Supply Chain Management Solutions Defense & Military Supply Chains

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Understanding supply chain management platforms for defense organizations

Challenges in implementing information technology in government and defense organizations are legendary. The US Department of Defense has acknowledged such problems in the past.

In 2011, the Institute for Defense Analyses reported, “DoD had invested over $5.8 billion in ERPs (Enterprise Resource Planning) and will invest additional billions before the ERPs are fully implemented. Most of these programs are over budget, behind schedule, and have not met performance expectations.”

Shortly thereafter, the Air Force shut down an ERP implementation project that had consumed over $1B and six years of effort with virtually no return on investment. The New York Times quoted the assistant secretary of the Air Force, Jamie Morin as saying, “The total cost on the system is now over $1 billion. I am personally appalled at the limited capabilities that program has produced relative to that amount of investment.”

In our work with the military, we’ve learned that this is an ongoing, widespread problem, plaguing departments, organizations and service arms.

"Organizations spend millions on IT systems, yet many fail to live up to the most basic standards, and most do not support the wider and long term organizational objectives." -David Stephens Share on X

Defense Organizations Face Unique Technological Challenges

Organizations spend millions of dollars implementing and upgrading systems, yet many fail to perform up to the most basic standards, and most do not support the wider and long term organizational objectives.

Today, military organizations are being asked to perform at higher levels, work together more closely, comply with challenging new mandates, and modernize legacy systems. They must do this in the face of a confusing array of technology choices, and in a rapidly evolving landscape of emerging technologies like blockchain, robotics and artificial intelligence.

Careful technology selection and implementation is critical to ensure IT systems work as expected and provide value for taxpayers’ dollars.

Identifying the Problem and Root Cause

Too often, we rush in with only a vague idea of what the problem is, and then go about solving the wrong one. Here are some, but not all, of the problems we hear about when consulting with military organizations about their technology:

Aging systems that are slow, error-prone, labor-intensive and drag down organizational performance
Lack support for new technologies like AI/ML, predictive and prescriptive analytics, and digital twins
High sustainment costs, usually with little new functionality or enhancement
Lack of inter-operability between departments and services
Duplication of efforts and investments across organizations
Ill-prepared for the future, as the technology is difficult and expensive to adapt to changing needs
Unable to meet mandates, including audit

In our experience, these problems stem from a root cause, the attempt to solve a network problem with an enterprise-centric solution, which by necessity limits opportunities to achieve true collaboration across service departments and service arms.

"You simply cannot solve a network problem with an enterprise-centric solution. Enterprise systems were not architected for true collaboration." -David Stephens Share on X

Worse still, this approach almost always contributes to and aggravates the aforementioned problems.

Choosing the right platform and implementation approach is critical to defense organizations. It’s important to choose a platform that drives continuous modernization, supports emerging and future technologies, and guarantees that the solution will never go legacy.

Understanding Supply Chain Management Platforms for Defense

Essentially, there are three approaches and types of platforms to consider:

1. ERP and Derivative Systems

Enterprise Resource Planning systems have been the technology of choice in enterprises and military organizations for decades, and they have delivered enormous value. Today, ERP systems are working to reinvent themselves as a platform and are making progress. However, they still carry limitations from their historical beginnings in the enterprise.

ERP provides a single version of the truth, but that version is only within an enterprise. ERPs are not a network and require integration. This makes it difficult for them to provide visibility beyond the enterprise, and across echelons of partners. ERP systems typically require high sustainment dollars for the support of customized applications and integration code. Unfortunately, in many cases they offer no additional capabilities or modernization for these additional support costs.

In addition, ERP is yet to transition to a development platform, so changes to the system are often difficult and expensive.

2. BPM Platforms

Business Process Management (BPM) solutions support low code/no code development, which aids productivity and speeds up growth. BPM is also capable of ramping up applications quickly. However, applications on the platform are limited in their power and sophistication. Because the applications are distinct by nature, they lack the ability to provide a single version of the truth. They also require a high level of integration to work effectively.

BPM platforms also lack an “industry core” concept (i.e. core modules that can be reused by all applications for a particular market). They also lack layered module capabilities that others can take advantage of without rewrite or legacy support which limits their efficiency and productivity. And, they struggle with meeting the stringent security and Information Assurance requirements that are in place today within the military/defense structure.

3. Multi-Party Networks

Multi-Party Network Platforms provide the benefits of single version of the truth across trading partners that are both internal and external to the enterprise. This option also supports rapid on-boarding of partners and new capabilities, and an integration platform and hub to embrace, enhance and replace legacy applications.

One of the key components of this approach is a development platform, or “developers’ network” which includes industry standard tool sets for application development, business process modeling, public APIs and industry-specific intelligence. Development platforms tend to provide a software development kit (SDK) which enables organizations to quickly extend the network solutions. This enables them to adapt existing modules to their needs, develop new modules for added functionality, and be ready to incorporate modern technologies, such as blockchain, as they emerge, without slow and costly implementations of new systems. And, everyone on the network has the capability to use everything on the network, governed by a strict and robust permissions model. This allows each service to take advantage of what another service implements, further decreasing both costs and time to production implementation.

A multi-party platform also boosts cooperation and collaboration by sharing a single version of the truth in the cloud, for all departments, organizations and service arms. The significance of this can hardly be overstated.

So what critical capabilities should a platform for defense supply chains include? I address this in this post: Why We Should Treat Defense Supply Chains as Networks.

Critical Capabilities for defense Supply Chains