I. Program Overview. Organization

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1 I. Program Overview Organization Name/Program Name: Program Leader Name/ Position/Contact information , Phone Program Category Program Background: What is this program all about? (No more than one page). Describe: The overarching need for this program History of the program The product that is created by this program Scope of work original & updated Expected deliverables Current status of the program BAE Systems/F-16 Automatic Test Equipment (ATE) John Kesser Director, Automatic Test Systems Category: Other System level production and sustainment The F-16 ATE programs began in the mid-1970s with the initial production fielding of the F-16 aircraft. The stations are used by the U.S. Air Force and its partner nations to test, diagnose and repair F-16 aircraft avionics systems. During the past 20 years, the test equipment has undergone two major transitions. The first was driven by the onset of new test equipment mobility requirements. The original 4-station shop set was reduced to a single station comprised of fourteen (14) individual transit cases that could be transported on a single 463L pallet in a C- 130 aircraft. The Improved AIS (IAIS) can be unloaded and set up at a forward operating location in less than an hour. The next transition began in 2000 and was primarily market driven as the ATE industry shifted toward the integration of Commercial Off The Shelf (COTS) instrumentation as a replacement for application specific instruments developed by the ATE manufacturers. The Rackmount IAIS (R-IAIS) saw a return to a standard 19 rack for customers that have no mobility requirements. Both the IAIS and R-IAIS stations are used at the intermediate and depot levels of maintenance, providing cost-effective and timely support for the F-16 fighter; providing the hardware and software tools to guide the technicians in identifying the defective module(s) within an avionics Line Replaceable Unit (LRU); and allowing them to repair the LRU at the operational site. For more than 23 years, BAE Systems has set the standard for DoD aircraft automatic test equipment maintaining an unprecedented on-schedule delivery and cost-reducing record with the US Air Force. Since 1992 BAE Systems has delivered 63 IAIS stations and as part of its on-going production, has fielded 53 R-IAIS stations. It continues to provide spares, repairs and engineering support to all of its delivered test stations including the original A/B and C/D AIS shop sets AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 1

2 I. VALUE CREATION = 20 POINTS Value: What is the value, competitive positioning, advantage, and return created by this program to your: Customers National interests, war fighter Company Strength, bottom line, and shareholders Scientific/technical value (particularly for R&D programs) Excellence and Uniqueness: What makes this program unique? Why should this program be awarded the Program Excellence Award? Value to the Customer: The IAIS and R-IAIS stations are designed to provide a thorough test and diagnosis of the F-16 aircraft avionics. Once a Line Replaceable Unit (LRU) has failed on the aircraft or at the flight line level of test, it is moved to the back shop where it is tested and if possible, repaired. The technician s ability to repair the avionics and return it to a serviceable condition creates a support cost savings. The Air Force continually measures the value the test stations provide by assessing that savings. The metrics include Cost Avoidance and Component Cost. Cost Avoidance captures the LRU exchange cost that flying units avoid by having test stations and base repair capability. If they are able to repair it on the base versus sending it back to the depot or the Original Equipment Manufacturer (OEM) they are able to avoid those costs. It is a reflection of what would have been spent if there were no intermediate level test stations. There is however a cost of ownership for those I-Level stations. This cost is captured in the Component Cost metric. It includes the amount spent by the AIS shops on parts used to maintain their stations. The Station Support Cost Savings is the difference between the Cost Avoidance and Component Cost. When calculated across the various commands within the Air Force that savings has been well in excess of $120M for each of the past two years. The contribution of the IAIS and R-IAIS stations to higher aircraft mission capable rates is a second measure of value to the customer. The I-level repair capability on base facilitates the efficient repair of aircraft avionics. Once an item is returned to serviceable condition, it is stocked in inventory and made available for the next aircraft need. This process can virtually eliminate the repair pipeline for LRUs repaired on the base. The F-16 maintains some of the highest mission capable rates in the Air Force due in large part to the airmen and women charged with their maintenance and in small part to the capability the IAIS/R-IAIS gives them to repair the avionics. While there are other factors that contribute to the F-16 s mission capable rate, the I-level test capability is a key component AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 2

