View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Calhoun, Institutional Archive of the Naval Postgraduate School Calhoun: The NPS Institutional Archive Theses and Dissertations Thesis Collection 2008-12 Squadron movements and associated transportation problems: an inner look into the process Hollis, William J. Monterey, California. Naval Postgraduate School http://hdl.handle.net/10945/10308 NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA MBA PROFESSIONAL REPORT Squadron Movements and Associated Transportation Problems: An Inner Look into the Process By: William J. Hollis Anthony S. Estep Nicholas T. Walker December 2008 Advisors: Geraldo Ferrer Aruna Apte Approved for public release; distribution is unlimited. THIS PAGE INTENTIONALLY LEFT BLANK REPORT DOCUMENTATION PAGE Form Approved OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington DC 20503. 1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED December 2008 MBA Professional Report 4. TITLE AND SUBTITLE Squadron Movements and Associated Transportation 5. FUNDING NUMBERS Problems: An Inner Look into the Process N/A 6. AUTHOR(S) William J. Hollis, Anthony S. Estep, Nicholas T. Walker 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION Naval Postgraduate School REPORT NUMBER N/A Monterey, CA 93943-5000 9. SPONSORING /MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING/MONITORING N/A AGENCY REPORT NUMBER 11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the authors and do not reflect the official policy or position of the Department of Defense or the U.S. Government. 12a. DISTRIBUTION / AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Approved for public release; distribution is unlimited A 13. ABSTRACT (maximum 200 words) The purpose of this MBA project is to explore the feasibility of prepositioning common aviation support equipment onboard aircraft carriers. When called upon to conduct shipboard operations, carrier-based squadrons are currently required to transport their common support equipment between their home station and their assigned aircraft carrier via commercially contracted trucks. The determination of prepositioning was made by conducting a cost- benefit analysis of purchasing additional support equipment versus the continuation of paying for contracted trucking. Additionally, the project investigates how the transportation funding program could be executed differently to better track funds and reduces current, questionable and unchallengeable charges. The project shows how proper scheduling of trucks for a carrier offload can prevent detention charges and assist in extending the taxpayer dollars from being used for non-value added activities. 14. SUBJECT TERMS Naval Aviation Enterprise, Distribution Network, Transportation Costs, 15. NUMBER OF Material Prepositioning, Inventory Management, Lean 6 Sigma, Detention Charges PAGES 115 16. PRICE CODE 17. SECURITY 18. SECURITY 19. SECURITY 20. LIMITATION OF CLASSIFICATION OF CLASSIFICATION OF THIS CLASSIFICATION OF ABSTRACT REPORT PAGE ABSTRACT Unclassified Unclassified Unclassified UU NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. 239-18 i THIS PAGE INTENTIONALLY LEFT BLANK ii Approved for public release, distribution is unlimited SQUADRON MOVEMENTS AND ASSOCIATED MOVEMENT PROBLEMS: AN INNER LOOK INTO THE PROCESS William J. Hollis, Lieutenant Commander, United States Navy Anthony S. Estep, Lieutenant, United States Navy Nicholas T. Walker, Lieutenant, United States Navy Submitted in partial fulfillment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION from the NAVAL POSTGRADUATE SCHOOL December 2008 Authors: _____________________________________ LCDR William J. Hollis _____________________________________ LT Anthony S. Estep _____________________________________ LT Nicholas T. Walker Approved by: _____________________________________ Dr. Geraldo Ferrer, Lead Advisor _____________________________________ Dr. Aruna Apte, Support Advisor _____________________________________ Theresa N. Rea, CAPT, USN, Acting Dean Graduate School of Business and Public Policy iii THIS PAGE INTENTIONALLY LEFT BLANK iv SQUADRON MOVEMENTS AND ASSOCIATED TRANSPORTATION PROBLEMS: AN INNER LOOK INTO THE PROCESS ABSTRACT The purpose of this MBA project is to explore the feasibility of prepositioning common aviation support equipment onboard aircraft carriers. When called upon to conduct shipboard operations, carrier-based squadrons are currently required to transport their common support equipment between their home station and their assigned aircraft carrier via commercially contracted trucks. The determination of prepositioning was made by conducting a cost-benefit analysis of purchasing additional support equipment versus the continuation of paying for contracted trucking. Additionally, the project investigates how the transportation funding program could be executed differently to better track funds and reduces current, questionable and unchallengeable charges. The project shows how proper scheduling of trucks for a carrier offload can prevent detention charges and assist in extending the taxpayer dollars from being used for non-value added activities. v THIS PAGE INTENTIONALLY LEFT BLANK vi TABLE OF CONTENTS I. INTRODUCTION........................................................................................................1 A. DEFINING THE ISSUES ...............................................................................3 B. OVERVIEW.....................................................................................................4 II. PROJECT BACKGROUND.......................................................................................7 A. SUPPLY CHAIN MANAGEMENT ..............................................................7 B. LEAN SIX SIGMA ..........................................................................................9 C. MILITARY EVOLUTION ...........................................................................10 D. PREPOSITIONING IN THE MILITARY..................................................12 E. INCREASE SPEED AND EFFICIENCY ...................................................13 III. SHIPPING COST FOR DETERMINING PREPOSITIONING ..........................15 A. FORMULAS...................................................................................................17 B. TRANSPORTATION....................................................................................18 C. INDIVIDUAL MATERIAL READINESS LIST........................................19 D. RETURN ON INVESTMENT......................................................................20 IV. PROBLEMS IN TRANSPORTATION FUNDING ...............................................23 A. TRANSPORTATION ACCOUNTING CODES/ LINE OF ACCOUNTING..............................................................................................23 B. RETENTION OF RECORDS, RECONCILIATION AND AUDITING .....................................................................................................24 C. PROGRAM MANAGER AND TRAINING ...............................................25 V. TRUCK SCHEDULING FOR REDUCED DETENTION CHARGES ...............27 A. DETENTION & SCHEDULING TRUCKS................................................27 B. SIMULATION ...............................................................................................28 VI. CONCLUSION ..........................................................................................................31 A. PREPOSITIONING ......................................................................................31 B. TRANSPORTATION FUNDING ALLOTMENT PROCESS..................31 C. TRUCK SCHEDULING PROCESS AND DETENTION CHARGES ....32 D. FURTHER RESEARCH...............................................................................33 APPENDIX A: REDUCED ENGINE TURN AROUND TIME........................................35 APPENDIX B: CHAIN FLOW OF TAC ............................................................................37 LIST OF REFERENCES......................................................................................................95 INITIAL DISTRIBUTION LIST .........................................................................................97 vii THIS PAGE INTENTIONALLY LEFT BLANK viii LIST OF FIGURES Figure 1. Percentage of Average Transportation Costs for West Cost Carriers during FY05-FY08......................................................................................................16 Figure 2. Chart of Return on Investment Thresholds to Purchase 1 Complete Super Hornet IMRL Outfit.........................................................................................21 Figure 3. Current Approach to Conducting Business, Scenario 1...................................29 Figure 4. Proposed