Industry integration – a new approach and attitude to Army logistics

This article was originally published in the Australian Defence Business Review ‘Land Forces 2018’ edition (September-October) and is posted here with permission. ADBR can be found at www.adbr.com.au.

By David Beaumont.

Logistics is the stored potential of a military force, and industry is the battery from which energy is drawn. For Army to be successful operationally, the integration of logistics and industry is vital.

One military theorist compared logistics to a bridge between the national economy and the battlefield, one where raw materials, goods and services are shaped through relationships and processes to achieve military outcomes. Industry is where logistics begins.

Yet there is a tendency to define the relationship between industry and Army (and Defence writ large) in terms of the introduction-into-service and sustainment of materiel, or in the provision of essential services that keeps an organisation of 45,000 soldiers ready.

The delivery of impressive new capabilities including combat and support vehicles, communications and information systems, and soldier combat equipment certainly focuses the attention of Army staff and their industry partners. This activity, though fundamentally important, reflects a portion of the relationship between Army and industry.

But we can’t forget that when Army deploys, industry contributes as a partner by supporting and resourcing Army’s logistics. This also means that when Army prepares for operations, defence industry should embark on its own activities to offer the surety that Army needs.

New Capability

Readers would likely be familiar with the Australian government’s policy direction relating to Defence and Industry.

The 2016 Defence White Paper and the supplemental Defence Industry Policy Statement continued the long tradition of following strategic intent with industry policy. Together, these documents extolled the self-evident role of industry as a fundamental input to capability (FIC),and sought to stimulate a closer collaboration between Defence and industry.

The relationship between Defence and industry may have initially been defined by the headline National Shipbuilding Plan, but there are now other projects which have the potential to capture the limelight.

Two of these, the LAND 121 program to deliver modern transport and the LAND 400 Combat Reconnaissance Vehicle, have brought the engagement between Army and industry to the fore. These programs have been linked to the idea of a ‘sovereign defence industry capability’, which simplified, is an industrial resource of such vital concern to the ADF that it must be maintained if not controlled for the purposes of national defence.

Army’s relationship with industry is not only measured by these two projects, or the many other programs to modernise the military that are currently underway. The way in which materiel is sustained and Army’s activities supported, is an equally important concern.

New Scenarios

This point was recently raised in a 2017 paper by the Australian National University’s Dr Stephan Fruhling who, in his ‘Sovereign Defence Industry Capabilities, Independent Operations and the Future of Australian Defence Strategy’, wrote of three key issues with the current paradigm of strategic thinking about industry.

Fruhling first notes that industry capabilities must relate to scenarios which apply to the force structure of the ADF, “not just consider industry as a collection of industry fundamental inputs into capability”. The relationship between industry and Army, as well as the industry options that are available and cost-effective can have a very significant bearing on force structure decisions.

This is especially the case with respect to logistics activities. For example, commercial activities might be leveraged to provide an operational effect. Army might ask whether it needs to invest in its own capabilities or arrange for stock or capability to be provided by industry ‘just-in-time’. How Army and industry prepares for this scenario is fundamentally important.

Secondly, and continuing from this point, Australia needs to look beyond a peacetime industry dependence on the US. While reliance was avoided because of the strategic policy orientation of self-reliance, he says “we must now also move to confront our dependence on US resupply in high-intensity operations”.

Global supply chains, now defined by producing commodities as they are required, can be extremely vulnerable to disruption or exhaustion, severely curtailing operations. We can be certain that if our strategic partner places a significant demand upon global commodities, the opportunity for a smaller military to resupply itself will be much less than we might hope. Industry must be ready.

Finally, Fruhling recognises that industry will be crucial to enable ADF operations in defence of Australia in the “era of long-range precision-strike”. This includes considering battle-damage capabilities in industry, as well as arrangements for “domestic base support”. In this case, Australian defence industry would have an incredibly important role in the repair and re-equipping the deployed force.

New Risks

These big strategic ideas about the industry contribution to future military operations are highly important. The devil is in the detail when ‘Sovereign Defence Capabilities’ are considered. There are, however, a few emerging questions with respect to the relationship between industry and militaries that should also be reflected upon by Army’s industry partners.

As alluded to above we are in an environment where supply chains supporting Army capability are global and complex, meaning many risks to sustainment can be hidden.

