Over the last several years, we’ve been witnessing a shift in the global power dynamic, but perhaps the most significant has been the economic and political repercussions that have followed these major events.
The outbreak of war, and increasing geopolitical tensions between Ukraine and Russia have revealed cracks in the United Kingdom’s defence sector supply chain. Tension across the global front has shown that the UK defence sector continues to rely on antiquated methods that are no longer effective, reliable, or provide modern solutions to an increasingly digitised world.
Building more resilient supply chains, creating more efficient management protocols, and ensuring the cost-effective delivery of sophisticated goods, materials and services, requires the defence sector to adopt new approaches that would stand to benefit the UK defence sector, the government and British constituents in an era of “new normal.”
The impact of the war in Ukraine on the UK defence industry
International conflict between Russia and Ukraine has led to a years-long war that has severely impacted global supply chains. The UK defence industry is one of many that has experienced the repercussions that followed, both in terms of economic growth and supply management.
Delay in equipment plan execution
In July 2020, the Ministry of Defence (MOD) concluded that it would not deliver a full equipment plan report for the defence sector until a review of spring, security, defence, development and foreign policy has been concluded.
This decision by the MOD, combined with pandemic-induced disruptions, the UK formally leaving the European Union, and the war in Ukraine, new equipment planning and execution is facing severe bottlenecks, and places pressure on the national defence sector.
Shortage of trained personnel
During the early months of the war, the government deployed UK military staff to assist and train the Ukrainian military. While this has proven to be effective in the defence against Russia, it has further highlighted the need for trained, skilled and knowledgeable personnel across the UK defence sector.
Shift towards older political strategies
Throughout the last several months, the government on all sides of the aisle have argued that Britain should lean in favour of returning to Cold War positions across Europe. Calls within the government and defence sector have said that the UK should abandon its “tilt” towards the Indo-Pacific, and further commit its attention to European conflict, along with international support from NATO.
Lack of integrated policies
The UK defence sector is faced with stringent supply chain policies and regulations that do not provide provisions or support in the event of major trade-offs between allied powers.
This would mean that in the event of further escalation of the war on European soil, the UK defence sector would be faced with mounting supply chain disruptions, severe or even extreme shortages in materials, and delayed response to conflict.
Currently, a lack of integrated policies, that cover the entire spectrum of both civil and military challenges, including trade and investment has not yet been introduced and poses a major risk to the UK defence sector.
Decreased access to global trade
The war between Ukraine and Russia has made it harder for the UK defence sector to securely access global trade within other parts of the world. Forces, such as China, which has sided with Russia, have increased supply chain tensions between Britain and parts of eastern Asia.
While the United Kingdom, and perhaps the UK defence sector doesn’t necessarily rely heavily on the import of goods, materials and other services from Russia or China for that matter, the lack of access would further increase competition among domestic suppliers, and further drive up the cost of delivery.
These developments would further flow against the UK defence sector’s strategy to provide more affordable, and cost-effective delivery, that ensures the safety of the country, and provides taxpayers with value for money.
Vulnerability of the UK’s defence supply chains
As the conflict drags on and geopolitical risks begin to spill over into other parts of Europe, and the global stage, vulnerabilities in the UK’s defence supply chains would put the country at risk, and in a volatile position.
Enforcing technological innovation
A supply chain requires resilient and innovative technology that helps to support and maintain the entire process. Without adequate digital tools, including supply chain management technology or artificial intelligence, the UK’s defence logistics will experience mounting pressure from foreign developments.
Lack of cybersecurity accreditations
Underestimation of the cyber threat environment during the last several years has further contributed to new challenges faced within the defence sector. With necessary cybersecurity accreditations, all tiers of the supply chain would become less vulnerable to potential cyber threats and help improve the national security digital framework.
