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Supply chain lessons from the military: what air freight could learn from the $2 trillion defence sector

By Nicole Verkindt | June 27, 2018

Nicole Verkindt, founder of OMX and host on Canada’s Dragon’s Den, is taking part in a panel exploring digital transformation in the supply chain at TIACA’s 2018 Air Cargo Forum in Toronto, Canada, which takes from 16-18 October. Speaking exclusively with TIACA, Nicole shares her views on what lessons airfreight can learn from the military.

Global military spending is at its highest since the end of the Cold War. At over USD$1.7 trillion, the defence sector accounts for 2.2% of global GDP.

I founded OMX seven years ago as a procurement network and supply chain platform to connect buyers and sellers to centralize the bidding, building, and reporting processes. What started in the defence sector has expanded to include energy, infrastructure and – you guessed it – aerospace and air freight.

 

Not just for aerospace companies  More than 60% of Canadian aerospace product exports were supply chain  components.  That means there's a lot of business opportunities even if you're not an  aerospace company.  GET STARTED

 

The defence and air freight sectors have a lot in common. Both have huge supply chains that span the globe. Both contain an increasing number of moving parts, tiers, and suppliers. And both are established industries that are still in the process of transitioning to digital solutions.

Today, the world’s largest defence contractors and aerospace companies like Boeing, Lockheed Martin, and Raytheon all use OMX for their procurement needs and to build billion dollar supply chains. Along the way, I’ve learned some important lessons from military and defence supply chains that are just as applicable to air freight:

 

Collaborate with your supply chain

It can be difficult to align an organization, let alone an entire supply chain.

But it’s not impossible and the benefits are overwhelming. During the Gulf War in 1990, U.S. forces operated as separate divisions on different tracks and contractors were paid on a per-repair basis, which meant a lot of  time and resources were spent on reconciliation.

By the Iraq War in 2003, all ground forces (including coalition partners and private contractors) were on a single, integrated network and contractors were now paid based on overall system availability –  increasing operational availability from 80% to 92%.

 

Read the other lessons and the rest of the article on TIACA's blog >>

 

About TIACA

The International Air Cargo Association (TIACA) is the only organization representing all segments of the air freight supply chain.

Our not-for-profit association supports, informs, and connects companies and organizations of all sizes with the aim of developing an efficient, modern, and unified air cargo industry worldwide.

We champion every size of business, and help shape the policy which affects all of our members, providing a unifying voice for the industry, working for global standards, and raising the profile of air cargo.

We host two major events, the biennial Air Cargo Forum and the biennial Executive Summit, as well as organising training and career development programs.

TIACA aims to inform both the public and its membership about the role and importance of air cargo, industry developments, and technical trends.

Nicole Verkindt

Nicole is the founder and CEO of OMX, a Dragon on CBC's Next Gen Den, and a thought leader in the procurement industry.

Nicole is a political appointee to the Board of the Canadian Crown Corporation, a board member of the Peter Munk School of Global Affairs, and the official technology columnist for Vanguard magazine with a readership of over one million. In 2017, Nicole was named StartUp Canada's "Woman Entrepreneur of the Year."

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Did you know?  Canadian policy states that 100% of defence investments must go back to  Canadian businesses.  That's $3,238,218,028 of unclaimed opportunities.  Learn more >>