Why the UK Defence Supply Chain Needs Procurement Reform
The UK defence industry must adopt innovative procurement strategies to strengthen supply chain resilience, support industry growth and maintain national security.
That's according to experts from Make UK Defence, techUK and ADS, who are calling for greater SME participation, procurement reforms and deeper NATO cooperation to ensure the sector remains competitive and efficient.
Enhancing NATO collaboration through procurement
A NATO-wide procurement strategy could improve cost efficiency by reducing duplication, consolidating defence purchases and leveraging economies of scale across member nations.
By standardising munitions, weapons and equipment, NATO allies can enhance synergism and ensure seamless joint operations. This would also improve supply chain resilience by addressing production bottlenecks and minimising reliance on individual nations.
Andrew Kinniburgh, Director General of Make UK Defence, highlights the financial and operational benefits of a NATO-wide collaboration on pilot training: “The UK MOD alone is spending £50 million (US$64.7m) a year outsourcing fast jet pilot training because there’s no availability of Hawk jets at RAF Valley. We’re sending dozens of pilots to the US, Italy and elsewhere.
“A UK company, Aeralis, has developed an advanced jet trainer. NATO could step in and say, ‘We are going to provide a NATO-wide resource for fast jet training, using the same jet across multiple nations.’ The RAF and other countries wouldn’t need to own them; they could just contract for availability.”
Julian David, CEO of techUK, stresses the need for greater standardisation within NATO: “At the end of the Cold War, the only two things that were common across NATO were diesel and 105mm ammunition. That’s ridiculous. There needs to be a real effort to address supply chain challenges and increase standardisation.”
While political differences and national defence priorities may slow implementation, a NATO-wide procurement strategy could streamline defence purchases, enhance collective capabilities and support smaller defence economies.
Defence spending priorities and supply chain resilience
The UK defence industry’s procurement priorities focus on:
- Strengthening domestic defence manufacturing
- Promoting technology development and innovation
- Reforming procurement processes
- Enhancing supply chain resilience
- Supporting export opportunities
By addressing these areas, the UK aims to build a robust defence sector that future-proofs its capabilities while fostering long-term economic growth. More efficient procurement processes will reduce delays and improve the competitiveness of UK defence firms in global markets.
Julian emphasises the need for a shift in defence spending towards software-driven and adaptable capabilities: “We are going to spend a lot more money, but we need to spend it differently. Stop specifying to the nth degree what you think you’ll need in 20 years’ time.”
The UK Defence Industrial Strategy is key to fostering long-term partnerships between government and industry, streamlining procurement and encouraging innovation to maintain national security. Investments in cybersecurity, emerging defence technologies and space capabilities are crucial for securing the UK’s strategic advantage amid global uncertainties.
In February, UK Prime Minister Sir Keir Starmer reaffirmed his commitment to raising defence spending to 2.5% of GDP from April 2027, with a potential increase to 3% in the following parliament.
Kevin Craven, Chief Executive of ADS, highlights the need for effective implementation of the strategy to maximise its impact: "A few years ago, DSIS had some very sensible suggestions, the majority of which were not implemented. An industrial strategy that we carry out and follow with rigour would be game-changing.”
Procurement reform as the key to defence efficiency
At the heart of these discussions is the urgent need for procurement reform to ensure more flexible and rapid defence spending, strategic international collaboration and improved NATO standardisation.
A clearly defined industrial procurement strategy will help align defence spending with modern military needs, ensuring cost-effective and efficient resource allocation.
The UK defence sector can strengthen its procurement processes, improve supply chain resilience and position itself as a leader in the global defence industry by adopting these changes.
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