COLLINS PROGRAM UPDATE AUSTRALIAN BUSINESS DEFENCE INDUSTRY UNIT 13 - - PowerPoint PPT Presentation

SLIDE 1

AIR VICE MARSHAL CHRIS DEEBLE

PROGRAM MANAGER COLLINS & WEDGETAIL

COLLINS PROGRAM UPDATE

AUSTRALIAN BUSINESS DEFENCE INDUSTRY UNIT

13 JUL 2012

SLIDE 2

SLIDE 3

What happens when you get it wrong!

OPERATIONAL CYCLE plus OPERATIONAL AND INTERMEDIATE MAINTENANCE

WORK NOT UNDERTAKEN REDUCED RELIABILITY

TECHNICAL AND INTEGRITY MAY BE COMPROMISED OPERATIONAL REQUIREMENTS NOT MET

INCREASING COST OF OWNERSHIP

LOSS OF GOVERNMENT AND PUBLIC CONFIDENCE SYSTEM AVAILABILITY

Depot Maintenance Depot Maintenance

ABILITY TO FURTHER ENHANCE THE CAPABILITY IS COMPROMISED

SLIDE 4

Getting Sustainment Right for CCSM

Depot Maintenance OPERATIONAL CYCLE plus OPERATIONAL AND INTERMEDIATE MAINTENANCE

ILS PLANNING BASE AND DISCIPLINES MAINTENANCE

• TECHNICAL INTEGRITY ASSURANCE
• RESPONSIBILITY, ACCOUNTABILITY AND

AUTHORITY DEFINED

• MAINTENANCE SCHEDULE UNDERSTOOD
• MAINTENANCE PLANS ESTABLISHED
• RELIABILITY, AVAILABILITY &

MAINTAINABILITY DISCIPLINES EMPLOYED TO OPTIMISE THE MAINENTANCE PLAN

• DISCIPLINED GOVERNANCE

SUPPLY SUPPORT

• SUPPLY CHAIN RATIONALISED
• SUPPLY CHAIN PRIMED
• SUPPLIES ALLIGNED WITH MAINTENANCE

PROGRAM

• OBSOLESCENCE MANAGED
• SPARES MODELS WITH FEEDBACK LOOPS
• SUPPLY CHAIN RESPONSIVE AND LEVEL

LOADED

CAPABILITY MANAGEMENT PLAN (WHOLE-OF-LIFE & WHOLE-OF-CAPABILITY) STAKEHOLDER IMPERATIVES ALIGNED INDUSTRY EFFICIENT, LEVEL LOADED AND WITH CAPACITY SUSTAINMENT FOUNDATIONS

• ENTERPRISE FRAMEWORK ESTABLISHED
• LOGISTICS SUPPORT FUNDED
• LOGISTICS PLANS IN PLACE
• MAINT REQUIREMENTS DETERMINATION

UNDERTAKEN

• LOGISTICS SUPPORT ANALYSIS COMPLETE
• INITIAL THROUGH LIFE COST MODELS

ESTABLISHED

Depot Maintenance

SLIDE 5

What has changed for CCSM?

• Rizzo and Navy CIP initiatives
• GM Submarines appointed
• ISSC signed and operative
• Budget increase $706m over the next 4 years and

>$1.6b over the decade

• New MSA developed and signed

These are game changers for the CCSM

• Coles Phase 2 report

– Enterprise perspective – Must change the way we do business across the CCSM enterprise – ISSC imperative reinforced – Setting realistic goals for CCSM availability – Must clearly articulate the benefits of what we are doing

We cannot waste this opportunity!!

