Kirsty Adams (KA): Damian we first spoke about the Ministry of Defence’s (MOD) and Leidos UK's Logistics Commodities & Services Transformation programme (LCST) early last year for our podcast. Can you tell our
audience more about the logistics project with the £6.7bn price tag?
Damian Alexander (DA): Our key aim of the 13-year LCST programme for the MOD has been to take a series of federated operations - across commodities, procurement, storage and distribution globally - and transform those operations with better technology and processes. Technology is being used to underpin an enterprise approach and provide a more streamlined, faster and techbased service to the frontline end-user.
The programme kicked-off in 2015 and runs until 2028. We went through a big phase of transition in the first few years which involved consolidation of stock, closure of certain sites – or handing them back to the MOD – and building a brand-new fulfilment centre. We put technology at the heart of our procurement, transportation, planning and warehouse operations to provide a cleaner and faster service to the frontline.
KA: How will the defence frontline be improved even further over the next eight years?
DA: LCST has transformed a part of the supply chain within the MOD. It’s dealt with depots, warehousing - but it hasn’t reached the end user yet. The new capabilities developed for LCST can now be applied to a broader set of processes, systems and new way of working, end-to-end.
We’re in dialogue with the MOD about where those opportunities may be. There could be further automation in some of their systems and processes, more robotics, or even drone capability.
Over the next 2-3 years, we will look at how we can leverage and utilise the technology and facilities which we have already invested in to provide wider end-to-end efficiencies across the supply chain from the supply base to the end-user.
KA: Damian what is true digital transformation?
DA: I think a lot of people see digital transformation as the replacement of a system and a process with technology, and I think there’s some truth in that. But in my experience, it’s the fusion of doing things in a smarter way, where technology either expedites or changes a way that a process is done from a manual way of the past to a more agile tech-based way of the future. It’s about the fusion of the individual, the use of technology and the improvement of a process.
It’s easy to apply digitisation to a substandard process or way of operating in logistics, but then all you get is an automated sub-standard process. Part of the opportunity with digitisation is not just about what technology can do, but applying it in a smarter way – to do things in a more innovative way - as opposed to just replacing a standard process.
KA: How have you digitised processes for the MOD?
DA: The previous systems and management for procurement of commodities, storage, distribution and payment at the MOD were very federated. Different teams in different places, using paper-based forms. Through LCST we introduced a supply chain integration platform – fusing different systems across procurement, supply, dynamic transportation management and payment systems. We’ve brought them together, not just joined the dots between legacy processes, but really streamlined those processes. Because we designed the whole solution we’ve been able to take a clear view of what a smooth process looks like and use technology to underpin new processes. That’s how Leidos applies itself to complex transformation, with the integration of different systems.
KA: What’s Leidos’ approach to sustainability and carbon reduction?
DA: We have employees in our team which champion sustainable procurement who ensure we’re transporting the right items - in the right configuration - into the supply chain in the first place. We have halved the packaging for our shirts by removing some of the nonessential items within it like cardboard inserts, the tissue paper, the clips, and what that means is we get a reduction in volume, and that reduction in volume can then be translated into a much more efficient load, which can help us reduce carbon during transportation.
Another example is our food ration packs. Via the tender process we make sure suppliers reduce single use items/plastics and a create a better composition within those items. It’s those types of initiatives, and having individuals which champion that within the organisation, which also help us to reduce transportation and fuel costs, and be kinder to the environment generally.
KA: What has the COVID-19 pandemic meant for logistics, Leidos and the UK?
DA: In the last few decades we have moved into a very globalised market and economy. I think supply chains and logistics have been the lifeblood of that in many respects, certainly in the retail sector. Due to the pandemic, operators will start to question their place in a globalised market. We’ve come from an era of ‘Just in Time.’ But what is the next era? We must find out what resilience and security means in this new normal. It doesn’t take much, as we’ve seen, for there to be a massive change in behaviour impacting the supply chain. For those providing high demand items – food or PPE – it’s been a real challenge.
Operators and clients will start thinking more locally. I’m not saying this is the end of a globalised supply chain – but I do think there will be an inwards focus towards more local suppliers, which is a good thing from a national economic perspective. I think what COVID-19 has done is bring logistics to the fore in many respects, as the lifeblood of both support to the front line and the national economy. It has proven the centrality of good logistics and good support to the national effort, to the front line, and to the nation as a whole.
KA: How do you build smart resilient teams at Leidos?
DA: The selection of the right team is absolutely critical. We are building teams of diverse thinkers. We want different, innovative thoughtful ways of approaching problems.
If we look specifically within Leidos we have people join us from the military service (20% plus of veterans) at different stages of their career who have a particular understanding given the nature of Leidos’ customers. But we also bring in experts from different industries, different sectors.
We bring in young graduates, interns and people at the early stage of their career, and really try and build a very inclusive, open and diverse workforce that enables us to get the best. We don’t see ourselves as a traditional hierarchical organisation, we try to apply diversity of thought, different approaches and ideas that help reach the most efficient solution.
The second article in the series from Leidos UK is Richard Wilding, Professor of Supply Chain Strategy at Cranfield School of Management, and non-executive director for Leidos UK’s logistics division. Available here.