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Transcript of 1 Performance-based Logistics Implementation Methods Peter R. Raymond Tom Parks Nancy Brandt March...
1
Performance-based LogisticsImplementation Methods
Peter R. Raymond
Tom Parks
Nancy Brandt
March 24, 2003
2
Workshop Agenda
Product Support and PBL in Depth
PBL Strategy Development
Alternative Development (Case Study Discussion)
Alternative Evaluation Method
PBL Lessons Learned
Question and Answer Session
3
Product Support Development
OSD policy support Product support reengineering Life cycle management policy PBL Guide
Program office PBL development
PRODUCT
SUPPORTPRODUCT
SUPPORT
Program Manager’s
Guide To
Buying Performance
4
The Need for PBL
Combatant Commanders need to project and sustain forces with a smaller logistics footprint
Program Managers need to improve readiness and compress the logistics chain
Military services need to reduce cycle times to industry standards
FY 2003-07 Quadrennial Defense Review Improve readiness for major weapon systems and commodities Compress supply chain by eliminating non-value added steps Reduce cycle time
FY 2003-07 Quadrennial Defense Review Improve readiness for major weapon systems and commodities Compress supply chain by eliminating non-value added steps Reduce cycle time
5
Today’s Product Support Environment
Annual weapon system sustainment cost is estimated at $62B Requirements process emphasizes weapon system
performance Limited attention to life cycle sustainment
Services implementing a variety of product support strategies
PMs responsible for life cycle management Limited sustainment expertise/guidance Flexibility to develop their own strategy
6
Product Support
Product support is a package of logistics support functions necessary to maintain the readiness and operational capability of a system or subsystem Covers all logistics elements
Program Managers are required to develop and document product support as part of their acquisition strategy
PBL is currently the leading product support strategy
7
CLS: Contractor Logistics SupportDVD: Direct Vendor DeliveryPBL: Performance-Based LogisticsTSPR: Total System Program Responsibility
Product Support Spectrum
Increasing supplier responsibilit
y/
Increasing supplier responsibilit
y/
Increasing Govt. risk
Increasing Govt. risk
ORGANIC SUPPORT
COMMERCIAL SUPPORT
Traditional TSPRCLSDVD
Increasing Govt. responsibilit
y/
Increasing Govt. responsibilit
y/
Decreasing Govt. risk
Decreasing Govt. risk
PBLPBLPBL PBL
PBL can fall anywhere along the spectrum
(PBL CLS)
8
PBL Characteristics
Centered on performance agreements between Warfighter and Program Manager Focused on system readiness and warfighter support Preserves warfighter resources: dollars and people Implemented and executed transparent to the warfighter
Responsive to the unique requirements of the military services
Managed by a Product Support Integrator who coordinates logistics support organizations across government and industry
Selects best-value providers from government, industry, or government/industry partnerships Product support agreement between program manager and product
support provider(s)
9
PBL Characteristics (Cont.)