SLIDE 6

Delivered thru Savings, efficiency and productivity

CCSM Program Strategy

• Safety, Reliability and Optimised

Maintenance Program

– Reliability Centred and Condition Based Maintenance

• Supply Support Reform

– Optimised Inventory – Optimised Supply Chain

• Strategic Contracts

– Performance Based and incentives for efficiency – 5 year rolling contracts – Make-Buy – Broader and sustainable industry base

• Culture Change

– Enterprise behaviours – Responsibility, Accountability and Authority – Governance

SLIDE 7

THREE BOATS AVAILABLE TO NAVY

INCORPORATION OF CAPABILITY ENHANCEMENTS AND LOTE

REFORM PROGRAM

• SAFETY, RELIABILITY

AND OPTIMISED MAINTENANCE PROGRAM

• SUPPLY SUPPORT

REFORM

• STRATEGIC

CONTRACTS

• CULTURE AND CHANGE

MANAGEMENT

ISSC TRANSITION MATURE ISSC

TRANSITION TO FUTURE SUBMARINE

GET AVAILABILITY RIGHT

CONFIDENCE CHECK POINT

RATIONALISE PROJECTS

• Recast Continuous

Improvement Projects

• Conduct Service Life

Evaluation

• Establish Diesel LBTF

10 YEAR OPERATING CYCLE AND 2 YEAR FCD FCD’s NOSE TO TAIL ONE BOAT IN FCD FOUR BOATS IN WA LEVEL LOADED ASC SA AND WA

FOUR BOATS AVAILABLE TO NAVY

SLIDE 8

10 YR OPERATING CYCLE 2 YEAR FCD ADDITIONAL OP CYCLE TRANSITION TO FSM TRANSITION TO 10 YR OP CYCLE AND 2 YEAR FCD THREE BOATS RELIABLY AND REGULARLY FOUR REDUCED COST OF OWNERSHIP $/MRD SINGLE BOAT IN FCD IMPLEMENT SLEP AND RATIONALISE PROJECTS

SLIDE 9

CCSM Strategic Contracts

CCSM CAPABILITY MANAGEMENT PLAN

NAVY CONTINUOUS IMPROVEMENT PROGRAM AND RIZZO ALIGNED TRANSFORMATION

Collins Sustainment

• Operational requirement

being met

• Logistics cost of
• wnership understood

and managed

• Drive for ongoing

efficiencies

• Whole-of-Life Whole-of-

Capability Management Plan

SAFETY RELIABILITY AND OPTIMISED MAINTENANCE PROGRAM SUPPLY SUPPORT SYSTEM REFORM SERVICE LIFE EVALUATION CULTURE AND CHANGE MANAGEMENT

FY12/13 FY13/14 FY15/16 FY16/17 FY17/18 STRATEGY FOR MSI ISSC DEVELOP MS ISSC AND CONDUCT RFT NEGOTIATE MS ISSC

MISSION SYSTEM INTEGRATOR

MSI ISSC TRANSTION PERIOD MATURE MSI ISSC PSI ISSC TRANSTION PERIOD MATURE PSI ISSC

PLATFORM SYSTEM INTEGRATOR

TRANSITION MSA MATURE MSA

MATERIEL SUSTAINMENT AGREEMENT

EXTEND EXISTING JFSRS CONTRACT

SERS TRANSITION MATURE SERS CONTRACT

DEVELOP NAVY CONOPS NEGOTIATE SERS CONTRACT

SM ESCAPE AND RESCUE SYSTEM CONTRACT

TRANSITION MATURE THALES CONTRACT

THALES SONAR SUSTAINMENT

SLIDE 10

PP2 YR3 PP2 YR4 PP2 YR5 TP YR1 TP YR2 PP1 YR1 PP1 YR2 PP1 YR3 PP1 YR4 PP1 YR5

Transition Period Performance Period 1 Performance Period 2 TCE Re-set for PP2 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

ISSC Contracting model

TCE Agreed for PP1 TCE Re-set for PP3 Cycle continues until 2031 (Planned LOT)

SLIDE 11

PP2 YR3 PP2 YR4 PP2 YR5 TP YR1 TP YR2 PP1 YR1 PP1 YR2 PP1 YR3 PP1 YR4 PP1 YR5

Transition Period Performance Period 1 Performance Period 2 TCE Re-set for PP2 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 TCE Agreed for PP1 TCE Re-set for PP3

TCE Reset

Required ‘Mature’ Performance Levels 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Actual Cost Performance

