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

By Carney Elias.

In an earlier post, I argued that Defence must become better at developing commercial acumen in logisticians. This assertion was made on the basis of my experiences within the Australian Army. In keeping with the fundamental principles of education and training used across Defence, to develop the commercial acumen of logisticians we must aim to provide theoretical instruction and the opportunity for practical application. The theoretical instruction should be an overview; a broad exposure to subjects such as procurement, contract management, commercial logistics practices, and factors that drive commercial business. This should be the starting point that gives all logisticians a basic understanding, and is subsequently built upon throughout the suite of logistic officer courses.

In this second part of my exploration of how logisticians train to develop commercial acumen, I will propose several improvements to existing programs. In the case of my own Service, Army, it will bring us closer to the level of education received by logisticians in the other Services of the Australian Defence Force (ADF). Furthermore, it will ensure that every Army logistician has a basic understanding of the private sector and how best to interact with commercial agencies.

Before progressing into options for developing commercial acumen as a general skill amongst logisticians, it is important to emphasise that training for specific roles (such as the courses offered by joint logistics agencies as described in my previous post) must continue. Furthermore, the requirement to complete relevant courses prior to taking up certain postings in these organisations must be formalised and facilitated. It serves neither the joint organisation or the individual being posted to it well if people are underprepared, with their training conducted in an uncoordinated manner. We mandate pre-requisite training for personnel deploying on operations, yet trivialise the same requirements for training and education when we post junior officers into roles that require them to deal with complex contracts or commercial agencies from day one.

The responsibility for the conduct of these courses does not lie within the Services in most cases. However, the Services must recognise the value of these courses and the associated postings to the professional attributes of the junior officer and the organisation. Furthermore, the Services must begin to prioritise postings to joint logistics agencies early in a logisticians carer as a way of preparing staff for the senior-most appointments. Anecdotal evidence that I have gathered suggests that this is a view shared by a growing number of middle-senior ranking officers.

To enable the practical application of this knowledge, we must look outward and establish greater connections with industry[1]. We must develop partnerships with commercial organisations; those that support Defence through existing long term contracts, and those which provide more ad hoc support such as equipment manufacturers, suppliers and maintenance organisations[2].

We must develop a formalised program that enables logisticians to dip into the commercial world throughout their career. Regularity is required for two key reasons. Firstly, it ensures that one-off experiences are not wasted. Secondly, it enables logisticians to remain abreast of changes and developments in the commercial sector. Outplacements and secondments do not need to remove logisticians from Army for extended periods of time. If these are a regular part of an officer’s development, then shorter durations can be as valuable as a longer one-off taken sometime during an officer’s career.

Further analysis is required to determine exactly what a formalised system of regular industry placements should look like. However, a key feature of the system must be that it provides opportunities for all logisticians in contrast to programs which view such opportunities as a career-development or scholarship opportunity. The ability for officers to understand the pressure that commercial organisations face to make a profit for their shareholders, and how that drives the way they interact with Defence is something that I do not believe can be developed effectively in any other way.

The final critical point to make on the development of commercial acumen in logisticians is that this is not just a problem for the Services. As I have already identified, the jobs that require the most commercial acumen in logisticians are not within Service logistics units; rather, they are in the joint domain and at the strategic level of Defence. The Defence Logistics Enterprise Strategy issued by the ADF’s Commander Joint Logistics Command clearly articulates the vision that all logisticians within all aspects of Defence must have a greater level of industry engagement.

Each of the three Services should provide theoretical instruction tailored to their specific needs. This training would complement the industry placements described above by ensuring military logisticians are in a better position to learn the right lessons from commercial experience. Joint coordination will provide the greatest level of efficiency and oversight, but the three Services must retain a level of ownership of the system to ensure that implementation is supported for all logisticians.

Naturally there are those that oppose these views. There are many who feel that Army’s system of training and development of its officers (including the logistics training continuum, the all-Corps training continuum, and the practice of regular and diverse postings) provides a robust, resilient officer capable of meeting the challenges of any position they are likely to be posted to[3]. This is not an uncommon view, and there is an element of truth in it. But it is also a view which prevents the logistic community from proactively and positively adapting the profession as the contemporary logistic environment changes:

The archaic practices of trial by fire and on-the-job training are no longer acceptable for professional development of combat arms officers in the areas of aviation, infantry, artillery, and armo[u]r, nor should they be acceptable for officers who provide the supplies and material the combat occupations use to accomplish national objectives.[4]

If we continue to ignore the relevance of commercial acumen to the military logistician, they will struggle to contribute meaningfully in Joint logistic roles and to compete for more senior roles within these Joint organisations. This will inevitably lead to the degradation of Defence’s logistic capabilities.

