HM

1
HME StandardizationConcept and Pilot

• 8 November 2006

2
Why are we here?

• Discuss the History of the HME ExComm
• Discuss the Concept of the First Commodity
• Understand Industrys process and perspective

Instill a Framework
3
State of Maritime HME Standardization Fleet
Wide
27.3 K
145,485 Equipment
19.2 K
70.7 K
28.3 K
Fleet Wide HME Equipment Population
4
Average Cost per APL
FY2000 thru FY2004 (5 years) APLs developed
11,264 Average ILS Cost/APL 148K Total
Projected ILS Cost 1.7B
Drives additional inefficiencies across Maritime
sustainment processes
5
Impact of Low Density HME

• Proliferation of non-Standard HME introductions
• Drives higher life cycle logistics support costs
• Negatively impacts readiness

3
2.97
Non-Standardization
2
1.78
CASREPS/100 Installations
1.68
1.65
1.64
1.41
1.33
1
0.13
gt100
51-100
21-50
11-20
6-10
3-5
2
1
Installation Range
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Maritime HME StandardizationThe Way Ahead
Establish Necessary Commodity Vehicles
Increased Readiness Reduced Life Cycle
Costs Without impacting ship
construction/repair costs
Incentives/clauses to Encourage Standardization
Reinforce Use of Standard HME at the Waterfront
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Structure
NAVSEA Co-Chair
NAVSUP Co-Chair
HME EXCOMM
New Governance Board established out of the ESC
and old WG-4
Governance Board SEA 09/SUP ED (SEA 04L/SUP
04/PEO/DASN(L))
Executive Steering Committee
SWE SMT
WG 4-( SUP 04/SEA 04L)
Bi-weekly Sitreps
METRICS
METRICS
METRICS
BVSPT
Working Group (1)
Working Group (2)
Working Group (3)
New Const/ Acquisition (PEO SHIPS/SEA 02)
Maintenance/ Modernization (MARMC/FISC)
Commodities Management (NAVICP 02/SEA 05)
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Roles/Responsibilities

• Governance Sub-Team Tasks include
• Schedule EXCOMM/Governance Board Meetings
• QA and distribute read ahead material
• Draft EXCOMM/Governance Board minutes/Action
  Items
• Draft EXCOMM Decision Memoranda

• Manage and document the HME EXCOMM process
• Monitor all EXCOMM assigned tasking

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Objective of WG 3

• Develop methodology and approach to analyze
  existing Allowance Parts List groups to identify
  commodities for potential standardization
  contract initiatives.
• Define, recommend and execute an acquisition
  strategy for commodity type contractual
  agreements.
• Recommend policy changes to Governance Group
• Define and collect supporting metrics that will
  drive standardization behaviors.
• Collect contracting requirements from WGs 1 and 2
  for approved standardized equipment.

GOAL Award long-term commodity contracts to be
used by industry and government that will drive
standardization into the fleet.
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Targeted Approach

• Compares OEM unique valve Family APLs to CAGEs
  for targeted groups of commodities
• Unofficial analysis shows 6 manufactures for
  largest grouping of Valves
• Conduct detailed Engineering Analysis for
  Acquisition Strategy and requirements
• Use Best Value Tool for further define population
• Pursue Commodity type contracts with best value
  OEMs/Sources

Apply same Methodology to Circuit Breakers
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Contracts- Commodities
Vendor(s)
Identify commodity groups
Assess and prioritize opportunities based on a
thorough analysis of APL Databank /Modernization
Efforts and Obsolescence
Develop detailed profile of commodity including
demand specifications
Conduct market analysis to identify industry
trends, supply demand levers, potential new
suppliers, negotiation levers, and available
contract vehicles
Develop enterprise-wide commodity acquisition
strategy based on Commodity Profile Supply
Market Analysis
Develop and issue RFP based on sourcing)
Utilize Best available means to announce
existence of Commodity Contract. Implement
contract, process and policy changes continually
measure, track and manage performance

• Commodity Contracts
• Ten-year Contracts (5 year Base)/Firm Fixed Price
  Preferred
• Indefinite Quantity (IDIQ) Type Contract
• Will Guarantee a minimum quantity/ Will Include
• Procurement of end item
• Repair of end item
• Parts and subassemblies
• Direct Shipment to Requisitioners
• Government Stockage only at minimum levels-
  Determined by IM/PM
• Will require FAR Part 51 Waiver- Signed by ASN
  (RDA)

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Commodity Identification Process
Vendor(s)
1
Identify candidates/ requirements
Identify commodity groups
WG 3 Commodities Management

• Use Commodity Group Analysis as identified for
  Valves and Circuit Breakers
• Cage Analysis
• Demand Analysis
• Spend Analysis
• APL Review
• Non- Technical Factors Only GOAL Reduce
  Redundancy!
• Drawing Review and Consolidation GOAL Reduce
  Population!
• Results fed to WG1, 2,3 for final review and
  approval or candidates

