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Title Developing a Business Framework Lisbon 21 October 2005 Major General Klaus-Peter Treche Deputy Commander Joint Support Command.

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Presentation on theme: "Title Developing a Business Framework Lisbon 21 October 2005 Major General Klaus-Peter Treche Deputy Commander Joint Support Command."— Presentation transcript:

1 Title Developing a Business Framework Lisbon 21 October 2005 Major General Klaus-Peter Treche Deputy Commander Joint Support Command

2 SKUKdo Page 2 Agenda “Transformation” – more than a catchword (everything is changing...) Framework for more cooperation with industry (a decisive pillar for the reorientation of the armed forces) Road to success (realised business cases and projects in the pipeline)

3 SKUKdo Page 3 The transformation is determined by new forms of conflicts Terrorism Terrorism Separatism Separatism Proliferation/drug trafficking Proliferation/drug trafficking “The Bundeswehr focuses on conflict prevention and crisis management operations as well as on operations in support of allies, including out-of-area operations.” Source: Defence Policy Guidelines 2003

4 SKUKdo Page 4 Total: 6,339 As of October 2005 KFOR KFOR 2,781 EUFOR 976 OEF 246 UNOMIG 11 ISAF/KUNDUZ 2,312 UNMEE 2 The Bundeswehr during Operations UNMIS 7 AMM 4

5 SKUKdo Page 5 Changing Mission means Change of Capabilities - Force Strength - 495, , , , ,000 55,000 Extended serv pers Conscripts National and Alliance defence Expeditionary warfare (changing multinationality)

6 SKUKdo Page 6 Changing Mission means Change of Capabilities - Structural Reform - Army Air Force Navy Focus on core tasks Joint Support Service Bw Joint Medical Service Army Air Force Navy Tasks performed at multiple levels Medical Service Logistics Old approach New approach Command and Control Support

7 SKUKdo Page 7 Changing Mission means Change of Capabilities - Equipment - Personal equipment and other capabilities Air transportability Modular approach Mine protection Advanced communications Cross-country capability

8 SKUKdo Page 8 Changing Mission also means Reorientation of the Defence Budget As of 2 Feb Trend Operating expenses Personnel Maintenance & other operations Defence expenditure

9 SKUKdo Page 9 Agenda “Transformation” – more than a catchword (everything is changing...) Framework for more cooperation with industry (a decisive pillar for the reorientation of the armed forces) Road to success (realised business cases and projects in the pipeline)

10 SKUKdo Page 10 Cooperation with Industry Targets Focal points Raising capital Obtaining external know-how Increasing efficiency and effectiveness in operations CPM 2001 Pilot projects Agency

11 SKUKdo Page 11 Internal optimisation PPP Outsourcing- ? ? ? Degree to which Bw is relieved from non-core tasks Real estate Logistics Procurement IT Other Fleet Training Clothing Food service € 10.5 billion for civilian services * * Defence budget 2001: ~ € 24 billion Relief from Non-core Tasks - Three Options for Better Cost Effectiveness

12 SKUKdo Page 12 Agenda “Transformation” – more than a catchword (everything is changing...) Framework for more cooperation with industry (a decisive pillar for the reorientation of the armed forces) Road to success (realised business cases and projects in the pipeline)

13 SKUKdo Page 13 Initial Situation in 2001 Vehicle pool: 100,000 (mil, partly mil, commercial) Unacceptable obsolescence (cars 12, trucks 17 years) Unacceptable failure times and operating costs Investment backlog of approx. € 2 billion Personnel strength approx. 5,000 civilian employees Source: g.e.b.b. Internal optimisation PPP Outsourcing- ? ? ? Degree to which Bw is relieved from non-core tasks Business Case: White Fleet Management

14 SKUKdo Page 14 Targets/Effects More economic rendering of services achieved with Fleet reduction by 50% Reduction of average age Increase in the level of vehicle utilisation through modern management methods Provision of vehicles on a lease basis Personnel reduction by approx. 65% Initial Situation in 2001 Savings in 10 years € 1.18 billion Source: g.e.b.b. Vehicle pool: 100,000 (partly mil, commercial) Unacceptable obsolescence (cars 12, trucks 17 years) Unacceptable failure times and operating costs Investment backlog of approx. € 2 billion Personnel strength approx. 5,000 civilian employees Business Case: White Fleet Management

15 SKUKdo Page 15 Individual demand Basic demand Previous peace-time TOE Additional and peak demand Type of mobility Long-term rental Short-term rental via regional mobility centres Drivers’ services and other Annual driving services in an activity New Bundeswehr Mobility Concept

16 SKUKdo Page 16 Berlin Wilhelmshaven Aachen Cologne Bonn Koblenz Hammelburg Ulm Kiel Hamburg Rostock Leipzig Dresden Fürstenfeldbruck Amberg Osterholz-Scharmbeck Flensburg Neubrandenburg BurgHanover Fassberg Munster Augustdorf Fritzlar Idar-Oberstein Mainz Sigmaringen Kaufbeuren Bad Reichenhall Ingolstadt Mobility Centres - Full Area Coverage under Regional Responsibility

17 SKUKdo Page 17 Business Case: White Fleet Management Efficiency Levers for the BwFPS Model Total payments per car km in €Cent/km Bw passenger cars BwFPS New passenger cars 1 st half 2003 Mileage per car p.a ,214 km 23,922 km ~-20% Repair   Availability Consumption   Utilisation Number of veh.  Ø Fleet age  Leasing Investments = 0 Source: g.e.b.b.

18 SKUKdo Page 18 1, , , Optimised Bw model Planned exp. BwFPS Source: Economic Efficiency Analysis 10/2001, FMOD Army Staff II , Actual exp. BwFPS Optimised Bw model Planned exp. BwFPS Actual exp. BwFPS Business Case: White Fleet Management Savings Realised in 2 Business Years Gains in efficiency BwFPS PLAN/ACT. € 192m BwFPS ACTUAL /. Bw model € 545m

19 SKUKdo Page 19 Business Case: Clothing Management Improved Services with Simultaneous Savings Expenditure balance Aug. 02 – Jul. 04 in € million LH offer ACTUAL LHBw costs Source: g.e.b.b. after 2 weeks Shortage in % Jan after 2 weeks after 3 days

20 SKUKdo Page 20 Developing a Business Framework Road to Success...Projects in the Pipeline and later Relieve the Bw from non-core tasks Create scope for investment through cost reduction in operation private capital & external know- how  Catering at home (outsourcing)  Technical training (PPP)  Logistic management  Catering during operations (outsourcing)  Construction project companies (PPP)  Travel management (PPP) (outsourcing / internal optimising)

21 Schlußfolie The “right” business cases pave the “road to success”


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