Anja Clausin is Business Director and Head of the Market and Procurement division at the Swedish Defence Materiel Administration (FMV). In FSN Perspektiv, she notes that FMV finds itself at a paradigm shift: not only regarding the security policy context in the world, but also from a procurement perspective.

The war in Ukraine has transformed the security policy context in which we have operated for many years. In times of uncertainty and increased defence appropriations, many countries are making major investments to strengthen their defence. This places significant demands on all actors within the defence sector to act swiftly and effectively. Governments must make decisions at a rapid pace, and agencies such as FMV need to streamline their procurement processes. Industry must deliver on time (preferably now), meet agreed quality standards, and adhere to contracted prices, while the high demand for defence materiel requires increased production capacity.

As Business Director with responsibility for procurement and export operations at FMV, I can state that we find ourselves at a paradigm shift, not only regarding the security policy context in the world, but also from a procurement perspective. We have moved from "just-in-time" to "just-in-case" with regard to our procurement strategies, and supply security considerations are becoming an increasingly important area to address in our procurements. The concept of just-in-time has long been a guiding principle for global supply chains and procurement worldwide. Through globalisation, digitalisation, and improved means of transport, it has been possible to supply a country with goods and services at precisely the right time, without the need to build up stockpiles and thereby tie up significant costs. During the pandemic, we experienced for the first time that this guiding principle no longer held, and no longer functioned.

Although FMV largely works with major projects that run over long periods, we are, like all other procurement organisations, dependent on the market functioning as we are accustomed to. Beginning with the Covid-19 pandemic, the market changed dramatically. FMV experienced this during our assignment for the National Board of Health and Welfare (Socialstyrelsen), and it has become even more apparent through the war in Ukraine.

During the pandemic, the National Board of Health and Welfare (Socialstyrelsen) was tasked by the government to secure the supply of protective equipment at a national level, and to redistribute protective equipment and other materiel in response to the spread of Covid-19. FMV was tasked by Socialstyrelsen to act as a central purchasing body and carry out these procurements. During the pandemic, we experienced that the supply chain principles we had relied upon changed fundamentally. Even though Socialstyrelsen in some cases needed to make decisions in as little as 20 minutes on certain procurements proposed by FMV, the materiel that FMV had reserved on the market could be gone in even less time. In addition to the market not functioning as usual, and decisions needing to be made immediately to avoid losing critical orders, there were tendencies towards unsolidaristic behaviour, with countries outbidding one another to gain access to, for example, protective equipment.

Transport challenges also arose due to a shortage of containers and closures at key ports. There were also complex problems involving new market actors, some of whom were less reliable. This required careful scrutiny of materiel quality before decisions could be made, in order to meet the high quality requirements. Another challenge was, of course, the rapidly escalating pricing of protective equipment and medical devices such as ventilators.

One positive experience from the pandemic was that we witnessed an extraordinary number of impressive and innovative initiatives from companies across Sweden, repurposing their production to manufacture protective equipment, and a general willingness among businesses to contribute. Despite the challenges prevailing on the global market, we nonetheless succeeded in delivering the materiel requested by Socialstyrelsen to the desired quality, on time, and at contracted prices. This was made possible because FMV had existing agreements in place and established relationships with our suppliers.

There are lessons to be drawn from this. I believe the assignment demonstrates that agencies can both collaborate and act swiftly when there is a shared sense of urgency. Furthermore, it shows that we and other procurement organisations need to have agreements in place, established relationships with our suppliers, and a strong capability at all levels to make correct decisions quickly.

At FMV, we have carried these lessons into our procurement work. The war in Ukraine has taught us the importance of ensuring that we have alternative supply chains or supply chain strategies. We also need to incorporate supply security considerations into our contracts through contractual clauses that enable increased production capacity, stockpiling, preparedness, and much more. Together with our suppliers, we also need to maintain a continuous dialogue on how we ensure that the Swedish Armed Forces (Försvarsmakten) receive the materiel they need to build operational effect, and that it is delivered on time (preferably now), to the desired quality, and at contracted prices.

How do we achieve this? In part, my view is that we need to have a com...