DCMA and Predictive Analysis

DCMA and Predictive Analysis
Introduce yourself and the team. Emphasize the importance of the training>>> I am taking time away from my office to bring you this training because the success of DCMA is directly proportional to the success of our PSTs. The PST is in many instances the only DCMA face seen by the customer. Presented By: Gary Gustafson DCMA Chair DAU

Full Service Acquisition Impact
Scope of work All major weapons system programs $1,173B in Contract “Face Value” $129B Unliquidated Obligations 335,000 Contracts 16,000 Contractors Flight Operations (1200 Aircraft/yr) $86B Government Property $8B Progress Payments $12B Performance Based Payments $37B in Small Business subcont. plans Span of Control 11,000 Professionals Over 800 Locations Worldwide 50 Major Field Commands $1.1B Budget Authority $81M Reimbursable/Foreign Military Sales Combat Support Agency

Readiness and Combat Support Timely Return to Mission Capable Status
The Apparent Big Items - Big $ - High Attention The Less Apparent Small Items - Small $ - High Importance DCMA covers… Readiness Driver NSN Delinquent Backorder NMCS The Full Spectrum The Critical Few Depot Maintenance Timely Return to Mission Capable Status Informed Engagement on Spares Combat Support Agency Focus on Customer’s Readiness Portals to Customer’s Supply Chain

Vision, Mission & Goals Vision:
An Indispensable Partner, Providing Our Customers Flexible and Responsive Contract Management and Acquisition Life Cycle Solutions. It Starts With Me! Mission: Provide Customer Focused Acquisition Support and Contract Management Services to Ensure War-fighter Readiness, 24/7 Worldwide Strategic Goals: Deliver great customer service. Lead the way to efficient and effective business processes. Enable DCMA people to excel. Performance Contract goals negotiated with customers – reinforced by PM/ICP MOAs at the local level

Where is The Agency Going?
Customer Centered Culture More Latitude with Requisite Greater Responsibility and Accountability Performance Measures Defined by Customer Success Requirements More Independent Predictive Analysis –Sooner Smaller, More Highly Skilled and Mobile Workforce Mandatory Non Mandatory

Achieve Customer Outcomes!
What We Do Achieve Customer Outcomes! Provide Customer Focused Contract Management Right Item = Quality Right Time = On-Time Delivery Right Price = Value for Money Combat Support Agency Military Operations Readiness of Fielded Systems Modernization of Military Equipment Industrial Surge – During Conflict Military Operations – We are in the theater with the combatant commanders to support their operations (base camp operations, oversight for contractor support, we provide in-depth support to critical weapon programs Readiness of Fielded Systems - we resolve critical parts issues, spare parts for legacy equipment to keep them fully operational to meet warfighter needs Modernization of Military Equipment – commercially available upgrades, etc Industrial Surge – we have industrial insight into what contractors have the capacity to meet demand and also issues that may impact production Teaming with Military Services and Defense Contractors to ensure that tax dollars achieve mission requirements

Worldwide Acquisition Impact
Scope of work $860B Face Value of Contracts 19,000 Contractors 320,000 Contracts $116B Unliquidated Obligations All ACAT 1, 2 and 3 programs Flight Operations (1200 Aircraft/yr) $95B Gov’t property in plant $8B Progress Payments $12B Performance Based Payments Span of Control 11,125 professionals - ACOs, PI, QA, Engr, IS, Prop 800 locations 60 major field Commands $1.1B budget authority $81M reimbursable FMS Standard Procurement System Combat Support Agency Updated #s Jan 03-FBP

5 CMOs with 32 Offices in 21 Countries
DCMA Worldwide Operations . . Northern Europe . . . . . . . . . . . . . . . . Americas . . . . . . West DCMA Southern Europe . . . . . . . . . . . . . . . . East DCMA --- HQ DCMAI . . . . . . . . . . . . . . . . . . . . Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Saudi Arabia . . . . . . . . . . . . . . . . . . . . . 5 CMOs with 32 Offices in 21 Countries

Types of DCMA Contract Management Offices (CMO’s)
Resident In Plant Offices Major Contractor Geographic Offices All Smaller Contractors in an Area

Types of Support Full Delegation: Program Support Team (PST):
Program Integrator (PI) - PST Coordinator ACO and CA - Contract Admin, Payments Etc. Engineering Support - EE, Mech.,Software Quality Assurance - Mech., Electronics, S/W Production - IE/IS Subcontract Support (SPST) Matrix Support: Property Transportation Safety

Remember it’s not All or Nothing - But some strings may be attached !
Types of Support Partial Delegation: The type and level of support can be tailored to fit the individual PM desires, program needs & risk levels. Some of the reasons for a partial delegation are: Low Risk Program Commercial Items Early Acquisition Phase Low dollar value PMO is providing oversight Very mature production Remember it’s not All or Nothing - But some strings may be attached !

