FOREWORD 5 INTRODUCTION 6 THE NATO SUPPORT AGENCY (NSPA) 7. Mission & Vision...7 Values...7 General Orientation...7 BACKGROUND 8

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2 TABLE OF CONTENTS FOREWORD 5 INTRODUCTION 6 THE NATO SUPPORT AGENCY (NSPA) 7 Mission & Vision...7 Values...7 General Orientation...7 BACKGROUND 8 Trends...8 Opportunities...9 STRATEGIC EXECUTION 10 Overall Strategy...10 Capability Areas...11 Capability Analysis & Development Opportunities...12 Support to Operations Weapon Systems Support Fuel Management Strategic Transport Procurement Support...24 Management...26 NSPA SUPPORT TO PARTNER NATIONS AND INTERNATIONAL ORGANIZATIONS 28 NSPA 2017 PICTURE 29 CONCLUSION 30 2 NSPA Strategic Direction

3 TABLE OF FIGURES Figure 01 Evolution of NSPA Portfolio & Customer Base...10 Figure 02 Capability Groupings Figure 03 NSPA Capability Analysis...12 Figure 04 Capability Development Opportunities...13 Figure 05 Capability Development in Support to Operations...15 Figure 06 Capability Development in Weapon Systems Support...17 Figure 07 Capability Development in Fuel Management...19 Figure 08 Capability Development in Strategic Transport...21 Figure 09 Capability Development in Procurement...23 Figure 10 Strategic Development in Support...24 Figure 11 Strategic Development in Management...26 Figure 12 NSPA Business Model...31 REFERENCE DOCUMENTS A. AC/338(SEC)D(2012)0007, dated 7 September 2012, NSPO Charter B. PO(2010)0081, dated 4 June 2010, LISBON SUMMIT C. PO(2012)0229, dated 19 May 2012, Defence Package (NR) D. AC/305(EAPC)D(2012)0007, dated August 2012, NATO Logistics Vision & Objectives NSPA Strategic Direction

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5 FOREWORD The NATO Support Agency will fully leverage its present capabilities and build on them to provide integrated support solutions for Smart Defence, evolving capabilities, and future NATO operations. The Agency will help connect all of the partners that play a key role in delivering Smart Support. And we must do this at a lower cost to NATO Nations. Mike Lyden NSPA General Manager Small opportunities are often the beginning of great enterprises. Demosthenes (384 BC- 322 BC) NSPA Strategic Direction

6 INTRODUCTION This Strategic Direction provides the final element in the set of initial planning documents for the new NATO Support Agency (NSPA). The other documents included the 2013 Business Plan, the 2013 Annual Financial Plan and the NSPA Road Map for delivering Greater Effectiveness, Efficiency and Savings. Together they provide the direction and intent for the NSPA. The first two documents set the business and financial foundations for the Agency s first full year of operations in The third document provided a bridge from 2013 into the future and detailed the specific Agency plans in terms of pursuing the objectives set by the North Atlantic Council (NAC). The Strategic Direction projects the Agency intent through This period captures most of the known challenges facing the Agency in the future. For operational support this includes Sustainment and Redeployment of ISAF and Troop Contributing Nation (TCN) forces, support to NATO operations in Afghanistan post-2014, and overall NATO evolution to an operational emphasis on training and exercises. It also represents a period of increasing financial austerity in nations, and in particular, in their defence budgets. As outlined in NATO s Smart Defence initiative, the cost of sustaining Alliance forces must be reduced in order to acquire the future capabilities required to support NATO s mission set. Finally, with NATO s partnerships, there is significant potential to leverage the NSPA s capabilities in partnerships with them. In each of these areas the NSPA can be a key enabler in achieving NATO and national defence goals. Its ability to develop innovative, multinational solutions will be critical in the future. It represents an extraordinary asset for NATO. To fully achieve its potential the Agency requires a critical look into the future. It must assess the current and future requirements of NATO and its Allies, and determine what adjustments must be made within its portfolio of capabilities. Since the development of capabilities takes time and coordination, this Strategic Direction becomes the road map to guide the Agency in this endeavour. This Strategic Direction represents only the start of a process, an initial blueprint of future opportunities. The Agency team looks forward to continuing to refine this road map with its stakeholders and customers. Their support is greatly appreciated. Mike Lyden Capellen, Luxembourg 22 May NSPA Strategic Direction

