Building GCC military performance through enhanced maintenance

26 July 2023 5 min. read
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GCC countries are investing to transform and upgrade their armed forces. However, to succeed they must devote similar attention to the maintenance of assets and vehicles, write Strategy& leaders Per-Ola Karlsson, Haroon Sheikh, and Ritesh Verma.

Generally, GCC armed forces outsource maintenance, repair, and overhaul (MRO) functions to contractors, which is an incomplete solution that does not provide the required standard of military readiness.

GCC armed forces should take a holistic approach that includes a governance structure that sets goals and enables transparency, innovative contracting, and underlying technology so that assets and vehicles are available when needed.

Per-Ola Karlsson, Haroon Sheikh, and Ritesh Verma - Strategy&

A central problem is that GCC armed forces possess large equipment fleets containing vehicles of various ages, few formalized logistics support contracts, and inefficient fleet management.

Some assets have much higher usage rates than others because armed forces often retain a small war reserve of unused vehicles in storage and then distribute the remainder to units for the lifetime of the vehicles. Some armed forces leave vehicles and logistics support elements in training areas or in operational theatres for extended periods, without understanding the financial costs or the administrative burden of replacing missing equipment.

Some vehicles do not last as long as they could because they are under the control of undermanned units with insufficiently trained personnel that fail to prioritize maintenance.

Optimizing equipment maintenance

Changing how armed forces maintain equipment would have considerable benefits. Armed forces would find their military equipment more reliable and available, which means greater operational effectiveness.

Armed forces can dispose of obsolete assets and obtain full value from new acquisitions, thereby reducing overall fleet costs. Improved contracting processes can create outsourcing opportunities for domestic companies and increase ties between the private sector and the region’s defence industry. Moreover, contractors can build a higher-skilled, more productive workforce, thereby strengthening the region’s defence industrial base.

Already, vehicle fleet managers in the commercial world use fleet-management processes that are proactive. GCC armed forces can apply many of these practices in three areas.

First, armed forces need a governance structure that sets goals and enables transparency. That means three levels of maintenance oversight. At the strategic level, defence leaders must set overarching frameworks and policies for maintenance and how these support military objectives.

At the management level, managers translate these frameworks and policies into specific maintenance plans and projects. At the operational level, these plans and projects become the day-to-day management of the fleet, including maintenance and repair, asset tracking, and monitoring of usage rates.

These three levels enable better planning for operations and training. They allow leaders to examine maintenance levels in a transparent manner linked to performance, down to the individual vehicle.

Second, armed forces can use innovative contracting to make assets and vehicles more available and improve overall readiness. Innovative contracting allows defence organisations to set specific parameters in line with their needs. For example, availability-based contracting allocates risks to the party best equipped to bear them by sharing responsibilities between a defence organization and an MRO contractor.

Capability-based contracting, by contrast, gives all aspects of an end-to-end capability normally handled by the defence unit to an outside organization. Performance-based logistics contracts link financial returns for the contractor to metrics such as the speed of service, cost-effectiveness, or the number of repeat repairs.

Third, armed forces can use their underlying technology. Although many defence organisations are implementing enterprise resource planning (ERP) systems, some of the software offerings treat maintenance requirements as at best a secondary concern. By contrast, some defence organisations have specific modules in their ERP systems that manage assets and materials. That can improve significantly an organisation’s ability to track fleet usage, identify potential readiness issues, and create budgets and plans for maintenance requirements.

Mature defence organisations use cloud-based ERP systems. These provide armed forces and commercial organisations real-time knowledge of their asset and inventory holdings, resulting in improved asset management and inventory management processes. These organisations are also investing in telematics and cloud computing to improve vehicle fleet management, along with predictive analytics to anticipate repairs and overhauls.

Another technology element is controlled humidity environments to store critical equipment when not in operational use. Such facilities require an upfront capital investment. They reduce dramatically the degradation of vehicles and weapons systems due to moisture-related issues. In the US, for example, the Army, Marine Corps, and Army National Guard all use humidity-controlled facilities to store equipment fleets around the world.

Battles are won and lost based on the equipment that the armed forces use. GCC governments investing to build world-class armed forces militaries should also ensure that maintenance is a part of that transformation.

About the authors: Per-Ola Karlsson is a partner at Strategy&, where Haroon Sheikh is a senior executive advisor, and Ritesh Verma is a principal. Strategy& is a global strategic consulting firm.