LOGISTICS ACQUISITION, AN EMPHASIS ON PLANNING FOR PERFORMANCE By Judith A. Elliott-Brown Naval Sea Systems Command Port Hueneme Division Naval Surface Warfare Center elliottbrownja@phdnswc.navy.mil 805-228-8419, DSN 296-8419

ACQUISITION LOGISTICS Acquisition Reform Today’s New Emphasis Evolutionary Acquisition Spiral or Incremental Development Systems Engineering Logistics Management Information (LMI) Supportability as a Performance Requirement A Logistics Management Process “Evolutionary Acquisition: Rapid acquisition of mature technology for the user. An evolutionary approach delivers capability in increments, recognizing, up front, the need for future capability improvements. The objective is to balance needs and available capability with resources, and to put capability into the hands of the user quickly. The success of the strategy depends on consistent and continuous definition of requirements, and the maturation of technologies that lead to disciplined development and production of systems that provide increasing capability towards a material concept.” (DODI 5000.2, pg. 3, para. 3.3, May 2003) “Spiral Development: Ultimate functionality cannot be defined at the beginning of the program, but only by the maturation of the technologies, matched with the evolving needs of the user.” “Incremental Development: Ultimate functionality can be defined at the beginning of the program, with the content of each deployable increment determined by the maturation of key technologies.” (Designing and Assessing Supportability in DOD Weapon Systems (Draft), pg. 19, para. 2.3, Nov. 2003)

SYSTEMS ENGINEERING - THE BOTTOM LINE Systems Engineering with Acquisition Logistics as part of the Team. A total engineering effort to meet cost, schedule, supportability, and technical performance. A life-cycle activity. “Systems Engineering: A comprehensive, iterative technical management process that includes translating operational requirements into configured systems, integrating the technical inputs of the entire design team, managing interfaces, characterizing and managing technical risk, transitioning technology from the technology base into program specific efforts and verifying those designs to meet operational needs. It is a life cycle activity that demands a concurrent approach to both product and process development.” (OPNAVINST 3000.12A, Operational Availability Handbook, pg. 67, June 2003). “Acquisition programs shall be managed through the application of a systems engineering approach that optimizes total system performance and minimizes total ownership costs. A modular, open-systems approach shall be employed, where feasible.” (DODD 5000.1, pg. 7, para. E1.27, May 2003).

SYSTEMS ENGINEERING PROCESS The principles of systems engineering: Know the problem, the customer, and the consumer. Criteria should be measurable (objective and quantifiable) Establish and manage requirements. Identify and assess alternatives. Verify and validate requirements. Design quality in. Maintain the integrity of the system. Use an articulated and documented process and readily available automated tools. “Determining the optimal approach for a total system’s design is a program management decision. All of a program’s technical activities, of which the system engineering activities are a part, are intended to support and facilitate sound program management decisions. The acquisition strategy, which is developed in consonance with the policies and procedures of the defense systems acquisition process, serves as a plan for the management and execution of an acquisition program.” (Acquisition Logistics Handbook, MIL-HDBK-502, pg. 4-18, para. 4.3, May 1997).

PLANNING FOR LOGISTICS Acquisition Logistics Emphasis is on Planning. Need is to incorporate Guidance. Goal is to meet Logistics Requirements. Be Responsive Reduce Redundancies Enhance what is available Be flexible and innovative Technology insertion Effective Management “Defense Acquisition: The primary objective is to acquire quality products that satisfy user needs with measurable improvements to mission capability and operational support, in a timely manner, and at a fair and reasonable price.” (DODD 5000.1, pg. 2, para. 4.2, May 2003). “To provide more affordable logistic support for material systems the DOD is focusing on total cost of ownership throughout the life cycle. Achieving affordable support depends upon effective acquisition logistics management and planning.” “Acquisition logistics activities are most effective when they are integral to both the contractor’s and Government’s system engineering technical and management processes.” (Acquisition Logistics Handbook, MIL-HDBK-502, pgs. i & 4-1, May 1997).

LOGISTICS MANAGEMENT INFORMATION (LMI) Defines acquisition logistics guidance to identify program requirements. A “road map” to acquire logistics. Provides guidance on system supportability assessment and analysis. Tailoring Program Requirements “The LMI is the methodology that analyzes and integrates the major logistics support elements. Alternative support concepts and cost trade-off analyses should be performed to achieve the support system design required to meet program needs.” (OPNAVINST 3000.12A, Operational Availability Handbook, pg. 35, June 2003). “Logistics Management Information (LMI) (MIL-PRF-49506): The supportability analysis documentation (previously called Logistics Support Analysis Record (LSAR)) that recognizes the effects of occurrences that place a demand on the logistics support structure without regard to the effect on mission or function.” (OPNAVINST 3000.12A, Operational Availability Handbook, pg. 60, June 2003).