Maintains long-term competitive pressures on government and industry providers
Relies on information systems across industry and government that enable: Comprehensive logistics chain integration Asset visibility Continuous improvement of weapon system support Continuous reduction in operating costs by dedicated
investments Technology insertion
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• PBL uses a commercial or organic product support integrator to meet the warfighter’s performance requirements
• PBL should improve:• Technology insertion• Reliability• Product availability• Total cost• Inventory management• Obsolescence management
• PBL uses a commercial or organic product support integrator to meet the warfighter’s performance requirements
• PBL should improve:• Technology insertion• Reliability• Product availability• Total cost• Inventory management• Obsolescence management
PBL Principles
PBL must provide: Improved weapons system
support Reduced cost
11
PBL Transformation of Product Support
Mission Need
IdentifiedPM Selects
OEM E&MDFull Rate
Production IOC MSD
TraditionalIdeal Product Support Transformation
DoD-wide weapon system sustainment cost estimate
to be about $62B
DoD-wide weapon system sustainment cost estimate
to be about $62B
12
Advantages of PBL Early in the Program Life Cycle
Defines and optimizes the sustainment infrastructure
Influences system design
Purchase support as an integrated, affordable performance package
Optimize system readiness
PBL uses long-term performance agreements among receivers and providers of support
PBL uses long-term performance agreements among receivers and providers of support
13
Warfighter
Product Support Integrator
Program Manager
Performance-based Agreement
Contract or MOU
Contract or MOU
Product SupportProvider
Product SupportProvider
Product SupportProvider
PBL Support Participants and Arrangements
May be commercial or organic
source
May be commercial or organic sources
14
The Warfighter’s Role
Identify system-level performance requirements that reflect their needs
Provide data for measuring attainment of PBL performance metrics
Participate in performing quantitative and qualitative performance evaluations of support providers
Participate in periodic reviews of PBL strategy
Potential Challenges:
Identifying who represents the warfighter
Obtaining full participation from the warfighter
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The Program Manager’s Role
Develop and document a product support strategy Have it address all the logistics functions Make it part of the program acquisition strategy
Negotiate a performance-based agreement that satisfies the warfighter’s needs
Develop a performance-based work statement for the product support integrator (PSI) Monitor the PSI’s performance
Update the product support strategy periodically At least every five years of the program’s life cycle
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Principal PBL Documents
Product Support Strategy
Performance-based agreement (PBA)
Contracts for commercial providers
Memoranda of understanding (MOU) for organic providers
These documents contain:
Metrics, their data sources, and computation methods
Expected cost and performance outcomes
Performance incentives and sanctions
Risk management methods
17
PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
18
PBL IPT
PBL Development IPT
IPT Outputs:
PBA SOW/SOO
BCA Contract/MOU
IPT Outputs:
PBA SOW/SOO
BCA Contract/MOU
CustomerTraining
Requirements/ICP
Physical Distribution
Maintenance Depot
Legal
Information Systems
Financial
Engineering
Contracting
OEM
Systems Command
PM
Competition concerns may
limit OEM participation
19
IPT Tasks
Focus on developing PBL strategy Work with all stakeholders early in the PBL
formulation process to ensure that core issues are addressed: Is the system core? What is core strategy? Is there DoD core logistics capability? What is the depot effect?
Address core compliance strategy in the justification and approval (J&A)
Initiate congressional notification as early as possible
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PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
21
Key Objectives of a PBL Strategy
Achieve warfighter-focused performance goals Develop the metrics and data sources for
measuring performance
Assign life cycle support responsibilities
Identify product support integrators and providers
Provide incentives support providers to attain warfighter goals
Developing a PBL strategy is an evolutionary process Developing a PBL strategy is an evolutionary process
