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Apply Role-Based Cost Control Principles to a Real World Scenario: M1A2 Main Gun Qualification Cases © Dale R. Geiger 20111.

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Presentation on theme: "Apply Role-Based Cost Control Principles to a Real World Scenario: M1A2 Main Gun Qualification Cases © Dale R. Geiger 20111."— Presentation transcript:

1 Apply Role-Based Cost Control Principles to a Real World Scenario: M1A2 Main Gun Qualification Cases © Dale R. Geiger 20111

2 Training has its Costs

3 Terminal Learning Objective Task: Apply Role-Based Cost Control Principles to a Real World Scenario Condition: You are training to become an ACE with access to ICAM course handouts, readings, and spreadsheet tools and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors. Standard: with at least 80% accuracy Determine appropriate characteristics of cost measurement and control process for case study scenario Prepare cost measurement and reconciliation for AAR Discuss requirements of cost management and control in context of case study scenario © Dale R. Geiger 20113

4 Call to Action: Ft Hood Campaign Plan for Improving Training Cost Effectiveness Fort Hood 2011 Campaign Plan efficientlymanage Item P 1-2: effectively and efficiently manage, synchronize and resource training This case exercise provides a hypothetical response to the III Corps strategic intent It outlines a Battalion level role based process Your tasks are to build and deliver the AARs for the various roles represented in training

5 © Dale R. Geiger M1A2 Abrams Main Battle Tank

6 The main armament is the 120mm M256 smoothbore gun. The 120mm gun fires the following ammunition: the M865 TPCSDS-T and M831 TP-T training rounds, the M8300 HEAT-MP-T and the M829 APFSDS-T which includes a depleted uranium penetrator. © Dale R. Geiger 20116

7 Starting Point: Commanders Intent Develop an intent statement for your Battalion M1A2 main gun qualification training that meets the Corps intent Make sure you address the two key goals of AAR processes: Understanding the costs of their mission Driving continuous improvement in cost effectiveness

8 Design Issues to Consider: How Often Should this Review Occur? Remember the frequency issues: The cost of the control process is the sum of the measurement cost and the process cost More frequent meetings increase both Should the training costs be review be: Event driven (after every training event?) Daily? Weekly? Monthly? Quarterly?

9 Design Issues to Consider: What Costs Should be Measured? Remember scope issues There is a point where the cost of greater detail exceeds the value of greater detail The goal is to reasonably approximate the cost of things that matter Choices: Soldier, Squad, Platoon, Company, Battalion The significant few cost elements The trivial many cost elements

10 Design Issues to be Considered: What Types of Costs Should be Included? Remember cost flavor issues: Different cost views exist to fill different intelligence need What cost view provides best intelligence in support of Commanders Intent? Choices: Controllable vs. Non-controllable Total vs. Incremental Fixed/Variable vs. Direct/Indirect

11 Design Issues to be Considers: How Full Should Cost be? Remember fullness issues: Cost considerations must be bounded to exclude elements that dont support goal Example: every cost in the Army could include an allocation from the Commander in Chief if truly full Choices: Allocations from Brigade, Division, Corps, etc. Allocations from personnel, resource management, chaplain, etc.

12 Potentially Key Support and Consumable Cost Elements for Training The following is a list of major training costs Soldiersmilitary pay Range: personnel, targets, power, etc. Class I: food, food preparation, delivery Class III: petroleum, oil, lubricants Class V: ammunition acquisition and issue Class IX: maintenance: operator level, organization level, depot level

13 Who Should Speak for the Cost Elements? Defining the Cost Chain of Command The focus of Commanders Intent is on the Battalion Commander Think of the Battalion CO as the customer of the process Who should the Battalion Commander assign the role to speak for each cost element? These will be the presenters at the cost AAR This is the subordinate Cost Chain of Command

14 Learning Check How does the use of the cost information affect the flavor of cost measurement? How should reporting roles be assigned? © Dale R. Geiger

15 Case A Lets start with a relatively simple case: Frequency After each training event ScopeClass III, V, and IX only FlavorDirect cost FullnessNo allocation of higher HQ No allocation of support Simple measurement process assumptions: Class III and IX cost calculated as actual tank miles at FORCES estimate of $/mile Class V cost calculated as actual main gun rounds expended at cost published in FORCES (use CTG 120MM TANK TP-T M831A1) © Dale R. Geiger

