Transdisciplinary Lifecycle Analysis of Systems 249 R. Curran et al. (Eds.) © 2015 The authors and IOS Press. This article is published online with Open Access by IOS Press and distributed under the terms of the Creative Commons Attribution Non-Commercial License. doi:10.3233/978-1-61499-544-9-249 Sustainment Management in the Royal Australian Navy
a,1 b Robert HENRY and Cees BIL a BAE Systems Australia, Hydrographic In Service Support, Cairns, QLD 4870, Australia b School of Aerospace, Mechanical and Manufacturing Engineering, RMIT University, Melbourne, VIC 3001, Australia
Abstract. The Australian Defence Force (ADF) like many industries faces ongoing challenges in the support of their assets, acquisitions, budgets and workforce management. Unlike other industries, the ADF is heavily affected by changes in Government, changes in Government policy direction, diversity of potential conflict scenarios and the manner in which budgets are set. This has led to a series of decisions being made that have addressed problems in the short term but have not adequately considered long term implications. More often than not, Government directives to deliver improved efficiencies come along with a corresponding budget cut, a direction to maintain services and capability without any real guidance on how this could or should be achieved and this continues to impact on the organisation long after the incumbent Government has left office. Resultant problem areas within the ADF maritime such as engineering and maintenance are covered by a number of Reports including the more recent Rizzo Report. The purpose of this paper is to look at the area of Sustainment Management within the ADF from a maritime perspective and the holistic view that defence industries need to consider in the development of their Support Solutions when entering into support arrangements such as Alliances and In- Service Support contracts.
Keywords. sustainment management, maintenance, Royal Australian Navy
Introduction
Many large organisations face continued pressures to ensure maximum plant up-time and availability while reducing support costs; the Australian Defence Force (ADF) and their prescribed supplier the Defence Materiel Organisation (DMO) are no different in this regard. The strategies implemented are very dependent on a range of factors including competition, quality and level of available data for analysis, desire for change, organisational culture, organisational structure, finances, change management practices within organisations, politics and many others. These factors have a heavy influence on outcomes and generally are not easily changed [1]. The Rizzo Reform Team has identified that to affect the required cultural changes necessary to improve engineering
1 Robert Henry, Maintenance Manager, Hydrographic In Service Support, BAE Systems Australia, Cairns, QLD 4870, Australia. Email: [email protected] 250 R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy outcomes within the Royal Australian Navy (RAN) is expected to take a generation dependent on the consistency of approach. Organisations may have a dominate engineering functional basis, have a heavy plant asset base or have little in the way of primary plant but all have an operational focus of some description. Balancing these apparent apposing requirements can often be difficult and is made more complex when the organisations prime objectives are not made the centre piece of each department’s objectives and managed with an overarching coordinated approach [2]. Within the ADF, staff retention, staff mobility and costs of training add considerable cost and complexity to this issue which has had negative impacts to engineering management within the RAN as identified by the Rizzo Report [3]. Since the late 1990’s, the Australian Defence Organisation (ADO) has continued its shift from self-reliance to ever greater levels of industry support where its functions have been deemed not part of the core business of war-fighting or not considered frontline support services required to support this purpose. This fundamental shift saw the introduction of Class Logistics Organisations later named System Program Offices (SPOs) that were focused on specific asset classes and often partnered with an industry service provider. This model has continued to develop and evolve gaining greater pace when the DMO was created in 2000 as a statutory independent organisation and prescribed supplier to Defence. The original model was supposed to retain military and Australian Public Service (APS) personnel in executive, finance, engineering and governance roles with industry partners providing the leg work to be brought in as required to meet project needs. This concept was supposed to allow for the flexible resizing of the organisation to support the varying work load. Unfortunately, this vision failed to be realised resulting in inefficient and costly structures. In more recent times primarily due to budget pressures, freezes on recruitment and other Government reviews into staffing levels of public servants, the original concept is likely to gain greater traction. The process of outsourcing services has come at a cost to the ADO as a whole through the effective deskilling of critical engineering functions as identified in a number of Reports including the more recent Rizzo Report [3]. An article appearing in the Australian Defence Magazine has gone further in revealing that the Commission of Audit review into government programs identified that the DMO has not been effective or enhanced accountability due to a range of skills shortages and high staff turnover [4]. Interestingly, this was highlighted in the Mortimer Review with a range of recommendations made to improve commercial practices, skills, risk management and workforce numbers [5]. What does this mean to defence industries? The obvious answer is a possible business opportunity but a discussion of business opportunities or how to win them is not part of this paper. The more likely answer is that defence industry may be asked to take on responsibility beyond the traditional supplier of materials and services. As discussed in an editorial article titled Time to let go of the Valley of Death and make a decision, many defence related industries have focused on a relatively narrow part of the spectrum and have primarily been concerned with acquisition and construction projects calling on the Government to provide certainty for the Australian Defence shipbuilding program in order to maintain skills [6]. While this maintains a large workforce with a range of skills that may not be easy to pull together again at short notice, the notion that it maintains a highly skilled work force that would somehow irrecoverably disperse is questionable. R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy 251
