All lines of effort require a robust, and secure industrial base. Without a strong defense industry and healthy manufacturing sector, including both domestic and with foreign allies and partners, DoD cannot ensure national security. All of the current and future activities of the new Executive Order directly support National Defense Strategy priorities.
Sequestration, uncertainty of defense spending, inconsistent appropriations, uncertainty about future budgets, ambiguity in Congressional expenditures, and the effects of the Budget Control Act create market instability. Decline of manufacturing base capabilities and capacity affect the viability of suppliers, overall capacity, and capabilities available domestically.
While overall performance of DoD military technologies and weapon systems is best in world, industry has at times failed to provide systems with the promised capabilities, or only done so after following delays, increased costs, or both. It is difficult to assess the full extent of these various programme shortfalls because they can often be dealt with by DoD actions .
DoD can make available additional funding, alter requirements to avoid owning up to shortfalls, or stretch out programmes until technical problems have been resolved. Moreover, program terminations due to acquisition difficulties can also be chosen by DoD to release funds for other uses or because products are no longer needed.
The original ’A Design for Maintaining Maritime Superiority’ plan called for “high velocity learning” – which encouraged the Navy acquisition community to try some new processes for designing, contracting and fielding programs on a tighter timeline. The updated Design 2.0 now expects that that learning will lead to faster and cheaper acquisition going forward.
“Embedded behind all these pretty aggressive plan was released. The elements of that are, let’s get our requirements team talking to industry earlier so that we understand, where’s the technological maturity, what can we achieve with confidence now?”
Intentions pair a drive to move faster – ditching arbitrary initial operating capability dates for an “ASAP” mentality – with a recognition that moving faster may require an iterative process that fields a good solution now and upgrades to a better one as technology matures.
“Things like the frigate, the large surface combatant – parts of that ship are going to last for the entire life of the ship: the hull of the ship, the power plant, the propulsion plant. But the rest of it is going to change very fast: the sensors and computing power and weapons even. It’s got to be designed into the ship to be able to swap that capability out quickly.
It gives us the confidence that we can converge on a pretty good hull form, build as much power into the ship as we can afford – it’s almost like memory for your computer, you’re going to use it all and want more – and then the rest of it’s designed to be rapidly upgraded through the life of the ship.
“For the frigate were going to have to converge on something that’s pretty well known right
now. We’re not going to be able to meet that timeline and design some kind of brand new hull form. And I’ll tell you what, naval architecture’s been around for a while, so we sort of know how that works, so I’ve got a lot of confidence that we’ll get to something that will be adequate soon. Beyond that, who knows?”
“So we’ll have the naval architects working in parallel, and so as these two streams move together so something’s mature enough – they say this is really going to be a lot more capable and also we can do this with confidence in cost and schedule – then we’ll just incorporate that it. So whether that’s at the next five-year mark or whatever it turns out to be, hard to say, but we’ll keep these things going.”
A key lesson the Navy learned over the past few years about cutting cost and time from acquisition programs is paring down requirements to the bare minimum. The MQ-25A program had just two key requirements: being able to operate from an aircraft carrier, and being able to refuel other aircraft. This model can be applied to everything from the next fighter jet to the next large surface combatant- it is key to allowing industry to move faster and avoid unnecessary costs.
“The approach that we want to minimise the number of hard requirements allows a tremendous amount of creativity in terms of going to meet those requirements. So what happens when we come up with reams and reams of very, very specific requirements is that … certainly has implications for the design and may box out a really creative solution if we over-specify any particular aspect of the ship, the design. And it’s for ships, aircraft, submarines, what have you. We want to really minimize the number of hard requirements, bring industry into the conversation and give them as much trade space and freedom to innovate to meet those requirements.”
“These aren’t just sort of random dates thought up on a late night. It was pretty carefully coordinated. “One of the things that’s been a persistent goal in some programs is to try and continue to buy schedule margin to add a little cushion to the already-tight timeline for the program.
