Unique IDs to reduce defence procurement cost by 30%

The cost of defence procurement will come down by up to 30% if the proposal to adopt a system to standardise military products is cleared by the government.

The proposal is to give each product used by the military a unique identification code which will reduce the inventory cost by streamlining the purchase and allowing for distribution of excess stock between different units of the armed forces. The Nato Stock Number (NSN), a 13-digit code recognised by all Nato countries besides others, gives products a global identity.

The National Codification Bureau of India, which comes under the Directorate of Standardisation, obtained basic membership of allied countries group (AC/134) back in 2008 and is all set to become a tier-2 member, which will enable the country to access 30 million products with the NSN.

Once the system is incorporated in the Defence Procurement Procedure (DPP), it will have a positive impact on the purchase and management of products. Speaking to DH at the Aero India exhibition hall, codification bureau director G S Vishweshwara said the system was expected to be incorporated in the DPP next year. “There have been studies showing that procurement costs can come down by nearly 30% if we streamline the process and efficiently manage the stocks. Incorporating the NSN allows us to save hundreds of crores of rupees,” he said.

At present, India depends on some firms to get spare parts for the products purchased from them. “Access to the NSN directory will give us options. We can search for similar products using the unique IDs. This will lead to better negotiation and better deals,” Rakesh Kumar, officer in charge of communications, said.

He said it would also allow interoperability between different armed forces. “At present, the Army, the Navy and the Air Force give different codes to the products they use. So, the management of stock becomes difficult as the excess in one force never comes to the notice even as we purchase more. This proliferation ultimately leads to increased spending. The NSN system will eliminate such expenditure,” he said.