Adaptable: Meeting Changing Demands

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• Adaptable Meeting Changing Demands

Frank Cappuccio Executive Vice President
General Manager Advanced Development Programs
Strategic Planning Lockheed Martin Aeronautics
Company
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Todays Challenge

• Declining Defense Spending
• Rapid Technology Change
• Smaller Fleet Sizes
• Achieving Affordable Readiness

Adaptability Necessitates a New Think
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War-Fighter Environment
Implications
Recognize the Aging Issue is Not Going Away
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Framework for Adaptability

• ADP Attributes
• Speed
• Quality
• Reliability
• Low Cost

Design
Innovation
Production
Support
Enabling Cost Effective Support
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Delivery of Adaptive Capability
84
72
Industry Average
60
YF-22
X-35
48
START DESIGN TO FIRST FLIGHT (MONTHS)
36
A-12
F-117
24
D-21
SR-71
POLECAT
HAVE BLUE
XF-104
12
F-90
U-2R
XP-80
Lockheed ADP (Avg 13 Mo.)
U-2
JETSTAR
F-94
0
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
FIRST FLIGHT
Underpinning Skunk Works Delivery are ADP
Customer Sustainment Packages
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Legacy of ADP Sustainment
From Cradle to Grave for 50 Years
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A Skunk Works Example F-117 Customer Support
A Success Story Never Told
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The F117 Program Support Vision

• Reduce Total Ownership Cost
• Meet or Exceed Air Force Performance Standards
• Preserve and Increase Precision Low Observable
  First Strike Capability

Total Systems Support Partnership (TSSP) LM
USAF Partnership to Platform Management
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F-117 TSSP Contract Overview

• Original TSSP Contract FY99 FY06
• Follow-on TSSP Contract FY07 FY11
• Assumed McClellan AFB ALC Role
• 90M Savings
• Contracted 50/50 Cost Share Incentive to Reduce
  Total Ownership Cost Win/Win
• US Govt. Share Reinvested to Fulfill Other
  Program Requirements

Best Product, Best Capability, Lowest Cost
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F-117 TSSP Performance Incentive Metrics

• Commitment to Equal/Better than Air Force
  Historical Performance
• Minimum Threshold Required to Capture 50/50 Cost
  Share

Incentivized Metrics Performance 2 More
Aircraft on the Ramp!
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Results Goals vs. Achieved

• Goal
• Drive Programmatic Cost Reductions and Continuous
  Performance Through Incentivized Contract
• Achieved
• 177M Contract Savings Commitment Met
• 90M Savings by Eliminating Duplication Through
  USAF Personnel Reduction
• End State Lockheed Martin Investments Led to
  Total Savings of 267M

8 Years Proven Success 100 Award Fees
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Lessons Learned
F-117
Future

• Build Customer Partnerships
• Create Win-Win Contracts
• Industry Willing to Invest
• Work Mutual Trust
• Establish Achievable Metrics

• Affordable Weapons System
• Agility
• Adaptability
• Capability

Wave of the Future
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F-35 Wave of the Future
Traditional Logistics Process Contractor Paid for
Breakage
Autonomic Logistic Innovation

• Aircraft Flies
• Aircraft Breaks
• Maintainer Identifies Fault and Replaces Failed
  Part
• Aircraft Flies
• Failed Part Sent for Repair
• Part Repaired Returned to Supply
• Contractor Paid for Repair

• Failure Analysis
• System Health Monitoring
• System Status and Health Transmission
• In-flight System Service Re-Routing
• Post Flight Services Ordered Prior to Landing
• Correct Repair Parts
• Support Equipment
• Fuel
• Weapons
• Trained Maintainers

Technology Permits Paradigm Shift
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Performance Based Logistics Concept
Performance Based Logistics Contractor Paid for
Usage
Traditional Logistics Process Contractor Paid for
Breakage
Contractor Paid to Support XX Flight Hours
Aircraft Flies
Aircraft Flies
Aircraft Breaks
Airplane Notifies Maintenance a Part Will Fail in
XX Hours
Aircraft
Maintainer Identifies Fault and Replaces Failed
Part
Aircraft
Maintainer Decides When to Replace Part
Failed Part Sent for Repair
Maintainer Replaces Part
Part Repaired Returned to Supply
Failed Part Sent for Repair
Contractor Paid for Repair
Contractor Repairs Part With Improved Reliability
Modifications (At His Cost) and Improved Part is
Returned to Supply
Contractor Aligned With Warfighter to Improve
Availability and Reduce Cost
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Wave of the Future
Traditional
F-35

• Pays for Activity
• Government provides
• Repairs
• Just in Case Inventory
• Transportation
• Ad Hoc Reliability Improvements
• Ad Hoc Maintainability Improvements
• Cost Contracting / Escalating LCC

• Pays for Performance
• Industry provides (Incentivized)
• Flight Hours / Performance (Metrics)
• Continuous Reliability Improvement
• Guaranteed Training System Availability
• Continuous Maintainability Improvement
• Predictable (and Controllable) O M Costs
• Effects Based Contracting

Contracting Behaviors Metrics Driven
(Distributed Decision Making)
(Single Point Accountability)
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F-117 The Legacy is Morphed
Mission Accomplished