A.T. Kearney Aerospace & Defense Services Creating tangible and lasting results in Aerospace & Defense
A.T. Kearney s Scope of Expertise A.T. KEARNEY IS A GLOBAL MANAGEMENT CONSULTING FIRM THAT uses strategic insight, tailored solutions and a collaborative working style to help clients achieve high-impact, sustainable results. Since 1926, A.T. Kearney has served both the private and public sectors. Our client work spans vital issues and challenges across the aerospace and defense value chain and for private sector industries, including automotive, consumer and retail, pharmaceuticals and healthcare, financial services, communications and high-tech, energy and processes, transportation and utilities. A.T. Kearney has worked with many of the U.S. Department of Defense s largest programs and helped to increase end-to-end visibility and transparency, reduce complexity, manage risks better and understand overall costs. We are uniquely positioned to assist the DoD across several key areas: Improving program effectiveness and affordability amid continued funding reductions Reducing program acquisition and sustainment costs without sacrificing mission readiness and operational availability Increasing supply-chain cost transparency and balancing the risk across prime and sub-contractors Managing and reducing the complexity of large-scale programs Recapitalizing an aging and obsolescent asset base with a cost-effective approach Upgrading and retaining human capital to meet today s changing and increasingly demanding needs A.T. Kearney AEROSPACE & DEFENSE STRATEGIC SERVICES 1
This unique and powerful combination of A&D-specific industry knowledge and creative and objective perspectives, based on broad multi-industry best practices, enables our teams to provide highimpact yet realistic and implementable solutions for our clients.
We Know Aerospace and Defense OUR TEAMS INCLUDE CONSULTANTS WITH DEEP AND BROAD experience across the aerospace and defense value chain, so we understand the industry s intricacies and unique requirements. Additionally, we draw on the knowledge of our experts from adjacent industries, such as automotive, communications and high-tech, as needed. Our typical approach includes a small team of five to 10 consultants who are staffed based on each client s and each project s unique requirements. Our talented professionals possess world-class skills in several dimensions: Functional (for example, technical discrete manufacturing) Industry Business processes (for example, large-scale program management) Most have one or more advanced degrees from top educational institutions, and have relevant working experience with major companies or public-sector entities before they join A.T. Kearney. In staffing projects, we use this experience and insight to solve our clients needs. Although many of our consultants come with high-level military or government experience, our approach emphasizes applying commercial best practices and insights from outside the defense sector. This unique and powerful combination of A&D-specific industry knowledge and creative, objective perspectives, based on broad, multi-industry best practices, enables our teams to provide clients with high-impact yet realistic and implementable solutions. A.T. Kearney AEROSPACE & DEFENSE STRATEGIC SERVICES 3
We Have Deep Capabilities PROGRAM ACQUISITION AND SUSTAINMENT PERFORMANCE A.T. Kearney is the industry leader in supply-chain management and strategic sourcing. With this expertise, we help our A&D clients address challenges across the acquisition life cycle. By applying leading industry thinking (such as design-to-cost), we also help our clients address cost reduction challenges in both procurement and sustainment, while ensuring that all performance requirements are met. Our capabilities include: Acquisition life cycle Acquisition strategy Should-cost analysis Proposal analysis Performance-based contracting Sourcing Negotiation strategy and analysis Sustainment strategy Cost reduction and cost realism Government furnished equipment (GFE) management Performance-based logistics (PBL) and performance-driven outcomes (PDO) Requirements and portfolio management Risk management 4 AEROSPACE & DEFENSE STRATEGIC SERVICES A.T. Kearney
