New technologies like automation and robotics, accompanied by upgrades to facilities and infrastructure, have enhanced productivity at Marine Corps Depots. As productivity and efficiency increase we are seeing corresponding decreases in labour, maintenance, and operational costs.
The depot readiness enterprise recently transitioned to business systems that use standard, industry recognised processes. The Logistics Modernisation Program is built on off-the-shelf tools for Resource Planning and shop floor integration.
These tools give us complete visibility on manufacturing and service operations, a capability we now have for the first time. These applications also help us improve the accuracy of our work orders; engage in more efficient production scheduling; enable interaction with our diverse vendor supply chain and reduce delays for parts.
These capabilities are increasing the speed at which materiel reaches the warfighter, and provides Marines with true “factory to foxhole” asset visibility/tracking. Depot enterprise is executing a number of supply chain initiatives to improve its effectiveness, including improving demand forecasting accuracy and imposing tougher performance standards on suppliers. These efforts create ability to purchase, manufacturer, and repair critical parts required to support warfighting equipment.
Maintaining good equipment condition is particularly important given the current high pace of operations for equipment units, as well as the potential for a further increase in operational requirements. However, DoD reset process has often delivered equipment to units late, affecting units’ ability to schedule and execute training as they prepare for their next mission.
DoD is aware of challenges in completing maintenance and returning reset equipment to units, and has identified several factors that contribute to delays, but has not assessed how much each of the factors contribute to delays.
Unless DoD conducts a comprehensive assessment of the relative importance of the factors affecting equipment reset timeliness and develops and implements appropriate corrective actions to address the results of the assessment, it will not be positioned to target its efforts most effectively to take corrective actions.
Equipment units have utilised a series of actions to mitigate the impact of delays in equipment receipt after maintenance, but such mitigation actions are sometimes not feasible or optimal. For example, officials said DoD shares equipment between battalions that are collocated on the same installation, but at different points in the readiness building timeline.
Specifically, when one battalion turns in equipment for reset, certain pieces of equipment from another battalion on the same installation, if available, might be borrowed to conduct training. Battalion officials noted, however, that this measure may not always be feasible.
Leadership from two battalions, for example, cited instances where their units were unable to train during their reset periods and could not borrow equipment from other battalions located on the same installation because those battalions were deployed.
In addition, units use simulators to conduct individual-level training to give personnel experience with new system upgrades, though brigade officials noted this is a stopgap measure while units are without equipment and does not allow for collective training.
Units can—once delayed equipment arrives or via borrowing equipment—conduct some collective training for extended hours each day while at their home station, but a battalion official noted that doing so is also not optimal for unit morale.
Supply chain problems impact challenges in obtaining needed repair parts and Internal depot quality controls identify depot work or parts deficiencies that require additional time to correct Equipment transportation Time equipment spends in transportation to and from the depot reduces available time for depot work .
According to officials, unit leadership of some deployed battalions do not emphasise preventive maintenance. As a result, equipment may not be properly maintained to adequate standards and can create additional work tasks for depot personnel when they receive it, such as conducting additional or more detailed inspections.
Officials cited some instances where equipment sent to the depot arrives in worse than expected condition, either due to damage incurred during transport or because unit personnel did not accurately report the condition of the equipment prior to turning it in.
For example, officials said a launcher was returned to the depot with unexpected severe corrosion on power cables, and certain equipment items, such as generators, were completely inoperable.
Officials cited another instance where a radar was pressure-washed prior to its return to the depot, causing extensive damage. These kinds of unexpected conditions result in greater repair work than anticipated for depot employees.
Supply chain challenges include inconsistent forecasts for parts orders but some depots are taking steps to improve its own forecasting. An official also noted that problems can arise if sole-source suppliers for critical parts go out of business, or if they have to order parts that are no longer regularly produced by vendors. For example, a radio is no longer in production so programme office is working with headquarters officials to identify a solution.
Depot quality controls impacted time spent correcting maintenance errors and quality defects—such as incorrect assemblies, defective parts, or improper painting during depot operations—contributing to the depot’s timeliness challenges.
For complex systems, some maintenance tasks can be challenging because it can be difficult to isolate equipment faults. For example, if system is composed of thousands of elements work requires extensive testing to ensure that each element is operational.
Officials said processes are designed to ensure that finished products meet operational standards, and that doing so sometimes takes longer than expected. DoD uses a series of metrics and reporting methods, such as internal tracking of defects and surveys and reports from customers, to monitor, document, and correct quality defects during maintenance process to ensure that any maintenance errors or defects are identified before the equipment is returned to units.
