Decoupling Points and the Defence Supply Chain
25th January 2018 | Jeremy Smith
How does the concept of decoupling work in a defence supply chain? Jeremy Smith, editor of Defence Logistics, explains this concept practically using a campaign in Afghanistan.
The material decoupling point (MDP) is generally considered to be the point in the supply chain’s materials pipeline where push meets pull. Typically, products are pushed to the MDP, and pulled from it. The MDP often coincides with a significant stock-holding point such as a warehouse or distribution hub. Strategic stock is held here, ideally in generic form, with its final differentiation being postponed until an actual demand signal is received for that specific differentiated product. Typically, products are pushed to the MDP on the basis of forecasted demand, if possible in economic batch quantities and with a view to maximizing efficiency.
The pull downstream of the MDP is driven by actual demand, the products being differentiated or configured as the customer or end-user requires, promoting effectiveness (see Christopher, 2011, p.102). It is generally accepted that the MDP should be positioned close to the customer to reduce lead times.
The information decoupling point (IDP) is the point in the information pipeline where '...market-driven and forecast-driven information flows meet’ (Mason-Jones and Towill, 1999, p.17). It is generally accepted that positioning the IDP upstream gives suppliers the richer, less compromised, demand data that will enable better forecasting.
But how does the concept of decoupling work in a defence supply chain to an expeditionary operational deployment of significant scale? Well, to begin with, the force may have established a forward mounting base (FMB) close to the theatre of operations, which acts as an MDP. The FMB enables lead times to be reduced, and it serves as a point at which to hold strategic stocks. Holding stocks in an FMB outside of the immediate theatre of operations can promote greater manoeuvrability and physical agility in theatre.
Theoretically, the inventory associated with the maintenance, repair, and overhaul (MRO) of military systems will be more accurately forecastable for push to the MDP if it is for preventive maintenance, which is scheduled in advance and therefore predictable, contributing to efficiency. Demand for specific inventory items should be able to be pulled from the MDP, to effect the MRO activity as scheduled – a contributor to effectiveness. However, the inherent unpredictability of corrective maintenance - that which is intended to repair damage or failure which has already occurred – makes demand more uncertain and forecasting more challenging.
Further complexity is created by usage and environmental factors. For illustration, military helicopters flying in Afghanistan had to work harder to gain the lift they required to get airborne in the thin atmosphere at altitude, in the process raising clouds of dust. This mixed with lubricants to create a highly effective grinding paste to erode rotating engine and transmission components. The net result was a compression of the preventive maintenance schedules and therefore accelerated demand for MRO inventory. With experience, and data, the environmental impacts became more quantifiable, and therefore predictable, leading to better forecasting. Similarly, it took time for the peaks in demand created by 'campaign season' in the warmer months to be quantified with reasonable accuracy, and also for the reduced demand that featured during the harsher winter months when combat activity reduced.
Defence logisticians recognize the value of undistorted demand data and would, logically, support the principle of moving the IDP as far upstream as is feasible. Unfortunately, many defence departments are in the process of integrating (often numerous) legacy, single-service, logistic information systems in order to create the end-to-end connectivity which is necessary if the vision of an upstream IDP is to be realized. Even if it did exist, the inclination by the end-user to enter real-time, or near-real-time, demand data may be lacking in high-tempo kinetic combat operations. Furthermore, the opportunity which end-to-end connectivity offers to make forecasting more timely and accurate may be compromised by military operational security requirements which may ban transmission of anything that hints at likely future operations, and therefore the demand activity they will generate.
Christopher, M. (2011) Logistics and Supply Chain Management. Fourth Edition. Pearson Education Limited. Harlow.
Mason-Jones, R. and Towill, D.R. (1999) Using the Information Decoupling Point to Improve Supply Chain Performance. International Journal of Logistics Management, 10, 2, 13-26
About the Author: Jeremy Smith manages modules on the Defence Acquisition Management and the Programme and Project Management MScs at Cranfield Defence and Security, UK. He developed and leads several logistics short courses and workshops pitched at strategic and practitioner levels. He served for 25 years in the British Army as a logistician and Ammunition Technical Officer.