Rizzo Reform Program What are we going to Achieve? CDRE Mark PURCELL, RAN Head Rizzo Reform Program

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1 Rizzo Reform Program What are we going to Achieve? CDRE Mark PURCELL, RAN Head Rizzo Reform Program

2 Rizzo Reform Program The Vision: A rebuilt and redesigned effective Maritime Capability Management & Technical Integrity Assurance System that drives seaworthiness and preparedness.

3 Rizzo is an opportunity for Navy Driving the Rizzo reforms through will require focussed leadership and commitment at all levels within Navy and represents both a challenge and a great opportunity. Reinvigorating technical integrity as a core element of our technically advanced capabilities within Force 2030 will require further cultural change. These changes are not about engineering - they are about capability management and they affect us all. VADM R. Griggs, AM, CSC, RAN Australian Defence Magazine Dec 2011 / Jan 2012

4 RIZZO Key Findings Poor whole-of-life asset management; Organisational complexity and blurred accountabilities; Inadequate risk management; Poor compliance and assurance; A hollowed-out engineering capability; Resource shortages in system program offices (SPOs) in DMO; and A culture that places the short-term operational mission above the importance of technical integrity.

5 How are we going to achieve it? RIZZO Review An implementation team of Navy and DMO personnel has been established and is led by CDRE Mark Purcell, RAN; This team is managing the detailed implementation of recommendations in concert with the related ANAO audit of Acceptance into Service of Naval Capability and the Strategic Review of Naval Engineering; and An Implementation Committee, chaired by Mr Rizzo is ensuring that the agreed recommendations are being effectively implemented in a timely way.

6 Capability Management End-to-End Lifecycle A balancing act

7 How are we going to do it? HRRP R24: PMO 1 Lifecycle Management 2 3 Capability Mgt Accountability & Responsibility Rebuild Engineering Total Cost of Ownership Seaworthiness Management Seaworthiness Culture R1: Asset and Sustainment Methodologies R7: Closer Working Arrangements R17: Rebuild Engineering R23: Confirm Maritime Resourcing R13: Integrated Risk Management System R21: Reinstate Cultural Importance of Risk Management R2: Whole of Life R8: Capability Management R14: Technical Compliance R4: Plan for Aging Vessels R5: Industry Partnerships R9: Workforce Planning R19: Engineering Talent R22: Quantify Maint and Eng Backlog R6: Remediate ICT Shortcomings R10: Fleet Command R20: Rebuild FSU Strategic Reform Program Related Reform Program R3: Constrain Kanimbla R11: Mutual Obligations R15: 3rd Party QA Submitted for Closure Dec 2011 R12: Information Exchange R18: Resource AASSPO Lead Recommendation Sustainment Business Model Lead recommendations provide overall structure and direction for work stream Mortimer LPA SwB report KPMG MSA Review R16: AINS ANAO AINS Helmsman Configuration MGT Review & Project Review LPA Operational Pause Report AASSPO Reconstruction AASSPO Fleet Regulatory Review SUCCESS Tech. Investigation SRNE NEWS 7

8 A deliberate, phased journey Evolution Rizzo Reform Journey Current Focus Aug 2012 Dec 2013 Build the Foundation Build High Performance Capability Management and Technical Integrity July 2011 Dec 2011 Address Near-term Priorities and Establish the Program Quantify large cost implications, including quantify and assess criticality of the backlog Quick wins implemented Future policy and organisation requirements determined Business case for Back to Basics phase Jan 2012 Jul 2012 Back to Basics New policies, processes and structured designed with implementation underway New Whole of Life approach designed Clear plan for ageing vessels developed Industry partnerships strengthened Near-term ICT shortcomings remediated New capability management resources defined Components of Engineering function rebuild defined Initiate culture change Maritime resourcing confirmed Full business case for end-state developed, including the high cost initiatives Robust whole-of-life asset management and decision making Simplified organisation with clear accountabilities and a clarified interface between Navy and DMO Holistic, integrated risk management across Defence and DMO Robust and comprehensive compliance and assurance Rebuilt and redesigned engineering function Sufficient trained and experienced resources in DMO SPOs Long-term ICT shortcomings remediated A culture that balances short-term operational mission needs against longterm asset implications and whilst maintaining agreed levels of technical integrity A rebuilt and redesigned effective Maritime Capability Management and Technical Integrity Assurance System that drives seaworthiness and preparedness Masters of the technology we employ informed user, owner, maintainer, customer Time 8

9 Lifecycle Management Project 1 Life Cycle Management Project Summary Project Director: Mr Mr. Scott Tony Huxtable Hindmarsh Project Executive: Mr. Tony Hindmarsh A formal, integrated and disciplined asset and sustainment management approach has been established across Navy, DMO and CDG over the whole of lifecycle, ensuring seaworthiness and preparedness and optimised Total Cost of Ownership Efficient and effective allocation of sustainment resources occurs as capabilities age Increased maturity is evident in Defence's process including the application of asset management and LEAN methodologies when purchasing an asset whole of life decisions are made taking into account all the enablers that contribute to the sustainment of an asset over life of type. detailed configuration baselines exist for all ship/submarines. Rebuilt expertise in ILS Promulgated policy for all stages of Capability Life Cycle Project Governance board covers through life support Efficient contracting mechanisms support broader and longer term contracts that build deeper and continuing industry relationships, whilst retaining competitive tension Navy, DMO and industry are collocated where possible with common goals, metrics and shared information systems An ICT system that provides decision makers with more reliable, timely information about materiel states, driving more effective maintenance and better operational & SPO level engineering Data integrity is improved and is more available for reporting, analysis and control