Army’s industry partners could help to reduce the opaque nature of these supply networks so we can better understand what is being produced and where. The digitisation of Army’s logistics systems, binding battlefield communications systems with modern enterprise resource planning, will come a long way to de-mystifying the supply chain. Industry might want to consider how it can innovatively contribute to solutions which give Army clarity.

Similarly, the ever-changing strategic environment will also require industry to seriously consider the scenarios in which Army, and the ADF, will approach it for support. Industry should think about its role in supporting an Army that must scale the size of its operations. Can production be increased, and can additional services be provided in the event of strategic surprise? Are there fundamental capacity issues or supply-chain problems in the sovereign defence industries that might curtail operations or limit how Army operates?

Furthermore, how can industry support in areas that Army does not have the capacity to provide itself, such as in specialist logistics, communications and other capabilities? There are real opportunities here for enterprise, where Army and industry can work together to overcome capability gaps.

Finally, there might also be a requirement to challenge the commercial notions of intellectual property, rights and propriety when it comes to a national crisis. If the maintaining of Army’s capabilities becomes financially non-viable to industry, it is essential that Army can repair and sustain its own equipment. This will be particularly important as equipment ages and nears the end of its life-cycle.

New Relationships

Of course, Army must also contribute to the relationship, and has its own obligations to industry. The relationship starts with clear and considerate language, realistic requirements and an appreciation of the commercial requirements that influence industrial capacity. Army must work persistently at all levels to effectively engage with industry partners.

Army has not always been a good partner. Some thirty years ago and in a time of the mass-outsourcing of Defence capability, Army was particularly combative in its relationship with industry. At times, its requirements can be so specific that competition and innovation in industry is stifled. This is not necessarily the case now, and industry engagement activities such as Land Forces 2018 support a renewed and active dialogue.

Army’s staff, and especially its logisticians of which a substantial portion of the service is comprised, must be trained to be able to meaningfully engage with industry and improve service delivery. We are increasingly seeing the integration of industry into Army’s daily life to the extent that commercial operations must be of a second nature to logisticians and others in Defence.

Army should continue to develop its institutional narrative and a plan that articulates its relationship with industry, and in doing so, helpfully define the future relationship. The partnership between Army and defence industry goes well beyond enduring the success of acquisition programs and product delivery. It is a partnership that is incredibly important for the success of Army in the operational environment.

As an idea, Sovereign defence industry capability should most certainly be expanded beyond its current definition to the sustainment of operations and the many other roles that defence industry performs to support an ‘Army in Motion’. Industry partners who are serious about their role in support Army’s operations and activities must consider some significant contemporary challenges.

However, Army must continue its aspiration to be a better partner with Industry; if it is not, there is little chance Army’s logistics requirements will be efficiently, and effectively, met.

David Beaumont is a serving Army officer and the thoughts here are his own. 

The Australian Defence Force and industry support to operations – is it time for a new ‘national support agenda’?

By David Beaumont.

This is the final post from the LIW archives on strategic logistics and logistics challenges prior to the Australia & New Zealand Defence Logistics Conference.

In 2016, the Australian Government released its 2016 Defence White Paper and the supplemental Defence Industry Policy Statement. Industry Statements signify Government intent to Australian Defence industry, and like strategic policy, combine hyperbole with requirements for change. In this case Government – in extolling the self-evident nature of industry as a ‘fundamental input to capability’ – sought closer collaboration between Defence and industry through the development of a native shipbuilding program, to support capability acquisition and sustainment for other major programs, as well as the enhancement of the commercial support on offer to Defence. The Statement also introduced the notion of a ‘Sovereign Defence Industry Capability’, an industrial resource of such vital concern to the Australian Defence Force (ADF) that it must be maintained if not controlled for the purposes of national defence. What the Statement didn’t do, however, was to detail a new path for industry in the context of supporting actual ADF operations.

