ARS 2004 San Diego, California, USA

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1 ARS 2004 San Diego, California, USA The Challenge of Supporting Aging Naval Weapon Systems RDML Michael C. Bachman Assistant Commander for Aviation Logistics Naval Air Systems Command

3 Outline Background Readiness Challenge AIRSpeed Defined AIRSpeed Approach In-Service Reliability Program Aging Aircraft IPT Summary Today s Readiness Challenge CNO has directed a new Fleet Readiness Program (FRP) to support fleet operations in the Global War on Terrorism Naval Aviation will have to support current levels of readiness despite a budget shortfall Requirements growth in the Flying Hour Program Navy and Marine Corps unit commanders will fight in a cost-wise readiness environment Slide Number: 2 Slide Number: 3 Naval Aviation s Aging Fleet the challenge NAVAIR S Focus: Reliability and Cost Create a Culture of Cost-Wise Readiness YEARS HELICOPTER / FIXED WING / COMBINED AIRCRAFT AVG AGE HELICOPTER FIXED WING FY00 AVERAGES HELICOPTER 20.1 YRS FIXED WING 17.2 YRS COMBINED 18.0 YRS COMBINED FISCAL YEAR NOTE: TRENDS ASSUME CURRENT PROCUREMENT PLANS EXECUTED THROUGH 2012 RECENT POM-02 CUTS WILL LEAD TO INCREASED AGE -Average Age of Fleet increasing through FY09 -Cost of readiness increases closely associated with age and wear AVERAGE AGE * BASED ON 9/30/98 AVERAGE ATTRITION RATE ** FY99 PRESIDENT S BUDGET (FY99-05) SOURCE: AIR Goal Provide the tools to understand, then optimize the business of Naval Aviation Output: Trained Units (squadrons / detachments) Flying Hour Program: Examine all FHP costs to find a better way to invest our limited resources Controllable elements Direct Costs (those that drive Cost Per Hour) Strategy: Investments to reduce support costs and improve reliability/readiness Reduced component demand = less maintenance = less cost Slide Number: UPDATE: 18MAY00 4 Slide Number: 5

Readiness Problem and the Start of NAVRIIP Metrics were un-reliable, inconsistent and had no common language (sorties, parts, dollars ) Limited predictability in parts requirements, FMC/MC were

4 Readiness Problem and the Start of NAVRIIP Metrics were un-reliable, inconsistent and had no common language (sorties, parts, dollars ) Limited predictability in parts requirements, FMC/MC were readiness metrics No reliability metrics tracked or measured Focus supported near term solutions, i.e. buy vice integrating all support elements The solution The Naval Aviation Readiness Integrated Improvement Program NAVRIIP T/M/S business teams created; responsibility and accountability assigned; process improvement tools deployed cockpit charts and entitlements Robust metrics using a common language Aircraft Ready for Training (RFT) installed All commands supporting aircraft/mission system needs in the right place at the right time PMAs and Wing Commodore share focus on readiness using the same metrics Requirements for the right readiness issued as a time phased aircraft and system forecast Linkage of sorties, parts, people and dollars enabled Slide Number: 6 Slide Number: 7 NAVRIIP Cost Management Strategy Link all NAVRIIP elements: Build business case for investments in Top Cost/ Readiness Degraders Identify applicable funding stream(s) Look for opportunities in POM budget process to invest Develop an Integrated Budget methodology Proven process employed by the PMB Applies reliability readiness-based analysis Quantifies sensitivity of budget options Highlights options ($ and Time) to achieve Cost Wise Readiness Touchstone AIRSpeed is NAVRIIP s Enabler for operationalizing cost-wise readiness across the Naval Aviation Enterprise. Slide Number: 8 Slide Number: 9

