UK PBL/PFI Examples & Supportability Audit
Air Commodore Allan Goody RAF (Retd)Managing Director, TFD Europe
Vice President Strategic Planning, TFD Group亜蘭
Logistics Seminar - IPS in UK & PLCS Standards
Grand Hill - Ichigaya
21st November 2019
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Purposex

Our Purpose
To optimise the cost and availabilityof supporting complex equipment systems or fleetsthat require maintenance

Quantified modelling and analysis will support logistic decision making toincrease performance and reduce cost
while mitigating commercial and operational risk

Do More, with Less

through

Smarter Ownership© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Scopex•

Budgetary issues and contracting methods – PBL & PFI•

Total System view•

Through-Life Support and Continuous Improvement•

Support Modelling & Analysis - Techniques & Tools– Data Availability, Data Quality– LCC Techniques– Spares Optimisation and budget setting– Life Cycle Costing & multi-resource optimisation– Supportability Audit– Through-Life Supportability Modelling Capability•

Case Studies•

UK Design for Supportability Centre of Excellence© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Operations Depend on Logisticsx

For the want of a nail, the shoe was lost

For the want of a shoe, the horse was lost
For the want of a horse, the rider was lost
For the want of a rider, the battle was lost
For the want of a battle, the kingdom was lost
And all for the want of a horseshoe-nailBenjamin Franklin© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Acquisition & Support Cost Budgetsx
Acquisition Costs
Budget Period

Project delay can control
current expenditure Bow Wave
Until the plan collapses
Years

Support Costs
Budget Period

You cannot delay most support costs
Only reduced activity can control
current expenditure
Years

More than half UK’s equipment budget (£23Bn) is spent on support (£12.8Bn)
Must Do More with Less
Modernising Defence target to save £10Bn over 10 years (8%)© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Contracting Mechanisms
The Contracting for Availability Staircase
UK
SparesInclusive

Traditional
Time & Materials
Business As UsualBusiness
As UsualTime &
Materials

Repair & Overhaul
Assured Lead Time
PBL 2
PBL 1

Lead Time
Assurance
Assured Lead Time
Production & R&O

Contracting for
Availability

Contracting for
Capability

Guaranteed System
Availability

Fill Rate
Assurance

Guaranteed
Spares Fill Rates

Full Service
Responsibility
PBL 4

PBL 3

Equipment
Availability
Guaranteed
System Availability

Capability
Assurance
Guaranteed
Systems

US PBL

MAAP

TFD
dV
System Data

EDCAS
VMetric

EDCAS
VMetric/Tempo© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

PBL Contracting
Key Questions
How can Governments and Industry work together through PBL contracts
to deliver effective support, affordably while making a profit?
•

What must be considered in constructing fair and reasonable deals?

•

What should the requirements be?

•

How do you identify, size and manage risk?

•

How do you establish a fair but profitable price?

•

How can Industry manage its risk after contract award?

How can modelling help to inform the commercial issues?
•

What are the steps to create a successful PBL contract?

•

What are the methods to manage a successful PBL contract?

A contract mechanism to pay for an agreed service level (availability or use)

The objective is reduced cost, better service level, or both
Do More with Less
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

What is PBL?
Outputs not Inputs
Traditional support contracts are for the provision of spare parts, repairs, labourand other enablers for system sustainment. These can be specified andmeasured as individual Inputs for system sustainment.
•

Customers must specify and contract for each individual element, andmanage the service integration risk.

•

For example, if spares and repairs are contracted item-by-item and priced
per item, suppliers are rewarded for poor reliability.

•

The supplier is incentivised to increase the quantity and price of inputs.

PBL contracts require delivery of system sustainment over specified periods as
Outputs where the service is measured by performance at the system level.
•

The customer defines the output performance and the supplier must
manage the integration risk.

•

If items have worse than predicted reliability, the supplier bears the
additional cost but makes additional profit if reliability is improved.

•

The supplier is financially incentivised to improve output performance© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

What is PBL?
Outputs not Inputs
PBL Buyers must:•

Understand their requirements in output terms.

•

Avoid excessive metrication just for comfort.

•

Attack Suppliers’ costs – not their profit (its more effective)•

Specify Key Performance Indicators that incentivise the Supplier to meettheir needs.

•

Be assured that the Supplier can and will deliver the service.

PBL suppliers must:•

Design and cost a complete, coherent support system capable ofdelivering system performance.