OPERATIONS EXCELLENCE A.T. Kearney has a long history of assisting clients with their toughest operational challenges. We work with our clients to bring unparalleled analytical rigor in addressing capital projects, commonality and supply chain challenges. Our capabilities include: Capital investment trade-offs Complexity reduction Constraints analysis Subcontractor and vendor optimization Supply chain excellence Materials management Lean production Maintenance improvement Supply chain and logistics effectiveness Value chain improvement BUSINESS TRANSFORMATION A.T. Kearney has the necessary capabilities to help our clients address business trans- formation challenges, including business strategy, technology strategy, and organizational and process improvement. Our capabilities include: Program analysis and management Workforce management and effectiveness Business strategy Business simulation Information technology strategy Independent validation and verification Organizational and process improvement A.T. Kearney AEROSPACE & DEFENSE STRATEGIC SERVICES 5
We Work Differently OUR APPROACH IS PROJECT-ORIENTED AND DELIVERABLES- BASED, WITH A CLEAR END With a unique approach for each situation, we spend considerable time upfront defining what best meets client requirements, crafting an efficient work plan and selecting an optimal team to get the work done. Importantly, each project has a defined end point, and there is no intention to continue on in some loosely defined capacity. Some firms serve government and A&D clients in staff augmentation capacities, complementing short-staffed programs and departments or even worse assuming most of the delivery in critical areas. A recent study by the Defense Business Board highlighted this issue and the misalignment between government and contractor personnel. In this regard, we are different we don t use the initial contract award as an invitation to set up camp and assume an ongoing role in the program. Unless a clearly defined need for our expertise exists, we maintain the relationship at a senior level but step back from active engagement. Our clients highly value this engage, deliver and move on model. 6 AEROSPACE & DEFENSE STRATEGIC SERVICES A.T. Kearney
We Help You Meet Your Objectives Collaboration is the key to our legacy of client success. Every project is different and unique and so is the strategy that will work for your command or agency. What remains constant, however, is our dedication and excellent track record of delivering tangible, positive results. CASE STUDY Supply chain transformation resulting in a 450 percent return on investment A major division of a U.S. defense contractor had grown through mergers and acquisitions, and its supply chain operations were inefficient. The contractor s buying and transaction locations were based on history, rather than strategic alignment or functional impact. While the supply chain was organized as a shared service, it had achieved only limited integration. Government pressure to reduce costs, improve cycle times and enhance risk management meant quick changes were needed. To meet these pressures, we realigned the supply chain organization and processes to increase collaboration between the supply chain and program managers. The workforce shifted to focus more on strategically important roles and higher-impact activities. Overall, the supply chain transformation program achieved a 450 percent return on investment. It significantly surpassed targets for material savings, increased transaction automation and improved employee productivity. A.T. Kearney AEROSPACE & DEFENSE STRATEGIC SERVICES 7
We Help You Meet Your Objectives CASE STUDY Space program proposal evaluation and contract negotiation improves scheduling and performance A.T. Kearney assisted the Air Force program office in a comprehensive evaluation of a proposal. We identified discrepancies and unsupported cost estimates, developed fact-based negotiation strategies, and supported the program office during negotiations. In addition to analyzing the proposal costs, the team helped structure a creative profit-margin incentive structure that offered a true win-win opportunity aligned with program costs, schedules and performance objectives. The net result was a reduction of several hundred million dollars from initial proposal costs. This meant a 19 percent reduction in proposed labor hours while still providing for necessary management reserves to address assembly, integration and test risks. We helped the program office develop standard proposal-evaluation templates and summary dashboards that tracked the proposal across multiple sources and formats. We also maintained constant interaction with the client s key team members to ensure their support, and to accomplish the knowledge transfer of techniques for proposal evaluation. 8 AEROSPACE & DEFENSE STRATEGIC SERVICES A.T. Kearney