16 Using FORCES Model Tank cost per mile: Go tab CFH Operating Tempo/Flying Costs Select Replenishment Parts & Fuel Cost by LIN Select T13305-TANK COMBAT 120MM M1A2 Ammo cost per round Go to tab CFH Unit Support Costs Select Ammo and Missile Unit Cost from menu Select 1315C784-CTG 120MM TANK TP-T M831A1 © Dale R. Geiger

17 © Dale R. Geiger Tank cost per mile = $ CFH tab

18 © Dale R. Geiger Ammo cost per round = $ CFH tab

19 Case A Data: This Training Event This training event 44 tanks drove 20 miles to the range, 5 miles on the range and 20 miles returning Each tank expended its allotment of 10 rounds Performance: qualification requires 7 bulls eyes 30 tanks qualified with first 7 rounds 10 tanks qualified on the 8 th round 2 tanks qualified on the 9 th round 2 tanks qualified on the 10 th round © Dale R. Geiger

20 Case A Data: Last Training Event The last training event 42 tanks drove 20 miles to the range, 10 miles on the range and 20 miles returning Each tank expended its allotment of 10 rounds Performance: qualification requires 7 bulls eyes 25 tanks qualified with first 7 rounds 10 tanks qualified on the 8 th round 5 tanks qualified on the 9 th round 1 tank qualified on the 10 th round © Dale R. Geiger

21 Individual Exercise Requirement The AAR presentation has been assigned to you as the Brigade S-4 Prepare your presentation: Showing and explaining costs and performance compared to expectation (prior training event) Several suggestions for continuous improvement (One hint: look up cost per mile for heavy equipment transporter T59048-TRUCK TRACTR HET M1070) © Dale R. Geiger

22 Student Presentations © Dale R. Geiger

23 Teachers Notes: Both Training Events © Dale R. Geiger last training eventper tanktankscost per$K miles to/from range miles on range rounds per tank qualifying rounds did not qualify this training eventper tanktankscost per$K miles to/from range miles on range rounds per tank qualifying rounds did not qualify Cost Data Performance Data

24 Teachers Notes: Reconciliation © Dale R. Geiger $K this training event882 last training event903 variance20 reconciliation 2 more tanks firing(14) 2 more tanks to range(23) fewer miles on range58 20

25 Teachers Notes: Performance © Dale R. Geiger performance: cum min rounds to qualify last timecumthis timecum 759.5% 68.2% 823.8%83.3%22.7%90.9% 911.9%95.2%4.5%95.5% 102.4%97.6%4.5%100.0% dnq2.4%100.0%0.0%100.0%

26 Teachers Notes: Performance © Dale R. Geiger This Event Last Event Cumulative Minimum Rounds to Qualify

27 Teachers Notes: Potential Savings Use heavy equipment transporters (HETs) to move tanks to and from the range © Dale R. Geiger potential savings HETs cost per mile6.17 tank cost per mile savings/mile from HETs282.2 miles to/from range1760 savings from HETs $K497

28 Teachers Notes: Potential Savings Return rounds not needed for qualification © Dale R. Geiger potential savings rounds fired440 rounds needed328 rounds over need112 cost per round savings from returns $K79

29 Case B: A More Complex Scenario It is possible to make the training AAR scenario much more realistic and complex First, lets consider the four requirements for cost control Leadership Staff Process Measurement How might each work in this scenario? © Dale R. Geiger

30 Requirement: Leadership Battalion Commanders and Deputy Brigade Commander drive the AAR Interact with support providers who: Explain cost and performance compared to expectations Develop continuous improvement initiatives that improve cost and performance

31 Requirement: Staff Support The Brigade Assistant to the Commander for the Enterprise (ACE) Supports Brigade and Battalion leadership as well as subordinates with Credible cost measurements, analyses, insights Constructive questions, suggestions, and ideas Reports directly to Division ACE Works for Brigade Deputy Commander

32 Requirement: Process The Cost and Performance After Action Review (CPAAR) Occurs monthly, quarterly or as needed Brigade DCO establishes meeting schedule Brigade ACE defines meeting format Providers present cost and performance by Battalion Battalion COs critique presentations and continuous improvement results

