Shifting Roles and Responsibilities between the Government and Industry

Appendix C--IDEF0 Model 91

Appendix D--IDEF3 Processes Model 95

Appendix F--ALC Perspective 113

Appendix H--Commercial Comparison -- FedEx Site Visit 121

Appendix I—Shop Service Center 125

Appendix J—C-130 PDM Contract Lessons Learned Comments 127

Appendix K--CAR Core Team Biographies 194

Appendix L—References 197

Appendix M—Acronyms 198

Appendix N—Distribution 203

In late 1995, the Warner Robins Air Logistics Center (WR-ALC) Commander established 6 center level Lean Logistics teams to develop plans for product directorates use in changing the way key products and services are provided to customers. One of the teams was tasked to focus on the contract aircraft repair (CAR) process. Simply put, the CAR team was challenged to develop initiatives and ideas that WR-ALC aircraft "companies" and support agencies could use in preparing, administering and supporting aircraft repair contracts that could result in reducing throughput (flow days) by 50%, reducing cost by 30% and improving customer satisfaction by 20%.

A cross-functional team was formed with representatives from the major ALC aircraft System Program Offices (SPOs) and support agencies, the Defense Logistics Agency, the Defense Contract Management Command, contractors and customers. Two contractors (Intergraph Corporation and Modern Technologies Corporation) assisted with the study. This document is a result of the team's research and effort and provides recommended initiatives/actions SPO program managers should consider when contracting, administering and supporting contract aircraft repair. If implemented and institutionalized, the CAR team has high confidence all three goals will be met--and in some cases exceeded.

The CAR team found that there were no quick or easy solutions in making contract aircraft repair cost and time more effective. There were no "silver bullets" that will transform it into a model of efficiency. Rather, the team found that the contract aircraft repair process needs a re-emphasis of basic economic and management principles.

Although the government determines what work is to be done and when, it is not, however, free to mandate how contractors perform that work. In fact, the government is specifically limited in its involvement in contractor processes by the Federal Acquisition Regulation (FAR). This being the case, any initiatives put forth in this report addressed how the government should influence how the contractor accomplishes its activities and performance without specifying and requiring specifics in the contract.

Because of the necessity to "stay out of the contractor box", the team’s initiatives are intended to address the things that are external to the contractor but controlled by the government--the inputs, constraints and mechanisms of the process. The focus areas mentioned earlier--workloading, scheduling, material, over and above, organizing for success, plus others--are areas where government changes can influence contractor output.

In studying the CAR process, the team found some key concepts or "truisms" that applied to the contract aircraft repair process:

Contractors will not improve performance unless doing so has a clear, significant impact on their bottom line.

The following sections highlight each of the CAR team’s major study areas and initiatives/recommendations in changing the way the contract aircraft repair process is contracted, administered and supported.

The team found that the most significant area impacting PDM contract aircraft repair cost and flowdays was a steady and sufficient amount of workload. A relationship between the number of aircraft worked and production cost follows a curve like the one shown above. Repetition allows workers to become better at their jobs and encourages specialization. As operators move down the learning curve, efficiency and quality gains are realized.

On the negative side, a lack of sufficient workload can increase flowdays and impact cost significantly. Unless workload is steady, some expensive skilled mechanics have reason to "stretch" work out to remain employed in lean times. They wind up sweeping hangar floors until more work arrives. All of these conditions are anticipated when contractors develop bids.

Scheduling is a basic function of any production effort. Clearly, in performing contract aircraft repair, the development and execution of a schedule for aircraft going in and out of a contract facility has a major impact on the contractor's ability to satisfy the contract and for the customer to receive the services/products when promised. Failing to schedule aircraft with production needs in mind sets up the cycle shown below. Customers have missions to fly, and often cannot input an aircraft into PDM until a replacement is completed. Uncertainty of aircraft input for PDM prevents contractors from delivering aircraft to the output schedule as well. Unlike workloading, which determines the number of aircraft to be worked and manpower allocation, the schedule determines when the work is to be accomplished. Knowing and being able to predict when a production effort is to commence is a major and critical step in resource planning.

An equally important factor that greatly impacts production is unchanging or stable workload. An input schedule that allows the contractor to "normalize" operations at steady manpower and facility utilization levels goes a long way toward delivering aircraft on promised due dates.