3 A third and somewhat less discretely measureable sense of value comes from the flexibility provided by the IAIS/R- IAIS systems. The USAF will often deploy F-16 and A- 10 aircraft to the same locations and each aircraft is charged with bringing the necessary support equipment to maintain operations for the deployment period. In this case, the A-10 I-level test station was obsolete and difficult to maintain, so rather than deploy it, the A-10 crew often sent their failed avionics back to a depot for repair - costing both time and money. Some enterprising technicians recognized that there are three avionics LRUs on the A-10 that are common to the F-16, and so as those items failed on the A-10, they took them to the F-16 IAIS test station and used it to facilitate repairs. As this approach caught on, the A-10 community recognized that they could rehost additional high failure rate A-10 LRUs onto the F-16 test stations. There were no changes required to the test station to support the A-10 avionics. As a result, the A-10 units were able to recognize cost savings by reducing the amount of support equipment required in their deployment package. In addition, the ability to use a common test station for both aircraft reduced training, maintenance and other operational costs. Value to the company: Over the past 35 years, the F-16 ATE programs have made significant contributions to BAE Systems top and bottom line growth. During that time, production rates have varied from a high of one station per week, to a low of one every three months. The continuous production line contributes to the company s operations base allowing BAE Systems to remain competitive with future F-16 related work as well as on new proposals. The logistics tail of any program is often the source of related programs and additional revenue. BAE Systems maintains a Depot Level Maintenance Facility (DLMF) in San Diego that is responsible for the repair of circuit cards, instruments and tester replaceable units (TRU) from all of the stations it has delivered reaching back to the original AIS stations from the late 1970s. Additional related programs include manufacture of production spares as well as hardware and software sustaining engineering. These later programs facilitate the resolution of problems reported from the field, provide yearly software updates and assist in the management and 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 3

4 resolution of parts obsolescence. The IAIS/R-IAIS programs directly support the company s competitive position resulting in derivative products based on the technology developed on the F-16 programs. The F-2 Avionics Support Equipment (ASE) program delivered 25 I-level stations that leveraged technology developed on the IAIS program. The evolution of this technology led to the company s first system comprised completely of COTS instruments. The T-50 Depot ATE retains commonality with the R-IAIS reducing the system development cost and schedule. In addition, the program validated that the open architecture of the R-IAIS could be easily augmented to support the additional depot level testing requirements. III. ORGANIZATIONAL PROCESSES/BEST PRACTICES: (HOW DO YOU DO THINGS) = 30 POINTS Strategic: Opportunity Management - Describe how your program has identified its operational and business opportunity, and manages this opportunity throughout the program s life cycle. Strategic: Strategic Supply Chain Integration and Cost Effectiveness Management: - Describe how your program is integrating its supply chain to assure visibility and adapting longterm cost effectiveness up and down the supply chain. BAE Systems maintains a close relationship with the customer at all levels. A technology roadmap focuses the team s efforts on potential roadblocks and the emerging technologies from the Test and Measurement industry that can be used to resolve obsolescence issues and to extend the useful life of the equipment. The roadmap is a shared vision between BAE Systems and the F-16 SPO. It provides insight into our research and development plans and allows the customer to provide input regarding the technology and the role it plays in future test equipment. The integration of the supply chain began with a strategic decision to outsource all of the manufacturing tasks leading up to final assembly and test. This action, coupled with a shift to integration of COTS instruments opened up an entirely new set of suppliers, data to manage and issues to resolve. BAE Systems procurement team is exploiting its enterprise resource planning tools coupled with tenacious shortage and corrective action resolution to allow for consistent on time deliveries while reducing the cost to the program. The supply chain is driven by people and therefore a focus is placed on the relationships in that chain. The relationships do not begin and end with the Procurement organization, but directly involve Engineering and Operations representatives from both the supplier and BAE Systems. Supplier outreach programs are conducted to share orders plans, new product 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 4