SPI - Capt Denise Yarber LM Missiles & Fire Control
JSF PI/SPI Network DCMI Northern Europe BAE Systems – Warton UK SPI -Tom Rejmaniak DCMA Rockford Hamilton Sundstrand SPI - Maj Susan Legatowicz DCMA San Francisco Kaiser & Vision Systems SPI - Tony Azucena DCMA Twin Cities LM Tactical Systems SPI - Bill Green DCMA BAE SYSTEMS-Nashua SPI – Lt Col Korina Kobylarz DCMA Pratt & Whitney East Hartford PI -Gary Gisi DCMA NG El Segundo SPI – Maj Paul Summers DCMA Long Island EDO SPI - Joe Thomas DCMA GE Aircraft Engines Cincinnati PI - Shelia Marshall DCMA LM- Palmdale SPI - Steven Luu “Take-away" point: The DCMA has an extensive network of resources throughout the supplier system for each major program. Something that contractors often overlook is that a government program support team in contractor facilities doesn't simply provide a service to the government. When utilized properly, the prime contractor can benefit directly as well. If we're honest with ourselves we all know there is a reluctance to share bad news right away with any customer. There is a tendency to try to fix the problem first and only identify it when it can no longer be hidden. That goes for contractor to government dealings, but the same goes for subcontractors in bringing bad news to the prime. Any advance notice provided by the SPI network for problem areas in the supply chain certainly provides value to the prime's management of the program...and, it doesn't cost the prime anything! DCMA Buffalo Moog SPI - Ray Struski DCMA NG Baltimore SPI - Capt Denise Yarber DCMA Honeywell Torrance SPI - Lop Ng DCMA Santa Ana Pilkington SPI - Steve Vega DCMA Syracuse BAE Controls SPI - Maj KellyJoShere DCMA LM Orlando LM Information Systems SPI - LtCdr Trent DeMoss LM Missiles & Fire Control SPI - Vince Runci DCMA San Diego TRW SPI - Michael Villela DCMA LM Fort Worth PI - Lt Col Bruce Ensor

What is Predictive Analysis?

Predictive Analysis is:
the collection, examination and synthesis of information and data from our on-site presence which states (in terms of future cost, schedule and performance) what we forecast will happen based on our special knowledge of the supplier and program Keeping in mind the definitions on the last slide, it would logically follow that predictive analysis is the examination of program data and stating what we think will happen based on our special knowledge of the program

Predictive Analysis - What it is NOT
Wild Guess Throwing Darts Unsupported opinion Shot in the dark It is not a certainty - our goal is to inform the right people early, which may prevent the event! What is a predictive analysis? First, let us discuss what it is not…. Guess Unsupported opinion Shot in the dark Crystal Ball

Why Predictive Analysis?

Customer Issues & Concerns?
More Predictive Insight into: Systems & Software Engineering – Technical Risk Schedule Surveillance – Critical Path Quality – Product/Process impact Direct/Indirect Cost Visibility - Rates Total Ownership Cost- Sustainment Change Management – Configuration EVM – Cost & Schedule integrated with Technical Performance INSTRUCTOR NOTE: Now that we have discussed who is our customer and looked at some of the global elements that our customers would like to see coming from their DCMA partners lets look at how your daily efforts play into supporting these goals. 17

I Know What Kept Me Awake Last Night…..
PM Most people do not like surprises!!! If nothing is done, the current issue could become a sleep deprivation issue…even though we know about it now. I Know What Kept Me Awake Last Night….. Tell Me What Will Haunt Me Three Months from Now!!

what they don’t already know!
Predictive Analysis Tell Customers what they don’t already know! Program Manager already has: Technical Data Status Reports & Plans Integrated Master Schedule Full Technical and Business Staff Cost Performance Report (CPR) wInsight (or some other software tool) Program Offices have access to the same data (CPR) and analysis tools that we have.. Therefore, we must go beyond the obvious and use innovative techniques to move towards being predictive.