Failure to put emphasis on material support will undermine the best efforts to properly workload and schedule aircraft repair. The CAR team discovered that unless it is known what parts are needed and aggressive actions to have the parts in place, delays are going to occur. The CAR team used many of the concepts coming out of the WR-ALC Lean Logistics organic aircraft repair team study in its recommendations. Foremost among those is the need for the development of an accurate bill of materials for each weapon system and a call for overhaul of the parts requisitioning system. Also, because aircraft repair contracts historically use Government Furnished Material (GFE), incentives need to be exerted to make the contractor more accountable for parts and shift the risk for schedule to the contractor. There will always be times when an unanticipated part need--a "stumble-on"--occurs. When this happens, it is imperative the government supply system, that contractors rely on for material support, is efficient and responsive. Creating and deploying a Shop Support Center (SSC), similar to those being established in the organic repair functions, addresses this need. Simply put, the SSC is a support team that includes the expertise and authority to handle many contractor issues--the greatest one being material.

Not surprisingly, despite all the best planning, unexpected inspection and repair work occurs on every aircraft. Consequently, aircraft repair contracts employ the use of over and above clauses to handle this work. This study identifies concrete recommendations for expediting these efforts to reduce the impact on schedule and cost. The CAR team member from Defense Contract Management Command (DCMC) played a crucial and major role in addressing this area. The CAR team found that a lot of historical information concerning PDM has been compiled over the years--and it's not only available at the ALCs. A wealth of knowledge can be gleaned from this data--knowledge that can help the government work smarter in the area of over and above support. The application of statistics to this information can help, for instance, in predicting an expected over and above allowance for a weapon system. Historical data, from both the ALC and DCMC databases sources, can better tell which items should have standards developed, and what those standards should be. Applying this information in the early stages of contract formulation, intelligent partnering with contractors, and allowing DCMC the opportunity to provide the total oversight streamlines the over and above process for both the government and contractor--resulting in faster throughput and at a reduced cost.

DCMC is the government representative at the contractor’s facility. The CAR team, as well as a joint AFMC and DCMC team, found this valuable resource is often under-utilized, as the ALCs historically retain control and management oversight over many support functions from a remote location. Utilizing the DCMC asset to its fullest potential would have a significant positive impact on contract PDM production and reduces redundant government resources.

One of the areas the team found needing change concerned the organizational structure of the Air Logistics Centers. This became apparent during a visit to a private company that contracted its aircraft heavy maintenance. The team found a clean organization that focused solely on maintenance actions--both organic and contractual. In the contracting portion of the organizational structure, the perspective was not solely procurement actions, but focused on total program management--especially as it related to partnering with contractors and getting the most benefits for both--a WIN-WIN situation! Based on DOD guidance and current events, the team sees contract aircraft repair activities increasing in the DOD as downsizing, privatizing, outsourcing and budgetary crunches become worse--not better. The CAR team also found that aircraft repair, in itself, was a service that delivered a specific product to a customer. In itself, aircraft repair did not appear to fall into the Integrated Weapon System Management (IWSM) preview of having to have, under a single weapon system manager, a production function. Instead, the CAR team concluded that aircraft PDM inspection and repair was just another service (an extremely big and costly one) that customers expected ALCs to provide them. Generally, from the customer perspective, it did not matter to them whether their PDM work was accomplished organically or by contract--just so long as it was done in a predictable and effective method.

The scope of aircraft repair is large and is somewhat a discipline in itself. Division of this function into weapon system unique organization is somewhat inefficient, has duplication of effort and fragments support. Contract aircraft repair actions accomplish the identical work of organic maintenance functional--just not under the day-to-day management of the government. It is in this area that the CAR team felt realignment of responsibilities by organizational changes could be made. Doing so would result in more efficient, effective and institutional changes that allow, across the ALC and other support agencies, significant improvements in the throughput, cost and customer satisfaction of aircraft undergoing PDM inspections and repair--at both the organic and contract activities. One possible organizational change the CAR team considered revolved around removing the production activities from the individual SPOs and aligning them under a single function responsible for depot level aircraft repair. (Of particular note is that the CAR team did not advocate eliminating or transferring the single weapon system manager’s responsibility of satisfying the customers need for aircraft repair--the SPO still retains the single manager responsibilities and is the single "face to the customer"). The CAR team looked at a possible change using the concept that would have the SPO "hire" an aircraft repair function to repair the customer's aircraft--determining the WHAT AND WHEN. The aircraft repair function would determine the WHERE and HOW.

