logisticians. Outplacements and secondments are, in my opinion, a vital component of any program designed to develop commercial acumen in the logistic leaders of the future.

With the exception of the Army logistic officer courses, the training opportunities already discussed are also available to both Navy and Air Force logisticians. So what follows is a brief assessment of the service specific logistics training provided by Navy and Air Force.

The Royal Australian Navy takes a more holistic approach to training, particularly at the junior level. They incorporate residential courses with time at sea and use a Capability Evidence Journal to ensure that their logisticians have been exposed to the full range of logistic tasks. They also carry out more financial management tasks at all levels, and tend to have more exposure at junior levels to contracts and external agencies. For this reason, Navy training contains a significantly larger amount of content that could be considered to develop commercial acumen. During their Basic Maritime Logistics Officer Course they undertake a total of 13 days (20% of the course duration) of training in procurement, contract management and financial management. During their Maritime Logistics Officer Application Course the total time spent on contracting and procurement is approximately 16 days (30% of the course duration). The theoretical learning is then applied practically during their time at sea which leads to greater levels of commercial acumen, but only as it applies to sustaining a ship at sea.

The structure of logistics officer training within the Royal Australian Air Force is more closely aligned to that of Army, with three logistic-specific courses conducted throughout the logistician’s career. The Logistic Officer Initial Course contains a three-day finance and procurement module and site visits to two commercial logistics organisations. These elements comprise approximately five days (or 14% of the course duration). The Logistics Officer Executive Course contains a one day contract management package which comprises approximately 7% of the total course duration.

The final Air Force course is a one-week symposium conducted in conjunction with Navy logisticians at the senior Squadron Leader / junior Wing Commander level. The course is aimed at giving logistic officers an opportunity to engage in an exchange of ideas about strategic issues within the Defence logistics space. The content varies from course to course based on which senior officers are selected to present to the course. However, the intent is to develop strategic thinking rather than commercial acumen. This may set up the naval logistician for dealing with contractors and external agencies, however their training is very narrow and not without its limitations.

The development of commercial acumen in ADF logisticians has been a long-stated goal in the training of logistics officers. However, I do not believe we develop commercial acumen in our logisticians as well as we might. Furthermore, the training is inconsistent across the three Services. Each Service in the ADF offers different proportions of their basic training for logistic officers to developing this important skill, and joint offerings are presently too limited to be as effective as hoped. In my next post, I will outline a way in which these concerns can be addressed, and a program of commercial acumen might be developed by training institutions in the future.

Carney Elias is a serving Australian Army officer posted to the Australian Army School of Ordnance. She currently commands the Administrative Services Wing.

[1] Frisbee, Sean M, and Scott Reynolds. 2014. Critical Thinking – A missing ingredient in DoD’s Acquisition (Education) System. Defense Acquisition Technology and Logistics (AT&L), Oct: 17-21.

[2] This paper focuses solely on the development of commercial acumen in logistics officers. Employment specifications are contained within the Manual of Army Employments – Combat Service Support Officer Employment Specification, available for ADF members through official means

[3] These comments are primarily based on personal experience: Master of Business (Logistics Management) from RMIT in 2006-2009; Master of Engineering Science (Data Communication and Analysis) from UNSW, Canberra, in 2015.

[4] Introductory Module on Logistics in Defence, Logistics Support to Capability, Support to Operations, and Coalition Logistics Education Package.

4 thoughts on “Commercial acumen – the missing link in the training of ADF logisticians: Part One”

  1. Nice summary Carney, although I do recall that about when you and I went through LOIC we did a 5 day commercial logistics package delivered by a contractor that visited some civi log nodes (Woolworths). Where did that go?
    Also, iconic and ironic photo: Given that we no longer have an aircraft production capability in Australia!

    Like

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