Predictive Analysis

Cost To Mitigate Increases Exponentially
Design Test Production Problems Cost to Mitigate Product Risks This chart shows when the three different types of risks occur over the life of a program. Process risks occur significantly throughout the life of a program. Most significantly, process risks are the only risks that are active in the earliest stages of a program. Next are product-specific risks; the earliest of these will appear sometime in the design phase, and continue through most of the program as well. Actual problems take time to develop, so they typically won’t gain visibility until later. Historically, TRIMS has focused on the process risks, because they occur earliest, and have the most significant impact on a program. Also, the majority of the other two categories tend to be the results of unmitigated process risks, so by focusing on them, there’s a good chance of reducing the numbers of these other two groups. Process Risks Time Risk Management or Damage Control?

Predictive Analysis vs. Corrective Action
Is it a Risk …………………………or a Problem Action Preventive Corrective Problem May occur Has occurred Thinking Strategic Tactical Time horizon Long Short Manage Risk and Future Issues (Predictive Analysis) Manage Problem and Future Impact (Corrective Action) Purpose of Slide: Relationship of risk, predictive analysis, problems/issues, & corrective action. Risk Management – used in normal routine to adjust surveillance but now include recommendations to the PST and the Program Office, i.e., bringing high risk issues to the table. Risk management plays a bigger role when performing Predictive Analysis. Don’t confuse corrective action efforts with predictive analysis. QAS personnel begin corrective action once a problem or trend is discovered. . .as well as pursuing root cause analysis (which may occur in conjunction with the contractor). Don’t delay forming a prediction while pursuing CA or Root cause. . .What will happen if the problem is not fixed? Timeliness? Performance? Product conformity? Suppose DCMA had been performing predictive analysis 5 years ago? If so, and you end up doing corrective action. . Then your predictive analysis failed (not necessarily the prediction, but the analysis.) Remember, we predict to prevent problems before they occur.

Steps to Making Predictions
Plan Surveillance Plan surveillance activities in a risk based approach Apply Measures & Collect Data Apply measures process to collect data from all available sources Analyze/synthesize data collected in a teamed environment. You may need several sources to come to a conclusion Analyze Data Generate Predictive Statement(s)

Data Sources Available
Schedule analysis Critical Path analysis TPM analysis TRL assessments Company Capability indicators (Maturity) EVMS analysis Quality Process reviews Product/Process audits Technical System reviews Water Cooler talks Scrap & Rework and Yield data Business Systems reviews SPI inputs Quality Delegation reports PST Member surveillance PST Program Risk assessments Contractor Capability Special Knowledge Software Surveillance results Payment Requests Requests for STE and baseline changes Intuition and critical thinking Predictive Analysis is performed using many types of data sources………..internal and external to the CMO.

Predictive Analysis Tools
CMMI TPMs TRLs Design Iterations Complexity How much Systems Engineering? Business Processes – Billing, Estimating Accounting Earned Value IEAC Integrated Master Schedule Critical Path Quality Assurance – Performance data and analysis Best Manufacturing Center of Excellence Integrated Spreadsheet Predictive Models

PA Customers want Predictive Analysis Need to forecast future problems To be truly predictive, one needs to look at the processes used to create the various products

Preparing Your Assessment
Is what you know about the progress reflected in the schedule? Examine Control Account Plans and detailed schedules Do you believe the schedule remaining for a task is sufficient? Examine Horizontal Dependencies Are the dependencies tied properly so that a slip on one dependent activity reflects on the other activity? Examine Vertical Dependencies Are slips in the detail level critical path reflected in the summary levels? More suggestions on things to investigation during your assessment. Based on your ‘special knowledge’, do you believe the remaining schedule is sufficient? Are schedule issues accurately reflected? If the system schedules are not properly ‘tied’, some dependencies can be missed. Ensure that a slip in one dependent task properly impacts the other dependent task. Further, schedule slips on the critical path should be reflected in the vertical summary level schedules. Many times the program manager only looks at the higher level schedules so vertical integration is imperative.