Although the CAR team did not recommend a specific organization to support the CAR initiatives, the team does recommend that another team be formed. The purpose of the team would be to study the need for organizational change and if warranted, recommend an organization that would better support the CAR process.

The results of the CAR team’s study provides 30 plus specific recommendations for improving the CAR process. The major ones being: (1) provide a economic workload to the contractor, (2) develop and follow an input schedule, (3) overhaul the government parts requisitioning system, (4) create and operate a Shop Service Center to support the contractor, (5) turn over more responsibility to DCMC, and (6) form another team to study and if warranted recommend organizational changes at the ALC to support the CAR process. Most of the recommendations mean minor changes in philosophy or direction at the SPO level in applying smart decisions to the CAR process; however, some recommendations require changing the very way the government approaches the business of aircraft repair--THINKING OUT OF THE BOX! Those recommendations needing center level or MAJCOM approval can best be processed first at the SPO level by requesting the support agencies/functions obtain the policy/guidance changes necessary to implement these recommendations.

In late 1995, the Warner Robins Air Logistics Center (WR-ALC) Commander established 6 center level Lean Logistics "Chain" teams, in concert with 8 Lean Logistics "Link" teams, to develop implementation plans for changing the way the center provided core services and products to the war-fighters--the CUSTOMER!

The task of each team was to use the umbrella principles of LEAN LOGISTICS and the specific initiatives and concepts of reengineering, acquisition reform, 2-level maintenance, just-in-time inventories, intelligent partnerships, integrated product teams, and all the other smart business practices available to the teams. The basics of Lean Logistics are defined below:

The CAR team recognized that government and commercial contracting practices differ in several fundamental ways. Commercial procurement actions attempt to obtain best value for the company to maximize profit. Government actions, however, are geared, by public law, to:

The government’s goals are more complex than those of the commercial sector, but the government can consider, at least in parts, many of the commercial acquisition practices. Some that the CAR team felt may be considered in contracting for aircraft repair services are:

This study addresses many of these practices. Use of these practices to the maximum extent possible under the Federal Acquisition Regulations (FAR), DOD guidance and good business practices during the procurement process of contracting aircraft repair, coupled with the other initiatives in this report, can and will result in providing to the user faster, cheaper and higher quality aircraft.

Air Force weapon systems are routinely scheduled for Programmed Depot Maintenance (PDM) at predetermined intervals to accomplish the heavy maintenance and inspections. Appendix A--Description of PDM--contains an overview of how the PDM process takes place. The majority of PDM work is accomplished "in-house" or organically, yet the trend is to contract more of this type work in the private sector. Although there is more aircraft repair work that is contracted (i.e., unscheduled depot-level maintenance, modifications, time compliance technical order, etc.), the CAR team focused primarily on those areas relating to contracting of aircraft PDM.

Even though the CAR team did not study CORE issues, it is important background to consider. As the DOD solidifies the definition of CORE depot maintenance capabilities to meet essential wartime demands, promote competition and sustain institutional expertise, the considerations to contract workload will adjust as necessary. The recently published Policy Regarding Performance of Depot-Level Maintenance and Repair, March 1996, by the Office of the Secretary of Defense is must reading for ALC managers as they consider workload factors--now and the future.

The purpose of the CAR Lean Logistics study was to examine the aspects of the CAR process in which government participation can be used to enhance the overall CAR performance, and to recommend any appropriate process modifications.

Simply put, the charter the team was given was to develop ideas/initiatives that system program offices could use in preparing, administering and supporting contract aircraft repair actions that would result in substantial improvements in throughput (flowtime), cost and customer satisfaction.

