Aircraft Remanufacturing Process Improvement Analysis
by
Michael J. Cuppernull
B.S., Civil Environmental Engineering
Clarkson University 1979
Submitted to the Systems Design and Management Program in Partial Fulfillment of the
Requirements of the Degree of Master of Science in System Design and Management
at the
Massachusetts Institute of technology
February 2000
0 1999 Michael J. Cuppernull
All Rights Reserved
The author hereby grants to MIT permission to reproduce and distribute publicly paper
and electronic copies of this thesis document in whole or in rnart.
of.Author......................
Signature
Signature of A uthor
.......................................................,r...............
/ ... .................
Systems Desigif and Management Fellow
December 13, 1999
C ertified by............................................................
.
Senior Lecturer, Aeronautics and Astronautics
Accepted by.................................
i ftomas A. Kochan
LFM / SDM
Co-Director
George M. -Bunker Professor of Management
.........................
Paul Lagace
LFM / SDM
Co-Director
Professor of Aeronautics & Astronautics and Engineering Systems
A ccepted by...............
.
MASSACHUSETTS INSTITUTE
OF TECHNOLOGY
1
JAN 2 0 W
LIBRARIES
E I
ER
Remanufacturing Process Improvement Analysis
by
Michael J. Cuppernull
Submitted to the Systems Design and Management Program on December 13, 1999 in
Partial Fulfillment of the Requirements of the Degree of Master of Science in
Engineering and Management
Abstract
Due to the high cost of replacement, the U.S. Department of Defense carries out
remanufacturing programs to extend the life of the major systems as an alternative to new
procurement. The development of such a program is an exercise in defining value in a
complex decision making environment. This process offers opportunities to develop
insight into the relationship between organizational decision making and the resulting
definition of value. An analysis of the decision making process is developed to show the
definition of a efficient, or "lean" manufacturing program is one that considers both
economic efficiency and the needs and influence of the multiple organizations involved
and integrates them in a manner that creates value or minimizes waste for the customer.
A systematic decision making or planning approach is proposed and utilized that
combines sequential decision tree analysis with elements of strategic planning to quickly
differentiate important but predictable issues from strategically significant issues that
warrant more detailed analysis. This allows the focus of limited resources as are typically
available early in the planning process on important questions whose outcome is not
obvious. As this analysis is developed a more detailed set of questions can be examined
in a similar manner.
An analysis of past remanufacturing programs and the issues they encountered is
developed to identify a range of alternate approaches. The involved organizations needs,
decision making authority, and influences are defined to identify the important
programmatic issues in the context of the organizations involved. Multiple
remanufacturing alternatives are analyzed to define a economically and politically
efficient combination of public and private industrial facilities. An assessment of the
affected decision making organizations expected reaction to the proposed approach is
developed to predict its likelihood of acceptance.
Thesis Supervisor: Joyce Warmkessel
Title: Senior Lecturer, Aeronautics and Astronautics
2
Acknowledgements
This thesis would not have been possible without the support of my family, friends,
coworkers, Sikorsky Aircraft, my SDM classmates and the MIT faculty associated with
the SDM program. I would like to provide specific thanks to a few people who have
made an exceptional difference in my ability to complete the program and this thesis.
First I would like to thank my wife Jane and children Catherine, Patrick, Ryan, and
Michael for their support and perseverance, and love throughout the last several years. I
will be grateful to be able to turn more of my attention back to you in the New Year. I
would also like to thank Doug Halley and Ken Rosen who encouraged me to pursue the
SDM program and supported me throughout it.
From the SDM program I would like to thank all those who have contributed to getting
the program off the ground and truly doing something new in the education field. I
especially would like to acknowledge the contributions of Tom Magnanti and Tom
Kochan whose vision for crossing the borders of engineering and management education
is at the root of the program.
Finally, I would most especially like to thank and acknowledge the contributions of my
thesis advisor, Joyce Warmkessel, who has provided consistently insightful and always
useful guidance on the direction and content of my thesis.
Biographical Note
The author is currently a program manager at Sikorsky Aircraft, United Technologies
Corporation for the U.S. Army BLACK HAWK modernization program. His current
responsibilities include developing a program to overhaul and upgrade the Army UH-60
BLACK HAWK helicopter fleet, the largest helicopter fleet in U.S. inventory. In past
assignments at Sikorsky he worked on a variety of projects in the Advanced Design and
Business Development group for all branches of the U.S. Military and a variety and
foreign customers. Prior to Sikorsky he worked for the Boeing Commercial Airplane
Company in Seattle primarily on the 737-300 CFM56 engine integration.
