A committee of MPs has warned the Ministry of Defence that its £1 billion investment in supply chain IT systems will not work unless it improves the quality of its data.

In March 2011, the National Audit Office identified grave shortcomings with the MoD's supply chain management, including nearly 40% over provisioning of materials. It found that supply chain data was stored in many disparate, poorly integrated systems, some of which are 30 years old.

In order to address these issues, the MoD is investing £1 billion in new inventory management systems. This includes an £800 million it awarded to engineering giant Boeing in 2010.

However, after investigating the MoD's progress so far, the Public Accounts Committee has warned that this investment will be unsuccessful unless underlying data quality issues are resolved.

"Any system is only as good as the information put into it, [but] currently the department lacks information on the inventory it holds and thus does not know the true scale of the problem it faces," said committee member Richard Bacon MP in a statement.

"Before getting its new system up and running, the department needs to perform a full cleansing and reconciliation exercise, to ensure it doesn’t waste even more public money.

"The MOD is now considering the outsourcing of inventory management but going ahead with this now, before the MOD has a firm grip on the true situation it faces, risks paying far more than necessary to outsource," Bacon added.

"Unless the department is extremely careful, outsourcing could prove to be an expensive cop-out."