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UK MOD: Enhancing the MOD’s capability to manage ‘monopolistic’ suppliers on a £27 billion programme

The UK Ministry of Defence (MOD) submarine programme enables the UK to maintain a continuous ‘at sea’ strategic deterrence and is one of the world’s most complex programmes. The challenge for the MOD is to deliver the programme to time and cost through four sole providers of submarine build, propulsion, support and warhead capabilities, for elements of which the UK can be the only customer.

Without being able to apply normal commercial levers, the MOD saw that managing these suppliers tactically on a project-by-project basis would not be enough. As such, the MOD first asked PA to work with them to design a new strategic supplier management capability.

We recognised early on that the key to success was achieving a deeper understanding of suppliers’ business and establishing a more aligned approach across the MOD to enable the organisation ‘to speak with a single voice’ and ‘to get on the front foot’. To achieve this, we established governance structures, supplier strategies, performance monitoring mechanisms and analysis capabilities that have started to deliver results. The new supplier management capability is helping to change behaviours that will improve supplier performance, providing greater understanding of suppliers’ ability to deliver to time and achieve £1 billion in savings over 10 years, and helping the MOD to intelligently manage the levers to realise improved future arrangements.

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