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Performance-Based Logistics

Status Report2 March 2004

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• Availability of parts• High maintenance levels• Retention/turnover of

maintenance personnel• Large maintenance/supply

footprint

Operational Challenges

Integrated strategy to achieve end-to-end accountability for weapon system support that meets transformation goals and requirements.

Structural Challenges

Weapon System Support Challenges

• Equipment designed to 75-85% availability

• Disjointed acquisition and logistics processes and accountability

• $67B per year in cost; no link to output

• Disjointed, functional support structure

• 16-day CWT for high priority parts• 50% of cost tied to maintenance;

vast majority at O&I level• Aging organic depot infrastructure

• Will not support rapid force projection

• Large footprint(people and equipment)

• Complex, disjointed logistics chains

• Limited asset visibility

Implications for Transformation

• Total Life Cycle Systems Management

• Performance-Based Logistics

• Depot Partnering• Conditioned-Based

Maintenance +

Mid-Term Solutions

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30 PilotPrograms DoD 5000

Policy

Oversight viaDAB/DAES

New programimplementation

OperationalDemonstrations

LessonsLearned

Adjustments

Oversight viaR-TOC Forum

ReengineerProduct Support

Quadrennial Defense Review• Performance-Based Logistics• Legacy Systems• FY03 DPG• Service Implementation Schedules

Performance-Based Logistics

A joint, disciplined program to successfully implement PBL!

JACG

• CY02/03 PEO/SYSCOM• PM Roundtables• AIA Product Support• Industry/Government

Tiger Team

04pm13-4Providing operational availability; not parts.

Future System Sustainment

Partnerships Force Provider

Weapon SystemManager

Visibility into cost/risk decisions across life cycleAcquisition

Provide continuous,reliable, affordable

support

Ensure system issustained at optimum

level

Disposal

Performance Agreement

Sustainment

Industry/GovernmentPerformance-

Based Logistics

Real-TimeSystem Status

(CBM+)

Performance Agreement

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PBL FY03 Accomplishments• Policy and workforce

development in place

• Program migration on schedule

• Documented $15B in savings in PBBE 05

• Demonstrated best in class readiness during OIF

• Initiated PBL Roadshows

• Established Logistics Community of Practice (DAU)

• Completed DBB Review

57

71

8592

0102030405060708090

100

2002 2003* 2004* 2005** Projected PBLs Based on Approved Service Plans

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BL

Pro

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PBL Implementation

57

71

8592

0102030405060708090

100

2002 2003* 2004* 2005** Projected PBLs Based on Approved Service Plans

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PBL Implementation

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0

2

4

6

8

10

12

14

1999 2000 2001 2002 2003

Logistics Response Time*

Day

s

Calendar Year*National level fills,

all requisitions

PBL programs providing significantly improved response times.

•F-117•HIMARS

•MCRS

•F-18 E/F•APU

•C-17•Sentinel

PBLPrograms

(To date)

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Aircraft And Equipment Pre-PBL and PBL Logistics

Response Times (LRT’s) Availability Improvements

F/A-18 Stores Management System (SMS)

Pre - PBL LRT = 42.6 Days PBL LRT = 2 Days CONUS

7 Days OCONUS

ARC-210 Pre - PBL LRT = 22.8 Days PBL LRT = 5 Days

ARC-210 Pre - PBL LRT = 22.8 Days PBL LRT = 5 Days

Tires

Pre - PBL LRT 28.9 Days PBL LRT = 2 Days CONUS

4 Days OCONUS

F-14 LANTIRN

Pre - PBL LRT = 56.9 Days PBL LRT 5 Days

H-60 Avionics Pre - PBL LRT = 52.7 PBL LRT = 8 Days

H-60 Avionics Pre - PBL LRT = 52.7 PBL LRT = 8 Days

APU Pre-PBL = 35 Days PBL PBL LRT = 6.5 Days

PBL Logistics Response Time

Achieving Commercial Standards through PBL.

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JSTARS B-2

F-117

AWACSCommon Ground Station

C-17

F/A-18 E/F

* PBL programs readiness exceeded traditional support; several achieved historically high availability!

Programs Contributing to GWOT*

Delivering

Capability NOW!

Delivering

Capability NOW!