•

Negotiate an agreed price for delivery of that service, at a profit, taking
account of variability, uncertainty and risk within measurement periods.

•

Deliver the service by integrated management of all elements•

Seek continuous improvement to improve service delivery, enhancemargins and improve future competitiveness.
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Why PBL?
Faced with increasing pressure on military resources to Do more for less,customers want to contract industry using Performance Based Logistics (PBL)
Support plans are often sub-optimal in practice because in reality:• equipment characteristics such as Reliability and Maintainability are
different and change over time
• support performance (TRT, price etc) doesn’t turn out as planned over timeleading to the risk of:• poor availability• increased system cost• inadequate military capability
The Support Manager’s Mission is to:Plan, implement and improve through-life the effective support ofa system to meet the required tasks, while seeking efficiencies touse fewer systems and balance more output with lower cost.
PBL is a potential contracting option to transfer risk to industry andincentivise better support performance
Do More for Less
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

PBL
Mutual Incentive Theory
More
ProfitPROFIT

Fixed%

PROFIT

Fixed
%

Same
ProfitCost
GrowthFixed

PROFIT

Lower
Cost

COST
COST

Baseline

COST

Cost +
Higher Price
More profit
More TurnoverSame Margin

PBL
Lower PriceSame profit
Lower TurnoverHigher Margin

PBL should incentive industry to take more responsibility and risk to gain a higher margin
So that the customer pays a lower overall price© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Private Finance Initiative - PFIThe Extreme Case
Governments can always borrow at the cheapest rates – but at a cost to national debt.
Where budgets do not allow up-front investment, PFI is a mechanism for industry to borrow onmarkets and recover the investment in a long-term financed service.

The debt remains on the Government balance sheet unless industry takes the risk.
But lenders don’t like taking risk and impose very robust due diligence. Robust due diligence
improves deliverability of the deal and assures the service.
$
AnnualCost
Financed Service
Investment
Service Delivery
NOW

OSD

Contract

RISK – Pass It On, Pass It Back, or Price It
But if you Price it, KNOW how to turn Risk into Profit© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Private Finance Initiative
The Extreme Case
Better value for money

PROFITSERVICEDELIVERYCOST

INVESTMENT

Total profit maintained
but on lower cost

Long-term contracts anddue diligence drive
service delivery costdown

Investment cost
increased

PROFITSERVICEDELIVERYCOST

INVESTMENTPFIBaseline

PFI can be VFM offering a lower price for government
with same profit for industry on a lower delivery cost for higher margin.
Win-Win?
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

The Total SystemxWhat does It
do?

How is It Used?
Usage
Pattern
Cost

Revenue

How muchdoes It cost?

OUTPUT
Equipment
DesignWhat is It
made of?

How muchdoes It earn?
Support
SystemEnvironment

What is It s
environment?
How does It all work as a Total System?
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

How is It
Supported?

The Total System Viewx
An Outcome
MissionSuccessAo

An Outcome

Activity
Task

Fleet
Size

Cost
£

USAGE

Input

Input

DESIGNSUPPORT

EBS & System
Characteristics

SupportArrangements

System Availability and Cost are driven by the interaction of
Usage, Design and Support© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Interactions of Support Disciplines
x
Reliability
Maintainability

Modifications

Equipment
DesignStock
Locations

Infrastructure

Facilities& Tools

Spares &Repairs
Availability

Cost

RepairCapabilities

Transportation

In-useFleet Size

Usage
Maintenance
PolicyInformation
WIP

RCM

PeopleTechnical
Publications

Military
Staff

Civilian Staff

Asset
StatusTraining

Support activities are complex, interconnected and must be tuned to avoid
unintended outcomes
It is critical to handle the complex interaction of all these activities© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Interactions of Support Disciplinesx

Obsolescence

Training

Alternatives

PLT

Turnover Rate

BITE
RCT
Parts

SkillsTest Equipment

MTTR
NFF

Tools

Reliability

Factors affecting
system availability
and cost

Facilites

Engineering
IssuesData

Poor Contracts

Usage
Scheduled
Maintenance

Visibilityof what ishappening

Modifications

Good / Poor
Planning

Rewarding bad
behaviour

Support interactions are complex and hard to quantify independently© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Interactions of Support Disciplines
x
Future Maritime Support Causal Model – Level 1

