BAE Systems Implements Secure, Innovative Sourcing

CASE STUDY
BAE Systems Implements Secure, Innovative Sourcing Process for the Type 26 Global Combat Ship
Programme with Exostar’s SourcePass and Managed Access Gateway
About BAE Systems
BAE Systems serves the needs of
their customers by delivering a wide
range of advanced defence,
aerospace and security solutions that
provide a performance edge. They
work together with local partners to
develop, engineer, manufacture and
support the innovations that increase
defence sovereignty, sustain
economies and safeguard commercial
interests. Their 88,000 employees in
six continents are committed to
creating solutions that protect and
strengthen nations, commerce,
communities and people. That’s
inspired work.
“The Trafalgar SourcePass
deployment is a testament to the
highly-collaborative effort between
BAE Systems and Exostar to
overcome a challenge and bring the
right solution to bear. Together, we
found a way to allow our business to
realize the advantages of SourcePass
in a restricted environment, and that
benefits our company, our customer,
and our suppliers.” -- Clive
Blackburn, Interim Head of Supply
Chain for T26 Major Systems and
Equipment, BAE Systems
Copyright © 2013 Exostar LLC. All rights reserved.
Challenge
The Global Combat Ship will be a highly capable and versatile multi-mission
warship. The UK programme to develop the Type 26 Global Combat Ship,
which will replace the Royal Navy’s Type 23 frigates, is now underway at
BAE Systems Maritime – Naval Ships. The highly sensitive nature of the
effort meant BAE Systems had to comply with International Traffic in Arms
Regulations (ITAR) and UK Export Control laws. These and other rules
collectively governed where applications could be hosted, where information
could be stored, and how information could be transmitted and handled.
In the past, BAE Systems in the UK had relied on manually intensive
sourcing processes for the purchase of equipment with a UK Restricted
classification, which would be required for the Type 26 programme. For the
Invitation to Tender (ITT) process, for example, the Naval Ships business
copied ITTs onto encrypted disks and sent them to suppliers through regular
mail. The BAE Systems team communicated with bidders via phone, regular
mail, and email. Suppliers submitted responses through a combination of
CDs and literally reams of paper documents.
The legacy sourcing approach took too long, involved too many resources,
was too costly, and provided too little visibility, traceability, and
accountability. Other organizations within BAE Systems used e-sourcing
solutions to mitigate these shortcomings. The Naval Ships business wanted
to use e-sourcing and in fact had tried to leverage the technology previously,
but no solution existed that could meet the security and compliance
requirements of programmes like Type 26.
Solution
BAE Systems had turned to Exostar’s cloud-based e-sourcing solution,
SourcePass, for more than seven years for programs not subject to ITAR
and UK Export restrictions. SourcePass had a successful track record of
helping BAE Systems to:



Streamline and standardize sourcing processes, including creating a
tender, responding to queries, and evaluating supplier responses;
Improve auditability for the company, its customers, and its suppliers
throughout the sourcing process; and
Reduce cost through resource efficiency and more competitive
bidding via eRFx and reverse auction functionality.
Because SourcePass was deployed via a Software-as-a-Service delivery
model and hosted in the U.S., the existing version of the solution did not
meet criteria for use on the Type 26 programme. With more than a decade
of corporate experience supporting customers in Aerospace and Defense on
highly secure programs, Exostar understood the circumstances and the
challenges facing the Naval Ships business.
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BAE Systems: Implements Secure, Innovative Sourcing Process
About SourcePass
SourcePass is a comprehensive, ondemand, cloud-based application that
allows organizations to effectively
lower their total landed cost for goods
and services, while promoting best
practices and enterprise visibility. The
solution’s robust functionality enables
today’s real-world sourcing and supply
management strategies to be captured
and executed to ensure emerging
requirements are addressed. For
competitive supply markets, the
platform offers a range of direct
negotiation formats, including reverse
auctions and eRFx. Exostar’s
experienced client services team
delivers customer success through
strategic sourcing knowledge, best
practices, commodity market
intelligence, supplier training, and
event white-glove service.
About Exostar
Exostar is a leader in secure cloudbased solutions that improve
collaboration, information sharing, and
supply chain management for over
100,000 companies worldwide,
including some of the largest players
in aerospace and defense, life
sciences, pharmaceuticals, and
financial services. Our secure, cloudbased, single-sign-on identity and
access management platform and our
multi-enterprise collaboration solutions
allow users to connect once and
access all their critical applications
and information across the spectrum
of partners and vendors they work
with. For more information, please
visit www.exostar.com.
Copyright © 2013 Exostar LLC. All rights reserved.
To help bring the right solution to bear for Type 26 programme sourcing,
Exostar collaborated with BAE Systems and its IT partner, CSC, to create a
new instance of SourcePass hosted on a secure server within the BAE
Systems/CSC facilities in Trafalgar. Trafalgar SourcePass combined the
benefits of SourcePass with compliance for application and information
hosting and transmission regulations. To ensure compliant information
access and handling, Exostar:

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Connected Trafalgar SourcePass to its Managed Access Gateway
(MAG) offering so BAE Systems/CSC could simply administer and
grant access to the system; and
Provided BAE Systems/CSC with one-time password hardware
tokens to issue to suppliers and customers for confirmation of user
identities with strong two-factor authentication to control system
access and protect sensitive information.
Results
Trafalgar SourcePass was a breakthrough for BAE Systems. For the first
time, BAE Systems used an e-sourcing solution to purchase UK Restricted
equipment. Trafalgar SourcePass also empowered the Naval Ships
business to fundamentally change its ITT process from a manually intensive,
paper-based approach to one that takes full advantage of automation to
improve speed and responsiveness, minimize resource requirements,
promote cost savings, limit the opportunities for miscommunication and
introduction of errors, and enhance transparency and accountability for all
parties. The one-time password hardware tokens and Exostar’s MAG
reinforced the security of Trafalgar SourcePass and the Type 26 programme
information it handled.
The programme’s e-sourcing team was able to adapt to the new technology
swiftly, ramping up from two ITTs in the first month to fifteen ITTs the next
month, keeping the fast-paced project on schedule. Within the first year of
the solution’s deployment, the Naval Ships business used Trafalgar
SourcePass to support dozens of complex, medium-to-large Type 26
programme tenders, with a cumulative value of roughly £57 million. More
than 60 suppliers participated in an ITT process. The average ITT included
the electronic transmission of hundreds of documents and responses
between BAE Systems and the supplier community, with each supplier
answering over 1500 compliance questions. To account for this volume and
the sophisticated two-strand scoring methodology mandated by the Type 26
programme, BAE Systems and CSC trained nearly 200 employees on the
Trafalgar SourcePass solution.
The complexity of the initial Type 26 programme tenders limited the scope of
the Naval Ships business’s use of Trafalgar SourcePass to request for
information interactions with suppliers. Looking ahead, as the tenders
become less intricate and more numerous, the BAE Systems team intends to
expand the role of Trafalgar SourcePass to take full advantage of all of its
eRFx and reverse auction functionality – driving even greater time, resource,
and cost savings.
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