An equally erroneous view is that we should leave the commercial focus to the civilians and make military logisticians focus on the provision of CSS in the battlespace. Again, there are merits to this argument, but it ignores the fact that virtually all ADF operations over the last twenty years have required logisticians to seek support from industry, including in the battlespace. In most cases the management burden of these contracted solutions fell to ADF logisticians who had had little previous experience in contracting.

We must recognise that the time for a lazy attitude to developing commercial acumen in the ADF’s logisticians is over. This attitude sees us send junior officers into positions where they are responsible for managing contracts and engaging with commercial organisations without the skills they need to thrive in these roles. The Services have abrogated responsibility for developing commercial acumen to joint and strategic organisations and they have limited ability to influence the content and requirements of the training accordingly. Furthermore, the ADF expends funds for officers to obtain university qualifications that are not optimised towards improving the ADF’s logistic performance or the development of commercial acumen in its logisticians. In most cases these courses are largely little more than a personal opportunity.

The future of logistics, even on the battlefield, will be more integrated with civilian service providers and supply chains delivering supplies right to the foxhole. Joint organisations have long understood this, and the Services must recognise the value of intentionally placing its logisticians in these organisations as a means of gaining exposure to these developments and the commercial organisations leading them. Recognising that not all logisticians will work in these organisations, we must provide a broad theoretical overview and regular outplacements and secondments in industry to all logisticians to develop and maintain relevant and current commercial acumen. These practices are vital now to develop professional logisticians with sound and relevant commercial acumen, capable of engaging commercial organisations effectively and in doing so obtain the best possible outcomes for Defence.

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

[1] A recurrent theme in the ADF’s First Principles Review and JLC Future Concepts

[2] The US Army Department of Acquisition has been using a similar model for several years now (Radican 2013).

[3] I suspect that over the years this view has contributed to the removal of elements that have previously formed parts of the suite of Army logistic officer courses such as simple procurement, site visits to commercial logistic organisations, and a civilian-provided supply chain management package.

[4] Mauldin, Randall M. 2005. Development of the Joint Logistician. JFQ, 25-29. Accessed May 17, 2016. https://www.researchgate.net/publication/235150313_Development_of_the_Joint_Logistician

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

  1. Carney, thanks for a great rundown. Here is my view, from a U.S. Army perspective (also posted on Warrior Logistician Facebook Page):

    The undertaking of commercial acumen by military logisticians is a tough proposition. The dilemma is similar to the question of when leaders should develop strategic leader competencies, as performance in tactical assignments historically forms the core criteria for promotion and selection. Strategic competencies are acquired through “broadening assignments”. The development of logistics competency is not much different.

    The first argument to evaluate is the requirement for commercial type acumen–when, where and why it is justified. I have encountered those who feel that even exploring this question sends a wrong impression to non-logisticians and contributes to the belief that logisticians are not proficient warfighters.

    I believe there is certainly a balance that must be achieved. On the one hand, logisticians should be raised as combined arms operators who understand operational effects and how to achieve them. Through this mindset, these “warrior logisticians” understand how their efforts must be integrated in order to truly contribute to operational effects.

    At the same time, being an effective Warrior Logisticians requires understanding the system of systems, and arguably taking a strategic view of problems. This is physically represented by the dependency of tactical operations on supply chains that quickly extend into operational and strategic areas (at least, for now). In the past, I have described this as a required ability to manage supply chains, both forward, rear and lateral. To do so effectively requires higher level systems and processes which may resemble commercial activities. I believe the Army Operating Concept and other future depictions of warfare reflect this required competency. I also believe the quote, “Amateurs talk tactics, professionals discuss logistics” stems from this belief.

    This exploration may be further clouded with the assertion that there is not enough time within Professional Military Education (PME, i.e., the Basic and Advanced Courses) to achieve the balance. I would respond that trying to address this problem through a PME solution is less valuable for this and other reasons. The real question is how we can adequately reassess which competencies our Army and respective organizations value, and why.

    Not too long ago, we added a ‘Logistics Corps’, a ‘multifunctional branch’ to a set of functional branches. Perhaps examining the need for a ‘Supply Chain Corps’ may be the next step towards achieving the Warrior Logisticians who can truly contribute to operational effects, both now and in the future. Perhaps. But we first must make the case.

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  2. It is not just the logistician that needs the extra training. Arms corps officers need to understand the descions they make have a second and third line effect upon the supply chain. These factors can be the difference between defeat or victory no matter how well your warriors are trained.

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