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Maritime Logistics Community News : Autumn 2010
9 NAVY SUPPLY NEWSLETTER AUTUMN 2010 The aim of SRP is to fundamentally overhaul Defence by driving efficiency and effectiveness to create $20 billion in savings over the next 10 years to be reinvested in current and future capability. Navy's Smart Sustainment contribution to reforms and efficiency is $1.873b over the decade 2009- 2019. Smart Sustainment is not just about savings, it is about cultural reform which marries very well with the aims of NGN and the signature behaviours. Importantly, the reforms are about maintaining and sustaining Navy capability, ensuring safety and being able to meet Government's requirements of Navy. What is to be Reformed ? Navy Smart Sustainment (SmtSus) reforms target the way Navy operates and sustains current capability. Together with DMO, a number of broad areas have been earmarked for reform: a. Contracting -- This involves improved contract management and re- negotiation of contracts to achieve better value for money (or bang for your buck), and is being undertaken by the DMO SPOs and other procurement agencies such as NIPO. b. Maintenance -- Most reforms in this area involve better maintenance planning and assessment of the maintenance required, changing to condition based monitoring, increased used of FSUs and improved processes. A major initiative within MSD is the Ship Repair Group Maintenance concept which seeks to batch maintenance contracts to achieve economies of scale and better knowledge of a platform by the contractor. c. Inventory -- Along with JLC and DMO inventory reforms, each of the SPOs are investigating better targeting of inventory buys for their systems. This goes hand in hand with improved configuration management to ensure the right products are procured. d. Engineering or Configuration Change - Currently configuration change master plans are being reviewed with a view to rationalise the amount of change introduced to ships. One policy initiative being introduced quickly by HMS is that no configuration change will be installed on a ship 5 years prior to a ship's POA2. e. Operating Methodology / Demand Behaviour -- There are potentially significant savings to be made in taking a different approach to operating the Fleet. Many reforms are being investigated but already inroads are being made such as cost conscious development of the Fleet Generation Plan which at the very least will reduce fuel consumption. f. Business Process Reform -- Streamlining processes and ensuring process steps add value, along with reducing duplication are all being pursued within all areas in materiel support. And, g. Cultural change and embedding cost consciousness -- This is being pursued via the NGN program and will have a significant positive influence on sustainment costs. Independent of the NGN program, other areas are also playing significant roles in promoting cost conscious behaviour, such as HNE producing a Shipboard Energy Conservation Guide for ships to assist with reduction of fuel consumption. How Will Reforms be Implemented Many of the reforms will be developed and implemented by the hard work of the staffs in Fleet, the Forces and the SPOs. Additionally DNCI will be utilising the Continuous Improvement team and their contractors to provide extra analysis power and assisting with developing reports and options for reforms. To ensure Navy implements the right reforms to achieve the savings and not have adverse downstream capability impacts, Navy have introduced a governance framework for SmtSus which consists of 3 tiers. The top tier is the Navy Reform Board (NRB) chaired by DCN. The middle tier is the seven SmtSus Steering Groups; Surface, Submarine, Fleet Air Arm, MCD, Hydro and Patrol Boat Forces, Communications and Electronic Warfare, Fuel, and Explosive Ordnance. The bottom tier is the Project Boards which develop reforms for the specific platforms. These Boards and Steering Groups review and approve implementation of the reforms (if within their remit) to ensure the reform is sustainable and is not going to transfer cost or work to others or jeopardise capability. In the case of major reforms, they must be passed to the NRB for review and approval. Conclusion Smart Sustainment and all it entails is a very large body of work involving many people who support ships. Over the next couple of years it will require motivated people to drive the reforms but also ensure that Navy does not undermine capability. Making the savings, introducing the reforms and ensuring Navy is able to provide ship availability for raise, train and sustain, and operations will be challenging but it is a very doable challenge when the blinkers are off, scared cows made into hamburgers, and initiative and innovation applied. Navy Smart Sustainment -- Reform for the Decade Smart Sustainment is a stream of the Strategic Reform Program (SRP)1 which is a comprehensive set of reforms endorsed by Government to implement the recommendations of the Defence Budget Audit and the intent of the White Paper. BY CAPT SIOBHAN BACON, RAN, DNLOGRS 1 There are other supply related streams which will have an impact on the Supply Branch. These are the Logistics Reform stream being run by JLC, the Non-Equipment Procurement impacting on DSG services and the Workforce and Share Services stream. 2 There will be room for some exceptions such as for safety.