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DAUPROGRAMMANAGERSTOOL KITTwelfth Edition (Ver 1.0)December 2002

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DAU PROGRAM MANAGERS TOOL KIT

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PREFACE

This 12th Edition of the “Tool Kit” contains a graphic summary of acqui-sition policies and managerial skills frequently required by DoD pro-gram managers. It is a current version of a “Tool Box” that was firstdeveloped by Mr. Charles F. Schied of PMC 92-1. For convenience, it issized for insertion into a 3-hole, 5-1/2” x 8-1/2” “Day Runner.” The infor-mation was extracted from Defense Acquisition University (DAU) coursematerial and is based on the DEPSECDEF memo, subj: Defense Ac-quisition, dated 30 Oct 2002. This memo cancelled DoDD 5000.1, DoDI5000.2, and DoD 5000.2-R, and issued interim guidance. The “Tool Kit”will be revised again when DoDD 5000.1 and DoDI 5000.2 are reissuedin early CY 2003. Material from the DAU Acker Library & Learning Re-source Center was also used.

Users of the “Tool Kit” are reminded that this summary is a guide onlyand should not be used as a substitute for official policy guidance.Periodic review of official policy guidance is recommended.



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ACKNOWLEDGMENTS

As Sponsor of the “Tool Kit” I wish to recognize the following membersof the Defense Acquisition University (DAU) faculty and staff for theirinput to this 12th Edition: Maj Norman Patnode, USAF, of the ProgramManagement and Leadership Department (PML) on the Capital/North-east Regional Campus, who, along with Mr. Bill Bahnmaier, formerly ofDAU, coordinated the input and editing of material from various DAUdepartments; Mr. Eduard Boyd of the Visual Arts Department for hissupport in preparing and editing drafts for printing, and Mr. Greg Caruth,Ms. Debbie Gonzalez, and Ms. Frances Battle of the same Departmentfor their detailed proofing of the final drafts and coordination of printingdetails. Other significant contributors were Mr. John Kelley, PML De-partment; Ms. Leslie Deneault, CM Department; Ms. Miriam Cohe,BCEFM Department; Mr. Richard Kwatnoski, Executive and Interna-tional Department; Mr. John Claxton, Dr. John Snoderly and Mr. GeorgeProsnik of the Curricula Development Support Center; Maj Mark McNabb,USAF, and Dr. Bob Lightsey of the Technology and Engineering Depart-ment, and Mr. Larry Heller of the Logistics Management Department. Ialso want to thank Mr. Tim Shannon, Dean of the Capital/NortheastRegional Campus for both his encouragement and support for this effort.

C.B. CochraneDirector, Center forProgram Management



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TABLE OF CONTENTS

I. Acquisition Management...........................................................1Program Manager’s Bill of Rights....................................................2Acquisition Decision Reviews & Phases.............................................3Acquisition Categories (ACAT).........................................................4Acquisition Strategy Elements.........................................................5Acquisition Excellence Initiatives........................................................6Planning to Support Acquisition Process .........................................7Acquisition Knowledge Sharing System (AKSS)............................7DAB Review Timeline.....................................................................8Information for Decision Reviews.......................................................9C4ISR Interoperability...................................................................10Science & Technology Linkage......................................................11ACTD Initiation Process..................................................................12Acquisition Program vs. ATD & ACTD............................................13Program Structure/Schedule (Example).........................................14International Armaments Cooperation.........................................15-16Resource Allocation Process....................................................17-20Appropriations........................................................................ 21-25Reprogramming............................................................................25Life Cycle Cost Composition........................................................ 26Cost Estimating ........................................................................... 27Performance Measurement........................................................... 28Contracting...............................................................................29-33Defense Industry Business Mgmt.............................................34-39Acquisition Logistics.................................................................40-43Organizational Structure...........................................................44-46Manufacturing Management.....................................................47-50Test & Evaluation (T&E)................................................................51Modeling and Simulation (M&S)................................................52-54Planning and Control................................................................55-61Risk & Trade-Off Analysis.........................................................62-64Technical Performance Measurement...........................................64Systems Engineering Process..................................................65-70Specs, Tech Reviews/Audits,....................................................71-73Configuration Management........................................................74-76Software Management..................................................................77Working Groups.......................................................................78-80



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II. Leadership & Managerial Skills..................................................81Delegation...............................................................................82-83Effective Meetings........................................................................84Personal Communications........................................................85-86Time Management...................................................................86-87Decision Briefing...........................................................................88Management Tools & Techniques...............................................89-90

III. Problem Solving Tools.........................................................91Brainstorming..........................................................................91-92Cause and Effect Diagram...............................................................93Force Field Analysis......................................................................93Histogram.....................................................................................94Scatter Diagram...........................................................................94Surveys.......................................................................................95Affinity Diagram......................................................................96-97Pairwise Ranking......................................................................98-99Pareto Chart.................................................................................99Benchmarking..............................................................................100Flowcharting...........................................................................101-103Nominal Group Technique (NGT).............................................104-105Problem Solving.....................................................................106-108Gantt Charts...............................................................................109



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IACQUISITION MANAGEMENT

• Things that make you go “Hmmm?...”

“The only thing most auditors fix is the blame.”

“Experience is something you got just after you needed it.”

“People are smarter than they look; listen to them.”

“The last 10 percent of the performance sought generates one-third of the cost and two-thirds of the problems.”

“Never open a can of worms unless you want to go fishing.”

“Those who believe it cannot be done will you please get out of the way of those who are busy doing it.”

• Things we should always remember.

“Be honest in everything you say, write and do.”

“Be good to your people, and they will be good to you.”

“Forgiveness is easier to obtain than permission.”

“Keep everyone informed; when in doubt, coordinate.”

“Be the first to deliver bad news.”

“Bad news does not get any better with time.”

“If you are sitting at your desk, you are not managing your program.”



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THE PROGRAM MANAGER’S BILL OF RIGHTSAND RESPONSIBILITIES

RIGHTS:

Program Managers have the RIGHT to:• A single, clear line of authority from the Defense Acquisition Executive.• Authority commensurate with their responsibilities.• Timely decisions by senior leadership.• Be candid and forthcoming without fear of personal consequences.• Speak for their program and have their judgments respected.• The best available training and experience for the job.• Adequate financial and personnel resources.

RESPONSIBILITIES:

Program Managers have the RESPONSIBILITY to:• Accept program direction from acquisition executives and implement it expeditiously and conscientiously.• Manage their programs to the best of their abilities within approved resources.• Be customer-focused and provide the user with the best, most cost-effective systems or capabilities.• Innovate, strive for optimal solutions, seek better ways to manage, and provide lessons-learned to those who follow.• Be candid about program status, including risks and problems as well as potential solutions and likely outcomes.• Prepare thorough estimates of financial and personnel resources that will be required to manage the program.• Identify weaknesses in the acquisition process and propose solutions.


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Pre-SystemsAcquisition

Technology Opportunities &User Needs

PRODUCTION & DEPLOYMENTOPERATIONS& SUPPORT

FULL-RATEPRODUCTION &DEPLOYMENT

LRIPCONCEPTEXPLORATION

CONCEPT & TECH DEVELOPMENT

TECHNOLOGY DEVELOPMENT

SYSTEM DEVELOPMENT & DEMONSTRATION

SYSTEM DEMONSTRATION

SYSTEM INTEGRATION

FRPDECISIONREVIEW

CRITICALDESIGNREVIEW

C IOCB

Systems Acquisition(Demonstration, Engineering

Development, LRIP & Production)

DEFENSE ACQUISITION DECISION REVIEWS & PHASES

FOC

Increment III

Increment II

Sustainment

Single Step orEvolution to Full

Capability

Sustainment DisposalA



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• DAB Review• Designated by DAE• Decision by DAE

• Component Review• Designated by DAE• Decision by Svc Sec/CAE

• ITOIPT Review• Designated by ASD(C3I)• Decision by ASD(C3I)

• Component Review• Designated by ASD(C3I)• Decision made by Comp. Chief Information Officer

• Does Not Meet ACAT I Criteria• Designated by Svc Sec/CAE• Decision by Svc Sec/CAE

• Does Not Meet ACAT I, IA or II Criteria• Designated IAW Component policy• Decision at lowest appropriate Level

• Not otherwise designated ACAT I, IA, II or III• Designated IAW Component Policy• Navy/USMC ACAT IVT/IVM• Decision at lowest appropriate level

ACAT 1D:

ACAT IC:

ACAT IAM:

ACAT IAC:

ACAT II:*

ACAT III:

ACAT IV:

Major DefenseAcq Pgms

Major AISAcq Pgms

MajorSystems

All Others(except for Army Navy, USMC)

ArmyNavyUSMC

ACQUISITION CATEGORIES (ACAT)

See AR 70-1 (Army)& SECNAVINST 5000.2B(Navy and Marine Corps)

No FiscalCriteria

$140M RDT&E or$660M Procurement(FY00 Constant $)

$378M Life Cycle Cost or$126M Total Prog. Costor $32M Prog. Cost inany single year(FY00 Constant $)

$365M RDT&E or$2.190B Procurement(FY00 Constant $)

*Army has an ACAT IIA for AIS reviewed at Army CIO level



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ACQUISITION STRATEGY ELEMENTSInterim Defense Acquisition Guidebook, 30 Oct 2002

• Requirements– Approved Source Docs– Status of In-process Source Docs

• Program Structure• Acquisition Approach• Risk• Program Management

– Resources• Advance Procurement• PMO Staffing & Support

– Info Sharing & DoD Oversight– IDE– Tech Reps at Contractor Facilities– Government Property In Possession of Contractors

– Tailoring & Streamlining• Requests for Relief or Exemption• Applying Best Practices

– Planning for Simulation-Based Acquisition and Modeling & Simulation

– Independent Expert Review of Software Intensive Programs

• Design Considerations– Open Systems– Interoperability

• Information Interoperability• Other-than Info Interoperability

– IT Supportability– Protection of Critical Program Info & Anti-Tamper Provisions

– Information Assurance• Support Strategy

– Product Support• Management Planning• Integration

– Source of Support• Contractor Log Support• Acq Cross-Servicing Agreements

– Human Sys Integration– Environ Safety & Occupational Health– Demil & Disposal– Life Cycle Support Oversight– Post Deployment Evaluation

• Business Strategy– Competition

• Fostering a Competitive Environment

– Competition Advocates– Ensuring Future Competition

• Building Competition Into Strategies

– Acquisition Phases– Evolutionary Acquisition– Industry Involvement

• Potential Obstacles– Exclusive Teaming– Sub-Tier Competition

• Potential Sources– Market Research– Commercial & NDI– Dual-Use Tech & Comm Plants– Industrial Capability

• SBIR Technologies– International Cooperation

• Cooperative Strategy• Interoperability• Compliance• Testing Required for Foreign

Military Sales– Contract Approach

• Major Contracts Planned• Contract Type• Contract Incentives• Performance Mgmt• Integrated Baseline Reviews• Special Terms & Conditions• Warranties• Component Breakout

– Leasing

• Core Logistics Analysis/Source of Supply Analysis

• Competition analysis (depot-level maint)• C4ISP issues summarized

From DEPSECDEF 30 Oct 02 memo, Defense Acquisition, Attach-ment 2, Operation of the Defense Acquisition System, Tab C.



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ACQUISITION EXCELLENCE INITIATIVES(Examples)

• Update/streamline the DoD 5000 Acquisition Process• Integrated Product and Process Development and Integrated Product Teams• Movement from Detailed Design Specifications and Process Standards to Performance and/or Commercial Specifications• Single Process Initiative• DoD Cost/Schedule Control System Criteria Replaced by Industry Standard Guidelines for Earned Value Management System (EVMS)• Commercial and Non-Developmental Item Acquisition and Practices• Cost As an Independent Variable (CAIV)• Open Systems Design and Interoperability• Acquisition Knowledge Sharing System (AKSS)• Defense Acquisition Pilot Programs• Implementation of Federal Acquisition Streamlining Act (FASA), Federal Acquisition Reform Act (FARA) and Information Technol- ogy Management Reform Act (ITMRA); (latter two are now known as Clinger-Cohen Act)• Electronic Commerce/Electronic Data Interchange• Collection and Use of Past Performance Information• Advanced Concept Technology Demonstrations (ACTD)• Acquisition Reform Benchmarking Initiative• Acquisition Workforce Personnel Demonstration Program• Contract Administration Reform• Procurement Process Reform• Performance Based Service Contracting• Logistics Transformation/Performance-Based Logistics• Alternative Disputes Resolution• Price Based Acquisition• Total Ownership Costs (TOC)



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PLANNING TO SUPPORT ACQUISITION PROCESS• Planning to support the acquisition process is accomplished within the Integrated Product and Process Development (IPPD) environment.• Program plans are for use by the PM and the integrated product

teams (IPTs) that support the PM and are discretionary.• There are four exceptions where specific plans are required:

Acquisition Plan required by the FAR/DFARS; Program ProtectionPlan; Command, Control, Communications, Computers and Intelli-gence, (C4I) Support Plan and TEMP -- the latter three are requiredby interim DoD 5000 guidance.

• Typically, the following areas will require some level of programoffice planning:

- Acquisition Strategy (page 5) - Risk Management- Systems Engineering - Computer/Software Devel/PDSS- Logistics Support/Post Prod Spt - Human Systems Integration- Program Protection - Deployment/Fielding- Training Development - Manufacturing- Technology Assessment & Control - Integrated Testing

ACQUISITION KNOWLEDGE SHARING SYSTEM(AKSS)

Legacy Deskbook

Frequently Accessed Links: DoDD 5000.1 (Interim), DoDI 5000.2(Interim), DCMA One Book, Interim GuideBook, FAR & DFARS,DCAA Manual Vol. 1, DCAA Manual Vol. 2 and FMS Manual.Collaborate & Share: Communities of Practice including CommunityCentral, Systems Engineering, Program Management, Contract Man-agement, Risk Management and Total Ownership Cost.

Order CDAsk a ProfessorDoD Forms Program

Manage Your Documents

Link to Other AT&L Sites Policy Documents: DoD, Army,Navy, Air Force, Marines, etc.Process/Topics:ESOH,Intn’l FMS, Other Transactions

Career Field: PM,Procurement, QA,Logistics, T&E, Other

Education & Training

The Following Quick Links and Information Browsers can be found onthe AKSS Web Site: http://deskbook.dau.mil/jsp/default.jsp

AKSS



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DAB TIMELINE MILESTONES B, C & FRPDR

Overarching Integrated Product Team (OIPT) Meetings

• ADM - Acquisition Decision Memorandum• CAIG - Cost Analysis Improvement Group• CARD - Cost Analysis Requirements Description• DAB - Defense Acquisition Board• FRPDR - Full-Rate Production Decision Review• JRB - Joint Requirements Board• JROC - Joint Requirements Oversight Council• LCCE - Life Cycle Cost Estimate(s)

3-4 WEEKS

JRBReview

2 WEEKS

2 WEEKS

CAIG briefsPreliminary

LCCE

DraftCARDto CAIG

30 DAYS

45 DAYS

180 DAYS

21 DAYS

DAB

OIPTReview

JROCReview

CAIGBriefs final

LCCE

TEMP toUSD(AT&L)/

DOT&E

MILESTONE DECISION INFORMATION —A POSSIBLE CONSTRUCT

WHY ? WHAT ? HOW ?

RISKS ? COST ? MANAGEMENT ?

AGREEMENT ?

1 2 3

4 5 6

7ü Have I Presented All Necessary Information ?

ü Does the Info Flow Logically ?

ü Is the Info Clear and Accurate ?

ü Is it Concise, Executive-Level ?