REQUIRES COMITTED AND RENEWABLE FUNDING
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Contracts- Ship Construction and Maintenance-
Process
Vendor(s)
1
Identify commodity groups
Identify candidates/ requirements
Contracts are DRIVEN by requirements and funding

• Candidates Identified
• -Opportunities (SHIPMAIN)
• -Design
• Modernization
• Obsolescence
• APL databank review

WG 2 Industrial/ Maintenance
WG1 New Construction/ Maintenance
WG 3 Commodities Management
Supports WG1 and WG2 -Coordinating data
analysis -Assisting with Contracting process
DASN (L)/PEOs NAVSEA
COMFISCS/RMC(s)
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Contracts- Ship Construction and Maintenance-
Process
Vendor(s)
1
3
Issue RFP Negotiate
Identify commodity groups
Identify candidates/ requirements
Develop Commodity Strategy
4
Candidates and Requirements passed to appropriate
Contracting Office -DLA for Consumables -NAVICP
for Repairable
WG1 New Construction/ Maintenance
WG 2 Industrial/ Maintenance
WG 3 Commodities Management
Supports WG1 and WG2 -Supports Market Analysis
and Acquisition Strategy Development
DASN (L)/PEOs NAVSEA
COMFISCS/RMC(s)
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Contracts- Ship Construction and Maintenance-
Process
1
3
4
5
Issue RFP Negotiate
Identify commodity groups
Implement Manage Perf.
Develop Commodity Strategy
Identify candidates/ requirements
-Announce contract existence and terms of use to
both Industry and Government -Implement
monitoring metrics to gauge performance and use
WG1 New Construction/ Maintenance
WG 2 Industrial/ Maintenance
WG 3 Commodities Management
Supports WG1 and WG2 -Announce
Contracts -Remove barriers to use -Monitor
performance
DASN (L)/PEOs NAVSEA
COMFISCS/RMC(s)
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Commodity Pilot
Defacto Standardization

• Valve NIINS
• 1
• 2
• 3
• 4
• 5
• 6
• 7
• 8
• 9
• 10

Commodity Contractor
Generic Specifications 1 to 3 Flow
Rate Material
Best Value TOC and APL
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Summary

• Need Industry Insight into Commodity Management
  Concept
• Complete the Requirements development Process
• Defined Construct, Drum Beat and Management Tools
• Move to Award Commodity ContractRepeat Process

Develop Repeatable Process
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BACK UP
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Where Weve Been

• Five Commodity Types Evaluated
• Pumps
• Valves
• Actuators
• Electric Motors
• Hydraulic Cylinders
• VADM Sullivan and NAVSEA 04L (J. Goodhart)
  Disagreed with Approach during 21 November 2005
  EXCOMM
• January 30 2006 Recalibration Teleconference
  held with NAVICP-M, NAVSEALOGCEN, NAVSEA
  Philadelphia and NAVSEA
• New Direction given by Mr. Goodhart

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Where Were at

• NAVSEA Philadelphia and NAVSEALOGCEN performed
  analysis of All HME Installs from FY02-FY04
• 982,355 Total HME Installs
• 269,757 were Valves
• Utilized HME Data Retrieval System (HEDRS) to
  identify Lead Allowance Parts List (LAPL)
• Plotted/Cross Tabbed All Valve APLs/Installs by
  LAPLs and OEM (CAGE)
• Parsley Chart Resulted

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Where Were at

• Eliminated Valve APLs lt 10 Installs
• Pattern Resulted
• Pattern Identified the Valve Commodity
• 5 Types of Valves
• 10 Different OEMs
• 7 Make All Types
• 3 Make 4 out of 5 Types
• Resulted in 43,710 Installations
• 28,976 Supporting Modernization/Repair
• 14,734 New Construction
• 978 Unique APLs

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Where Were at

• Focused on MOD/Repair Installs
• Matched 978 APLs to HEDRS to get Characteristics
• Met with ISEA to discuss the overall approach
• and here we are!

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Targeted ApproachValves and Circuit Breakers

• Compares OEM unique valve Family APLs to CAGEs
  for targeted groups of commodities
• Unofficial analysis shows 6 manufactures for
  largest grouping of Valves
• Conduct detailed Engineering Analysis for
  Acquisition Strategy and requirements
• Pursue Commodity type contracts with best value
  OEMs/Sources

Apply Same Approach to Circuit Breakers
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Whats Next

• Valve Commodity Data Requires final smoothing
• Missing Characteristics
• Grouping into Final Commodities based on ISEA
  feedback
• ISEA Review and Provide
• Procurement Specifications
• Source Selection Criteria