The CAR Team was provided advice and assistance from the past and current C-130 System Program Directors and Deputy System Program Director (WR-ALC/LB):

Col Greg Siegel (Current C-130 SPD)

Mr. Mike Hatcher (GM-15) (Deputy C-130 SPD)

The initial CAR team was formed in September 1995 and consisted of representatives from various Air Logistics Center support functions, WR-ALC aircraft single manager program offices, Defense Logistics Agency (DLA), Defense Contract Management Command (DCMC), contractors, and customers associated with contracting aircraft repair--especially as it related to programmed depot maintenance (PDM). Since there was an on-going effort to renew the C-130 weapon system PDM contract, a large majority of the team consisted of representatives from the C-130 System Program Office (SPO). The team composition changed throughout the study based on findings and new areas of study; however, a core number of people were members during the duration of the study. Individual members of the CAR Team are:

* Ed Humphreys WR-ALC/LB (MTC) Jenny Thompson WR-ALC/LKSA

Denise Yawn WR-ALC/LBPLC Mike Earehart DCMC/PEMCO

Carolyn Green WR-ALC/RE/LL Bill Clark WR-ALC/LBRSD

Hugh Nelson WR-ALC/LBRA Chuck Gibson HQ AFRES/LGMA

Ed McDowell McDonnell Douglas Capt. Mike Nowaczyk WR-ALC/FML-1

Perry C. Doyle 78ABW/LGSP Wade Summer WR-ALC/FMLMC

Ralph Hill WR-ALC/FMLMC * Franklin Kee WR-ALC/LJK

Gerald Barron WR-ALC/LBPCA John McGraw 78ABW/LGSIC/LBP

Tammy Phelps WR-ALC/LBRS Annick Woodlock WR-ALC/PKPB

Margie Tyner WR-ALC/LBKA * Joel Murphy WR-ALC/LFPC

Maj. O.B. Mercer DLA/DDWG/E Lt. David Flynn WR-ALC/LB-PIT

Melvin Gillis 78ABW/LGTPL Mike Bishop DCMDE-AOB

Glenna Abney 78ABW/LGTPM Jim Harper WR-ALC/LBRA

Cheryl Maddux DCMDE-AT * Jimmy Rogers WR-ALC/FMLMC

* John McDonald WR-ALC/LBRA Roy Abbot WR-ALC/RE/LL

* Ron Harlow Intergraph * Mike Denson Intergraph

Carol Thomas WR-ALC/LU

* Core Member (Core Team biographies are at Appendix K)

As part of the CAR study, information about the current processes was gathered through team modeling meetings, interviews, symposiums, site visits and surveys.

Intergraph Corporation used the following software tools to model and simulate portions of the CAR "As-Is" process:

IDEF0 Model AI0Win KBSI

IDEF3 Model Prosim KBSI

Simulation Witness AT&T Istel

The Stakeholders And Their Objectives--most processes are shared by several groups of people, and each group is a stakeholder in that process. It is important to understand who those stakeholders are as well as their interests (or objectives) in the process. The importance and relevance of any portion of the process are different from stakeholder to stakeholder, and each perspective has to be considered.

The Process Steps--processes are composed of process steps, and each step is carried out by some individual, organization or machine at some location and consumes some amount of time and cost. Each process step should contribute in some way to the process itself, and can be characterized as value-added or non value-added. An IDEF model allows the definition and detailing of these steps in a graphical way.

The Process Technology--the mechanisms that are used to carry out a process are important. Many process steps can be automated by taking advantage of current technology in ways that vastly improve the overall process performance.

The Motivational Elements Of The Process--processes themselves are not always to blame for poor process performance, as many processes are not used, misused and abused. More often than not, process steps are performed by people, and the efficiency and effectiveness with which those process steps are executed depend greatly on the individuals involved. There is more to be gained in overall process performance by providing motivation for performance than by changing and even eliminating process steps.

To accomplish the study, the CAR team used the following meetings/symposiums in the fact finding portion of the effort.

Contractor Symposium (See Appendix E for details)--Representatives from twelve different contractor companies gathered to discuss with the CAR team the issues that impacted their performance.

Contractor Site Visit (See Appendix E for details)--The CAR team made a trip to a contractor’s facility to observe the operation first hand, and to discuss the areas being addressed by the team.

Process Modeling (See Appendix D for details)--IDEF process models were developed for three of the focus areas (over and above, parts, and engineering support) by interviewing functional experts in each area.

Customer Symposium (See Appendix G for details) -- Representatives from all of the customer groups met with the team to explain their concerns and priorities as related to CAR.