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PBL Strategy Development Process
Assess the ProgramAssess the Program
Develop Evaluation CriteriaDevelop Evaluation Criteria Develop Product Support Alternatives
Develop Product Support Alternatives
Assign EvaluationCriteria Weights
Assign EvaluationCriteria Weights Evaluate Alternatives (Qualitative)Evaluate Alternatives (Qualitative)
Evaluate Alternatives (Quantitative)Evaluate Alternatives (Quantitative)
Combine Alternative ScoresCombine Alternative Scores
Select AlternativeSelect Alternative
Conduct Business Case
Analysis
Conduct Business Case
Analysis
23
PBL Strategy Development Process Overview
Use expert opinion from a range of acquisition and support competencies
Compare alternatives against qualitative and quantitative criteria
Assess alternatives using criteria established and weighted by the program office and key stakeholders
Assess sensitivity to individual measures
24
PBL Pair-wise Comparison
PBL StrategyPBL Strategy
Criterion 1Criterion 1
Alt. 3Alt. 3 Alt. 4Alt. 4
Alt. 1Alt. 1 Alt. 2Alt. 2
Criterion 2Criterion 2
Alt. 3Alt. 3 Alt. 4Alt. 4
Alt. 1Alt. 1 Alt. 2Alt. 2
Criterion 3Criterion 3
Alt. 3Alt. 3 Alt. 4Alt. 4
Alt. 1Alt. 1 Alt. 2Alt. 2
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Assess the ProgramAssess the Program
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Program Assessment Areas
Criteria Definition
Life Cycle Stage Assess the program’s life cycle and the potential benefits associated with implementing PBL
DoD Infrastructure
(Organic Base)
Assess the effect of PBL solutions on DoD infrastructure (maintenance depots, inventory control points, and distribution depots)
Commercial Base Evaluate the ability of the commercial base to successfully implement a PBL strategy
Acquisition Strategy Identify the programmatic risks associated with implementing PBL into the acquisition program
System Design Identify how the system’s design affects the benefits and risks of PBL
Technology Estimate how PBL will preserve or advance the system’s technology
27
Life Cycle Stage(DoD 5000 Model)
Concept
Refinement
Technology
Development
Production &
Deployment
System Development
& Demonstration
Operations &
Support
ConceptRefinement
Decision
CriticalDesignReview
FRPDecisionReview
Pre-Systems Acquisition Systems Acquisition Sustainment
ICD: Initial Capabilities Document
CDD: Capabilities Development Document
CPD: Capabilities Production Document
IOC: Initial Operating Capability
FOC: Full Operating Capability
LRIP: Low-Rate Initial Production
OT&E: Operational Test and Evaluation
FRP: Full Rate Production
ICD CPDCDD
A CB
User Needs &Technology Opportunities
• Process entry at Milestones A, B, or C
• Entrance criteria met before entering phase
• Evolutionary Acquisition or Single Step to Full Capability
Systems Acquisition
28
PBL Candidate Selection
ACAT I, II, and new start programs
Obsolescence Challenges
Low Reliability
Poor Availability
High Cost/High Demand
Use Cost Performance
Matrix
Use Cost Performance
Matrix
29
High Performance/
High Cost
Systems
High Performance/
Low Cost
Systems
Low Performance/
Low Cost
Systems
Low Performance/
High Cost
Systems
Low Performance/
High Cost
Systems
Performance
Co
st
Lo
wH
igh
Good Poor
Cost-Performance Matrix
Performance Index = Reliability and Supportability
Lo
gis
tics
Co
st
Ind
exTarget poorly performing systemsTarget poorly performing systems
30
Core Logistics Capability(10USC § 2464)
Requires DoD to maintain a government-owned and operated core logistics capability (CLC) Includes government personnel, equipment , and facilities
SECDEF identifies CLC and workload required to maintain those capabilities
CLC must include capabilities necessary to maintain and repair weapon systems and other military equipment identified to fulfill JCS strategic and contingency plans (including establishing organic depot capability NLT 4-years after IOC)
SECDEF assigns government-owned, operated facilities sufficient workload to ensure cost efficiency and technical competence in peacetime while preserving surge capacity and reconstitution to support strategic and contingency plans
“The CLC Rule” -- DoD must have core logistics capability“The CLC Rule” -- DoD must have core logistics capability
31
Core Logistics Capability (Cont.)(10USC § 2464)
SECDEF notifies congress, with justification, the first time a weapon system/equipment is determined to be a commercial item for the purposes of exception to core
EXCLUDES: Systems and equipment under special access programs Nuclear aircraft carriers Commercial items
