IDF looks to McKinsey to cut spending

Defense Ministry hopes to save hundreds of millions by implementing consulting firm's recommendations.

By
May 4, 2009 00:39
1 minute read.

 
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The Defense Ministry hopes to save hundreds of millions of shekels by implementing a series of measures recommended by the McKinsey & Company global management consulting firm, officials said on Sunday. McKinsey won a three-year multimillion dollar contract in July 2008 to create a 10-year streamlining plan for the IDF. It is one of the world's leading consulting companies and previously conducted similar projects for the US and British militaries. According to senior IDF officers, McKinsey teams are scheduled to complete their review of the various army branches by the end of the month and will then present their findings and begin assisting in their implementation. The IDF's Technological and Logistics Directorate has already begun implementing a number of McKinsey recommendations and is hoping to save close to NIS 200 million out of its NIS 5.4 billion annual budget already this year. One example of a cost-saving measure being instituted is in public transportation. Currently, the IDF pays some NIS 500m. annually to the Egged and Dan bus cooperatives, whose lines are used daily by thousands of soldiers. The IDF recently conducted a survey that revealed that fewer soldiers than was previously thought use the buses and therefore it would be cheaper to pay per ride and not a global annual sum. In addition, the army is currently in negotiations with Israel Railways to lower the price it pays for soldiers who ride for free on trains. One idea the IDF is proposing is for soldiers to wait to ride trains on Sunday - a very busy day - until the afternoon. This could save NIS 60m. The IDF is also increasing its procurement of US military surplus. Earlier this year, the army purchased 30 heart monitors but instead of paying $30,000, it paid $5,000. The IDF also bought 26,000 sleeping bags. But instead of paying $60 a piece it paid 50 cents.

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