Manufacturing and Weapon Support Manufacturing and Weapon Support Innovation Innovation A A Warfighting Warfighting Imperative Imperative John Phillips John Phillips VP VP Aftermarket Aftermarket Growth Growth Program Director Program Director Spacelift Spacelift DMSMS Conference DMSMS Conference August 22, 2000 August 22, 2000
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Manufacturing and Weapon SupportManufacturing and Weapon SupportInnovationInnovation
AAWarfighting Warfighting ImperativeImperative
John Phillips John Phillips VP VP Aftermarket Aftermarket GrowthGrowth
Program Director Program Director SpaceliftSpaceliftDMSMS ConferenceDMSMS Conference
Warfighting Warfighting is uncompromisingis uncompromising
41-17864 Page 2
Growing Worldwide DemandGrowing Worldwide Demand
1992LA
Riots1992Typhoo
Iniki
1992HurricaneAndrew
1994Granada
1994Restore
Democracy
1991HaitiNEO
1990Just
Cause
1991-3GTMO/HaitiRefugees
1998Hurricane
1990SierraLeoneNEO 1990
LiberiaNEO
1995Liberia
NEO
1993RwandaFamine
1993-4SharpGuard
1993-4ProvidePromise
1992-6SinalMNF
1991-6ProvideComfort
1992Able
Sentry
1992Provide
Hope1993-6DenyFlight
1994Iraqi
BorderFeint
1992-6Southern
Watch
1991Somalia
NEO
1992-4SomaliaFamine
1990-1DesertStorm
1991-2Sea
Angel I/II
1995Taiwan
Maneuvers
1991Pinatubo
Evac
1994NorthKoreaAlert
1998MidEast1998
EmbassyBombing
1998Albaina
1998Iraq
19991999E TimoreE Timore
19991999KosovoKosovo
Military OperationsMilitary Operations
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The Changing Concept of OperationThe Changing Concept of Operation
• What We have– Heavy combat emphasis– Short legs– Big targets– Slow movers– Single function– Long/heavy logistics tails– Extended deployment
timelines– Stovepipe intel– Unique hardware– Old systems
• What We Need– Broad capability– Longer range– Dispersed operation– Agile forces– Multi-dimensional platforms– Small logistics footprint– Rapid response– Integrated information– Common systems– Upgrades– Space based technology
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Fiscal Year
0
1000
2000
3000
4000
5000
6000
10
Nu
mb
er o
f A
ircr
aft
JSF90 92 94 96 98 00 02 04 06 08
F-14
F-22F-22F/A-18E/FF/A-18E/FF/A-18C/D
F/A-18A/B
AV-8BA-6
F-16
F-15
F-111
F-117
F-4A-10
Today
1000New Systems
10001000New SystemsNew Systems
4200Aircraft42004200
AircraftAircraft
Department of Defense TacAir InventoryDepartment of Defense TacAir Inventory
Focus of O&S ImprovementsFocus of O&S Improvements
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Tank and IFV Inventory
Fiscal Year
90 92 94 96 98 00 02 04 06 08 10
Nu
mb
er o
f V
ehic
les(
K)
M2A4M2A4M2A3M2A3
M1A3M1A3M2ODSM2A2
M2A1
M2A0M1A2
M1A1
M1A0
M60
0
2
4
6
8
10
12
14
16
18
20
16,000Tanks &IFV(s)
16,00016,000Tanks &Tanks &IFV(s)IFV(s) 3000
NewSystems
30003000NewNew
SystemsSystems
Today
Focus of O&S ImprovementsFocus of O&S Improvements
Focus on After Market/MTSFocus on After Market/MTS
LM Boeing (MD) Bell-Boeing Boeing Boeing (MD) Boeing (MD) LM (NG) ???Major sub LM (NG) Sikorsky Boeing LM (NG) Boeing B/MD or LM?Engine Allison T 406 ASA T800 P&W F119 GE F404 P&W JT3D-3B P&W or GEQty QDR(Projected)
120 375 1292 800 remanuf. 335 550 35 3500+
Budget(2000 – ON)
$43B $20B+ $25B+ $9B $50B $25B $12B $150B+
MIL A/C Production Beyond 2000MIL A/C Production Beyond 2000
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U.S. Restructuring - Major FirmsU.S. Restructuring - Major Firms
Bath Iron WorksBath Iron Works
General DynamicsGeneral Dynamics
GE AerospaceGE Aerospace
Martin MariettaMartin Marietta
LockheedLockheed
LoralLoral
LTVLTV
GrummanGrumman
NorthropNorthrop
WestinghouseWestinghouse
BoeingBoeing
RockwellRockwell
McDonnell DouglasMcDonnell Douglas
MagnavoxMagnavox
HughesHughes
E-SystemsE-Systems
RaytheonRaytheon
Texas InstrumentsTexas Instruments
TRWTRW
BDMBDM
AlliedSignalAlliedSignal
HoneywellHoneywell
GeneralGeneralDynamicsDynamics
LockheedLockheedMartinMartin
Loral SpaceLoral Space
NorthropNorthropGrummanGrumman
BoeingBoeing
Hughes SpaceHughes Space
RaytheonRaytheon
TRWTRW
HONEYWELLHONEYWELL(NEW)(NEW)
NEW ADDITIONSNEW ADDITIONSComputer DevicesComputer DevicesGTE Government SystemsGTE Government SystemsNational Steel & ShipNational Steel & ShipGulfstreamGulfstream
Note: NAVESEA data includes NSWC and NUWC. Air Force data excludes SA-ALC, SM-ALC, and AMARC.Note: NAVESEA data includes NSWC and NUWC. Air Force data excludes SA-ALC, SM-ALC, and AMARC.
