Making the Business Case for Industrial Base and Supply Chain Management for the Aerospace and Defense Industry

Transcription

1 National Aeronautics and Space Administration Making the Business Case for Industrial Base and Supply Chain Management for the Aerospace and Defense Industry A 10 Step Guide to adopting SCM* and review of current SCM Projects including an Interagency Supply Chain Interoperability Pilot Study 4 November 2009 Presented by: Michael C. Galluzzi NASA HQ ESMD and Constellation Supply Chain Manager * Supply Chain Management: SCM is not the management of suppliers but rather the integration of NASA Project Elements and all associated functions, Centers, Facilities, third party enterprises, Industrial Base (Suppliers), orbital entities, space locations, and space carriers that network/partner together to plan, execute, and enable an Exploration mission that will deliver an Exploration product (crew, supplies, data, information, knowledge, and physical samples) and to provide the after delivery support, services, and returns that may be requested by the customer.

2 10 Steps to Product Support Business Model (PSBM) Adopt Industrial Base and Supply Chain Management Best Practices 1. Establish SCM contract language to ensure Product Lifecycle Management and mission goals. 2. Obtain visibility of the lower tier suppliers and continually assess the health of the IB 3. Institutionalize IB considerations into strategic processes e.g. Mfg Readiness Level (MRL) during DDT&E. 4. Enhance Interagency processes to increase product demand pressure and collaborative demand planning 5. Define the measurement framework to enable the Prime Contractor, but don t totally delegate to the Prime. Set targets and thresholds for the key supply chain performance indicators (SCOR KPI) then integrate into the budget process. 6. Vendor Managed Inventory, a driver to JIT Make-to-Order than Make-to-Stock 7. Establish a common enterprise information architecture to provide consistency and synchronization between supply chain participants (ERP,MRP,CAD,CAM) 8. Involve suppliers during the DDT&E phase of the product lifecycle. 9. Eliminate process proliferation and maverick procurement 10. Ensure technology insertion is the rule not the exception Benefit Potential* Value Source* Reduced Obsolescence Mitigation Costs Reduced supplier management and maintenance labor cost Effect of demand aggregation: reduced cost due to increased volume Reduction due to reduced duplicate parts *Source: SAP America, Inc. Industry Improvement Range (in %) 30 50% 20 50% 3 8% 8-15% Better accuracy in procurement, leverage Vendor Managed Inventory, Technology Insertion built into process Comprehensive visibility and analysis of supplier capability, performance and quality Higher volume gives better supplier viability and pricing while improving product quality Duplicates get identified based on comparison of multiple part numbers: Reduced Inventory.

3 Project Overview Supplier Mapping Department of Commerce Industrial Base Study Integrated Modeling and Simulation (IM&S) Economic Stability Indicator Model Value Engineering Assessment of IB and SCM Integrated Enterprise Architecture Initiative Interagency Interoperable Supply Chain Pilot DoD ManTech Program Network Centric Manufacturing Supplier City Interagency collaboration and coordination Assess Policy, Contracts, Organization Acquisition Strategy Agency and Program Risk

4 Cost of DoD Reset Restoring and enhancing combat capability... Collaboration + Integration = Success Past costs exceed $56B Army -$38B Marine Corps -$10.9B Navy -$4.3B Air Force $1.9B Production in DoD Maintenance Depots FY98-02 capacity reduction driven by BRAC 95 closures of major depots Major production increases seen beginning in FY04 driven by Army and USMC-Army 24M DLH from 10.3M -USMC 3M DLH from 2.2M Overall, depots operating at about 101% of capacity, but Army depots at ~115% Future costs... Army estimates $13+ billion per year required for the foreseeable future Marine Corps estimates annual future funding requirements of $3+ billion Navy assumes three years to complete reset after hostilities end at added cost of $11+ billion Pending DoD FY 2008 GWOT Supplemental contains $46.4B for Reconstitution requirements:$ 13.7B has been funded to date

5 NASA and OUSD/DoD Interoperable Supply Chain Pilot Suppliers Transitioned and Optimized for Rapid Manufacturing Project STORM Objective To demonstrate the value of creating interoperability between the NASA and DoD supply chains Utilizes excess supplier capacity by shaping product demand pressures to maintain product viability for both NASA and DoD Provide 3-D official data and process data files on parts and demonstrate how a common Product Data Management warehouse and 3D data helps enable interoperable supply chains Identify adoption issues for interagency interoperable supply chains Creates safety net from failed supply chains Suppliers are Transitioned and Optimized for Rapid Manufacturing (STORM) Page 1

6 Interagency Collaboration and Coordination Agency Sponsors LTG Patrick J. O Reilly Director Missile Defense Agency Lt Gen John T. Sheridan Commander USAF Space Command Maj Gen Ellen M. Pawlikowski. Deputy Director National Reconnaissance Office RDML M. Elizabeth Liz Young Program Executive Officer Space Systems *added Apr 08 Mr. Bryan D. O Connor Chief Safety and Mission Assurance Officer NASA Mr. Charlie E Williams, Jr., SES Director Defense Contract Management Agency Industry Government Space Industrial Base Council (SIBC) Co-chairs DoD EA & DNRO SQIC 1 st & 2 nd Tier Exec Sect : NSSO Sponsors (NASA, NRO, NAVY, MDA, SMC, DCMA, NSSO) SSC Lower Tier Critical Technology Working Group Supply Chain Management Efforts Supply Chain Mapping Standards Section H RFP language Supplier Rating Systems Supplier Early Involvement Make/Buy Decisions Requirements Flow Down Mr. Joseph D. Rouge, SES Director National Security Space Office

7 Value Engineering Assessment Enhancing operational efficiencies through a sustainable supply chain improvement strategy. Investigate the following: Reducing the recurring and non-recurring indirect costs Eliminate process proliferation and process optimization Operational Effectiveness Strategic Planning Neglected Opportunity The Iceberg effect Vehicle Operations Planning Direct Touch Labor Costs < 10% The Indirect Costs Flow of Materials, Information, Services and Finances 90% The benchmarking study includes analysis across 3 primary Supply Chain Planning processes Sustainment Effectiveness Process Based / Operational Planning Tactical Planning Collaborative Demand Planning and Forecasting Inventory and Asset Control Planning Supply Planning Supplier / Vendor Managed Inventory (VMI) Supplier Collaboration Manufacturing Readiness Level (MRL) Production Planning and Detailed Scheduling Flexible Upside Supply Chain Order Promising