Total Life Cycle Management Key Considerations: A Logisticians Perspective

1. Total Life Cycle Management Key Considerations: A Logisticians Perspective Southern Methodist University Dr. Russell A. Vacante, Defense Acquisition University April 3, 2008

2. Introduction to TLCSM Key Considerations When Implementing TLCSM System Engineering Interoperability Reduce Total Ownership Cost (RTOC) Supply Chain Management DoD Interpretation of Supply Chain Management Conclusion Total Life Cycle System Management

3. INTRODUCTION TLCM is an end-to-end, integrated and iterativesystem engineeringprocess Logisticians need to be involved continuously inall phasesof the total life cycle process Sound system engineering practices in the TLCM process willenhance the supply chain managementfunctionality Metrics Matter – if you can’t measure performance outcomes customer satisfaction becomes a guessing game Total Life Cycle System Management (TLCM)

4. System Engineering Key Consideration #1 What is it? What it does? How to do it?

5. What Is The Systems Engineering Process? Transformsrequirements into a system architecture through an iterative and recursive design & development process Integrates performance, reliability, maintainability, supportability, survivability, and other design goals into the system Disciplined approachused to assure process compatibility & product (hardware & software) interoperability Ensurescompliance with design throughout life

6. Develops atotal systemdesign solution Integrate all life-cycle requirements Balance cost, schedule, performance & risk Technical discipline throughoutlife cycle Generates and tracks technical information needed for decision making Ensures essential technical things get done Verifies technical solutions satisfy requirements Why use the SE Process?

7. Who uses the SE Process? • Government (DoD) • Defense Industry • You • Others

8. SE Process Supportability Inputs • Available ? • Reliable ? • Maintainable ? • Deployable ? • Sustainable ? • Affordable (Support Cost) ?

9. Introduction to System Engineering 4’ 8.5”

11. 2005 Chevrolet Corvette

12. Design Solution • Transforms the architecture (functional to physical) • Each part/task must meet at least one functional architecture requirement • Any part/task can meet more than one requirement • Define alternative system concepts, configuration items & system elements • Select preferred product and process solutions • Define/refine physical interfaces (internal/external)

13. Logistician’s Role in Design Solution Includes: • Identify & design support tasks • Determine support resources • Develop support products & processes • Maintenance, Supply, and Training Plans • Technical Publications, etc • Define & implement PBL support environment

14. Develops a total system design solution Balances cost, schedule, performance, & risk Integrates all life-cycle requirements (cradle to grave) Provides technical discipline throughout the life cycle Ensures essential technical activities get done Generates, tracks, and archives technical data needed for decision making Verifies technical solutions satisfy need What the SE Process Does

15. SE in the Defense AT&L Life Cycle Management Framework https://acc.dau.mil/ifc

16. Design System Engineering in SDD V System level SVR System-level design requirements SFR Configuration items Fabricate, integrate & test TRR Decomposition Item level design requirements Synthesis PDR Assemblies Design requirements complete Components CDR

17. System Engineering in SDD SVR PRR Combined DT&E/OT&E/LFT&E Demonstrate System to Specified User Needs & Environmental Constraints Interpret User Needs, Refine System Performance Specs & Environmental Constraints Trades Trades SRR Develop System Functional Specs & System Verification Plan System DT&E, LFT&E & OAs Verify System Functionality & Constraints Compliance to Specs SFR TRR Evolve Functional Performance Specs into CI Functional (Design to) Specs and CI Verification Plan Integrated DT&E, LFT&E & EOAs Verify Performance Compliance to Specs PDR Evolve CI Functional Specs into Product (Build to) Documentation And Inspection Plan Individual CI Verification DT&E CDR Fabricate, Assemble, Code to “Build-to” Documentation

18. Supportability Analyses Tailored application of engineering efforts during acquisition, to identify/solve logistics issues through iterative SE process of definition, synthesis, tradeoff, test & evaluation LOGISTICS MANAGEMENT INFORMATION (LMI): Documentation associated with supportability analyses Logistics Supportability Analyses LMI

