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Air Commodore Rob Woods OBE Chief of Staff (Air), Defence Equipment & Support Royal Air Force the Team…

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Air Commodore Rob Woods OBE Chief of Staff (Air), Defence Equipment & Support Royal Air Force the Team… A Warfighters View: Weapon System Availability – A Collaborative Challenge Air Commodore Rob Woods OBE Chief of Staff (Air), Defence Equipment & Support Royal Air Force The Team….. Air Cdre Rob Woods Mr Richard Hamilton MoD DE&S BAE Systems plc Gp Capt Simon Vicary Mr Geraint Spearing MoD DE&S MoD DECA Mr Ian Manley Mr Ian Cole MoD DE&S MoD DECA UK Defence Equipment & Support (DE&S) “To equip and support our Armed Forces for operations now and in the future” DE&S’s Role • Procure & support equipment, through life, for UK’s Armed Forces for both current & future operations • MOD’s lead department for commercial activities • Manage relationships with MOD, the Front Line & Industry DE&S HQ, MOD Abbey Wood, Bristol, UK DE&S Budget to Spend 2019/20 • £10.8 Billion Core Spend: − £5.4 Billion for Purchase of New Equipment − £5.4 Billion for Equipment Support • £3.9 Billion budget for Air Domain, 56% of which for Support Air Domain Portfolio Backdrop for Transformation in Support: 2000-05 • Strategic Defence Review 1998 • Similar lessons learnt over multiple –Smart Acquisition operations; urgent need to improve • DLO Strategy • Increasing demand for UK military –20% Savings & ‘Transformation capability across the globe Staircase’ • Nature of operations changed • Air & Land End-to-End Review • Defence White Paper 2004 • Need to find efficiencies • Government Efficiency Review 2004 – Preserve current & future capability • Formation of DE&S End-2-End Review of Air & Land Logistics - 2003 • Simplified lines & levels of support - From 4 x Lines of Maintenance to 2 x Levels: Forward & Depth • Creation of Depth Support Hubs for platforms - Tornado @ Marham and Harrier @ Cottesmore • ‘Contracting for Availability’ - Tornado Future Support - ATTAC Phase 1 & ROCET • Reliable & consistent supply chain - Reduced in-theatre delivery Op TELIC from 4-7 to 1-2 days; in NW Europe from 28 to 7 days • Application of ‘Lean’ techniques - Training & migration to Continual Improvement National Audit Office Report - Jul 2007 ‘Transforming Logistics Support for Fast Jets’ “The Department made significant reductions in the cost of support to fast jets; the Tornado and Harrier Project Teams’ costs reduced from total of £711M in 2001-02 to £328M in 2006-07, providing cumulative savings of some £1.4Bn over the 6-year period.” “The Department has continued to achieve broadly the same level of performance in terms of flying hours throughout the transformation. On this basis, the Department’s transformation of logistics support represents good value for money to date …although there are risks…” 2003-11: Air Efficiency – Target v Achievement £M 500 400 Achieved Target 300 DLO/ 200 DE&S 100 Front Line 2003/04 04/05 05/06 06/07 07/08 10/11 • 11 The UK’s Support Transformation Staircase Today’s Support Solutions • Relationship between DE&S and Industry largely stabilized; ‘post- Levene’ relationship between DE&S and Air Cmd still in work • Have developed areas where analysis of Perspectives 1 & 2 match, and increasingly tailored contracts on proven ‘good practice’: – Governance is key: Programme Boards now regularly making tough decisions; SDSR 2015 provided real opportunities to grow capability – CEO DE&S has driven the ‘S’ back in DE&S – Set requirements early on - focus on teamwork, transparency & trust between SROs & DE&S Delivery Teams – Coherence in Deployed Space, and greater emphasis on Safety Continuing Efficiencies Realised in Support Attack Helicopter Hercules IOS: 17% IOS: 21% savings savings over 6 years over 5 years - Dec - Dec 15 14 ATTAC: 18% Merlin IOS: 20% savings to Out of savings over 5 years Service - Jul 16 - Apr 15 Chinook TLCS: Hawk Support: 8% 23% savings over savings over 4 years - 5 years - Jan 15 Mar 16 TyTAN Launch - July 2016 An Industry View: Weapon System Availability – A Collaborative Challenge Mr Richard Hamilton Manufacturing & Support Director, BAE Systems plc Typhoon Total Availability Enterprise (TyTAN) • 10-year deal for all aspects of Typhoon operational support – Brings together several legacy contracts into one arrangement – 10 year framework allows industry to make long term investments to optimise support • Target price 38% lower than previous arrangements – Unachieveable through “business as usual” negotiation with single-source supplier • Reinvestment of support savings directly in platform capability development The Challenge For the UK MOD SAVE MORE • Funding stream for UK Typhoon Support insufficient Reduce based on current run rates Operating • Tornado Out of Service Date driving required Typhoon Costs Capability Enhancements • Operational commitments driving need for improvements to how Typhoon is operated in the UK Fleet DELIVER MORE SPEND MORE Increase Reinvest Competitive Savings in For BAE Systems Advance Capacity • Driving recurring support costs down will allow recycling of c.