Industrial Capability & Material Readiness
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1 Industrial Capability & Material Readiness Jim Buchanan & Steve Roadfeldt Industrial Capability & Warstopper Program Ronnie Favors Defense National Stockpile Center (DNSC)
2 Agenda Industrial Capability Readiness The Surge and Sustainment (S&S) Process Electronic Capability Assessment Plan Warstopper Program Execution Warfighter Support Strategic Material Readiness Initiatives Strategic Metal Buffer Defense National Stockpile Center 2
3 Industrial Capability & Material Readiness INDUSTRIAL CAPABILITY 3
4 Surge and Sustainment 4
5 Electronic Capability Assessment Plan System Login Select solicitation CAP data collection process report: Capability to deliver Services go to war requirements Production constraints preventing requirement delivery Opportunities and costs to mitigate constraints Summarize data Review Print Submit ecap 5
6 ecap Login Self register or Login First user Super User ecap tool access 6
7 ecap Select Solicitation Select Solicitation 1 7
8 ecap Identify Capability 2 Start Capability Assessment Offer Full Quantity Yes No 8
9 ecap Constraints 3 4 Solution Available Or 9
10 ecap Proposed Solution
11 ecap Summary 7 Review Edit Print Submit with Offer 11
12 Class IX Batteries Medical Readiness Operational Rations Class IX Cesium Lamp Nerve Agent Antidote Auto Injector Class IV Bastions 12
13 EXECUTION WARFIGHTER SUPPORT Critical transmission part for the Bradley Fighting Vehicle (BFVS) requires special steel BFVS transmission cited as number 2 of top 5 Army readiness drivers Pre-positioned raw material and material rotation reduced the lead time for 571 to 77 days Reduced backorders 130% increase in production Wartime Demand Surged 1300% above peacetime levels 13
14 EXECUTION WARFIGHTER SUPPORT 84 different, low peacetime demand hydraulic tubes Tubes share similar components and manufacturing processes Contractor increased raw material safety stock at no cost Reduced Production Lead Time form 508 to 129 days and 75 days in Wartime Aircraft Hydraulic Tubing Surged 1000% above peacetime levels 14
15 EXECUTION WARFIGHTER SUPPORT Cesium lamp defeats Infrared (IR) missiles Low peacetime demand/high Wartime demand Staged raw materials & subassemblies at BAE Reduced Production Lead Time from 360 to 30 days (Sapphire crystal has 4-month lead time to grow in lab Cesium Lamp Reduced backorders in ½ over 6 months 15
16 EXECUTION WARFIGHTER SUPPORT Critical valve system used on Reverse Osmosis Water Purification Unit (ROWPU) Sole source manufacturers plant was destroyed by Hurricane Katrina lost item production ~ 1 year Urgent request from Iraq for help with this part to keep systems running Surge & Sustainment coverage kept 24 ROWPUs operating Diaphragm Assembly Continuity in water supply for troops in theater 16
17 EXECUTION WARFIGHTER SUPPORT Reduced production lead time 200 to 63 days Reduced delivery times by four months Nut, clip-on Geotextile Steel 17
18 Industrial Capability & Material Readiness STRATEGIC MATERIAL READINESS INITIATIVES 18
19 Strategic Material Readiness Initiatives AREA WARSTOPPER Strategic Material Project DNSC Strategic Material Security Program Focus Wartime Surge & Sustainment Peacetime & Wartime Level Scope Primary Method Expertise Sustainment DLA Procured Items Vendor to Vendor Procurement Finished product supply chains Weapon System Sustainment DOD Essential Civilian Vendor to vendor managed inventory Right to recover Government Furnished Property Right to buy Procurement Material Supply Chains 19
20 Strategic Material Project 20
21 Strategic Material Project Execution Interim procedures established Material ready for GBM approved release as vendor to vendor sale Developing pilot execution test plan Material Type Maximum Lead time Applications 300M Billets 10 weeks Landing Gear 300M (Round bar BAE added testing) M50 ( Diameter) M50 ( Diameter) 18 weeks Torsion Bars Specifications AMS 6257, AMS 6417, AMS 6419, BMS 7 26, C , CE 0896, CPS 4911, DMS 1935, GM 1012, IGQ 41 11, LAT , MIL S 83135, MIL S 8844, MTL 1201, S155, ZFNL weeks Bearings AMS 6491, CFR 5200, CPW 378, D1198, DMD , EMS 52491, GE C50TF56, KBM250, MSRR 6083, PWA 725, PWA 793 and others 21