5 Strategic: Operational Integration and Systems Engineering Describe the challenges faced by your program in terms of integrating the system into its operational environment and its impact on systems engineering planning and management. Operational: Planning, Monitoring, and Controlling - Describe your planning and resource allocation processes. How do you monitor and review your program s progress and make corrections to keep the program on track? Operational: Supply Chain and Logistics Management -- What processes, tools and relationship-building methods have you used to develop, refine and improve supply chain and stakeholder integration? Please indicate also methods used to analyze/fact-find development and to support capacity planning within the supplier s facility. These suppliers in turn share their product development plans providing key insight into future obsolescence issues and capabilities required for the next generation of ATE. The operational imperative for any set of test equipment is to provide transportability of the TPSs across the test stations. In other words, any combination of avionics and TPS must operate the same way on any station in any location. The challenge comes in the form of hardware and software changes in any of the three components of that equation (ATE, TPS, LRU). The F-16 program team that includes the Air Force, ARINC, Lockheed Martin Global Training and Logistics, and BAE Systems, participates in a process that validates the ATE s yearly software update against a statistically significant sample size of LRUs and TPSs. Changes discovered during the validation process are fed back into the station software prior to its release to the field. Resource allocation begins during the proposal phase and is validated against on-going production requirements. The Integrated Product Development Team (IPT) meets weekly (or daily as the program requires) to address specific program issues and to assign corrective actions. The program manager is responsible for maintaining the log of ongoing actions and following through to completion. The R-IAIS program has adapted BAE Systems Life Cycle Management processes to the specific needs of the program. This includes a monthly review at the Business Area level of schedule, financials, manpower, strategic direction and programmatic issues. Program elements are graded with a color code (red, yellow, green) and return to green action plans developed for any area that falls into a red or yellow grade. Reliability of the data used to manage the supply chain is paramount to the program s success and our enterprise resource planning tool provides consistently accurate data. Our supplier database has been developed and refined over the past 20 years, resulting in a trusted supplier group with whom we share technology and business projections. Our suppliers are considered part of our IPT and are held to the same standards of performance that we require of our internal teams. We conduct site visits for new suppliers of system critical components. These visits include representatives from the Procurement, 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 5

6 regarding supplier proposals. This is one of the most imperative needs of our industry please provide specific details and data that assisted you in gauging the effectiveness. Operational: System Integration, Testing & Reviews - Describe the activities and processes used to succeed in your system integration, and testing. How did you conduct system design and technical reviews? Operational: Risk / Opportunity Management Describe the processes used to identify both risks and opportunity and to assure potential for both is addressed effectively Please indicate any forwardleaning processes to support. Team Leadership: Team Culture and Motivation Describe how you created Engineering and Program Office. We review their processes and procedures to provide a high level of confidence that they are able to meet the technical, schedule and programmatic requirements prior to issuing a Request for Quote. Technical and programmatic reviews are scheduled as warranted and the supplier s progress is tracked as part of the team s weekly review and the business area monthly review. If issues arise during the program, BAE Systems will often provide subject matter experts to assist with resolution and to return the supplier to an on-schedule condition. The R-IAIS production program operates under BAE Systems Life Cycle Management process that requires periodic phase reviews consistent with the particular stage of the program. These Phase Reviews include specific entry and exit criteria along with a set of deliverables that can be tailored to the needs of the program. Peer and internal team reviews are conducted for replacement of key components and subsystems. Testing is conducted at the instrument level and with the stations to ensure compatibility with the requirements. We have at least one of each station type available at the San Diego facility and testing is done on each type for those instruments that are common to more than one station. Once the station level testing is complete the instrument is sent to the Depot at Hill AFB or to LM GTL for testing with the avionics. BAE Systems maintains an active risk and opportunity management plan (ROMP), beginning with proposal development. While the Program Manager owns the risk process, the IPT is responsible for providing input. This is viewed as a team building exercise, ensuring that all functions and team members at all levels receive a voice in the process. After identifying both risks and opportunities, the group quantifies them in terms of dollars, total exposure and probability of occurrence. Mitigation plans are established and a final assessment defined (Resolve, Manage, Monitor). A key to this process is the parallel assessment of both risks and opportunities. The team is challenged to identify specific opportunities within the existing program. This is particularly important for the R-IAIS production as all the delivery orders are firm fixed price. The IPT was established during the development of the IAIS in 1989 to break down functional barriers. We recognized the need to improve communications both vertically and horizontally and to establish clear lines of 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 6

