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Business Planning and Execution Mr. Don Tison 28 March, 2012.

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Presentation on theme: "Business Planning and Execution Mr. Don Tison 28 March, 2012."— Presentation transcript:

1 Business Planning and Execution Mr. Don Tison 28 March, 2012

2 Three Over-arching Processes Challenge is in the Integration of All Three REQUIREMENTS RESOURCESACQUISITION Events BasedCalendar Based Variable Joint Capabilities Integration & Development System (JCIDS) VCJCS/Service Chief Oversight GW-N Defense Acquisition System Milestone Decision Authority (MDA) Oversight Packard Planning, Programming, Budgeting & Execution Process (PPBE) DEPSECDEF Oversight McNamara 2

3 Two Processes That Get at the Challenge Tied to the Three Key Business Processes RESOURCE AUTHORIZE SUSTAIN NIINLIN SSN PPBE Support Procurement Funding (EE PEG) OPTEMPO Funding (TT PEG) Sustainment Funding (SS PEG) ARRG SLAMIS Requirements Resources ACQ RQMTS Resources 3

4 ARRG: Army Working Capital Fund Requirements Review Group Purpose: Review and evaluate issues or proposed modifications impacting the Army Working Capital Fund (AWCF) business areas What the ARRG Does: Provides strategic recommendations and resource authorization for the AWCF Evaluates, understand and control costs Examines AWCF issues collaboratively during the Program and Budget cycle Reviews the AWCF POM and impacts on other Army programs Strengthens the AWCF supplier and customer relationship ARRG is the Executive Leadership Forum for the AWCF $15B per Year Business ARRG Overview ARMY MATERIEL COMMAND G-3 (Operations) G-4 (Logistics) G-8 (Resources) ARMY SECRETARIAT ASA(FM&C) ASA(ALT) ASA(MR&A) G-6/CIO ABO, Dir Bus Ops ABO, Dir Ops Sprt DASA-CE Army Audit Agency ARMY STAFF G-3/5/7(Operations) G-4 (Logistics) G-8 (PA&E) ACSIM OCAR ARNG Co-Chairs: HQDA Deputy G-8 & Deputy Director Army Budget Office Key Players 4

5  Typically examine over $2.3B in price and credit changes and drive $1B of savings to the customer  Exchange Pricing implemented; eliminating the waiting period of expected credit for unserviceable items and mitigating the loss of ~ $250M cash  Consolidated Depot Maintenance and Operational Readiness Growth at ~twice the rate of inflation in OPTEMPO Program and Budget disconnected Customer/Supplier relationship on cost growth unclear 1. THE ISSUE: 2. THE SOLUTION: 3. THE GOOD NEWS: * Army Working Capital Fund Requirements Review Group ARRG Background* Controlling costs while providing predictable prices and credits 5

6 Cost Factors Outputs Direct OPTEMPO Latest Acquisition Costs LAC Repair Costs Cost Recovery Rate (CRR) Force Structure G4/ABO Policies Training Strategy Modernization ARRGEVALUATIONARRGEVALUATION ARRGEVALUATIONARRGEVALUATION AMCAMC Price & Credit G3 T R M OPTEMPO Requirements SAFM-CES Price & Credit + Demands + Activity ARRG Cost Factor Review Equipment Cost Factors 6