Most of the skills needed in the bulk construction phases of shipbuilding are transferable between Defence and commercial work and are also required to support the maintenance and modification programs that are largely performed in-country. Specifically, the areas often cited as a concern for skills retention in the ship builder sector are more related to maintaining employment opportunities rather than skills retention. Additionally, the skills that are valuable for retention including engineering for systems integrations continue to be required in support modification programs and high end technical skills that are required to support the vessels past the build phase. From the author’s direct experience over the last 20 years, the most difficult skills to retain and replicate from Sustainment perspective are those related to complex systems diagnostics and field repairs of military systems/equipment which up until the last decade or so largely originated from within defence due to the lack of commercial equivalent training. Generally, reviews into Defence have focused on the performance of either a single service, DMO or the partnership. These reviews have placed many of the engineering and sustainment performance problems squarely at the feet of the ADO. This may be valid when considering the performance of the governance function and commercial acumen but industry also needs to stand up and be counted in underperforming. From the author’s experience of being on both sides of the fence, it is evident that the base problems affecting the ADO are equally applicable to industry in Sustainment support of military systems / equipment. What are these shortcomings and are they easily addressable?
1. Problem Description
Under pressure to reduce manning levels on board Her Majesties Australian Ships as this represents the single biggest cost of running a Naval vessel, the RAN began requesting replacement vessels that were considered to be minimum manned in line with commercial shipping trends. New vessels have more automated control and equipment requiring less routine maintenance to be performed while at sea requiring a smaller highly skilled technical workforce as part of the crew. This shifted the focus from providing engineering, technicians and tradesmen as a significant crew component to one of addressing the core operational requirements of war-fighting and seamanship in line with RANs mission statement of “to fight and win at sea”. One aspect of this approach was to distribute the function normally handled by a “whole of ship” maintenance planning cell amongst various “Work Centres”. The term Work Centre came about in response to the Computerised Maintenance Management System (CMMS) progressively rolled out across the maritime fleet. This has led to circumstances resulting in poor outcomes including adverse press concerning the materiel state of ships and consequently, a number of Government driven reviews. This problem is further compounded by the organisational size, work place culture, geographical diversity, diversity of equipment, the manner in which capability procurement activities are implemented, separate training programs and diversity of activities that ADF personnel are expected to perform. Over the last decade or so, maintenance management as a discipline has been increasingly recognised as something other than a sub function of engineering management or project management. In response to industry demand, a number of universities now offer post degree qualifications in maintenance management or asset 252 R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy management. In comparison, the RAN dropped maintenance management training as they rolled out Computerised Maintenance Management Systems (CMMS) and increasingly relied on DMO to pick up the shortfall. DMO became a prescribed service provider under the Financial Management and Accountability Act 1997 in 2000. The services provided in support of maritime maintenance have generally been in regards to contracting and contract management of maintenance tasks identified as being outside of the crew capability or capacity. Initially, there were no defined accountabilities or performance measures identified which was identified in the Mortimer Review that included recommendations for Defence and DMO to enter into Material Sustainment Agreements (MSAs) [5]. Though the recommendation was taken up, implementation across the RAN was inconsistent and dependent on the relationship between the various SPO’s and Capability Group’s. Around the same timeframe, the RAN reduced the recognised maintenance categories from Organisational (ship level), Intermediate (navy support workshops) and Depot (those functions not within Defence capability) down to two levels – Organic (ship level) and External (not conducted by ship’s crews). One of the unfortunate side effects of this decision was that training programs supporting intermediate level maintenance were either reduced or dropped with nothing put in place to fill the gap. The underlying assumption was that industry would fill it, but the reality is far more complex in areas where the technology is unique to defence or where other limitations exist.
