Performance Measurement of Military Supply Chains

Abstract

Defence is the largest item of physical expenditure in the Union budget presented by the Government of India every year. A substantial portion of the budget is allocated for equipping the army, a task which is performed by a very complex and extended supply chain. Therefore, it is essential that the performance of the military’s supply chain is measured and monitored, so that the nation derives value from the expenditure made on the supply chain. Moreover, the effectiveness of the supply chain provides the defence forces competitive advantage, and thus its performance has a direct bearing on the country’s security. The wars in future are more likely to be a competition between the rival supply chains. Development of a suitable framework for measuring the performance of any extended supply chain is a challenging task. The challenge arises from the very design and nature of the supply chain construct. The entities which constitute the supply chain invariably have varied goals and objectives, and therefore more than often, they indulge in adversarial practices and operate in an environment of mutual distrust. The paper dwells upon the conceptual development of an ideal performance measurement framework for the military supply chain. It compares the military and commercial supply chains, and discusses some of the principal performance measurement frameworks, like the Balanced scorecard, Supply Chain Operations Reference model amongst others used by the commercial supply chains. It also discusses the endeavours made towards supply chain performance evaluation by some of the modern militaries to include that of the United States, United Kingdom, and Australia. It also briefly covers the Indian approach to evaluation of supply chain performance. The paper brings out the relevance of the subject, challenges there in, and its importance to the country’s armed forces.