“A Senate report related to the National Defense Authorization Act for Fiscal Year 2007 asked GAO to compare quality management practices used by the Department of Defense (DOD) and its contractors to those used by leading commercial companies and make suggestions for improvement. To do this, GAO (1) determined the impact of quality problems on selected weapon systems and prime contractor practices that contributed to the problems; (2) identified commercial practices that can be used to improve DOD weapon systems; (3) identified problems that DOD must overcome; and (4) identified recent DOD initiatives that could improve quality. GAO examined 11 DOD weapon systems with known quality problems and met with quality officials from DOD, defense prime contractors, and five leading commercial companies that produce complex products and/or are recognized for quality products.”
Booz Allen Hamilton in Norfolk, VA received a $25.6 million cost-plus-fixed-fee, firm-fixed-price contract to provide expertise in change management, organizational barrier identification and removal, and key enterprise performance metrics to the US Navy. This contract includes a base year and 4 one-year options, which if exercised, bring the total estimated value of the contract to $120.1 million.
Work will be performed in various locations around the continental United States (CONUS), and the base year will be complete by January 2009. Contract funds will expire at the end of the fiscal year. This contract was competitively procured though Government-wide Points of Entry, Navy Electronic Commerce On-line, and Federal Business Opportunities websites, with 3 offers received by the Fleet and Industrial Supply Center Norfolk (N00189-08-D-0022).
It’s well understood, and long-practiced – but not usually well integrated. The transition from product design to production can often be the most expensive, time-intensive aspect of delivering products. The complexities and extreme specifications of military products make that doubly true, and the growing popularity of concepts like spiral development, and through-life management that includes redesign and upgrades, will tax corporate systems even further. Product life-cycle management (PLM) systems exist, and manufacturing execution systems (MES) exist, but integration is often the missing link. If the resulting back-end systems aren’t agile enough to keep up with accelerating customer demands, the result can be costly mistakes, or even development bottlenecks.
MBDA is a joint venture of EADS, BAE and Finmeccanica, and the European firm has become one of the globe’s top 2 missile suppliers, alongside Raytheon. The firm took advantage of capabilities in Apriso’s July 2007’s FlexNet 9.4 MES update to streamline processes by passing data to their Siemens Teamcenter PLM package. The effect was a system that lets them track manufactured product specifications against paper specifications in a way that’s accessible throughout the supply chain. The firm’s next step was to feed that history into MBDA’s SAP ERP uber-back end system, which adds data about materials used and orders placed before flowing the information back.
This kind of integration creates more than just quality control and tracking; it ends up letting MBDA use work instructions from tracked processes as templates for new ones, which helps them bring their best practices into new production processes. See Manufacturing Business Technology’s “Manufacturers can hit product innovation targets with PLM/MES integration.”
It seems like a simple, and eminently sensible change. Instead of paying for hours of service and spare parts for military platforms, and trying to forecast usage, set required reliability levels. Then implement public-private partnerships and pay defense contractors a fixed rate per year, with incentives and penalties centered around required in-service rates. Sensible? Yes, and financially attractive because it turns large portions of the maintenance budget into pre-contracted, fixed costs. Simple? No.
Minor complications include the critical importance of in-service availability as something that extends beyond a mere contract term, and the need to avoid bankrupting one’s contractors after they have accepted most of your fleet’s maintenance risk. To which one must add factors such as highly variable per-year usage rates for equipment, the lack of adequate information to make accurate forecasts on either side of the table, the importance of creating the right incentives around long-term maintenance so this is not skimped, and the need to factor maintainability into future equipment contracts in a much more integrated fashion. Each one of those aspects, taken by itself, represents a major challenge. Together, they present formidable obstacles to success.
Faced with constrained budgets and rising maintenance costs, however, the British Ministry of Defence has spent the last several years creating exactly this kind of “future contracting for availability” through-life maintenance framework for platform after platform. The efforts of exceptional individuals like former Air Vice-Marshal Nigel Bairsto have made a tremendous difference, and so has the extensive organizational commitment of multiple MoD agencies and front-line commanders. Britain currently leads the world in this field, even as the rising curve of aging defense equipment throughout the Western world forces defense ministries and departments to confront the same issues. This Spotlight article provides an index of DID’s coverage in this area.
Lord Paul Drayson was an accomplished man when he entered government. The founder of the needle-free vaccination firm PowderJect reaped over GBP 80 million, rose to a seat in the House of Lords, and went from an under secretary position to a full Ministry. He then went on to accomplish a great deal over 30 months as Britain’s Minister of State for Defence Equipment and Support. Britain has become the world’s leading practitioner of availability-based support contracts for a wide range of weapons systems, major mergers of government departments have been undertaken to move that approach forward, and NAO audits have confirmed the effectiveness of the new approach. A Defense Industrial Strategy has been put in place that outlines key technical skills Britain believes it must retain, and industry consolidation and changes have followed in its wake as the industrial base moves to adjust. The country is now on track to buy full-size aircraft carriers for the first time in decades, and other shifts have begun, albeit slowly, in the land sector.
