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Transitioning into an Integrated Support Model (ISO)

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“Cost Principals for ISO’s” Glenn Brown Head of Qantas Aviation Services Defence Cost Estimation Conference 2011 Adelaide, South Australia Monday, 27 th June 2011. Transitioning into an Integrated Support Model (ISO).

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“Cost Principals for ISO’s”Glenn BrownHead of Qantas Aviation ServicesDefence Cost Estimation Conference 2011Adelaide, South AustraliaMonday, 27th June 2011

transitioning into an integrated support model iso
Transitioning into an Integrated Support Model (ISO)
  • Qantas started 90 years ago by 2 ex-Flying Service pilots, Fysh and McGinnis serving the Commonwealth in times of need ever since.
  • Qantas Defence Services was launched 11 years ago to streamline the ways that Qantas and Defence did business which were historically very ala carte, launched with C130H DM contract in 2000.
  • Over the decade 1 contract became 5, expanding to encompass C130, VIP Fleet, RR engines and MRTT conversion and TLS contracts, all operating successfully but separately (stove-piped).
  • Qantas Aviation Services (QAS) launched 2 major Q-Future reconsolidation projects to break down the stovepipes in Operations in GSE and Cleaning and merge large fragmented operations at the same time as QDS identified the same needs on Defence contracts…
  • LEAN analysis launched by QDS in 2009 highlighted significant inefficiencies across the various contracts, although all were compliant to contract requirements and customer (SPO) needs.
what is an iso
What is an ISO?
  • An ISO (Integrated Support Organisation) simply put is an integrated set of Operations support functions that support multiple programs, which in QDS had historically been direct charge costs to contracts (stovepiped assets).
  • ISO’s by other names are common practice in 3rd party MRO in the commercial world and in large military MRO’s that serve multiple programs/customers in common facilities.
  • The QDS ISO concept does not include G&A or BD functions, only Operational Support functions including:
    • Quality: Inspection and NDT/NDI;
    • Production/MRO Planning including IT ERP systems;
    • Procurement and Supply Chain including RI’s;
    • Shop floor control, supervision and rostering;
    • Facilities management and costs;
    • Tooling and Calibration and Technical training;
  • Allocation of the cost pool to final cost objectives is achieved by using total direct cost input base as opposed to either Direct Labour or Direct Material.
iso and mro inter relationship
ISO and MRO Inter-relationship

ISO = Back Hangar Support: Operations Management, QA, IT, Planning, Logistics, Supply Chain, Labour Rostering, Training, NDT


  • New Deeper Maintenance Projects:
  • Rotary Wing MRO





Fixed cost of facilities

Savings to Commonwealth come from fuller utilization of support personnel and facilities creating economies of scale and greater labour and overhead efficiency.

transition issues
Transition Issues
  • Existing contracts will only be converted to an ISO service support concept if agreed to by the SPO’s.
  • If so desired by the SPO’s, contracts will be modified at sensible renegotiation points to avoid contract repricing.
  • Operationally accountability would follow commercial form: consistent pricing, costing and contracting methodologies.
  • SPO’s can always opt for continuation of dedicated capabilities where required. These would not be rolled into ISO cost centers or pricing and would remain as direct cost as required by customer contract and needs.
  • The ISO base would contain the direct cost input only for the contracts that are serviced by it. Contracts requiring those services to continue to be charged direct would not be subject to ISO charges. (No related costs in the pool or in the activity base).
  • Cost savings come to the Commonwealth via not paying for unused operations support capability and achieving economies of scale in those functions such as duplication of management and efficient work loading and multi-skilling, minimizing paying for standing capabilities that are poorly loaded and sub-optimal.
  • Servicing the customer’s needs will be key to success to keep SPO’s happy.