7 SAFM-BUR provides AMC CRR and AMI Sales Estimates SAFM-BUR-S reviews/updates FY13 Price and Credit Tables HQDA G-3 briefs ARRG on BF 3.1 SAFM-CE briefs ARRG on impact of cost factors* Army Program Development POM14-18 Lock G8 Transfers Database to FM&C HQDA G-3 briefTRMresults to ARRG* to ARRG* POM EXSUM HQDA G-3 completes BF 5.0 TRM AMC G-8 submits FY13 Price and Credit Table Change Requests SAFM-CE delivers cost factors to HQDA G-3 PAED SLDA JANFEBMARAPRMAYJUNJUL 1 PPBE Conf CNA Briefs 9 ARRG Price & Credit Timeline HQDA G-3 completes BF 3.1 TRM SAFM-CE develops historical OPTEMPO demand data base for POM AMC G-8 submits BF 3.1 APACT to SAFM-BUR-S and SAFM-CE 20 2 AMC briefs ARRG on OPTEMPO LAC/CRR price impact & repair cost changes* 18 SAFM-CE develops cost factors and provides to HQDA G-3 AMC submits BF 5.0 APACT to SAFM- CE 10 PEG RQMT and Funding Decisions Command RQMT, Funding, and Manpower Reviews Publish BF3.0 Rqmts CNA Input Due SRG #3 Billpayers SA CSA Guidance POM Offsite 29 Nov 11 Publish BF5.0 OPTEMPO Rqmt 30 Publish BF3.1 Rqmt & Funding Fixes 132 * Dates are subject to change Bill/Bill-Payer Decisions SRG #2 PEG/CMD Updates PEG Rqmts & Funding Briefs to PPBC 22 Issue APGM & TGM PPBC Prioritize Refined 1-N List 8 Publish PF1.0 PF1.1 Publish PF SA/CSA POM Approval SRG #1 POM Guidance Publish BF4.0 CMD Sched TGM 4.0 TGM 3.0 SRG #4 Emerging Rqmts/ Billpayers SRG #5 Billpayers SA CSA Guidance 11 Receive OSD TOA Guidance SRG POM Way Ahead 10 1-N List Refinement POM/BES Submission to OSD 29 ARRG POM Calendar 7

8 Some ARRG Successes FY05: Consolidated Depot Maintenance and Ordnance Activity Groups eliminating redundant efforts preparing separate budget submissions FY07: Evaluated over $50B of OPTEMPO requirements, examined $2.3B of Price & Credit changes and drove $1B of customer savings FY09: MRAP FY11-15 Sustainment. ARRG initiated actions to migrate MRAP into base funding, and actions that led to Army decisions to retain ~19K of the most effective and supportable MRAP variants. FY10: ARRG initiated actions resulting in Aviation component reliability improving for 19 of 25 top cost drivers, with a projected $630M return on investment over 10 years. FY 10: ARRG guidance on developing cost factors resulted in a $1.2B cost avoidance for POM12-16, with a reduction in FY12 demands of $229.8M FY11: For POM13-17, the ARRG evaluated over $10B of annual OPTEMPO requirements and drove savings through demand adjustments and improved cost estimation Reduced the AWCF cost recovery rate from 15.9% to $14.1%. This reduced OPTEMPO costs by $55.5M, passing along savings to AWCF customers Collective ARRG analysis generated a $1.3B reduction in OPTEMPO requirements 8

9 ARRG Benefits to the Army Only forum that balances customer and supplier relationships through the Program, Program Review, and Budget cycles Focus is to understand, then control, repair cost growth challenges Depot workload and the perception of excess carryover Inventory levels Assesses impact of programs in the POM Collaborative forum for AWCF management Leverages the experience of AWCF leadership and functional experts to discuss and resolve financial and logistics related issues ARRG continues as a model for collaborative financial and logistical management. Now in its eleventh year, the ARRG includes senior executive membership across the financial and logistics communities 9

10 SLAMIS Overview Key Players SLAMIS: Standard Study Number (SSN), Line Item Number (LIN) Management & Integrating System SSN: Budget Control Number LIN: Equipment Control Number Purpose – A web based system that linked equipment funding to equipment fielding to improve accountability of LIN lifecycle management of standard and non-standard equipment What SLAMIS Does -- SLAMIS links processes, data systems, and organizations together to facilitate the coordination of LIN lifecycle management for all equipment SLAMIS expanded over time to include other LIN lifecycle issues, and eventually to address all LIN lifecycle issues, including non-standard LINs. LIN Lifecycle Data Elements 10