33 Requirement: Measurement Providers (with the help of the ACE) develop suggested measures and methods Leaders approve measures and methods Measurement goals Credibility: actionable, understandable Usefulness: continuous mission improvement Affordability: perfect is too expensive

34 What is the role of the ACE in staff support? What is the role of the ACE in the AAR? © Dale R. Geiger Learning Check

35 Case B: Expanded Complexity Lets evolve to a more complex scenario: Frequency Quarterly training brief ScopeClass I, III, V, and IX (food, POL, ammo, maintenance) FlavorDirect cost and indirect cost FullnessNo allocation of higher HQ Garrison allocation of support Additional measurement process assumptions: Class I cost calculated from MRE cost per serving data: FORCES CFH Unit Support Cost Subsistence Data Garrison support costs for food handling, ammunition issuance and range management must be allocated © Dale R. Geiger

36 Case B: Expanding Complexity Key Support Providers: i.e. AAR Presenters Class I, III, V, IXBrigade S4 Range: Garrison Range Manager Food Prep: Garrison Dining Facility Mgr Ammo Issue: Garrison Ammo Supply Mgr

37 Garrison Support - Food Food prep: Manager estimates that 90% of her cost supports dining facilities and 10% support range ops Total cost for last quarter was $420,000 Served 90,000 meals in dining facilities Served 5,000 meals in field Total cost for this quarter is $440,000 Served 95,000 meals in dining facilities Served 4,000 meals in field © Dale R. Geiger

38 Garrison Support – ASP Ammunition Supply Point: Manager estimates that 95% of cost supports ammo issuance and 5% supports ammo return Total cost for last quarter were $120,000 Issued 5,000 main gun rounds Returned 200 main gun rounds Total cost for this quarter is $140,000 Issued 6,000 main gun rounds Returned 300 main gun rounds © Dale R. Geiger

39 Garrison Support – Range Management Range Management: Manager suggests allocating range cost on the basis of range days reserved by units Total cost for last quarter was $320, days were available for range usage 90 days were reserved for range usage by units 70 days were used by units Total cost for this quarter is $310, days were available for range usage 90 days were reserved for range usage by units 60 days were used by units © Dale R. Geiger

40 Case B: Additional Data Last Quarter Last quarter training: 150 trips to and from range, 450 miles on range Each tank expended its allotment of 10 rounds Performance: qualification requires 7 bulls eyes 54% qualified with first 7 rounds 30% qualified on the 8 th round 10% qualified on the 9 th round 2% qualified on the 10 th round 10 range days were reserved and 4 used 300 soldiers were fed four MREs each day © Dale R. Geiger

41 Case B: Additional Data this Quarter This quarter training: 180 trips to and from range on HETs, 1080 miles on range Each tank was issued 10 rounds and unneeded rounds were returned to the ASP Performance: qualification requires 7 bulls eyes 50% qualified with first 7 rounds 30% qualified on the 8 th round 10% qualified on the 9 th round 10% qualified on the 10 th round 8 range days were reserved and 5 used 320 soldiers were fed four MREs each day © Dale R. Geiger

42 Team Exercise Teams Assign Members as Follows: Battalion CO – most senior Brigade ACE – elected by group Range MGR DFAC MGR ASP MGR Brigade S4 Prepare AAR briefings for Range MGR, DFAC MGR, ASP MGR, and Brigade S4

43 Team Presentations © Dale R. Geiger

44 AAR Briefings – Teachers Note Last teams Battalion CO (acting as Deputy Brigade Commander) and Brigade ACE (acting as Battalion CO) receive the AAR from the first team First teams Battalion CO and Brigade ACE receive the AAR from the second team, etc., etc. (All team members including Battalion CO and ACE can help their teams presenters answer questions) © Dale R. Geiger

45 Teachers Note: Range MGR last qtrthis qtrvar cost $K reserved days90 cost per $K battalion reserved days108 range cost $K © Dale R. Geiger potential savings used days45 reserved days108 unneeded days63 unneeded cost $K