Source: DoD
Depot Capacity and Utilization
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Major Studies of the Acquisition ProcessMajor Studies of the Acquisition Process
3Reduce acquisition cycle time by 25%3Achieve visibility of 90% of DoD materiel assets3Reduce logistics response time by 50%3Use purchase card for 90% of all DoD micropurchases3Reduce excess inventory by $13B3Reduce paper transactions by 50%3Achieve O&S costs visibility through ABC3Dispose of $2.2B in excess National Defense Stockpile
inventories3Dispose of $3B of unneeded Government property3Achieve annual defense procurement of at least $54B
Rapidly removing barriers is key to success
NPR Goals - O&S Cost by FY2000NPR Goals - O&S Cost by FY2000
• Military Specs and Standards Reform• Single Process Initiatives• Earned Value Management Initiatives• Purchase Card• Prime Vendor Direct• Cost as an Independent Variable• Dual Use Application Program• Federal Acquisition Regulation Rewrite
– FAR Part 15 - More Communication with Industry– FAR Part 45 - Eliminate Record Keeping on Government Property– FAR Part 37 - Emphasize Performance-Based Contracting
• Department of Defense 5000.1/5000.2 - R Rewrite• Information Technology Management Reform Act• Reduced Total Ownership Cost• Centers of Technical Excellence• Teaming with Industry
– Reduced acquisition cost– Timely incorporation of latest technology– Elimination of organic depot (and
associated costs)– Improved reliability (MTBF)– Reduced Number of spares in the
logistics pipeline– Personal pride in being part of a
paradigm busting program
CONTRACTOR:• Cost:
– Contractor funds all non-recurring effort– Contractor funds cost to upgrade
hardware
• Benefits:– Reduced cost to manufacture– Increased market share– Timely incorporation of latest technology– Longer product life cycle– Contractor depot– Contractor receives timely and accurate
feedback on field problems (failures - asevidenced by units returned for repair)
– Personal pride in being part of aparadigm busting program
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Acquisition - A Complex ProcessAcquisition - A Complex Process--A Readiness and Sustainment Enabler-A Readiness and Sustainment Enabler-
Direct Vendor DeliveryLong Term Contracting
ACO PRO
CreditCards
EDI
Pre-AwardPre-AwardSurveysSurveys
InvoicesInvoices
ShipmentsShipmentsInvoicesInvoices
BidsBidsProposalsProposals
HardwareHardwareSoftwareSoftware
CONTRACTORCONTRACTOR
SustainmentSustainmentStatementStatementOf WorkOf Work
CommunicationsCommunications•• Land-Line primary Land-Line primary communications communications•• Satellite link to CONUS Satellite link to CONUS back-up communications back-up communications
LOGISTICLOGISTICSUPPORTSUPPORT
CONTRACTSCONTRACTS
Success: The Promise of E-CommerceSuccess: The Promise of E-Commerce
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Toward PaperlessToward Paperless
Integrated Information TechnologyIntegrated Information Technology
SYSTEMSSYSTEMS PROCESSESPROCESSES
• Inbound Logistics• MRP Systems• JIT Delivery• Just Enough
Shipment TrackingProof of DeliveryInventory ManagementVendor Owned InventorElectronic CommerceElectronic DO250
Shipment TrackingShipment TrackingProof of DeliveryProof of DeliveryInventory ManagementInventory ManagementVendor Owned InventorVendor Owned InventorElectronic CommerceElectronic CommerceElectronic DO250Electronic DO250
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Inventory Instead of InformationInventory Instead of Information
CapacityCapacityBuffersBuffers
CapacityCapacityBuffersBuffers
ExpensesExpensesAssetsAssets
ROAROA
ManufacturingManufacturingPlanningPlanning
DeploymentDeploymentPlanningPlanning
++ ==
SUPPLY CHAINSUPPLY CHAINMANAGEMENTMANAGEMENT
IS ABOUTIS ABOUTINCREASING INCREASING
RETURN ON ASSETSRETURN ON ASSETS
NOT ENOUGHNOT ENOUGH
Pipeline inventory bloat not only adds cost but obscuresPipeline inventory bloat not only adds cost but obscuresopportunities for cross-partner process improvementsopportunities for cross-partner process improvements
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Better Solution: Better Solution: Collaborative Processes and TechnologiesCollaborative Processes and Technologies
–– Flexible machine languageFlexible machine language
–– Job order brokering/scheduling processJob order brokering/scheduling process