19. Conceptual Design Preliminary Design Detailed Design & Development Production Sustainment Determine Logistics Support Requirements Design for Sustainment Acquire Logistics Support Provide Life Cycle Logistics Support Deactivation Logistics Life Cycle

20. Interoperability Key Consideration #2 Interoperability is the ability of independent systems to exchange meaningful information and initiate actions from each other, in order to operate together to mutual benefit. In particular, it envisages the ability for loosely-coupled independent systems to be able to collaborate and communicate. Ref. ISO/IEC 21000-6 Dictionary

21. Interoperability • Joint Pub 1-02 • (DoD–NATO) The ability of systems (units, or forces) to provide services to and accept services from other systems, units, or forces and to use the services so exchanged to enable them to operate effectively together. • (DoD only) The condition achieved among communications–electronics equipment when information services can be exchanged directly and satisfactorily between them and/or their users. The degree of interoperability should be defined when referring to specific cases.

22. Interoperability is essential in the modern domestic/military environment. Standardizationis essential for interoperability. Commonality is one outcome of standardization. Standardization and commonality can make logistics support more effective, less costly, easier, and faster. Standardization and commonality can improve readiness, availability, and reliability and supportability Interoperability, Standardization, & Commonality

23. Compatibility is something less than interoperability. Compatibility means systems or units do not interfere with each other’s functioning. Itdoes notimply the ability to exchange services. Interoperability & Compatibility Interoperable systems are by necessity compatible, but the converse is not necessarily true.

24. Although interoperable systems can function independently, an integrated system loses significant functionality if the flow of services is interrupted. Interoperability and Independence An integrated family of systems must be interoperable, but interoperable systems need not be integrated.

25. Interoperability lies in the middle of an “integration continuum,” somewhere between compatibility and full integration. Interoperable Fully Integrated Compatible Integration Continuum Interoperability, Compatibility, & Integration

26. Mitigation opportunities New systems will need to be interoperable Modifications to existing systems will need to enable interoperability. New acquisitions and contracts will need to include interoperability and address standardization and parts management. Standards are needed to ensure interoperability between the newest technical systems and legacy systems. Addressing 21st Century Interoperability Requirements

27. Reducing Total Ownership Key Consideration #3

28. Life-Cycle Cost Effectively Cumulative Rendered Unchangeable For a Given Design Percent of Life-Cycle Cost Life-Cycle Cost Actually Expended Early Decisions Affect Life-Cycle Cost 100 90 80 70 50 System Life-Cycle 10 Milestones A Out of Service

29. Aircraft Total Ownership/Life Cycle Cost Composition Source: http://www.ncca.navy.mil/resources/ncca_strategic_business_plan.pdf

30. Uses of LCC: Input to Acquisition Decision Source: Money Magazine 3/96 LOWEST LCC 5 YR LCC CLASS VEHICLE ACQ COST <$20k Honda Civic CX $13,065 $18,451 $20,000 $20-25K Acura Integra LS $28,564 $25-35k BMW 323I $28,800 $33,658 HIGHEST LCC CLASS VEHICLE ACQ COST 5 YR LCC <$20k Cutlass GLS $19,715 $31,517 $20-25K Pontiac Firebird Formula $23,065 $38,077 $25-35K SVT Mustang Cobra $31,470 $45,887 life-cycle Costs based on depreciation, financing, insurance, maintenance, repairs, registration fees, and fuel costs.

31. Supply Chain Management Key Consideration #4 A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as the manufacturer, the supply chain includes all functions involved in receiving and fulfilling a customer request. These functions include, but are not limited to, new product development, marketing operations, distribution, finance, and customer service. Source: Chopra and Meindl A basic supply chain consists of a company, and immediate supplier, and an immediate customer directly linked by one or more of the upstream and downstream flows of products, services, finances, and information…An ultimate supply chain includes all the companies involved in all upstream and downstream flows of products, services, finances, and information from the initial supplier to the ultimate customer Source: Mentzer Supply chain management is the integration of business processes—from the end user through the original suppliers—that provide products, services, and information that add value for the customer. Source: Council of Logistics Management A supply chain consists of organizations involved in the management of flows of products, services, and information. Source: Anderson, Britt, and Favre