Cost Saving Cost Overrun

50:50

50:50

TCE

Integrated ISSC Cost Model

Drive for continuous improvement and efficiencies

PAIN GAIN

BCE TCE Set

Moderated by Performance Framework

SLIDE 12

PP2 YR3 PP2 YR4 PP2 YR5 TP YR1 TP YR2 PP1 YR1 PP1 YR2 PP1 YR3 PP1 YR4 PP1 YR5

TransitionPeriod Performance Period 1 Performance Period 2 TCE Re-set for PP2 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 TCE Agreed for PP1 TCE Re-set for PP3

Re-assess PMF

Required ‘Mature’ Performance Levels ‘Transitional’ Performance Levels 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Actual Performance

Superior Performance Poor Performance

X%

X%

PROFIT

Integrated ISSC Performance Model

SLIDE 13

PP3 YR3 PP3 YR4 PP3 YR5 PP2 YR3 PP2 YR4 PP2 YR5 TP YR1 TP YR2 PP1 YR1 PP1 YR2 PP1 YR3 PP1 YR4 PP1 YR5

Transition Period Performance Period 1 Performance Period 2 TCE Re-set for PP2 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 TCE Agreed for PP1 TCE Re-set for PP3

CCSM Program Operational and Saving Goals

Performance Period 3

10 YEAR OPERATING CYCLE AND 2 YEAR FCD

CN10 $540-570M $90-95M per CCSM pa CN10 $450-480M $75-80M per CCSM pa CN10 $300-360M $50-60M per CCSM pa

Saving levers

• Optimised

Maintenance program

• Optimised Inventory
• Optimised Supply

Chain

• Strategic PB based

contracts

• Culture Change

NOTE Cost modelling and benchmarking underway to verify

3 BOATS RELIABLY, MORE REGULARLY 4

2 BOATS RELIABLY, OCCASIONAL 3

4 BOATS RELIABLY

COST AVAIL

OPTIMISED INVENTORY OPTIMISED SUPPLY CHAIN OPTIMISED MAINTENANCE PROGRAM

SLIDE 14

Australian Submarine Enterprise Performance Goal

TP1 TP2 PP1 PP2

Drive to understand true Logistic Cost of Ownership through Continuous Improvement Minimise cost Minimise Downtime Maximise Utility

800 450

$/MRD

FY 14/15 FY 15/16 FY 12/13 FY 13/14

SLIDE 15

Australian Submarine Enterprise Initiatives

FY 14/15 FY 15/16

MRD Target

800 450

$/MRD

• Enterprise initiatives
• Safety, Reliability and Optimised

Maintenance Program

• Whole-of-Submarine safety case
• Rizzo reforms – Maintenance Engineering
• Reliability Centred and Condition Based

Maintenance

• Supply support reform
• Logistics Support Analysis
• Optimised Inventory
• Optimised Supply Chain
• Strategic Contracts
• Make – Buy Discipline
• Performance Based Incentive Contracts
• 5 year rolling contracts
• Productivity Improvement
• Labour utilisation and efficiencies
• Culture Change
• Responsibility, Accountability and Authority

clarity

• Outcomes focussed and performance driven
• Enterprise Governance
• Benchmarking

FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 12/13 FY 13/14

SLIDE 16

ISSC Performance Measure Hierarchy

Safety KRA Availability KRA Reliability and Quality KRA Maintainability KRA Supportability KRA Cost KRA

KPI-01: Days Late from Maintenance Availability (DLMA)

Performance Fee Profit Payment Period

KPI-02: Adjusted Schedule Performance Index (ASPI)

Performance Fee Profit Payment Period

KPI-03: Mission System Availability (MSA)

Performance Fee Profit Payment Period

KPI-04: Post Maintenance Availability URDEFs

Performance Fee Profit Payment Period

KPI-05: Priority 1 Contractor Demand Satisfaction Rate

Performance Fee Profit Payment Period

KPI-06: Priority 2 Contractor Demand Satisfaction Rate

Performance Fee Profit Payment Period

SHI-16: Maintenance Availability Work Scope Growth

Strategic Review Profit Payment Period

SHI-08: Maintenance Availability Schedule Growth

Strategic Review Profit Payment Period

SHI-09: Days Variation into Maintenance Availability – Navy (DVMA-N)