Commercial Comparison (See Appendix H for details)--The CAR team traveled to Memphis, Tennessee to meet with a representative of FedEx. FedEx contracts out its air fleet for maintenance much the same as the Air Force.

• The Contractor Perspective: Contractor Symposium, site visit
• The ALC Perspective: "As-Is" IDEF process modeling, interviews
• The Customer Perspective: Customer Symposium

The customers own and fund the aircraft that are inspected and repaired by the PDM activities, which can be carried out by organic (Air Force) depots or contractor depots. For any weapon system, there are multiple customers such as the Air National Guard, Air Force Reserve, Air Combat Command, etc. The role of the customer in this process is to submit aircraft for PDM with as little impact as possible on operations and readiness. The customers are interested in:

INITIATIVES

This portion of the study focuses on the CAR processes that the CAR team found needed improvement. It outlines the recommended changes to the government controlled conditions, that when implemented, positively alter the contractor’s operations.

The basic premise of the CAR study is that the government, primarily the ALC, cannot, by itself, impose or dictate improvements in the contractor's performance--instead, contractors must be incentivized to improve their own performance. In incentivizing the contractor, the ALC can indirectly influence the contractor's performance by establishing positive conditions for contract aircraft repair:

1. Develop and maintain a "PARTNERSHIP" relationship between the contractor and the government. (A WIN-WIN situation for both).
2. Create an environment and infrastructure which will support the contractor performance at the desired performance levels.
2. Motivate and incentivize the contractor to achieve these performance levels.

The CAR team felt that when these conditions are met, contractors will perform up to the goals set forth in this report. This is not wishful thinking, nor is it a hap-hazard guess. During the course of this CAR investigation, the team saw substantial evidence to support this claim. Other organizations that contract aircraft repair --both in and out of the Air Force--experienced performance levels that met or exceeded the goals stated in this study.

In presenting the following CAR team initiatives, the Chapter 2 format was standardized for continuity. The individual initiative discussions start with a general background of the particular area, followed by a short impact summarization on the PDM process. The specific CAR team recommendations are then presented. The individual initiative area is concluded with examples of metrics or measurement tools that SPOs or managers could use in tracking implementation success.

WORKLOADING INITIATIVE

DISCUSSION/BACKGROUND

From the CAR Team’s perspective, providing the contractor a sufficient amount of workload at a steady rate is the most important area that needs to be considered and implemented when contracting aircraft repair--especially programmed depot maintenance. Pre-determining the amount of workload a contractor can efficiently and effectively accomplish, coupled with a firm input/output schedule (discussed in a following section), will ensure achievement of the majority of the expected flowdays and cost savings with the increased customer satisfaction goals detailed in this report.

Workloading refers to the amount of work being submitted for contract aircraft repair. In addition to the number of aircraft input to a contractor’s facility, workloading also defines the type of work to be done on those aircraft. PDM work makes up the majority of work, but other types of work such as modifications, Time Compliance Technical Orders (TCTO), Unscheduled Depot Level Maintenance (UDLM) and Organizational & Intermediate (O&I) level maintenance have significant impact on workload.

At the contractors symposium (see Appendix E-1), contractors told the CAR team that they needed to maintain a stable work force and support core teams if they are to be able to reduce flowdays. The team verified this statement as being valid by thorough research at organic government facilities and other commercial activities. Reducing flowdays provided contractors the opportunity to apply better business practices and reduce operating/overhead expenses which in turn means they will be able to pass the savings on to the government in their bids.

The CAR team found that in today’s CAR process, the priority in assigning workload is to fill--and even overfill--organic facilities first, and send the remainder out on contract. In some cases, this remainder is not enough to allow the contractor to be efficient in the contract execution. In addition, some contracts contain large bid ranges that are designed to give the government maximum flexibility. While this does provide flexibility to the ALC, it also drives up the contractor’s cost because of the impact this uncertainty has on material levels, manloading and facility availability. In short, the ALC is purchasing a high capacity and utilizing only a portion of that capacity. Yet this does allow the government to surge if the need arises.

There is a direct relationship between the amount of work done at a facility and the efficiency, cost and quality of that work. Numerous skills (aircraft mechanic, sheet metal mechanic, electrician, etc.) are needed to accomplish the different work operations in the PDM package. These skills are used throughout the aircraft repair process and are moved to different operations as workload demands. However, there will be some skills that cannot be fully employed and will be idle if there are too few aircraft on station to work. When this constraint is not alleviated, the inefficiencies result in idle time and higher cost to the customer. Government decisions to contract too few aircraft or to provide erratic inputs directly impact the contractor's ability to perform efficiently and cost effectively.