PROHIBITS: Non-Government activities from performing core workload
AUTHORIZES: SECDEF waiver, with Congressional notice, if SECDEF determines workload is no longer required for national defense reasons
32
50/50 Rule(10USC § 2466)
No more than 50% of a military department’s depot-level maintenance and repair workload funds in a fiscal year can be applied to non-federal government work
DoD civilian employees involved in the depot-level maintenance and repair must be managed on the basis of available workload and funds, not on the basis of end-strength
Service Secretaries may waive this limitation for a particular fiscal year with Congressional notice and a determination that waiver is needed for reasons of National security
The “50/50 Rule” -- Applied at the military service levelThe “50/50 Rule” -- Applied at the military service level
33
Requires competitive contracts for transfers of DoD depot-level workload >$3MRequires competitive contracts for transfers of DoD depot-level workload >$3M
Competitive Workload Transfers(10USC § 2469)
Competition required to move >$3M annual organic, depot-level workload to the private sector
Merit-based procedures are required to move >$3M annual depot-level workload from one DoD depot to another DoD depot
$3M threshold includes the cost of labor and materials for work performed by a DoD depot-level activity
OMB Circular A-76 does not apply
34
Congressional Outsourcing Notification
Congressional outsourcing notification must address: The competitive procedures used to award the
contract The cost/benefit analysis demonstrating savings Conformance with 10 USC 2466 (50/50 rule) Conformance with 10 USC 2464 (CLC requirement)
P. L. 105-261 Sec. 346 as amended by P. L. 106-65 Sec. 336 (from FY99 & FY00 DoD Authorization Acts)P. L. 105-261 Sec. 346 as amended by P. L. 106-65 Sec. 336 (from FY99 & FY00 DoD Authorization Acts)
35
Develop ProductSupport Alternatives
Develop ProductSupport Alternatives
36
Agenda
Process Overview
Product Support Alternatives Matrix
Notional Case Study
37
Process Overview
Consider system characteristics Readiness drivers Sustainability drivers Life cycle phase Architecture Acquisition strategy DoD & Industry Infrastructure Intended operational use Operational environment Existing or mandated programmatic and operational constraints
Consider the range of logistics elements appropriate for the client’s product support needs
38
Process Overview(con’t)
Develop alternatives that have significant differences Define constraints and assumptions Start with opposite ends of the support spectrum and work
towards the middle Leverage/consider successful support strategies used in other
programs Develop general support concepts first, then flesh out
specifics for each logistics element (iterative process) Record data in matrix format (e.g., Excel spreadsheet) Describe specific support option for each logistics element
within each support alternative Identify advantages, disadvantages, enablers, and mitigators
for each alternative
Critical element for evaluating/ranking alternatives
39
Product Support AlternativesMatrix: Basic Template
Hardware
Maintenance
Software
Maintenance
Spares Support
Configuration Management
Training ……
Full ContractorLogistics Support
Contractor - Organizational
LogisticsSupport Mix
Full Organizational
LogisticsSupport
Logistics Elements
Pro
du
ct S
up
po
rt S
pec
tru
m
(Co
ntr
acto
r to
Org
anic
Su
pp
ort
)
40
Product Support Alternatives Matrix
41
Nomenclature Section
42
Product Support Alternatives Matrix: ILS Elements Section
43
ILS Elements Section
44
Product Support Alternatives Matrix: Qualitative Assessment Section
45
Qualitative Assessment Section
46
Developing Product SupportAlternatives:
Notional Case Study
Developing Product SupportAlternatives:
Notional Case Study
47
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
48
System X Characteristics
Successful Navy ACTD that is being installed via rapid acquisition program – adapted from existing DoD (non-Navy) system Full contractor logistics support (CLS) using field service
representatives (FSRs) on-board each System-X equipped ship OEM provides operator training (“buttonology”) Navy provides tactical training
Aggressive installation schedule (12 – 15 installs per year); total population undefined (6 – 160)
System is open architecture, largely COTS hardware and software
Few parts in DoD supply system
49
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
50
Constraints