5 What is AIRSpeed? It is an enterprise approach Creates a continuous process improvement environment It aligns and optimizes Maintenance and Supply activities to end-user demand (Operations) Leverages existing initiatives Synergizes a set of industry tools Eliminates sub-optimization Local decisions made with Global impact known Creates a pull system Fundamental Principles Manage RFT/O Mission Reduce Inventory/Investment Parts Equipment Facilities APN Reduce Operating Expenses O&M,N MPN Local decisions must be aligned to the global impact Slide Number: 10 Slide Number: 11 AIRSpeed Current Tools Three Key Deployment Elements Theory of Constraints is based on the belief that any organization has at least one constraint and that any improvements on non-constraints may not yield as significant ROI as working on the constraint. LEAN focuses on the removal of waste -- defined as anything not necessary (no value added) to produce the product or service. Six Sigma is based on the assumption that the outcome of the entire process will be improved by reducing the variation of multiple elements. AFAST is a Cost Analysis tool used to understand Consumption Variances and Production Cycles. Basic Theory of Constraints (BTOC), Formerly known as RIFLe Lean and Six Sigma Advanced Theory of Constraints (ATOC) All combined to create a culture of Continuous Process Improvements Under the notion of Cost-Wise Readiness Slide Number: 12 Slide Number: 13

6 AIRSpeed Teams Will. Re-design the sustainment, repair and replenishment processes Break down all the walls and start over Beginning on the flight line and then work what happens to a part through the entire process Squadron - I level to the Depot Distribution (DD) Center including the DLA/Supply process This is not component specific - it is process based Local actions with global implications below the LORA & WP level AIRSpeed s Synergy AIRSpeed capitalizes on other NAVAIR initiatives: IISRP Integrated In- Service Reliability Program AAIPT Aging Aircraft Integrated Product Team Slide Number: 14 Slide Number: 15 IISRP Integrated In-Service Reliability Program SUPPORT THE WARFIGHTER BY IMPROVING RELIABILITY We must sustain the war against terrorism develop [a] plan to improve aircraft engine and component reliability ADM Vern Clark Chief of Naval Operations CNO Guidance for 2003, Achieving Seapower 21! Target high value/low reliability Aviation Depot Level Repairable components Employ proven R&M methodologies and best commercial practices adapted to our environment Team with leading industry experts to enhance our processes Export the resulting R&M practices to Fleet Support Teams throughout NAVAIR Optimize In-service R&M Slide Number: 16 Slide Number: 17

IISRP Process Involves all stakeholders: Fleet O and I-Level Maintainers PMA/FSTs Depot Managers and Artisans NAVICP and DLA Scrutinizes every aspect of support Ensures proposed fixes are supported

7 IISRP Process Involves all stakeholders: Fleet O and I-Level Maintainers PMA/FSTs Depot Managers and Artisans NAVICP and DLA Scrutinizes every aspect of support Ensures proposed fixes are supported by root cause analysis Monitors results Slide Number: 18 AAIPT Vision To improve fleet readiness and reduce life cycle cost by aggressively attacking and countering the effects of aging aircraft. Identify Problems - Quantify Risk Provide Information to Program teams Available Funding Sources Other IPT Solutions Advocate for Enabling Technologies Provide Standard Risk and Cost Evaluation Tools Focus Attention to Aging Aircraft problems Not a Program Office Provides Pointer to PMAs Future Naval Capabilities Total Ownership Cost IPT Teaming NASA, FAA, USAF Slide Number: 19 Naval Aviation - AAIPT Team Approach Step 1 AAIPT Develop Process PMA NALDA Risk ID Determine options Cost Models AAIPT Transition Agent Solutions Coordinated Funding Quick Response Step 2 Program Implement Solutions POM Input LECP/TOC Step 3 Solutions Provide Feedback to Improve Process S&T Rapid Prototyping RAMECs Pubs Long Term Fleet Naval Aviation s Bottom Line. Warfighting Is Naval Aviation s Number One Priority. Successful Warfighters Understand How To Lead And Manage Their Commands To Extract The Maximum Warfighting Capability. While We Measure Our Profit In Terms Of Readiness And Mission Success, We Have a Duty To Achieve These Goals In The Most Cost Efficient Manner. - VADM Malone Slide Number: 20 Slide Number: 21

8 Summary To date, we have achieved great readiness at great cost. Now we need great readiness at optimized cost. Dynamic change is needed in the way we fund and support our weapon systems across all levels of maintenance. This is all about the Business of Naval Aviation, something new, something we have never had to learn before. Leadership commitment is the Key to success. Slide Number: 22

NAVAIR News Release AIR-6.0 Public Affairs Patuxent River, MD

NAVAIR News Release AIR-6.0 Public Affairs Patuxent River, MD Marine Corps Deputy Commandant for Aviation Jon Dog Davis and Brig. Gen. Greg Masiello, Commander for Logistics and Industrial Operations, Naval Air Systems Command (AIR-6.0) discuss how CBM+ can increase