Navy is focused on. first and foremost, delivery. We have got to get capability into the fleet, whether that’s new capability, new construction or sustaining the capability we have. So the big measure of success is through the fleet size. Reorganising our value proposition along that line is an important piece.
Second piece is focusing on agility. The world is changing faster and faster, threats are changing, we’re in a world competition. And so if we can’t change faster, we are not going to be relevant.
Third piece has been focusing on getting some fundamental costs out. And as we try and grow the fleet, they won’t do as much good if we can’t afford to build and operate that fleet. We want to take fundamental costs out of the system.
Congress has been vocal about the need to control the costs of the first-in-class ships. We’ve got Columbia coming up, as well as FFG(X), large surface combatant and a fleet of unmanned ships. How will Navy get their arms around that?
That’s certainly a fundamental thing to watch. First-in-class ships are tough. It comes down to a couple of different things. One is having a robust dialogue as we are building requirements with both industry and our technical experts, and moving away from transactional requirements.
The frigate is an example where we’ve had a much more interactive dialogue. We've actually changed requirements based on cost and time, and so, that’s an important element. We’re doing a lot more of that.
Industry seems excited about predictive analytics in the maintenance world: knowing what’s going to break before it breaks. Is there potential for significant cost savings?
That’s where the commercial world’s gone. We have the data. We haven’t integrated the data and the analytics into our processes the way we need to.
In the future we will essentially have a Digital Twin of the ship in terms of how all the systems are working, what needs maintenance, what doesn’t and how are they operating, to better condition our maintenance planning.
The biggest thing we need to improve in our maintenance work is planning, and so that when we open up a ship, we have a better idea of what needs to be done. And then a little less focus on cost and more focus on schedule, because what the fleet really is sensitive to is ships coming in on time and ships coming out on time.
Sometimes we get a little too fixated on cost, and we incur a lot of cost because we control cost by having schedule move-out, and that just ripples its way all the way through the system.
We need to set the standards for shipbuilders in the ship repair world, and then let them go so that we are not unnecessarily holding up maintenance activities as they’re ongoing. That’s what we need to deliver for the fleet.
The private shipyards that do maintenance often complain the Navy is too unpredictable. How can the Navy regain the trust of industry?
Lack of either planning or adhering to plan has been one of the core issues. This is the first year we’ve ever produced a 30-year ship maintenance plan. Now, it’s not specific for every ship at every time, but it shows the amount of work we’ve got to do and how we’ve got to build so that industry can make smart investments seeing that.
Then what we’re trying to do for the ships returning from deployment is we’re moving away from executing a contract 30 days before we needed to start the maintenance. So now we’re back to a six-month goal, so we have a plan.
We’re never going to be able to control every variable. It’s not a commercial effort where you own every route and you can control every variable to hyper-optimize. We don’t want to hyper-optimize because then you lose some resiliency. But we’re trying to find that sweet space of enough predictability so that we can be efficient.
The other thing we’re doing is setting some controls. In new construction, we have a very disciplined way to add work in. We didn’t have quite that level of discipline in repair, and so we tended to add work in late in the game.
We’re adding some discipline into that, so if we advance plan a little bit sooner and add some more discipline, then we can make a better decision on the exact impact. Because while it may not seem that large for that individual ship, it could have a huge ripple effect, and we need to be cognizant of that when we make those decisions.
Navy has been especially challenged on the submarine maintenance front, particularly with the attack boats. Is there some light at the end of the tunnel?
We have accelerated by about a year hiring all the DoD folks in the shipyard to get to full strength. So the good news is we’ve got the workforce. The challenges are that they’re inexperienced.
There has been some great work, at some locations but all the shipyards are getting that experience to level up. That will give us the depth going forward in a couple of years to take care of our fleet as we build back up to a 66-submarine fleet.
To help some of the surge, we’ve been sending some to the private yard. And that’s another area we’ve got to get a skilled base of repair specialists. We’re challenged a little bit on the front end, We will work our way through that.
Then there is rebuilding the shipyards for the future. Navy has about a $21 billion investment over the next 20 years. That will allow us, as the workforce matures, to then gain efficiency, about 20 to 30 percent, which will then allow us to take that increased load once we come out of the dip in submarine numbers.
Columbia-class ballistic missile submarine program is on deck as the Navy‘s #1 prioroty. There supplier issues. Does the Navy have a plan to stabilize the supplier base?
