Planning and Liaison

Preparing our Stockholding to be Ready in a Post COVID-19 World

By Robert Gibson September 12, 2020


“You won’t find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics” – General Dwight D Eisenhower

Introduction

Throughout our history, the ADF has had to ready itself for combat and contingency many times over, often at very short notice. Mobilisation, force projection and sustainment have been three key pillars when deploying a force, and readiness underpins all three. Recently, the global security destabilisation caused by COVID-19 has caused the ADF, and more broadly, the Government of Australia, to question whether we are logistically ready as both a defence force and a nation. The ADF is now at a critical decision point whereby investment must occur in order to increase the readiness and effectiveness of the supply chain to meet the contingency requirements of the Australian Government both domestically and regionally.

This article will argue that the Australian Army is failing to meet its readiness requirements due to insufficient stockholding of crucial items of supply. To support this position, the article will firstly argue that the Force Generation (FORGEN) cycle and Army readiness focus needs to be broadened to include logistics readiness and measurement of stockholding levels. Secondly, the article will demonstrate that logistics readiness is crucial to the success of Army in its requirement to respond to threats within the region. Finally, the article will provide a solution that balances effectiveness with efficiency of the supply chain to ensure Army readiness requirements are met.

The FORGEN Cycle and Army Readiness

Recently, the effectiveness of the Force Generation (FORGEN) cycle, and more broadly, the focus of Army readiness, has come into question. Army has grappled with a larger than usual number of tasks in support of the Australian community and this has identified that the FORGEN cycle may not be robust enough to survive first contact, particularly for a large scale response such as a high intensity warfighting operation. Up until now, responses such as this have largely been dismissed due to perceived low likelihood. The situation has now changed. COVID-19 has proven that mobilisation is a real requirement.

As an Army we measure our readiness based off individual readiness statistics for personnel, maintenance statistics for equipment and Army Training Levels met for training. This has seemingly worked; however, it should be noted that we haven’t responded to significant conflict within recent times to test if this system gives Army an accurate measure of its readiness. Generally, we generate small contingency capabilities from larger ones, potentially masking any deficiencies we would ordinarily have in supporting large scale operations. Additionally, readiness of stock has never been measured. So although we may have the personnel, equipment and training to conduct our mission, we may not have the stock to do so. Some discrete elements across Army are supported with cached stores for contingency response, but at the formation level we do not measure our stockholding in relation to the requirement to meet short notice tasks. It is assumed that a Combat Brigade’s warehouse is adequately stocked to conduct such tasks but this has not been tested. The stock that is held and consumed within a barracked Combat Brigade is very different to that of a Combat Brigade in the field, which is in turn different to that of one on a high intensity warfighting operation. In particular, our holding of critical repair parts is minimal due to the cost of holding stock comparative to the usage rates in barracks. Further, our history suggests that we have not adequately prepared our stockholding to support contingency operations in the past.

Our History of Logistics Readiness

The Australian Army has a proud history of deploying in support of its regional neighbours at short notice. Perhaps the largest regional deployment in recent history was the International Force East Timor under OPERATION WARDEN in 1999. OP WARDEN was a multinational non-United Nations peacemaking taskforce led by Australia which identified a number of logistics challenges associated with a large-scale deployment within the near region. It is an excellent example of a regional operation whereby Australia supported itself in mobilisation, projection and sustainment of an operation. During OP WARDEN it was identified that the performance of the supply chain was greatly reduced due to items of supply not being held within the National Support Base (NSB). Due to this, many of the demands made in support of OP WARDEN were not able to be satisfied.

Following the operation, it was recommended that a wider range of stock be held in greater quantities within the NSB to enable the provision of support to similar operations in the future. It also identified that closer ties with Defence industry needed to be made and this is a lesson we are still learning today. The question of Defence industry and the sovereignty of such industry has been raised recently due to the concern created by restricting imports and state border crossings due to COVID-19. In particular, The Australian Strategic Policy Institute stated that positioning ADF units in the North of Australia is ineffectual if accompanying industry and logistics are dislocated in time and space. The Defence White Paper of 2016 reinforces this when it mentions the defence of Australia as the highest priority for Government and the 2020 Defence Strategic Update further highlights the requirement for investment in ADF capability. Without a reliable and effective national supply chain, or at the very least a sufficient depth of reserve holding where it is needed, the Army reduces its ability to support short notice operational deployments to the near region. This in turn undermines the security of Australia.

The National Supply Chain

Australia has a national supply chain that is designed around the premise of ‘just in time logistics’ which is aimed at reducing wastage and the cost associated with holding stock. Although this is considered the epitome of what we aim to achieve as logisticians; the right items of supply, in the right location and condition, at the right time. COVID-19 has exposed the rigidity of this method of stockholding and although it makes the supply chain highly efficient, it brings with it a reduction in effectiveness through reduced responsiveness. The supply chain is not sufficiently flexible to cope with the uncertain. Events such as COVID-19 momentarily expose the key weakness in the national supply chain which is the inability to absorb surges in demand. This was observed in the grocery industry during COVID-19 when the supply chain failed to meet surge in demand. So could we have similar problems when procuring commodities for mobilisation of the ADF in support of a short notice contingency operation? Although we can regulate our own supply chain to avoid ‘panic buying’, we can’t regulate what other governments and militaries do. This could leave us in a situation where Australia is the last customer preparing for the contingency, and therefore the lowest priority.