Strategic Review Profit Payment Period

SHI-18: Percentage of Organic Maintenance Compliance

Reverse Measure Monthly

SHI-10: Days Available for Maintenance

Strategic Review Monthly

SHI-19: Number & Age of Unsatisfied Priority 1 Demands

Strategic Review Monthly

SHI-15: Number of Extant Concessions

Strategic Review Monthly

SHI-11: Mean Time Between Critical Failure (MTBCF)

Strategic Review Profit Payment Period

SHI-12: Top 20 Reliability Degraders

Strategic Review Profit Payment Period

SHI-17: Top 20 Maintainability Degraders

Strategic Review Profit Payment Period

Behaviours KRA

SHI-23: Number of Non Codified Demands

Strategic Review Monthly

SHI-22: Global Demand Satisfaction Rate (DSR)

Strategic Review Monthly

SHI-21: Number of Cannibalisations

Strategic Review Monthly

SHI-13: Number & Age of Open External CARS Past Required Rectification Date

Strategic Review Profit Payment Period

SHI-25: Staff Turn Over by Region and Resource Code

Strategic Review Profit Payment Period

SHI-20: Number & Age of Unsatisfied Priority 2 Demands

Strategic Review Monthly

SHI-14: Configuration Record Accuracy

Strategic Review Profit Payment Period

SHI-04: Maintenance Availability Price Growth

Strategic Review Profit Payment Period

SHI-05: Labour Efficiency per Maintenance Availability

Strategic Review Annual

SHI-06: Top 20 Cost Drivers

Strategic Review Profit Payment Period

SHI-07: Sustainment Cost per Actual Maintenance Day

Strategic Review Monthly

SHI-01: Number of Priority 1 Safe URDEFs

Strategic Review Monthly

SHI-02: HRI 1 – 9 Safety Risks

Strategic Review Monthly

SHI-24: Number & Age of Defective Material Design Reports (DMDR)

Reverse Measure Monthly

SO-07: Responsiveness to Requests for Information

Strategic Review Annual

SO-04: Relationship with CCSM Organisations

Strategic Review Annual SO-03: Performance Culture Strategic Review Annual

SO-02: Continuous Improvement and Innovation Culture

Strategic Review Annual

SO-08: DMO Company Balanced Scorecard

Strategic Review Annual

SO-09: Make-Buy Objectives

Strategic Review Annual

SO-11: Transitional Objectives

Strategic Review Profit Payment Period

SO-06: Annual Trend of the Adjusted Performance Levels of the SHIs

Strategic Review Annual

SO-05: Annual Trend of the Adjusted Performance Levels of the KPIs

Strategic Review Annual

SHI-03: Achievement of Whole of Submarine Safety Case Milestones

Strategic Review Monthly

SO-10: Sustainable Financial Outcome

Strategic Review Strategic Review Annual Annual

SO-01: Safety Culture

Strategic Review Strategic Review Annual Annual CCSM Performance Measure Hierarchy Version 15 Dated 14 Feb 12

Legend (noting colours dependent on KRA)

Strategic Objective (SO) are annually assessed performance measure typically used to reflect long term behaviours against KRAs Key Performance Indicators (KPIs) are quarterly assessed performance measures used to reflect lag delivery of performance against specified requirements System Health Indicators (SHIs) are performance measures used to reflect a both lead and lag performance against specified requirements Type 1 Performance Measure reflects those performance measures which have existing data/ process and will require minimal resources to enable use in PMF reporting from ED. Type 2 Performance Measure reflects those performance measures which have some (partial) data/process and will require limited resources to make into a Type 1 and use in PMF reporting Type 3 Performance Measure reflects those performance measures which have no existing data/process and will require dedicated resources to make into a Type 1 and use in PMF reporting. Typically a Transition Milestone.

SHI-26: Commonwealth Approval Response Satisfaction

Reverse Measure Profit Payment Period

SHI-29: Commonwealth Achievement of end to end milestones in Maintenance Availability

Reverse Measure Profit Payment Period Type 4 Performance Measure reflects the Strategic Objectives which have yet to be reviewed in detail as at the date of this Version.