7 THE NATO SUPPORT AGENCY (NSPA) Mission & Vision Mission Provide responsive, effective and cost-efficient logistics, operational and systems support and services to the Allies, NATO Military Authorities and partner nations, individually and collectively, in time of peace, crisis and war; and where required to maximize the ability and flexibility of their armed forces, contingents, and other relevant organizations, within the guidance provided by the NAC, to execute their core missions. Vision - Smart Support NATO s premier logistics and services provider team, with an integrated network of logistics capabilities for NATO, and its Nations and partners. Values We have put in place strong foundations to make NSPA a premier logistics partner. As part of this process, we have five values that express our shared understanding of our ambition and how we aim to perform as an organisation. These are Excellence, Transparency, Effectiveness, Efficiency, and Unity of Effort. General Orientation The NATO Support Agency (NSPA) provides integrated logistic support solutions to NATO and its Allies. It provides support as requested by them from its extensive portfolio of capabilities. The support is currently provided by three business units: Logistics Operations, Central Europe Pipeline System (CEPS) and NATO Airlift Management (NAM). NSPA s Logistics Operations business unit delivers traditional in-service logistics support for weapon systems as well as logistics services in a broader context, including support to NATO and its Allies. Here it acts as an integrator for bilateral and multinational initiatives in direct support of deployed troops. The Central Europe Pipeline System (CEPS) Programme provides jet fuel transport and bulk storage, point to point transport of diesel, gasoline, domestic fuel and naphtha, both to military and commercial customers. The NATO Airlift Management (NAM) Programme owns and supports three Boeing C-17 Globemaster III aircraft operated by the Heavy Airlift Wing. The Agency Headquarters is located in Capellen, Luxembourg with key elements operating in Papa, Hungary; Versailles, France; Taranto, Italy; and various locations in Afghanistan. NSPA Strategic Direction

8 BACKGROUND An assessment was carried out to review political, economic, social, technological, environmental and legislative trends that may impact the Agency over the period The elements of NATO s Strategic Concept, NATO Forces 2020, Smart Defence, Connected Forces Initiative, and NATO s Logistic Vision and Objectives 2013/2022 (References B, C & D) were also fully considered in the analysis. The product of this process was to build a future Capability Portfolio for the Agency that addressed opportunities and trends likely to be faced by the Agency as it matches to the evolving requirements of its customers. Trends Pressure on national defence budgets: Expected reductions in national defence budgets may reduce funding available for multinational and common initiatives. Nations searching for greater cost-effectiveness. Emphasis on national industries: Decreased national defence spending may put pressure on nations to favour their national defence industry rather than multinational approaches with international competition. Increased role of defence industry in full life-cycle support activities: Industry is increasingly looking across the spectrum of life cycle support for opportunities to replace revenues lost due to reduced procurements of new weapon systems. Reduction of NSPA operational support activities: The completion of NATO s ISAF mission and the proposed reduction in forces for the follow-on RESOLUTE SUPPORT Mission will result in reduced support requirements. Changing operational environment of NATO: As the ISAF mission ends in 2014 NATO s military focus will return to exercises and training as envisioned in the Connected Forces Initiative (CFI). The current large scale operation (i.e. ISAF) will be replaced by emergent smaller joint operations in response to crises or humanitarian disasters that will require rapid response capability including for logistics. Riskier operational environments: Follow-on missions in Afghanistan will involve much more execution outside traditional security structures provided by military forces. New business models will be required to maintain security of deployed NATO civilians and contractors. Increased role of NATO partner nations: NATO s partner nations will bring new support requirements as they may desire to increase their interaction with NATO Nations and leverage NATO capabilities such as the Support Agency. Risk of CIS unavailability through cyber-attacks: Business critical systems need to be protected against global threats. Increased environmental awareness: This will drive requirements for new support capabilities such as ammunition demilitarization and environmental remediation. 8 NSPA Strategic Direction

9 Opportunities Leverage ISAF operational expertise: NSPA has developed broad experience in critical areas such as base operating support (BOS), Real Life Support (RLS) and infrastructure project management that can be leveraged to support evolving NATO and national support requirements at reduced costs. Increase leadership roles in Smart Defence initiatives: NSPA can take the lead for pending or future logistics or operational initiatives. Support national logistics outsourcing initiatives: NSPA knowledge and experience provides ideal environment to deliver best value alternatives to national solutions. Increase cooperation with other international organizations: NSPA can share logistics activities and capabilities to avoid duplications in logistics capabilities. Increase participation in multinational defence initiatives: NSPA is ready to provide in-service support to future multi-national weapons system procurement programs. Expand support partnerships to evolving weapon systems: NSPA will look for multinational opportunities for additional weapon system support, either for existing or new families of weapon systems. Offer effective and cost-efficient support: NSPA is focused on providing cost-effectiveness benefits to the nations that are under pressure in search for such benefits. NSPA Strategic Direction

10 STRATEGIC EXECUTION Overall Strategy Akey objective for the new Agency was to preserve the capabilities (products and services) incorporated from the three former Agencies. This portfolio is represented in Figure 1 below by the blue box, where the Agency provides existing support to existing customers. A complementary objective is to fully leverage these current capabilities and to expand them to meet the evolving needs of NATO and its Allies, as illustrated by the arrows which move outward from the blue box. SUPPORT TO OPERATIONS STRATEGIC TRANSPORTATION New Support (Products & Services) NEW & EXPANDED support capabilities in response to NATO and its Allies (WEAPON) SYSTEMS SUPPORT (Based on Through Life Cycle Management) FUEL MANAGEMENT Existing Support (Products & Services) NSPA SUPPORT PORTFOLIO (current) Expand customer base NEW customers Enhance cooperation with other Agencies & Organizations Develop cooperation with national logistics PROCUREMENT Capability drivers Existing Customer(s) New Customer(s) Figure 01 Evolution of NSPA Portfolio & Customer Base These arrows reflect 5 Capability Areas that have been identified as shown in the diagram. These are Support to Operations, Strategic Transportation, Weapon System Support, Fuel Management, and Procurement. In each Capability Area the Agency will work to move out along both axis either expanding systems and services, or the range of customers. The 5 year Strategic Direction for these Capability Areas is detailed in the following sections. 10 NSPA Strategic Direction