• Threat• Capability

• Requirement• Analysis of Alternatives • Acquisition Strategy

• Risk Mgmt Plan• T&E Plan

• T&E Results

• CAIV Objectives• LCCE

• ICE

• PMO Structure• IPT Structure

• WIPT - OIPT Structure

• APB• ADM

• Exit Criter ia

Milestone

FinalCARDto CAIG



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Milestone/ReviewRequired Information A B C FRP X X X X

X X XX X XX X

XX

XX

XX X

XX X XXX XX X X

X X XX XX XX XX

X X XX XX X XX X

XX

X X XX

XX

X XX X X

XX XX X XX XXX XX X XX XX X X

INFORMATION FOR DECISION REVIEWS

Note 1. Also summarized in acquisition strategyNote 2. OSD T&E Oversight programs onlyNote 3. ICD, CDD & CPD replace MNS & ORDNote 4. If no Milestone B, submit at Milestone CNote 5. Program Initiation for Ships

Acquisition Decision Memorandum (ADM) (Note 5)Acquisition Program Baseline (APB) (Note 5)Acquisition Strategy (See page 5)Affordability AssessmentAnalysis of Multiple ConceptsAnalysis of Alternatives (AOA) (Note 4)Beyond LRIP Report (note 2)Capabilities Development Document (CDD) (Note 3)Capabilities Production Document (CPD) (Note 3)C4I Support Plan (Notes 1 & 5)C4I Supportability CertificationClinger-Cohen Act Compliance (MAIS) (Note 5)Competition Analysis (depot-level maintenance rule) (Notes 1 & 5)Compliance with Strategic PlanComponent Cost Analysis (MAIS; optional MDAP) (Note 5)Consideration of Technology IssuesCooperative Opportunities (Note 1)Core Logistics/Source of Repair Analysis (Note 1)Cost Analysis Requirements Description (MDAP & MAIS) (Note 5)Economic Analysis (MAIS)Exit Criteria (Note 5)Industrial Capabilities (n/a AIS) (Note 1)Independent Cost & Manpower Estimate (MDAPs; n/a MAIS)Independent Technology Assessment (ACAT ID only)Initial Capabilities Document (ICD) (Note 5)Interoperability CertificationIT Certification (MAIS)Live Fire T&E Waiver (covered systems)(note 2)Live Fire T&E Report (covered systems)(note 2)LRIP Quantities (n/a AIS)Market ResearchOperational Test & Evaluation ResultsPost Deployment Performance ReviewProgram Protection Plan (Note 1)Pgm Environ, Safety & Ocup Health (w/NEPA schedule) (Note 5)Registration of Msn Critical & Msn Essential Info Sys (Note 5)Spectrum Certification Compliance (Note 4)System Threat Assessment (n/a AIS)Selected Acquisition Report (MDAPs)Technology Readiness Assessment (Note 5)Test & Evaluation Master Plan (eval strategy due MS A)


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C4ISR INTEROPERABILITYDoD Policy: (CJCSI 6212.01B)

DISA: Defense Information Systems AgencyJITC: Joint Interoperability Test Command

Recommends:• Certify• Certify with Comments• Not Certify

Requirements CertificationCINC/

Service/Agency

JointStaff

JointStaffDISA

Interoperability Certification

• Supports clarification of Interoperability test issues• Witnesses/conducts Interoperability tests

Interoperability Certification

CINC/Service/Agency

TEMP/Test Results DISA/JITC

RequirementsCertification

MNS*ORD*

Certification

* MNS and ORD will be replaced with ICD, CDD and CPD when CJCSI 3170.01B is revised in CY 2003.

• All C4I systems developed for use by U.S. forces are considered to be for Joint use.• All C4I requirements shall be reviewed/updated at every milestone.• Joint Staff will certify all requirements documents for conformance with Joint C4I Policy & Doctrine, architectural integrity, and Interoperability standards.


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11 MDADECISION

oversightpanel

Adv Tech Dev (6.3)

ACTDATDLab/field demoWarfighting Experiments

Warfighting Needs&

R&D Objectives

Tech Base (6.1/6.2)

Basic Research Applied Research

oversightpanel

STOP

STOP

Systems

S&T

Options

(1)Concepts for new systems/upgradesystems out of production.

(2)Insert into ongoing systems development,or complete ACTD development.

(3)Upgrade system in production/fieldedsystems, or produce mature ACTD.

(4)Use of new technology for demilitarization/disposal.

S&T LINKAGE TO DEFENSE ACQUISITION PROCESS

(1) (2) (2) (3) (4)(3)PRODUCTION & DEPLOYMENT

OPERATIONS &

SUPPORT

FULL-RATEPRODUCTION & DEPLOYMENT

LRIPCONCEPTEXPLORATION



SYSTEM DEV & DEMONSTRATION


SYSTEM INTEGRATION

FRPDECISIONREVIEW

CRITICALDESIGNREVIEW

C IOCBA


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ACTD INITIATION PROCESS

Breakfast Clubbriefing/

assessment

DUSD(ASC)Review

JROCbriefing/

assessment

Overallprioritization/approval

(USD(AT&L)-VCJCS)

JWCA

ACTDConceptTechnology Inputs

ServicesAgenciesIndustry

Allies

JROCJWCACINCsServices

Needs

DeveloperSponsor


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ACAT: Acquisition CategoryDT/OT: Developmental/Operational TestingDUSD(AS&C): Deputy Under Sec Def (Advanced Systems & Concepts)FAR: Federal Acquisition Regulation

Motivation

Requirement

Oversight

FundingACATConfiguration& TestingRulesRole of User

Acquisition Program• Develop, produce and field system• Cost, schedule, performance

MNS/ORD*Milestone Decision

Authorityfully FYDP funded

all ACATssystem/subsystemprototypes DT/OT

DoD 5000 Series/FARmax involvement

Advanced Technology Demonstration (ATD)• Demonstrate feasibility and maturity• Reduce technical risks and uncertainties at relatively low cost

not required

RDT&Enot ACAT effort

technologydemonstrations

informal/FAR/OTAsome involvement

FYDP: Future Years Defense ProgramMNS: Mission Need StatementORD: Operational Requirements DocumentOTA: Other Transition Authority

ACQUISITION PROGRAM VS. ATD & ACTD

DUSD(ASC) Oversight Panel(Breakfast Club)

RDT&E (2 yrs in field)not ACAT effort

tech demonstrations in fieldenvironment with users

implementation directive/FAR/OTAmax involvement

Advanced Concept Tech Demonstration (ACTD)• Gain understanding of and evaluate utility prior to acquisition decision• Develop concepts of operation and doctrine

labs/R&D centers

user sponsor & JROC prioritization

* MNS and ORD will be replaced with ICD, CDD and CPD when CJCSI 3170.01B is revised in CY 2003.


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PROGRAM STRUCTURE/SCHEDULE (EXAMPLE)

ContractAward

RDT&EProcurementO&MMILCON

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

CE TDSys Integ Sys

Demo

System Devel & Demo

C&TD

AB

PrototypeCompetition

CDRFRPC IOC

Incr 2SD

B FRP IOC

FRP IOCCB

SI SD LRIP PROD Incr 2PROD

Incr 3SD

Incr 3PROD

C

DecisionReviews& Phases

TechnicalReviews

(as needed)

Developmental& Operational

Testing

DeliveriesOT

FOT&E

EDMEOA

LRIP Production

LRIP Full-Rate Prod & Depl Sustainment/Disposal

Incr 2

Incr 3

(eng dev models)

DT&E

LFT&E

IOT&E

C&TD

ASR CDR PCAPCAPDRSRR SFR FCA/SVR

Prod & Deployment Operations & Support

CDR PCA



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DoD INTERNATIONAL ARMAMENTSCOOPERATION POLICY

SECDEF Memorandum 23 March 1997“It is DoD policy that we utilize International Armaments Coop-eration to the maximum extent feasible, consistent with soundbusiness practice and with overall political, economic, techno-logical, and national security goals of the United States.”

THE SCOPE OF DEFENSE COOPERATIONProduction &

RDT&E Procurement Follow-on SupportInformation Foreign Military Sales Cooperative LogisticsExchanges Supply Support

Engineer & Direct Commercial Sales Mutual SupportScientist Exchanges Exchanges

Cooperative R&D Cooperative Production Logistics Support(Joint Funds)

Comparative or Coproduction/Licensing Host Nation SupportJoint Testing (ForeignFunds) Defense Industrial

BaseStandardization Reciprocal Procurement

The Program Manager’s Focus



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INTERNATIONAL ACTIVITIES ASSOCIATED WITHDEFENSE ACQUISITION PHASES

Cooperative Production Coproduction Licensed Production Production Sharing Foreign Military Sales

Technology Opportunities& User Needs

NATO ForumsDEAs/IEPsStaff TalksS&E Exchanges

CooperativeDevelopmentIntl. Testing

Concept &Technology Development

System Demonstrationof SDD Phase

Production &Deployment,Sustainment

DEFENSE SALES VS. COOPERATIVE ACQUISITIONThey are Different

• Defense Sales• Any Nation• U.S. Contracts (FMS)• U.S. Manages (FMS)• Production & Support• DoS or DoC + DoD - USD (Policy)• Foreign Initiated• Foreign Funds (or U.S. Credit/Grants)

• Cooperative Acquisition• Allied or Friendly• U.S., Ally or NATO• Jointly Managed• All Acquisition• DoD - USD (A&T) + DoS and DoC• U.S. and/or Foreign• Foreign + U.S. Funds

Note: DEA = Date Exchange Agreement IEP = Information Exchange Project


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RESOURCE ALLOCATION PROCESS - OVERLAPCOMPRESSED POM/BUDGET CYCLES

CY02 CY03 CY02J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

FY04

FY05

FY06

Planning Enactment Execution

Planning Enactment Execution

FY02

FY03

Programming &Budgeting

*Previously a sequential programming/budgeting process

POM FY06-11Budget FY06-07

FY02 & prior

Execution

Enactment Execution

FY03 FY03 & priorProgramming &

Budgeting

*Programming &Budgeting

POM FY04-09Budget FY04-05

DPGFY04-09

POM FY05-09Budget FY05

FY04 &prior

Planning

FY04 FY04 & prior

DPG FY 05-09 FY005

DPG FY06-11


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JPD: Joint Planning DocumentNMS: National Military StrategyCPR: Chairman’s Program RecommendationDPG: Defense Planning GuidanceNSS: National Security Strategy

PPBS - PLANNING PHASE

FEB MAR SEP FEB MAR APR/MAY

NMS

SECDEF

JPD DRAFTDPG

DPG

CPR

CJCSJoint Staff/OSDCmbt CmdsDepts/Agencies

PresidentNational Security CouncilCIA/DIA/CJCS/OSD

NSS

1st Year 2nd Year

Joint Staff/OSDCmbt CmdsDepts/Agencies


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PPBS - PROGRAMING/BUDGETING PHASE

AUG SEP OCT NOV DEC JAN

DoD Components(Military Depts,

Defense Agencies &Others)

OSD

JointStaff

POM

BES OSD

FYDP

DPGcompliance

Issues

CPA

Questions/Hearings

PDM

DoD Components - PEO - PMAnswer/Reclama

FYDP

PRG/DRB

meetings

PBMBIPBD’s

1st PBD FInal PBD

POM: Program Objectives MemorandumBES: Budget Estimate SubmissionDPG: Defense Planning GuidanceCPA: Chairman’s Program AssessmentPBD: Program Budget DecisionMBI: Major Budget IssuesPB: President’s BudgetPDM: Program Decision MemorandumDRB: Defense Resources BoardPRG: Program Review Group



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RESOURCE ALLOCATION PROCESSEnactment

DoD

President& OMB

Congress AuthorizationCommittees

AppropriationCommittees

Testimony Appeals

Authorization/AppropriationConference(Acts Passed)

Phase I:

PPBS

President’sBudget

Apportionment

Allocation/Execution

Phase IV:

BudgetCommittees

Phase III:

CONGRESSIONAL ENACTMENT TIMETABLE

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT15 15

BudgetResolution

House

Senate

House

Senate

House

Senate

Authorization

Appropriation

PressBudget Committee Inputs

FloorHRINGS MARKS FLOOR

HRINGS MARKS FLOOR Floor

BILL / RPT HASC HRINGS MARK-UP FLOOR FLOOR

CONF ACT /RPT ^

SASC HRINGS MARK-UP FLOOR FLOOR BILL / RPT

BILL / RPT HAC HRINGS MARK-UP FLOOR FLOOR

CONF ACT /RPT ^

SAC HRINGS MARK-UP FLOOR FLOOR BILL / RPT

CONF RESOLUTION ̂

“TARGET”FISCALYEAR



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- 2031

- 2032

- 2033

- 2034

- 2035

- 1506

- 1507

- 1508

- 1611

- 1810

- 1109

PROCUREMENT APPROPRIATIONS(ACCOUNT NUMBERS AND BUDGET ACTIVITIES)

Appropriation Budget Activity

1. Aircraft 2. Modification of Aircraft 3. Spares &Repair Parts 4. Support Equipment & Facilities

1. Other Missiles 2. Modification of Missiles 3. Spares& Repair Parts 4. Support Equipment & Facilities

1. Track Combat Vehicle 2. Weapons & Other CombatVehicles 3. Spares & Repair Parts

1. Ammo 2. Ammo Production Base Support

1. Tactical & Support Vehicle 2. Commo & ElectronicsEquipment 3. Other Support Equipment 4. Spares& Repair Parts

1. Combat Aircraft 2. Airlift Aircraft 3. Trainer Aircraft4. Other Aircraft 5. Modification of Aircraft 6. AircraftSpares & Repair Parts 7. Aircraft Support Equipment& Facilities

1. Ballistic Missiles 2. Other Missiles 3. Torpedoes &Related Equipment 4. Other Weapons 5. Not Used6. Spare & Repair Parts

1. Ammo, Navy 2. Ammo, Marine Corps

1. Fleet Ballistic Missile Ships 2. Other Warships3. Amphibious Ships 4. Mine Warfare & Patrol Ships5. Auxiliary, Craft & Prior Year Costs

1. Ship Support Equipment 2. Commo & ElectronicsEquipment 3. Aviation Support Equipment4. Ordnance Support Equipment 5. Civil EngineerSupport Equipment 6. Supply Support Equipment7. Personal & Command Support Equipment8. Spares & Repair Parts

1. Not Used 2. Weapons & Combat Vehicles 3. GuidedMissiles & Equipment 4. Commo & ElectronicsEquipment 5. Support Vehicles 6. Engineering& Other Equipment 7. Spares & Repair Parts

Army (21 -)Aircraft

Missile

Weapons

Ammo

Other

Navy (17 -)Aircraft

Weapons

Ammo

Shipbuilding& Conversion

Other

Marine Corps (17 -)

Procurement



22

- 3010

- 3020

- 3011

- 3080

- 0300

- 0350

- 0360

- 0390

Appropriation Budget Activity

PROCUREMENT APPROPRIATIONS(ACCOUNT NUMBERS AND BUDGET ACTIVITIES)

(Continued)

Air Force (57 -)Aircraft

Missile

Ammo

Other

Defense (97 -)Defense-Wide

National Guard & Reserve Equipment

Defense Production Activity Purchase

Chemical Agents & Munitions Destruction

1. Combat Aircraft 2. Airlift Aircraft 3. TrainerAircraft 4. Other Aircraft 5. Modification of In-Service Aircraft 6. Aircraft Spares & Repair Parts7. Aircraft Support Equipment & Facilities

1. Ballistic Missiles 2. Other Missiles 3. Modificationof In-Service Missile 4. Spares & Repair Parts5. Other Support

1. Ammo 2. Weapons

1. Not Used 2. Vehicular Equipment 3. Electronics &Telecommunications Equipment 4. Other BaseMaintenance & Support Equipment 5. Spares &Repair Parts

1. Major Equipment 2. Special Operations Command3. Chemical/Biological Defense

1. Reserve Equipment 2. National Guard Equipment

1. Defense Production Activity Purchases

1. Chemical Agents & Munitions Destruction-RDT&E2. Chemical Agents & Munitions Destruction-Procurement 3. Chemical Agents & MunitionsDestruction-O&M



23

MFP 6 RDT&E R&D Budget Category Activity

RDT&E APPROPRIATIONSRelationship Between MFP 6 (Research and Development)Categories and RDT&E Appropriations Budget Activities

RDT&E APPROPRIATIONS(ACCOUNT NUMBERS)

ProgramElement #s

RDT&EBudget Activity Title

6.1 BA 1 Basic Research 0601xxx6.2 BA 2 Applied Research 0602xxx6.3 BA 3 Advanced Technology Development 0603xxx6.4 BA 4 Demonstration & Validation 0604xxx6.5 BA 5 Engineering & Manufacturing 0605xxx6.6 BA 6 RDT&E Management Support 0606xxx --- BA 7 Operational System Development 010xxxx;

020xxxx;030xxxx; etc.