CASE STUDY Navy ship fleet commonality strategy reduces costs, improves acquisitions and establishes best practices The U.S. Navy was facing significant challenges, from deteriorating program acquisitions and stalled modernization to delayed program schedules, higher program costs and increased life-cycle support costs. To address these challenges, A.T. Kearney developed an overall strategy for deploying commonality tools and approaches to reduce system complexity and improve cohesion for its targeted ship system. By working with the Navy to tailor commonality concepts and identify savings across the fleet, we helped the U.S. Navy reduce part variation by more than 50 percent and reduce overall total cost of ownership by 30 percent for its targeted ship systems. A.T. Kearney AEROSPACE & DEFENSE STRATEGIC SERVICES 9
We Help You Meet Your Objectives CASE STUDY Armored vehicles: fleet reset and logistics strategy improves life-cycle costs and performance With its fleet of armored vehicles wearing out prematurely due to heavy wartime usage, and with fewer available assets for missions and training, the U.S. Marine Corps called on A.T. Kearney to help develop a more-effective product support, logistics and maintenance strategy. Armored vehicles were getting six years worth of wear in just two years, and the traditional vehicle reset program (complete vehicle overhaul) was too costly and time consuming to apply. A.T. Kearney performed a deep-dive analysis of fleet reset operations, a market study of supply chain alternatives, and a business case analysis. From these analyses, we recommended a new approach for fleet reset, in which vehicles receive targeted maintenance based on technical inspection and reliability analyses. The new approach resulted in several hundred million dollars in savings and reduced lead time by 70 percent or more compared with the traditional reset approach. We also recommended a performance-based logistics (PBL) strategy for key powertrain subsystems. The PBL strategy would result in further savings as it balances tradeoffs among key operational metrics, implementation risks and life-cycle costs; we estimated nearly 20 percent savings in powertrain maintenance costs and improved operational availability. These strategies are now being implemented across the different commands of the U.S. Marine Corps. 10 AEROSPACE & DEFENSE STRATEGIC SERVICES A.T. Kearney
We Offer a Global Network of Industry and Service Experts A.T. KEARNEY S AEROSPACE AND DEFENSE CONSULTANTS ARE PART OF A LARGER GLOBAL TEAM of innovative, insightful and collaborative experts who deliver creative, meaningful and, above all, sustainable results. It s a team of nearly 2,000 management consultants that generates powerful strategic insights to address practical, real-world needs and sees each project through to completion. With deep expertise across a wide range of global industries and a proud legacy of collaboration, we pride ourselves on delivering great outcomes for every one of our clients. Our firm includes top experts in the following industries and service practices: INDUSTRIES Aerospace & defense Automotive Communications and high-tech Consumer products and retail Financial services Public sector Pharmaceutical and healthcare Energy and processes Transportation Utilities SERVICE PRACTICES Complexity management Innovation Manufacturing Marketing and sales Mergers and acquisitions Organization and transformation Procurement & analytic solutions Strategic IT Strategy Supply chain management Sustainability A.T. Kearney AEROSPACE & DEFENSE STRATEGIC SERVICES 11
FOR MORE INFORMATION, PLEASE CONTACT: BOB WILLEN Practice Leader, robert.willen@atkearneypsds.com
A.T. Kearney is a global management consulting firm that uses strategic insight, tailored solutions and a collaborative working style to help clients achieve sustainable results. Since 1926, we have been trusted advisors on CEO-agenda issues to the world s leading corporations across all major industries. A.T. Kearney s offices are located in major business centers in 37 countries. For information on obtaining additional copies, permission to reprint or translate this work, and all other correspondence, please contact: AMERICAS EUROPE ASIA PACIFIC MIDDLE EAST & AFRICA Atlanta Boston Chicago Dallas Detroit Mexico City New York San Francisco São Paulo Toronto Washington, D.C. Amsterdam Berlin Brussels Bucharest Copenhagen Düsseldorf Frankfurt Helsinki Kiev Lisbon Ljubljana London Madrid Milan Moscow Munich Oslo Paris Prague Rome Stockholm Stuttgart Vienna Warsaw Zurich Bangkok Beijing Hong Kong Jakarta Kuala Lumpur Melbourne Mumbai New Delhi Seoul Shanghai Singapore Sydney Tokyo Abu Dhabi Dubai Johannesburg Manama Riyadh A.T. Kearney, Inc. Marketing & Communications 222 West Adams Street Chicago, Illinois 60606 U.S.A. 1 312 648 0111 email: insight@atkearney.com www.atkearney.com Copyright 2010, A.T. Kearney, Inc. All rights reserved. No part of this work may be reproduced in any form without written permission from the copyright holder. A.T. Kearney is a registered mark of A.T. Kearney, Inc. A.T. Kearney, Inc. is an equal opportunity employer.