Air Commodore Rob Woods OBEChief of Staff (Air), Defence Equipment & Support

Royal Air Force

A Warfighters View:

Weapon System Availability – A Collaborative Challenge

The Team…..Air Cdre Rob Woods

MoD DE&S

Gp Capt Simon VicaryMoD DE&S

Mr Ian ManleyMoD DE&S

Mr Richard HamiltonBAE Systems plc

Mr Geraint SpearingMoD DECA

Mr Ian ColeMoD DECA

UK Defence Equipment & Support (DE&S)

“To equip and support our Armed Forcesfor operations now and in the future”

DE&S’s Role• Procure & support equipment, through life, for UK’s Armed Forces for both current & future operations

• MOD’s lead department for commercial activities

• Manage relationships with MOD, the Front Line & Industry

DE&S HQ, MOD Abbey Wood, Bristol, UK

DE&S Budget to Spend 2019/20• £10.8 Billion Core Spend:

− £5.4 Billion for Purchase of New Equipment

− £5.4 Billion for Equipment Support

• £3.9 Billion budget for Air Domain, 56% of which for Support

Air Domain Portfolio

Backdrop for Transformation in Support: 2000-05• Strategic Defence Review 1998

–Smart Acquisition• DLO Strategy

–20% Savings & ‘Transformation Staircase’

• Air & Land End-to-End Review

• Defence White Paper 2004

• Government Efficiency Review 2004

• Formation of DE&S

•Similar lessons learnt over multiple operations; urgent need to improve

• Increasing demand for UK military capability across the globe

•Nature of operations changed

•Need to find efficiencies

– Preserve current & future capability

End-2-End Review of Air & Land Logistics - 2003• Simplified lines & levels of support

- From 4 x Lines of Maintenance to 2 x Levels: Forward & Depth • Creation of Depth Support Hubs for platforms

- Tornado @ Marham and Harrier @ Cottesmore• ‘Contracting for Availability’

- Tornado Future Support - ATTAC Phase 1 & ROCET• Reliable & consistent supply chain

- Reduced in-theatre delivery Op TELIC from 4-7 to 1-2 days; in NW Europe from 28 to 7 days

• Application of ‘Lean’ techniques- Training & migration to Continual Improvement

National Audit Office Report - Jul 2007

“The Department made significant reductions in the cost of support to fast jets; the Tornado and Harrier Project Teams’ costs reduced from total of £711M in 2001-02 to £328M in 2006-07, providing cumulative savings of some £1.4Bn over the 6-year period.”

“The Department has continued to achieve broadly the same level of performance in terms of flying hours throughout the transformation. On this basis, the Department’s transformation of logistics support represents good value for money to date …although there are risks…”

‘Transforming Logistics Support for Fast Jets’

2003-11: Air Efficiency – Target v Achievement

11

2003/04 04/05 05/06 06/07 07/08 10/11

200

100

300

500

400Target

Achieved

DLO/DE&S

Front Line

£M

•

The UK’s Support Transformation Staircase

Today’s Support Solutions• Relationship between DE&S and Industry largely stabilized; ‘post-

Levene’ relationship between DE&S and Air Cmd still in work

• Have developed areas where analysis of Perspectives 1 & 2 match, and increasingly tailored contracts on proven ‘good practice’:– Governance is key: Programme Boards now regularly making tough decisions; SDSR

2015 provided real opportunities to grow capability – CEO DE&S has driven the ‘S’ back in DE&S– Set requirements early on - focus on teamwork, transparency & trust between SROs &

DE&S Delivery Teams– Coherence in Deployed Space, and greater emphasis on Safety

Continuing Efficiencies Realised in SupportAttack Helicopter IOS: 21% savings over 5 years - Dec 14

ATTAC: 18% savings to Out of Service - Jul 16

Hercules IOS: 17% savings over 6 years - Dec 15

Merlin IOS: 20% savings over 5 years - Apr 15

Hawk Support: 8% savings over 4 years -Mar 16

Chinook TLCS:23% savings over 5 years - Jan 15

TyTAN Launch - July 2016

Mr Richard HamiltonManufacturing & Support Director, BAE Systems plc

An Industry View:

Weapon System Availability – A Collaborative Challenge

Typhoon Total Availability Enterprise (TyTAN)• 10-year deal for all aspects of Typhoon operational

support

– Brings together several legacy contracts into one arrangement

– 10 year framework allows industry to make long term investments to optimise support

• Target price 38% lower than previous arrangements

– Unachieveable through “business as usual” negotiation with single-source supplier

• Reinvestment of support savings directly in platform capability development

The Challenge

• Funding stream for UK Typhoon Support insufficient

based on current run rates• Tornado Out of Service Date driving required Typhoon

Capability Enhancements• Operational commitments driving need for improvements

to how Typhoon is operated in the UK Fleet

• Driving recurring support costs down will allow recycling of

c.£0.5bn into capability programmes• Enhanced operational effectiveness of the Typhoon weapon

system to support UK RAF requirements

• Typhoon Export sales dependent upon cost efficiencies being

realised

Reduce Operating

Costs

Reinvest Savings in Capacity

EnhanceTyphoonProduct

Increase Competitive

Advance

SAVE MORE

SPEND MOREDELIVERMORE

DO MORE

For the UK MOD

For BAE Systems

TyTAN – A Step Change in Typhoon Support – Joint Plan

• Agreement signed Jul 2016Replaced existing multiple support contracts with a single output-based availability serviceJointly developed by BAE Systems and MoD under Future Support Operating Model project during 2015/16