SHI-27: Commonwealth Materiel Satisfaction

Reverse Measure Profit Payment Period

SHI-28: Commonwealth Provision of Reliability / Condition Monitoring Data

Reverse Measure Reverse Measure Profit Payment Period Profit Payment Period

SHI-30: TML Accuracy

Strategic Review Profit Payment Period

Note: This diagram reflects the current state of the various performance measures represented in the Strategic Objectives (SOs), Key Performance Indicators (KPIs) and System Health Indicators (SHIs). Accordingly, this diagram will need to change through the life of the contract to reflect changes in reporting requirements and access to data including:

• a. at the completion of each Transition Milestone activity which allows the change from a Type 2 or 3 to a Type 1;
• b. after each PMF Efficacy Review; and
• c. at the completion of Type 2 activities resulting in a change from a Type 2 to a Type 1.

SLIDE 17

Managing CCSM Capability

NAVY HQ SUBFOR INDUSTRY PARTNERS

Materiel Sustainment/Acquisition Agreement In-Service Support Contract

COLLINS PROGAM OFFICE

CAPABILITY SYSTEM MANAGEMENT PROGRAM REVIEW BOARD

Deliver Capability (FIC Based) Capability Management Sea/Air

• worthiness &

safety

Understand Demand Materiel Delivery Services Supplier Management Services Integration Services Deliver Products Deliver Services Deliver Advice Performance Based Affordable Efficient

ALIGNED METRICS

SLIDE 18

CCSM Enterprise Framework

` SUSTAINMENT ENTERPRISE INFORMED CUSTOMER

What is required?

INTELLIGENT BUYER

How to buy it?

RELIABLE SUPPLIERS

How to deliver it efficiently?

ENTERPRISE BEHAVIOURS

• VALUES BASED BEHAVIOURS
• BEST FOR PROGRAM DECISIONS
• NO SURPRISES
• SHARED UNDERSTANDING AND

ALLOCATION OF RISK

• PARTNERING WITH TRUST AND

RESPECT

• RESPECT FOR KNOWLEDGE AND

EXPERTISE

• PERFORMANCE DRIVEN
• JOINT GOVERNANCE AND

DECISION MAKING

SLIDE 19

Collins Enterprise Framework

SUSTAINMENT ENTERPRISE NAVY DMO

PLATFORM AND MISSION SYSTEM INTEGRATORS

In-Service Support Contracts

ENTERPRISE MANAGEMENT FRAMEWORK

Clear lines of Responsibility, Accountability and Authority Disciplined Processes

• Baseline management
• Cost and schedule
• Management reserve

SLIDE 20

MISSION SYSTEM INTEGRATOR

Submarine Enterprise Framework

PLATFORM SYSTEM INTEGRATOR

STRONGER SUSTAINABLE INDUSTRY CAPABILITY BUY-IN COMPETE BASED ON VALUE FOR MONEY

RECOGNISE UNIQUE NATURE

(INVEST, PARTNERSHIPS

• r JOINT

VENTURES)

SYSTEM INTEGRATOR ROLE

(BEST PRACTICE)

UNIQUE NATURE COMPETITIVENESS

SLIDE 21

TEAM COLLINS Best Practice

PROGRAM PERFORMANCE

Stakeholder Integration Business Plan and Business Cases (Materiel Sustainment and Acquisition Agreements) Risks, Issues and Opportunity Management Help Needed and Independent Reviews Program Communication Leadership and Accountability

Baseline Change Management Execution & Control Schedule Financial Configuration/Technical Performance Organisation/Workforce Infrastructure

Strategic Guidance

Integrated Logistics Support

WHY USE BEST PRACTICE?

