Procurement Costs Transparency and Assurance

Transcription

1 BAE Systems Military Air Solutions Procurement Costs Transparency and Assurance Mark Gornall Manager, Supply Cost Assurance BAE SYSTEMS PLC 2009 All Rights Reserved. The copyright in this document, which contains information of a proprietary nature, is vested in BAE SYSTEMS Public Limited Company. The contents of this document may not be used for purposes other than that for which it has been supplied and may not be reproduced, either wholly or in part, in any way whatsoever, nor may it be used by, or it contents divulged to, any person whatsoever without the prior written permission of BAE SYSTEMS Public Limited Company 1

2 Military Air Solutions a proven track record We have supplied most of the UK s fixed wing fleet. We have a track record of partnering with the UK customer to support in-service aircraft. We have a long established relationship with many overseas customers. We are a prime systems integrator we underpin the performance and safety of the solutions we provide. Proven capabilities in Prime contracting Rapid engineering Systems integration Manufacturing Maintenance repair and upgrade Military training 2

3 A Through-Life Portfolio Hawk TMk1 VC10 Tornado GR4 Tornado F3 Future Concepts SUAV(E) Unmanned Air Vehicles Fast Jet Training Solutions F-35 Lightning II Nimrod MRA4 Hawk Advanced Jet Trainer Typhoon E-3D Sentry Nimrod MR2 Harrier T-45 Goshawk Jaguar Concept Assessment Demonstration Manufacture, migration and initial service In service support Transition to out of service 3

4 The Environment UK Defence Industrial Strategy Recognises The importance of sustaining through-life capability. The need for transformation of the air sector and that military capability must be value for money and affordable. A need for a much more open and transparent dialogue between the MoD and UK defence industry, enabling more effective planning of investment in people, skills technologies and facilities. The importance of MoD and Industry partnering to deliver all of the above. Export Opportunities Building on a customer base in over 30 countries world-wide. 4

5 Extract from DE&S Strategy identify trade-offs between performance, time and cost recognise and respect the contribution made by industry; seek to share objectives, risks and rewards while recognising that different drivers apply Value openness and transparency; share future plans and priorities wherever possible to encourage focused investment and avoid wasted effort embed a through-life culture in all planning and decision making value objectivity based on clear evidence rather than advocacy 5

6 Success for DE&S means. Greater Value for Money Shared planning assumptions Efficient use of Cost Models: Based on Industry standard levels of performance Maintained and Updated through life Shared with Industry, giving alignment between affordability and capability Trust 6

7 Success for BAE Systems MAS means We deliver Value for Money capability We are strategic partners with MoD Provide Industry leadership in Cost Assurance Establish sustainable supply chain solutions Measure our supplier s prices against a should cost standard Apply our estimating resource through life to maximise value Trust 7

8 Where does Supply Cost Assurance fit in? Sits within the MAS Procurement Function Annual spend circa 1B 650 Procurement staff Majority are located within Integrated Project Teams 10 Major Projects, 6 Main Sites Supply Cost Assurance team providing targeted independent cost analysis 8

9 MAS Procurement Environment Need for change Bought Out representing some 60-70% of total air platform costs Costs based on Supplier quotations Limited validation based on previous buys or near neighbour analogy Difficult to access data from other projects Reliance on Government pricing authorities Challenge - improve our Estimating Capability 9

10 Vision MAS Procurement has an estimating capability Single database of supplier prices Central parametric cost model library Buyers can constructively challenge or validate supplier prices Partnership Cost Modelling with Customers & Suppliers Customers trust MAS to secure competitive pricing from its Suppliers 10

11 Where are we on the Journey? Core Parametric Estimating capability SEER for Hardware & Manufacturing Trained SEER users across projects Parametric user groups Core estimating team Central Library for cost models established Single database of supplier prices Actual pricing data collected and catalogued Cost Modelling now being undertaken in direct support of projects 11

12 Challenges in 2009 Embed Procurement Estimating as way of life Process, Organisation and Culture Break down barriers between buyers & estimators Deliver benefits at project level Expand joint cost modelling with suppliers Establish trust in cost modelling with customers 12

13 Procurement Costs Transparency & Assurance Questions?? 13