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GWOT PBL Results

Availability on DemandAvailability on Demand

F-117 FA-18E/ F AV-8B F-14D F-15C/ E F-16C

Figure 1 – PBL programs achieved readiness during OIF

0102030

4050

6070

8090

100M

issi

on

Cap

able

Rat

es

PBL Traditional Support

F-117 FA-18E/ F AV-8B F-14D F-15C/ E F-16C

Figure 1 – PBL programs achieved readiness during OIF

0102030

4050

6070

8090

100M

issi

on

Cap

able

Rat

es

PBL Traditional Support

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Common Ground Station

• PM is life cycle manager

• Government led PBL strategy

• Tobyhanna is product support integrator

• Deployed 30 CGS to support OIF

• Streamlined maintenance flow

• Achieved 99% Ao during OIF

• Forward-located repair activity at Baghdad International Airport

• Achieved real-time fleet management/asset visibility

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DBB RecommendationsMajor

RecommendationKey Elements

(From the DBB)Ongoing Action

1. Pursue PBL Aggressively • New and legacy system application as supported by business case

• Services on schedule for BCAs• Pending SPG language

2. Issue Standard Guidance • Consistent approach to PBL• Consistent Business Case Analysis• Consumable item manager

• BCA Tiger Team 11/7• Coordinated BCA guidelines• Updated Guidebook

3. Reform financial and contract management

• Move toward a single manager• Seek funding flexibility and multi-year authority

• Management Improvement Directive

4. Leverage DAU to accelerate PBL implementation

• Create PBL Center of Excellence• Partner with industry to share lessons learned• Create Exportable teams to assist PM offices

• Ongoing at DAU• Ongoing via LOGCOP and AIA• Roadshows emerging via DAU

regional centers

5. Increase exposure to private sector practices

• Expand AF education with industry• Leverage Defense Corporate Fellows Program to

include supply chain assignments

6. Change structure/culture of PM office

• Create a central “log provider” entity to coordinate all logistics activity for the PM

• Streamline program offices based on the F-117 and FCS models

• Review PM assignments for applicability of civilian PM

• Specify tenure for Deputy PM for Logistics• Enforce Congressional mandate to keep military PMs

in place for 4 years

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• Joint Strike Fighter

• Future Combat System

• Advanced Amphibious Assault Vehicle

Weapon System Sustainment Roadmap

Historic• Suppressed Readiness• Marginal reliability• Fractionated Accountability• $67B/year• Huge footprint

• Warfighter-driven readiness

• Ultra-reliability• Clear PM

accountability• Minimal

Footprint

PM accountable for life cycle

JROC established sustainment requirements

Enabling Depot legislation

Revised Maintenance Policy

Industry Supply ChainsReengineered Training

Financial Reform (PR05)Single-line AccountingLife Cycle Cost

Management• Operational requirements

synchronized with PBBS

2000 2005 2015

57

71

8592

0102030405060708090

100

2002 2003* 2004* 2005** Projected PBLs Based on Approved Service Plans

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BL

Pro

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PBL Implementation

57

71

8592

0102030405060708090

100

2002 2003* 2004* 2005** Projected PBLs Based on Approved Service Plans

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BL

Pro

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PBL Implementations

0

5

10

15

20

25

30

35

40

45

Army Navy Air Force Marines

1998 2002

Num

ber

Number of Partnerships(1998 & 2002)

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FY 04 PBL Acceleration• Strategic Planning Guidance

– Directs assessment of PBL at system level for all ACAT I and II programs

• Management Initiative Directive– Lead programs for single-line accounting

• OSD Special Interest Programs– Application of commercial supply chain practices

• Weapon System Support Metrics– Implemented via Logistics Balanced Scorecard

• Government/Industry Tiger Team– Monthly meeting to eliminate barriers

04pm13-14

Still On Schedule!!

5000 Series Updates

FY02

TLCSM WG

FY03 FY04 FY05

Revised WSM Logistics Curriculum

TLCSM WG

ServicePBL Schedules

JROCAdjustments

PBL Road Ahead

Enabling Financial Mechanisms

Workforce Development

Program Transition per Service Schedules

04pm13-15

FIELDED CURRENT FUTURE

• Transaction-based • Fractured Supply Chains• Random Failures• Batch Process orders• Limited Accountability

• Performance-Based• Integrated Chains• Fleet Management• Integrated Systems• PM Accountability

• Capability-Based• Industrial Integration• Autonomic Logistics• End-to-End Solutions• Single-Line Accounting

F-18 C/D

DDG

BRADLEY

F-18 E/F

LPD-17

Stryker

JSF

DDX

FCS

2000 201016 days 5-8 days 1-5 days

We Must . . .

ResponseTime:

. . . therefore, we will!!