Figure 1. Differences in Work Allocation. Figure 1 is a simplistic view of how job allocation for maintenance was broken into three levels which was initially determined at the acquisition stages based on the level of training required, facilities required, test equipment, parts availability, required turnaround times, certification and performance testing, access and availability of intellectual property amongst others. The first part of Figure 1 shows a clean allocation which in reality was not neat and clean. The second part of the figure depicts the current practice in the maritime context but the formal training that was originally R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy 253 available for the Intermediate work scope has largely disappeared. This aspect had a significant impact as the training and development of maintenance staff in the intermediate facilities allowed the development and retention of corporate knowledge.
2. Key Issues
From a defence naval perspective, there are a number of areas that need to be addressed that could be equally applicable to a range of other service support arrangements. This poses a number of questions that will be considered by this paper in line with the principles of System Support Engineering focused on Sustainment (maintenance) related issues and are summarised in this section:
1. What’s does the support environment look like? Support contracts are let for any number of reasons. Understanding the rational and objectives can be crucial to success. Are there any constraints being applied or mandated tools, equipment or facilities being provided by the customer? What could be argued by the customer as a cost saving measures could unwittingly be a set of liabilities. 2. What’s in the contract? This is often fundamental to many of the problems encountered between DMO, Industry and the subsequent disconnected expectations of the RAN. Do all parties understand what’s being asked for and is it realistic? As basic as it seems, often the contract is written by one group of parties and handed over to another to implement based on a briefing. While the contracts are made available, the page/word count, complexity and legalese way in which they are written tends to discourage reading beyond the introductory sections. The result is that at least one party often doesn’t understand their obligations or what is required to be delivered. In this regard, relationships between the parties can become unnecessarily strained when the difference between the parties becomes too large placing them in an adversarial position. 3. What are the explicit and implicit requirements? The explicit components are normally easy to manage on the proviso that they are realistic; the implicit ones including unstated expectations and intent are the ones that often bite. Often, aspects are covered in a series of related reference material and written in a manner that assumes the other party has pre-acquired knowledge. 4. Are the references used in the contract available and are they understood? In the last 2 major support projects the author has worked within, this was a fundamental failing in that some publications were not made available prior to the contract signature and in other cases assumptions were made that were never suitably questioned by either party. From the Contracting parties perspective, potential Contractors contribute to this situation by providing assurances that the contract is understood. 5. What tools have been mandated? This is in reference to corporate software tools that the Customer may want the service provider to use. This can and does impact on staff work-loads but is rarely able to be evaluated upfront or may be introduced or modified after the contract start date with an assumed or asserted nil impact assessment by the customer in regards to the required level of effort. Generally, this is not intentionally misleading, just a reflection of the individuals direct experience with the tools. 254 R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy
6. Are there Key Performance Indicators (KPIs) identified in the contract that are quantified and defined up front or are they listed as generic performance areas with KPIs that are to be determined and agreed post contract signature? Difficult to measure or quantify KPIs are not uncommon. More to the point, incorrectly qualified KPIs can inadvertently setup undesirable behaviours. 7. Are training requirements or competency profiles identified upfront; is there sufficient information to determine this? Working within Defence, there are a number of applications and systems that are unique and not accessible via normal commercial training providers. In some cases, the contract may identify that the training is to be at the Contractors expense or made available as a one off delivery in the early days of the contract period. If this is the case, there is an expectation that the Contractor will use this opportunity to develop and implement their own training programs to ensure continued service delivery. 8. Are the stakeholders clearly and easily identifiable? The ADO is a complex entity to deal with not least as a result of frequent name changes, geographical diversity of support business units and relatively short staff posting cycles. A common mistake is to only focus on the business unit managing the contract. 9. What is the framework / context that the contract will operate? This question relates to the regulatory and statutory frameworks. Maritime assets by their very nature are required to be supported in all Australian states and territories and on occasion during overseas deployments. The question then becomes one of international vs federal vs state vs RAN and often all of the above are applicable. 10. What are the cultural influences and differences between defence and industry that may affect performance? This is a broad question but will be looked at in the context of the contract, attitudes, stability and change management.
