Hot Topics in DoD Logistics

2017 PSM Workshop 1

Kristin K. FrenchActing Assistant Secretary of Defense

Logistics and Materiel Readiness

June 6, 2017

Hot Topics

• FY 2017 NDAA Re-organization

• Sustainment Planning

• Lifecycle Sustainment Plan (LCSP)

• Supply Chain Risk Management

2017 PSM Workshop Life Cycle Sustainment Planning and the LCSP 2

FY 2017 NDAA Re-organization

3

USD

(Intel)

USD

(Policy)

USD

(Compt.)

SECRETARY OF DEFENSE

__________________DEPUTY SECRETARY

OF DEFENSE

USD

(Personnel & Readiness)

USD

(Acq, Tech, and Log)

ASD

(Acquisition)

ASD

(Nuc. Chem. Bio Defense)

ASD

(Research & Engineering)

ASD

(Log & Mat. Readiness)

ASD

(Energy, Inst., & Env.)

USD

(Intel)

USD

(Policy)

USD

(Compt.)

SECRETARY OF DEFENSE

__________________DEPUTY SECRETARY

OF DEFENSE

USD

(Research & Engineering)

USD

(Acq & Sust.)

USD

(Personnel & Readiness)

FY 2017 NDAA Sec. 901. Effective February 1, 2018

ASD*

(??)

ASD*

(??)

ASD*

(??)

ASD*

(??)

Current Organization of the Office of the Secretary of Defense

*Number of ASDs TBD2017 PSM Workshop

SECDEF #1 Priority: Readiness

4

“Readiness and modernization have also been casualties of reduced funding in a threat environment that demands continued engagement.”Secretary of Defense Jim Mattis

Advance Policy Questions, 2017

2017 PSM Workshop

Why Plan for Sustainment?

2017 PSM Workshop 5

O&S

Savings

Benefit of Life

Cycle Planning

Sustainment Planning Goals

• Control cost drivers to

deliver improved service

and reduced cost

• Manage life-cycle cost

drivers

• Implement sustainment

efficiencies

Sustainment Curve Absent Planning

Early Sustainment Planning = Overall Life Cycle Savings

Co

st

SDD LRIP Production Sustainment

Acquisition Cost

~ 30% of Life Cycle Cost

Traditional Sustainment Cost

~ 70% of LCC

Cost Drivers

• Poor Reliability

• Poor Maintainability

• Inefficient Supply Chain

• Organizational Redundancy

• Obsolescence

• Manpower

Sustainment Planning Across the Life Cycle

2017 PSM Workshop 6

•Defined Metrics and test methods

•Support structure defined

• Execution plan established

• LCSP fully defined

• Product support package requirements defined

• Metric verification methods established

IOCA

Systems Acquisition SustainmentPre-Systems Acquisition

Operations & Support

B

Technology Maturation &

Risk Reduction

Engineering and Manufacturing Development

Production & Deployment

C FOC

LRIP/IOT&E

MaterielSolutionAnalysis

● Assess preliminary materiel solutions

• Identify key technologies

• Notional maintenance concept

• Est. LCC

• Initial plan for sustainment

• Set Metrics Goals & thresholds

• Should Cost initiatives to reduce expected cost drivers

LCSP Evolves and Matures Across a System’s Lifecycle; the LCSP Changes to Reflect the System’s Phase

•LCSP is stand alone

•Metrics tracked & adjustment plans established

AoA

LCSP Must Align With Other Major Acquisition Documents

Acq Strat, SEP, PPP, TEMP

7

AT&L Product Support Guidance

How do I plan for product support?

What do I need to consider?

PPP

Guidebook

Partnership

development

(October 2016)

PBL Guidebook

Performance Based

Strategy &

Arrangements

(April 2016)

BCA Guidebook

COA analysis

process

(February 2014)

O&S Cost Mgt.

Guidebook

Cost guidance

(February 2016)

What needs to be done for planning product

support?

(I)LA Guidebook

Logistics

Readiness

Assessment

(July 2011)

MIL- HDBK-502A

Supportability

Analysis Process

(March 2013)

RAM-C

Guidebook

Design for

Supportability

(June 2009)

PSM Guidebook

Product Support,

management and

reference

(April 2016)

Where do I document

my planning efforts?

DoDI 5000.02

February 2017

Overarching acquisition

direction

Defense Acquisition Guidebook

February 2017

Acquisition guidance

Chapter 4, specific to Life Cycle Logistics

Life Cycle Sustainment Plan Outline

January 2017

Documentation of sustainment planning

Additional Guidance documents to supplement Product Support Planning:

DoD Supply Chain Risk Management (SCRM)

• We work in a hostile environment !!

• As supply chain managers, mitigating risk is what we do… everyday

• Multiple vulnerabilities and risks to consider (all are intertwined)

• As we look to the future• What do we mean by SCRM? Are our definitions the same?

• Where do lines of responsibility lay? What is in my basket of concerns as a non-IT functional community?

• How do we prioritize our vulnerabilities and risks?

• How do we know we’re successful?

2017 PSM Workshop 8

Suppliers Your Organization Customers

Supplier Performance

Supply Chain Disruption

Supplier Environ. Risk

Market Dynamics Risk

Disaster Risk

Political/Country Risk

Supplier Financial Risk

Regulatory Risk

Operational Risk

Technical Risk

Financial Risk

Legal/Regulatory Risk

Environmental Risk

HR/Health and Safety Risk

Financial Risk

Distribution Risk

Relationship Risk

Brand/Reputation Risk

Product Liability Risk

Environmental Risk

Questions?

2017 PSM Workshop Life Cycle Sustainment Planning and the LCSP 9

Backup

2017 PSM Workshop Life Cycle Sustainment Planning and the LCSP 10

LCSP Content

2017 PSM Workshop Life Cycle Sustainment Planning and the LCSP 11

LCSP Outline 2.0 (January 2017)

1. Introduction

Purpose, scope, focus and objective

2. Product Support Performance

Metrics, their values, and measurement over time

3. Product Support Strategy

Strategy (maintenance & supply chain) and what drives it, product support arrangements

4. Program Review Issues and Corrective Actions

Results from Independent Logistics Assessments, Program & Design reviews

5. Influencing Design and Sustainment

6. Integrated Schedule

Sustainment related events

7. Cost and Funding

O&S cost estimates, cost drivers, Should Cost Initiatives, Affordability, Budget

8. Management

Organizational structure & management construct

9. Supportability Analysis

Design Interface & determining Product Support Elements

LCSP Annexes

The LCSP is a framework

allowing programs to think

through a set of integrated

sustainment planning

factors

Effective and affordable sustainment is achieved through careful planning

Key Stakeholders

Product Support Manager, Program Manager, and Program Executive Office

Warfighter, Training and Operational Commands Readiness requirements, performance-based agreements

Service/Defense Acquisition Executive Executable and affordable programs

Systems Engineering Executable sustainment requirements

Resource Sponsor

Funding to execute

Sustainment Providers- Organic and Industry

Depot maintenance partnering agreements

Transportation arrangements

Warehousing

2017 PSM Workshop Life Cycle Sustainment Planning and the LCSP 12

The LCSP requires input and buy-in from multiple stakeholders in both acquisition and sustainment.