NB INFRASTRUCTURE

NC ASSETS& CREW

DE&S
NB SERVICESNB FACILITIESMAINTENANCE
WATERFRONTCOSTSSupport interactions are complex and hard to quantify independently
Their relationships are critical and the system must be optimally tuned
A Wicked Problem that cannot be solved top-down© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Timing of Support Planning
Cumulative %LCC

Decisions Defining LCC

100
90%

95%

70%

In-Service
Date

Programme
Decision Point50

ILS Activity0

Incurred LCC

Mid-life
Upgrade85%

Concept
Formation

Project Decisions are often madebefore most ILS activity has happened

Design &Development
Proposal
Development

Through-life Management
Deployment

Disposal

PLAN
DESIGNFOR SUPPORTDESIGN
THE SUPPORTCONTROL
IMPLEMENTSUPPORTTEST &EVALUATESUPPORTSUPPORTTHE
DESIGNCONTINUOUS
IMPROVEMENT

Support must be addressed from the start of the Life Cycle© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Continuous Improvement
x
Model
&
Plan

Planning
Data Source

DecisionsBaseline
Plan

Re-Modelor
Re-PlanControl

AnalyticalEngineAct

Decisions

Reality

Real WorldData

Don t Act

PLAN
CONTROL

Achieving AFFORDABLE AVAILABILITY requires both PLANNING and CONTROLCONTROL requires FEEDBACK which requires VISIBILITY© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Continuous Improvementx

Data Sources

BOM
Codification

Work & AssetManagement
SystemLogistic Planning
Data

Logistic Management
Data
PLAN
Logistics Decisions

Periodic Review - SA

Supportability
ACT
Audit
Semi-automated - SCO

DON T
ACT

MONITOR
Logistics Plan

PLAN

CHECK
Inventory
Tracking
System

In-Service Data

SupportScenario

ERP System

EXECUTE
Logistics Plan

Ao £
DO

Build a Digital Twin of Support
Use it continuously to improve Availability and Cost
To Do More, For Less through Smarter Ownership© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Business
Management

Support Modelling & Analysis
Building & Using the Digital Twin for Supportx

Techniques

PeopleTools

Skilled Analysts

Powerful Models

Data
Repository of Trusted Data

Without good techniques, modelling is ineffective© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Integrated Support Planning & Control
x

Change the
Usage

Usage
Operating Events

DesignFailure Analysis

Redesign
Control Loop

DesignModification

MaintenanceControl Loop

Maintenance
Review

Resources
Control Loop

SupportManagement

Task Analysis / RCM
Maintenance Events
Level of Repair Analysis
Support Resource Requirements by Location
Manpower Training

Spares

Tools

Infrastructure

Technical Documentation

Support Plans

Support & Maintenance Data
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit
Driving an Improvement Programme

Supportability is the responsiveness to unreliability that prevents a system’s utility

When there’s a problem on a system, how quickly can its utility be restored?
UnSupportability (US) is a metric to describe downtime
US = ∑ 𝑻𝑻𝑹 + 𝑷𝑴 𝑻𝒊𝒎𝒆 + 𝑪𝑩𝑴 𝑻𝒊𝒎𝒆 + 𝑨𝑳𝑫𝑻
US
5
4
3
2
1
0

Each component has a specific US metric
The System US metric is a single number for the total area under the curve© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit
Driving an Improvement Programme

US is a single number metric for top-level management
Continuous Improvement Action Plan$

To achieve fixed Target Ao

US

Today

Time

Kaizen to progressively reduce both the cost of support and improve availability
Bend the Cost Curve to Do More with Less through Smarter Ownership© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Data Availability, Data Qualityx
I want modelling to be simple (cheap), quick and accurate
Tough – you can only have 2 out of 3!
Typical Responses to Requests for Data for Modelling•

We haven’t got it, or not all of it••

Yes you do
It already exists in current maintenance plans•

The data we have isn’t good enough• We know, nobody’s is• Make assumptions• Test sensitivity• Evaluate uncertainty• Establish the confidence level•

It needs too much data and takes too much time to assemble•

A lot less than you imagine

Modelling with limited data is better than not modelling at all – that’s just guessing© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

LCC Techniquesx
LCC

LCC Estimating

LCC Management

EVM

Planning

Parametric

Benchmarking

Deterministic

Worst Case
Most Likely
Best Case

PRICE SYSTEMS
TruePlanning

TFD
Supportability Workbench

Concept
Development
Assessment
Manufacture

In-Service

Functional
DesignAs Maintained

PhysicalDesignAs Built

Disposal© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit‘Bending the Cost Curve’