* NOTE: Although similar, titles of the Major Force Program (MFP) 6 Categories(which are not shown above) are not exactly the same as titles of the RDT&EAppropriation Budget Activities. In addition, as indicated by the potential PEnumbers that can be assigned to the “Operational System Development” BudgetActivity for RDT&E BA 7, those activities are not considered MFP 6 efforts. Whilecorrectly funded with RDT&E dollars, these efforts do not fall under a MFP 6Category; rather, for MFP purposes, the efforts are considered part of the MajorForce Program within which the fielded operational system falls.

Appropriation Account NumberRDT&E, Army 21 - 2040RDT&E, Navy 17 - 1319RDT&E, Air Force 57 - 3600RDT&E, Defense Wide 97 - 0400Development T&E, Defense 97 - 0450Operational T&E, Defense 97 - 0460



24

SAMPLENAVY APPROPRIATIONS AND BUDGET ACTIVITIES

* Note: Below Threshold Reprogramming (BTR) amount limits are cumulative over entire period of time the specific fiscal year appropriation is available for obligation purposes (i.e., 1, 2, 3 or 5 years).

PROCUREMENT

SCN-1 Ship Conv - FBM Ships $10M Greater of 5 FullSCN-2 Ship Conv - Other Warships $10M orSCN-3 Ship Conv - Aphib Ships 20% ofSCN-4 Ship Conv - Mine & Pat Ships amountSCN-5 Ship Conv - Aux, Craft & PY Costs appropriated

WPN-1 Weapons Proc. - Bal. Msl 3WPN-2 Weapons Proc. - Other MslWPN-3 Weapons Proc. - Torp & Eq.WPN-4 Weapons Proc. - Other WpnWPN-5 Weapons Proc. - Other Ord.WPN-6 Weapons Proc. - Spares & Repair Parts

OPN-1 Other Proc. - Ship SEOPN-2 Other Proc. - Comm/Elec EqOPN-3 Other Proc. - Aviation SEOPN-4 Other Proc. - Ordnance SEOPN-5 Other Proc. - Civil Engr SEOPN-6 Other Proc. - Supply SEOPN-7 Other Proc. - Pers & Com SEOPN-8 Other Proc. - Spares & Repair Parts

APN-1 Aircraft Proc. - CombatAPN-2 Aircraft Proc. - AirliftAPN-3 Aircraft Proc. - TrainerAPN-4 Aircraft Proc. - OtherAPN-5 Aircraft Proc. - ModsAPN-6 Aircraft Proc. - SparesAPR-7 Aircraft Proc. - SE & Fac.

Below Threshold Years Available Reprogramming Rules for Obligation Funding

Other Appropriations / Titles Max In Max Out Purposes Policy

O&M, N Operations & Maintenance $15M No Congressional 1 AnnualRestriction

MILPER, N Military Personnel $10M No Congressional 1 AnnualRestriction

MILCON, N Military Construction Lesser of No Congressional 5 Full +$1.5M or 25% Restriction Appropriated

6.1 BA 1 Basic Research $4M Greater of 2 Incremental6.2 BA 2 Applied Research $4M or6.3 BA 3 Advanced Tech. Devel. 20% of6.4 BA 4 Demonstration & Val amount6.5 BA 5 EMD appropriated6.6 BA 6 RDT&E Mgmt Supp

(T&E Ranges) (Civilian Salaries)

BA 7 Operational Systems Devel. (Post-Production)

Procurement Below Threshold Years AvailableBudget Buget Activity Reprogramming Rules for Obligation FundingActivity Description Max In Max Out Purposes Policy

[At Line Item Level]

MFP 6 Below Threshold Years Available R&D RDT&E Budget Activity Reprogramming Rules For Obligation FundingCategory Number and Title Max In * Max Out * Purposes Policy

[At Program Element Level]



25

LINE ITEM

BELOW THRESHOLD REPROGRAMMING ACTIONS

APPN MAX INTO MAX OUT LEVEL OF CONTROL OBL AVAIL

Reference Sources: DoD Financial Management Regulation (DoD 7000.14-R); Volume 3, Ch 6 (Aug 2000).

BUDGET ACTIVITYSOME BA 1 SUB- ACTIVITY

LIMITATIONS ON DECREASES(OPERATING FORCES)

LESSOR OF+ $ 2M

+ 25%

3 YEARS(SCN: 5 YEARS)

PROJECT

RDT&E

PROC

O&M

MILPERS

MILCON

NONE, UNLESSOTHERWISESPECIFIED

NO SPECIFICCONGRESSIONAL

RESTRICTION

NO SPECIFICCONGRESSIONAL

RESTRICTION

GREATER OF- $ 4M

- 20 %+ $ 4M PROGRAM ELEMENT 2 YEARS

+ $ 10M

+ $ 15M

+ $ 10M BUDGET ACTIVITY 1 YEAR

1 YEAR

5 YEARS

GREATER OF- $ 10 M

- 20 %

Amounts are Cumulative Over Entire Period of Obligation Availability

APPROPRIATION LIFE

Current Period: Available for new obligations, obligation adjustments, expenditures, and outlays

O&M

RDT&E

Procurement

Ships

MILCON

MILPERS

YEARS1 2 3 4 5 6 7 8 9 10 11

Expired Period: Available for obligation adjustments, expenditures, and outlays

Cancelled: Unavailable for obligations, obligation adjustments, expenditures, and outlays



26

LIFE CYCLE COST COMPOSITION

Source: DoDD 5000.4

FLYAWAYCOST

DEVELOPMENT COST LIFE

CYCLECOST

PROCUREMENTPRIMEEQUIPMENT

PROGRAMACQUISITION

COST

WEAPONSYSTEM

COST

PROCUREMENTCOST

RDT&E, PROC &MILCON• FACILITIES

RDT&E, PROC, MILCON, O&M, & MILPERS• OPERATIONS SUPPORT• DISPOSAL

PROCUREMENTSUPPORT EQUIPMENT,TECH DATA, PUBS, ETC.

PROCUREMENT• INITIAL SPARES

RDT&EPRIME EQUIPMENT;

SUPPORT EQUIPMENT ITEMS;TECH DATA; PUBS; ETC.

PRODUCT IMPROVEMENTSFunding Decision Tree

Does ProposedModification (Mod)Increase System

Performance?Is System

Currently InProduction?

NOO&M $Procurement $

NO

YES YES

IF . . . . .

THEN . . . . .

AND . . . .Fund Purchase of the Mod Kitsand Installation of those Mod Kitson the Fielded System with . . . . .

Fund Developmentand Testing with. . . . .(To Include the ModKits used for Testing)

Is DT or IOT&ERequired?

Procurement $

YES

RDT&E $

NO



27

Estimate Methods CommentsAnalogy - Comparison to one similar existing system;

based on judgments. Little or no data available;Relatively quick, easy, flexible. Used in earlyphases (e.g., Concept & Tech Dev / CE).

Parametric - Comparison to many similar existing systems;based on statistical analysis. Determine primarycost drivers and Establish Cost EstimatingRelationships (CERs) Used in early to mid-phases(e.g., Concept & Tech Dev / CE and System Dev& Dem / SI).

Engineering or Summation of “all” individual items in the system.“Bottoms-Up” Uses WBS structure for estimating purposes.

Used in mid-phases (e.g., System Dev & Dem /SD).

Extrapolation - Comparison to historical cost of same system.Based on extrapolation from actuals.Uses Learning Curve Theory Used in late phases(e.g., production and replenishment spares).

COST ESTIMATING

1. Make sure cost data is relevant and homogeneous. Caution: Watch out for historical data in times of change. Prior actuals may include uncompensated overtime or were priced as a “buy-in.” 2. Focus on cost drivers. 3. Test sensitivities and data relationships.

Guidelines

COST ESTIMATING RELATIONSHIPS(CER) - (Parametric) Est.

Cost

+ Sigma

Most LikelyCost

- Sigma

New Parameter Parameter (Size, Wt.)

MEAN+ Sigma

- Sigma

= Similar Systems



28

BCWPACWP

BCWPBCWS

BCWP (cum)BAC

ACWP (cum)BAC

PERFORMANCE INDICES

Cost Performance Index CPI =

Schedule Performance Index SPI =

Percent Complete =

Percent Spent =

=

ESTIMATE AT COMPLETION

EAC BAC__(Lowest Est.) CPI(cum)

EAC = ACWP(cum) +(Highest Est.)

BAC - BCWP(cum)EAC - ACWP(cum)v

BAC - BCWP(cum)_{CPI(cum) *SPI(cum)}

TCPI(EAC) =

TO COMP PERFORMANCE INDICES

Defining, Planning and Budgeting

Work Packages Planning Packages(6 month coverage) (remainder of effort)

PERFORMANCE MEASUREMENTCOST & SCHEDULE PERFORMANCE MEASUREMENT

$45

1. Define the work (WBS)2. Schedule the work3. Allocate budgets } Cost Account

WBS

Task A

Task B

Task C

Tasks D-X

$10

$ 3

Element/Cost Account - 300

$ 4

4. Prepare and monitor performance profiles

TERMINOLOGY VARIANCESBCWS - Budgeted Cost of Work Scheduled Cost Variance CV = BCWP - ACWPBCWP - Budgeted Cost of Work Performed Schedule Variance SV = BCWP - BCWSACWP - Actual Cost of Work PerformedMR - Management Reserve Cost Variance % CV% =EAC - Estimate at Completion (Govt)LRE - Latest Revised Estimate (Contractor)BAC - Budget at Completion Schedule Variance % SV% =CBB - Contract Budget Base (CTC+AUW)CTC - Contract Target CostPMB - Performance Measurement Baseline Variance at Completion VAC = BAC - EACAUW - Auth Unpriced Work

BCWP - ACWP BCWP

BCWP - BCWS BCWS

}}

CBB

SCH VAR

ACWP

BCWP

MR

- COST VAR

NOW

BCWS

BAC

EAC/LRECTC

PMB}

TIME

COST



29

TYPES OF CONTRACTS

Cost Family: Appropriate when product not well defined; high risk; contractor pro-vides best efforts; Government pays all allowable costs. Fee varies by type.

Cost Plus Fixed Fee (CPFF) - Fee same regardless of actual cost outcome.

Cost Plus Incentive Fee (CPIF) - Actual fee earned computed by applying shareratio to over/under run, subject to min/max fee limits.

Fixed Price Family: Product well defined, low risk; contractor must deliver product.

Firm Fixed Price (FFP) - Price fixed regardless of actual cost incurred.

Fixed Price Incentive Firm Target [FPI(F)] - Final price computed by applyingshare ratio to over/under run,subject to ceiling price limitation.

Award Fee (AF) - Either stand alone Cost Plus Award Fee (CPAF) or combinedwith cost or fixed price types. AF unilaterally determined by government based onsubjective evaluation of contractor’s performance.

Fee Limits: CPFF - Fee limited to 15% for R&D; 10% for Production and services.No statutory or FAR/DFARS regulatory limitation on other contract types.

CONTRACTINGCOMPONENTS OF CONTRACT PRICE

Contract Price = Cost + Profit/Fee

Direct Cost Indirect Cost

Direct Labor Direct Material Overhead G&A FCCM OtherDirect Cost (ODC)

Engrg Mfg Raw PurchasedLabor Labor Material Parts Engrg Mfg Mat’l

Std Comm Spt Spt Handling Items

Subcontracts Inter-divisional Transfers

TYPICAL CONTRACT TYPE BY PHASE CTP SDD/SI SDD/SD PROD CPFF,FFP CPFF, CPIF CPIF, CPAF FPI(F), FFP



30

CONTRACT TYPE FEATURES

PromiseContractor Risk

Cash FlowProgress Payments %

AdministrationFee Limit %

FIXEDPRICEDeliveryHighDelivery75/90/95LowNone

COSTREIMBURSEMENTBest EffortsLowAs IncurredN/AHigh15/10/6 on CPFF

FEE

FIXEDFEE

(SHARE 100/0)

COST ESTIMATED COST

PRICE = COST + FIXED FEERisk Highest to the GovernmentObtains Fee Regardless of Cost

CPFF

FEE

COST TARGET COST

(Target) PRICE = (Target) COST + (Target) FEEAll Reasonable Cost PaidShared Risk Between Min/Max Fee

MAX

TARGET

MIN

CPIF

Share Ratio



31

COST

CONTRACT TYPE FEATURES(Continued)

COST TARGET COST

(Target) PRICE = (Target) COST + (Target) Profit

=Point of TotalAssumption

(PTA)CEILING PRICE - TARGET PRICE

GOVERNMENT SHARE + Target Cost

0/100 SHARE

FPI(F)

FFP

PRICE = COST + PROFIT

PTA

Share Ratio

CEILINGPRICE

PROFIT

PROFIT

TargetProfit



32

PRE-SOLICITATION PROCESS

POST-SOLICITATION PROCESS

MarketResearch

AcquisitionStrategyRequirement

AcquisitionPlan

Post Draft RFPon ElectronicBulletin Board

CBD NoticeAdvisory Multi-Step

FinalizeRFP

CBD Notice ofRFP

Release

RFP Releaseto Industry

BriefSSAC

SSADecision

Receipt of Oral& WrittenProposals

Initial Eval ClarificationsLimited Communications

CompetitiveRange

Determination

Face-to-FaceDiscussions/Negotiations

Receive & AnalyzeField Surveys(if requested)

Prepare for Discussionswith

Remaining Offerors

Request FinalProposalRevision

Receive &Analyze

Final Revision

DebriefUnsuccessful

Offerors

BriefSSA

Contract Award(Distribution)

SourceSelection Plan/

Strategy

RFP ReleaseBriefing to

SSA



33

• GSA Multiple Award Schedules (MAS)– General Services Administration contracts for both products and

services–available to all agencies.

• Government–Wide Agency Contract (GWACs)– similar to MAS but more restricted in products and services available.

• Indefinite Delivery/Indefinite Quantity Contracts– Task orders (services) & Delivery Orders (products) issued under

omnibus umbrella contract.

• Other Transactions (OT)– Defined: Vehicles used for basic, applied and advanced research projects and

prototype development. OTs are not Contracts, Grants, or CooperativeAgreements.

– Objective: Attract commercial companies and consortia that historically havenot done business with the Department of Defense because of statutoryand/or regulatory requirements. OTs are not subject to the FederalAcquisition Regulation. Designed to increase DoD access to dual useTechnologies.

– Research Projects:

• Where practical, government cost share should not exceed cost share of other parties.

• Use OT when standard Contract, Grant or Cooperative Agreement is not appropriate.

– Prototype Projects:

• Must be directly relevant to weapons or weapon systems proposed to be acquired or developed by DoD.

– Constraints:

• At least one non-traditional contractor participating.

• If no non-traditional contractor participates, 1/3 of cost paid by parties otherthan federal government, or, senior procurement executive justifies transaction

– OT Guide for Prototype Projects, January 2001.