How do you top that? How about by submitting the most unusual, way-out, and flat-out interesting senior official government resignation letter we’ve ever seen. Or are likely to see in our lifetimes…
VIVACE(Value Improvement through a Virtual Aeronautical Collaborative Enterprise) is a very large research & technology project funded by the European Commission that was launched in January 2004, grouping 63 companies and research institutions from the aerospace sector to improve 7 key areas of the product development process, providing solutions in “Design Simulation”, “Virtual Testing”, “Design Optimisation”, “Business and Supply Chain Modelling”, “Knowledge Management”, “Decision Support” and “Collaboration in the Extended and Virtual Enterprise”. By using the latest innovations in advanced simulation and modeling techniques, it hopes to provide the means to improve knowledge about the product prior to its physical development, reducing development costs, shortening time to market, and improving product quality.
If European aerospace firms can incorporate these advantages, the thinking goes, they will be in a better position to maintain their global competitiveness. By creating shared learnings among many companies, meanwhile, the research creates a common base of knowledge and practices among its participants, improving the odds that they will be on the same page managerially and technically as well. A level of commonality that is crucial, if the full gains of the research are intended to extend beyond any one firm’s supply chain.
Airbus has put out a release, stating its belief that its co-ordination of the VIVACE project has produced significant results. The final results of VIVACE were presented at a public Forum held in Toulouse from 17th to 19th October, and further background is available online as a 25 MB book.
“The characteristics of Small Wars have evolved since the Banana Wars and Gunboat Diplomacy. War is never purely military, but today’s Small Wars are even less pure with the greater inter-connectedness of the 21st century. Their conduct typically involves the projection and employment of the full spectrum of national and coalition power by a broad community of practitioners. The military is still generally the biggest part of the pack, but there a lot of other wolves. The strength of the pack is the wolf, and the strength of the wolf is the pack.” — Small Wars Journal
“The SWJ is one of the finest resources on the Internet for the student of counterinsurgency, and has attracted… a who’s who of the debate on counterinsurgency theory, including Kilcullen, Nagl, Frank Hoffman, Malcom Nance, Bing West and Lt. Col. Paul Yingling. The addition of SWJ contributors in recent months is especially impressive. For example, following his controversial May 2007 Armed Forces Journal essay, “A failure in generalÂ¬ship,” Yingling joined the SWJ blog as a contributor to address some of the response his article had received… The site also offers the digital SWJ Magazine, which principally pubÂ¬lishes articles by the captains and majors who are fighting the wars in Iraq and Afghanistan, and provides another excellent venue for expanding and enhancing the debate on the war. After so many articles about how the milblogging phenomenon has threatened chains of command, engendered violations of soldiers’ civil liberties and fueled a digital propaganda war, it is refreshing to note that the [digital medium] can also serve as a virtual graduate seminar for the practitioners of war.”
Innovative Productivity Incorporated (IPI) in Louisville, KY received a $28.7 million cost-plus-fixed-fee, level of effort contract for the operation and management of the McConnell Technology and Training Center (MTTC). The focus of the work will be to identify and/or develop innovative technologies, processes and concepts, with a focus on reducing operating costs and increasing product quality. MTTC will enhance selected technologies and technology transfers between DOD and private industry, and/or develop them where appropriate.
IPI is a partner in the US Navy’s Fleet Maintenance Reduction Program (FMRP), which helps the Navy resolve nagging and costly shipboard problems by inserting innovative products and technologies; the US Navy estimates that the MTTC projects will save approximately $1 Billion over the next 15 years. IPI also runs the National Surface Treatment Center which works with the Navy on corrosion issues, and the firm offers Quality Management and Business & Industrial Skills Programs that include Six Sigma, Lean strategies, and ISO certification.
Work will be performed in Louisville, KY and is expected to be completed by September 2012. Contract funds in the amount of $10.4 million will expire at the end of the current fiscal year. The contract was not competitively procured by the Naval Surface Warfare Center, Carderock Division in Carderock, MD (N00167-07-C-0008)
The USA’s Mine Protected Ambush Resistant (MRAP) vehicle program has received a DX rating from the Pentagon – a rating normally restricted for items like nuclear missile submarines. That rating gives MRAP vehicles supplier priority over almost every other Pentagon weapons program, and the Defense Department has been rushing to ensure that items earlier in the supply chain like tires, steel, radios, et. al. are ordered well in advance to avoid slowing production. Military-grade and high-alloy steel are inputs of especial concern, since they’re produced in large but nonetheless limited quantities.
Work will be performed in Waukesha, Wis., and is expected to be complete by April 22, 2008. This was a sole source contract initiated on Aug. 22, 2007 by the U.S. Army Tank-Automotive and Armaments Command in Warren, MI (W56HZV-07-C-0621).
Sept 11/07 saw Northrop Grumman celebrate some milestones for its National Security Cutter program. The release arrived shortly on the heels of a Defense News Report that notes some of the process improvements in use within the program, but puts the total cost of the first ship at $641 million.
First-of-class ships are often more expensive, post 9/11 changes did add 1,000 of the final design’s 4,300 tons, and the NSC program compares favorably in many respects with past efforts like the AEGIS DDG-51 destroyers and CG-47 cruisers that now form the core of the US Navy. Even so, that $641 million price tag begins to place the Legend Class cutters in the same realm as the new Fridtjof Nansen Class AEGIS air defense frigates that form the high end core of Norway’s navy. Price tags often decline as more ships are built, but there are also cases like the LPD-17 San Antonio Class, whose $1.7 billion cost and 100% overrun on the first ship appear to have perpetuated throughout the build cycle.
Which example will this ship class follow? DID looks at the recent milestones and process improvements underway, in order to begin to answer this question…