10 Capability Management Accountability and Responsibility Project 2 Capability Management Accountability and Responsibility Project Summary Project Director: CAPT Simon Woolrych Navy is more aware of its materiel needs and DMO is more aware of how materiel requests support Capability this improved working relationship drives collaboration and better strategic outcomes in design, engineering support, policy, maintenance and supply performance through improved Materiel Sustainment Agreement (MSA) reporting clarified responsibilities between Navy and DMO SPO directors are empowered to deliver performance levels in the MSA MSAs with clearly defined obligations of Navy and DMO supported by performance measures and a reporting framework minimise duplication of effort and gaps in the materiel sustainment process to drive improved engineering support and more effective maintenance Project Executive: RADM Alan DuToit A performance management framework for the MSA that appropriately incentivises both Navy and DMO to adhere to their responsibilities, ensuring improved engineering support and more effective maintenance Strengthen capability management resources to assess the state of the fleet against the MSA including increasing resources available to the capability manager Effective workforce better aligns skills to position requirements, driving improved performance at the operational and support level and more effective maintenance Fleet Command has greater capacity to ensure the operational preparedness of platforms, across both materiel and personnel elements

11 Rebuild Engineering Project 3 Rebuild Engineering Project Summary Project Director: CDRE Keith Malpress Navy Engineering has authority and clear accountability to ensure technical integrity of the fleet Navy inspects and surveys ships, providing greater confidence in the technical integrity of the fleet Rigorous and recurring 3rd party quality assurance of platform seaworthiness, providing independent assessment of technical materiel integrity, generating greater confidence that ships and submarines are fit for service As is the case with Submarines, the material condition of surface ships will be certified/assessed prior to proceeding to the next stage of employment under the FOC in order to provide the FC with assurance that minimum material standards have been met. Project Executive: RADM Michael Uzzell A Seaworthiness Management System that provides CN transparent, rigorous and independent assurance of Safety, Operational Effectiveness and Environmental protection across fleet An Engineering, Maintenance and Supply Support System that is adequately resourced to support platforms in the various stages of the operational cycle defined in the FOC. A program of building engineering talent that enhances the available pool of capable personnel to ensure technical integrity of the Fleet The capability of the Fleet Support Units is rebuilt, and the FSU has a significant formal role in the provision of maintenance support to platforms and repairable items.

12 Total Cost of Ownership Project 4 Total Cost of Ownership Project Summary Project Director: CAPT Ljiljana Bradley Project Executive: RADM Allan du Toit A joint usage and upkeep plan between Navy and DMO outlines the future engineering and maintenance costs for aging vessels providing decision makers with the information necessary to make trade-offs when managing materiel (including the mitigation of Bathtub effects) The maintenance and engineering backlog across the fleet is accurately quantified and costed via an independent audit. Recovery action reduced the backlog and remediate any consequences of maintenance or engineering that was not conducted when required. An agreed baseline of the resources (workforce) required to adequately operate and maintain materiel for the next 10 years. This includes: Choules, New Submarines, LHD, AWD, AASSPO rebuilt Navy Engineering removing the engineering and maintenance backlog across the fleet improving capability management in the groups, whilst not slowing down the DCP remediation for certification, configuration and safety case baselines New Asset and Sustainment Methodologies

13 Integrated Risk Management Project 5 Seaworthiness Management Project Summary Project Director: CAPT Paddy Hodgman Project Executive: RADM Michael Uzzell An integrated risk methodology for maintenance of maritime capability emphasises the vertical link between risk appetite at the enterprise level and its application at the workface; and the horizontal processes necessary to capture the full risk-benefit trade-off. The integrated risk management system has: Enhanced business discipline and internal controls promoting a culture of ethical and accountable behaviours Reduced reactive management time spend on fighting fires through a more consistent early notification of risk threshold alerts A more structured approach to quantifying the overall risk and uncertainty from all factors across the DMO maritime programs and all stages of the program lifecycle A heightened awareness and transparency around material risks and efforts to manage them

14 Seaworthiness Culture Project 6 Seaworthiness Culture Project Summary Project Director: CAPT Michael Sander Project Executive: RADM Trevor Jones A culture exists in Navy and DMO that recognises technical integrity as a key enabler of capability. Operational demands are balanced against maintaining technical integrity Technical integrity is improved across the fleet DATE 14

15 Change Management Approach A structured approach

16 What are we addressing and what will it benefit? Process Acting as capability manager End-to-end Asset and Sustainment methodologies, processes and tools Risk management codified into day-to-day operations Seaworthiness Organisation Assured authorised engineering organisations Clarified organisational interface between Navy and DMO Rebuilt and redesigned Navy engineering function and people capabilities with strengthened accountability Clear reporting and information flows across the organisations Informed trade-offs across both the near and long-term Information Total Cost of Ownership Capability Preparedness Assured, fit-for-service Maritime platforms Right tools to support decision making Technology

17 The reforms will assist with Enterprise Risk Management A Navy that Confidently Goes to Sea Fight & Win at Sea Deliver Capability to Government Attract & Retain our Workforce Continuously Improve Achieve public confidence and trust in Navy s Capabilities

18 QUESTIONS "It is the capacity for maintenance that is the best test for the vigour and stamina of a society. Any society can galvanise for a while to build something, but the will and the skill to keep things in good repair, day in and day out, are fairly rare. (Eric Hoffer)