NATO LOGISTICS STOCK EXCHANGE (NLSE)

The project NLSE aims at bringing together information concerning stock holdings of the armed forces in NATO in order to have greater visibility and be able to pro-actively predict future replenishment requirements. Such future replenishment requirements can then be better procured through international competitive bidding with the aim to establish outline agreements with fixed prices and delivery times for direct on line ordering using electronic catalogues.

Policy Context

Bringing closer together armed forces of NATO and EU Nations with the aim to benefit from broad competitive bidding for the mutual benefit of reduced Defence spending 

Description of target users and groups

Armed Forces and National procurement organizations

Description of the way to implement the initiative

Project innovation and concept development was made between NAMSA and the Ministries of defence and armed forces. Formalization was done through the creation of a legal entity under NATO/NAMSO (Legal Partnership). Development of IT tools and management of the operations was done by NAMSA. Political guidance and financing was done through contirbnutions by the Nations.

Technology solution

Microsoft tools

Technology choice: Open source software

Main results, benefits and impacts

Implementation of the project permitted the visibility for participating armed forces of some 6 Million line items, the demand history, prices and leadtimes. This information is used to redistribute materiel to fill requirements. The redistribution of assets permits to gain back dead capital for stock sthat are in excess in one armed force and are in short supply in aother armed force. Selling customers recuperate at least 70% of the value of the materiel and buying customers benefit from 30% price savings. Furthermore the implementation permits the armed forces to jointly predict requirements and gain best prices through international competitive bidding. All operations are paperless and fully electronic using web-based tools. 

Return on investment

Return on investment: Larger than €10,000,000

Track record of sharing

Sharing the expereince of the NLSE permits readers to judge the value of joint procurement amongst organizations dealing in the same or similar materiel.

Lessons learnt

Lesson 1 Collaborative projects take time as they have to overcome cultural obstacles. However is the idea is sound and logical, people will adhere sooner or later

Lesson 2 Keep things simple. No need to reach for the stars right away. Most IT support solutions deal with too much useless data

Lesson 3 innovate and develop together with future customers. No matter how bright the ideas is, if it does not mean anything to you future partners, you are wasting your time. However VISION must be and one has to make vision part of the project. 

Scope: International