32. Separately Managed Logistics Processes Raw Material Transportation Storage Manufacturing Storage Distribution Retail

33. Supply Chain Management (SCM) Involves Coordinated Management of Logistics Processes Raw Material Transportation Storage Manufacturing Storage Distribution Retail • Focus on process, not function • Focus on integration and coordination of all organizations

34. Supply Chain Management Metrics Metrics are simple. If metrics require a lot of explanation and definition, then collecting data, and translating that data in to actions becomes difficult. Easy-to-understand metrics have a strong impact on the process and the people who use it.

35. Why Develop Metrics at All? • Improve your performance • Provide objective quality evidence • Measure your processes How do you know what you know?

36. Metrics A metric is a standard measure to assess performance in a particular area. A performance measure, is an indicator which conveys information on the level of success or achievement of a program or activity.

37. SMART Metrics SSpecific Specific and targeted to the area being measured. MMeasurable Accurate and complete data is collected and correlated against a standard. AActionable Allows corrective actions to be taken or maintained. RRelevant Don’t measure things that are not important! TTimely Data is available when it is needed.

38. Developing effective metrics is not easy!! SMART Metrics • Top 5 Common traps that should be avoided in developing effective metrics: • Developing metrics for which accurate or complete data can not be collected • Developing metrics that measure the right things, but cause people or the organization to act in a way contrary to the best interest of the organization (“make numbers”) • Developing so many metrics that they create excessive overhead or red tape • Developing metrics that are complex and difficult to explain • Developing metrics without defining applicable ground rules and assumptions

39. Although many current metrics provide useful information, they don’t provide senior managers with a sense of how well the supply chain is performing. Don’t measure total supply chain performance only wholesale performance. Others simply measure the implementation of an initiative without any link to the performance metrics that should indicate the resulting supply chain improvement. Not linked or correlated to one another so managers can consider important supply chain relationships. For example, reduced inventory may not be beneficial if readiness rates are declining. Supply Chain Metrics

40. Categories of SE Metrics • Metric Categories include: • Progress Metrics: • Cost/Schedule Variances • Earned Value • Status of Risk Events • Product Metrics: • Operational Availability • Mean Time Between Failure • Weight, Speed, Payload, Range • Unit cost • Process Metrics • Number of Design Changes • Cycle Time • Defect Rates • Length of Team Meetings

41. Network-Centric Warfare Global Information Grid Focused and Agile Just Enough Inventory-Based Desert Storm Today - OIF Tomorrow More is better Large amounts of material measured in days of supply Use massive inventory to overcome uncertainty in demand and supply Mass inventories slow down operational flexibility and are unaffordable Adaptive system Inventory is dynamically positioned throughout Uses transportation flexibility and modern IT to handle demand uncertainty Supports distributed, uncertain operations On-time is better Inventory is reduced to a minimum and kept moving Use demand prediction and static optimization to purge uncertainty Higher Risk Prime Metric: Speed / Time Definite Delivery Prime Metric: Days of Supply Prime Metric: Flow Time DoD Adaptation of SCM Key Consideration #5

42. Wartime & Missions Other than War Theater Activities CONUS Bases Units Posts Bases Inventory Control Points, Maintenance & Supply Depots, Other Services Units Supply, Maintenance & Transportation Activities Point of Embarkation Private Sector Suppliers, Distributors, Maintainers, Transporters Point of Debarkation D A Container Consolidation Point Distribution Points Materiel/Services Information Peacetime Intermediate Activities Consumer Activities Wholesale Activities The Logistics Process Acquisition Logistics Asset Management Materiel Distribution Materiel Maintenance Materiel Disposition Materiel Requirements DoD Structure Creates SCM Challenge

43. Actions You Can Take: ? “You can’t solve a problem with the same kind of thinking that created it” Albert Einstein

44. Questions? Russ.vacante@dau.mil 703-805-4864 “His Mother should have thrown him away and kept the stork.” -Mae West