Acquisition Support Strategy requires: Two-level maintenance concept; on-equipment maintenance
(O-level) concept is remove-and-replace Off-equipment (D-level) maintenance performed by contractor Basic operator (‘buttonology’) training provided by contractor
and USN USN will develop operational tactics and provide associated
training
51
Assumptions
Total number of System X 71 Each System X & mini-System X will have one
dedicated maintainer onboard ship when deployed When FSR/”Super-Tech” does not physically reside
with BG/ARG, maintainers will require higher skill levels
System configuration/capability will continue evolving rapidly because of COTS HW/SW lifecycles and multi-service user environment
FSR = Contractor Field Service Rep
Super Tech = E-6 - E-9 with FSR-equivalent training & skills
BG/ARG = Battle Group/Amphibious Ready Group
52
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
53
Product Support Alternatives
Contractor Logistics Support (CLS)
Organic Logistics Support (OLS)
– Full-service support contractor– Partial CLS (contractor as integrator)
– Partial OLS (government as integrator)– Full OLS (USN only) – Full OLS (DoD – cross service)
54
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
55
Maintenance Alternatives
• Contractor Logistics Support (CLS)
• Organic Logistics Support (OLS)
– FSR maintenance
– FSR on-site support (one FSR per BG/ARG)
– Tele-FSR assistance
56
CLS Maintenance
57
Maintenance Alternatives
• Contractor Logistics Support (CLS)
• Organic Logistics Support (OLS)
– FSR maintenance
– FSR on-site support (one FSR per BG/ARG)
– Tele-FSR assistance
– Tele-“GS -Tech” assistance
– Tele-“Super-Tech” assistance
– “Super-Tech” on-site support (one S-Tech per BG/ARG)
– “Super-Tech” maintenance
58
OLS Maintenance
59
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
60
CLS Alternatives:Supply Support & Transportation
61
CLS Alternatives:Maintenance Training & Documents
62
System XProduct Support Alternatives Matrix
Key
Blue = Contractor functions
Yellow = Organic functions
Green = Mixed functions
Brown = Assumptions & constraints
63
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
64
Full CLS: Advantages, Disadvantages, Enablers, Mitigators
65
Developing Alternatives
1. Consider system characteristics
2. Define constraints and assumptions
3. Develop “general” product support alternatives
4. Consider the range of logistics elements
1. Maintenance Alternatives
2. Supply Support Alternatives
3. …….etc
5. Identify advantages, disadvantages, enablers, and mitigators for each alternative
6. Refine product support alternatives
66
Refining Product Support Alternatives
Conduct evaluation/review Convene panel of in-house ILS experts (cross disciplines
and cross service is best) Conduct pair-wise comparison of alternatives
Fill in details and modify support alternatives as necessary
Conduct evaluation/review with Service Representatives Convene panel of selected Program Management Office,
Fleet, product support representatives Conduct pair-wise comparison of alternatives
Modify support alternatives as necessary
67
Develop Evaluation CriteriaDevelop Evaluation Criteria
68
Potential Evaluation Criteria
Qualitative Factors: Sustainability Readiness Modernization
Quantitative Factor: Cost – business case analysis
69
Sustainability(Wartime Risk Reduction)
Maintainability: Ability to keep system operating - repair of hardware and software failures, faults, and anomalies
Mobilization: Ease of moving logistics support supplies and personnel to foreign nations and/or ships at sea
Surge: Maintenance capacity, supply capacity, stability of logistics workforce
70
Readiness(Peacetime Risk Reduction)
Stability and capability of maintenance organizations and workforce
Ability to respond to OPTEMPO changes
Ability to respond to requirements changes/demands through technology investments
Ability to respond to obsolescence and diminishing sources
71
Modernization(Technology Preservation)
Ability to yield performance or support improvements through technology investments
Ability to reduce need for future government R&D investment
Ability to maintain system’s technological capability
72
Cost
Acquisition Training and training equipment Technical data Technical manuals ICS (interim contractor support) Interim spares
Operations and support Maintenance – hardware and software CLS (contractor logistics support) Train government personnel Supply support (contractor and/or government) Training facilities, equipment, courses
73
Weight Criteria
How important is each criterion?
How important is each criterion?