11 These efforts will contribute to the objectives of NATO s Logistics Committee to implement effective mechanisms and tools. The successful pursuit of the Capability Areas by the three current business units will require comparable future direction in the areas of Support and Management: Support: Deliver capabilities (products and services) in the most efficient manner possible. Management: Optimize Agency operations at minimum cost. Within each of these three areas Capabilities, Support and Management Lines of Action (LOA) have been developed to outline the Agency s Strategic Direction through Capability Areas Vision Expand portfolio of logistic capabilities for NATO and its Allies. NSPA will continue to deliver the capabilities needed by NATO using its well-established business model focused on consolidation, centralization and competition of requirements. It will enhance existing capabilities and identify new capabilities required in the future. Figure 2 shows the five Capability Areas Support to Operations, Weapon Systems Support, Fuel Management, Strategic Transport and Procurement as the key elements of NSPA s overall capability. The Agency will continue to look across each of these Capability Areas with its customers and stakeholders to identify, prioritize and pursue new products and services required to meet evolving requirements. NSPA Capabilities Support to Operations Weapon System Support Procurement Strategic Transport Fuel Management Figure 02 Capability Groupings NSPA Strategic Direction

12 Capability Analysis & Development Opportunities Figure 3 illustrates the capability analysis process executed by the Agency. It included 3 paths: leveraging and building on current strengths, exploiting new opportunities from NATO s future direction, and finally, identifying those capabilities where the demand will significantly be reduced or sunset in the future. The process CAPABILITY ANALYSIS STRENGTHS (build, enhance) NSPA Portfolio Expertise & Experience (new) Industry Solutions NDPP 1 OPPORTUNITIES (exploit, expand) Smart Defence Connected Forces Chicago Summit Most pressing capability needs Lisbon Summit CAPABILITIES Sunset Smooth off-ramp planning NSPA Business Planning Synchronized with NATO s & Nations needs - Leveraging NSPA strengths and industry added value 1 NATO Defence Planning Process (NDPP) Figure 03 NSPA Capability Analysis 12 NSPA Strategic Direction

13 The results are shown in Figure 4, an NSPA opportunity matrix. It maps potential capability development opportunities, by Capability Area and prioritising them in accordance with implementation ease, level of criticality for NATO and estimated benefit. In the following sections, this overall capability opportunities matrix will be broken down by each Capability Area and discussed in greater detail. NATO critical Importance for NATO NATO low interest Difficult Easy Implementation ease Support to Operation Weapon Systems Support Fuel Management Strategic Transport Procurement Figure 04 Capability Development Opportunities NSPA Strategic Direction

14 Support to Operations NSPA Capabilities Support to Operations Weapon System Support Vision Provide responsive support to operations. Opportunities Procurement Strategic Transport Fuel Management The opportunity matrix below details potential capability development opportunities in the area of Support to Operations that NSPA may pursue as part of its Strategic Direction through NATO critical 6 Support to Operations Importance to NATO NATO low interest Difficult Implementation ease Easy 1 ISAF Redeployment 6 Rapidly Usable Enabling Contracts (RUEC) 8 Demilitarization, Dismantling, Disposal (D3) in theatre 9 General Medical Support 14 Trust Fund Projects 15 Humanitarian Support 27 Logistics Assistance to RESOLUTE SUPPORT 28 Support to Afghan National Army (ANA) 29 Base /APOD Support 31 Infrastructure Project Management The majority of the projects in this category are of high importance to NATO. Some can be rapidly and easily implemented support to ANA (28), D3 (8), and Base/APOD Support (29) based on existing experience. Others would be more difficult due to complexity or lead-time required redeployment (1), logistics assistance to RESOLUTE SUPPORT Mission (27), and general medical support (9). Rapidly usable enabling contracts or RUEC (6) give NSPA a strategic role in operational contract support for future operations. Humanitarian support (15) is another area where the Agency has a proven track record, particularly with disaster relief. While infrastructure project management (31) is reducing in scope as the ISAF mission comes to an end, NATO has built valuable expertise within the Agency that could support the RESOLUTE SUPPORT Mission, Trust Fund projects (14) and national requirements. Lines of action in each area are listed in Figure 5. Objectives Retain and leverage existing proven support capabilities developed in ISAF and NRF support. Extend support provision to related areas of interest to NATO and its Allies. 14 NSPA Strategic Direction

