By Paul R Salmon FCILT, FSCM
In defence logistics, seemingly small changes can have far-reaching consequences. One of the most underestimated levers in the support chain is failure rate—a percentage that, at first glance, might look innocuous. But make no mistake: even a marginal rise in failure rate can send shockwaves through inventory planning, supply chain capacity, and warehouse infrastructure.
This article explores how a slight uptick in failure rate can quickly escalate into a major logistical challenge, particularly within complex, resource-constrained environments like UK Defence and NATO operations.
What Is Failure Rate—And Why Should We Care?
Failure rate refers to the frequency at which items—such as equipment, components, or consumables—break, degrade, or become unserviceable. It’s usually expressed as a percentage or a Mean Time Between Failures (MTBF).
Why does it matter? Because failure drives demand.
If a particular component starts failing more frequently, that creates increased demand for spares, replacements, and maintenance. And when that failure rate is not accurately forecast or proactively managed, it can lead to cascading issues across the entire support ecosystem.
Inventory: The First Domino to Fall
When failure rates increase, the first and most obvious effect is on inventory levels.
1. Higher Stock Requirements
Every failure must be met with a replacement. More failures mean more spares. To maintain availability targets (e.g., for front-line equipment), logisticians must increase base stock levels, including:
Safety stock to buffer against variability Reorder points to trigger earlier resupply Pipeline stock to account for lead times
Suddenly, the carefully balanced inventory plan becomes out of sync, and you’re chasing demand rather than shaping it.
2. Increased Inventory Cost
Holding more stock isn’t just a space problem—it’s a cost problem:
Capital is tied up in unused or slow-moving inventory. Obsolescence risk increases, particularly in fast-evolving platforms. Inventory insurance, handling, and administrative overheads also rise.
This is especially challenging in defence, where many components have strict shelf-life requirements or demand controlled storage environments (e.g., temperature, security, or explosive safety compliance).
Supply Chain Capacity: The Hidden Strain
Higher failure rates don’t just impact what’s held in store—they stretch the entire supply chain.
1. Production and Procurement Pressures
OEMs or suppliers may struggle to keep up with demand surges. Long-lead items, in particular, become pinch points. If parts are bespoke, out-of-production, or subject to export controls, response agility diminishes.
This can:
Trigger expedite costs and emergency buys Increase backorder rates, eroding platform availability Delay overhaul and repair programmes
For NATO coalition operations, this is compounded by dependencies on multinational sourcing, different equipment variants, and dispersed stockholding arrangements.
2. Transport and Handling Overload
An increase in replenishment demand means more freight movements, more pallet builds, more customs clearance, and more strain on transport assets—particularly in contested or deployed environments.
This raises a key question: Can our logistic enablers scale proportionally with the failure rate?
If not, delays become inevitable, and operational effectiveness takes a hit.
Warehousing: When Space Runs Out
Once you’ve sourced the additional inventory and moved it into theatre or base supply, you need somewhere to put it.
1. Storage Capacity Creep
Warehouses are rarely empty—and most operate with space planned to a fine margin. A sudden increase in stock driven by rising failure rates can exceed capacity limits, leading to:
Overcrowding and disorganised storage Difficulty in locating or issuing stock (longer pick times) Increased damage and deterioration from improper storage
In the worst cases, this can force a compromise on compliance (e.g., storing hazardous items outside designated zones) or require costly off-site storage.
2. People and Process Impact
More stock equals more effort. It affects:
Warehouse staff – higher throughput, more picks and packs IT systems – greater dependency on accurate data to avoid loss/misplacement Inventory control – rising risk of errors or write-offs
If warehouse teams are not scaled or trained appropriately, availability is undermined at the very point of issue.
A Strategic Risk, Not a Tactical Detail
Failure rates are often treated as a technical or engineering concern—but their impact is fundamentally logistical.
In fact, failure rate should be considered a strategic planning input—feeding into:
Force generation models Operational sustainment planning Through-life support cost forecasting Spare parts obsolescence and re-procurement plans
The UK Defence Support Chain must increasingly think in terms of scenario-based modelling, where the impact of variable failure rates on readiness and cost is fully understood.
What Can Be Done?
Here are five proactive strategies to mitigate the risk:
1. Invest in Failure Data
Accurate failure rate data—linked to usage, environment, and condition—enables better forecasting. This includes embedding sensors (CBM+), feedback loops from maintenance, and tighter integration with OEMs.
2. Use Predictive Modelling
Capacity planning tools should include failure-rate sensitivity testing. Use digital twins or Opus 10-style tools to model “what if” scenarios and prepare for surge effects.
3. Segment Inventory
Adopt ABC (criticality) and XYZ (variability) analysis to determine where to hold buffer stock. Not all failures have the same operational consequence.
4. Increase Flexibility, Not Just Volume
Sometimes the answer isn’t “more stock,” but faster response. This includes agile contracts, forward stocking locations (FSLs), or modular warehousing solutions.
5. Plan Sustainment as a System
Don’t treat warehousing, inventory, and transport as isolated elements. A systems view shows how a failure in one area (e.g. slow replenishment) can snowball into broader unavailability.
Final Thought: Think Big From the Small Things
A 5% increase in failure rate might seem minor on paper. But multiply that across thousands of parts, dozens of platforms, and weeks of operation—and the impact becomes mission-critical.
Understanding this domino effect is vital for planners, logisticians, and commanders alike. As we evolve towards a data-driven, coalition-enabled, and high-tempo operating environment, the ability to predict, absorb, and adapt to these changes will define success.
After all, in defence logistics, small things break big things—unless we’re ready.
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