This issue is one among many examined by Dr Stephan Fruhling, Australian National University, in a recent paper ‘Sovereign Defence Industry Capabilities, Independent Operations and the Future of Australian Defence Strategy.’ As part of the ‘Centre of Gravity’ series of papers, the purpose of its analysis of the idea of ‘sovereign defence industry capabilities’ is to provide strategic policy recommendations, of which there are three.[1] All three are aligned to addressing aspects of the issue of industry support to ADF force structure, and most importantly, operations:

  1. Industry capabilities must relate to scenarios which apply to the force structure of the ADF, ‘not just consider industry as a collection of industry fundamental inputs into capability’.
  2. Australia needs to look beyond a peacetime industry dependence on the US. While reliance was avoided because of the strategic policy orientation of ‘self-reliance’, ‘we must now also move to confront our dependence on US resupply in high-intensity operations’.
  3. Industry will be crucial to enable ADF operations in defence of Australia in the ‘era of long-range precision strike’. This includes the establishment of battle-damage repair capabilities in industry, as well as arrangements for ‘domestic base support’.

Fruhling notes that these ideas are ‘not what the Government had in mind’ with its industry statement. However, they are legitimate concerns that should be echoed in strategic and industry policy calculus. If the Government requires the ADF to be able to operate with any independence from coalition sources of tactical logistics support, the idea of independence should also apply at the strategic level, and with industry in mind.

It is also tremendously worthwhile to consider this issue from the perspective of Defence in its engagement with industry. The role of Defence, and the ADF in particular, in industry policy largely boils down to the articulation of the strategic or operational requirements, and the effective integration of national industrial infrastructure into ADF operations and daily business. This integration is enabled by policy and governance, and through consistent organisational behaviour. Defence presently engages with industry through a multiple of channels, with key agents being the Capability Acquisition and Sustainment Group (CASG), Joint Logistics Command (JLC) and a variety of other groups, units, functions, including the Services, responsible for their own component of the logistics process. Each agency or group has its own objectives and requirements, and the approach is demonstrably fragmented. In the past, however, the ADF has concertedly sought a corporate solution to the problem.

In the late 1990’s the ADF pursued a ‘national support agenda’, a strategic approach to its engagement with industry for ‘ the application of all the resources of the Nation to maximise the defence capability of Australia’.[2] The need for a national support strategy had been born out of reforms as early as the 1980’s, and given greater emphasis as a consequence of the downsizing of the ADF’s organic logistics support capabilities which followed. Industry’s ability to support ADF operations was conceptualised, and tested – albeit in a haphazard and ultimately inadequate way – during the major exercises of the time. The idea of national support culminated with the raising of the National Support Division (NSD) in 1997 during the Defence Reform Program. This Division was a fundamental refocussing of a downsizing Strategic Logistics Division of Headquarters ADF, and was to ‘broaden, shape and improve national and international capabilities to better enable the force generation, mobilisation and sustainment for the ADF.’[3] For just over two years NSD developed concepts and policy which reflected strategic-level logistics at its most essential; extracting support from the national economy for the benefit of military outcomes.

With the creation of the Defence Materiel Organisation in 2000, NSD was disestablished with its functions split between the ADF’s capability staff, Strategic Policy Division and the newly raised Joint Logistics Command. This decision came with questionable timing given it was soon after the ADF’s deployment to East Timor in 1999, an operation during which numerous issues with the quality and capacity of national support available could be seen. Only a year later the Departmental-level Defence Committee agreed to the raising of Strategic Logistics Branch in JLC to better progress national support issues, though some of Defence’s senior leaders considered this was merely a temporary solution to the problem. JLC continues to lead in this area, but across the wider Defence organisation the strategic concept of national support has greatly diminished in its potency. The focus now sits on supporting the ADF’s operations at hand, acquisition and sustainment rather than the how and why of mobilising industrial capacity to suit operational sustainability as a strategic concept. By 2003 and the deployment of ADF forces to support coalition operations in Iraq, where much commercial support was obtained through coalition partners and industry engagement was predominantly focussed upon the rapid acquisition of supplies and equipment, strategic engagement for long-term policy objectives was becoming a strategic side-show.

With industry being declared a ‘fundamental input into capability’, perhaps it is time for a new national support agenda. Such an approach will complement evolving strategic and industry policy as depicted in Fruhling’s paper. This does not necessarily mean further wholesale organisational change is required; a succession of changes in the organisation of Defence has already contributed to the degradation of a strategic approach to industry over the last decade. Concepts have been forgotten and policy compromised with entities like the NSD having little time to prove their worth to the ADF. However, it is logical to review authorities and accountabilities, and to reinforce areas responsible for considering industrial capacity and mobilisation on the basis of a purportedly new paradigm in defence-industry relations. It is especially necessary given the increasing engagement of industry as a supplement or complement to military capability, as is being currently postulated through several initiatives being progressed by the ADF’s Services. Finally, it is necessary simply because of its immense importance to any future considerations of how the nation might mobilise in a future war. The ADF may be prepared to launch an operation, but without industry similarly responsive the weight of national power cannot easily be brought to bear.

