2013 Program Excellence Award

Transcription

1 2013 Program Excellence Award The Aviation Week Program Excellence Award initiative was developed in 2004 in recognition of the need Phase I Submission Name of Program: Auxiliary Power Unit (APU) Performance Based Logistics (PBL) Name of Program Leader: Tricia Unger Phone Number: tricia.unger@honeywell.com Postage Address: 1300 W. Warner Road, Tempe, AZ, Name of Customer Representative: Magdalini Dimitrakis Phone Number: (215) magdalini.dimitrakis@navy.mil Bio for program leader: Tricia Unger is the Customer Business Manager for US Navy Performance Based Logistics (PBL) and Depot Partnership programs for the Defense & Space (D&S) business unit of Honeywell. In this role Tricia leads a cross-functional team of 12 in providing aftermarket support to Navy programs as well as cross-service initiatives. Tricia brings extensive experience in leadership and customer support to her current role. She began her 18-year career with Honeywell as an Industrial Engineering Intern at the Phoenix Engines facility. Her business acumen was developed in the Integrated Supply Chain (ISC) function; progressing from supervising production to directing the Demand and Asset Management department and program managing deployment of a robust Sales and Operations Planning Process across Honeywell s Aerospace Division. In December 2006, Tricia transitioned to a leadership role in the Customer and Product Support, managing a team of 25 Customer Support Program Managers and Engineers to develop Entry-Into-Service plans for new products and resolution of all customer-identified issues. Tricia holds both a Masters in Business Administration and a Bachelor of Science in Industrial Engineering from Arizona State University. She has attained certification with the Association of Production and Inventory Management as well as Black Belt Certification for Six Sigma. Tricia resides in Queen Creek, Arizona with her husband, Ron, and three children.

2 Phase I Program Narrative - 1 Background Honeywell stands at the forefront of implementing innovative commercial logistics sustainment programs, including Maintenance Service Agreement (MSA) and Material Charge per Aircraft Landing (MCPAL) programs for our commercial airline customers, Maintenance Service Plan (MSP) and Honeywell Avionics Protection Plan (HAPP) programs for our Business and General Aviation customers, as well as highly-customizable Integrated Services Solutions (ISS) programs. Taking a page from our commercial successes, Honeywell and the US Navy collaborated to establish the Navy s first outcome-based contract known as the Navy Total Logistics Support (TLS) Program. This ground-breaking sustainment program was initially contracted for a five-year period (with one five-year Option) in July of As a result of our collective performance and dedication in support of the warfighter, our partnership on value chain optimization and our commitment to a mutually beneficial and cost-effective solution, the USN exercised the original contract option as well as awarded a bridge contract. On August 24 th, 2012, Honeywell was awarded a follow-on five-year, firm-fixed price Federal Acquisition Regulation (FAR) Part 12 (Commercial Item) contract (valued just over $180 million). The new contract, known as the APU PBL (Performance-Based Logistics), incorporates the lessons learned from the original Navy TLS Program and is designed to address the Navy s current affordability and system availability goals. APU PBL Program and Award Descriptions The latest Navy contract is a PBL contract supporting the Auxiliary Power Systems on the F/A- 18, C-2, and P3 Aircraft, P-3 Engine Driven Compressor, and F/A-18 Main Engine Fuel Control. Support includes depot overhaul, component repair, and spares support with worldwide shipments direct to the Navy fleet, USMC and Royal Australian Air Force (RAAF). The work scope also includes field service engineering and engineering services. The contract has specific availability performance requirements which Honeywell has addressed by establishing the infrastructure, material flow, and IT systems to achieve these requirements. The related Navy Press Release* stated: Honeywell has supported APUs via PBL since 2000 when the original 10-year PBL contract was awarded. The multiplatform APU PBL with Honeywell has historically produced solid levels of material availability hovering near 97 percent and on-time delivery at 99 percent to support aircraft readiness. "The Honeywell APU PBL has been a well-performing PBL that has provided unprecedented levels of material availability to support aircraft readiness," said NAVSUP Weapon Systems Support Operations Director Capt. Duke Heinz. "The renewal PBL is expected to continue this high-level of supply support to the Fleet." 2013 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 4