CostCost
ModernizationModernization
SustainabilitySustainability
ReadinessReadiness
74
Weighting the Criteria
Stakeholders and program office identify relative importance of evaluation criteria
Assign a weight to each criterion to identify its relative importance to the decisionCompare relative importance or preference of
each criterion with respect to another criterion (pairwise comparison)
75
Ranking and Weighting Method(Notional Example)
Criteria Rank Weight
Sustainability 4
Cost 3
Readiness 2
Modernization 1
Rank on a scale from 1- 4 (low to high)
Weight each choice over the lowest ranked item
76
Pairwise Comparison Scale
Intensity Scale Explanation
1 Two activities contribute equally
3 One activity is slightly favored over another
5 One activity is strongly favored over another
7 An activity is favored very strongly over another
9 An activity is favored to be extremely important over another
2, 4, 6, 8 For compromise values
77
Ranking and Weighting Method(Notional Example)
Criteria Rank Weight
Sustainability 4 .36
Cost 3 .27
Readiness 2 .21
Modernization 1 .16
Rank on a scale from 1- 4 (low to high)
Weight each choice over the lowest ranked item
78
Evaluate Logistics Alternatives(Qualitative)
Evaluate Logistics Alternatives(Qualitative)
79
Analytic Hierarchy Process (AHP)
Analytic Hierarchy Process (pair-wise comparison) Method for performing multiple-criteria decision-making Information decomposed into a hierarchy of criteria and alternatives LMI uses software tools such as ExpertChoice® and DecideRight®
PBL AHP decision elements Decision goal: PBL Strategy Decision criteria: Sustainability, Readiness, Modernization Decision alternatives: Full CLS, Mix of CLS and OLS, Full OLS
Perform Pair-wise comparisons of alternatives Compare relative importance of one alternative against another with
respect to each criteria In reference to a specific criteria, decide which alternative is more
important and how much more important
80
Ranking and Weighting Method
Qualitative Criteria: Assessed using expert opinion
Qualitative Criteria: Assessed using expert opinion
Quantitative Criteria:
Assessed using business case
analysis
Quantitative Criteria:
Assessed using business case
analysis
Sustainability(.36)
Readiness(.21)
Modernization(.16)
Cost(.27)
Select the Best Alternative(Combined Qualitative and Quantitative
Score)
Alternative 1..
Alternative 4
Alternative 1..
Alternative 4
Alternative 1..
Alternative 4
Alternative 1..
Alternative 4
WeightedOutcomesWeightedOutcomes
Alternative 1..
Alternative 4
Alternative 1..
Alternative 4
+ + + =
81
Weighted Scores(All Qualitative Measures)
0.59
0.26
0.12
0.12
0.20
0.27
0.41
6 - OLS – “Super-Tech” maintenance
5 - OLS – “Super-Tech” on-site support
4B - OLS – tele-“Super-Tech” support
4A - OLS – tele-“GS-Tech” support
3A - Partial CLS – tele-FSR support
2 - Partial CLS – FSR on-site support
1 - Full CLS – FSR maintenance
82
Evaluate Logistics Alternatives(Quantitative)
Evaluate Logistics Alternatives(Quantitative)
83
Business Case Analysis (Quantitative Analysis)
Limit evaluation to top alternatives, probably no more than three or four
Measure only relevant costs If all alternatives incur a similar cost, don’t bother
measuring it Sunk costs are irrelevant
Quantify the uncertainty associated with costs and benefits, if possible Measure effects across a range of risk
84
Business Case Analysis(Minimum Data Requirements)
Assumptions and Methods Scope of analysis – product support alternatives evaluated Assumptions Metrics
BCA Model Cost Benefits Analytical method – NPV Non-financial benefits – from qualitative analysis
Conclusions Recommendations
85
Combine Alternative Scores/Select PBL Alternative
Combine Alternative Scores/Select PBL Alternative
86
0.83
0.53
0.51
0.52
6 - OLS – “Super- Tech” maintenance
5 - OLS – “Super-Tech” on-site support
2 - Partial CLS – FSR on-site support
1 - Full CLS – FSR maintenance
Notional Weighting Scores(All Measures)
Highest ranked alternative - Develop an execution plan that exploits strengths and manages risk
Highest ranked alternative - Develop an execution plan that exploits strengths and manages risk
87
PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
Identify measurable,warfighter performance
requirements and metrics
Using Performance-Base Agreements
Support Provider Force Provider
Weapon SystemManagement
Cost and Risk Decisions Affecting the Life Cycle
Acquisition
Translate warfighter requirements into
optimumsustainment
DisposalSustainment
Industry and OrganicBuy
performanceas a package
(Include surge and flexibility)
PBAPSA
PM
89
PBA Contents