7 your team spirit and culture, and accomplished entire team integration and individual team member motivation. Team Leadership: Lessons Learned and Knowledge Management Describe how you collect lessons learned and best practices, and how they are shared with your team and company to improve performance. Also how are you capturing expertise and knowledge to assure availability over the life of the program? Team Leadership: Leadership Development How do you develop team s skills and build future leaders Best (& Next) Practices: Identify your program s specific Best Practices that you believe are unique, and could be shared with others and become industry s Next Practices. responsibility. The transition to this approach had to be abrupt and complete. The team was empowered to make process changes, cross traditional functional boundaries and in general to do what it took to get the job done within the scope of the program. With a sense of ownership established, a camaraderie quickly developed and now after 23+ years, no one wants to be the one who drops the ball. While we maintain a formal lessons learned database, the most effective methods for documenting and sharing lessons learned are company sponsored forums conducted at the business unit, sector and corporate level. The Competency Mentoring Organization (CMO) leverages subject matter experts from around the business unit to conduct informal brown bag learning opportunities and more formal training covering a broad range of topics both technical and programmatic. At the corporate level, periodic Project Management Conferences are held with representatives from BAE Systems facilities around the world. The IAIS/R-IAIS programs were recently featured where real-life case studies from programs throughout the company large and small are presented to the group to provide a valuable perspective on the approaches taken by individual teams to solve complex program issues. The IAIS/R-IAIS programs benefit from an experienced workforce whose average seniority is in excess of 20 years. This level of program experience is invaluable to mentoring new employees or those new to the ATS business. We challenge individuals within the program to step outside their comfort zone in accepting new assignments, but provide the support within the business to ensure their success. The CMO, while not a program specific best practice, has become a valuable asset to the business area. More than 30% of the engineering workforce and hundreds of others from all functions participate in either the formal or informal training. Upcoming topics are widely publicized and coordinated to be available to employees on both the east and west coasts. Employees donate their time to attend the training sessions as a means of reducing the cost of the program. During the first 5 months of 2012, more than 5400 hours have been donated in the advancement of learning. The program that began in San Diego is gaining popularity and expanding to other business within BAE Systems Inc AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 7

8 IV. ADAPTING TO COMPLEXITY: (HOW DO YOU DEAL WITH YOUR PROGRAM S UNIQUE COMPLEXITIES) = 20 POINTS Identify the Program s Market Uncertainty level How new is your product to your market and users, based on the definitions below. Then describe how you deal and address this specific uncertainty: - Platform a new generation in an existing product line. Identify the Program s Technological Uncertainty using the definitions below. Then describe how you deal and address this uncertainty: - Medium Technology: existing technology modified to meet new design requirements - High-Technology: recently developed new technology Identify the level of your System Complexity using the definitions below. Then explain how you are dealing with this level of complexity: - A Sub-system fitting within a larger system. The IAIS and R-IAIS are second and third generations of the original 4-station AIS shop sets. At each stage in the product s evolution, we have paid particular attention to the end-user; in this case the US Air Force technicians. Prior to the development phase of the mobile IAIS, we traveled to the user communities, initially to gain insight into what was important to them. In subsequent visits, we brought a prototype of the test station to gauge user reaction to specific design elements and to assess the impact of potential design changes. During the development phase, USAF personnel were active members of the IPT. Even today, customers are able to provide input to system/software changes through a series of one-on-one meetings held with the program team at regularly scheduled user conferences. The R-IAIS consists primarily of Commercial Off The Shelf instruments and subsystems that fit squarely within the definition of medium technology. However, it is the system s very definition that contributes to the technological uncertainty. Most weapon systems (and therefore their associated support equipment) are expected to last well past 20 years while it is the nature of most COTS instruments to be replaced every three to five years. Many of the COTS instrument suppliers in our supply chain are willing to share product road maps with us as we look to extend the life cycle of the existing system. With insight into the end of life of a particular product or series of products, we are able to plan for a graceful transition to the new technology. The IAIS/R-IAIS stations are designed to test a broad range of avionics including communications, navigation, radar, stores management, displays and electronic warfare systems. They are part of a larger system that includes the avionics and the Test Program Sets (TPS) that provide the hardware and software interface between the station and unit under test. BAE Systems seeks to minimize the impacts of changes to the stations, or avionics through the development and fielding of an open architecture system that leverages the latest in synthetic instrument (SI) based stimulus and measurement technology. SI based systems are software reconfigurable, allowing us to adapt to new requirements by updating software personality modules instead of adding new hardware and the integration and acquisition costs that go with it AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 8