The impact of obsolescence, technology
insertion and longer in-service lives

Cumulative %LCC
100

Decisions Defining LCC
95%

90%

Mid-life
Upgrade85%

80%

In-Service
Date

Systems do NOT get cheaper
to run as they get older

Programme
Decision Point

50

Incurred LCC

Based on 1970's US DoD data whensystems were replaced when militarily
obsolete
Now 80% LCC for support
0

C

A

D

M

I

D

I

‘Bend the Cost Curve’ using Supportability Audit© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

D

LCC Techniquesx
LCC

LCC Estimating

LCC Management

EVM

Planning

ParametricControl

Benchmarking
Supportability Audit
Techniques
Deterministic

Worst Case
Most Likely
Best Case

PRICE SYSTEMS
TruePlanning

TFD
Supportability Workbench

Concept
Development
Assessment
Manufacture

In-Service

Functional
DesignAs Maintained

PhysicalDesignAs Built

Disposal© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Spares Optimisation
Happy Shelves or Happy Systems?
MoE
Fill
Rate

Availability-based
MIME ModellingClassic Single Item
Fill Rate Modelling£2.1M (28%) Saving
Requirement 90%£5.4M
MIME Derived
Spares Cost
Only 60%
Availability£7.5M
Single Item
Spares Cost

£4.2M (44%) Saving

UK MOD data presented by Lt Col M J Levett-Scrivener
DES LogNecProg-PPM-SO1 BIWMS Inv Opt
WLCM WG 2012

TypicalEngineering
Judgement£9.6M
Initial Proposed
Spares Solution£
For Single Item Fill Rate modelling, the price of each spare is irrelevant
Each and every item is provisioned to exceed its requirement
For System availability modelling, items are traded-off based on price
The Fill Rate is achieved at the system level
System breakdown structure is essential for System Availability modelling© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Spares Optimisation
Marginal Analysis

A0
Locus of Optimal
ChoicesRequirement

Cost / Budget© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide$

How to Set Optimal Spares Budgets
Single System, Multiple Locations
Location 1

Location 2

Location 3

Ao = 80%

Ao = 80%

Ao = 80%

O-LevelO-LevelO-LevelI-LevelI-LevelI-LevelDefines the optimal spares list and cost
D-LevelLocation 4•

To deliver the required Ao•

At each level of maintenance•At each location

Tempo handles changing scenarios over multiple years•

Automated multiple runs to reflect changes over time•

Using a single model

Tempo identifies the optimal fleet spares & repairs budget allocation for each year
© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

How to Set Optimal Spares Budgets
Multiple Systems, Multiple Locations, Multi-year
Location 1

Ao = 80%
O-LevelI-LevelLocation 2

Ao = 75%
O-LevelAo = 75%

Ao = 90%

Ao = 90%

Ao = 50%

Ao = 90%

Ao = 50%

O-LevelAO-Levelo = 75%

O-LevelO-LevelO-LevelO-LevelO-LevelI-LevelLocation 5

Location 7

Location 4

Ao = 80%

I-LevelD-LevelLocation 3

D-LevelI-LevelI-LevelLocation 6

D-LevelLocation 8

Defines budgets for each fleet’s optimal spares• To deliver the required Ao• For each system• At each maintenance level• At each location
Tempo handles changing scenarios over multiple years• Automated multiple runs to reflect changes over time
• Using a single model
Tempo identifies the optimal spares & repairs budget allocations for each year
acrossmultiple
fleets© Copyright 2001-2019
Systems Exchange,
Inc., All Rights Reserved
Worldwide

Life Cycle Costing & Multiple Resources
MAAP Operating & Maintenance Events

Operating Events

Resource

SystemSub-System

Maintenance Events

Sub-System

Maintenance Events

Upgrade Events
LRU

LRU

Maintenance Events

Operating Events:
Maintenance Events:
On Systems
Scheduled or Unscheduled
At Units
At any level of indenture
At a periodicity: usage, hours, shots etc
At Units by support level
Consumes Resources
Consumes Resources
In a Quantity
In a Quantity
With a certain probability
With a certain probability
For a time
For a time
At a cost defined by the resource
At a cost defined by the resource© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Resource
Training Events