PA Statements – Positive & Negative
Predictive Analysis takes under consideration what is strong or weak about a contractor’s process Predictions should trace directly to: Strengths & Weaknesses of the contractor’s process and the words used in our predictions should effectively communicate Strengths and Weaknesses as the rationale for such a prediction Similarly…Changes or Adjustments to our in-plant activities should be based on the same observed strengths and weaknesses -- with a customer centered focus on working with the contractor to improve

Other Measurements Major milestone exit criteria (e.g. PDR, CDR)
If these slip, all subsequent events are impacted Drawing release This is an excellent early indication of schedule validity Number of changes per drawing If the drawing change rate exceeds the planned change rate, then the amount is design effort will be higher than budgeted Dependency Number of sub-contracted items and their complexity Stability Anticipated changes due to external or internal factors These are examples of key problem indicators. For example, tracking the rate at which drawings are released and comparing this to the supplier’s planned release rate can provide insight into the validity of follow-on activity schedules. This planned vs. actual comparison can be used to provide status insight into many different facets of the program such as technical manual completion and component test completion. Dependency – Look at what items the prime contractor has direct control over. If the prime is contracting a lot of complex items out the probability there will be problems will be higher. Stability – look at the number of changes happening on the program. The more changes happening means the contractor will have to have a way of managing this change or there will be problems on the program.

Examples of Surveillance Applied
Tying it All Together Systems Engineering Manufacturing Business Process Info. QA EVMS Blending Examples of Surveillance Applied Predictive analysis is the product of multi-functional information/data gathering and analysis within the program support or contract management team. More than a mere blending of information or data points, predictive analysis includes an element that facilitates intuitive judgements and allows us to predict a possible future state for the program or contract with some certainty. In effect, predictive analysis allows us to state: “Based on what we now know (facts) this is what we believe (belief) will occur in the future.” Predictions Synthesis/Analysis Customer

The process can start with EVM Data
????? EVM data can identify the source of the variance! WBS ELEMENT

????? EVM data can identify the source of the variance! WBS ELEMENT Your CAM Interview should be asking. - Is the CAM aware of the variance? - Has the root cause of the problem been identified? If not when? - Has a corrective action plan been developed? If not when? If it has been how are they tracking?

This Provides a baseline EVM data can identify the source of the variance! WBS ELEMENT Your CAM Interview should be asking. - Is the CAM aware of the variance? - Has the root cause of the problem been identified? If not when? - Has a corrective action plan been developed? If not when? If it has been how are they tracking? When do you plan to have this under control and or resolved? What is the on going impact to the program?

What’s Happening Now? Is progress being made towards recovery plans? Are there technical issues that will impact the plan? Is the Critical Path affected? What do you predict will happen next month? Can you predict beyond next month?

Now Expand the process to the entire team
????? ENGINEER – What is the Technical Maturity Level? Is the corrective action and time frame reasonable based on TML? How will this effect any TPM’s or KPP’s. WBS ELEMENT If the Technical Maturity Level (TML) is low the risk can be higher. If the TML is high then the risk is probably centered on integration rather then new technology and the risk may be lower. If the problem is associated with a Technical Performance Measure (TPM) you could be looking at an impact on the next Milestone review & remember PM’s get fired for Milestone Breaches so it’s important to them.

????? ENGINEER –How will this effect any TPM’s or KPP’s. WBS ELEMENT If the problem is associated with a Technical Performance Measure (TPM) you could be looking at an impact on the next Milestone review & remember PM’s get fired for Milestone Breaches so it’s important to them.

Questions to consider on your program
Is Systems Engineering applicable to the program? Does the program include Software Engineering? Does the supplier have any process weaknesses? Are the Requirements stable? How Complex is the program? What is the Technology Readiness Level? Are there numerous Design iterations? Do the Technical Performance Measures (TPMs) have a planned profile? Can you be predictive? All the above questions lend themselves to predictive statements or analysis. These will be covered in detail on the remaining slides.

????? Industrial Specialist – Is this on the Critical Path? How does what the CAM is saying fit with the Integrated Master Schedule and what I’m seeing when I go out onto the floor? WBS ELEMENT If the WBS element is on the Critical Path the risk of a schedule impact is increased. The contractor trying to fix this may also drive a cost increase. Do I see the corrective action on the floor or am I seeing bottlenecks and work around activity.

IMS Analysis The IMS should be the framework for program reviews and assessments Are the schedules shown during the review representative of what is happening on the program? Are problem areas identified and discussed? Predictive Analysis By viewing the dependencies identified on the IMS, you can forecast how schedule problems on one WBS will impact other WBS elements Again, we stress that here is where you can add value. Because DCMA makes in-plant observations and interviews, we can consider the variances and efficiencies to date, assess the effectiveness of correction actions, and then make predictions. The key is understanding the content of the work scheduled and the interdependencies of the IMS.