We have a submarine industrial base — both DoD, supplier, and at 2 private shipyards— that has done tremendous things rebuilding itself from a decade of hiatus in the ’90s. We’ve gotten up to two Virginias per year and done a very good job with that.
Submarines are very sensitive to cadence and sequence, and so the arc will be, as we add in Columbia and some of the other mods we want to do to Virginia, not to mess up that cadence and sequencing. That would cause massive disruptions.
So we put the biggest focus on Columbia, making sure that design is solid. The biggest threat to Columbia is Virginia, and so if we don’t keep Virginia on track, then that can cause disruption to Columbia.
The biggest threat to Virginia is the supplier base not being able to keep up. We have an integrated enterprise that looks at all the suppliers for all of our nuclear construction — in total it is over 300 suppliers — and making sure they are up to the task. And then, where we see challenges either getting it right or having kind of single source, proactively addressing those challenges.
Congress has been a great help with us. They provided funding to go after those, and so we will continue to manage that, but it’s a big enterprise, and we have got to keep focused on it.
Depot Metrics to Measure and Improve On
When it comes to metrics, it’s often said that what gets measured gets done. Part of this is because you are so busy with your other tasks. Everyone has more piled on their plate than ever, and many workers find themselves constantly re-prioritizing their work activities.
So metrics that have the attention of business and manufacturing leaders tend to be those that get measured and improved upon by their employee teams.
Effectively measuring/improving manufacturing metrics is not as simple as it may appear. While there are certain metrics that work well for specific job roles, it’s often the case that there are multiple combinations of metric indicators needed to ensure that a larger business objective is being met.
For this reason, metrics need to be aligned to larger goals and objectives. Think “SMART” goals—Specific, Measurable, Actionable, Realistic, Time-Based. This construct contains some key concepts.
It’s important to understand the interrelationships between high-level goals and objectives as well as what actions or methods are required for an organization to achieve them—this falls under Specific. Measurable and Actionable are when metrics come into play—any desired result must have a set of defined measurements, targets, and actions that can be taken in order to “move the needle” on the metrics that are leading or lagging indicators of results.
In manufacturing, each major goal typically requires multiple metrics. Metrics can often be grouped together relating to specific higher-level goals and objectives e.g. increasing quality, improving customer experience, achieving efficiencies, flexibility promoting innovation, etc.
The Realistic component of SMART can present a significant area of challenge. Leaders want teams to stretch and achieve more than what is individually perceived as possible. However, if goals are set too high, and workers don’t believe they can be achieved, they may give up.
Since every goal needs to be driven by some type of deadline or period to achieve the target, a Time-Based aspect is important to keeping everyone focused.
Sustainable metrics improvements require a continuous improvement methodology—a cycle that is never fully complete. As can be seen, measurement and metrics is a central pillar of this continuous improvement cycle.
What Metrics Matter Most?
1. On-Time Delivery to Commit
This metric is the percentage of time that manufacturing delivers a completed product on the schedule that was committed to customers.
2. Manufacturing Cycle Time
Measures the speed or time it takes for manufacturing to produce a given product from the time the order is released to production, to finished goods.
3. Time to Make Changeovers
Measures the speed or time it takes to switch a manufacturing line or plant from making one product over to making a different product.
4. Supplier’s Quality Incoming
A measure of the percentage of good quality materials coming into the manufacturing process from a given supplier.
5. Capacity Utilization
Indicates how much of the total manufacturing output capacity is being utilized at a given point in time.
6. Overall Equipment Effectiveness
This multi-dimensional metric is a multiplier of Availability x Performance x Quality, and it can be used to indicate the overall effectiveness of a piece of production equipment, or an entire production line.
7. Schedule or Production Attainment
A measure of what percentage of time a target level of production is attained within a specified schedule of time.
8. Rate of New Product Introduction
Indicates how rapidly new products can be introduced to the marketplace and typically includes a combination of design, development and manufacturing ramp up times.
9. Engineering Change Order Cycle Time
A measure of how rapidly design changes or modifications to existing products can be implemented all the way through documentation processes and volume production.
10. Customer Order Fill Rate/On-Time delivery
This metric is the percentage of times that customers receive the entirety of their ordered manufactured goods, to the correct specifications, and delivered at the expected time.