OTHER WAYS TO BUY



34

CONTRACTOR PROFITABILITY RATIOS

The basic concept of profitability ratios is to measure income againstrevenue or against the investment required to produce it. There arethree principal profitability ratios with which you should be familiar.They are:1. Return on Sales which shows what percentage of dollars are leftafter the company has paid for all costs, interest, and taxes. It isexpressed as:

2. Return on Total Assets which looks at the efficiency with whichmanagement has used its resources, the company’s assets, to gen-erate income. It is computed as:

As noted, ROA addresses how well management utilizes the assetsof the firm in generating income. The ROA formula reflects the com-bined result of Return on Sales and the total asset turnover ratio (sales/total assets), broken down as follows:

3. Return on Common Stockholder’s Equity measures the rate of re-turn on the owners’ investment—their equity in the company. This isalso known as Return on Equity (ROE).

ROE can also be broken into two components: these being return onassets adjusted for preferred dividends and financial leverage (a ratioreflecting the relationship of creditor to owner financing—expressedas total assets/ common stockholders equity). This is shown by:

These profitability ratios give three different viewpoints concerningthe “bottom line” on the income statement—how much net profit isbeing made on each sale, how much is being made for the assets thatare employed, and how much is being made for the company owners.From an owner’s perspective, another profitability ratio you may beaware of is Earnings Per Share (EPS):

Return on Sales = Net IncomeSales

ROA = Net IncomeSales

SalesTotal AssetsX

ROE = Net Inc. - Pref. Div.Total Assets

X Total AssetsCommon Stockholder’s Equity

Earnings Per Share = Net Income Minus Preferred DividendsNumber of Shares of Common Stock Outstanding

ROE = Net Income - Preferred DividendsCommon Stockholders’ Equity

ROA = Net IncomeTotal Assets


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FINA

NC

IAL A

NA

LYSIS SHEET

(EXAMPLE)

Y96 5.01 0.92 4.60 4.60 4.27 19.65Y97 4.63 0.99 4.58 4.58 5.48 25.12Y98 3.81 0.91 3.48 3.48 4.68 16.31Y99 1.50 0.85 1.27 1.27 4.72 6.01Y00 -2.05 0.83 -1.71 -1.71 4.24 -7.25

Q4Y00 -2.05 0.83 -1.71 -1.71 4.24 -7.2512 mo. trailing

Return on Sales (%)(Net Income/Sales)

-4.00-2.000.002.004.006.008.00

Y96 Y97 Y98 Y99 Y00 Q4Y00

Total Asset Turnover(Sales/Total Assets)

0.00

0.200.40

0.600.80

1.001.20

Y96 Y97 Y98 Y99 Y00 Q4Y00

Return on Assets (%)(Net Income/Total Assets)

-4.00

-2.00

0.00

2.00

4.00

6.00

Y96 Y97 Y98 Y99 Y00 Q4Y00

Return on Assets (%)(Net Income/Total Assets)

-4.00

-2.00

0.00

2.00

4.00

6.00

Y96 Y97 Y98 Y99 Y00 Q4Y00

Equity Multiplier(Total Assets / Shareholder Equity)

0.001.00

2.003.00

4.005.00

6.00

Y96 Y97 Y98 Y99 Y00 Q4Y00

LOCKHEED MARTIN CORPLMT

Return Tot. Asset Return Return Equity Returnon Sales % X Turnover = on Assets % on Assets % X Multiplier = on Equity%

DUPONT ANALYSISSIC: 3760 GUIDED MISSILES &SPACE VEHC

Fiscal Year End: 12

X =

X =

Return on Equity (%)(Net Income / Shareholder Equity)

-15.00-10.00-5.000.005.00

10.0015.0020.0025.0030.00

Y96 Y97 Y98 Y99 Y00 Q4Y00



36

Cashreceived

CASH CYCLE

Accountsreceivable

Sale(DD 250)

Finished goodsinventory

Raw materialinventory

Contractaward

Cashdisbursed

Cashdisbursed

Wagespayable

Work in processinventory

Accountspayable

- Delivery

CONTRACTOR FINANCING AND PAYMENTS

Commercial Non-Commercial Commercial Non-Commercial

* Internal Contractor Financing — Retained Earnings

- Govt specified- Offer or proposed- Interim- Advance

- Private • Trade Credit • Bank Credit — Revolving Credit — Term Loan- Government • For Non-Commercial — Progress Payments

• Performance Based• Cost Incurred Based• % Complete

— Unusual ProgressPayments

— Assignment of Claims — Guaranteed Loans — Advance Payments

- Periodic- Partial

PAYMENTSFINANCING (External*)



37

Indirect costs

• Costs that can’t be tracedto a single cost objectbecause they areassociated withmultiple cost objects.

• Example: electricity forthe company’s facilities

Direct costs

• Costs that can betraced to a singlecost object.

• Examples: materialand labor to assemblean aircraft

DIRECT AND INDIRECT COSTS

Indirect costs areassigned to cost

objects usingindirect rate(s).

Traced directly

Traced directlyDirect

material

Directlabor

CostObject

ASSIGNING INDIRECT COSTS

CALCULATION OF INDIRECT RATES

RATE = Indirect Cost PoolAllocation Base



38

LIFE CYCLE OF INDIRECT COST RATES

BIDDING ONCONTRACTS

ADJUSTINGPAYMENT &

CLOSINGCONTRACTS

PAYINGCONTRACTS

FORWARDPRICINGRATES

BILLINGRATES

ACTUALRATES

Direct material $ 40,000Material handling 10% 4,000

Direct engineering labor 6,000Engineering overhead 100% 6,000

Direct manufacturing labor 12,000Manufacturing overhead 150% 18,000

Other direct costs 6,000Subtotal 92,000

General and administrative 25% 23,000Total cost 115,000

profit 15% 17,250Cost of money for facilities capital employed 1,500

Price $133,750

CONTRACTOR’S COST PROPOSALEXAMPLE



39

CONTRACTOR BUSINESS PLANNING PROCESSOUTPUTS

MANPOWER PLAN

Ratesfor

Estimating

SALES

ANNUALOPERATING PLAN

CAPITALINVESTMENT PLAN

PRODUCTION &ENGINEERING PLAN

MASTER DELIVERYSCHEDULE

IR&D/B&P PLAN

TOP MANAGEMENTGOALS, OBJECTIVES,

STRATEGIES

OVERHEADFORCAST

BUSINESS BASESALES FORCAST

$ $

TREND



40

PRINCIPAL ACQUISITION LOGISTICSGOALS/OBJECTIVES

• Influence product design for supportability

• Design the support system

• Concurrently deploy system (includes support infrastructure)

• Maintain readiness and Improve affordability

• Support Strategy is part of the acquisition strategy and an integralpart of the systems engineering process. The support strategyshall address life-cycle sustainment and continuous improvementof product affordability, reliability, and supportability, while sustaining readiness.

• Supportability Analyses is a set of analytical tools, conducted asan integral part of the systems engineering process, to determinehow to most cost effectively support the system throughout thesystem life-cycle and form the basis for related designrequirements included in the system performance specification andlogistics support plan.

• Product Support Management Plan is a life-cycle plan thatincludes actions to assure sustainment, and continually improveproduct affordability. This plan is used throughout initial procurement, reprocurement, and post-production support. The plandocuments an integrated acquisition and logistics strategy for thelife of the system.

• Performance-Based Logistics is the output performanceparameters to ensure a system ready capability, the assignment ofresponsibilities and implementation of incentives for the attainmentof the goals associated with these performance parameters, andthe overall life-cycle management of system reliability andsustainment, and total ownership cost.

LOGISTICS MANAGEMENT PROCESS NOTES



41

Maintenance Planning – establishes maintenance concepts and require-ments.

Manpower & Personnel – identification of personnel skills, grades andquantity required to support operation and maintenance of system.

Supply Support – determine requirements to acquire and manage sparesand repair parts.

Support Equipment – identify all equipment required to support operationand maintenance of the system.

Technical Data – scientific and technical information used to supportsystems acquisition.

Training & Training Support – determine requirements to acquire trainingdevices and conduct training of operators and maintenance personnel.

Computer Resources Support – identification of facilities, hardware,software and support tools to operate and support embedded com-puter systems.

Facilities – identify real property required to support system.Packaging, Handling, Storage and Transportation – identify designs and

methods to ensure the system is preserved, packed, stored, handledand transported properly.

Design Interface – relationships of logistics related design parameters toreadiness and support resources requirements; influence design forsupportability.

SUPPORT ELEMENT DEFINITIONS

BEST PRACTICE:Support Elements

MaintenancePlanning

Manpower &Personnel

SupplySupport

SupportEquipment Training &

Training Support

TechnicalData

DesignInterface

ComputerResources

Support

SYSTEM

Facilities Packaging, Handling,Storage and

Transportation

Note: Under Performance-Based Logistics (PBL), Support Elements are still valid even thoughGovernment is buying results and solutions, not specific resources or processes.


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SYSTEMS ENGINEERING (SE) LINKAGE TO DEFENSE ACQUISITION PROCESS

PRODUCTION & DEPLOYMENT OPERATIONS & SUPPORTFULL-RATE

PRODUCTION &DEPLOYMENT

LOW-RATEINITIAL

PRODUCTION

CONCEPTEXPLORATION



SYSTEM DEV & DEMONSTRATION


SYSTEM INTEGRATION

FRP DECISION REVIEWCRITICAL DESIGN REVIEW

Technology Opportunities & User Needs

C IOC FOC

Single Step orEvolution to Full

Capability

Pre-Systems Acquisition Sustainment

Sustainment Disposal

Analysi s

Al lo cation

Syn thes is

(Balan ce)

R e qu ir e men ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Analysis

Al lo cation

Syn thes is

(Balan ce)

R e qu ir e men ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Analysi s

Al lo cation

Syn thes is

(Balan ce)

R e qu ir e men ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Analysis

Al lo cation

Syn thes is

(Balan ce)

R e qu ir e men ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Produce Product

ProduceSupport System Product

SupportManagementPlan

ProductSupportManagementPlan


DemonstrateSupportability& Life CycleAffordability

DemonstrateSupportability& Life CycleAffordability

Inputs to:• ORD• TEMP• APB• Contract

GO

AL 1

GO

AL 4

GO

AL 2

Design Productfor Supportability

Design DevelopSupport System

Acquire & DeploySupportable System

GO

AL 3

Maintain/ImproveReadiness &

Improve Affordability

Modifications & Technology Insertion

Post Deployment Evaluations

Post ProductionSupport

Readiness &Total OwnershipCost Objectives

PerformanceBased

Logistics

AcquisitionStrategy

SupportStrategy

Evaluate AlternativeLogistics Concepts

SupportConcepts

SYSTEMS

ENGINEERING

PROCESSSYSTEMS

ENGINEERING

PROCESSSYSTEMS

ENGINEERING

PROCESSSYSTEMS

ENGINEERING

PROCESS

IOCFACTORY

CLOSED

Systems Acquisition

Demil&

Disposal


BA

INCREMENT IIINCREMENT III



43

Sufficient SparesAnd Repair Parts for

System Life?

Yes

Yes

No

No

MonitorUsage Data

MultipleSources?

EvaluateAlternatives

MonitorVendors

Sole SourceReprocurement

CompetitiveReprocurement

SubstituteParts

ComponentRedesign

Life of TypeBuy

POST-PRODUCTION SUPPORT DECISION PROCESS

Logistic Down Time

(LDT)

CorrectiveMaintenance Time

(CMT)

AdministrativeDelay Time

(ADT)

PreventiveMaintenance Time

(PMT• Locating tools• Setting up test equipment• Finding personnel (trained)• Reviewing manuals• Complying with supply procedures

• Parts Availability “In the Bin”

• Needed items awaiting transportation

• Preparation time• Fault location time• Getting parts• Correcting fault• Test and checkout

• Servicing• Inspection

OPERATIONAL AVAILABILITYStandby

TimeOperating

Time

Uptime

DowntimeAO =

Uptime +



44

PROGRAM OFFICE ORGANIZATION STRUCTURES

ENGRNG PRODUCTIONBUSINESS LOGISTICS

FUNCTIONALDIVISIONS

FUNCTIONALDIVISIONS

FUNCTIONALDIVISIONS

STAFF STAFF STAFF

PM

PM

STAFF

Functional Structure

“Pure” Product Structure

PMSYSTEM A

PMSYSTEM B

PMSYSTEM C


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ENGRNG

PROGRAM OFFICE ORGANIZATION STRUCTURE(Continued)

Matrix StructurePEO

PM PM PM

STAFF STAFF STAFF

ENGRNG PRODUCTION

BUSINESS LOGISTICS

FUNCTIONALDIVISIONS

FUNCTIONALDIVISIONS

SYSCOMHEAD

FUNCTIONALDIRECTORS

LOGISTICS

PRODUCTION

BUSINESS



46

IPT = Integrated Product TeamPIT = Program Integration Team (Composed of Functional Directors)

Note 1: IPTs mirror Work Breakdown Structure

PROGRAM OFFICE ORGANIZATION STRUCTURE(Continued)

PIT

AIR VEHICLEIPT

ENGINEIPT

SUPPORT SYSIPT

TRAINING SYSIPT

Note 1

INTEGRATED PRODUCT TEAMS

SYSTEM PROGRAM DIRECTOR

DIR OFLOG

DIR OFTEST

DIR OFCONTRACTS

DIR OFPROJECTS

DIR OFENG

DIR OFFIN MGT



47

THE ROLE OF MANUFACTURING IN THEACQUISITION PROCESS

SUSTAINMENTFULLRATELRIPCE T D DEMON-

STRATION INTE-

GRATION

CBA

Execute the Manufacturing Plan Reflect Design Intent Repeatable ProcessesContinuous Process Improvement

PRODUCTION Influence the Design Process Prepare for Production

RDT&E

Producible DesignFactory Floor Characterized

MILESTONE C EXITREQUIREMENTS

CURRENT DoD 5000 PROCESS

• Unstable requirements/engineering changes• Unstable production rates and quantities• Insufficient process proofing• Insufficient materials characterization• Changes in proven materials, processes, subcontractors, venders, components• Producibility• Configuration management• Subcontractor management• Special tooling• Special test equipment

COMMON PRODUCTION RISKS THAT GREATLYIMPACT COST, SCHEDULE & PERFORMANCE

Uniform, Defect-Free ProductConsistent PerformanceLower Cost

NET RESULT:



48

• Producibile system design shall be a development priority*• Design/engineering shall focus on*;

- Producibile design- Capable manufacturing process- Necessary process controls- Minimizing manufacturing costs

• Full rate production shall require*;- Stable systems design- Proven manufacturing process- Available production facilities and equipment

• Quality management process shall*;- Establish capable process,- Continuously improve the process- Monitor and control critical processes and product variation- Establish mechanisms for feedback of field product performance;- Implement an effective root cause analysis and corrective action system

PRODUCIBILITY

DEFINITION: The measure of relative ease of manufacturing a product.The product should be easily and economicaly fabricated,assembled, inspected and tested.

* The PM is responsible for Producibility *

PRODUCIBILITYInterim Defense Acquisition Guidebook, 30 Oct 02

5.2.3.5.1 Producibility, 5.2.3.5.3 Quality

*Under Revision; NOT Mandatory



49

.90

.85

.80

.75

.70

.65

.60

.55

_X

UCL

LCL

2 31 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 24 25

.40

.30

.20

.10R =.178

UCL

19

2 31 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 24 2519

_X (Control Chart)

_R (Control Chart)*

*Note: No lower control limit for R Chart for sample size below 7.