The ADF Supply Chain

The ADF supply chain is largely indifferent to that of the nation. It favours efficiency over effectiveness due to the relatively low risk, until now, of having to respond to a threat at short notice. Stockholding policies and directives have limited the amount of stock a formation can hold. In some instances this aims to reduce stock to only what can reasonably be consumed by the formation prior to expiration of the stock. In other instances, bulky or slow moving items that are not economically reasonable to hold forward are held rearward to reduce the corporate governance burden on the formation. Lastly, it costs money to hold stock and also costs money to maintain a standing Regular Army that can maintain the stock. The ADF supply chain is therefore designed to reduce stockholding to absolute minimum requirements. This leaves our stockholding levels low across the ADF network meaning we rely heavily on the national and international freight system to ensure stock can be moved from centralised locations to where it is needed, only when it is needed. This centralisation further reduces ADF costs as we are able to procure items at the national level which brings with it centralised buying power and greater value for money.

The ADF supply chain is made even more efficient by allocating a single Joint Logistic Unit (JLU) as the Primary Storage Unit (PSU) for an item of supply. This means that many items within the ADF supply chain exist within just one JLU within the network. Although this is highly efficient in times of certainty, it can create a problem when demand surges whereby the majority of our ADF stock is centralised in a single location. Further, these items are likely to be dislocated from the mounting base for an operation. Problems with stockholding are only then identified once a formation raises a demand for an item. The ADF supply chain is geared toward supporting a peacetime, in barracks organisation and as such has only a very limited capacity to support large-scale high intensity warfighting operations.

Where should our Stock sit?

The CDF, General Angus Campbell put it aptly when he said “2025 is essentially today, and we’ll be fighting with today’s ADF” in his speech to ASPIs ‘War in 2025’ International Conference. From a logistics perspective, this means that we need the stock today, to fight a war tomorrow. In order for a formation to hold stock to support contingency operations, it must be authorised to do so ‘just in case’. Noting some items may sit within a PSU (ADF supply chain) or with the Original Equipment Manufacturer (National Supply Chain), any items that are not able to be held within the formation must be able to reach the formation within its notice to move. If this is not the case, the element is not ready. Therefore, Army must hold stock forward ‘just in case’ to avoid deploying without the required equipment. I will note that stock can follow on from the initial forces in theatre at a later date, but often stock will be required early in the mission. In this case follow on stock may not meet the requirements of the mission. Priority freight, in this instance, may not be enough to win the war, and may in fact lose the war. A formation must arrive in theatre ready and capable of fighting, and without deployable stock on hand ready to support such action, this will not occur.

How do we become ready?

So what do we need to do to be ready? If we want to measure the readiness of a Combat Brigade from a stockholding perspective, we need to understand what a Combat Brigade will use during a high intensity warfighting operation. It is not easy to calculate the requirements of a task we have never conducted with our current ORBAT. Therefore we need to gather as much data as we can on the usage rates of our equipment from sources that are as broad as possible including foreign allies with similar equipment and set the Operational Viability Period (OVP) we require of the Combat Brigade. That is, how long we need the Combat Brigade to be self-sufficient prior to the supply chain being established within the theatre of operations. This allows for the initial mobilisation, force projection and sustainment of the force prior to resupply. Then we must be approved to hold the stock required to meet that OVP, and therefore meet our readiness requirements.

What is often missed when we look at our short notice deployment force elements is accounting for the follow on force. In this case, a Combat Brigade or Combat Brigades deployed to conduct tactical actions in support of the mission. From a stockholding perspective this means that each Combat Brigade must be stocked to support deployment of its entire ORBAT. As previously stated, to support such a force, stock doesn’t necessarily need to be held within the formation but it needs to be able to reach the mounting base within the NTM of the element. The solution this forces is regionally held items sufficient in quantity and variety to support the Combat Brigade for 30 days prior to the supply chain being established and freight networks being built to support short notice demands in theatre. Fast moving and critical items must be held within the formation with bulky or intensively managed items held within the regional JLU. Items that can be rapidly procured locally or regionally may not need to be held within the ADF supply chain, so long as analysis has been conducted to ensure they can be procured within the NTM.

Most ADF specialist items such as repair parts, combat rations and general military equipment cannot be procured in this way. For those items, readiness means having stock packed in stores modules and on flat racks ready to be loaded for a contingency. This comes at significant cost in up front procurement costs, maintenance costs, overheads and governance for each of the formations but offers the highest level of readiness to CDF and government. Let me be clear. This solution is not ‘over ready’. This solution makes the formations as ready as they need to be. Continuation of the stockholding policy we have relied upon in the past is not sufficient to support short notice deployments in the future.

Conclusion

In conclusion, this article has argued that Army needs to drastically change the way it conducts stockholding and the way it measures logistics readiness to enable it to meet readiness requirements. It has argued that the FORGEN cycle does not test logistic readiness and that readiness needs to focus on measurement of stockholding levels in addition to personnel and equipment readiness. The article has demonstrated the need for a focus on logistics readiness to enable Army to respond to threats within the region. It has also provided a stockholding solution that balances effectiveness and efficiency to ensure formations are enabled to support contingency operations. True readiness will come at a cost which we must pay in order to maintain security and sovereignty within our region.

Acknowledgements

I would like to give credit to the Officers, Warrant Officers and NCOs of 3rd Field Supply Company, 3 CSSB that have supported and continue to support the development of solutions to baseline the logistics readiness of the 3rd Brigade.


Portrait

Biography

Robert Gibson

Robert Gibson is currently posted to 3rd Combat Service Support Battalion as Officer Commanding 3rd Field Supply Company. He has been posted to Headquarters Joint Operations Command as a Logistics Planner, the Army School of Logistic Operations as an Instructor as well as Regimental postings to 1st Aviation Regiment, 1st Combat Service Support Battalion and 9th Force Support Battalion. In 2016 he deployed as the Operations Officer for Force Support Element Five.

 

The views expressed in this article are those of the author and do not necessarily reflect the position of the Australian Army, the Department of Defence or the Australian Government.



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