15 Lines of Action Operational Logistics Planning Planning for logistics support to operations began with the NRF cell providing planning support for Small Joint Operations (SJO). This is evolving to acting as the Contract Integrator (CI) for ACO as well as providing related support services to individual nations. The development of the Rapidly Useable Enabling Contracts (RUEC) will expand these planning activities from SJOs to an integral element in planning for up to Major Joint Operations (+) across the full NATO Command Structure (NCS) and in particular the JFCs. This will also allow responsive, tailored support to humanitarian crisis situations, where NATO and its Allies need to act quickly with robust support packages. The ability to provide well-tailored support in accordance with national requirements can be better advanced with increased participation by nations in the Operational Logistics Support Partnership (OLSP). Operational Support NSPA has provided with a wide variety of services such as APOD and Real Life Support (RLS) for ISAF and KFOR sustainment, and has a portfolio of redeployment services for ISAF. The deployable NATO HQ camp facilities managed by the Southern Operations Centre (SOC) have reached initial readiness. This experience provides a solid foundation for offering similar services for the follow-on RESOLUTE SUPPORT Mission. In addition, NATO s Connected Forces Initiative (CFI) and its increased focus on training and exercises will require increased support capabilities including ensuring full mission readiness for the complete NATO HQ camp facilities. Infrastructure Support Agency staff have executed extensive construction and maintenance requirements for ISAF and KFOR facilities, and site remediation in connection with ISAF redeployment. These services will still be required for sustainment of the RESOLUTE SUPPORT Mission. This expertise could also be leveraged for base operational support (BOS) for NCS installations and other activities. In addition to specific use of the capability, NSPA has proposed the need for an enduring Infrastructure Cell which would safeguard some portion of current capacity and ensure future responsiveness, particularly with Crisis Response Operations Urgent Requirements (CUR). Turnkey Projects The wide range of successful Partnership for Peace (PfP) and national projects managed by NSPA shows its impressive flexibility to develop and execute various demilitarization, disposal, environmental and training projects. This capability could be further leveraged and expanded into new technical areas and geographical regions. Smaller nations lacking the necessary technical and specialist resources could use the Agency for management of more turnkey projects. Medical Support This area addresses a critical requirement. There is a rapidly increasing demand for greater interoperability and related savings in the procurement and support of complex medical equipment and consumables. The Agency has already worked with ACT in this area. These efforts could be gradually evolved into the development and management of a medical supply chain. This initiative would benefit greatly by leveraging NSPA s advanced e-procurement and supply chain management systems. Capability development 2017 horizon Support to Operations Lines of Action Operational Logistics Planning Operational Support Infrastructure (Infra) Support Turnkey Projects Medical Support CI NRF Cell / SJO Expansion of OLSP ISAF sustainment Redeployment support Deployable camp readiness ISAF sustainment Redeployment support BOS to NCS & nations CI & RUEC NRF cell / Expand to MJO RESOLUTE SUPPORT sustainment CFI (exercises & training) Trust Fund projects D3 / Environment/Training Host Nation (Infra) projects Supply Chain Management (Equipment and supplies) CI & RUEC NRF cell / MJO 2000 camp Full Ops RESOLUTE SUPPORT sustainment Enduring Infra Cell Figure 05 Capability Development in Support to Operations Full NCS engagement Expand to new areas NSPA Strategic Direction

16 Weapon Systems Support NSPA Capabilities Support to Operations Weapon System Support Vision Provide full range of system life cycle support tasks. Opportunities Procurement Strategic Transport Fuel Management The opportunity matrix below details potential capability development opportunities in the area of Weapon Systems Support that NSPA may pursue as part of its Strategic Direction through NATO critical 6 Weapon Systems Support Importance to NATO NATO low interest Difficult Implementation ease Easy 3 Mi 17 (Smart Defence Project) 5 Life-Cycle Support 7 A400M 8 Demilitarization, Dismantling, Disposal (D3) (Smart Defence Project) 12 Unmanned Aerial Systems (UAS) 16 Leopard 18 Boxer 19 Mine-Resistant Ambush Protected (MRAP) (Smart Defence Project) 20 Medium Extended Air Defense System (MEADS) 22 Precision Guided Munitions 25 Alliance Ground Surveillance (AGS) 30 Eastern defence technology and equipment 32 Partnerships with MoDs 34 Concentration of all NATO logistics activities 37 Multi Role Tanker Transport (MRTT) Weapon systems support across the life cycle from acquisition logistics, to in-service support and maintenance, to disposal has been a core capability of NSPA s Logistics Operations Business Unit (formerly NAMSA) for decades. There is significant potential to leverage this capability for additional platforms and systems, both existing (Eastern defence technology and equipment)(30) and new (AGS)(25). The Agency will continue to explore support opportunities for other NATO logistics activities (34). The dismantling/destruction/disposal (D3) project (8) will remain central to NSPA s lead role in the related Smart Defence initiative. Several new projects are being pursued including support to A400 M (7), Mi17 (3), Boxer (18), MEADS (20), MRAP (19), UAS (12), Leopard (16), and MRTT (37). Some of these will expand NSPA s partnership with OCCAR. A final area for consideration will be increased partnering with MODs for national support requirements (32). 16 NSPA Strategic Direction