3. Moving Forward
While the purpose of the paper is not to propose an organization structure, a review of some structures associated with Defence Maritime will be used to highlight some aspects of the structural framework that are both good and poor and discuss some possible areas of improvement along with providing clarification of requirements.
Step 1
As a start point, what are the key elements that need to be understood by all parties involved in the Support Solution? This is succinctly identified by the following elements extracted from DI(N)LOG 47-3 - Regulation of Technical Integrity of Australian Defence Force Maritime Materiel [7]: People – Individuals and Technical Support Network – qualified, authorised and competent; Systems – Quality Management System (QMS) appropriate for the type of work performed with a minimum standard certified to AS/NZS ISO 9001:2000 or equivalent standard acceptable to Chief of Naval Engineering (CNE); Processes – Procedures and plans – evidence of compliance; and Data and facilities – use of relevant and authorised data and facilities appropriate for the activity being performed. R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy 255
Responsibilities for ensuring most of these elements are in place and met rests with the Contracting Authority with points (a) and (b) being the responsibility of the Authorised Engineering Organisation (AEO). In most instances, both of these functions are now managed by each System Program Office (SPO). Generally, the level of assessment is only undertaken as far as the Prime Contractor’s management team and a review of their management plans. It is often assumed that the Prime Contractor flow these requirements down through their own organisation structure and onto any sub- contractors engaged. In order to develop a support solution, a potential service provider needs to gain a level of understanding behind the elements contained with the ABR 6492 - Navy Technical Regulations Manual [8]. This is a five volume set with Vol 1 – Policy and Vol 2 being the prime volumes of interest and the remaining volumes providing simplified overviews. Vol 2 is broken into 8 sections that cover specific areas and follow the same basic format: chap 1 - policy, chap 2 – regulations, sect 3 - organisational and individual responsibilities and chap 4 – guidance (Figure 2).
Figure 2. Section headings from NTRM Vol 2.
Step 2
It should come as no surprise that many of the SPOs arrange themselves to functionally align with the Naval Technical Regulatory Framework (NTRF) and Defence Procurement Policy Manual (DPPM) where staffing levels permit. Understanding this allows an organisation providing support services to determine likely organisational interface requirements. Within this structure, there are 3 different types of governance function: 1. Executive – This is led by the SPO-Director. Individuals within each functional area may be delegated an Executive Authority based on levels of risk and or finance involved; 2. Engineering – This is led by the Chief Engineer and Level 2 delegates are assigned by CNE. This person may be authorised to delegate lower levels of engineering authority within some of the functional areas. These are voluntary roles and awarded based on demonstrated understanding of the NTRF, qualifications, experience and type of engineering function being performed; and 256 R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy
3. Finance – This may be assigned and led to the SPO-D or by the Business Manager. Individuals within each functional are may be delegated a level of financial authority dependent on the nature of tasks managed and requires completion of a Simple or Complex Procurement course. Exercising of executive and engineering or finance delegations cannot be performed by the same person against the same task. Many support organisations have similar structures for exercising different types of authorities and delegations though this may not be as transparent.
Figure 3. Comparison of NTRF Structure to possible SPO structure. Within the functional areas depicted in Figure 3, the governance functions are depicted in the upper three colored boxes as shown, they provide support and direction to personnel awarded delegations in each of the other functional areas.
Step 3
Understand the “scope” which encompasses both explicit and implicit requirements. This notion is also applicable in determining the boundaries of authority and responsibility. Using the Hydrographic In Service Contract as an example, it is evident that areas of Sustainment Management are being compromised in the mistaken belief that since the Contractor has been tasked with compiling information, they are also responsible for the endorsement and acceptance of that information even though authority has not been given. This aspect is an example of confusing a Governance function with a support activity.