Resource

Life Cycle Costing & Multiple Resources
MAAP
Events & Resource Profile

Time
Operating Events
Maintenance Events
Upgrade Events

Training Events
Resource

Chart of Accounts / Cost Breakdown Structures
Alternative Views
CBS 1 - System

CBS 2 - Suppliers

SystemSubSystem
SubSystem

SubSystem

CBS 3 - Budgets
SystemSystemSubSystem

SubSystem

SubSystem

SubSystem

SubSystem
SubSystem

SubSystem

SubSystem

SubSystem

SubSystem

SubSystem

SubSystem
SubSystem

SubSystem

SubSystem

SubSystem

SubSystem

SubSystem

An event-driven, activity-based ‘adding engine’ of ‘cost atoms’ to derive LCC
It handles automatically all the complex interactions of support© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit
Identifying the Problems

Failure Rate

Interaction between
Reliability and Maintainability
A

B

C
Constant
ImpactTime to Repair© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit
Identifying the Problems
Resource Costs

Frequency
of MEsThe Impact of MEs on
Cost
D

ALDT

Frequency
of MEsThe Impact of MEs on
Delay

A
E

A
G

G

F
Constant
ImpactCost of Maintenance Event

TTR + PM + CMM

Frequency
of MEsThe Impact of MEs on
Maintenance Downtime

Delay of Maintenance Event
H

Delay of
Maintenance
Event

G

M

A

L

H

A

M
Constant
Impact𝑼𝒑𝒕𝒊𝒎𝒆𝑼𝒑𝒕𝒊𝒎𝒆+𝑫𝒐𝒘𝒏𝒕𝒊𝒎𝒆

G

B

Duration of
Maintenance
Event

L

L

Duration of Maintenance Event

A0 =Constant
ImpactB=

M

H

Cost of Maintenance Event

𝑴𝑻𝑩𝑨
𝑴𝑻𝑩𝑨 + 𝑴𝑻𝑻𝑹 + 𝑷𝑴 𝑻𝒊𝒎𝒆 + 𝑨𝑳𝑫𝑻

© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit
Quantifying the Benefits
What is the impact on
cost, frequency, resources, duration and delays?
FailureRate

R to L
A

B
COSTS
How
Much?

OPTIONSC

L to R
Constant
ImpactTime to Repair

Compare previous System LCC with assumed future System LCC,
and previous System Availability with Future System Availability,

to derive potential cost and availability benefits© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

BENEFITWhat?

Supportability Audit‘Bending the Cost Curve’

The impact of obsolescence, technology
insertion and longer in-service lives

Cumulative %LCC
100

Decisions Defining LCC
95%

90%

Mid-life
Upgrade85%

80%

In-Service
Date

Systems do NOT get cheaper
to run as they get older

Programme
Decision Point

50

Incurred LCC

Based on 1970's US DoD data whensystems were replaced when militarily
obsolete
Now 80% LCC for support
0

C

A

D

M

I

D

I

‘Bend the Cost Curve’ using Supportability Audit© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

DSupportability Audit
Driving an Improvement Programme

US is a single number metric for top-level management
Continuous Improvement Action Plan$

To achieve fixed Target Ao

US

Today

Time

Kaizen to progressively reduce both the cost of support and improve availability
Bend the Cost Curve to Do More with Less through Smarter Ownership© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Through-life Modelling
Planning & Control
TFD Domain
What If? Scenarios

Supportability
Audit
Supportabilty
Simulation
Audit
Visualisation
Evaluation

BI Dashboard

Data Sources
Build & Run
Model

BOM
Codification

ActionPlan

OutputData CubeWork & AssetManagement
SystemInventory
Tracking
System

SupportScenario

Logistic
Planning
Data

In-Service
Data

Real World Data

ERP System© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Through-life Engineering Services (TES)PAS280:2018x

UnSupportability

Support Activity Assets to Deliver Output

Support Activity Assets Lifecycle

The Business Cycle© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Supportability Audit
Summary

SA is a powerful analytical technique to find, assess and quantify thebusiness case for significant support cost savings.
SA can be applied cost effectively to most, if not all, systems covering awide range of environment, technology and maturity.
Extrapolating the benefits from these examples across Defence could
make significant inroads into the cost of support.
SA requires a small investment to build the models.

A programme of SA projects will be better than self-funding.

