DLO PRESS RELEASE

21 July 2005

MoD strengthens Defence Supply Chain 


The Defence Supply Chain is to undergo a radical transformation in a move that will significantly improve support to the Front Line, Secretary of State for Defence John Reid announced today.

The MoD has chosen an in-house option for the outcome of the Future Defence Supply Chain initiative, which was set up to improve the performance of the Defence Supply Chain.  This will involve a major reorganisation of how equipment and supplies are stored and distributed, with the best possible combination of greater effectiveness and lower costs.

This new way of doing business will improve current levels of support, whilst also reducing costs by £50 million a year by 2010, saving the taxpayer more than £400 million over the next 10 years.

Mr Reid said:

“This in-house option will help improve logistics support to the front line, significantly enhancing the vital support we provide to soldiers, sailors and aircrew.

“These changes are the result of three years of detailed work involving management, the Trade Unions and staff. They will enable us to better cope with surges in demand and ensure that goods and equipment reach the right location, at the right time.”

The Defence Logistics Organisation, which is responsible for the UK element of the supply chain, will now enter detailed discussions with the trades unions, as today’s decision will streamline the structure of the existing storage and distribution network, resulting in an expected reduction of around 2,000 posts. Storage Depots at Stafford, Llangennech and Longtown (storage and distribution only) are expected to close by 2007, 2008 and 2009 respectively.  Others will reduce in scale over the next five years.

MOD, in conjunction with the unions, will do everything possible to mitigate the impact on the staff concerned, with current plans envisaging that the civilian reductions will be achieved through a combination of redundancies, natural wastage and voluntary early release.  There will be no redundancies from the Armed Forces as a result of this initiative.

Mr Reid said,

“These decisions have been made in the best interests of our Armed Forces. Natural staff wastage and voluntary redundancies will account for many of the job losses, but compulsory redundancies cannot be ruled out. Every effort will be made to help staff to find alternative employment.”




Notes to Editors

1.  The Future Defence Supply Chain initiative was set up in 2002 to assess a range of options for managing and operating the non-deployed Defence Supply Chain to reduce costs of ownership, whilst maintaining or improving service levels and enhancing operational capability. 

2.  Alternative models of in-house provision were compared with a potential partnered solution, for which proposals were sought from industry. Two consortia:  Defence Logistic Solutions (DLS): comprising BAe Systems, AgustaWestland and TNT; and Defence Supply Chain Solutions (DSCS): comprising Devonport Management Ltd and Exel were invited to submit proposals.  

3.  Operation TELIC in Iraq was not instrumental in the creation of FDSCi, however, a number of lessons learnt from this operation in terms of stock holdings and movements and the ability of the supply chain to respond rapidly to changing circumstances have influenced the final decision.

4.  Implementation of this initiative is expected to make savings of over £50 million per year by 2010 and over £400 million over the next 10 years.

5.  A list of depots impacted by this announcement is attached below

 SITE

IMPACT 

CURRENT POSTS 

ESTIMATED 
   REDUNDANCIES 
Note 1  

ESTIMATED TOTAL POST
REDUCTIONS  
Note 2

 Bicester  

 960

 0

 180

 Donnington  

 830

 180

 360

 Stafford

 DSDC Closure
by End 2007

 530

 280

 530

 Gosport  

 430

 0

 80

 Beith  

 360

 10

 60

 Longtown

 DSDC Closure
by Mid 2009

 290

 70

 140

 Llangennech

 DSDC Closure
by Mid 2008 

 260

 120

 190

 Ashchurch  

 250

 30

 80

 Kineton  

 220

 0

 50

 Andover  

 140

 0

 10

 Plymouth  

 140

 0

 0

 Glen Douglas  

 110

 10

 20

 London  

 70

 0

 0

 Longmoor  

 70

 0

 0

 Keynsham

 Relocation to
Llangennech

 50

 10

 50

 Germany  

 380

 90

 160

 Sub Total  

 5090

 800

 1910

 Smaller Sites
Note 3

 

 280

 70

 90

 Total (Rounded)  

 5400

 900

 2000

Note 1: It is anticipated that redundancies will be voluntary, but compulsory redundancies cannot be ruled out at this stage.
Note 2: Post reductions include eductions through natural wastage, retirements, resignations, transfers (within MoD and to Other Governement Departments) the removal of vacancies and redundancies.
Note 3: At smaller depots it is not possible to provide a detailed breakdown until we have consulted with the Trades Unions.

6. FDSCi will contribute substantially to the MoD's staff reduction targets announced July 2004.

For further information please contact

National Media       MoD Press Office                       0207 218 87909/85903
Specialist Media     DLO Press Office                       01225 468819/467148
Scottish Media        Sara Reed, MoD PO Scotland   0131 310 2004/05: 07747 767963
North West Media  Greg Stringer, MoD PO NW        0151 242 2494: 07899 962569
Midlands Media      Pat Sever, MoD PO Midlands     01543 434348/07802 206729
Welsh Media          Paul Barnard, MoD PO Wales    01446 797096/07876 477795
SE Media               Susi Coulthard, MoD PO SE       01252 347011/07771 835 1112
Gosport Media       Anton Hanney, P’mouth NB PO  02392 723737

Regional media briefings are being organised at the depots most impacted,

• Donnington/Stafford Pat Sever
• Llangennech  Paul Barnard
• Longtown   Greg Stringer
• Bicester   Susi Coulthard/Paul Starbuck 07771 835044

 please contact the press officer named above to confirm local times

DLO Press Office is handling calls for all other parts of the country not named above.

The MoD web-site can be found at http://www.mod.uk
Alternatively you may contact the MoD Press Office by e-mail at dnewspol@dgcics.mod.uk

Last Updated: 21 Jul 05