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EXCOMM HME Deliverables Timeline/VTC
Schedule/Topics
WG-1/2/3 0706003
WG-4 0706008
WG-4 0706001
WG-4 0706002
WG-3 0706007
WG-2/BVPT 0706012
SEA 05 0706006
WG-4 0706005
WG-4 0706004
WG-1/2 0706009
The Governance Board Agenda for Monitoring
Progress
WG-3 0706011
WG-2/BVPT 0706010
REPORT OUT
Sitrep 9 Aug
Sitrep 31 Aug
Sitrep 15 Sep
Sitrep 29 Sep
SWE- TBD ExComm-TBD
Gov Bd 31Aug
Gov Bd 29 Sep
MEETINGS
UPDATE
UPDATE
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EXCOMM HME Deliverables/Timeline
No 0706003
WG-1/2/3 - Supported. Supporting-
WG-4 Deliverable Individual team Action Plans
Status
Picture
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HM EEXCOMM Action Items
No 0706003

• Assigned to Working Group 3
• Status Draft Charter and POAM created and
  presented to ESC. Comments pending.

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HM EEXCOMM Action Items
No 0706007

• Assigned to NAVSEALOGCEN and NCSWCD-SSES
• STATUS A draft POAM has been developed and the
  details have to be finalized. 

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Proposed Drumbeat
Meetings
Governance Document
ExComm Meets Quarterly Governance Board
Meets Monthly WGs Meets
Bi-Weekly Governance Sub-Team (SEA 04L/SUP 04)
Meets Bi-Weekly

• Background/Scope
• Purpose/Objective
• ExComm Structure/Authority
• Governance Board Structure/Membership
• Roles/Responsibilities
• WG Mission Statements
• Metrics
• Key governance focus areas
• WG alignment
• Map key HME introduction processes
• Identify process ownership/authority levels
• Alignment with Technical authority
• Concept for enterprise approach to
  standardization
• Alignment with Competency/Enterprise
• Barrier I.d. and removal process

Regular Focus with a Common Process
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Working Group Three-120 Day Forecast

• Completed items last 30 days
• Completed development of Acquisition Strategy for
  TOTs Valve
• Identified funding for modification of Composite
  Pump Drawings
• Assisted in the development of the initial
  version of the Best Value Selection Tool
• Presented status to the HME EXCOMM
• Updated Baseline Metrics

• Next 120 days
• Define Approach and Methodology
• Standardization-Overarching
• Standardization- Valves
• Standardization- Circuit Breakers
• Define Schedule
• Create Process Mapping for Existing Processes
• Define To Be Commodity Selection Process
  Criteria
• Review Current metrics and Develop the Result and
  Driver Metrics for Current and Future state
  processes
• Team Drumbeat
• Initial F2F with Working Group on 7 August-NAVICP
• Bi-weekly VTC or Phone Conf. (Schedule TBD)
• Monthly F2Fs (Schedule TBD)

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HM EEXCOMM Action Items
No 0706011

• Assigned to NAVICP-M and NAVSEALOGCEN
• Status Process flowchart in development. Policy
  questions being circulated with other Working
  Groups.

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ExComm Sitrep Options
As is

• Bi-weekly sitreps to ExComm Co-chairs by WG 4
  with focus on governance
• ExComm meets quarterly
• Maintain ExComm Structure

Option 1

• Replace ESC/WG-4 with Governance Board
• Bi-weekly sitreps to Governance Board by WGs 1-3
• ExComm meets quarterly

Option 2

• Replace ESC/WG-4 with Governance Board
• Bi-weekly sitreps to ExComm Co-chairs
• WGs 1-3-Once/month
• Governance Board-Once/month
• ExComm meets quarterly

• Recommend Option 2
• Provides SWE-like drumbeat
• Provides continuous communication
• Provides insight into Working Group progress

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EXCOMM Process Flow
EXCOMM (Flag Level) Meet Quarterly
Provide Direction/ ESC Business Decision Approval
Issue Decision Memoranda
Read Ahead/ Meet
Publish EXCOMM/ ESC Minutes and Action Items
Governance Sub-Team Meet as required Support
to EXCOMM/Governance
Schedule Meeting/ Notification
QA/ Distribute Read Ahead
Draft Decision Memoranda
Top Level Metrics
Funding ROI Org/ Policy Impacts
Governance (Senior Level) Meet Monthly
Review Analysis/ Approach/ Meet
Approve WG Approach

• Escalate impacts to
• Fleet Maintenance Accounts
• Ship delivery delays
• Warfighting Rqmts

Approve WG Plans, Metrics
Implement Changes/ Measure Results
Identify Approach and Targets of
Opportunity Metrics
Fast Track Changes (Lower risk, Low decision
authority)
Identify/ Analyze Issues
Working Groups Meet Bi-weekly
Implement Change/Measure Results
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Defining the End StateEffects Based Thinking
Model
Drill down to Detailed sub-tasks for each WG
E X A M P L E