Critical Path Analysis
Know which WBS elements are on or near the Critical Path Compare them with the actual performance If tasks are delayed and near/on CP, then this is a high risk area that must be managed If tasks are shown as ‘on schedule’ yet you are aware of performance issues, investigate why CP does not reflect delay Do you think the planned Corrective Action will have the desired effect on the Critical Path schedule? Has the Corrective Action that was taken last month and this month had the intended impact? When analyzing the critical path, it is important that you focus on the WBS elements on the path and determine if slippages have or may occur based on current status and predictions. Also assess the effectiveness of any corrective action that the contractor might be pursuing. Contractor may have a plan to reduce the time required to complete an event by adding a second shift, or adding resources. Be prepared to articulate in your assessment whether the plan will work to get the schedule back on track or not. Also assess the additional costs of adding shifts or resources.

Preparing Your Assessment
Is what you know about the progress reflected in the schedule? Examine Control Account Plans and detailed schedules Do you believe the schedule remaining for a task is sufficient? Examine Horizontal Dependencies Are the dependencies tied properly so that a slip on one dependent activity reflects on the other activity? Examine Vertical Dependencies Are slips in the detail level critical path reflected in the summary levels? More suggestions on things to investigation during your assessment. Based on your ‘special knowledge’, do you believe the remaining schedule is sufficient? Are schedule issues accurately reflected? If the system schedules are not properly ‘tied’, some dependencies can be missed. Ensure that a slip in one dependent task properly impacts the other dependent task. Further, schedule slips on the critical path should be reflected in the vertical summary level schedules. Many times the program manager only looks at the higher level schedules so vertical integration is imperative.

????? Quality Assurance – What am I seeing on the floor? Is this a process issue? Is this a make or buy item? Is what the CAM saying proved out on the floor? What am I seeing in rework? Is the contractor requesting wavers and deviations? WBS ELEMENT The QA is in a unique position to provide the team a sanity scrub between what the contractor is saying and what he or she is seeing. If this is a buy item do we have a delegation and what is the DCMA representative at the sub saying about the problem?

QAS Inputs to PST What can the QAS provide to the PST?
Performance Data and Analysis Test information/results Trends Bottlenecks * Scrap/Rework Subcontracting effort/issues Contractor Personnel Skill Levels Management/Labor Insights Purpose of Slide: There are specific areas of QA effort that can benefit the PST; provide possible high risk areas of importance leading to predictive analysis through PST Synthesis. A Risk Management Plan should already be developed which addresses many of these items listed here. The QAS is looking at product and process, generating a pool of knowledge that can be shared for predictive analyzing. Consider the data the contractor is collecting; make a determination whether the data is providing the right information to assure process or product conformance. (Supplier Performance). Supply chain management requires a high level of insight since many of the integration issues may begin at sub-tier suppliers. Be in touch with the QA Network. Since the QAS is usually on the floor or evaluates methods, operations, and processes, he/she would be the first to determine if the appropriate supplier skills are functioning on the work floor or know of upcoming labor issues that could impact the program. Example: Customer expects supplier to provide Senior technical expertise, yet personnel with no experience outside of college are performing the work. Customer is paying for something they have not received. * QAS sometimes acts as a production specialist

????? ACO – Have I received requests for baseline changes? How does this stack up against progress payment requests, contract mods? Am I seeing requests to purchase special test equipment (STE) ? WBS ELEMENT The ACO should be looking at the business indicators. Progress Payment reviews can show a different picture. Baseline changes with out corrective action are problematic. The new need for STE can be an indicator of a problem. What do the contract mods indicate? Are there any up coming rate or overhead impacts?

Predictive Analysis PMO Earned Value Analysis
CAM Interviews Root Cause Analysis Technical Performance Analysis Progress Against TPMs Schedule Analysis Critical Path Analysis Development Test Evaluation Other PST Technical/ Business Inputs Blending Predictive analysis is the product of multi-functional information/data gathering and analysis within the program support or contract management team. More than a mere blending of information or data points, predictive analysis includes an element that facilitates intuitive judgements and allows us to predict a possible future state for the program or contract with some certainty. In effect, predictive analysis allows us to state: “Based on what we now know (facts) this is what we believe (belief) will occur in the future.” PMO Predictive Reporting Synthesis

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