17 Objectives Play a key role in life cycle logistics planning in new system acquisitions. Leverage existing life cycle support capability over a broader range of systems and equipment. Lines of Action Support Partnerships for existing (Weapon) Systems Through consolidation of requirements and competition this well-proven multinational concept of systems and equipment support achieves multiple positive effects for NATO and its Allies. This capability will be strengthened and retained as its customer base and portfolio of weapon systems expands in the future. There is still considerable opportunity for more multinational initiatives to support similar systems and equipment as well as increased participation by nations in existing Support Partnerships. In parallel, the Logistics Operations Business Unit will realign its organization by consolidating and combining similar support areas to increase synergy and lower costs. New (Weapon) Systems New systems and equipment should attract new users and prompt formation of new Support Partnerships across the full range of Land, Air, Naval and C2 systems. A core focus area will be preparing for the support of the NATO AGS system after its acquisition is complete. This includes helping plan the support during system acquisition phase to ramping up capability for the provision of full In-Service-Support. NSPA will continue to work with Nations on national projects (BOXER, LEOPARD, SIDEWINDER etc.) through the development of tailored in-service support packages. Increased NSPA engagement in early acquisition support planning will help ensure the development and delivery of best-value, integrated life cycle support solutions that match customer needs. Consolidate NATO Logistics While some NATO activities currently may require specific in-house logistics support infrastructures, this area still represents considerable opportunity for NATO. As an initial step, the General Managers of NCIA and NSPA have developed a strong partnership framework. One of its objectives is to identify and propose alternatives for existing inefficient duplication and overlapping of logistics functions. Cooperation with MODs in Logistics With the increased pressure on national defence budgets and the related need to lower support costs, the Agency will expand its dialogues with interested NATO nations regarding potential direct NSPA employment for national support requirements. This higher-level cooperation will need to have flexible approaches and NSPA / MOD partnering frameworks. Capability development 2017 horizon Weapon Systems Support Lines of Action Support Partnerships for existing (weapon) Systems New (Weapon) Systems Based on System Lifecycle Support Acquisition (logistics planning) In-service (support, dispose) Expansion (systems & customer base) Org Realignment Logistics Operations AGS (preparation) Land Systems Air Systems Naval Systems C2 Systems AGS ILS planning AGS In-Service Support Consolidate NATO Logistics Cooperation with MODs in Logistics NCIA/NSPA Partnering Exploration potential projects Explore other partnerships Partnering project definition and planning Partnering Figure 06 Capability Development in Weapon Systems Support NSPA Strategic Direction

18 Fuel Management NSPA Capabilities Support to Operations Weapon System Support Vision Deliver efficient and effective fuel management services to NATO and its Allies. Procurement Strategic Transport Fuel Management Opportunities The opportunity matrix below details potential capability development opportunities in the area of Fuel Management that NSPA may pursue as part of its Strategic Direction through NATO critical 6 Fuel Management 5 33 Importance to NATO NATO low interest Difficult Implementation ease Easy 4 Fuel Management Centre of Excellence 17 Storage of fuel for non-ceps military users 26 ISAF Fuel 26 ISAF Fuel 2 Central Fuel Procurement 33 Energy Supply Security Fuel support to operations such as ISAF (26), and its follow-on mission, and KFOR, is of critical importance to NATO, its Allies. NSPA s core principle of consolidation of requirements to achieve buying power offers opportunities for these and other large fuel procurement initiatives (2). Energy supply security (33) is another critical area where the NSPA fuel expertise could be leveraged. Beyond these, other fuel related projects, such as a fuel management centre of excellence (4) and storage of fuel for non-ceps military users (17) are of lower relative value and strategic priority. Objectives Execute Smart CEPS and look for other areas to leverage NSPA s fuel experience and expertise. Commit to discussions and initiatives that contribute to advancement of energy security Expand support to efficient fuel procurement and sustainment operations. 18 NSPA Strategic Direction

19 Lines of Action Multi-product Transportation & Storage CEPS will continue its core mission to operate, finance and maintain an integrated crossborder fuel pipeline and storage system for its nations, while implementing the elements of Smart CEPS, the rationalization of the system through the de-activation of some of its elements to obtain annual savings up to 10 MEUR. Further, it is expec ted that storage capacity may be available to offer to non-ceps military requirements by NSPA Cooperation with other NATO Pipeline Systems (NPS) NSPA will actively participate through the NATO Petroleum Committee to engage with all NPSs to explore areas for increased cooperation and benefit to all. A number of potential modalities have been identified and will constitute the basis of future discussions with other NPS organizations. Energy Supply Security The security risks of Europe s dependence on imports of refined products has become a key concern for NATO and its Allies, and has prompted increased attention particularly on alternative fuels. NSPA will look for opportunities to contribute on related discussions, initiatives, and activities. Fuel Support to Operations NSPA gained valuable experience in supplying fuel to KFOR and ISAF from the strategic distribution down to consumer consumption including with power generation at Kandahar Airfield (KAF). NSPA will assume a much larger role in fuel management by tailoring the ISAF fuel supply contracts to match the closeout of ISAF and resizing and reshaping for RESOLUTE SUPPORT mission support requirements. In addition flexible contractual instruments will be developed to enable expeditionary fuel support for future NATO training and exercises, and missions. Fuel Procurement Fuel procurement will be an integral part of fuel support to operations but NSPA will also explore other potential opportunities to expand its fuel procurement role. Capability development 2017 horizon Fuel Management Lines of Action Multi-product Transportation & Storage (CEPS 1 ) Smart CEPS Storage non-ceps military NSPA cooperation with other NATO Pipeline Systems (NPS) Energy Supply Security Fuel Support to Operations Fuel Procurement 1 Central Europe Pipeline System (CEPS) 2 High Pressure Pump Station (HPPS) Reduce System (324 Km) Identify demand Explore & develop modalities Active involvement in NATO and national initiatives KFOR / ISAF Mission Fuel (KFOR-ISAF-RESOLUTE SPT) Naval Bunker Fuel (NLSP) Align system to future requirements Reduce System (74 Km) Establish agreement(s) Implement cooperation agreements RESOLUTE SUPPORT Expeditionary Fuel Support NATO Fuel (e.g. AEW) Reduce System (1 HPPS 2 ) Reduce System (94 Km) Review offer vs. demand Implement Nations Fuel Figure 07 Capability Development in Fuel Management NSPA Strategic Direction

