The Defence Logistics Organisation (DLO) is going through a significant period of change in order to achieve its mission of delivering logistics support to the Armed Forces. This has involved building an organisation capable of implementing and sustaining best practice procurement across all areas of its annual £6bn procurement spend with industry; from repairing and overhauling fast jets, to refitting ships, or to buying utilities.

Business Challenges

• Atos Consulting’s Procurement Transformation practice has been working with the DLO since 2002 to deliver this change through the ‘Procurement Reform’ programme
• To deliver run rate savings of £210m by 2007/2008
• To develop and deploy best-in-class procurement skills and capabilities across direct and indirect spend
• To introduce category and supplier relationship management to transfer skills and knowledge to create an organisation that can deliver sustainable benefits over the long term

Solutions

• Implementation of a strategic category management approach to procurement and supplier management processes
• Roll-out of an effective skills transfer programme, through a mixture of training and on-the-job coaching
• Design and implementation of a blue-print for a new organisational structure and supporting systems
• Introduction of a new performance measurement reporting process
• Introduction of an effective change management and communications programme

Benefits

• £45m cash savings for the DLO and £18m for the MoD within the first six months
• On track to meet the run-rate savings target of £210m by 2007/2008
• 800 DLO personnel have been trained in category management techniques within the first six months
• The DLO is now at the cutting-edge of procurement within Government as referred to in the Chancellor’s budget speech, March 2005
• Winners of the Management Consultancies Association (MCA) Gold Award for HR (2005); and the CIPS Award for Best Public Procurement Project (2005)