–– Demand forecasting Demand forecasting
Limited success todayLimited success today
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DoD Depot Mfg Infrastructure• Teaming for Success• E-Business• Manufacturing on demand• Maintenance & Service• Direct vendor delivery• Supply Chain Mgmt• Diverse Mfg. Complex
CompanyA
CompanyB
PrivateCompany
CompanyC
DepotX
DepotY
DepotZ
PublicDepot
NuclearReactor
Foundry
5 AxisMil
Machine
Virtual FactoriesVirtual Factories
Producing Public and Private Sector PartsProducing Public and Private Sector Parts
Declining Budgets Overhaul Variability AAN 80% Legacy Systems
Aging Fleet
Loss of Industrial Base Declining Battalion Size
Prose
Partnership to Reduce Operation and Support Cost of EnginePartnership to Reduce Operation and Support Cost of Engine
PROSE Addresses Coming Challenges
41-17864 Page 46
Health and Usage Monitoring System (HUMS)Health and Usage Monitoring System (HUMS)íí Used on foreign Military & Commercial HelicoptersUsed on foreign Military & Commercial Helicoptersíí Major Aircraft Companies use HUMSMajor Aircraft Companies use HUMSíí Monitors Major SystemsMonitors Major Systemsíí Reduces Maintenance TimeReduces Maintenance Timeíí Detects & Records TrendsDetects & Records Trendsíí Improves Fault IsolationImproves Fault Isolationíí Enables Corrective ActionEnables Corrective Action
beforebefore Damage OccursDamage Occurs
Install HUMS during production, modification & scheduledInstall HUMS during production, modification & scheduledsystem upgradessystem upgrades
Rotor-InducedRotor-InducedVibrationVibration
StructuralStructuralIntegrityIntegrity
TransmissionTransmissionDrive TrainDrive Train
HealthHealth
EngineEngineHealthHealth
HelicoptersHelicopters
41-17864 Page 47
Use Available Technology• Reduce manpower• Maintain war fighting capability
Smart Ship
Reduce Infrastructure … Improve Efficiency• Commercially available technology• Local community partnerships• Regionalized
•• DoD ChallengesDoD Challenges–– Increased reliance on microelectronics (“Smart” weapon systems)Increased reliance on microelectronics (“Smart” weapon systems)–– Decreased market share (<0.5%)Decreased market share (<0.5%)–– Increased weapon system life cyclesIncreased weapon system life cycles–– Decreased operation and support fundsDecreased operation and support funds
•• Commercial Technology Drives the MarketCommercial Technology Drives the Market–– Profit/competition has led to rapid technology advancesProfit/competition has led to rapid technology advances–– Technology obsolescence can occur every 18 monthsTechnology obsolescence can occur every 18 months
•• DoD Microelectronic Obsolescence Solutions Must Include Reality ofDoD Microelectronic Obsolescence Solutions Must Include Reality of•• Commercial EnvironmentCommercial Environment
–– Flex with commercial developmentsFlex with commercial developments–– Ensure long term DoD needsEnsure long term DoD needs
(Technology/Vendors)
41-17864 Page 49
Common SolutionDramatically decreases O&S costs!
Common ProblemCommon Problem
Source: DMEA
41-17864 Page 50
Future Growth Through TechnologyFuture Growth Through Technology
• Information Systems– Battlespace Management, Situational Awareness, Combat ID
• C41– Secure Comm., Electronic Mods and Upgrades, Intel Systems, Targeting, Small Unit
Operations (SUO)
• Platform Automation– UCAVs/UAVs– Warfighter– Health Monitoring– VMS
• Space Asset Control and Exploitation– Space Based radar– Directed Energy Weapons
• Missile Defense• Deep Precision Strike and Navigation• Simulation and Training• JSF• Light Weight Track Vehicle• Electric Power Generation• Battery Technology• Data Fusion From Multiple Sources
Holistic Support - Holistic Support - Consolidated Service ProviderConsolidated Service Provider
41-17864 Page 52
SummarySummary
• Operating tempo is steady• Weapon systems are in service life extension• Modernization dependant on TOC reductions• Vanishing vendors and obsolence are impacting readiness• Radical reform needed
– Government industry teaming– ManTech funding increase– Streamlining contracting lead time
• Stay the course on current initiatives• Industry teaming - A requirement• Profit margin increase needed
– Responsibility/risk• Competitive sourcing a reality
Warfighting is UncompromisingWarfighting is Uncompromising