20 Strategic Transport NSPA Capabilities Support to Operations Weapon System Support Vision Provide a full portfolio of strategic transport capability. Opportunities Procurement Strategic Transport Fuel Management The opportunity matrix below details potential capability development opportunities in the area of Strategic Transportation that NSPA may pursue as part of its Strategic Direction through NATO critical 5 Strategic Transport Importance to NATO NATO low interest Difficult Implementation ease Easy 10 Increase Air lift Capability 13 Medical Evacuation (MEDEVAC) 21 Development of Land Lift Capability 23 Development of Sea Lift Capability 35 Integration of different means of transport 36 Expand SAC with new or other type of aircraft A prioritized shortfall area for NATO particularly with airlift, expanding strategic transport capability will be a priority for the Agency (10, 21, 23). Multi-modal arrangements, such as those in place for ISAF redeployment will be a key element of this (35). The development of more airlift capability should include potential options for expanding MEDEVAC (13). The NATO Airlift Management Programme capability could be leveraged for additional aircraft or services (36). Objectives Develop comprehensive portfolio of responsive strategic transportation to augment national capabilities. Leverage the lessons learned and potential capacity of the NAM Programme for additional initiatives. Cooperation with existing transportation coordination and tasking bodies. 20 NSPA Strategic Direction

21 Lines of Action Expand Airlift capabilities There are opportunities to further leverage and expand the airlift and basing capabilities in coordination with the Strategic Airlift Capability (SAC) nations, many of which are being studied as part of the SAC Strategic Planning Working Group. These include improvement of Pápa Air Base as a bimodal (air/land) transportation hub or using the base to support new airlift platforms that will enter service in the future. Experience gained using SALIS and the airlift spot market will assist in providing reliable access to commercial strategic airlift capabilities via assured access contracts. Better NSPA responsiveness to immediate requirements should be central to future use of spot-market capabilities. A MEDEVAC outline agreement needs to be developed and exercised as a backup solution to cover emergent requirements or those in excess of national capability. Assured access to Sealift There is strong potential for greater participation by nations in NSPA s current strategic sealift assured access roll-on/roll-off (RO/RO) capability. The Experience from current capabilities such as the assured access contracts like the Multinational Implementation Arrangement (MIA) can be used to establish commercial contracts for naval support activity worldwide. Expand on Land Lift (road/rail) NSPA provides critical land (road, rail) transport capability in the ISAF theatre, particularly with redeployment. It demonstrated the requirement to have robust land movement options available to support the operational planning process. An organic high-performance land transport capability will also remain essential to support the activities of the Agency s weapon system support programs. Evolve Multimodal Transport concepts Support to ISAF has demonstrated the need to develop a Multimodal Transport Concept for NATO. A Multimodal Transport Group could be established within the Agency combining expertise from the different transport functions. Capability development 2017 horizon Strategic Transport Lines of Action Expand Air lift capabilities NAM/SAC Pápa Air Base HUB SALIS 1 Spot Market Contracts MEDEVAC Assured access to Sea lift Expand on Land lift (road/rail) SALIS Follow-on MEDEVAC requirement Maintain assured access to RORO capacity Spot market contracts Coordinate with SAC Strategic Planning Working Group Expand Pápa Air Base into transport HUB Assure easy access to Strategic Air lift market Early-on development of tailored MN solutions to include Strategic Rail options Manage Strategic Transport within a Multimodal Transport Concept Establishment Multimodal Strategic Transport Concept Fully Operational 1 Strategic Airlift Interim Solution (SALIS) Figure 08 Capability Development in Strategic Transport NSPA Strategic Direction

22 Procurement NSPA Capabilities Support to Operations Weapon System Support Vision Deliver best value market offers to meet requirements. Opportunities Procurement Strategic Transport Fuel Management The opportunity matrix below details potential capability development opportunities in the area of Procurement that NSPA may pursue as part of its Strategic Direction through NATO critical 5 Procurement Capability Importance to NATO NATO low interest Difficult Implementation ease Easy 11 Merge Procurement Agencies, full acquisition 24 NATO General Procurement e-procurement 39 COTS/MOTS procurement The broad procurement experience of the Agency is a recognized asset for NATO and has significant potential to serve as the framework for NATO s Shared Services initiative in General Procurement (24). In parallel, the extension of electronic procurement (e-procurement) (38) constitutes an opportunity to enhance the responsiveness and effectiveness of all procurement actions. In addition, NSPA could expand and extend its procurement role for COTS/MOTS requirements (39). NATO s Implementation Plan for Agency Reform established a decision point in 2014 on NSPA s role in connection with the NATO Procurement Agency (NPA) initiative (11). Objectives Expand role as NATO s lead for General and E-procurement. Provide nations and multinational initiatives with a robust, as-needed acquisition capability 22 NSPA Strategic Direction