“If we buy enough margin that we can deliver the thing earlier, let’s do it. Quick turnaround dates were included in Design 2.0 are included with the hope the acquisition community and industry will be off to the races to field these new capabilities “ASAP.” There are often talks about making changes or otherwise slowing down a program, which is deemed acceptable as long as the program still meets its required IOC date.
By taking away IOC as a measure of success, the hope is that it puts all of us in a much more competitive mindset. What has emerged is a system that for whatever reason is really kind of internally focused, and is not really focused on winning in a competitive environment.
Just imagine the smartphone industry: the second smartphone that has a particular capability, that’s a significant disadvantage over the first to market. And it’s the same in military capability. So we want to make sure that we’re delivering this capability at a competitive speed.
We are first on the water with the high capability and not the second.”
“So by saying let’s not build in an artificial date – that may give us comfort and slow down our pace. Let’s get competitive and race this thing.
Navy building new office to ‘short-circuit’ traditional DoD acquisition system with mission to translate new technologies into actual weapons systems much more quickly than the Service can do today.
The new organization’s primary purpose will be to better connect the science and technology research that’s already being done in Navy Department research facilities with the short-term, real-world equipping needs of sailors and marines.
“We have a very strong technical base. “But we need to better leverage it and we need to marry it up more tightly with the fleet to short-circuit the long process that involves everything we do now, from requirements definition to the budgeting process to ultimately get something into a program of record.”
Navy is going to launch into experimentation and prototyping that matters to a given threat or technology, and do it at the same time the machinery is starting up to define our budgets and requirements.
Then by the time we get into the traditional budget cycle, we have a firm understanding of the technical possibilities, we have a much greater understanding of the costs and we can point our industrial base toward the solution. We can make progress in the interim while we’re developing the technology and then reduce the amount of time it takes on the back-end to field the ultimate solution.”
Navy is going to do more testing and prototyping of new technologies within the funding lines that pay for large programs of record such as ships and airplanes, similar to the flexibilities the Navy already has within R&D accounts.
Under the current process, it takes DoD a full year to prepare a budget, another year to argue the spending plan’s merits before Congress and another year to actually expend the money once funds are appropriated into extremely rigid buckets.
“That’s a challenge for us when we are, for example, moving through the process to buy a combat vehicle or a tactical truck. If industry or our own applied research comes up with a new transmission that can reduce our fuel consumption by 50 percent, it will be another year before program can be flexed to incorporate the new technology because of the way we identify our funding lines. If I have some flexibility, we can use the things we’re already doing through open systems architecture to at least start the process to plug that new transmission in now.”
Part of the message will be that many prototypes will fail, but that DoD needs more latitude to fail early instead of building large programs of record which rely on promised but yet-unproven technologies.
The challenge will be convincing Congress that DoD is not squandering money in the process.
“We’re going to lay out an approach that will give Congress the confidence and insight in terms of how we would increase the amount of funding we’re putting toward experimentation and prototyping. “We already have the authorities. What we need to do is persuade the Congress that it also has the oversight authority it needs to do its job.”
The military also needs more freedom to spend on technologies even when they don’t have an obvious connection to the major programs of record that make up the bulk of DoD’s acquisition funding.
“The notion of risk becomes really important when you look at technologies that are hard for us to integrate right away or that aren’t mature enough, and all too often the budget process forces us to walk away from those. “Unless those technologies are mature enough to plug in right away, it’s hard to defend the funding both internally and across the department and with Congress.”
“We need the ability to experiment in those areas and then, as we get more definition, be able to apply it directly to a program right away.”
Procurement division in any company must understand how to obtaining products and services. The procurement cycle follows specific steps for identifying a requirement or need of the company through the final step of the award of the product or contract. Responsible management of funds is vital when handling this necessary process, whether in strong or weak mission demand signal markets.
A procurement process template provides a model and a framework to work within to Save you time; ensure that you get the right solution to meet your business needs; ensure you pay the right price and avoid overlooking vital steps that may come back to bite you later.