The author graduated from Clarkson University with a B.S. in Civil and Environmental
Engineering in 1979 and is currently pursuing a Masters of Science in the Systems
Design and Management Program at MIT.
3
Table of Contents
Chapter 1 - Introduction ...............................................................................................
8
Im pact of Aging System s..................................................................................................8
Rem anufacturing Rationale .............................................................................................
9
UH-60 BLACK HAW K ...............................................................................................
10
Scope of UH-60 Rem anufacturing Program ..................................................................
10
Organizational Decision Making
10
.......................................
Study Approach .................................................................................................................
12
Chapter 2 Sikorsky UH-60 BLACK HAWK Program ................................................
14
Sikorsky History ................................................................................................................
14
Current M arket Conditions .............................................................................................
15
Arm y Aviation ...................................................................................................................
16
UH-60 Program ..................................................................................................................
16
UH-60L Model...................................................................................................................17
Arm y Aviation M odernization Plan................................................................................
18
Construction of M ajor Components................................................................................
19
Future Plans / Rem anufacturing Integration ..................................................................
20
Chapter 3 Analysis of Remanufacturing Requirements ..........................................
21
Program Goals ...................................................................................................................
21
Related Trends and Opportunities .................................................................................
26
Technical Requirem ents................................................................................................
27
Chapter 4 O rganizational Interests and Influences...................................................29
Organizational Decision M aking ....................................................................................
29
Government Agencies and Decision Making Responsibilities......................................30
Congress.............................................................................................................................30
Department of Defense and Department of the Army Leadership ...............................
4
33
Material Developer (Program Management Office - PMO)....................35
Corpus Christi Arm y Depot (CCAD)...........................................................................
37
Prim e Contractor (Sikorsky).........................................................................................
39
Chapter 5 O rganizational Decision M aking..............................................................
45
Organizational Decision M aking Analysis ....................................................................
45
Impact on End User N eeds............................................................................................
46
Organizational Decision M aking Analysis Approach ..................................................
46
BLACK HAWK Rem anufacturing Analysis.....................................................................48
Need for Program ...............................................................................................................
50
Funding Alternatives.......................................................................................................51
Sole Source Acquisition................................................................................................
52
DoD Support for Sikorsky and Depot Long Term Goals ..................................................
53
Technical Requirements, Configuration, Development and Test, and Logistics Plan
Definition...........................................................................................................................54
Rem anufacturing Analysis..............................................................................................55
Chapter 6 Analysis of Remanufacturing Alternatives .............................................
58
Introduction........................................................................................................................58
Other Remanufacturing Program Approaches...................................................................61
BLACK HAW K Remanufacturing Alternatives ...............................................................
63
User Value Impact ........................................................................................................
65
Manufacturing Task Allocation Decision Analysis.......................................................
67
Decision Variables .............................................................................................................
68
Plant Capacity ....................................................................................................................
68
Political and Financial Considerations............................................................................72
Final Assembly, Hanger Operations, Delivery .............................................................
73
Labor Costs ........................................................................................................................
76
Increasing User Value - Cost Reduction To Meet Additional Requirements................77
Overhaul and Procurem ent Funding Accounts .............................................................
5
79
CCAD H-60 O CM/RECAP Plan.......................................................................................79
Organizational A lignm ent..............................................................................................
81
Reduction of Sikorsky Costs.........................................................................................
82
Schedule .............................................................................................................................
84
Public-Private Partnership .............................................................................................
85
Shipping Im pact .................................................................................................................
86
Facility Strengths and Weaknesses................................................................................
88
V irtual Prim e V endor ........................................................................................................
90
Recom m endation ...............................................................................................................
90
Strategic Organizational Interests ..................................................................................
91
Chapter 7 Sum m ary ....................................................................................................
95
Bibliography .....................................................................................................................
97
A ppendix...........................................................................................................................99
SH -60R Rem anufacture Program ......................................................................................
99
CCAD Role in A H -64 Rem anufacturing .........................................................................
101
6
List Of Figures
9
Figure 1 DoD Weapons Systems Operating and Support Cost Vicious Circle ...............
Figure 2 Sikorsky Major Medium Lift Production Quantities.......................................15
Figure 3 Remanufacturing Savings versus New Production ........................................
23
Figure 4 Remanufacturing Value Defined In Terms of Impact on User Operations.........24
Figure 5 Induction Time Impact on Aircraft Availability..............................................25
Figure 6 UH-60L+ Requirements Growth Summary ....................................................
28
Figure 7 Sikorsky Strategic Manufacturing Task Analysis ...........................................