9 Identify the Pace and Urgency of your team s effort using the definitions below. Then describe how you deal with the program s pace requirements: - Regular timing no specific time pressures. - Time Critical there is an absolute and critical-to-success deadline. Other Complexities & Uncertainties - Describe other complexities and unknown factors faced by this program and how you addressed them. An excellent relationship with our customer allows us to accurately predict our year-to-year orders without crisis or blitz requirements. The standard lead time for manufacture of the R-IAIS is approximately 12 months, but accommodations have been made when necessary to reduce the lead time by one to two months. The IPT has been able to adjust over time to longer term changes in manufacturing rates. We are able to adjust resources to accommodate changes in demand providing for what can be considered regular timing. There is however a time critical element to the program. Our customer has come to rely on BAE Systems to deliver the IAIS/R-IAIS stations on time giving them the ability to ensure their end customer (USAF or FMS) that their test equipment will be received and operational to coincide with new or updated aircraft deliveries. There have been obstacles and challenges outside the control of the program IPT throughout the life of the IAIS/R-IAIS programs. The business area was involved in four separate changes in ownership and two facility moves. Changes in ownership often involved new priorities or a change in focus, but the emphasis on program performance never wavered. Both facility moves included a consolidation of facility space and a requirement to build ahead to avoid any impact to delivery schedules. The ERP system and ISO 9001 assessed processes helped a dedicated team make the moves without missing a beat. V. METRICS (HOW DO YOU MEASURE PROGRAM S PERFORMANCE) = 30 POINTS Customer - How do you measure the impact of your program on your customer and your customer s satisfaction? Include a description of your metrics, as well as numerical evidence. The IAIS/R-IAIS programs use a combination of the formal government CPARS and our own Customer Satisfaction Survey. The F-16 IAIS/R-IAIS sustaining engineering programs maintained their exceptional rating in the five CPAR categories of; Quality of Product or Service, Schedule, Cost Control, Business Relations and Management of Key Personnel during its most recent rating. The production programs utilize the BAE Systems Customer Satisfaction Survey where they have consistently received the highest rating (Blue) in the areas of technical, schedule, management and communication. Probably the most impressive metric for our customer has been the team s ability to control the cost of the R-IAIS station over time. The cost of the R-IAIS station has decreased by 8% since the initial order in The price decrease is direct reflection of the team s dedication to improving efficiencies in manufacturing and production support, seeking lower cost solutions for instrument 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 9

10 Performance - How do you measure your program s performance in traditional terms such as schedule, budget, requirements, and business results? Preparing the Future - How do you measure and assess the long-term contribution of your program to the corporation/organization? Team - How do you measure and assess the impact of your program on your team development and employee satisfaction? Unique Metrics - Describe any unique metrics you are using to measure your program s progress and how do you focus it for outstanding success. replacements, working hand-in-hand with valued members of our supply chain and actively seeking out opportunities within the constraints of the program. We assess the Cost and Schedule Performance Indices (CPI/SPI) as part of the program s Earned Value Management System (EVMS). The production program cumulative indices stand at 1.0/.99 respectively. We use S-Curves to evaluate leading indicators such as Purchase Order Placement and Production Starts to provide insight into potential problem areas. Lines of Balance give the manufacturing team the flexibility to adjust work flow based on information from those leading indicators. Our realization metric is the measure of production and test performance for individual assemblies against established standards. These metrics are bounded with Upper and Lower Control Limits (UCL/LCL), reviewed monthly and action items assigned as values reach the established control limits. BAE Systems tracks the traditional salients (orders, revenue, PBIT and cash) as a means of assessing the program s contribution to the overall success of the business area. Over the past 10 years, the R-IAIS program revenue exceeds $190M. In addition, the IAIS/R-IAIS programs play a significant role in achieving the business area s goals for small business participation, as nearly 60% of the program s subcontract dollars are with small businesses. Staffing on the IAIS/R-IAIS is assessed at three stages throughout the program. Prior to start-up the PM and Engineering organizations assess the team to ensure the resources are available to meet any start-up ramp. The team self-assess throughout the program to keep a balanced skill mix to meet the requirements. Finally, during the later phases of the program, we look to move people to other programs in order to achieve the required ramp-down and projected costs. The ability to move people freely among programs provides for effective development of talent across the ATE domain and challenges individuals to accept new responsibilities. Our top-line metric is on-schedule delivery of our Automatic Test Equipment. We have an outstanding record of on-time deliveries that will reach 24 years in September BAE Systems takes the opportunity throughout the year and at key milestones in the life of the program to recognize the team for its outstanding performance. At the celebration of the 20 th anniversary in 2008, we invited customers, suppliers, teammates and retirees to join in the festivities AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 10