The Cost Of Unlevel Workloading

Contractors, like any other commercial business, are most productive and efficient when the input workload level matches the workforce capacity. In reality though, workload is seldom (if ever) level--even though level workload is the most desirable situation. A fluctuation in workload causes cost and schedule overruns. The production organization, in this case a government contractor for aircraft repair, typically operates in one of four modes depicted in the below chart:

Capacity Operation--this is the fine line where the amount of work to be done on an ideal schedule matches the man-hours available. This situation is ideal for the contractor, but is not always possible--and almost never happens for a significant length of time. The flexibility of the contractor determines how far above or below the regular hour capacity line that operations can work efficiently.

Overtime Production--This occurs when the man-hour demands for a period of time exceed the regular-hour man-hour availability for that same period, but can be met with overtime work. This causes a cost increase.

Demand Beyond Capacity--when man-hour demand rises above even the overtime capacity, there is no other means to increase production. The result of operation in this mode is increased flow days and cost.

Idle Workforce--The skilled workforce employed by the contractor is not a temporary resource pool. Since that workforce cannot be fired and re-hired to match production cycle fluctuations, additional cost is incurred whenever the workload demand drops below the man-hours available. This extra cost is caused by workers remaining on the payroll without production return, and by deliberate cuts in work efficiency in an effort to remain billable--meaning increased flowdays and cost.

Basically, the chart above is depicting that there is a minimum number of aircraft inputs a contractor needs to efficiently and effectively utilize the numbers and skills of the workforce required to accomplish the work requirements of the PDM workload. Without this steady input of work, the dynamics of capacity negatively impact both flowdays and cost. In decreasing both, the contractor must have an efficient quantity and a steady workload.

Another factor in considering workload has to do with properly man-loading the work. Man-loading means applying manpower to the work. Significant flow day reductions can be achieved by fully man-loading the critical path jobs of the work--on multiple shifts. The contractor must know the critical path of the work and identify the manpower quantity and skills, with material, needed to meet the scheduled completion for all major jobs. All things being equal, if decreasing flowdays is the sole objective, this is an important event that needs to occur to reduce flowdays! Since the government does not have direct control or management responsibility over the contractor's workforce, the government must offer incentives to the contractor so the contractor will apply maximum manpower to the critical jobs on at least two shift operations. Doing so will result in reduced flow days. Conversely, spreading the same manpower on a single shift, over multiple aircraft, results in inadequately manloaded aircraft that produces increased flow days and cost. The team found that FedEX Corporation wanted their aircraft down for a minimum amount of time and thus they required 24 hour, 7 day a week contractor coverage on their aircraft. They did this via the contract vehicle.

In order for the contractor to do either of the above, they must have a clear understanding of what the workload is and what will be expected of them. Unknown and undefined work requirements drastically affect contract cost and schedule. Providing the contractor sufficient lead time for developing standardized repair procedures, material requirements and provisioning has a major impact on the contractor reducing cost and schedule impacts to the contract. Another consideration the CAR team looked at was to assess the condition of the scheduled PDM aircraft before it arrived at the contractors facility. Doing so would reduce the uncertainty or unknown work by allowing the contractor to plan and lay in necessary parts to expedite repair actions. Adding Time Compliance Technical Orders ’s (TCTO’s), modifications and AFTO Forms series 781 and AFTO Form 103 discrepancies to a basic PDM work package generate most of the variable unplanned requirements. Although mission requirements may drive accomplishment of these requirements, there is a strong need for analysis of repetitive requirements to allow for the development of standard work packages.

An efficient number of aircraft, properly manloaded on the critical path jobs, will clearly positively impact schedule and cost performance. However, the single most important aspect of ensuring that proper workloading produces savings is having the right part on hand when it is needed. Since most of the parts and material currently provided the contractor are GFM, the government and contractor must have an in-place process that assures material is on-hand, when needed by the mechanic, to complete the job. The Material Support Initiative is discussed later in this report.

