Performance Partnering on the Astute Submarine Programme

Funder: UK Government (Department for Trade and Industry)

Introduction

BAE Systems (Marine) were under pressure from its customer, the Ministry of Defence (MOD), to keep costs on the Astute submarine programme under control while ensuring that quality and innovation were not compromised. This MOD pressure was largely a function of arguments made in the Government’s Strategic Defence Review published in 1998, in particular the need to procure the UK’s defence capabilities more efficiently and effectively.

Research objectives

The objective of Dr. Sanderson's research was to bring about a significant change in the approach employed by BAE Systems (Marine) in managing their key suppliers on the Astute submarine programme.

Research outputs

BAE Systems had not historically engaged in collaborative supply chain management initiatives, but saw this research as an opportunity to explore the potential of such supplier collaboration as a way of delivering what the MOD wanted.

The research demonstrated the value of ‘performance partnering arrangements’ (PPA) designed to drive improved supplier performance (cost, quality and delivery) in return for a longer-term, multi-boat contract from BAE.

Research impact

Since 2008, and as a direct result of this engagement with Birmingham Business School, BAE have used PPA in a series of procurement arrangements.

The research was disseminated into the collaborating companies/user community through a series of four workshops led by Sanderson, each of which focused upon one of the supply chain case studies. The findings and analysis were also written up and disseminated to the collaborating companies in the form of a detailed report for each supply chain case study. The industry trade body associated with the research, the Shipbuilding and Ship-Repair Association, also ensured wider dissemination of the findings through its publications and website.

Sanderson was invited to visit BAE Systems (Marine) to assist members of their procurement and supply management function in understanding how the methodologies used in the DTI-funded research could be adopted more widely to model and evaluate performance improvement opportunities in other supply chains.

He was also asked to give advice on how best to handle vulnerable sources of supply involved in providing critical components to the Astute submarine programme.

BAE Systems (Marine) benefited greatly from this research, demonstrated by the radical change to the management of key suppliers on the Astute submarine programme through the introduction of longer-term (multi-boat) contracts called Performance Partnering Arrangements (PPA).

Learn more

Find out more about the research within Birmingham Business School

Learn more about Dr. Joe Sanderson