Healthy ecosystem, healthy supply: Strengthening the UK’s defence supply chains

The defence landscape is wildly congested, with everything happening everywhere all at once. Pockets of development take place in siloes, often at facilities located across the globe. Major industrial players have significant dominance over critical national security solutions, while inflexibility compromises innovative iteration.

The closer the threat of conflict gets to home, the more important it is for defence supply chains to withstand the shockwaves of war and recover fast. The time to build this resilience is during peacetime conditions, when relationships are under less strain and the plane can be built without flying it at the same time. How can the UK government create reliable, robust, flexible defence supply chains?

Diversify funding and investment

In February 2025, the Prime Minister, Sir Keir Starmer, made a statement to the House of Commons that committed the UK government to spend 2.5 percent of UK GDP on defence by 2027, with a further 0.5 percent increase in the next Parliament. Starmer called this, “the biggest sustained increase in defence spending since the end of the cold war.” The government’s promise to funnel investment into the defence sector recognises the existential threat we face and indicates a commitment to strengthen the UK’s position. But is it enough?

Given the increasing uncertainty of global geopolitics, there’s both appetite and enthusiasm from investors to fund stronger defence supply chains. Matching UK defence capability to evolving threats requires new, diverse funding streams delivered through public-private cooperation. Investors need a clear demand signal – Australia’s re-equipping strategy shows how transparent communication can enable corporations and venture capitalists to make informed investments. By recognising and investing in defence, public and private funders can help the sector to fuel UK economic growth, with stronger supply chains as a result. And to incentivise them to do so, they will need the certainty of returns and long-term commitment than has historically been guaranteed through defence procurement.

Move from closed and complex to open and collaborative

Currently, defence supply chains are rigid and complex. Our current platform-centric approach has been incentivised by cost control and efficiency – multiple systems, sub-systems, and equipment have created a web of complexity that makes it overly hard to map and manage resilience at a truly ‘system of systems’ level.

While it makes sense to draw on the expertise and resources of major suppliers, there’s a risk that big complex platforms become single points of failure. The big industrial primes supplying these platforms also, naturally, make decisions based on their commercial interests. Instead, defence supply chains need to draw from technology-agnostic integrators that choose solutions on merit, not manufacturer or commercial bias. This will shape a more efficient ecosystem, that encourages innovation and facilitates faster, better procurement.

Breaking down barriers and fostering more open architecture would make it easier for the defence sector to make use of readily available ‘dual-use’ tech developed for other applications such as software and nuclear technology. This would also allow a broader range of suppliers and small businesses to be incorporated into defence supply chains, supporting resilience and economic growth.

It’s not just about bringing more suppliers into defence – it’s about finding the right organisations to support end-to-end defence supply chains that are open, collaborative, and able to move quickly. In 2022, we formed Team Protect with Leonardo UK, Leidos UK, and Marshall to develop life-saving capabilities that protect soldiers from radio-controlled threats. Since launch, Team Protect has built an ecosystem of 110 UK organisations to drive bolder and faster innovation – 45 percent are small or ‘micro’ businesses, while over half operate in the innovation space, increasing the ability to integrate new technologies into the defence supply chain at pace. We’re also supporting the Defence Industrial Strategy team to turn transformation policy into practice, creating a delivery plan that understands the relationship between policies and deploys them in a coherent and applied way to support military capability needs.

Proactive adaptation, not reactive scramble

Current UK defence supply chains don’t facilitate iterative innovation. This also poses an interesting question around the most appropriate resilience strategy. Increased stockpiles may be the easy answer, but isn’t always optimal. Lessons from Ukraine have underlined the importance of flexible, sustainable replenishment of the supply chain. What’s required is the agility to manufacture needs-based batches more efficiently, with the ability to scale up as demand increases.

Much like population health, taking preventative action in defence avoids future issues, saves costs, and keeps nations healthy and safe. Because the threat landscape moves so quickly, it’s far better to make changes before they become necessary to maintain the capability edge over our adversaries. By engineering a regular update cycle into defence equipment, with flexible supply, stakeholders can adapt proactively – not scramble reactively.

We’re supporting the UK Ministry of Defence to deliver its Defence Supply Chain Capability Programme (DSCCP), building end-to-end supply chain capabilities focused on supply chain shaping all the way through to proactive risk management. The work also aligns to the UK government’s industrial strategy, ensuring appropriately skilled people are in place to pull the right levers to achieve a given goal.

As recent events in Ukraine have shown, conflict compromises supply chains. The time to design adaptable supply chains isn’t during conflict. It’s during peacetime. Right now, the UK is in a position of peace. But with the threat of conflict edging closer to home in all senses, there’s an urgent need to finetune our defence supply chains. Through diverse investment, collaborative supply chains and proactive adaptation, the UK’s defence ecosystem will manage risks and ruptures, and create a secure future.