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Business Planning and Execution

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Presentation on theme: "Business Planning and Execution"— Presentation transcript:

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

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

3 Two Processes That Get at the Challenge
ARRG 2001 2012 Requirements Resources SLAMIS RESOURCE AUTHORIZE SUSTAIN NIIN LIN SSN PPBE Support Procurement Funding (EE PEG) OPTEMPO Funding (TT PEG) Sustainment Funding (SS PEG) 2001 2012 ACQ RQMTS Resources Tied to the Three Key Business Processes 3

4 ARRG is the Executive Leadership Forum for the AWCF
ARRG Overview 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 Key Players 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-8 (PA&E) ACSIM OCAR ARNG Co-Chairs: HQDA Deputy G-8 & Deputy Director Army Budget Office ARRG is the Executive Leadership Forum for the AWCF $15B per Year Business 4

5 Controlling costs while providing predictable prices and credits
ARRG Background* 1. THE ISSUE: Growth at ~twice the rate of inflation in OPTEMPO Program and Budget disconnected Customer/Supplier relationship on cost growth unclear 2. THE SOLUTION: 3. THE GOOD NEWS: 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 Controlling costs while providing predictable prices and credits * Army Working Capital Fund Requirements Review Group 5

6 Equipment Cost Factors
ARRG Cost Factor Review A R G E V L U T I O N Latest Acquisition Costs LAC Outputs Direct OPTEMPO G3 T R M Price & Credit SAFM-CES Price & Credit + Demands Activity Repair Costs AMC Cost Factors Cost Recovery Rate (CRR) Training Strategy Modernization Force Structure G4/ABO Policies OPTEMPO Requirements 6

Offsite 29 Nov 11 SLDA SRG #3 Billpayers SA CSA Guidance SRG #4 Emerging Rqmts/ Billpayers SRG #5 Billpayers SA CSA Guidance SRG POM Way Ahead SRG #1 POM Guidance SRG #2 PEG/CMD Updates Receive OSD TOA Guidance SA/CSA POM Approval 10 5 29 11 18 3 17 31 Army Program Development 14-18 POM EXSUM PAED Command RQMT, Funding , and Manpower Reviews PEG RQMT and Funding Decisions Bill/Bill-Payer Decisions POM14-18 Lock G8 Transfers Database to FM&C 1-N List Refinement PEG Rqmts & Funding Briefs to PPBC Publish BF5.0 OPTEMPO Rqmt POM/BES Submission to OSD PPBE Conf CNA Briefs Publish BF3.1 Rqmt & Funding Fixes Publish BF4.0 CMD Sched 8 Issue APGM & TGM PPBC Prioritize Refined 1-N List CNA Input Due Publish BF3.0 Rqmts TGM 3.0 Publish PF1.0 PF1.1 TGM 4.0 Publish PF2.0 TGM 2.0 12 15-17 22 13 16-21 23 30 17 27 2 3 8 11 18 24 1 29 JAN FEB MAR APR MAY JUN JUL ARRG Price & Credit Timeline AMC briefs ARRG on OPTEMPO LAC/CRR price impact & repair cost changes* HQDA G-3 briefs ARRG on BF 3.1 SAFM-CE briefs ARRG on impact of cost factors* AMC G-8 submits FY13 Price and Credit Table Change Requests SAFM-BUR provides AMC CRR and AMI Sales Estimates SAFM-CE develops historical OPTEMPO demand data base for POM13-17 SAFM-BUR-S reviews/updates FY13 Price and Credit Tables AMC submits BF 5.0 APACT to SAFM-CE SAFM-CE delivers cost factors to HQDA G-3 HQDA G-3 brief TRM results to ARRG* 25 17 9 28 5 10 30 1 2 28 20 18 24 AMC G-8 submits BF 3.1 APACT to SAFM-BUR-S and SAFM-CE HQDA G-3 completes BF 3.1 TRM SAFM-CE develops cost factors and provides to HQDA G-3 HQDA G-3 completes BF 5.0 TRM 7 * Dates are subject to change

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 LIN Lifecycle Data Elements
SLAMIS Overview 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. Key Players LIN Lifecycle Data Elements 10

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

12 SLAMIS Background * 1. THE ISSUE: 2. THE SOLUTION: PPBE Support
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 spent because of data gaps, conflicting processes, stove piped systems, outdated publications, and the loss of experienced personnel 2. THE SOLUTION: PPBE Support Procurement Funding (EE PEG) Sustainment Funding (SS PEG) RESOURCE AUTHORIZE SUSTAIN SSN LIN NIIN OPTEMPO Funding (TT PEG) 3. THE GOOD NEWS: 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 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 SLAMIS – Benefits to the Army
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 13

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

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