Outline the program’s PBL Strategy Recognize Warfighter and Program Manager roles and
responsibilities Specify critical readiness and sustainability drivers Identify warfighter performance metrics
Constraints and assumptions Computation methods Data sources Measurement frequency
Delineate methods for reviewing and updating performance requirements
90
Metrics
Measurement is important Key to performance improvement Identify problems in advance of crisis
Metrics should be Understandable Economical Field tested Highly-leveraged Timely Improvement-oriented Applied to all life cycle phases Useful at multiple levels
91
Recommendations for Selecting Metrics
Tie metrics to risk and problem areas
Only as good as underlying data
May evolve with program
Use multiple metrics
Do not measure everything Some metrics are universal Some are program-unique
92
Metrics Examples
Performance: Time free of casualty reports Response time – number of hours required to resolve a
CASREP/IPG-1 Percent of total installations and modifications that begin with
a complete and fully integrated installation package
Cost: Maintenance labor hours expended per total operating hours
Planned and corrective maintenance
93
Baseline Current Process
Determine status of: Resources: personnel and operating budgets Data availability, timeliness, and accuracy Performance by each metric Validate metric computation methods
Compare to cost and performance goals
94
PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
95
Product Support Agreements (PSAs)
PSAs are contractual agreements* between the PM or the PSI and the product support providers Define the output performance goals that support the PBL
agreement with the warfighter Identify the desired outcome in terms of objectives and
thresholds Set a target price for a set level of PBL capability and
performance Delineate any constraints or boundary conditions Include specific terms and conditions related to warfighter-
provided items such as physical space for maintenance and information about the quality of the weapon system
* Contracts for the private sector and MOU’s for the public sector
96
PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
97
The Product Support Integrator’s (PSI) Role
Product support integration is a key element of PBL The PSI is the single point of contact for numerous
organizational entities
Because product support is accomplished by numerous organizational entities, PSI coordination activities can include: Organic organizations Private sector providers Organic and private sector providers organized in a
partnership
98
The PSI Role (Cont.)
The PSI manages, directs, and controls requirements and processes using an integrated product development and total system approach
Most likely candidates for PSI are: System’s OEM or prime contractor Military service product or logistics command Private sector 3rd party logistics provider PM’s own logistics organization
Process for selecting the PSI will vary greatly depending upon commercial and organic capability, nature of the system, and maturity of the program
99
PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
100
Monitor PSI Performance
Monitor metrics
Identify and validate exceptions
Monitor risk management Surge capability Integration and supplier alliances
Assess rewards and penalties Warfighter role
101
PBL Development Process
Establish
PBL Team
Establish
Product
Support
Integrator
Develop
PBL Strategy
Draft
Warfighter
Performance
Agreement
Develop
Product
Support
Agreement
to Implement and Monitor Performance
Develop
Program
Metrics and
Baseline
(Performance and Cost)
Monitor
PSI
Performance
Review and
Update PBL
Strategy
102
Review and Update PBL Strategy
PBL is tailored for each program
Plan on regularly updating
103
Lessons Learned
Early engagement of the warfighter is essential The Program Office has to work to cultivate warfighter
participation
Other IPT participants provide valuable, complementary perspectives
Selection of criteria and weighting is essential to the outcome
Avoid developing differences without distinctions
Plan on many iterations in the process of refining the outcome
104
Back Up Slides
105
Logistics Elements
Maintenance planning Computer resources support Technical data Supply support Training Support equipment Facilities Manpower and personnel Packaging, handling, shipping, and transportation Design interface
106
Developing Alternatives
Pare down possible alternatives to a reasonable set
Don’t create distinctions without a difference
For each alternative, identify major advantages and disadvantages Identify methods for exploiting advantages and
mitigating disadvantages