£0.5bn into capability programmes • Enhanced operational effectiveness of the Typhoon weapon Enhance Typhoon system to support UK RAF requirements Product Typhoon Export sales dependent upon cost efficiencies being • DO MORE realised TyTAN – A Step Change in Typhoon Support – Joint Plan • Agreement signed Jul 2016 Replaced existing multiple support contracts with a single output-based availability service Jointly developed by BAE Systems and MoD under Future Support Operating Model project during 2015/16 • Delivers flying hours, simulator availability and pilot training in support of the Typhoon Force Command Plan • Transformation programme a critical enabler Enterprise “One Team” integrated approach to ensure success ‘Enablers’ are multi-organisational in nature Investment of cash; energy and leadership TyTAN Features & Performance Management • Highly integrated enterprise approach (BAES/RAF/DE&S) • Only one main Performance Indicator - Pay Per Flying Hour FLYING NON-FLYING HOURS SERVICES – Simple measure that is used to drive delivery and behaviour – Other indicators used for management information only COST • “Key Resilience Indicators” act as safety net to RESILIENCE protect military output and operational CONTROL flexibility – e.g. Bank of Hours, Inventory health TyTAN - Performance Management Payment Governance • Flying HourAchievement •KPI 1 - Training and Mission Support •KPI 2 - Airworthiness & Safety •European OPMI Flying Non-flying Hours Services Deliver... One Enterprise Whilst ensuring... Cost Control Resilience Transformation Key Resilience • Continuous Improvement Indicators • Recycling for capability • KRI 1 - Flying Hour Resilience • KRI 2 - Supply Chain Resilience • KRI 3 - Safety & Availability Modifications Embodiment Typhoon Total Availability Enterprise (TyTAN) • 10 year, Output Based contract with Price Per Flying Hour (PPFH) • 40% Savings reinvested into future capability • Output based services (Flying Hours and Simulator Availability) • Avionics provider (Leonardo) fully integrated into the Joint Avionics Service (JAS) • Long term deal providing better incentives for Transformation • Operates as a single Enterprise (BAES, RAF and DE&S) Enterprise Enablers 25 Enterprise Leadership TyTAN RSO Typhoon Force Commander • FH achieved Air Cdre Mark Chappell • Recycling for capability No 1 Group DE&S BAE Systems Delivery Lead Delivery Lead Delivery Lead UK Support (TyTAN) Delivery Deputy Force Commander Deputy Head FAST – CapSust Director Gp Capt Jez Milne Ian Manley Alison Ballard • CP & IYDP • Contract Management • Service delivery • Transformation • European interfaces • Transformation • Fly the Plan • Strategic Support Planning • Cost reduction Relentless focus on: Doing the right thing, at the right time, in the right place Driving out/avoiding waste Delivering the Command Plan 26 Joint Governance Structure 2-Star 6-monthly TyTAN Review TyTAN Senior Monthly with every 3rd Management Perfomance Review & Quad meeting being 1* Quad Enterprise Enterprise Operation and Transformation Monthly Review Enterprise Operation Strategic TyTAN Change Fin/Comm Performance Monthly Review Board Working Group Planning Cell Review Review Management Contract Blue Box - Reviews - Service Delivery Team Leads 27 Transformation Cultural Change – The Challenge Changing legacy cultures and behaviours key to TyTAN’s success Three dimensions of change; BAE Systems – DE&S – Air Command BAE Systems Front Office vs Back Office European Collaboration Requires all teams to be focused on the priorities of the solution; Flying Hour & Pilot competency Maintaining Airworthiness Achieving Transformation & Efficiency Enabling Recycling for Capability From Customer / Supplier to Partnering to Enterprise 28 TyTAN – What have we learnt? • Early alignment of objectives (around operational output) is crucial • Re-investment of support savings is a powerful incentive to all • Trust takes time to build; transformation and cultural change is a c5 year process; long term security is Relentless focus on: needed to enable investment Doing the right thing, at the right time, in the • Customer has to change too and work in a highly right place, with the right behaviours integrated way with industry for the common good Driving out / avoiding waste • Leadership demonstration of changed behaviours essential Delivering the Operational Output • All parties need a mature understanding of each other's business, motivations and cost drivers 29 Conclusions & Future Relationships • Identify good practice inter-organizationally & adopt it • DE&S and Industry will continue working together: trust achieved through shared values - ‘win-win criteria’ - clear contracted responsibilities & open communications • Innovation & coherence - together • Consider intelligent support on future Foreign Military Sale platforms • Remain flexible - resources likely to need further balancing • Make Plan A work; reflect that perhaps there never was a Plan B… “The Snowplough Test” Question. Who gets the snowplough out in the morning ? Answer. It’s now our industry partner because…… ……..it’s in their interest for us to fly! Questions…?.
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