R-TOC Best Practices: R-TOC Management
Area: R-TOC Management
Area: R-TOC Management
Best Practice: Coordination of R-TOC Initiatives
Pilot Programs: Aegis Cruisers, Common Ship, CVN-68 Carriers, LPD-17
Initiative: Four of the Navy's R-TOC Pilot Programs are primarily concerned with reducing ship ownership costs. Collectively, these four Pilot Programs address most surface ship types in the Navy, including legacy systems (Common Ship, Aegis Cruisers, CVN-68 Carriers) and ship types that are still in design or production (CVN-68 Carriers and LPD-17). Although the ownership cost issues are different for each ship type, the projects are making efforts to ensure that ideas developed by one Pilot Program are implemented widely.
PEO Theater Surface Combatants (TSC) (Aegis Cruisers) was given direction and the lead by the Smart Fleet Executive Steering Council to reinstate the Smart Fleet Innovation Technology Cell for the purpose of coordinating workload (and TOC reduction) efforts. The Innovation Cell has been created and is focused toward collaboration among the Fleet, other Navy Programs and activities. Its purpose is to evaluate new workload reducing, beneficial, enabling technologies and/or processes for implementation. Fleet participation has assisted in identifying accompanying Navy policy and procedural changes necessary to maximize utilization and imbed the innovations.
The Common Ship team meets regularly with other Navy R-TOC teams and has briefed the Smart Fleet Innovation Team.
PM, Aircraft Carrier Program (PMS 312) and PM, Future Carrier Program (PMS 378) have planned a combined Program TOC Summit. This initiative is focused on determining how best to combine program efforts to leverage resources more efficiently and eliminate duplicate efforts. The summit provides the PEO Carriers Program Offices a chance to better define high cost drivers and to identify new technology initiatives that can be back fit into CVN68 Class carriers to reduce TOC. Further, analysis of actual R-TOC initiative return cost data and operational data from in-service aircraft carriers is of significant value to the Future Carrier Program as they work to improve the design of future carriers.
Benefits: The LPD-17 team has incorporated many of the concepts developed by other R-TOC teams, including Advanced Food Service, Integrated Bridge System, and other initiatives developed by "Smartship" and other R-TOC initiatives. Similarly, new initiatives developed in the CVN-68 Carriers and other Pilot Programs are being carried forward to future carrier designs.
Area: R-TOC Management
Best Practice: Coordination of Legacy and New Systems
Pilot Program: Fire Support C2
Initiative: In June 2000, the former Advanced Field Artillery Tactical Data System (AFATDS) pilot program was redefined and renamed to the Fire Support Command and Control (FSC2) pilot program. The objective of this initiative is the integrated life cycle management of AFATDS, the Forward Entry Device (FED), the Lightweight FED (LFED), Fire Support C2 Legacy Systems, and the Advanced Deep Operations Coordination System (ADOCS) with cost effectiveness as the top priority. The Commanding General of the Army Communications and Electronics Command (CECOM) and the PEO for Command, Control, Communications, and Surveillance (C3S) have signed a formal memorandum of agreement (MOA) with the goals of reducing O&S Costs for Army Fire Support C2 and integrating life cycle management of AFATDS and Fire Support C2 legacy systems.
Benefits: With a single Combat Development organization managing both the Acquisition and Legacy Fire Support C2 Requirements, both Program Manager (PM) Field Artillery Direct Support (FATDS) and CECOM continue to realize the benefits of improved synchronization and avoidance of potential duplicative software functionality.
Area: R-TOC Management Best Practice: Remanufacture and Replacement of Legacy Systems Pilot Program: H-60
Initiative: The cornerstone of the Navy's Helicopter Master Plan (HMP) [supplanted in September 2002 by the Chief of Naval Operations Concept of Operations, or CONOPS] calls for replacing a number of aging helicopter systems with a total of 241 new MH-60R aircraft that provide enhanced mission capabilities and reduced O&S costs. This R-TOC approach has been modified on a number of occasions. The original R-TOC plan assumed that 243 SH-60Bs and SH-60Fs would be remanufactured into SH-60Rs; the Navy has since decided to build new MH-60Rs rather than remanufacture.
The cycle time from start of the MH-60S program to first aircraft in the fleet was only two years, and the total time from program start to initial operating capability (IOC) was only four years. Development costs came in at less than the $72M Milestone II Acquisition Program Baseline (APB).
The Navy ultimately will replace seven types of helicopters (including various H-60 models plus the UH-3H, CH-46D, and HH-1N) and many of the S-3B aircraft missions as well, with two Blackhawk systems (MH-60R and MH-60S). System improvements include common avionics and software, a variety of obsolescence initiatives, an integral Health Usage Monitoring System (HUMS), and extensive built-in test with IETMs. The program office has also developed a number of reliability improvement and cost avoidance initiatives via the CREIC or the R-TOC PBD processes.