IMPACT

The benefits of having an economical number of aircraft are many: work repetition, retention of higher quality skilled workers, justification for multiple shifts and core teams, investment in equipment that reduces man-hours, and so forth. None of these ideal working conditions are possible with less than economical workloads. At the other extreme, too many aircraft create a situation where some constraint limits throughput--whether it be manpower, facilities, tooling, etc. In this case, the flowdays for all aircraft will go up because aircraft are waiting for some resource. With consistent scheduling/workloading, the contractor can retain a stable, trained, experienced work force capable of achieving reduced flow days, reduced cost and increased customer satisfaction.

RECOMMENDATIONS

2. Once the decision is made to contract aircraft PDM and prior to determining the number to contract, the System Program Office benefiting from this effort should conduct an analysis to determine the minimum quantity of aircraft that constitutes a consistent workload to a contractor. This is the minimum number of aircraft that should be required in the contract. The number should be such that it allows a contractor to support a stable, trained and experienced work force. In determining this number of aircraft, the contracting SPO should also consider the amount of required work, the desired flowdays, and the maximum number of aircraft MAJCOMs would be willing to place in PDM status--at all facilities. This analysis should include an input/output schedule that supports the workload.

3. Encourage the contractor to employ multiple shift man-loading. Significant flow day reduction can be achieved by fully man-loading the critical path jobs on multiple shifts. The contractor should apply maximum manpower to the critical jobs on at least two shifts to minimize repair flow days and the number of aircraft in plant. Conversely, spreading the same manpower over multiple, inadequately manloaded aircraft increases flow days. The major jobs not on the critical path must also be managed so they are completed prior to impacting the critical path jobs. These can be used to effectively balance the skill's mix needed to support the PDM tasks.

4. Incentivize the contractor to develop a critical path for the PDM process that specifically identifies manpower and material requirements by major job. The contractor must then manage the PDM work flow and assign his work force by the critical path. This intensified manloading requires firm commitment from the contractor and from the government. The contractor must develop a critical path that identifies when skills and material are needed to meet the scheduled completion for all major jobs. Critical path jobs obviously impact schedule immediately; but, the other jobs will impact schedule also.
5. Since most of the parts and material are GFM, the government and contractor must have in place a Shop Service Center, similar to that being created in the C-130 and C-141 SPO organic facilities that assures the material is provided when needed to complete the job
5. Provide standard workload package vs variable ones. Unknown and undefined work requirements drastically affect contract cost and schedule. Sufficient lead time for developing standardized repair procedures, material requirements and provisioning will reduce cost and schedule impacts to the contract. TCTO’s, modifications and AFTO Form 781/103 write-ups generate most of the variable unplanned requirements. Although mission requirements may drive accomplishment of these requirements, analysis of the repetitive requirements will provide recommendations for development of standard work packages for future cost and schedule reductions.
7. To allow for variances in outyear number of aircraft requiring PDM (see the example of C-130 PDM outyear projections at Appendix A) and unknown contingencies, the contracting SPOs Request For Proposal (RFP) should request pricing quotations from contractors for accomplishing work on an incremental range of aircraft numbers (For example, 10 to 20, 20 to 30, etc.). The RFP should provide a best economic quantity (BEQ) number for each range to allow for establishing evaluation criteria in selecting a contractor. Or an average of the unit price of each range could be used for the BEQ price. Additionally the government must provide, as early as possible, to the contractors, the range options the government will exercise with each option. The SPO should assign a probability of occurrence for each range to use in evaluating the various contractor proposals. This allows the government and the contractor to work together in a cooperative partnership as requirements change due to force reductions, new purchases, catastrophic events, etc. This also provides the government cost-benefit analysis data for use in deciding the final number of aircraft to contract.

WORKLOADING METRIC

There are two major metrics to consider in this area. The first is to chart the number of aircraft placed in the contractor facility compared to the computed economical number and at what rate they are placed in the facility. The second area is charting the scheduled amount of work against what is actually accomplished.

BACKGROUND/DISCUSSION

Scheduling is a basic function of any production effort. Clearly, in performing contract aircraft repair, the development and execution of a schedule for aircraft going into and out of a contract facility has a major impact on the contractor's ability to satisfy the contract and for the customer to receive the services/products when promised. Unlike workloading, which determine the number of aircraft to be worked and manpower allocation, the schedule determines when the work is be accomplished. Knowing and being able to predict when a production effort is to commence is a major and critical step in resource planning. And as the CAR team found, resource planning and proper execution are key factors in a contractor being able to satisfactorily perform the contract.