11 Request NSN 90 days to IPR Request SLIN 30 days to IPR DLIS Assigns NSN NSN MD R ACAT-I & II IPR Approve SLIN Acquisition Decision Memorandum Assemble Material Status Record MSR New SLAMIS Links Potential Future Links KEY: TRADOC AMC - LOGSA HQDA USAFMSA AMC - IMMCs PM UNITS SAMAS BOIP Feeder Data APPROVAL DAMO-FD MARC CTU FILE FMSA-RDD DCSPRO GUIDANCE Request ZLIN (exception) Approve & Input TAV Data To RDS For TOE Update (RDD) TOE SACS FMSA-HQ RDS FB Certify HQDA Approved BOIP Force Structure TOE FILE BOIP FILE Approve ZLIN Approve SSN Request ZLIN 60 days from ZLIN to complete BOIP Input Process ZLIN Request #1 #2 Requests SSN Request ZLIN TAV Review or Input BOIP feeder data Into TAV BOIPFD Built BOIPFD Built HQDA Requests Budget SSN DCSOPS CARD Approve HQDA Budget SSN HQDA Requests Budget SSN Approve HQDA Budget SSN Delete Old LIN Requests Old LIN Deletion Review Old LIN Deletion Request CBS-X Army Flow Model LIDB FIELD FIELDERPBO Priorities/ DAMPL Procurement P & R Reports to ASA(FM) Fielding Requirements Development Requirements Development EDSS The Participants IPR MSR Review Concept & Technology Development Concept & Technology Development Engineering and Manufacturing Development Production & Development Operations & Support Disposal FD A A B B C C Material Solutions Analysis Decision Review IOT&E FDD FRP TAADS FMSA-ADD MTOE ‘Lead’ Responsibility Organization by color Mission Needs Statement (MNS) ICT MRD Operational Requirements Document (ORD) Complete & Forward or Directly input BOIP Feeder Data Into TAV Current SLAMIS Links = The Challenge: Manage System Lifecycles LSS 11

12 SLAMIS Background *  SLAMIS now centralizes, standardizes and links processes/data elements to provide visibility and accountability of all Army procured equipment: –the SSN: reflects programmed procurement dollars for Army equipment –the Type Classification process for awarding the standard LIN required for unit’s authorization document (MTOE) and OPTEMPO funding, –the tools to create relationships between the SSN, LIN and NIIN In 1998, an HQDA PPBE IPAT formed to look at how the Army accounts for procurement dollars HQDA could “account” for only 7¢ of every procurement dollar HQDA could “account” for only 7¢ of every procurement dollar spent because of data gaps, conflicting processes, stove piped systems, outdated publications, and the loss of experienced personnel 1. THE ISSUE: 2. THE SOLUTION: RESOURCE AUTHORIZE SUSTAIN NIINLIN SSN PPBE Support Procurement Funding (EE PEG) OPTEMPO Funding (TT PEG) Sustainment Funding (SS PEG) 3. THE GOOD NEWS: Now, the Army can “account” for more than 80% of every procurement dollar * Standard Study Number – Line item Number Automated Management & Integrating System 12

13 Integrates relational data for managing major items throughout their life cycle Requiring  Funding  Procuring  Fielding  Accounting  Sustaining  Disposing Integrates with key Logistics, Acquisition, and financing requirements systems Improves programming and budgeting decisions for procurement and sustainment Highlights gaps and friction between major management systems Provides framework to resolve emerging life-cycle management issues Provides linkage for tracking rapid transition of items from non-standard to standard SLAMIS – Benefits to the Army 13

14 Three Over-arching Processes REQUIREMENTS RESOURCESACQUISITION Joint Capabilities Integration & Development System (JCIDS) VCJCS/Service Chief Oversight GW-N Defense Acquisition System Milestone Decision Authority (MDA) Oversight Packard Planning, Programming, Budgeting & Execution Process (PPBE) DEPSECDEF Oversight McNamara Hard Issues take time Challenge is synching management of the processes How do you manage the seams? Hard Issues take time Challenge is synching management of the processes How do you manage the seams? 14

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