By using a standard procurement process, you will find that suppliers will be familiar with the steps you take. They will know what to expect and will know that they are dealing with a professional organization.
Every project is different. Some procurement projects are small and every step of a formal process may not be required. Alternatively, some projects are highly complex or regulated and a generic framework will not be appropriate or sufficient. Despite this, every procurement project follows the same broad process . The key thing to remember is to adapt the process to fit the project.
Digital procurement solutions can be a significant source of help in various stages of the procurement process. For instance, an digital procurement solution will electronically generate purchase orders, with all of the requisite information.
Also, a digital procurement solution is a critical tool when it comes to delivery and record keeping. With a digital procurement solution, all purchase orders will be sent electronically in the system to ensure delivery is completed immediately.
Finally, a digital procurement solution will catalogue every transaction in the system, ensuring your records are kept up-to-date. Those records are of critical importance for financial forecasting or process efficiency tracking.
Procurement has so many moving parts it requires constant analysis and monitoring by someone or a team within an organization. There is always more to know/more data to analyze/more forecasts to produce – all of which is a responsibility of procurement.
The benefits of digital procurement system extend to each stage of the procurement process. Stream line your purchasing and procurement processes, reduce personnel headaches, eliminate unnecessary paperwork. Now is the time to switch to a digital procurement system
So…what are the stages in the procurement process? What are those constantly moving pieces in procurement?
As you learn/read more about the procurement enterprise, it becomes glaringly obvious that each of the factions involved in procurement has a slightly different take on the stages in the procurement process. That’s why we put together a solid list of the critical stages in the procurement process.
We find confusion in most outside reports and procurement manuals, were the procurement process is said to include inventory control and management, storage and distribution, and even disposal—all functions which are more appropriately classified as part of logistics, and even supply chain management, but not necessarily procurement.
So, in line with the above, the steps in digital procurement process are those listed below and they will be addressed in more detail in future posts. So here is a proven Step-by-Step technique enables procurement teams to successfully achieve goals of field-level service.
1. Need Recognition
The business must know it needs a new product, whether from internal or external sources. The product may be one that needs to be reordered, or it may be a new item for the company.
2. Specific Need
The right product is critical for the company. Some industries have standards to help determine specifications. Part numbers help identify these for some businesses. Other industries have no point of reference. The company may have ordered the product in the past. If not, then the business must specify the necessary product by using identifiers such as color or weight.
3. Source Options
The business needs to determine where to obtain the product. The company might have an approved vendor list. If not, the business will need to search for a supplier using purchase orders or research a variety of other sources such as magazines, the Internet or sales representatives. The company will qualify the suppliers to determine the best product for the business.
4. Price and Terms
The business will investigate all relevant information to determine the best price and terms for the product. This will depend on if the company needs commodities readily available products or specialized materials.
5. Purchase Order
The purchase order is used to buy materials between a buyer and seller. It specifically defines the price, specifications and terms and conditions of the product or service and any additional obligations.
The purchase order must be delivered and sometimes the specific delivery method is specified in the purchasing documents. The recipient then acknowledges receipt of the purchase order. Both parties keep a copy on file.
Expedition of the purchase order addresses the timeliness of the service or materials delivered. It becomes especially important if there are any delays. The issues most often noted include payment dates, delivery times and work completion.
8. Receipt and Inspection of Purchases
Once the sending company delivers the product, the recipient accepts or rejects the items. Acceptance of the items obligates the company to pay for them.
9. Invoice Approval and Payment
Three documents must match when an invoice requests payment – the invoice itself, the receiving document and the original purchase order. The agreement of these documents provides confirmation from both the receiver and supplier. Any discrepancies must be resolved before the recipient pays the bill.
10. Record Maintenance
In the case of process review events, must maintain proper records. These include purchase records verifying any purchase order to confirm information. Purchase records reference future purchases as well.