Currently, the PDM schedule for the contractor is driven basically by two things--the ability of the customer to deliver an aircraft for PDM and the workload needs of organic facilities. When an aircraft is projected to be available from the customer, the first decision made is whether or not it can be sent to an organic facility--even if that facility is fully loaded. If the decision is to not accept or perform the work organically, then "it goes to the contractor". Very little consideration appears to be given to the impact of receiving or not receiving an aircraft to the contractor or the timing of the input. In several cases the CAR team found that contractors often are not aware that an aircraft is arriving until it arrives, and the costs of the inability to plan materials and manpower become quite high.

Below is a specific example of a previous input schedule for aircraft into a contractor PDM facility .

During the CAR Contractor Symposium (see Appendix E), discussions with Federal Express Corporation (see Appendix H), and in the "As Is" process (see Appendix D), the CAR team found that improvements in workloading and scheduling were areas that had the most potential for changes that could result in reaching the goals for this effort.

Introducing variations and unknowns into the schedule sets up a cycle where unpredictable PDM input results in unpredictable PDM output. On the other side of a coin, the customer cannot input an aircraft until he knows when a replacement will return from PDM, so the unpredictable PDM output results in unpredictable PDM input.

1. The SPO PDM Program Manager should conduct annual PDM outyear schedule conferences (at least 6 months in advance of the last scheduled aircraft schedule review) with all the "players"--customers, DCMC, contractor(s) and organic maintenance division(s).
1. The contracting SPO should publish an annual schedule for all aircraft and all PDM facilities (organic and contractor). The team suggest making the PDM schedule an Memorandum Of Agreement (MOA) signed by all parties.
1. The SPO should "evolve" the annual PDM schedule, each month by replacing the last month with a new month--making it a "living" schedule. This should be the control schedule--measure how well the schedule is met by all parties!
1. The SPO should develop an implementation process or system that provides contractors and customers access to the scheduling program/data. One quick way to provide interim visibility to the PDM schedule is to place the schedule on the Internet. This should also be well addressed in any Request For Proposal (RFP).
1. The SPO PDM Program Manager and each weapon system customer should develop an MOA that commits the customer to identify and if necessary input an "alternate" aircraft (in an agreed upon time) into the contractors PDM facility. This would occur when the "primary" aircraft is unable, due to operational or mechanical reasons, to be placed in the contractor PDM facility at the scheduled date. The purpose of using this basic scheduling principle is to preclude any disruption of the contractors PDM workflow.
1. The SPO PDM Program Manager should provide the contractor all known work for specific tail number aircraft at least six months in advance (modifications, TCTOs, AFTO Form 103 with the AFTO Form 781 series discrepancies). In order to accomplish this, the customer must provide the ALC a list of requested/approved/funded customer work (AFTO Forms 103) at least seven months in advance of the PDM scheduled input date and be willing to limit the work requested (within operational limitations) to this list. The customer would update this list 60 days prior to the scheduled input date. (Note: Only Safety of Flight AFTO Form 781A discrepancies should be added to the work package after this update.)
1. The SPO, the contractor, and customer should establish an agreement whereas the contractor could perform field visits to pre-inspect specific tail number aircraft scheduled for PDM. The purpose being to pre-plan unusual or difficult work to be accomplished during the contractor PDM.

The basic metric for this initiative is scheduling effectiveness. The measurement should consist of how well the customer meets the input "living" schedule and how well the contractor meets the "living" output schedule. The example below is a format with notional data that could be used for each schedule.

At the contractor symposium, the contractors indicated that the material support issue has a great effect on performance. Most contract flowday extensions requested are in relation to some part need. A properly manloaded aircraft, in a properly equipped facility, becomes nothing but an inefficient effort when parts are not available to repair the aircraft. An accurate bill of materials (BOM) for the basic PDM is critical for the contractor to lay in the known material requirements, and a responsive parts acquisition system is imperative to support the unknown material requirements.

 

 

 

 

 

 

 

 

 

 

MATERIAL SUPPORT METRICS

DISCUSSION/BACKGROUND