23 Lines of Action Strategic Sourcing NSPA could provide the collaborative and structured process of critically analysing NATO s organizational spending and use this information to acquire commodities and services more effectively and efficiently. Requirements would be consolidated for General Procurement type items, from across NATO (Agencies, NATO HQ, IMS, NCS, etc.). Activities would access online contractual agreements to satisfy requirements. Programme Specific Supply and Services Rationalization will continue to refine NSPA s core procurement process in support of its Business Units. Value Stream Management will identify continuous improvements to increase productivity. Acquisition Procurement NSPA will leverage its experience and current capabilities to optimize, and develop where appropriate, its capability to perform off-the-shelf acquisitions that are required for the Agency s mission. Such procurement will comply with the NSPO Charter and Procurement Regulations. In future years, NSPA will execute any NATO decisions associated with the NATO Procurement Agency (NPA) initiative and be ready to support acquisition procurement activities associated with future NATO Multinational acquisitions. Capability development 2017 horizon Procurement Lines of Action General Procurement Programme specific supply & services Value proposal to Office Shared Services Process review Policy harmonization NATO Strategic Sourcing Rationalization Alignment procurement Acquisition Procurement COTS/MOTS Procurement Transfer from existing Procurement Agencies Lead future NATO MN acquisitions Process review Policy harmonization Process review Policy harmonization Random Brokerage & NLSE Random Brokerage Projects Support of acquisition dedicated programme Support of multilateral agreement based acquisition programme Figure 09 Capability Development in Procurement NSPA Strategic Direction

24 Support Vision Deliver best value market offers to meet requirements. Support development 2017 horizon Support Lines of Action Enhance Human Resource (HR) Management Workforce Planning Optimize recruitment Employee Performance Management System (EPMS) Enable Staff Mobility Cultural change Automate HR administrative processes Requirement planning / Competency based PDs Fully Operational Process improvement / Onboarding Implement new EPMS Improvement Fully Operational Mobility Board Fully operational Continuous process Process Review (optimization) / Automation Employee & Managers Self Service (ESS/MSS) Fully Operational Improve Information Technology (IT) Capability Pursue NCIA Partnership Converge Components, Re-use & Sharing Leverage NCIS Cloud Capability Fully Operational Harmonize & integrate Financial Management Consolidate ERP (SAP Financial) Fully Operational Achieve Agency Reform savings 3.5 MEUR Overhead 5.3 MEUR Overhead 7.1 MEUR Overhead Figure 10 Strategic Development in Support 24 NSPA Strategic Direction

25 Lines of actions in Support Enhance Human Resources (HR) Management Several key actions revolve around workforce planning and automating associated HR administrative processes. The Agency will incorporate managerial soft skills in post descriptions and make these competencies part of the recruitment process. The Agency has undertaken a critical analysis of its Employee Performance Measurement System (EPMS) with the aim of developing a more valuable and responsive process. The Agency also sees considerable opportunity to automate HR processes and improve their performance. These efforts, combined with continuous improvement initiatives such as the Agency s Corporate Climate Survey, Exit Survey and Recognition Programme, will deliver a world-class human capital process. Improve Information Technology (IT) Capability As part of the Agency s partnership with the NCIA, it will move toward using NCIA as its primary source for common IT requirements and services, including fully leveraging its cloud capability. Other components of the current NSPA IT landscape will be consolidated and optimized. Harmonize & integrate Financial Management The NSPA financial harmonization project will deliver an initial integrated financial process and associated policies to support 2014 budget execution and will continue to be refined through This will include a single ERP platform for the Agency. Achieve Agency Reform Savings The Agency has programmed savings into its planning for to achieve its target of a 20% reduction in Agency overhead costs. The Agency will work toward achieving reductions of 5% per year with no impact on the effectiveness of its provision of services to its customers. NSPA Strategic Direction

26 Management Vision Drive excellence and innovation across Agency operations. Management development 2017 horizon Management Lines of Action Management & Organization Offer pan-agency Integrated Management Capability Review & minimize Agency regulation Develop Organization & Management solutions matrix Process review (lean) Simplify/Remove waste Implement pan-agency Integrated Management & Organization solutions New regulatory framework established Continuous monitoring and reporting of process efficiency and effectiveness Synchronize Management Controlling in 2017 SD 1 context Management Dashboard & Balanced Score Card implemented Fully Operational Continuous improvement Knowledge Management (KM) Agency-wide Quality Management System (QMS) Identify required KM capability Quick wins for KM (e.g. skills/talents capture) Implement Agency QMS Manage Accreditation LL/LI 2 capability Establish behaviours & processes Initiate development of KM IT tools Initial KM capability established Expand KM capability & improve effectiveness Monitor QMS to ensure retention of accreditation Manage Agency Reform Shared Services (SS) engagement Support OSS 3 studies Consider NSPA SS capability offerings Manage migration of adopted services Migrate service provision into NSPA Monitor price and performance of SS provision Monitor & improve SS offerings deliver at Best Value 1 Strategic Direction (SD) 2 Lessons Learned / Lessons Identified (LL/LI) 3 Office of Shared Services (OSS) Figure 11 Strategic Development in Management 26 NSPA Strategic Direction