Just as Fruhling points out that there is much more to ‘sovereign defence industry capability’ to be explained if Government requires the ADF to conduct independent operations, there is also a need for Defence to reinvigorate its approach to engagement with industry to enable effective outcomes in these future missions. The development of proficiencies for military and civilian logisticians and others to engage with industry, or reconsidering the manner and means by which industry is approached, remain important to this end. However, it is also important for logisticians and leaders to approach the matter comprehensively, cognisant that national support to operations is one of considerable professional relevance. As the ADF’s strategic and operational logistics ‘tail’ comprises a greater commercial component, the effective engagement of the ‘sovereign defence industry capability’ must be second nature to logisticians and others in Defence. A strong institutional narrative regarding the integration of industry with all Defence activities, and in particular military operations, must become a priority. In the context of Stephan Fruhling’s view on the future of Australian defence strategy, the ADF’s success in strategically independent operations will be a clear reflection of the quality of this vitally important relationship.

[1] These paraphrased points are summarised at Fruhling, S., Sovereign Defence Industry Capabilities, Independent Operations and the Future of Australian Defence Strategy, ANU College of Asia & the Pacific, 2017, p 2

[2] As approved by Steering Committee, July 2001, from the Inspector General Division, Progress in pursuing the national support approach, Portfolio Evaluation Report, Department of Defence, 2001, p2-1.

[3] Ibid., p 2-7

David Beaumont is a serving military officer, and the thoughts here are his own. This article was originally posted in 2017.

LIW Editorial – taking the national support base ….. beyond the nation

By David Beaumont.

As a military logistician, the idea of integrating logistics as part of a coalition is hardly revelatory. Most Western militaries have spent the last twenty years of operations in lockstep with one another accepting that there are always a range of difficulties. Forces deployed in the Middle-east integrate life support, ammunition, distribution methods and modes, systems for obtaining local or contracted support – the list goes on. Integration is enabled by the employment of longstanding principles under arrangements defined by multi-national military arrangements such as the North Atlantic Treaty Organisation, or through mutual support arrangements established between partner nations who can count on each other to provide the right resources at the right time. This is a ‘pointy end’ view of the matter, and if you wanted to take a more strategic look at the picture, you can start considering common standards for equipment and procurement, and the methods by which these are negotiated. Consider arrangements such as the America, Britain, Canada, Australia and New Zealand (ABCANZ) program for land forces which also helps to enable integration on operations. From ‘logistics in support of operations’ to ‘logistics in support of capability’ as we in the Australian Defence Force describe, the integration with coalition partners is an essential part of contemporary military practice.

At its most strategic, the idea of a ‘national support base’ is being challenged by continued integration between likeminded nations at the industry policy level. A recent paper, National technology and industrial base integration,  published by the Center for Strategic and International Studies (CSIS) describes this in detail. The authors of this paper contend that the industrial base has been challenged by globalisation, where nations ‘cannot assume that all of the capabilities it needs will be found domestically’ or that defence technology can be controlled.[1] We only have to look at the F-35 Joint Strike Fighter program as a powerful example of this issue, where a consortium of nations has shared the burden of producing the platform. For nations such as the United Kingdom and Australia who have ties to nations with existing arrangements for the sharing of technology and industrial base capability (the United States and Canada specifically), the problem is even more acute. Their national defence effort depends upon access to technology, logistics support and supply that other nations must be willing to share. The paper presents detailed studies of the problems in enabling integration and promotes new ways of breaking down the barriers between countries.[2]

I won’t pretend that as a military officer I have a strong grasp of national industrial policy, nor does discussion of the paper or its issues comfortably sit in a blog that has historically focussed on operational logistics. The reason I felt the paper was worth sharing was because of the questions it raises. What is an appropriate level of integration between coalition partners? Do we understand the risks involved with sharing our ‘defence secrets’? What if national interests differ over specific issues? What defines what is essential for the national support base to produce? How can a collective industrial and technology base support military operations when all its constituents demand the operational priority? Most of all, what is the impact upon military strategy? The integration of national industrial and technological capacity in a global environment makes accessing the global commons more defining an influence on strategic decision making. After all, the fight to win in war is often a fight to win supply.

