IFS sees real market opportunities for Performance-Based Logistics in the BRICS economies


Defence spending in the BRICS economies is growing dramatically – Indian military imports are nearing $100 billion, African defence spending now totals $20 billion and Latin America spent $73 billion in 2011. These nations are looking to achieve the same levels of efficiency that the developed western powers benefit from to remain competitive. Jeff Pike, Head of Marketing and Global Markets Development for IFS Defence, explains how Performance-Based Logistics (PBL) solutions are now a proven way of managing the often complex customer and supplier contracts, particularly when they are delivered as part of an enterprise wide Information System (IS).

Performance-Based Logistics provide a range of strategies for system support, and PBL contracts are a globally successful way for A&D organisations to invest in an integrated performance package designed to optimise system readiness. The success of contracts in this market is often dependent on the ability to provide detailed performance analysis to ensure that both parties – customer and supplier – achieve their objectives, with risks on both sides managed.

This is precisely what PBL achieves. By providing openness between both sides of the contract, it gives the customer control and confidence in platform availability, while the feedback of operational data enables suppliers to meet KPIs and maintain assets more efficiently as well as delivering improved reliability and availability.

IFS now offers PBL as part of an IS solution to eliminate some of the challenges presented by information sharing by establishing a common version of truth around KPIs and eliminating strategy leakage across the enterprise

Importance of PBL for emerging BRICS economies
PBL has had a significant transformational effect in maturing markets such as the US and the UK over the last decade where in many cases it has combined proven positive improvements in managing contracts with significant savings. Indeed, PBL is now a mandated consideration in all UK major procurements.

While Europe’s strongest nations are cutting or flat-lining defence spending in the coming years, the BRICS economies are seeking to assert themselves on the global stage and are willing and able to invest in improving the capabilities of their armed forces as their A&D industries look to expand and mature as they seek to re-balance the world order towards the new economic powerhouses.

PBL solutions – easy to customise and to implement
With the rising costs of maintenance and the increased complexity of equipment and systems, PBL contracts have become an increasingly important requirement for military and defence suppliers, and recent developments in the PBL solutions such as the IFS templated offering, come just as BRICS A&D industries are expanding and maturing, and looking for competitive advantage without the expense and inflexibility of traditional ERP systems.

One of the ways IFS Defence has dealt with this is to offer a customisable, templated solution that can be easily and quickly implemented and be modified as requirements change. Because the IFS PBL solution is modular it can be implemented at low TCO with minimum disruption to existing systems – whether paper-based or automated.

The IFS PBL solution is based on specific modules of IFS Applications 8 ERP software and can be easily customised based on individual PBL contract characteristics. It allows both organisations and service providers to retain control, gain visibility and optimise a range of contract types from traditional support and Contracting for Availability (CfA) through to full Contracting for Capability (CfC). A specific aspect of the IFS PBL solution is its Corporate Performance Management (CPM) capability which affords a unique management level perspective of the contract’s performance across the end-to-end enterprise, driving in the planned strategy for both military and industry partners.

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