Equipment transportation time is included in policy for returning equipment from reset to units, and it often takes a significant amount of time before equipment is transported to the depot from theater. So depot can be left with less time to complete reset work before it has to return equipment back to units if it is to meet requirements.
Quality defects that may affect timeliness can still arise so DoD must establish target for hours spent at the depot correcting quality defects that arise during maintenance, which are then tracked and used as indicators of the overall quality of the maintenance process. As tracked by the depot, time spent correcting quality defects varies, when averaged across each time period.
Officials said depot is in early stages of adopting cost and schedule performance index metrics, with potential to improve depot forecasting and better inform decision making.
DoD uses a series of measures to mitigate parts availability issues, such as having the depot utilise its own equipment to fabricate some items on short notice and by taking parts from incoming equipment and using them for equipment nearing completion of maintenance.
Depot has received authorisation to purchase critical “long-lead” parts for specific items in advance of anticipated need, but usually depot is not allowed to purchase items without funding in place so cases exist where teams are unable to acquire critical parts, or lack the funds to do so delays occur.
DoD must place emphasis on importance of transportation of equipment and its effects on timeliness. While there is ongoing work to identify and correct issues as they arise, efforts to correct these issues are conducted in isolation from one another and not compiled and compared to enable DoD to identify their relative importance in terms of effect of each factors effect on timeliness.
DoD has options to increase the pace of availability recapitalisation, but each of these options poses challenges. One option is to reduce the amount of equipment available for ongoing commitments and recapitalise it at the depot. Officials said one way DoD could increase the pace of recapitalisation would be to reduce the amount of equipment available for ongoing commitments, but that this is not feasible given the current high pace of operations. Further, DoD does not anticipate that operational requirements will lessen under projected security scenarios.
The near-term schedule assumes that ongoing operational commitments is not likely to change and is designed to line up recapitalisation with currently scheduled operational deployments and training. Officials responsible for coordinating the near-term schedule told us that the near-term schedule has little flexibility given DoD limited force structure.
Another option is to procure additional equipment to provide to units turning in equipment for recapitalisation. Officials said DoD could buy extra equipment to provide to additional units turning in their equipment for recapitalisation to accelerate the recapitalisation pace.
Officials said if DoD were to adjust the pace to recapitalise more battalions, it would require buying more equipment to ensure that any additional units undergoing recapitalisation would not be left without equipment.
DoD has reviewed its options and the associated challenges related to increasing the pace of recapitalisation and has decided the best path forward based on its review is to continue recapitalising battalion equipment at same rate although this pace of recapitalisation includes some risk—as identified by DoD officials—and will likely create challenges in meeting long-term goals for equipment systems
1. Can contracts vehicles enabling modern maintenance processes be made more efficient for determination of condition/function reporting, transit, work load assign?
Maintenance process flow diagram should be created to show the different steps that an unserviceable asset experiences until it is fully repaired. When examining the maintenance process, product support directorate should consider the average number of maintenance days required per unit, and the period demand rate for maintenance.
Another consideration is how many of the candidate assets are in inventory and are subject to sustainment financial obligation. Assets with a larger number of units in inventory typically present a greater opportunity for cost savings. Any inefficiency that could potentially be eliminated by introducing performance-based incentives must be identified.
2. Are there any substantial delays in the repair process?
The team should review the current maintenance and repair processes and identify any delays, issues, or opportunities for improvement that could be addressed by introducing a performance-based arrangement.
Bottlenecks in the process step where the duration is the greatest must resolve that issue first. When identifying issues in the repair process, the team should also investigate the root causes to better understand the reason for delays.
Even when Warfighter requirements are being satisfied, it is possible for performance-based logistics to deliver greater efficiency leading to improved process agility and/or reduced cost.
3. Can sustainment planning and demand forecasting be more accurate and efficient through the introduction of performance incentives?
If product support provider is held accountable for an outcome that is impacted by the accuracy of the demand forecast, they will be incentivised to assist directorate with improving this forecast.
If the agreement with product support is for maintenance services, for example, the product support provider may have more detailed information about failure rates and system reliability across the fleet that will improve the demand forecast.
4. Is the supply support strategy satisfying Warfighter requirements?
The team should verify if the Warfighter requirement metrics are being met from a supply perspective. If they are not being met, the team should try to identify the percentage of non-mission capable assets due to supply shortages. This should give the team a starting point to assess opportunities to resolve these shortages through performance-based arrangements.