27 Lines of actions in Support Align Organization & Management The Agency will execute a deliberate process review to create an Integrated Management Capability that will drive optimal organizational alignment and management in support of Phase 3 of the NSPA Implementation (Optimization). The current initiative in the Logistics Operations Business Unit will be expanded to determine the appropriate structures to match the Agency s future capability portfolio. Potential geographical relocations will also be assessed beginning with CEPS in Synchronize Management Controlling The Agency s executive dashboard of 17 top-level metrics will continue to be refined to ensure that the metrics represent the pulse points for business health and success within the Agency. Reinforcing the top-level, the Agency will retain its corporate level Balanced Scorecard to monitor longer term achievement of Agency strategic goals and objectives. Continuous Improvement In developing an Agency-wide management approach it will be essential to ensure that the Agency operates under a robust Quality Management System (QMS). A knowledge management capability will be used to manage the extensive level of personnel knowledge, skills, and document stores. Shared Services Full attention will be applied to synchronize Agency initiatives with the Office of Shared Services to help maximize their contributions to the Agency savings targets. The Agency will position itself, where appropriate, to provide some of the services at best value for NATO. NSPA Strategic Direction

28 NSPA SUPPORT TO PARTNER NATIONS AND INTERNATIONAL ORGANIZATIONS NATO s Strategic Concept identifies cooperative security as one of NATO s three essential core tasks. It states that the promotion of Euro-Atlantic security is best assured through a wide network of partner relationships with countries and organizations around the globe. These partnerships make a concrete and valued contribution to the success of NATO s fundamental tasks. NSPO s mission includes these partners as potential customers of the Agency along with Allies and NATO military authorities. NSPA is dedicated to serve NATO and its Allies and stands ready to respond to their logistics support requirements, including preparing the marketplace to improve better co-operation among nations and non-nato partners through Support Partnerships (SP) and other multinational initiatives, on a case-by-case approval by the Agency Supervisory Board and/or Council and as appropriate. Partner nations currently participate, after required approvals, in the full range of capabilities offered by the Agency. With NATO s goal of increased global partnerships this area of support is expected to increase in the future. 28 NSPA Strategic Direction

29 NSPA 2017 PICTURE Weapon System Support Cradle to Grave Fuel Management Support to Operations Strategic Transport NSPA VISION NATO s premier logistics and services provider team, with an integrated network of logistics capabilities for NATO, and its Nations and partners. Procurement EFFECTIVENESS Management & Support EFFICIENCY NSPA Strategic Direction

30 CONCLUSION This Strategic Direction is the final element of the NATO Support Agency s initial series of key strategy and execution documents. Along with the 2013 Business Plan; 2013 Annual Financial Plan; and the Agency Road Map for Achieving Greater Effectiveness, Efficiency and Savings; the Strategic Direction will guide the evolution of the Agency as its adapts to meet changing requirements of its stakeholders and customers. The Strategic Direction extends the current dialogue and planning out through This timeframe captures the transition of NATO and its Allies from the current environment of large scale combat operations and increasing fiscal austerity, to a future world where NATO s execution of its follow-on mission in Afghanistan will be well underway. In addition, NATO s focus will be on building capability for NATO Forces 2020, achieving Smart Defence objectives, maintaining and transforming NATO s operational capabilities through Connected Forces Initiative where exercises and training will be a priority. To meet these challenges, the Agency will develop the right portfolio of capabilities to meet future needs. This portfolio will be delineated in five capability areas: Weapon Systems Support, Support to Operations, Fuel Management, Strategic Transportation, and Procurement. In each area there are proposed Lines of Action to deliver the key capabilities in each area. The Agency will remain fully engaged with its customers to ensure its plans are fully aligned with NATO and national needs. The Agency must deliver this portfolio of capabilities in the most efficient manner possible to ensure best value products and services to its customers. Supporting processes must be world-class and fully embrace best practices for each supporting function: Finance, Procurement, HR and IT. Focusing the portfolio and Agency resources on the right products and services, and delivering them with efficient processes, with a keen focus on the customer, will produce the savings desired by the Nations. The Strategic Direction is an outline of a road map for the Agency to pursue in future years. It will be a living document that will continuously be updated to reflect the evolving ambitions and requirements of NATO and its Allies. It will be a challenging period but certainly one of tremendous opportunity for NATO to reach its level of ambition. The Agency leadership team understands the importance of full transparency and engagement with the Nations as this Strategic Direction is further developed. While it represents the top-level planning document, stakeholder and customer inputs will help guide the Agency as it turns the Strategic Direction into actionable business and financial planning each year. The team passes on its sincere appreciation in advance for the continued superb support of the Agency s stakeholders and customers. 30 NSPA Strategic Direction

31 P E O P L E Q U A L I T Y STAKEHOLDERS CUSTOMERS EFFECTIVENESS Do right things Portfolio of capabilities Customer focused EFFICIENCY Do things right Alignment/Processes/Policies SAVINGS Cost awareness Decisions based on cost Annual savings targets STAKEHOLDERS CUSTOMERS C O M M U N I C A T I O N Figure 12 NSPA Business Model NSPA Strategic Direction