If you have any answers to these important questions for strategic logisticians, I would love to hear from you. The increasingly integrated nature of national technology and industrial bases is one of the more significant military logistics challenges of our time. We should give it our personal and professional attention.

* Editor’s note – a day after this post was published, a short piece from the Lowy Interpreter examined the difficulty of Australia generating a larger national defence industry. The article, here, is useful to read in conjunction with my piece. Can Australia benefit from reinforcing its defence industry (albeit in an export-focussed manner) while integrating internationally?

[1] McCormick, R., Cohen, S., Hunter, A., Sanders, G., National technology and industrial base integration, Center for Strategic and International Studies, https://www.csis.org/analysis/national-technology-and-industrial-base-integration, accessed 11 Mar 18, p 2

[2] ibid, start from p 54

The Australian Defence Force and industry support to operations – is it time for a new ‘national support agenda’?

By David Beaumont.

In 2016, the Australian Government released its 2016 Defence White Paper and the supplemental Defence Industry Policy Statement. Industry Statements signify Government intent to Australian Defence industry, and like strategic policy, combine hyperbole with requirements for change. In this case Government – in extolling the self-evident nature of industry as a ‘fundamental input to capability’ – sought closer collaboration between Defence and industry through the development of a native shipbuilding program, to support capability acquisition and sustainment for other major programs, as well as the enhancement of the commercial support on offer to Defence. The Statement also introduced the notion of a ‘Sovereign Defence Industry Capability’, an industrial resource of such vital concern to the Australian Defence Force (ADF) that it must be maintained if not controlled for the purposes of national defence. What the Statement didn’t do, however, was to detail a new path for industry in the context of supporting actual ADF operations.

This issue is one among many examined by Dr Stephan Fruhling, Australian National University, in a recent paper ‘Sovereign Defence Industry Capabilities, Independent Operations and the Future of Australian Defence Strategy.’ As part of the ‘Centre of Gravity’ series of papers, the purpose of its analysis of the idea of ‘sovereign defence industry capabilities’ is to provide strategic policy recommendations, of which there are three.[1] All three are aligned to addressing aspects of the issue of industry support to ADF force structure, and most importantly, operations:

  1. Industry capabilities must relate to scenarios which apply to the force structure of the ADF, ‘not just consider industry as a collection of industry fundamental inputs into capability’.
  2. Australia needs to look beyond a peacetime industry dependence on the US. While reliance was avoided because of the strategic policy orientation of ‘self-reliance’, ‘we must now also move to confront our dependence on US resupply in high-intensity operations’.
  3. Industry will be crucial to enable ADF operations in defence of Australia in the ‘era of long-range precision strike’. This includes the establishment of battle-damage repair capabilities in industry, as well as arrangements for ‘domestic base support’.

Fruhling notes that these ideas are ‘not what the Government had in mind’ with its industry statement. However, they are legitimate concerns that should be echoed in strategic and industry policy calculus. If the Government requires the ADF to be able to operate with any independence from coalition sources of tactical logistics support, the idea of independence should also apply at the strategic level, and with industry in mind.

It is also tremendously worthwhile to consider this issue from the perspective of Defence in its engagement with industry. The role of Defence, and the ADF in particular, in industry policy largely boils down to the articulation of the strategic or operational requirements, and the effective integration of national industrial infrastructure into ADF operations and daily business. This integration is enabled by policy and governance, and through consistent organisational behaviour. Defence presently engages with industry through a multiple of channels, with key agents being the Capability Acquisition and Sustainment Group (CASG), Joint Logistics Command (JLC) and a variety of other groups, units, functions, including the Services, responsible for their own component of the logistics process. Each agency or group has its own objectives and requirements, and the approach is demonstrably fragmented. In the past, however, the ADF has concertedly sought a corporate solution to the problem.

 

Land 400 Phase 2

Contenders for Army’s future combat reconnaissance vehicles undergoing air portability trials. Photo by Department of Defence.

