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NAVICP Top 2 Aviation Supply Chain Concerns. Presented to the Senior Executive Partnership Round Table 10 2 May 2007. Naval Aviation Supply. NAVICP Concerns. Meet Warfighter Material Availability Expectations Decrease Customer Direct Turn Over (DTO) Backorders

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Navicp top 2 aviation supply chain concerns

NAVICP Top 2Aviation Supply Chain Concerns

Presented to the Senior Executive Partnership

Round Table 10

2 May 2007


Naval Aviation Supply

NAVICP Concerns

  • Meet Warfighter Material Availability Expectations

    • Decrease Customer Direct Turn Over (DTO) Backorders

    • Reduce Organic Depot Awaiting Parts (AWP) Levels

  • Support CNO Cost-Wise Readiness Objectives

    • Implement Ready For Tasking (RFT) Focus

    • Expand Utilization of Performance Based Logistics (PBLs)

The War On Terror And The Battle Against Cost ... We Must Win Both


Decrease customer dto backorders
Decrease Customer DTO Backorders

Backorder Breakdown

(NAVICP Managed Items)

Observations

  • DTO slice of the pie is too big

  • We must do a better job of filling outfittng / stock rqmts to prevent DTOs

  • To succeed, we must reinforce our day to day efforts on basic business

F

M

S

Outfitting

DTO

Stock


Decrease Customer DTO Backorders

The Way Ahead

Reinforce sound supply chain management practices

as part of day to day business operations

  • Continually improve requirements forecasting

  • Execute timely placement of procurements

  • Ensure on-time delivery of all due-in material

  • Pursue aggressive expediting, where required

  • Utilize intense customer collaboration to prioritize efforts

Focus

on the

Basics


End FY06

Current

% Change

Metric

East

2105

2312

9.8%

Total Comps in AWP

772

975

25.8%

Comps > 150 days

693

758

9.4%

Comps w/ BBs

South

East

558

781

40.0%

Total Comps in AWP

149

273

83.2%

Comps > 150 days

164

278

69.5%

Comps w/ BBs

South

West

616

711

15.4%

Total Comps in AWP

118

317

169.0%

Comps > 150 days

162

227

40.1%

Comps w/ BBs

Reduce Organic Depot AWP

Fleet Readiness Center AWP Scorecard

FRC

Bottomline: Need To Reduce The Negative Trends


Reduce organic depot awp
Reduce Organic Depot AWP

What We're Doing

  • Continue aggressive interface with FRC-Ds / DLA

    • Validate requirements, target expediting, and discuss select inhibitors

    • Focus on AWP with BBs, overaged AWP, and AWP with single downers

    • Review growth in local purchase/local manufacture requirements

    • Reinforce process discipline and reconcile data bases

    • Conduct DLA site visits; ICP AWP Summit; Business meetings

    • Assemble and disseminate “AWP report card”

  • Develop AWP Entitlement metric

    • NAVICP developing with DSCR, FRC-D supply/production reps, NAVAIR

    • Entitlements set by site, based on historical induction rates, budgeted delay time


Implement Ready for Tasking (RFT) Focus

RFT Overview

  • RFT Defined: ”The right readiness, at the right time, at the right cost”

    • Amount of required readiness for any given aircraft is determined by mission

    • RFT replaces traditional Full Mission Capable (FMC) standard... ”Aircraft and all mission systems ready at any given time”

  • RFT creates some Initial Support Challenges

    • RFT is dynamic...must be defined for each T/M/S and each mission...effort is in its infancy

    • Virtually all current metrics are based on FMC standard...RFT will demand revised metrics to properly focus support efforts

Paradigm Shift From “Readiness At All Costs” To “Cost-wise Readiness”


Implement Ready for Tasking (RFT) Focus

Current Effort

  • The Naval Aviation Enterprise (NAE) is working three FY07 goals to support RFT attainment

    • Achieve necessary RFT gap closure

    • Identify and prioritize systems degrading RFT

    • Improve reliability of RFT degraders

Right readiness, right time

RFT Availability (E-2C)

RFT Entitlement

RFT Gap

Degraded RFT

Actual RFT


# days

contribution

to RFT gap

Other(Non-

PDS-ESM, 0.11

RAM/RBM), 0.07

Engine/ Power

IFF Interogate, 0.15

Plant, 0.80

CEC, 0.17

JTIDS (Link 16),

0.23

UHF/HF Radio,

Propellers, 0.46

0.23

Radar, 0.68

Flight Controls,

0.45

Airframe, 0.33

Other NRBA

Systems, 0.44

Landing Gear, 0.26

Inspections, 0.10

Elec. Pwr. Sup. &

Navigation/Insts.,

Light, 0.26

ECS/Pneum. Sys.,

0.18

0.25

Implement Ready for Tasking (RFT) Focus

E-2C Example


Expand Utilization of PBLs

The Essence of PBLs

  • What we buy:

    • Comprehensive performance package... not individual parts

  • Value Proposition:

    • Substantially improved performance at less than or equal to cost

  • Why they work:

    • Government sets performance, establishes long-term fixed price relationship ... Fixed price "pay for performance" contract motivates vendor to reduce failures / consumption

    • Long term commitment enables vendor to balance risk vs. investment

Vendor asked to provide

superior performance

at no additional cost

A Reengineering Tool To Improve Readiness Through Improved Reliability And Better Availability


Expand Utilization of PBLs

PBL Program Performance

Availability

Reliability

Inventory Reduction

H-60 FLIR ... 40% increase

ALR-67 (v)3 Radar Warning

Receiver- 53% increase

Aviation Tires ... - Wholesale Inventory

reduced by 90%

- Plane-side inventories

reduced by 66%

F/A-18 SMS - availability

was 65% ... now 98%

ARC - 210 Radio –

availability

was 70% ... now 85%

APU - availability was

70% ... now 95%

F404 engine availability

was 43% ... now 99%


Expand Utilization of PBLs

Current Enterprise Objectives

PBL Cost Reduction

- Reduce the cost of PBLcontracts renegotiated inFY07 by an average of 2%

  • Reduce AVDLR costs for items supported by PBLs renegotiated in FY07

  • Support NAE cost-wise readiness goals and objectives

PBL Demand Coverage

Goal: - Increase aviation demand covered by PBL contract to 28% by the end of FY07

Benefits: - Enhance supply support at equal or lower cost - Achieve select reliability improvements

- Support NAE RFT and ACWT goals and objectives


Summary

  • NAVICP Top Priority is Meeting Enterprise Performance Expectations

as defined by

CNO Guidance and

Our Customers

while

Improving the Supply Chain

and Reducing Life Cycle Costs


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