3 Phase I Program Narrative - 2 This contract award demonstrates NAVSUP WSS' commitment to renewing PBL contracts where the contractor's performance improves material availability and aircraft readiness while delivering cost savings to the Fleet," added NAVSUP Weapon Systems Support Director of Contracts Capt. Chris Mosher. "The APU PBL contract with Honeywell is a proven winner. It has steadily improved Fleet readiness and provided the lowest life cycle cost support solution since its award in The renewal contract captures the benefits garnered during the original PBL contract and is a great example of a well-structured PBL contract that balances Supply Response Time (SRT) metrics and reliability metrics to incentivize performance," Mosher continued. *Excerpt reference: Navy News Service, NAVSUP Weapon Systems Support Awards $180.9 million Performance Based Logistics Contract, Story Number: NNS , dated 9/8/2012, by Lt. Cmdr. Chris Kovack, Naval Supply Systems Command. Lessons Learned / Implemented: From Honeywell s perspective, the extent to which a PBL program will result in a winwin (Government and Contractor) is contingent on applying lessons learned through all phases of the program, from project initiation through implementation and the management of continuous process improvement, through the effective monitoring of established metrics. Pre-Award: Collaboration at project initiation provides the starting point to maximize benefit for both Honeywell and the DoD. Once a government agency determines the desired end state and has followed all required Government due diligence for source selection, co-development of the elements of the program ensure a clear understanding of the baseline program assumptions, deliverables, and infrastructure required. It is also important to establish a plan for program growth, the addition of products and or customers to the program, and for potential platform sunsets or program termination. Maximizing savings for the Government, while maintaining profitability, is contingent on the contract framework agreed to upon program initiation. Utilizing a FAR Pt. 12, 10-year term (5- year base, 5-year option), fixed-price, incentivizes both Honeywell and the Government to continually strive to achieve savings objectives, by implementing process changes that reduce and/or avoids cost, increases asset availability and utilization, and reduces the cash tied up in spare parts inventory while creating lasting improvements in depot processes and workforce capability. Contracting on a cost-per-flight-hour (or system or platform equivalent) versus transactional delivery orders provides the customer increased visibility to the comprehensive cost to support a given weapons system and encourages contractor investment in continuous improvement initiatives AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 5

4 Phase I Program Narrative - 3 It is imperative that the USG and Honeywell work together to ensure data and program assumptions are accurate, clear and consistent, such that each can develop a robust contract Business Case Analysis (BCA), to ensure the merits of proceeding with an outcome-based, payfor-performance type program. Defined and mutually-agreed to performance definitions and metrics across platforms, with a consistent reconciliation process, reduces ambiguity and facilitates accurate risk assessments. Lastly, a baseline status of fleet assets/product condition requires reconciliation as well as configuration baseline (with an Over & Above contract remedy where unserviceable assets turned-in to the program for repair do not meet that minimum configuration). Value Chain Optimization: Increasing product availability and reliability under a FAR Part 12, firm-fixed price contract, awarded at a price to the Government, which is break-even or better to current sustainment program cost requires contractor commercial investment in engineering efforts that drive reliability improvements and value chain optimization that drives productivity in depot repair processes. Honeywell would not have been able to demonstrate success without NAVAIR engineering and the Depot team s earnest cooperation relative to initiatives which ultimately resulted in extended time on-wing or in reductions of Depot maintenance man-hours. The extent to which the Government is willing to partner directly correlates to the magnitude of realized program benefits. For example, the elapsed time for the approval of an Engineering Change Proposal (ECP), process improvement at the Depot, or changes in maintenance concepts, contributes to time lag associated of implementing and associated cost-savings to be realized within the period of performance. The establishment of mutual rules of engagement for the processing of requests is important. Partnering with the Depot is by far the most critical success factor for value chain optimization of a PBL Program. Working together to ascertain best practices and implement standard work between the depot and our Honeywell repair facilities significantly improves the consistency of product delivered and drastically reduces waste in the process. Having trusted, on-site, materials management and engineering support allows Honeywell to manage a single supply chain, facilitates the incorporation of LEAN manufacturing methods and maximizes velocity through the repair processes with minimal overhead and bureaucracy AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 6

5 Phase I Program Narrative - 4 Monitor and Control Performance: A robust Management Operating System (MOS) between the procurement officer, Honeywell and, in turn, the performing depot ensures that everyone is clear on expectations, the required actions to maximize performance and ultimately program results. Starting with a vetted requirements stream, based on historical fleet usage and adjusted for known changes in operating environment, Honeywell coordinates with the depot to establish a mutually-agreed to production schedule. This critical step in the process allows Honeywell to make workload allocation adjustments between the Depot and the contractor facility, if required, to accommodate capacity adjustments and / or emerging requirements, ensuring our ability to meet or exceed required availability for the Warfighter. Proactive forecasting, demand planning and materials management also enabled significant improvement in parts availability and elimination of delays due to part shortages. In additional to an effective requirements planning process, monitoring performance to the established production plan at the appropriate level to drive expeditious course correction as required, dramatically improves the effectiveness of the program. The review cadence should include, but not be limited to, daily progress / escalation, weekly reconciliation of output-to-plan and action review, monthly Management Operating Review (MOR) with Depot to review labor hours and material cost-to-plan, repair turn-around time (TAT), trend analysis, workload planning, process improvement projects etc, and finally, a comprehensive Quarterly Program Review with the procurement officer and the product / platform managers to review compliance to the contract program metrics. Summary: As the preceding lessons learned demonstrate, this program and other Public-Private Partnership (P 3 ) Programs are directly aligned with the US Government s 2010 Better Buying Power (BBP) initiative for the the implementation of best practices to strengthen the Defense Department s buying power, improve industry productivity, and provide an affordable, value-added military capability to the Warfighter. BBP encompasses a set of fundamental acquisition principles to achieve greater efficiencies through affordability, cost control, elimination of unproductive processes and bureaucracy. Honeywell s commitment to the value provided and gleaned by performance-based contracts is also evident with our recent formally expressed interest in participation in the multi-service, Enterprise Next Generation PBL AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 7