4. Regulatory framework
Across the ADF, different views exist concerning the technical and statutory regulatory framework and the applicability to a particular asset or to the organisation as a whole. Defence has traditionally enjoyed a view that aspects of the regulatory framework are not applicable due to the nature of their core business activity. This view was recently challenged by the Australian Government in support of the WHS Act 2011 resulting in the ADF agreeing that outside of direct combat situations there were no operational situations precluding compliance of the Act. However, there remains a persistent view within the ADF community that these aspects are only a guide and therefore somehow R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy 257 not applicable if they are inconvenient, cause an increase in costs or add to the overall job complexity. Fortunately, this view continues to decline as one of the Rizzo reform activities continues with a focus on cultural change. Just as in other areas of the Australian industrial context, there is a raft of regulatory pitfalls that need to be navigated including some that are not so familiar to industry such as the Weapons of Mass Destruction Act. Defence Maritime in particular has to contend with Australian law as well as a number of international laws pertaining to Shipping though there are some peculiarities associated with warships that make it difficult to comply with some IMO codes and these are addressed by the Naval Ship Code (NSC) introduced circa 2007. Each arm of the ADF has its own implementation of a Regulatory Framework that is required to be implemented in line with Defence Instruction (General) LOGistics (DI(G)LOG) 4-5-012 – Regulation of technical integrity of Australian Defence Force materiel. In support of this requirement, the RAN version is DI(N) LOG 47-3 – Regulation of technical integrity of Australian Defence Force maritime materiel. This requires that ADF maritime materiel is fit for service and pose no hazards to personnel, public safety or the environment. The Navy Technical Regulatory System aims to ensure that ADF maritime materiel is designed, constructed and maintained to approved standards, by competent and authorised individuals, who are acting as members of authorised engineering organisations and whose work is certified as correct [9]. Relatively recently, ADO began consolidating a number of manuals into a single electronic manual set known as the Defence Logistics Manual (DEFLOGMAN). This is being undertaken to reduce the level of duplication and standardise the approach taken in support of a range of policies and activities. Maintenance in particular is now covered by DEFLOGMAN, Part 2, Volume 10 and provides clarification concerning applicability to both ADF members and contractors performing maintenance. The maintenance policy spelt out in this manual reinforces the requirement to ensure that both ADF members and industry are appropriately qualified and authorised to perform the work using approved documentation, to approved standards and the work is certified as correct. DI(G) LOG 4-5-020 – Defence Engineering and Maintenance Manual (Chief of Defence Force, 2013) covers a new governance framework being introduced across the ADO and must be read in conjunction with DEFLOGMAN. DI(G)LOG 4-5-020 represents a further consolidation of more than 10 separate policy manuals affecting engineering and maintenance activities conducted by both ADO and industry. What does this mean to industry in a support contract? Fundamentally, this means that industry needs to understand the requirements that are identified in the current ASDEFCON templates being used. In particular, it means that industry partners need to take note of the high level references used and to follow and understand a myriad of related references.
5. Conclusion
In amongst an ever increasingly complex environment, the approach by defence services has the appearance of searching for the proverbial silver bullet to solve a wide range of woes. In reality, the problems are becoming more and more complex and require a combination of strategies that need to involve a wide range of stakeholders to 258 R. Henry and C. Bil / Sustainment Management in the Royal Australian Navy ensure that impacts or risks are not unintentionally transferred to other elements of the support chain noting that they may not be able or geared to cope with them. The “silver bullet” also commonly called the “magic bullet” or “magic wand’ is simply a metaphor referring to an expectation that a straightforward or simple solution will resolve a complex issue. This can and often is an allusion based on the notion that a “new” method or new technological solution or a new contract can provide an immediate fix to complex issues or provide problem resolution at a substantially lower cost and within an improved timeframe. Over the years, the defence maritime sector has continued searching for the silver bullet in an attempt to reduce costs and improve outcomes. Unfortunately, this has not been the result as identified in the Rizzo Report [3]. What does this mean to a defence sustainment engineering services provider? Overall, this means that industry needs to get more familiar with the defence regulatory frameworks, corporate systems, corporate tools, technical risk management and stakeholders in order to gain a better understanding of the complex chain of interactions. This is not an easy task made more difficult by the level of poor understanding of the legal framework by many of the decision makers working within the RAN and SPOs. To highlight this facet, a common misconception espoused by some senior management personnel within DMO made the observation that there is a Financial Management Act (FMA) that they are accountable to but there isn’t an Engineering Management Act or that the FMA somehow takes precedence over the other applicable legislative instruments. This particular argument doesn’t hold in Queensland which has a Professional Engineers Act 2002 requiring registration of practising Engineers providing Engineering services. While this does not directly affect military personnel, it does affect industry service providers. The Board of Professional Engineers of Queensland has recently made a proposed amendment to broaden the definition of Engineering Services to include operations and maintenance [10].
References
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