Supportability Audit - Interrogate the Digital Twin

Do More, with Less

through

Smarter Ownership© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

UK
RAF Chinook CH47 Case Study
During Afghanistan & Iraq conflicts, severe pressure forgreater output from RAF Chinook fleet for more flying hours(FH) on operations and for training.
RAF achieving 65 FH per aircraft per month on operations
but only 40 FH in training compared with about 200 FH for
civilian operators. Even setting aside obvious differences inthe environment, considerable room for improvement.
Question - How to increase fleet flying from 12,500 FH to 16,500 FH, 18,500 FH and,eventually, to 21,000 FH?
Method•Structured diagnostic interviews•

Data capture and analysis•

Build a model to test hypotheses•

Construct a coherent action plan
Potential for 39% more FHs© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

UK
RAF Merlin Mk3/3A (EH101) Case StudyRAF Merlin Force only achieving 60% of flying task,
without any complication of operations in Afghanistan.
62% fleet unserviceability with 38% awaiting resources.
• Manpower
17.9%• Spares12.8%• Info4.4%• Crew
2.0%• Weather
0.5%• Tools & Test
0.4%
Shortage of resources impeding management efficiency
Question - How to increase fleet achievement to achieve annual task?
Method•Structured diagnostic interviews•

Data capture and analysis•

Build a model to test hypotheses•

Construct a coherent action plan

Potential for 32% more FHs and 13% more Serviceable aircraft© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

UK
British Army and Royal Navy Lynx Case Study
British Army and Royal Navy operated a fleet of 160 ageing
Lynx helicopters in 4 variants in the battlefield utility, antiarmour, search and rescue and anti-submarine warfare roles.
Rapidly increasing support costs.
Transition to the successor was unaffordable.
MOD Proof of Concept contract to demonstrate that support modelling & analysis
could deliver a minimum Return on Investment of 10:1•

What costs could be reduced with minimum impact on availability?

•

Identify potential problems in transition from the old to the new aircraft

Two sets of models - spares optimisation & through-life support costs – showed that:•

Spares holdings had been over-provisioned by £70M•

Reducing current inventory value by £70M would reduce Ao by only 0.4%•

Current stock of Main Rotor Gearbox was 66 whereas optimal stock was only 27•

Immediate savings of £1M made by halting purchase of 2 MRGBs each costing £500K
Study demonstrated savings greatly exceeding 10:1 Return on Investment© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

UK
Sentinel & Apache Case Studies

RAF Sentinel - Airborne Stand-Off Radar Surveillance
Raytheon proposed a top-up spares buy of £88M to
supplement existing stock of £33M
Shadow spares modelling reduced estimate to £3.5M

Army Apache – Attack Helicopter
Westland Helicopters estimated life cycle cost for 25 year
contract at £450M
Shadow modelling reduced estimate by £110M - 25%© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

US Air ForceB-2 Spirit
Despite supplier achieving the logistic KPIs in a
PBL contract, B-2 Spirit weapons system Ao was
unsatisfactory.
Only 28% Ao achieved against 85% required
Question – How to improve Ao whilst keeping the supplier incentivised under PBL?

Poor performance was partly attributed to conflict and interaction between KPIs which
drove wrong behaviours.
To inform re-negotiations, TFD evaluated KPI regime at the higher contract level to identify
commercial ‘sweet spots’ for customer and contractor, and identify risk margins.
Using simulation based on MAAP data models, TFDE derived new contract KPI framework
for an acceptable balance between Ao requirements and supplier incentivisation‘Happy System’ not ‘Happy Shelves’© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

RAF Puma Mk1
Supportability Audit Case StudyRAF Puma Mk1 – Support Helicopter
Supportability Audit to identify potential support shortfalls andopportunities for improvement

•
•
•
•
•
•

Number of aircraft on both 230 Sqn & 33 Sqn reduced by 3 aircraft but the total flying
task was maintained at each unit; each aircraft flew more sorties
Fleet operational availability (Ao) target increased from 75% to 80%
Maintenance staff to receive either additional training, or maintenance procedures
improved, to reduce maintenance task durations by 15%
Suppliers to improve production lead times (PLTs) on first time demands by 15%
Suppliers to deliver a price challenge of 15% challenge on purchase and repair prices
RCM-based review of maintenance policy to reduce frequency of all unplanned
corrective maintenance by 15%
Potential cost savings of £5.6M or 23% of annual costs
AND 5% increase in availability delivering same task with 6 fewer aircraft© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Sweden Tgb 14/15
Supportability Audit

Tgb 14/15 – Utility Support Vehicle
Supportability Audit to identify potential support shortfalls andopportunities for improvement.
Tgb 14/15 is a fleet of 347 vehicles used only in training and fully supported by Mercedes.
The basic Geländewagen is a very mature vehicle that has been in production for 36 years.
More than 200,000 have been built.
•

Vehicle utilisation was low and up to 70 vehicles could have been placed in storage
reducing maintenance costs by 11% while meeting availability levels and driving an
additional 2,750Km.