 

In the late 1990’s the ADF pursued a ‘national support agenda’, a strategic approach to its engagement with industry for ‘ the application of all the resources of the Nation to maximise the defence capability of Australia’.[2] The need for a national support strategy had been born out of reforms as early as the 1980’s, and given greater emphasis as a consequence of the downsizing of the ADF’s organic logistics support capabilities which followed. Industry’s ability to support ADF operations was conceptualised, and tested – albeit in a haphazard and ultimately inadequate way – during the major exercises of the time. The idea of national support culminated with the raising of the National Support Division (NSD) in 1997 during the Defence Reform Program. This Division was a fundamental refocussing of a downsizing Strategic Logistics Division of Headquarters ADF, and was to ‘broaden, shape and improve national and international capabilities to better enable the force generation, mobilisation and sustainment for the ADF.’[3] For just over two years NSD developed concepts and policy which reflected strategic-level logistics at its most essential; extracting support from the national economy for the benefit of military outcomes.

With the creation of the Defence Materiel Organisation in 2000, NSD was disestablished with its functions split between the ADF’s capability staff, Strategic Policy Division and the newly raised Joint Logistics Command. This decision came with questionable timing given it was soon after the ADF’s deployment to East Timor in 1999, an operation during which numerous issues with the quality and capacity of national support available could be seen. Only a year later the Departmental-level Defence Committee agreed to the raising of Strategic Logistics Branch in JLC to better progress national support issues, though some of Defence’s senior leaders considered this was merely a temporary solution to the problem. JLC continues to lead in this area, but across the wider Defence organisation the strategic concept of national support has greatly diminished in its potency. The focus now sits on supporting the ADF’s operations at hand, acquisition and sustainment rather than the how and why of mobilising industrial capacity to suit operational sustainability as a strategic concept. By 2003 and the deployment of ADF forces to support coalition operations in Iraq, where much commercial support was obtained through coalition partners and industry engagement was predominantly focussed upon the rapid acquisition of supplies and equipment, strategic engagement for long-term policy objectives was becoming a strategic side-show.

With industry being declared a ‘fundamental input into capability’, perhaps it is time for a new national support agenda. Such an approach will complement evolving strategic and industry policy as depicted in Fruhling’s paper. This does not necessarily mean further wholesale organisational change is required; a succession of changes in the organisation of Defence has already contributed to the degradation of a strategic approach to industry over the last decade. Concepts have been forgotten and policy compromised with entities like the NSD having little time to prove their worth to the ADF. However, it is logical to review authorities and accountabilities, and to reinforce areas responsible for considering industrial capacity and mobilisation on the basis of a purportedly new paradigm in defence-industry relations. It is especially necessary given the increasing engagement of industry as a supplement or complement to military capability, as is being currently postulated through several initiatives being progressed by the ADF’s Services. Finally, it is necessary simply because of its immense importance to any future considerations of how the nation might mobilise in a future war. The ADF may be prepared to launch an operation, but without industry similarly responsive the weight of national power cannot easily be brought to bear.

Just as Fruhling points out that there is much more to ‘sovereign defence industry capability’ to be explained if Government requires the ADF to conduct independent operations, there is also a need for Defence to reinvigorate its approach to engagement with industry to enable effective outcomes in these future missions. The development of proficiencies for military and civilian logisticians and others to engage with industry, or reconsidering the manner and means by which industry is approached, remain important to this end. However, it is also important for logisticians and leaders to approach the matter comprehensively, fully cognisant that national support to operations is one of considerable professional relevance. As the ADF’s strategic and operational logistics ‘tail’ comprises a greater commercial component, the effective engagement of the ‘sovereign defence industry capability’ must be second nature to logisticians and others in Defence. A strong institutional narrative regarding the integration of industry with all Defence activities, and in particular military operations, must become a priority. In the context of Stephan Fruhling’s view on the future of Australian defence strategy, the ADF’s success in strategically independent operations will be a clear reflection of the quality of this vitally important relationship.

[1] These paraphrased points are summarised at Fruhling, S., Sovereign Defence Industry Capabilities, Independent Operations and the Future of Australian Defence Strategy, ANU College of Asia & the Pacific, 2017, p 2

[2] As approved by Steering Committee, July 2001, from the Inspector General Division, Progress in pursuing the national support approach, Portfolio Evaluation Report, Department of Defence, 2001, p2-1.

[3] Ibid., p 2-7