43
Figure 8 Organizational Decision Making Analysis Approach....................................48
Figure 9 Initial Remanufacturing Decision Tree ..........................................................
49
Figure 10 Major Decision Alignment with Impacted Organizations Interests .............
57
Figure 11 Other Programs Remanufacturing Task Allocation Summary......................62
Figure 12 Remanufacturing Facilities Alternatives and Their Capabilities..................64
Figure 13 Aircraft Flow Alternatives.............................................................................
66
Figure 14 Plant C apacity................................................................................................
69
Figure 15 Baseline UH-60L+ Flow and Facility Choices .............................................
71
Figure 16 UH-60L+ Plant Capacity Summary .............................................................
74
Figure 17 UH-60L+ Plant Capacity Impact - Weighted Average ................................
75
Figure 18 Labor Cost Com parison................................................................................
77
Figure 19 Cost versus Requirements Alternatives.........................................................78
Figure 20 Benefits of Combined OMA and APA Account Funding............................81
Figure 21 Impact of Lower Cost Disassembly Labor vs Target ....................................
83
Figure 22 Shipping Decision Tree and Resulting Issues ...............................................
88
Figure 23 Manufacturing Allocation Trade Summary..................................................91
Figure 24 Manufacturing Issues and Likely Positions of Interested Organizations .......... 94
7
Chapter 1 - Introduction
Due to the high cost of new aircraft procurement, the U.S. Department of Defense carries
out remanufacturing programs designed to extend the life of the aircraft for up to thirty
years as an alternative to new aircraft production. The larger remanufacturing programs
can last over a decade and cost billions of dollars. The United States Army has begun
planning such a program to extend the life of its 1600 aircraft UH-60 BLACK HAWK
helicopter fleet, the largest fleet of helicopters in the Department of Defense inventory.
The development of the remanufacturing plan for such a program is an exercise in
defining value in a complex decision making environment. This process offers
opportunities to develop insight into the relationship between organizational decision
making and the definition of value.
Impact of Aging Systems
Figure 1 shows the cost impact of aging systems, which feeds on itself to the detriment of
the DoD budget. The older a system gets, the higher the operating and support costs to
maintain it, this prevents the money from being used to replace the system, increasing the
average age, which compounds the problem.
8
Aging Weapons System Impact
Increased
System
Age
Decreased
Procurement
Budget
Increased
Operating And
Support Costs
Figure 1 DoD Weapons Systems Operating and Support Cost Vicious Circle
Remanufacturing Rationale
The Department of Defense attempts to break the aging chain by resetting the clock
through remanufacturing programs. These programs restore the system to a nearly new
condition sometimes referred to as zero timing the aircraft or system. This has generally
been regarded as a cost-effective approach, particularly where the system still meets the
users needs, no significant technology advance is available, or the service simply has
higher priorities.
9
UH-60 BLACK HAWK
The UH-60 BLACK HAWK fleet entered service in the Army in 1978 and the Army
currently doesn't plan to begin replacing the aircraft until 2025. With approximately a
twenty-year production program for the eventual replacement, the last BLACK HAWK
can expect to be flying until almost 2050. Sikorsky, the manufacturer of the BLACK
HAWK, has primarily been a producer of medium lift military helicopters like the H-60
for over forty years. The BLACK HAWK is the largest medium lift helicopter fleet in the
world today and its remanufacture is one of Sikorsky's larger business opportunities.
Scope of UH-60 Remanufacturing Program
The cost and schedule of the program provides the rationale for developing an efficient
remanufacturing process. The remanufacturing program is likely to last 20 years and
requires billions of dollars due to the fleet size and the limitations of annual funding
availability. The duration of the induction period for remanufacturing is also critical
because the longer the induction time, the more aircraft required to support the necessary
annual flow which results in fewer aircraft available to the Army for operations.
Organizational Decision Making
Recognizing the complexity of the governmental decision making process which
inevitably must balance technical, cost, and political considerations this thesis attempts to
develop a approach for defining decisions in terms of the affected organizations interests,
10
priorities, and influence. This thesis attempts to show the definition of a efficient, or
"lean" manufacturing program is one that considers both the traditional economic
analysis and the needs of the multiple organizations involved and integrates them in a
manner that creates value or minimizes waste for the customer. The remanufacturing
case study offers the opportunity to develop such a definition by analyzing several
potential combinations of public and private remanufacturing alternatives and considering
the interests and influence of Congress, the Departments of Defense, and other agencies
involved in formulating a program plan to meet the end users needs.