•

Despite the maturity, issues were identified with:•Air filter – this was traced to incorrect item identification data which was driving
excessive and wasteful procurement•

Central locking system which was an acknowledged intermittent system fault. The
Audit quantified the cost enabling FMV to press Mercedes for a solution.

Potential savings of £250K over 10 years - 2.7% of annual costs, 11% less maintenancemeeting availability targets using 70 fewer vehicles© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Sweden Tgb 360
Supportability Audit
Tgb 360 – Armoured Terrain Vehicle
Tgb 360 is a new fleet of 113 Armoured Fighting Vehicles of 4variants built by Patria, supported by FMV and operating from 2
bases in Sweden.
As a new vehicle with little in-service data available, this SA set amodelling baseline while identifying current weaknesses andpotential areas for improvement.
Issues identified included:• Maintenance policy review by location andinterval identified potential to reduce resources by
8% with a PM cost reduction of 2%.
• Data quality review revealed errors andomissions in the contractor’s maintenance datathat identified the risk of system underperformance and erroneous procurement.
• Major materiel cost drivers review identified theneed and benefit of modifying 2 additional items.

Confirmed majority of key support metrics but identified annual cost savings of >2% on
SEK 29M. Protected Ao by identifying key data errors© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

PBL BCA
TH-480B – Basic Training Helicopter

TH-480B is the JGSDF’s basic training helicopter. Japan wish to
adopt PBL to increase Ao at reduced cost.
JGSDF GSO tasked TFD with an independent Business Case
Analysis of a bidder’s proposal.
TFD used VMetric and EDCAS models to quantify the spares
investment and annual costs for repairs and consumption•

PBL could save approx ¥329.3M (20%)•

Cost within budget providing both VFM andAffordability but analysis showed that:

Ao As Is v PBL: Spares Investment and Ao, EHC Items , No Existing Stock
0.9

•

0.8
0.7

0.6

Spares scale proposed by bidder would beinadequate

0.5
0.4
0.3

•
•

Savings could be achieved with a different
optimal spares scale
Potential for further 5% saving by performing areview of the repair policy for Discard items

PBL Spares
Cost ¥1022M
Ao = 82.6%

0.2
0.1
0.0
¥0M

¥200M

PBL Spares

¥400M

¥600M

¥800M

As Is Spares
Cost ¥1512.8M
Ao = 82.6%¥1,000M¥1,200M¥1,400M

As Is Spares

Subject to changes identified through TFD’s analysis, PBL could yield savings of approximately¥411.6M representing 25% of current spares and MRO budgets© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

FMV Sweden
MAAP Models
Tgb 14 – Utility Support Vehicle
Mercedes Geländewagen

Tgb 15 – Utility Support Vehicle
Mercedes Geländewagen

Tgb 16 – Utility Support Vehicle
BAE Systems

Tgb 360 – Armoured Modular Vehicle
Patria© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

FMV Sweden
MAAP Models
CV 90 – Armoured Modular Vehicle
Hägglunds and Bofors

Strv 122 – Leopard Main Battle Tank
Krauss-Maffei

Hkp 10 - Puma EC 225 Helicopter
Eurocopter

Hkp 14 – NH90 Helicopter
Eurocopter© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

FMV Sweden
MAAP Models

CB 90 – Fast Patrol Boat
Dockstavarvet

BV 410 – Amphibious Vehicle
BAE Systems Hägglunds

Tp 84 – C130 E/H Transport Aircraft
Lockheed

C130J – Transport Aircraft
Lockheed Martin© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

Design for Supportability Centre of Excellence
D4S COE© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide

QUESTIONS ?

亜蘭

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to EVA Aviation© Copyright 2001-2019 Systems Exchange, Inc., All Rights Reserved Worldwide