Constraints in Critical Defence Industrial Skills
Defence research, manufacturing and defence security require critical industrial skills. In recent years, there has been a growing shortage of trained and skilled military personnel. This has led to a decrease in defence leadership taking control over defence strategies to effectively enhance supply chain management and the competitiveness thereof.
Defence contract term barriers
Changes in defence procurement policies and regulations have increased barriers to entry for small to medium enterprises (SMEs). Bureaucratic processes within the defence procurement and public contracts regime have favoured larger, top-tier companies, and have yet to recognise innovations and advancements made by smaller companies.
Weak communication channels
Current military procurement, military contracts and arms contracts awarded to larger private suppliers have created communication barriers between SMEs and the MOD. These weak, or seemingly non-existent channels make it harder for smaller and medium-sized suppliers to market to the defence sector, provide innovative solutions, and have limited interface with the MOD and branches of the defence sector.
The UK government’s response to the challenges posed by geopolitical tensions
Building a resilient defence supply chain requires investment, a change in policy, and a forward-looking strategy that underscores the United Kingdom’s competitive relationship on the global stage.
Rely on evidence-based support
To better understand how to make the necessary changes and improvements to the UK defence industry, and defence sector supply chain, the MOD will need to continuously rely on evidence-based research that highlights their vulnerabilities and provides actionable solutions.
Leverage existing tools and systems
Instead of trying to create a completely new procurement regime, leveraging current systems, with the necessary improvements will help to better understand where the defence sector supply chain experiences shortcomings and how newer, and more adaptive procedures can help to create a robust, resilient and efficient supply chain.
Promote SME engagement
Through the necessary policy adjustments, and by introducing new changes, the defence sector can create more active engagement with smaller and medium-sized suppliers to meet their direct innovation needs.
Support SME adoption
Additionally, the government, and more importantly, the MOD has looked to support SME adoption throughout the supply chain. This not only ensures the effective delivery of necessary supplies, materials and services but creates a more robust network that ensures the long-term supply of resources for the defence sector.
Mitigate underlying challenges
Understanding underlying challenges that are often overlooked, the government is now seeking ways to make improvements that would deliver high-quality defence capabilities throughout the entire value chain, and not only focus on bigger, and more prevalent challenges.
The implications for the future of the UK defence industry
Resolving existing issues in the defence supply chain will ensure a more efficient network that fulfils the needs of the defence sector, while simultaneously creating more equal opportunities for small, medium and top-tier private suppliers.
Adequately addressing key challenges
Improved supply chain management and effective collaboration between public and private enterprise would ensure the defence sector not only addresses current problems but also focuses on forward-looking problems that may arise in the near future.
Creating a people-centric supply chain
Relying on older, and more traditional knowledge would ignore the importance of human capabilities and the importance of people throughout the supply chain. Creating a more people-focused value chain ensures the competitiveness of the UK defence sector on the global stage.
Understanding time constraints
Learning from current problems, and further overcoming past experiences will help the defence sector to better understand the value of time amid geopolitical tension. This would further create a more robust supply chain that delivers materials on time and within budget.
Share key defence objectives
Supply and demand will continue to grow over the coming years, and this would require the defence sector to share key objectives with private suppliers to ensure sufficient supply chain management and encourage focused investment.
Promoting technological innovation
In the near future, and perhaps already, advanced technological systems will play a key role in the defence sector. Utilising advanced digital tools, and collaborating with private service providers would ensure a more co-adhesive ecosystem that helps to promote skill sharing and knowledge building.
The bottom line
The invasion of Ukraine by neighbouring Russia has already sent ripple effects throughout the globalised economy. Here in the United Kingdom, the Ministry of Defence and broader defence sector have realised that traditional thinking will not help resolve modern problems of conflict and geopolitical tension.
Finding more robust, and forward-thinking strategies that would not only promote a more Global Britain, but support an efficient defence supply chain can help the defence sector build a steadfast preparedness strategy, and further increase the United Kingdom’s competitiveness within the defence sector.