VARIABILITY CONTROL• GOAL: Minimize and control manufacturing variation on key product characteristics• WHY: Direct correlation between deviation from nominal value on key characteristics and product quality and functionality• TOOLS: QFD, DOE, Process control chart (Statistical Process Control, see below)

QUALITY MANAGEMENT SYSTEMSInterim Defense Acquisition Guidebook, 30 Oct 02

“The PM shall allow contractors to define and use a preferred qualitymanagement process that meets required program support capabilities.The PM shall not require third party certification or registration of asupplier’s quality system.”

Note: ISO 9000 Series International Quality Standard is considered a Basic Quality System --focus is mainly on “Document what you do, and do what you document”

Advanced Quality Systems (AQS) such as Boeing’s D1-9000, Motorola’s Six Sigma, and others, focus on Customer Satisfaction, Key Processes Identification and Control, Metrics, Flow-down to Suppliers, and many other advanced process-oriented techniques.



50

PRODUCTION READINESS REVIEWS (PRRs)

• Identify program risks, issues and opportunities Early• Assess capibility of contractor (and sub-contractor) to deliver

on-time, within cost• Assess actual contractor performance (metrics?)• Assess effectiiveness of contractor’s corrective actions• Measure improvement of contractor’s performance

“WHY WE DO THEM”

“HOW TO DO THEM”• Get a Charter that the PMO and contractor both understand• Coordinate with DCMA/CAS - use them• Establish areas of Assessment with Metrics

- Producibility- ECOs/design stability- Sub-contractor management- Cost of scrap, rework and repair- Manufacturing process control- Tooling status

• Ask questions, touch things, talk to shop floor workers- See what is actually happening on the factory floor

ADDITIONAL INFORMATION SOURCES

• DAU’s Advanced & Electronic Manufacturing Resources(A&EMR) website:

- Go to www.dsmc.dau.mil, then click on Information Dissemination, then click on the A&EMR- Contains references to DoD Manufacturing Requirements, and Best Business Practices such as Lean Production, e-Commerce, Six Sigma, Basic and Advanced Quality Systems, and Supply Chain Management

• Best Manufacturing Practices Center of Excellence- www.bmpcoe.org

• Lean Aerospace Initiative (LAI)- http://web.mit.edu/lean/index.html



51

Use Combined DT/OT - single integrated Contractor/Gov’t DT and OT Team;shared test events & test data; independent data analysis & reporting.

ACAT I & II Programs - require an independent, dedicatedIOT&E to proceed Beyond Low Rate Initial Production.

T&E Required before going Beyond Low Rate Initial ProductionProduction Qualification T&E - Verify Design Article meets Spec/PM responsiblePerformed by Contractor &/or Government/DPRO assistance valuable. Readinessfor IOT&E.• Live Fire T&E (LFT&E) - Vulnerability and Lethality/Dev’l Agency fund and execute.DOTE oversight, approval and Congressional reporting for ACAT I, II and selectedprograms.• Initial Operational T&E (IOT&E)- Operational Effectiveness and Suitability/Independent Svc OTA plan and manage. DOTE oversight, approval, andCongressional reporting for ACAT I and selected systems.

Models and Simulations used throughout the Acq Process

REQUIREMENTS DEVELOPMENT

ENGINEERING DESIGN

FABRICATION & TEST (BENCH, LAB)

INTEGRATION & TEST (H/W IN THE LOOP)

OT&E:

TEST & EVALUATION (T&E)Developmental T&E (DT&E)/Operational T&E (OT&E) Comparisons:

OT&E• Operational effective/suitable• Operational Test Agency (OTA) resp.• “Typical” User Personnel• Many test articles/each test• “Combat” environment/Threats• “Production Rep” Test Articles• Contractor may not be allowed

DT&E• Tech. perf. measurment• Dev. agency rsp. (PM)• Technical Personnel• Ltd. test articles/each test• Controlled environment• All types of Test Articles• Contractor involved

T&E Tasks & Events

• Test Rqmts• Test Interfaces• Eval Strategy• Sys. Engineering• Design for Test• S/W Human T&E• TEMP• Subsystem T&E• Software Only T&ESystem DT&E• CSCI T&E• R. A. M.• Supportability• Interoperability• Production Qual• Live Fire T&E• Cert of Readiness for IOT&E

AGONIZE OVER THRESHOLDS!

To Support T&E during: RQMTs Definition T&E Planning Engr Design Fabrication Integration Sys DT&E OT&E Training Ops

System OT&E• Effectiveness• Suitability

• Acceptance Test• Manf. Test

• Data Collection• Reporting

DEVELOPMENT T&E:QUALIFICATION T&E,ACCEPTENCE T&E, LFT&E

PRODUCTION (PAT&E, FOT&E)

DEPLOY & OPERATIONAL SUPPORT

EOA, OA, IOT&E(OPEVAL)



52

M & S PLANNING

IDE Planning

• Establish a business processimprovement team

• Identify High Payback ProcessAreas

• Identify potential legacy systemsand data repositories

• Identify user base includingremote sites

• Capacity of PC workstations• Bandwidth of communication lines• Where servers are/will be located• Identify legacy system host

platforms

SBA Planning

• Establish a simulation & VV&Aplanning process

• Identify High Payback ProcessAreas

• Identify potential legacy systems,Service/Joint-standard simulations,Architectures and data repositories

• Identify where user and simulatorsare / will be located

• Capabilities & Architectures ofExisting Simulations

• Network Bandwidth Requirements• IDE utilization opportunities• Interoperability / Interface / Immer-

sion Requirements• Required Capability Gap• Design SBA Architectures• Establish long term plan, budget,

DOCUMENT & implement• Manage it, update, evolve, reiterate

HOW DO WE PLAN? - A NOTIONAL APPROACH

Simulation Support Plan (A,MC),Single Acquisition Mgt Plan (AF),Acquisition Strategy, TEMP

• ACCESS YOUR SERVICE CENTERS OF M&S EXPERTISE• Establish a simulation coordinating group; the EARLIER the better• Design long term M&S applications and the Integrated Digital Environment

through the acquisition strategy, TEMP, STEP, SSPs• CONTINUOUS PLANNING PROGRAM PLANNING

TEMP

M& S inAcquisition

Feb 2000

SimulationBased

AcquisitionA New

Approach

DSMCDec 98

AFI 16-10021 June 2000

M&SSupport toAcquisition

USAFSimulation

BasedAcquisition

A NewApproach

DSMCDec 98

SMARTPlanning

GuidelinesJAN2000

ARMY

{SBA}

TheEffectiveness

of Modeling &Simulation in theWeapon System

Acquisition ProcessOct 1996


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HIERARCHY OF MODELS AND SIMULATIONS FUNCTIONS

RESOLUTION SUPPORTED MODELS & SIMULATIONS FORCE OR SYSTEM LEVEL

IncreasingResolution

ActualPerformance

IncreasingAggregationComparative

Results

The Hierarchical Aggregation of Models reduces Fidelitysignificantly & must be evaluated. - (PM, DIS & DMSO)

Test &Evaluation

Operational Req’ts DevelopmentEffectiveness AnalysisTactics DevelopmentMission Planning & Rehearsal

DesignManufacturing

CostSupport

DevelopmentTech Req’ts Dev.

Joint/CombinedForces

Air Wings Battle Groups

Air Wing

EWA/C

AircraftSystem

Fire Control

Radar

Corps

Air Vehicle

(System/Subsystem/Component)

(One-on-One)

(Many-on-Many)

Theater/Campaign

Mission/Battle

Engagement

Engineering

(Groups of Systems-Force Package)


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THE EVOLUTION OF MODELING & SIMULATION

VIRTUAL PROTOTYPE PHYSICAL MOCK-UP FINAL PRODUCT

DistributedInteractiveSimulation

(DIS)

FullSystem

Prototypes

CADCAMCAE

CADAM

Simulation BasedAcquisition

The Advancing Computer & Communications Technology Revolutions

SimulationBase Design

(VirtualPrototyping

with mfg design,risk/cost analyses,mat’l designation)

CONCEPTDEVELOPMENT

DEPLOYMENT& SPPORT

MANUFACTURING

TEST & EVALUATION

ENGINEERING DESIGN& ANALYSIS

INTEGRATED

SYSTEM DATA

Operational Training

Oper ational Simulation

P ar ametr ic DesignDetailed Design

Manufacturing

Acquisition Planning

Advanced Surface CombatantDARPA



55

TYPICAL TIMES FOR PROGRAM ACTIVITIES

EventTime

(months)6 - 9

9 - 126 - 8

24 - 3030 - 362 - 3

9 - 122 - 3

6 - 12 3

18 - 30

(ADD’L TYPES OF PLANNING CHARTS ON NEXT 5 PAGES)

TYPES OF PLANING CHARTS

MILESTONE CHART (Gantt)

PLANNING AND CONTROL

Procurement Request Development TimeContract Lead-timeDAB Lead-timeSI Design, Fab and TestSD Design, Fab and QualTest Readiness Review Lead-timeDT&EOT Readiness Review Lead-timeOT&EOT Report PreparationProduction Lead-time

Time Period J F M A M J J A S O N D J F M A M

DesignFabIntegrateGnd. TestQualFlt. TestProduce

• Advantages: Simple

• Disadvantages: Difficult to show dependencies between activities unless computer-constructed chart.

Activity:



56

NETWORK CHART

= CRITICAL PATH

TIME 5 4 7 4 52117 6 7

COST2,200

15,0002,5004,600

028,00023,00013,5009,000

PLANNING AND CONTROL(Continued)

3 5

1 2 6 7

TASKBriefTransportShip GFEShip systemInspectTrain maint.Train oper.Integ. sys.Dry Run

TASK #1-22-32-62-44-63-63-56-77-8

4

8

ACCELERATECOST TIME - 500 600 750 - 800 800 - 400

53425

1412

65

• Advantages: Shows dependencies; computes critical path• Disadvantages: Complex; computerized support required to maintain

Does not provide any chronology

17

21

5

4

6 7

4

7

5

• Advantages: Shows chronology and dependencies• Disadvantages: Complex; computerized support required to maintain

SWAN CHART

0 5 9 12 14 26 30 36 43 DAYS

• USE TASKS & TIMES FROM CHART ABOVE

6-7 7-8

2-33-6

1-2 2-6

2-4

3-5

4-6


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1 2 6 7 8 9

3

4

5

10

11

125

4

4

21

5

17

7 6 7 21 30

45 7

5

BRIEFSHIPSYS

INSPECT

INTEG-RATE

TRANSTROOPS

TRAINOPS

DRYRUN

TEST

TRAINMAINT

SHIP GFE

GOVTANALYZE

GOVTREPORT

KTRREPORT

KTRANALYZE

Normal PERT Display for manual method:

* PERT = Program Evaluation & Review Techniques

5BRIEF

SHIP 7GFE

INTEG- 6RATE

DRY 7RUN

21TEST

GOVT 30ANALYZE

GOVT 5REPORT

KTR 7REPORT

KTR 45ANALYZE

TRAIN 17OPS

TRANS 4TROOPS

SHIP 4SYS

TRAIN 21MAINT

5INSPECT

Most widely-used PERT Display using scheduling software:

PERT* NETWORK CHARTS

INTE-GRATE


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Project WorkBreakdown

Structure (WBS)

Task/ResponsibilityMatrix

“ When ”

Networks

“ How Much ”

“ How ”

NETWORK SCHEDULE DEVELOPMENT

T&E

a

b

M

a

b

S

a

b

c

C

10

11

12

20

21

22

30

31

32

33

40

41

42

43

50

51

5230

2010

Scheduleabcdabcdabcd

MNSAOA,ORD

TechnicalCriteria

“ What ”

“ Who ”

WorkPackages

Manpower& MaterialEstimates

ProjectPlans

Org.WBS

10

20

30

40

11122122313241

T&E M S Ba b a b a b a

p s1

s1 pp

s1

p s1

s2

p

C

RequirementsDocuments


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26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

WORKING DAYS PRIOR TO COMPLETION (LEAD TIME)

(SUB-CONTRACTPART)

(PURCHASE PART)

(PURCHASE PART)(PURCHASE PART)

(SUB-ASSEMBLY “B”)

(SUB-ASSEMBLY “A”)

FINAL ASSEMBLY

(FABRICATED PARTIN-HOUSE)

TEST SHIP

6

874

1

2

3 5

121110

9

LEAD TIME CHART


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80706050403020100

80706050403020100

O N D J F M A M J J 1 2 3 4 5 6 7 8 9 10 11 12MONTHS CONTROL POINTS

80706050403020100

PlannedActual

LINE OF BALANCE TECHNIQUE

26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

PRODUCTION LEAD TIME CHART 22 WORK DAYS/MONTH

61

4 7 8

2

3 5 9

10 11 12

Snapshot in time: 1 May



61

ACQUISITION PROGRAM BASELINE(Performance) - An Example

Baseline Values

Objective

Threshold

X

.85

.80

.75

.70

.65(Prob)

ExitCriteria

(.77)

System Integration System Demonstration Low-Rate Initial Prod Full-Rate Prod

CurrentEstimate

Growth (Maturity) Curve

MS B CDR MS C FRP DR

SURVIVABILITY

ExitCriteria

(.73)

System Development &Demonstration Phase

Production &Deployment Phase

* in this example the current estimate falls below the threshold -this represents a baseline breach of performance.

*


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List ofTop Risks

RISK MANAGEMENT PROCESS MODELRisk

Assessment

Risk Monitoring/Reporting

Risk EventIdentification

List of HandlingOptionAlternatives

Process Plans & Controls

Organization & Training

Revised BestHandlingOptions

StatueReports

Best Options

Revised TopRisk List

Risk Mgt Plan(Implemented)

ProcessPreparations

RiskMonitoring& Reporting

Risk HandlingOption Analysis

ScheduleBudget & MIS

RiskIntegration

Risk ManagementPlanning/Prep

Risk Handling

RiskAnalysis

Risk HandlingOption

Identification

Risk andRisk Handling

OptionIntegration

List of RiskEvents

RiskDescriptions



63

RISK MANAGEMENT

1. Develop program plans to the work package level.

2. Assess risk at the lowest work package/WBS level.

3. Manage the highest risk work packages; most others will work out.

TRADE-OFF ANALYSIS*

1. Identify alternative solutions

2. Select evaluation criteria/factors & MOEs; i.e. cost, schedule, performance criteria

3. Weight evaluation criteria

4. Develop utility functions for each factor

5. Conduct evaluation (weighted utility summary table where weight is multiplied by utility function value)6. Perform sensitivity check7. Select highest scored alternative

RISK & TRADE-OFF ANALYSIS

Risk PlanningRisk Mgmt Plan (The Process) Risk ID

TechnicalCostScheduleLessons learnedWBS

Risk AnalysisNetworksSimulationWatch listsTemplates

Risk HandlingAvoidanceControlAssumptionTransferResearch

Risk Management Risk Assessment

*With Cost As an Independent Variable (CAIV), aggressive cost objectives areestablished as a result of trading performance and schedule for cost.

SOW DELIVERABLES WBS

OBS

WORK PKGPLANNING PKG

GANTT/NETWORK

CHART

COSTEST.

COSTVS

TIME

PLAN RISK MGTPROCESS

ASSESS RISKHANDLE RISK

Specs Contract



64

TECHNICAL PERFORMANCE MEASUREMENTTHE CONCEPT

TECHNICALPARAMETERVALUEe.g., MTBFWeightFuelConsumption

Tolerance Band

Threshold

Planned Value

CurrentEstimate

TIME

Variation

Planned Profile

Achievement to date

Milestones

}

1. ARE ALL VIABLE ALTERNATIVES BEING EXPLORED?

- Is each alternative clearly defined? - Have the alternatives been

prescreened? How? - Are affordability limits established? - Can all of the screened-out alternatives

be defended?

2. ARE SELECTION CRITERIA IDENTIFIED?

- Are all significant criteria identified? - Do the criteria discriminate between

alternatives? - Are the criteria measurable? - Have the criteria been pre-approved?