Benefits: The H-60 program office estimates that longterm O&S savings from the implementation of the CONOPS will exceed 35% of the "as is" baseline.
Area: R-TOC Management
Best Practice: Replacement of Original R-TOC Initiatives
Pilot Program: Apache
Initiative: The Apache helicopter's original R-TOC plan involved a well thought out and potentially important proposal for Prime Vendor Support (PVS). The proposal envisioned a five-year firm fixed price (FFP) contract for "power by the hour," with annual renewal options. The contract would have incentivized the contractor to reduce customer wait time and provide a more reliable parts supply. After prolonged discussion, the Apache PVS proposal was rejected within the Army, primarily because of the adverse impact it would have on the Army Working Capital Fund (AWCF), leaving Apache with no documented R-TOC activities.
The Apache program office showed great flexibility in the aftermath of the rejection of their original R-TOC plan. Within two years, the program office had: assigned R-TOC responsibility to the O&S IPT; identified O&S cost drivers; campaigned for funding through programs such as Supply Management, Army/O&S Cost Reduction (SMA-OSCR), COSSI, and VE; developed a recapitalization (recap) baseline and recap/remanufacture program; commenced development of a recap data system; and developed a variety of reliability and safety initiatives
Benefits: The initiative shown by the Apache Pilot Program in redefining a new R-TOC approach has yielded significant benefits. The Apache projects a total life cycle O&S cost saving from R-TOC investments in excess of $2.2B, a considerable improvement over the Pilot Program's situation two years ago, when it reported that its only R-TOC initiative had been rejected.
Area: R-TOC Management
Best Practice: Developing TOC Conscious Culture
Pilot Program: B-1
Initiative: General Joseph W. Ralston, former commander of Air Combat Command and current Commander, U.S. European Command and Supreme Allied Commander Europe, has observed that "B-1 cost of ownership is more threatening to the aircraft than the enemy." The team organized teams to control O&S costs as early as the mid-1990s and formed a red team in 1997 to help understand the causes of a projected $600M O&S increase over the FYDP, to organize B-1 TOC reduction efforts, and to insitutionalize and educate the B-1 community about cost reduction processes.
The B-1 was one of the first USAF programs to form a Cost Reduction Integrated Product Team (CRIPT) and was a major contributor to the development of the Air Force R-TOC template and the AFTOC process. The mission of the CRIPT is to document, track and champion cost reduction initiatives and to perform analyses based on R-TOC guidelines. Participation involves the entire B-1 community, including representatives of the user and the contractor.
Benefits: In the past decade, the B-1 has undergone several capability upgrades and has successfully transitioned from a low altitude bomber with primarily a nuclear deterrence mission to a high altitude conventional platform with in-flight mission planning capability. First used in Kosovo, the bomber attained a 73 percent mission capable (MC) rate, a number that improved to 80 percent during Operation Enduring Freedom. Of 100 R-TOC initiatives considered, 25 have been or are being implemented, with FY05 savings exceeding $600M.
Area: R-TOC Management
Best Practice: Continuing Efforts to Develop R-TOC Initiatives
Pilot Program: F-16
Initiative: The F-16 Pilot Program provides one of the best illustrations of the importance of viewing R-TOC as a continuing process, rather than a one-time reporting requirement. Managing TOC is particularly complex for this program because of the quantity and complexity of the inventory (over 4000 aircraft, in 12 major blocks, were purchased by 19 countries.
Life cycle costs for the system are growing. In coordination with users, contractors, and others, the program office has undertaken continuing assessments and refinements of high cost drivers. Though there are limited upfront investment funds, potential new R-TOC initiatives are still being studied. Because of the volume of continuing international sales, the F-16 is somewhat unique in the sense that many of the opportunities for TOC reduction initiatives come about as a result of international sales opportunities.
Currently funded initiatives are not forecast to meet the 20% savings goal for FY05 (although the F-16 fleet is so large that even the 3.6% currently forecast represents a lot of money.
The F-16 SPO and various other stakeholders "allocated" the 20% goal among themselves and progress toward the goal is being tracked by the various organizations. This provides strong enterprise-wide motivation to identify ways to reduce O&S costs and ensures that all stakeholders will be involved in the process.
The essence of the F-16 R-TOC strategy is to identify cost drivers, document potential cost reduction initiatives, and obtain funding; continue to grow the R-TOC philosophy across the entire F-16 team; and seek international cooperation efforts to support mutually beneficial R-TOC initiatives. Six separate organizations (including the SPO and three Air Logistics Centers) have sponsored 26 separate R-TOC initiatives.
Benefits: The program offices persistence has resulted in development approval and funding of new R-TOC initiatives. In August 2000, projected FY05 savings totaled only $20.1M; this estimate has grown to $65.5M, and life cycle savings exceeds $1.5B.