• Delivers flying hours, simulator availability and pilot training in support of the Typhoon Force Command Plan

• Transformation programme a critical enablerEnterprise “One Team” integrated approach to ensure success‘Enablers’ are multi-organisational in natureInvestment of cash; energy and leadership

TyTAN Features & Performance Management

FLYING HOURS

NON-FLYING SERVICES

RESILIENCECOST

CONTROL

• Highly integrated enterprise approach (BAES/RAF/DE&S)

• Only one main Performance Indicator - Pay Per Flying Hour

– Simple measure that is used to drive delivery and behaviour

– Other indicators used for management information only

• “Key Resilience Indicators” act as safety net to protect military output and operational flexibility

– e.g. Bank of Hours, Inventory health

TyTAN - Performance Management

OneEnterprise

Flying Hours

Non-flyingServices

Cost Control Resilience

Payment• Flying HourAchievement

Governance•KPI 1 - Training and Mission

Support

•KPI 2 - Airworthiness & Safety

•European OPMI

Transformation• Continuous Improvement

• Recycling for capability

Key Resilience Indicators• KRI 1 - Flying Hour Resilience

• KRI 2 - Supply Chain Resilience

• KRI 3 - Safety & Availability

Modifications Embodiment

Deliver...

Whilst ensuring...

• 10 year, Output Based contract with Price Per Flying Hour (PPFH)

• 40% Savings reinvested into future capability• Output based services (Flying Hours and

Simulator Availability)

• Avionics provider (Leonardo) fully integrated into the Joint Avionics Service (JAS)

• Long term deal providing better incentives for Transformation

• Operates as a single Enterprise (BAES, RAF and DE&S)

Typhoon Total Availability Enterprise (TyTAN)

Enterprise Enablers

25

Enterprise Leadership

2626

TyTAN RSO Typhoon Force Commander

Air Cdre Mark Chappell

No 1 Group Delivery Lead

Deputy Force CommanderGp Capt Jez Milne

DE&S Delivery Lead

Deputy Head FAST – CapSustIan Manley

BAE Systems Delivery LeadUK Support (TyTAN) Delivery

DirectorAlison Ballard

• CP & IYDP• Transformation• Fly the Plan

• Contract Management• European interfaces• Strategic Support Planning

• Service delivery• Transformation• Cost reduction

• FH achieved• Recycling for capability

Relentless focus on:Doing the right thing, at the right time, in the right place

Driving out/avoiding waste Delivering the Command Plan

Joint Governance Structure

2727

2-Star TyTAN Review

TyTAN Senior Perfomance Review &

Quad

Enterprise Operation and Transformation

Review

Fin/Comm Working Group

Operation Performance

Review

Blue Box - Reviews - Service Delivery Team Leads

Ente

rpris

eM

anag

emen

tC

ontr

actM

anag

emen

t6-monthly

Enterprise Strategic

Planning Cell Review

Monthly with every 3rd meeting being 1* Quad

Monthly

MonthlyTyTAN Change Review Board

Transformation Cultural Change – The Challenge

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Changing legacy cultures and behaviours key to TyTAN’ssuccess

Three dimensions of change;BAE Systems – DE&S – Air CommandBAE Systems Front Office vs Back OfficeEuropean Collaboration

Requires all teams to be focused on the priorities of the solution;

Flying Hour & Pilot competencyMaintaining AirworthinessAchieving Transformation & EfficiencyEnabling Recycling for Capability

From Customer / Supplier to Partnering to Enterprise

29

TyTAN – What have we learnt?

Relentless focus on:

Doing the right thing, at the right time, in the right place, with the right behaviours

Driving out / avoiding waste

Delivering the Operational Output

• Early alignment of objectives (around operational output) is crucial

• Re-investment of support savings is a powerful incentive to all

• Trust takes time to build; transformation and cultural change is a c5 year process; long term security is needed to enable investment

• Customer has to change too and work in a highly integrated way with industry for the common good

• Leadership demonstration of changed behaviours essential

• All parties need a mature understanding of each other's business, motivations and cost drivers

Conclusions & Future Relationships• Identify good practice inter-organizationally & adopt it

• DE&S and Industry will continue working together: trust achieved through shared values - ‘win-win criteria’ - clear contracted responsibilities & open communications

• Innovation & coherence - together

• Consider intelligent support on future Foreign Military Sale platforms

• Remain flexible - resources likely to need further balancing

• Make Plan A work; reflect that perhaps there never was a Plan B…

“The Snowplough Test”

Question. Who gets the snowplough out in the morning ?Answer. It’s now our industry partner because……

……..it’s in their interest for us to fly!

Questions…?