February 25, 2014, 1:23 PM

How BAE Systems speeds up sourcing for a high-security Royal Navy job

When BAE Systems took on a contract last year to develop a new combat ship for the United Kingdom’s Royal Navy, it faced the laborious task of sourcing products offline to meet strict data security requirements. But then it worked with Exostar and CSC to securely process bid requests over the Internet, speeding up sourcing.

Paul Demery

Managing Editor, B2B E-commerce

Lead Photo

Aerospace manufacturer BAE Systems has plenty of experience in both developing high-tech products like military aircraft and using the Internet to source parts and supplies—but, because of data security restrictions, not at the same time. So when its Maritime-Naval Ships division won a contract a year ago to design and build a new combat ship for the United Kingdom’s Royal Navy, it faced the time-consuming and laborious task of encrypting requests for proposals for parts onto computer discs, mailing them to suppliers, and then following up to work out contract details via phone, mail and e-mail.

That process, though standard procedure for high-security projects, “took too long, was too costly” and provided no good centralized means to organize and record all of the correspondence and check project status, the company says in a case study it prepared with Exostar.

There had to be a better way, BAE figured. It had already been using for several years SourcePass, an Internet-based e-sourcing system from Exostar for exchanging RFPs and follow-up contract documents with suppliers for other contracts not subject to the strict data security requirements of combat aircraft. The company worked with Exostar and its I.T. consultant, CSC (formerly known as Computer Sciences Corp.) to develop a new version of SourcePass to meet the Royal Navy’s data security requirements in the contract to develop the Type 26 Global Combat Ship, a replacement for the Royal Navy’s Type 23 frigate.

Exostar took two major steps to secure the new software, which was named Trafalgar SourcePass after a U.K. naval facility. It connected Trafalgar SourcePass to Exostar’s managed access gateway, enabling BAE and CSC to ensure authorized access to the sourcing system. Exostar also provided BAE and CSC with a system of “one-time” passwords that get deleted after each time a supplier or buyer accesses Trafalgar SourcePass.

Within the first two months of using the new e-sourcing system,  BAE says it went from two to 15 RFPs. And in the first full year, the Maritime-Naval Ships business has used Trafalgar SourcePass to process dozens of “complex, medium-to-large Type 26” program tenders with more than 60 suppliers, with a total value of about 57 million British pounds (US$95.18 million). The average RFP (also known in the U.K. as an ITT, or invitation to tender) included the electronic transmission of hundreds of documents between BAE and its suppliers, with each supplier answering more than 1,500 questions, the company says.

BAE and CSC trained nearly 200 employees in how to process documents through Trafalgar SourcePass.

As the Type 26 Global Combat Ship project moves ahead and includes some less complex interactions involving lower levels of security, BAE says it expects to expand its use of Trafalgar SourcePass to include other SourcePass features. Those include reverse auctions, which will let BAE post purchasing plans online for suppliers to bid on.

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