SUPPORTABILITY “The capability of a total system design to support operations and readiness needs throughout the systems service life at an affordable cost.” Integrated analysis. Primary element in logistics support. Balance design objectives with supportability concerns. “The primary objective of ‘design for system supportability’ is to positively impact and reduce the requirements for the various elements of logistics support during the system operations and maintenance phase. Accordingly, the focus is on addressing issues pertaining to: a) Commonality (physical, functional, and operational); b) Modularity (physical and functional); c) Standardization (system elements and parts, test and support equipment); and d) Technology maturity and refreshment (Diminishing Manufacturing Sources (DMS), Commercial Off-The-Shelf (COTS) technology maturity, open system standards, proprietary issues, single source items.).” “The emphasis should be on increased reliability and decreased logistics footprint.” (Designing and Assessing Supportability in DOD Weapon Systems (Draft), pg. 15, November 2003)

PERFORMANCE BASED LOGISTICS Performance Based Strategies Performance Based Logistics contracting: State requirements in terms of results. Define functional rather than detailed requirements. Develop criteria and metrics that measure performance and verify compliance. Achievable Relevant Performance Based Strategies: To maximize competition, innovation, and interoperability, and to enable greater flexibility in capitalizing on commercial technologies to reduce costs, acquisition managers shall consider and use performance-based strategies for acquiring and sustaining products and services whenever feasible. When using performance-based strategies, contract requirements shall be stated in performance terms, limiting the use of military specifications and standards to Government-unique requirements only.” (DODD 5000.1, pg. 6, para. E1.16, May 2003). “Performance cannot be considered separate from the other elements of operational effectiveness - they are inextricably linked. The system capabilities and functions represent the desired mission capabilities as a total package, together with the sustainment objectives and the desired logistics footprint reductions.” (Designing and Assessing Supportability in DOD Weapon Systems (Draft), pg. 12, para. 2.2.1, Nov 2003). “The overarching goals of PBL are to compress the supply chain, eliminate non-value added steps, reduce Total Ownership Cost, and improve readiness for weapons systems and commodities.” “Each PBL contract is hand crafted and will vary from other PBL contracts.” (Performance Based Logistics (PBL) Support Guidebook, pg. 2 & 3).

A LOGISTICS MANAGEMENT SYSTEM Logistics Management Supportability Analysis (LMSA) Efficient and Cost Effective. Provides a baseline start, process to accumulate data, look at trends, investigate cause and effects, compare data, establish performance levels. Flexible and Tailorable. “All logistics elements are merged into the LMI through the logistics support analysis process. The logistics team orchestrates this process, reduces uncertainty in support planning, ensures the compatibility of resources and planning, diminishes the duplication of action, and coordinates the transition of support tasks from the contractor to the Navy.” (OPNAVINST 3000.12A, Operational Availability Handbook, pg. 45, para. 2.4.4.4, June 2003).

SYSTEM/LMSA PROCESS CHARTS Figure 1 - Full Systems Process Chart Figure 2 - Tailored LMSA Process Chart

Figure 1 depicts considerations for a total system logistics assessment.

Figure 2 depicts the tailored considerations identified within LMSA Figure 2 depicts the tailored considerations identified within LMSA. The process can be expanded or tailored further to accommodate specific program requirements. The need is to also keep in mind the interface considerations with other utilized logistics products, processes, and tools to obtain a total logistics representation.

Navy System Support Vision VISION VS. REALITY Navy System Support Vision Concurrent Engineering and Logistics Support Central Supply Point Effective Teaming from Cradle to Grave Commercial Off-The-Shelf Equipment Minimal Support Technology Refreshes Elimination of R&D and Traditional Support Logistics Management System Reality Check Example Total Ownership Cost “No program is immune to changes that affect system reliability, maintainability, supportability, or producibility. When changes occur, the support team’s functions require them to: 1. Maintain the supportability analysis. Continue to document all parameters used to determine support resource requirements and relate those parameters to the program thresholds. 2. Establish interdependencies among the program elements. The support team is able to identify the impact of a change in one area to any other logistics element. 3. Identify critical risk. Tasks requiring operations and maintenance funds are particularly susceptible to changes in schedule that modify the fiscal year in which the task is begun. 4. Assess and reduce risk. Risk is a function of both the probability and and the consequences of failure. The logistics team is expected to identify the impact of changes on other program elements and to minimize or prevent degradation.” (OPNAVINST 3000.12A, Operational Availability Handbook, pg. 45, para. 2.4.4.4, June 2003). Example of a Logistics Management System. Benefits and Challenges. Continue to look closely at Total Ownership Cost to include out year carrying costs for technology refresh, support guidance specified for acquisition plans, identification of testing and system integration to ensure software/hardware continue to be compatible with existing systems.

An effective Acquisition Logistics approach. CONCLUSION An effective Acquisition Logistics approach. Systems Engineering to include hardware, software, and planned Logistics resources. Assess Supportability. Measure Performance not detail. An effective Logistics Management System for program life-cycle support. As defined by the Navy’s Acquisition Reform Office, Acquisition Logistics is, “the set of functions and processes designed to provide the Program Manager and the system end user an adequate and cost-effective system operational support package upon delivery and throughout the system life cycle. It is composed of Acquisition Logistics Planning, Functional Processes, and Design Interface elements.” The Bottom Line: A total engineering effort to meet cost, schedule, supportability, and technical performance.