3. IS THE CRITERIA WEIGHTING SYSTEM ACCEPTABLE?

- Are rationales for criteria weightsexplained?

- Are criteria weights consistent withguidance?

- Are criteria weights consistentlydistributed in the tree?

4. ARE UTILITY (SCORING) CRITERIA DETERMINED?

- Is defensible rationale established foreach criterion?

- Are criteria developed from operationalmeasures of effectiveness wherepossible?

- Do all plans use the same numericalscale?

- Is the location of the “zero point”explained?

5. ARE EVALUATION METHODS DOCUMENTED?

- Are test data reliability estimates(confidence levels) incorporated?

- Are models validated? When? Who?

6. HAS SENSITIVITY BEEN ESTIMATED?

- Are error ranges carried through withworst-on-worst case analysis?

- Have the effects of changes in the utilitycurve shapes been examined?

- Have rationales for the limits beendeveloped?

PROGRAM MANAGER’S CHECKLIST FOR REVIEW OFTRADE-OFF PLANNING AND STUDIES


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PROCESS OUTPUT• Development Level Dependent

- Decision Data Base- System/Configuration Item Architecture- Specifications & Baselines

SYSTEMS ENGINEERING PROCESS

Functional Analysis/Allocation• Decompose to Lower-Level Functions• Allocate Performance & Other Limiting Requirements to All Functional Levels• Define/Refine Functional Interfaces (Internal/External)• Define/Refine/Integrate Functional Architecture

Synthesis• Transform Architectures (Functional to Physical)• Define Alternative System Concepts, Configuration Items &

System Elements• Select Preferred Product & Process Solutions• Define/Refine Physical Interfaces (Internal/External)

System Analysis& Control(Balance)

Requirements Loop

Requirements Analysis• Analyze Missions & Environments• Identify Functional Requirements• Define/Refine Performance & Design Constraint Requirements

• Trade-Off Studies• Effectiveness Analyses• Risk Management• Configuration Management• Interface Management• Data Management• Performance Measurement - SEMS - TPM - Technical ReviewsDesign Loop

Verification

PROCESS INPUT• Customer Needs/Objectives/Requirements

- Missions- Measures of Effectiveness- Environments- Constraints

• Technology Base • Output Requirements from

Prior Development Effort • Program Decision Requirements • Requirements Applied through

Specifications and Standards

• Customer = Organizations Responsible for Primary Functions• Primary Functions = Development, Manufacturing, Verification, Deployment, Operations, Support, Training, Disposal• System Elements = Hardware, Software, Personnel, Facilities, Data, Material, Services, Techniques

RELATED TERMS



66

REQUIREMENTS ANALYSIS QUESTIONS• What are the reasons behind the system development?• What are the customer expectations? How will they measure

the performance of the system?• Who are the users and how do they intend to use the product?• What do the users expect of the product?• What are their level of expertise?• With what environmental characteristics does the system

have to comply?• What are existing and planned interfaces?• What functions will the system perform, expressed in cus-

tomer language?• What are the constraints – hardware, software, economic,

procedural – with which the system must comply?• What will be the final form of the product – model, prototype,

mass production?

• Specific, Clear and Unambiguous: Contains no vague terms• Understandable: Stated with sufficient detail in everyday language• Concise: Contains no unnecessary words• Consistent: Top-to-bottom consistency with identical usage of terms and conformance to standards• Stable: Baselined and under configuration control• Traceable: Derived from the mission profile or the contractor’s design policies• Verifiable: Determine whether the product is satisfying the requirement• Feasible: Can achieve, produce, and maintain the requirement

ATTRIBUTES OF A WELL – DEFINED REQUIREMENT



67

FUNCTIONAL ANALYSIS/ALLOCATION(THE CONCEPT)

• Allocate Functions • Decompose Higher

Functions• Allocate Performance • From Higher to

Lower Functions• Functional Descriptions • Functional Flow

Block Diagrams • Time Line Analysis • Functional Architecture

(2 min) (60 min) (5 min)

LAUNCH CRUISE LAND

FLY

start end

(67 min)

CRUISE LAND LAUNCH

FLY

REQUIREMENTS LOOPPROCESSINPUT

FunctionalAnalysis/Allocation

Synthesis

Requirements Loop

RequirementsAnalysis

Design LoopVerification Loop


PROCESS OUTPUT

• Ensure all requirements are covered by at least one function.• Ensure all functions are justified by a valid requirement. (No unnecessary duplication)

Requirements Loop

Functions Transport Load Start Carry Stop Unload Communicate

Transport Troops X X X X X XSquad Level X X X X50 KM X X90 Minutes from Transporter X X X X XArrivalConstant XCommunication

Requirements



68

DESIGN LOOP

PROCESS

INPUT


Synthesis

Requirements Loop




PROCESS OUTPUT

• Ensure all functions are covered by at least one hardware (or software) element

• Ensure all elements of physical architecture are justified by a valid functional requirement. (No unnecessary duplication)

Aircraft Air Frame Engine Communications Nav System Fire Control

Preflight Check X X X X XFly

Load XTaxi X X XTake-Off X X XCruise X X X XRecon X X X X

Communicate XSurveillance ? ? ?

FunctionPerformed

P H Y S I C A L A R C H I T E C T U R EFUNCTIONALARCHITECTURE

AUDIT TRAIL, DECISION DATABASE,ITEM SPECIFICATIONS, ETC.



69

SYNTHESIS• Defines the Physical Architecture

- Each Part Must Meet At Least One Functional Requirement- Any Part Can Meet More Than One Requirement

• Justify Architecture by Trade Studies & EffectivenessAnalyses

• Document All Process Information in Database• Generate Documents from Database

VERIFICATION LOOPPROCESS

INPUT


Synthesis

Requirements Loop




PROCESS OUTPUTVerification Loop

• Each Requirement Must be VerifiableSection 4 of Specification

• Verification Evaluates whether SolutionMeets Requirements

• 4 Types of Verification• Examination• Demonstrations• Simulations / Analysis• Test

FLY TechDoc’s

EJECTDESTROYPROPEL


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HOW DO I MAKE DECISIONS ?

WILL IT DO JOB/WORTH THE $$ ?

ARE WE DOING THE RIGHT THING ?

HOW DO I KNOW IT WORKS?

WILL IT MEET THE PERFORMANCE CRITERIA?

WILL IT ALL WORK TOGETHER ?

DO WE KNOW WHAT WE HAVE ?

ARE WE READY TO GO ON ?

HOW DO I RUN THIS PROGRAM ?

SYSTEM ANALYSIS AND CONTROL(MGMT TOOLS)

H E L P !

TRADE STUDIES

EFFECTIVENESS ANALYSIS

RISK MGMT

TECHNICAL PERF MEASURES

MODELING & SIMULATION

TECH PERF MEAS

CONGFIG MGMT

TECHNICAL REVIEWS

INTEGRATED PLANNING



71

SPECIFICATIONS AND STANDARDSA New Way of Doing Business (Acquisition Reform)

(Sec Def Memo of 29 June 1994)

1. Use Performance-Based Specifications

2. Cancel/Convert Manufacturing and Management Standards to Performance or Nongovernment Standards (NGSs)

3. Encourage Contractors to Submit Alternative Solutions to Military Standards/Specifications

4. Prohibit Use of Military Specifications/Standards Except when Authorized by SAE or Designee

Design/Fab Require desired Specify exact parts andoutcomes or functions, componentsSpecific design to KTR

Processes Few, if any Specify exact processes

Physical Give specifics only for Specify more physicalCharacteristics interfaces, environment, characteristics, than

or human factors needed for int, env,etc.

Interface Reqmts Detail interface data does Detailed interface dataNOT solely make a perf.spec a detail spec.

Materials Leave specifics to KTR Require specific materials

Test & Eval State performance Prescribed testingneed; KTR picks processtest procedure

PERFORMANCE DETAIL / DESIGN

PERFORMANCE VS. DETAIL SPECIFICATIONS



72

• Program Unique Specifications advantages:• Help avoid duplication and inconsistencies.• Enables good estimates of necessary work and resources.• Provides consistent communication among players as people

rotate.• Can be used to prepare test plans.• Can be used a long time after the system has been put into

operation.• Serves as an interface between customers, developers and

designers.• Can act as negotiation and reference document for engineering

changes.

MIL-STD-961Standard Performance Specification

Standard Design SpecificationProgram-Unique SpecificationsNo waiver required to use.

STD PRACTICE

PROGRAM-UNIQUE SPECIFICATIONS

• Defines mission/technical performance requirements. Allocates Requirements to functional areas. Defines interfaces.

• Defines performance characteristics of CI’s (form, fit, function). Details Design Require ments only to meet interfaces. “DESIGN TO.”

• Includes “how to” and specific design requirements. Usually includes specific processes and procedures. “BUILD TO.”

• Defines process performed during fabrication.

• Defines production of raw materials or semi-fabricated material used in fabrication.

System

(HW or SW)Item

Performance

(HW or SW)Item

Detail

Process

Material

Functional(“System”)

Allocated(“Design to”)

Product(“Build to”)

Product

Product

Specification Content Baseline

Specs



73

Anal ysi s

Alloca tion

Syn thes is

(Bal ance)

R equ ir e men tsL oop

De si gn

L oop

Ve rif ic at ion

Ana lysis

Al loca tion

Syn thes is

(Balance )

Re qu ir em en ts

Loo p

D esi gn

Loo pVe rif ic at io n

Ana lysi s

Allocati on

Syn thes is

(Bal ance )

R equ ir e men ts

L oop

De si gn

L oop

V e rif ic at ion

Ana l ysi s

Alloca tion

Syn thes is

(Bal ance)


De si gn

L oop

Ve rif ic at ion

Ana lysis

Al loca tion

Syn thes is

(Balance )

Re qu ir em en ts

Loo p

D esi gn


Ana lysi s

Allocati on

Syn thes is

(Bal ance )

R equ ir e men ts

L oop

De si gn

L oop

V e rif ic at ion

Ana lysis

Al lo ca tion

Synth es is

(Balance )

Re qu ir e m en tsL oo p

D e si gn

L oo p

V e rif ic at io n

Ana l ysis

Allo cati on

Syn th es is

(Bal an ce )

Re qu ir e men ts

L oo p

De si gn

L oo pVe rif ic at io n

Ana lysi s

Al lo ca tion

Synth es is

(Balance )

R e qu ir e m en ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Ana lysis

Al lo ca tion

Synth es is

(Balance )


D e si gn

L oo p

V e rif ic at io n

Ana l ysis

Allo cati on

Syn th es is

(Bal an ce )

Re qu ir e men ts

L oo p

De si gn

L oo pVe rif ic at io n

Ana lysi s

Al lo ca tion

Synth es is

(Balance )

R e qu ir e m en ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Ana l ysi s

Alloca tion

Syn thes is

(Bal ance)


De si gn

L oop

Ve rif ic at ion

Ana lysis

Al loca tion

Syn thes is

(Balance )

Re qu ir em en ts

Loo p

D esi gn


Ana lysi s

Allocati on

Syn thes is

(Bal ance )

R equ ir e men ts

L oop

De si gn

L oop

V e rif ic at ion

PDR - Preliminary Design Review

CDR - Critical Design Review

PRR - Production Readiness Review(s)

TRR - Test Readiness Reviews(s)

FCA - Functional Configuration Audits

SVR - System Verification Review

PCA - Physical Configuration Audit

- Approve allocated requirements- Establish allocated baselines

- Preliminary product requirements- Ready for fabrication

- Assess producibility/manuf readiness

- Assess test readiness- Approve test plans

- Verify CIs perform to spec

- Verify CIs perform to system spec

- Verify the product baseline

ASR - Alternative Systems ReviewSRR - Systems Requirements ReviewSFR - Systems Functional Review

SSR - Software Specification Review

- Preferred System Solution meets needs- Preliminary Functional Requirements- Approve functional requirements- Review preliminary allocated requirements- Approve S/W allocated requirements

SYSTEM REVIEW DEFINITIONS

ASR SRR PRRs/TRRSSFR CDRSSRPDR PCASVRFCA

Contractor

DocumentsSys Perf SpecItem Perf SpecsItem Detail/TDP

BaselinesFunctionalAllocatedProduct

Tech Reviews

MS A B C

Government

Draft

System Definition SYS

CI

SysTechRqmts

ItemDesignRqmts

DetailedDesignRqmts

SYSTEMS ENGINEERING MANAGEMENTin Acquisition

Block ILRIP



74

CONFIGURATION MANAGEMENT PLANNING

• The decisions on• Which baselines the government should eventually control• The data needed• When that control should be established

...are strategic management decisions that involve• Acquisition strategies - sources, competition, etc.• Logistics support plans - repair levels, data needs, open systems, etc.• Technology insertion - stable vs rapidly moving technologies, etc.

• Government should control the Functional Baseline (documents systemlevel requirements)

• DoD PMO’s increasingly choose to leave Allocated Baselines under contractor control until late in development. (Documents the CI level design requirements.)

• Promotes contractor design flexibility• Relieves PMO from administrative burdens of managing design ECPs• Requires effective implementation of IPPD

• When and if to control baselines is dependent on support philosophy and acquisition management strategy.

“A management process for establishing and maintaining consistencyof a product’s performance, functional and physical attributes with itsrequirements, design and operational information throughout its life.”

• Identify and document the functional and physical characteristics ofconfiguration items.

• Control changes to configuration items and their relateddocumentation.

• Record (or Status Accounting in DoD terms) and report informationneeded to manage configuration items effectively, including thestatus of proposed changes and implementation status of approvedchanges.

• Audit configuration items to verify conformance to specifications,drawings, interface control documents, and other contract require-ments.

CONFIGURATION MANAGEMENTNon-Government Std: EIA Standard-649

Also see MIL HNBK 61

- Adopted by DoD, 22 Nov 96



75

• The Government PMO:– Identifies External Interfaces– Establishes interface standards

(baselines)– Maintains interface stability

• The Contractor:– Manages Internal Interfaces– Establishes Interface

- Requirements to Include- Internal & External Interfaces

– Controls Interfaces to Ensure- Accountability & Timely- Dissemination of Changes

The government increasingly chooses to manage interfacesleaving design details to contractors

• Identifies, documents, & controls all functional and physicalcharacteristics.

• Interfaces, what?• Common boundary.• Types: Mechanical, Electrical, Operational, Software.• Functional & Physical characteristics.

• Where?• Within one contractor’s design.• Between contractor’s items and GFE.• Between multiple contractors’ items.• Between systems

• Controlled by Interface Control Working Group.• Documented in Interface Control Documents.

?

INTERFACE MANAGEMENTWill it all work together?

INTERFACE CONTROL CONCEPT



76

BASIC PURPOSES OF WBS

HOW TO CREATE A WORK BREAKDOWN STRUCTURE

Sys Eng

System

Training Test Mfg

computer sensor

CrewSimulator

HW

XXXSystemSW

ApplicationSW

displays

Grouping forSpec.

DevelopmentInterface

ManagementEarned ValueEvaluation

RiskAssessment

TechReview

Structure

$$$Management

ProductTree

ECPImpact

IPTSetup

SupportCATT

AppendixA

BC

MIL HDBK881

System

Anal ysis

Allo cati on

Syn thesis

(Balan ce )


D e si gn

L oo p

V e rif ic at io n

Anal ysis

Al lo cati on

Synth esis

(Bal an ce )

Re qu ir e m en ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Anal ysi s

Al lo ca ti on

Synth esis

(Bal ance )

R e qu ir e m en ts

L oo p

D e si gn

L oo p

V e rif ic at io n

Definethe Product

Tailor(supporting processes)

Create and refineas design matures



77

SOFTWARE MANAGEMENT

• Nine Principal Best Practices to Improve Software Development, Reduce Costs, and Increase User Satisfaction*

- Formal Risk Management- Agreement Interfaces- Peer Reviews/Inspections/Walk-throughs- Metric-Based Scheduling and Management- Binary Quality Gate, at Inch-Pebble Level- Program-wide Visibility of Project Progress vs. Plan- Defect Tracking Against Quality Targets- Configuration Management- People-Aware Management Accountability

• Nine Project “Breathalyzer ” Questions to provide “Quick Look” at Software Project Health**

- Do you have a current, credible activity network supported by a work breakdown structure (WBS)?- Do you have a current, credible schedule and budget?- Do you know what software you are responsible for delivering?- Can you list the current top 10 project risks?- Do you know your schedule compression percentage?- What is the estimated size of your software deliverable? How was it derived?- Do you know the percentage of external interfaces that are not under your control?- Does your staff have sufficient expertise in the project domains?- Have you identified adequate staff to allocate to the scheduled tasks at the right time?