46 Teachers Note: DFAC MGR last qtrthis qtrvar cost $K % range4244 meals cost per meal battalion soldiers days45 meals at 4 per day cost of meals (30.1) © Dale R. Geiger potential savings bas per soldier day8.48 soldiers days45 recoverable cost $K

47 Teachers Note: ASP MGR last qtrthis qtr cost $K % issuance $K rounds issued cost per issue % return $K rounds returned cost per return © Dale R. Geiger battalionlast qtrthis qtrvar tanks rounds issued10 total rounds issued cost of issues $K (5.7) tanks returning 3090 rounds returned0270 tanks returning 2054 rounds returned0108 tanks returning 1018 rounds returned018 total rounds returned0396 cost of returns $K09.2 (9.2)

48 Teachers Note: Brigade S4 Class I Foodlast qtrthis qtrvar soldiers days45 4 per cost per meal7.23 meal cost $K (11.6) © Dale R. Geiger Class III POL IX Maintlast qtrthis qtrvar tanks miles to/from range400 total miles to/from range60000 cost per mile tanks cost $K miles on range cost per mile tanks cost $K (181.7) HETs0180 miles to/from range40 total miles07200 cost per mile6.17 HETs cost $K (44.4) Class V ammo rounds issued rounds returned0396 rounds used cost per round ammo cost $K

49 Teachers Note: Summary $Klast qtrthis qtrvar Class III IX to range Class V Ammo Class III IX on range (181.7) DFAC cost (30.1) Range cost Class I Food (11.6) ASP issues (5.7) ASP returns0.09.2(9.2) reconciliation HET use Return rounds plan58.7 More miles on range(181.7) More soldier days(41.6) All other © Dale R. Geiger

50 Teachers Note: Performance © Dale R. Geiger This Event Last Event Cumulative Minimum Rounds to Qualify

51 Case C – Individual Exercise Add Military Pay for the Soldier days involved at an average cost of $65K per year and 250 work days per year Discussion on materiality How significant is Military Pay? © Dale R. Geiger

52 Teachers Note: Case C Summary Mil Paylast qtrthis qtrvar soldiers days45 soldier days cost per day260 soldier cost $K (104.0) © Dale R. Geiger $Klast qtrthis qtrvar Class III IX to range Class V Ammo Mil pay (104.0) Class III IX on range (181.7) DFAC cost (30.1) Range cost Class I Food (11.6) ASP issues (5.7) ASP returns0.09.2(9.2) reconciliation HET use Return rounds plan58.7 More miles on range(181.7) More soldier days(145.6) All other

53 Cost Elements - Budget Soldier Cost: military manpower appropriation managed at Department of the Army level Range Cost: Garrison Ranges (IMCOM) Class I: Garrison DFACs (IMCOM) Class III: Brigade budget Class V: appropriation managed at Army level ammunition issuance is Garrison ASPs (IMCOM) Class IX: split between brigade, Garrison DOLs (IMCOM) and OMA appropriation (DA)

54 Conclusion: Budget vs. Cost Views ArmyArmy FORSCOMFORSCOM CorpsCorps DivisionDivision BrigadeBrigade BattalionBattalion Mil Pay $ Ammo $ Food $ IMCOMIMCOM RegionRegion GarrisonGarrison Range $ Ammo Issue $ DFAC $ Maint $ POL $ Repair $ BattalionBattalion BrigadeS4BrigadeS4 Ammo SP Manager Brigade S4 Brigade S1 Range Manager DFAC Manager AAR

55 Conclusion: Budget vs. Cost Crosswalk ArmyArmy FORSCOMFORSCOM CorpsCorps DivisionDivision BrigadeBrigade BattalionBattalion Mil Pay $ Ammo $ Food $ IMCOMIMCOM RegionRegion GarrisonGarrison Range $ Ammo Issue $ DFAC $ Maint $ POL $ Repair $ BattalionBattalion BrigadeS4BrigadeS4 Ammo SP Manager Brigade S4 Brigade S1 Range Manager DFAC Manager Maint $ Repair $ POL $ Ammo Issue $ Food $ Ammo $ Mil Pay $Range $DFAC $ AAR

56 Conclusions Role based cost management and control offers numerous opportunities to engage In improving the cost effectiveness of complex processes With many different types of cost With many different supporting organizations and accountable personnel © Dale R. Geiger


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