5. Can supporting supply chains be made more efficient through introduction of performance incentives?
The current state of supply support should also be assessed to find opportunities to increase readiness and reduce cost when pursuing a change in sustainment arrangement. A well-structured performance based logistics agreement would provide incentives for the product support integrator to reduce supply chain inefficiency.
A long-term contract would provide the product support integrator the opportunity to recoup investments in process improvements, lay-in of spare parts, and redesign of components for improved reliability.
Depending on the scope of a potential performance-based logistics, integrator could be responsible for reducing delays and inefficiencies across the entire supply chain. Based on these opportunities, the Programme directorate can determine if the timing and current state of the programme will allow a smooth transition into a performance-based arrangement.
6. Are there any substantial delays in the procurement process for spare parts or new units?
One process that impacts the system’s availability may be the lack of repair parts. For example, delays, deficits in manufacturing, packaging issues, and poor inventory control are potential causes of materiel availability problems. Performance incentives will encourage suppliers to reduce their internal transaction lead time, particularly improving their make and delivery processes to mitigate the shortages of the Warfighter.
7. Are there any significant inventory build-ups at any stage in the supply chain or are parts no longer made available?
Significant inventory build-ups are a sign of supply support inefficiencies, potentially a bottleneck in the process. The process right before may be overproducing, or perhaps the process right after is unable to keep up due to quality issues. In order for materiel to flow smoothly, the entire supply chain must be leveled.
Many programme offices confront issues with parts supply within their supply chain not readily accessible, as technologies change and some sources or materials are no longer available. These issues can be mitigated through active teamwork and monitoring efforts, which should involve the relevant industry participants.
A performance-based arrangement could be structured to hold product support provider responsible for ensuring the availability of parts that are subject to shortage concerns, so product support provider would be required the to actively address these concerns in coordination with programme office.
8. What is the scope of opportunity for repair teams to get access to system technical specs?
A repair part or repairable used on multiple systems or an end item used by more than one military Service provides the opportunity to evaluate an enterprise-wide arrangement. There is a potential to save in terms of maintenance spend and inventory costs by aggregating the requirements and improving supply chain efficiency.
Generally, the larger aggregated requirement improves the negotiating position of the programme directorate during contract discussions. An enterprise-wide performance-based logistics strategy for multiple systems must be pursued whenever doing so will satisfy Warfighter requirements and reduce costs.
If the technical specs packages are not purchased as part of the initial acquisition, limitations can occur for that particular programme. If a lack of technical specs exists, Services will be limited to the removal and installation of units, placing limitations on conducting diagnostic testing and work against in-house or alternate repairs. If contracts with subcontractors exist, restrictions in independently selling technical specs also confines the programme in range of future sustainment options.
9. Does the available contract mechanism not conflict and allow for a long-term performance-based arrangement?
The programme directorate must determine whether a performance-based logistics agreement is feasible under the current funding mechanism used for sustainment, or any alternative funding mechanisms that are available.
In particular, the programme office needs to determine whether the funding mechanism allows for funding of long-term contracts.
Working capital-funded programmes allow for long-term performance arrangements with long-term incentives, and working capital funds have been successfully used for contracts in the past.
Ability to pursue performance-based logistics arrangement may be limited by existing contracts. If there is an existing long-term contract in place that will not expire by the time performance-based arrangement could be established, the programme team must consider postponing the effort. Otherwise, the existing contract must be terminated in addition to negotiating a performance-based logistics arrangement.
10. Is it the right time for a change in sustainment strategy with enough time remaining to benefit from emerging technology and performance-based logistics business model?
Performance-based logistics contracts work best when implementation is possible through a series of long-term contracts, allowing the product support provider enough time to recoup investments in process improvements and product modifications.
Additionally, a series of long-term contracts allows programme directorate to recoup the realised cost savings during the renegotiation phase of each contract cycle. Stable and predictable revenue streams resulting from long-term contracts are desirable to both shareholders and capital markets so result of negotiation is lower costs in exchange for increased contract length.
Assets with longer expected service life in the inventory present the opportunity for greater savings from to performance-based sustainment strategies. The team should consider available technology base for system in terms of potential risks and benefits. Technology insertion/refreshment over the entire service life and the associated challenges, risks, and benefits to supportability should also be addressed, along with the risk associated with achieving performance requirements.