*“Little Yellow Book of Software Management Questions” (Software Program Managers Network)**“Project Breathalizer Questionnaire Software Health”; Software Program Managers Council



78

TYPICAL WORKING GROUPS

• Logistics Support Management Team (LSMT)• Test & Evaluation Working Group (TEWG)• Computer Resources Working Group (CRWG)• Requirement Interface Working Group• Interface Control Working Group (ICWG)• Technology Assessment Working Group• "Tiger" Team• Process Action Team• Integrated Product & Process Teams

RECOGNIZE WHICH PHASE OFTEAM DEVELOPMENT YOU AREIN AND TAKE POSITIVE ACTIONTO WORK THROUGH

WORKING GROUPS

TEAM DEVELOPMENT WHEEL

PerformingCreativeTrustingEffectiveConfident

FormingMillingConfusionPolitePurposeless

NormingCohesionPurposeFeedbackRelevancy

StormingConflictFrustrationResistanceCliques

Note: These can be an additional phase – “Adjourning” – when the teamdisbands, says good bye, and reflects on lessons learned.

This is a “celebration” phase.



79

Disadvantages• Takes more time• Hard to terminate• Paralysis by analysis

WORKING GROUPS(Continued)

Group Consensus - a general agreement by all team members that theycan live with, and be commited to a particular course of action. Untilyou have this agreement, you don't have consensus. Guidelines forachieving:

1. Avoid arguing for your own opinion.

2. Go for "win-win" solutions.

3. Do not change your mind to avoid conflict.

4. Avoid majority vote, coin-flipping, horse-trading.

5. Expect differences of opinion.

MANAGEMENT TRADE-OFFSFOR WORKING GROUPS

Advantages• More ideas & solutions• Consensus positions• Strong commitments



80

• Decision Making• Resolving Issues• Communicating• Planning• Executing• Controlling

• Customer Focus• Leadership• Values• Vision• Purpose• Goals & Objectives• Critical Success Factors

• Diversity• Conflict• Comfort Zones• Communications• Focus• Organizational Climate• Trends

• Awareness• Roles & Responsibilities• Operating Agreements• Team Accountability• Empowerment• Trust• Five Cs• Team Identity• Self assessment

CommunicationCommitmentCooperationContributionCaring

Team Processes

Team Principles

Team Dynamics

Team Foundation

ThinkingLearning

TEAM PERFORMANCE MODEL

Charter



81

IILEADERSHIP & MANAGERIAL SKILLS

• More things that make you go “Hmmm?... ”

“An authority is a person who just happens to know the source.”

“A conservative is a person who believes nothing should bedone the first time.”

“Diplomacy is the art of hearing all parties arguing in a dispute andnodding to all of them without ever agreeing with any of them.”

“The meeting raised our confidence that the contractor can actu-ally accomplish the task and that it will occur in our lifetime.”

“This is the earliest I've been late.”

“The world would be a much better place if people weren't allowedto have children until they've proven they can successfully man-age a DoD program.”

“Everyone is bound to bear patiently the results of his/her own ex-ample.”

“The superior person is firm in the right way, and not merely firm.”



82

DELEGATION

REASONS FOR DELEGATING 1. Improve manager's time management

a. Increase manager's span of controlb. Increase time allocated to long range planningc. Increased management efficiency

2. Assure tasks performed by most qualified3. Build organizational depth4. Improve employee motivation5. Increased teamwork (IPTs/TQM)6. Maximize resources7. Appropriate organizational responsibility

12 STEPS FOR DELEGATING1. Set clear objectives and task statements2. Select "Delegate"; check qualifications3. Provide training, if necessary4. Solicit input from Delegate5. Assign task and deadline6. Provide any relevant guidance

a. Critical information required to do tasks rightb. Potential approaches - only as suggestions!c. Describe results desired

7. Makes a delegation "contract" (see next page)8. Establish controls9. Maintain controls

10. Provide feedback11. Identify lessons learned12. Evaluate performance



83

DELEGATION(Continued)

DELEGATION RECORDDescription of Action: Date:

Person Assigned:

Authority Level (specify):1 - Take action; do not report back2 - Take action; report back (see Frequency)3 - Prepare plan; proceed upon approval4 - Do only as directed below

Frequency of Contact (specify):1 - daily2 - weekly3 - monthly4 - other

Suspense Action:

Performance Assessment:

Suspense Date:

Delegation Guidance/Agreements:

(SAMPLE)



84

EFFECTIVE MEETINGS

PRE-MEETINGA. Establish type of meeting

1. Information (quick, crisp)2. Planning/Strategizing (slow, deliberate)3. Problem solving (divergent/convergent)4. Decision (deliberate)5. Staff/Conference (repetitive, short)6. Feedback/Evaluation (slow, contemplative)7. Training (smooth, flowing)8. Social (rambling)

B. Select participants1. Based on purpose; relevant; decision auth.2. Size: 4-7 ideal; 10-12 tolerable; >13 unsat.

C. Circulate agenda (3-5 days in advance)1. Type, purpose, date, place, start/finish times2. Topics, time allocated (minutes), speakers3. Assign recorder

CONDUCTING MEETINGA. Opening

1. Start on time2. Repeat type and purpose of meeting

B. During1. Facilitate the meeting2. Encourage openness and communication3. Develop cohesion4. Use active listening5. Stick to agenda

C. Closing1. Set time and date of next meeting2. Summarize agreements, actions, decisions3. Close on time or before

AFTER MEETINGA. Review minutes with recorderB. Publish minutes



85

DIRECTIVE• Give advice• Evaluate• Motivate• Explain• Reassure

NON-DIRECTIVE• Don't display authority• Listen carefully• Don't advise• Facts only; no opinions• Employee find solution

Advantages• Effective with inexperienced personnel• Quick• Take charge attitude

Advantages• Develops commitment• Good training• Employee responsible• Supports delegation

Disadvantages• Perceived insulting• Does not support delegation• Manager keeps responsibility

Disadvantages• Takes time• Skill/patience required• Ineffective with inexperienced personnel

COUNSELING PROCESS

1. Set up interview - private, confidential,unhurried

2. Encourage discussion - open questions,active listening

3. Help employee think it through - deal withfacts, no opinions or own views

4. Let them find the solution - their solution totheir problem

COUNSELING

PERSONAL COMMUNICATIONS



86

PERSONAL COMMUNICATIONS(Continued)

WIN-WIN NEGOTIATIONS

FOCUS: Defeat the problem; not the person

APPROACH:Resolve conflictReach agreementNormalize relationshipsCombine efforts

GOAL:Acceptable gains by both parties

INTER-PERSONAL NEGOTIATIONS

1.Separate people and emotions from the problem2.Focus on interests, not positions3.Generate options for mutual gain4.Insist on objective criteria

- Screen for importance- Limit to 2 minutes- Do all at one time- Itemize topics before calling- Don't socialize- Screen for importance- Do not invite into office- Remain standing- Re-delegate- Stay focused on subject area and on schedule

1. Incoming telephone calls

2. Outgoing telephone calls

3. Unscheduled visitors

4. Improper delegation5. Poorly conducted meetings

TIME MANAGEMENTTIME ROBBERS AND AVOIDANCE TECHNIQUES



87

TIME MANAGEMENT(Continued)

1. List all tasks.2. Categorize tasks using matrix.3. Review quadrant 3 items; re-assign as 1, 2, or 4 as appropriate.4. Do quadrant 1 tasks first; consider delegating!5. Strive to maximize time for quadrant 2 tasks (be proactive!).6. When all 1 and 2 tasks are complete, do quadrant 4 tasks.

KEEP A "TO DO" LIST

1. List all goals and tasks.2. Categorize as A - High value

B - Medium value C - Low value

3. Prioritize within each category (e.g. A-1, A-2, etc.).4. Accomplish all A tasks, then all B. Do C if time permits.5. Review list and priorities daily.

HIGH IMPORTANCE LOW

HIGH

URGENCY

LOW

DO ITNOW

VERIFY&

RE-ASSIGN

MID-TO-LONGRANGE

PLANNING

BUSYWORK

1

2

3

4



88

DECISION BRIEFING

Elements of a Decision Briefing

• Purpose - Issues• Outline - Agenda• Background• Assumptions• Alternatives Identified• Evaluation Criteria• Analysis of Alternatives• Recommendation• Implementation Plan

Things to Expect (from Briefee)

• Challenges to assumptions, definitions, methodology• Does it comply with or change policy?• Is the situation sensitive to change?• Issues with analysis, tradeoffs, recommendations, implementation• Open/closed questions



89

MANAGEMENT TOOLS & TECHNIQUES

1. Activity-based Management (ABM). Uses detailed economicanalyses of important business activities to improve strategic andoperational decisions. ABM increases the accuracy of cost informa-tion by more precisely linking overhead and other indirect costs toproducts or customer segments. Traditional accounting systemsdistribute indirect costs using bases such as direct labor hours,machine hours, or material dollars. ABM tracks overhead and otherindirect costs by activity, which can then be traced to products orcustomers.

2. Balanced Scorecard. Defines what management means by“performance” and measures whether management is achievingdesired results. The Balanced Scorecard translates mission andvision statements into a comprehensive set of objectives andperformance measures that can be quantified and appraised. Thesemeasures typically include: financial, customer value, internalbusiness process, learning and growth, and employee performance.

3. Cycle Time Reduction. Decreases the time it takes a company orprogram to perform key activities throughout its value chain. CycleTime Reduction uses analytic techniques to minimize waiting time,eliminate activities that do not add value, increase parallel pro-cesses, and speed up decision processes within an organization.Time-based strategies often emphasize flexible manufacturing, rapidresponse and innovation in order to attract the most profitablecustomers.

4. Groupware. Refers to a broad range of technologies that allowpeople in organizations to work together through computer networks.These products range from sophisticated electronic mail packagesto applications that link offices and employees. Organizations usesuch technology-aided communications to better inform strategicand financial decisions and to more effectively and economicallybring together working groups. (DAU has a Groupware capability inits Management Decision Center, which is used for managementdecision making by offices and agencies throughout DoD.)



90

MANAGEMENT TOOLS & TECHNIQUES (Continued)

5. Outsourcing. Occurs when a company or Government agency usesthird-parties to perform non-core business activities. Contractingthird-parties enables a company or agency to focus its efforts on itscore competencies. Many companies find that outsourcing reducescost and improves performance of the activity. Third-parties thatspecialize in an activity are likely to be lower cost and more effective,given their scale. Through outsourcing, a company or agency canaccess the state of the art in all of its business activities withouthaving to master each one internally.

6. Business Process Reengineering. Involves the fundamentalredesign of core business processes to achieve significant improve-ments in productivity, cycle times, and quality. In Business ProcessReengineering, companies start with a blank sheet of paper andrethink existing processes to deliver more value to the customer.They typically adopt a new value system that places increasedemphasis on customer needs. Companies and/or Governmentagencies reduce organizational layers and eliminate unproductiveactivities in two key areas. First, they redesign functional organiza-tions into cross-functional teams. Second, they use technology toimprove data dissemination and decision making.

7. Strategic Planning. Is a comprehensive process for determiningwhat a commercial business or Government agency should becomeand how it can best achieve that goal. It appraises the full potentialof a business and explicitly links the business objectives to theactions and resources required to achieve them. Strategic Planningoffers a systematic process to ask and answer the most criticalquestions confronting a management team – especially large,irrevocable resource commitment questions.



91

BRAINSTORMING

PURPOSE: To stimulate the free flow of ideas.

METHOD: Group members take turns generating ideas. One ideastimulates another and then another. Freewheeling of ideas is en-couraged. Brainstorming stops when all group members run out ofideas. See the back of this page for questions that may suggest newideas for you.

GROUND RULES:

Put judgment aside. Remember, all ideas can be thought of asstarters.

No criticism allowed. This is not the time to judge an idea. Don'tcriticize other ideas no matter how ridiculous they may seem. Theideas can be discussed in detail later; now, the objective is to gen-erate more ideas.

Welcome free-wheeling or blue-skying. Let those wild ideas comeout—otherwise you may conceal your creative process. The im-practical ideas may trigger other ideas that are possible to use.

Strive for quantity, not quality. The more ideas brought out, thebetter the chance of a great solution.

Combine and rearrange ideas. Single ideas aren't the only way tomake a suggestion. You can make additions or combinations ofpreviously suggested ideas to create still better ideas.

Record all ideas exactly as expressed. This keeps the mind free ofremembering what was said and allows you to build on previousideas.

IIIPROBLEM SOLVING TOOLS



92

BRAINSTORMING(Continued)

Why does it work?

Some of the reasons why brainstorming enhances a group's creativity are that it:

- Increases involvement and participation.

- Produces the most ideas in the shortest time.

- Reduces the need to give the "right" answer.

- Frees up the group; allows the members to have fun and is interesting.

- Reduces the possibility of negative thinking.

QUESTIONS TO STIMULATE YOUR BRAIN CELLS:

1. Can we use this idea elsewhere? As is? With changes?2. If we change it,; Is there anything else like it? Any related issues?3. Modify? Change? Rearrange? Meaning, color, motion, sound, odor, taste, form, shape, layout, etc.?4. Magnify? Add what? More, stronger, larger, new?5. Minimize? Subtract what? Eliminate, smaller, lighter, slower, split?6. Substitute? Who, what, when, where?7. Reverse? Opposite, backwards, upside down, inside out?



93

FORCE FIELD ANALYSISA Force Field Analysis illustrates the relationship and significance offactors that may influence the problem or goal. This analysis helps usbetter understand driving and restraining forces.

Used for making decisions, force field analysis can help:• Identify realistic improvement opportunities;• Develop systematic action plan for problem resolution; and• Create criteria for evaluating effectiveness of improvement actions.

CAUSE AND EFFECT DIAGRAMThe cause and effect diagram is a graphical illustration of the relationshipbetween a problem or goal (the effect) and its potential contributors (thecauses). Sometimes called the “fishbone” or Ishikawa diagram.Used for analyzing problems, a cause and effect diagram can help:• Determine root causes of a given effect;• Identify areas where there is a lack of data.

GOAL: Stop Smoking+ Driving Forces

Poor Health

Burned Clothing

Poor Example

Cost

Impact on Others

Restraining Forces –

Habit

Addiction

Taste

Advetisements

Stubborn

ENVIRONMENT MACHINEPEOPLE

POORPHOTOCOPY

QUALITY

METHODS MATERIALS

OriginalSettings

PencilHardness

DryingTime

Bad PaperHandling

PoorMaintenance

Bad SettingsContamination

PaperAlignment

HandsDirty

BadOriginalsHumidity

OperatingHours

Sharpness

Lamp DirtySpeed

Roll ConditionNotCleaning-up

Not Level

PoorQuality

PoorStorage

Copy Paper

WritingPressure



94

SCATTER DIAGRAMA scatter diagram depicts the correlation between two variables (X and Y).

Used for data analysis, a scatter diagram can help:• Confirm a hypothesis that two variables are related.• Provide both visual & statistical means to test the strength of a potential relationship.