• FRAMEWORK FOR MANAGING COMPLEXITY

AND AMBIGUITY

• SETS BATTLE RHYTHM
• CREATES CONTEXT FOR DECISION MAKING
• PROVEN PROCESSES AND LESSONS

LEARNT

• PREDICTIVE AND PROACTIVE RISK

MANAGEMENT

• SETS CLEAR LINES OF RESPONSIBILITY,

ACCOUNTABILITY AND AUTHORITY

• STAKEHOLDER ENGAGEMENT – INTERNAL

AND EXTERNAL

• BREAKS DOWN STOVEPIPES
• MANAGES BASELINES

SLIDE 22

PMC&W

DG Collins Acquisition Program DG Collins Sustainment Program

Director Collins Project Engineering Director Collins Projects Director Collins Strategic Contracting Director Collins Sustainment Director Program Control Director Collins Sustainment Logistics Director Collins Commercial

• Sustainment

Collins Chief Engineer

Collins Program Strategic Planning

Director Collins Reform Program Director Collins Strategic Engagement Director Collins Analysis and Reporting Director Collins Commercial

• Projects

Collins Program - Organisation

Director SM Escape and Rescue Manager Collins Resources Director Collins Sustainment Engineering Manager

Engineering Forum

Director Collins Project Logistics

Change Control Boards Logistics IPT Commercial IPT

Escape and Rescue IPT

INTEGRATED PRODUCT TEAMS INTEGRATED PROJECT TEAMS

+

SERVICE LIFE EVALUATION TEAM

SLIDE 23

CCSM Program Responsibility, Accountability and Authority

MONEY

WORKFORCE &OPERATING EXPENSES

DEFENCE AGREEMENTS

CN10 BUDGET

MANAGEMENT RESPONSIBILITY INDUSTRY CONTRACTS GOVERNANCE RESPONSIBILITIES

MAJORS AND MINORS MATERIAL ACQUISTION AGREEMENT MATERIAL SUSTIANMNET AGREEMENT

DGCAP

• PROJECTS
• MISSION SYSTEM

SUSTAINMENT

• MAA

MANAGEMENT

PM C&W

• CCSM PROGRAM

DGCSP

• CCSM

SUSTAINMENT

• SER SUSTAINMENT
• MSA MANAGEMENT

ACQUISTION CHANGE CONTROL BOARD PROGRAM REVIEW BOARD SUSTAINMENT CHANGE CONTROL BOARD

• PLATFORM

SYSTEM INTEGRATOR ISSC

• SERC SYSTEM

CORDINATOR

• MISSION SYSTEM

INTEGRATOR ISSC

• SONAR ISSC

COLLINS PROGRAM

SLIDE 24

CCSM Enterprise Governance Framework

PROGRAM REVIEW BOARD

DMO/NAVY/INDUSTRY PARTNERS

STAKEHOLDER GROUP CN/GMSM/CEO ASC/DoFD COLLINS SUSTAINMENT

• Change Control Board
• Risk Issues and

Opportunities Review Board

COLLINS PROJECTS

• Change Control Board
• Risk Issues and

Opportunities Review Board

Integrated Product Teams Integrated Project Teams

TEAM COLLINS

STEERING COMMITTEE SECDEF/CDF/SECFIN

WHOLE-OF- GOVERNMENT

SLIDE 25

Submarine Whole-of-Life Whole-of Capability

WORKFORCE MAJOR SYSTEMS TRAINING INFRASTRUCTURE ORGANSTION SUPPLY

SUBMARINE CAPABILITY ENABLING INPUTS TO CAPABILITY FORCE IN BEING FUTURE FORCE ENHANCED FORCE STRATEGY TO FIC BASED TASK SCHEDULE RISK

TRANSITION TO FSM DCP PROJECTS INCREASED AVAILABILITY & RELIABILITY

DOCTRINE

PLATFORM MISSION SYSTEM ESCAPE & RESCUE STRATEGIC FRAMEWORK TO MAKE DECISIONS

• GROWING CREWS
• PROJECT PRIORITIES

AND IMPLEMENTATION

• LIFE OF TYPE

CONSIDERATIONS

• TRANSITION OF

CAPABILITY

• BUILDING AND

SUSTAINING INDUSTRY BASE

OBSOLESCENCE TREATMENTS

SLIDE 26

MAKING A DIFFERENCE ‘WORKING TOGETHER TO EQUIP AND SUSTAIN AUSTRALIA’S DEFENCE FORCE’

Questions