22 National Defense Stockpile History Shortages of WWI War Industries Board recommends setting aside critical materials National Defense Stockpile (NDS) Program 1939 Executive Order designated the Secretary of Defense as the Stockpile Manager Fiscal Year (FY) 1994,Congress authorized the sale of excess NDS inventory Since 1994, commodity sales have totaled approx $7B Market value of remaining NDS inventory is approx $1.6B 2006, concerns raised about DOD s ability to supply material for defense programs given current market conditions & increasing reliance on foreign sources of supply 22
23 National Defense Stockpile? In 2006, House Armed Services Committee (HASC) asked for review of DOD policy to dispose of NDS materials In 2007, Independent Study conducted by National Materials Advisory Board (National Academy of Sciences) In 2008, Senate Appropriations Committee (SAC) asked DoD to: Describe materials critical to strategic defense interests Describe domestic suppliers and their reliance on foreign sources of production Describe foreign countries efforts to stockpile critical material Describe steps to ensure availability during protracted conflict In 2008, USD (AT&L) established a Working Group (WG) to review NAS report findings and address issued raised by Congress Conclusion: Establish Strategic Material Security Program (SMSP) 23
24 SMSP Status Report sent to Congress April 2009 Briefed House Arms Services Committee (HASC), subcommittee on Readiness Received positive/favorable response 24
25 SMSP Program Concept Integrated, interagency approach to strategic materials management Military material needs in scenarios ranging from non conflict to full mobilization Essential civilian requirements Ability to quickly adapt to global market conditions to ensure material availability Wide variety of risk mitigation strategies Develop risk based value propositions Programmatic flexibility to efficiently and effectively acquire the right materials 25
26 SMSP Process 26
27 Risk Assessment Factors and Conditions Factors: Changes in global market conditions Economic changes Geo political issues Competition for scarce/limited resources Changes in U.S. industrial base Loss of access due to natural/man made disasters Conditions: National security emergency scenarios, and Peacetime supply disruptions scenarios 27
28 DNSC Services Material expertise and acquisition support Material risk assessments Provide/implement mitigation strategies Ensure availability of materials Lead time reduction Cost Reductions/Avoidance Buying agent; drawing on leveraging quantities to benefit DoD by consolidating requirements 28
29 DNSC Benefits to Military Services Recognized as material experts with global market understanding and ability to maneuver in markets without undue disruption Act as your buying agent can support military services by ensuring timely availability of materials needed to satisfy defense contracts Predictable price Provide Right to recover opportunities Perform role of logistics facilitator Ensuring the release of materials to DoD contractors, shielding the defense contracts from surging market prices and ensuring the integrity of the materials certifications 29
30 SMSP Execution DNSC issued solicitation to procure titanium: Navy Requirement: 50,400 to 268,800 lbs over 4 years Army Requirement: 10,000 to 100,000 lbs annually; provided 10,000 lbs of offal material as feedstock Solicitation incorporated: Army receive a credit for the offal material provided as feedstock Right to recover opportunity included Small scale procurement for Army resulted in approximately $1M cost avoidance Collaborating with Army to expand the procurement to a much larger scale 30
31 Readiness Initiatives Next Steps Outreach to Military Services and industry to learn about material needs and issues Attendance at DoD sponsored conferences (e.g., DMC) Establish a process to compile live data on materials used in weapon systems Phase 1 of Strategic Material Management System (S2SM) to support Strategic Material Project (SMP) 31
32 S2MS Phase 1 Management tool for strategic materials Collect part to material mapping (requirements) Defense material requirements Identify material for risk assessment Impacts of MERIT & REACH Catalog of available materials (risk mitigation strategies) Coordinate material release requests (execution) 32
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