HISTOGRAM

The histogram chart displays the distribution of a measurable character-istic (for example: weight, length, speed, etc.). A histogram shows whatthe variability of the data is in a graphical or pictorial manner.Used for data analysis, a histogram can help:• Present a picture of how the process is operating;• Compare actual process measurements with an expected distribution;• Observe patterns in the data; and• Investigate process stability.

Y

X

FREQUENCY

MEASURABLE CHARACTERISTICS



95

SURVEYS

A Survey is used to collect data from a variable number of items or peoplefor a comparative study. They are used when a new project is planned,to prove the need and the demand of the customer.Surveys can be used anywhere in the organization to find out specificinformation which is necessary to make improvements in a process.

Surveys:- Are an inexpensive way to test a system or product.- Can be used with a large number of people or a small group.- Can give you an overall view, determined by the questions you ask.- Show if an organization is meeting its quality goals.- Help identify satisfied and dissatisfied customers or employees.

Survey Process1. Determine the group to be studied.2. Determine what questions will be asked.

Note: Train your data collectors thoroughly. Everyone must know how to askthe questions, who to approach, and how to approach them.

3. Compile your results in chart form using a Pareto chart, histogram,and other tools that will give you clarification.4. Use the compounded data to form a base for improvement.5. Continue to take data to monitor improvements, and make sure theimprovements you have made are working.

Caution!

Data must be collected honestly and consistently.An untrained collector can skew the data to reflect personal biases.A poor, inconsistent survey will give you invalid data.Make sure there is enough time allowed for the collecting process.

Brainstorming

SURVEY1.2.3.4.



96

AFFINITY DIAGRAM

An affinity diagram is a technique for organizing verbal information intoa visual pattern. An affinity diagram starts with specific ideas and helpsyou work toward broad categories. This is the opposite of a cause andeffect diagram, which starts with the broad causes and works towardspecifics. You can use either technique to explore all aspects of anissue.

Affinity diagrams can help you:• Organize and give structure to a list of factors that contribute to aproblem.

• Identify key areas where improvement is most needed.

How to do it:1. Identify the problem. Write the problem or issue on a chalkboard

or flip chart.

2. Generate ideas. Use an idea-generation technique to identify allfacets of the problem. Use index cards or sticky-back notes torecord the ideas.

3. Cluster your ideas (on cards or paper) into related groups. Usequestions like “Which other ideas are similar?” and “Is this ideasomehow connected to any others?” to help group the ideastogether.

4. Create affinity cards. For each group, create an affinity card, a cardthat has a short statement describing the entire group of ideas.

5. Cluster related affinity cards. Put all of the individual ideas in agroup under their affinity card. Now try to group the affinity cardsunder even broader groups. You can continue to group the cards untilyour definition of “group” becomes too broad to have any meaning.

6. Create an affinity diagram. Lay out all of the ideas and affinitycards on a single piece of paper or a blackboard. Draw outlines ofthe groups with the affinity cards at the top of each group. Theresulting hierarchical structure will give you valuable insight into theproblem.



97

Environment

EquipmentErgonomics

Training

Original Document

No Definitionof Quality

NoiseLightingDesk HeightChair HeightComfort

HandwritingGrammarPunctuationSpelling

Draft CopyFinal CopyDistributionFont

ComputersPrintersTypewriters

Typing SkillEditing SkillComputer SkillProofreading Skill

No MeasurementNo Feedback

Technical JargonSlang

Affinity Diagram

Interruptions

UnreasonableDeadlines

Time of Day

Typographical Errors

Author Skill Requirements

AFFINITY DIAGRAM EXAMPLEA publication team wanted to reduce the number of typographical errorsin their program’s documentation. As part of a first step, they conducteda brainstorming session that produced the following list of factors thatinfluenced errors.

Computers No FeedbackProofreading Skill PrintersUnreasonable Deadlines NoiseLighting TypewritersChair Height ComfortDesk Height Time of DayTechnical Jargon InterruptionsHandwriting GrammarSlang SpellingDraft Copy PunctuationDistribution FontFinal Copy Editing SkillComputer Skill Typing SkillNo Measurements

The following affinity diagram helped them to focus on areas for further analysis.



98

PAIRWISE RANKING

Pairwise ranking is a structured method for ranking a small list of items inpriority order.Pairwise Ranking can help you:• Prioritize a small list.• Make decisions in a consensus-oriented manner.

How to do it:1. Construct a pairwise matrix

2. Rank each pair. For each pair, have the group (using a consensus-oriented discussion) determine which of the two ideas is preferred.Then, for each pair, write the number of the preferable idea in theappropriate box. Repeat this process until the matrix is filled.

3. Count the number of times each alternative appears in the matrix.

4. Rank all items. Rank the alternatives by the total number of times theyappear in the matrix. To break a tie (where two ideas appear the samenumber of times), look at the box in which those two ideas are compared.The idea appearing in that box receives the higher ranking.

Each box in the matrix represents the intersection(or pairing) of two items. If your list has five items,the pairwise matrix would look like this, with the topbox representing idea 1 paired with idea 2:

1 2

3 4

2345

12 21 3

4

2345

12 2

3 4

2345

12 21 2 31 2 3 45 5 5 5

2345

1 and 2 compared2 is better



...and so onuntill...

Alternative 1 2 3 4 5Count 2 3 1 0 4Rank 3rd 2nd 4th 5th 1st

Alternative 5ranks 1st overall

Alternative 5 appears4 times in the matrix

Alternative 1 2 3 4 5Count 2 3 1 0 4Rank



99

PAIRWISE RANKING EXAMPLEA program team was asked to recommend a site for testing a uniqueportion of a system. A feasibility study produced a list of six possiblelocations. The team then used pairwise ranking to determine thatNellis AFB was best suited for this particular test.

1. Fort Huachuca 4. Nellis AFB2. Edwards AFB 5. Eglin AFB3. Kirkland AFB 6. Hanscom AFB

12 21 3 34 4 4 45 5 5 4 51 6 6 4 5

23456

Site 1 2 3 4 5 6Count 2 1 1 5 4 2Rank 3rd 6th 5th 1st 2nd 4th

PARETO CHARTA bar chart which arranges contributing factors/causes to a problem inorder with respect to their degree of contribution to the problem.Used for analyzing problems, a Pareto chart can help:• Select improvement opportunities;• Identify root causes with greatest impact from a cause and effect

diagram;• Check results of improvement efforts by comparing Pareto charts

before and after action is taken.

40

30

20

10

Customer Complaints (Food Service)

POORSERVICE COST QUANITY TASTE OTHER

Causes

%Contribution



100

AF Product Division A 75 daysNavy Product Division B 79 days

AF Product Division B 95 days

Army Product Division A 110 days

Navy Product Division A 140 days

Government Agency C 200 days

BENCHMARKING

Benchmarking is the process of measuring products, services, andpractices against the toughest competitors or those known as leaders intheir field. Benchmarking can help you:• Understand how you compare with similar organizations.• Identify areas for process improvement.How to do it:Identify the process to be benchmarked. Select a process (asopposed to a product) that is important to both your organization and yourcustomers. Be sure the process in your organization is similar to, andmeasured in the same manner, as the one it’s being compared to.Study other organizations. Develop a list of organizations withcomparable products and services. Determine what specific processesthe organization performs. Based on this information, rank the organiza-tions from best to worst.Compare and evaluate. Compare your process to the best and worstcases, and list the important differences. These differences can suggestpotential improvements to your process.

Note: Benchmarking is not replicating a process from an organization thatexcells. (Unless your goal is to be 2nd best.) It is studying the process, clearlyunderstanding the theory behind the process and then restudying your ownprocess to determine improvements.

Benchmarking ExampleUsing inputs their customers pro-vided, the executive leaders atAF Product Division B decidedthat their source selection pro-cess needed improvement. Aspart of the initial analysis, theywanted to see how their processcompared with others. They de-termined that the average num-ber of days required for sourceselection was an important pro-cess measure.As a result of this analysis, rep-resentatives visited AF ProductDivision A and Navy Division Band studied their source selec-tion procedures.

Best

Worst

(Our Organization)

(Average number of days required)

Source Selection



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FLOWCHARTING

A flowchart is a graphic representation of the steps of a process.Flowcharts help us understand the process by mapping out the steps inas much or as little detail as needed.

Enlisted Accessions and Training

Used for analyzing a process, a flowchart can help:

• Understand the existing process;

• Locate improvement areas in a process;

• Document changes to a process;

• Show relationships between different steps in a process; and

• Identify critical stages of a process.

There are standard flowchart symbols. When you are developing aflowchart, especially in a group environment, the goal is to chart theprocess. Don't waste time debating which shape a symbol should be. Aflowchart that doesn't use the standard symbols can be just as useful asa chart that does use them.

RECRUITING

HASPRIOR

SERVICEENTERSBASIC

TRAINING

ASSIGNEDTO A

SPECIALTYFIRST DUTY

ASSIGNMENT

TECHTRAINING

REQUIRESTRAINING

DISCHARGED

PASSES

RETAIN

FAILS

NO

YES

NO

YES

NO

YES

NO

NO

YES

YES



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A

B

This Symbol... Represents...

Start/Stop

Decision Point

Activity

Document

Connector (toanother page orpart of thediagram)

Some Examples:

Recieve TroubleReportMachine operable

Approve/DisapproveAccept/RejectYes/NoPass/Fail

Drop off travelvoucher

Open access panel

Fill out troublereport

STANDARD FLOWCHART SYMBOLS

DEPLOYMENT FLOWCHARTS

A deployment flowchart shows the process flow and the work groupsinvolved in each step. It provides a graphic representation of a givenprocess or system work groups, or individuals responsible for each activity.

A deployment flowchart is used anytime individuals or groups need toanalyze a process in order to improve a system.



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Deployment flowcharts are used for various functions such as trainingagenda, daily schedule, meeting analysis, emergency procedures, pur-chasing process, communication procedures, maintenance process, etc.

Deployment Flowcharts:• Identify involvement in a process, as it relates to the whole process.• Define work processes, and identify existing loops through people or

departments.• Visualize a process or system.

Deployment Process1. Select a process or system to analyze.

2. Identify the cast of characters (people involved in the process).

3. Document the existing process using the flowchart symbols.

4. Discuss changes to be made in the process with all those involved withthe process.

5. Update the deployment flowchart with the proposed changes andimplement the new process

6. Study the effectiveness of the change and return to step #1 above.

Time correlation if applicable

Process Identification

Cast of Characters

Task Box

Circle denotes added support

Meeting

Decision Diamond

Decision Line

Shadow box means more informationon another flow chartReport

End Source: Dr. Myron TribusDeployment Flow ChartingQuality & Productivity, Inc.,Los Angeles, CA 90024

NO

YES



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NOMINAL GROUP TECHNIQUE (NGT)Ranking of consensus

Why?Allows a team to come to consensus on relative importance of issues,problems, or solutions by combining individual importance rankings intoa team’s final ranking.

What?• Builds commitment to the team’s choice through equal participa-

tion in the process• Allows every team member to rank issues without being pressured

by others• Puts quiet team members on an equal footing with more dominant

members• Makes a team’s consensus (or lack of it) visible; the major causes

of disagreement can be discussed.

How to do it:1.Generate the list of issues, problems, or solutions to be prioritized

In a new team with members who are not accustomed to team participation, it may feel safer to do written, silent brainstorming, especially when dealing with sensitive topics.

2.Write statements on a flipchart or whiteboard

3.Eliminate duplicate and/or clarify meanings of any of the statements As a leader, always ask for the team’s permission and guidance when changing statements.

4.Record the final list of statements on a flipchart or whiteboardExample: Why does faculty have inconsistent output?

A Lack of trainingB No documented processC Unclear quality standardsD Lack of cooperation with other departments in developing

standardsE High turnover

Use letters rather than numbers to identify each statement so that team members do not get confused by the ranking process that follows.



105

5. Each team member records the corresponding letters on a piece ofpaper and rank orders the statements Example: Larry’s sheet of paper looks like this:

A 4B 5C 3D 1E 2

• This example uses “5” as the most important ranking and “1” asthe least important. Since individual rankings will be latercombined, this “reverse order” minimizes the effect of teammembers leaving some statements blank. Therefore, a blank(value = 0) would not, in effect, increase its importance.

6. Combine the rankings of all team members John Paul George Ringo Mary Total A 4 5 2 2 1 = 14 B 5 4 5 3 5 = 22 C 3 1 3 4 4 = 15 D 1 2 1 5 2 = 11 E 2 3 4 1 3 = 13

“No documented process,” B, would be the highest priority. The teamwould work on this first and then move through the rest of the list asneeded.

Variation:Weighted MultivotingEach team member rates, not ranks, the relative importance of choicesby distributing a value, e.g., 100 points, across the options. Each teammember can distribute this value among as many or as few choices asdesired.Example: John Paul George Ringo Mary Total A 20 10 = 30 B 40 80 50 100 45 = 315 C 30 5 10 25 = 70 D 5 10 20 = 35 E 10 10 20 10 = 50With large numbers of choices, or when the voting for the top choices isvery close, this process can be repeated for an agreed upon number ofitems. Stop when the choice is clear.



106

CREATIVE PROBLEM SOLVING

PROCESS STEPS1. List perceived problems2. Gather relevant data3. Define actual problem4. Determine alternative solutions5. Analyze and evaluate alternatives6. Select solution7. Validate solution

DIVERGENT THINKING*1. Accept all ideas and alternatives2. Defer judgment or evaluation3. Discuss, combine, hitchhike, improve ideas4. When exhausted, move to converge

CONVERGENT THINKING*1. Establish categories of alternatives2. Develop evaluation criteria3. Avoid premature closure4. Keep eye on objective5. List strengths and weaknesses6. Select best alternative or idea

*Used sequentially during all problem-solving steps



107

KNOT CHART

As you work your way thru the problem, everything should move intothe left column – Know.

The Knot Chart is useful for:

• Initially sorting the wheat from the chaff• Organizing/coordinating the next steps of the problem solving

process

Think we knowOpinionKnow Need to know



108

QUALITATIVE PROBLEM SOLVING(Kepner - Tregoe)1/

Deviation Statement: (Describe the actual performance vs. should performance)

1. Define deviation.2. Describe what deviation IS and IS NOT.3. List distinctions between what deviation IS and IS NOT.4. Do distinctions indicate or suggest a change?5. Determine possible causes based on distinctions and changes.

1/ Copyright Kepner Tregoe, Inc. (1981). All rights reserved. Reprinted with permission. (Kepner-Tregoe, Inc.,Research Road, P.O. Box 704, Princeton, N.J. 08542)

SpecifyingQuestion

What?(Identify)

Where?(Location)

When?(Timing)

Extent?(Magnitude)

Does the distinctionsuggest a change?

What is distinctive about"Is" vs. "Is Not"?Is Is Not

Possible Causes:

Most Likely Cause:



109

GANTT CHART

A Gantt Chart is used for planning schedules and managing projects. Itis a method for basic planning and work instruction.

How to do it:1. The Gantt Process begins by listing the activities of a project inorder of execution.

2. Place the number of each activity across the top of your chart. Timeduration such as days, weeks, years, etc., can replace activity num-bers if appropriate.

3. Draw vertical lines across the chart for each item.

4. Starting with number 1 begin comparing the activities. Can number 1be done at the same time as number 5 or 6?

5. Draw horizontal lines to indicate which activities can be done simul-taneously.

6. You now have an overview of your project giving you a starting point,and time saving measures to help you complete the project on time.

ACTIVITIES 1 2 3 4 5 61. Requirements are written2. Finances are arranged3. Bidding takes place4. Contractor is selected5. Prototype is built6. Testing begins

ACTIVITIES1. Requirements are written2. Finances are arranged3. Bidding takes place4. Contractor is selected5. Prototype is built6. Testing begins



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Notes