Oster refers to the concept of "bounded rationality" which simply stated means that
decision makers do the best they can with the inevitable limits of information availability
and their own information processing capabilities. The problems associated with bounded
rationality become more severe as the size and complexity of the organization(s) involved
grows. This happens in complex environments, such as the Department of Defense,
primarily because participants in the planning process have different objectives and larger
organizations inevitably have more participants. (Oster, S.M. Modern Competitive
Analysis)
Considering the decision making environment, the objective of the thesis is to develop a
approach that results in a plan that is both economically efficient and has a high
probability of being accepted by those organizations with the power to alter it. This
minimization of both the program costs and the possibility of major redirection combines
to provide a lean program development approach.
11
Study Approach
Steiner identifies a five-step investment decision approach that has been generally
followed in the development of the economic alternatives in this thesis. The first step is to
identify the objectives, the second is to examine alternatives, the third is to predict the
consequences of each alternative, the fourth is to identify the method of evaluation, and
the fifth, finally is to make the decision. (Steiner, H.M. EngineeringEconomic
Principles)
The program objectives are identified in terms of the system end user or operators needs.
To create value for the end user or customer of a system, the system or proposed
improvements are considered from the point of view of eliminating or minimizing waste
from the users operations. This thesis shows the requirements for the remanufactured
BLACK HAWK helicopter can be traced to eliminating or minimizing inefficiencies in
the end users maintenance and flying operations.
The involved organizations, there needs, decision making authority, and influences are
identified to frame the strategic issues requiring resolution. To address this political
perspective a systematic decision making or strategic planning process was developed.
This process for assessing the impact of major decisions on the affected organizations is
utilized to develop a program approach that both meets the major needs of most
organizations and provides a high likelihood of being adapted. This approach combines
sequential decision tree analysis with elements of strategic planning. By aligning
common interests where possible and analyzing the influence and authority of parties
with conflicting interests we can predict what decisions will be rather straight forward
12
and what decisions require attention. This allows focus on areas that warrant more
detailed analysis.
Multiple remanufacturing alternatives are considered with the objective of minimizing the
costs to the customer and the number of aircraft out of service and utilizing the existing
expertise of the involved organizations. A recommended approach defines a costeffective mix of the Original Equipment Manufacture's facilities and the existing Army
aviation depot that can be combined through a public-private partnership.
13
Chapter 2 Sikorsky UH-60 BLACK HAWK Program
Sikorsky History
Sikorsky began producing helicopters in 1942 and grew into the medium lift military
utility transports that have made up the majority of its production volume for over forty
years as shown below. Sikorsky's strategy for some time has been to focus on the
medium lift (20,000 pound gross weight) military aircraft because it has been the most
profitable segment of the helicopter business. Size or gross weight generally segments the
civil and military markets with most civil helicopters falling below 10,000 pounds and
most military helicopters above 20,000 pounds. Smaller commercial helicopters have
fewer barriers to entry and are difficult to command a price that assures a high margin
over the necessarily long life cycle of the product. The military market usually requires
winning a significant up front competition but then offers a stable production
environment for many years, often over a decade which has been the case for the UH-60
(or S-70 commercial designation) BLACK HAWK and the Navy variant the SEA
HAWK. Larger "heavy lift" military helicopters provide solid long-term business as well
but generally in much smaller quantities. This has the result of making the medium lift
market the "knee of the curve" between high volume but unprofitable small commercial
helicopters and high margin but small volume heavy lift helicopters. A brief summary of
Sikorsky's production history is shown in the chart below.
14
2500
Q 2000.
U
a 1500
n
t
1000.
t
Y
500.
0.
1942
1945
1946
1950
1955
1960
1974
R-4
R-6
S-51
S-55
S-58
S-61
S-70
Figure 2 Sikorsky Major Medium Lift Production Quantities vs 1st Flight or 1'
Production date (not all data available for all models, not all Sikorsky models
included)
Current Market Conditions
While the international market has considerable opportunities for growth particularly in
the former Soviet Union and in Mainland China, the U.S. Department of Defense market
has shrunk since the end of the Cold War. With the exception of the MV-22 tiltrotor
DoD has few new start programs and is currently focusing on major remanufacturing
programs to extend the life of current airframes for another twenty to thirty years.
There are no plans that indicate any significant opportunities for substitute forms of
transportation or a reduction in the dependency of the U.S. Military on vertical lift
transportation given long term issues such as difficult terrain, land mines, shipboard
15
operations, and military search and rescue and medical evacuation requirements. Because
of this trend Sikorsky has recognized that the key to retaining its leadership position in
the military medium lift marketplace is the remanufacture of the current aircraft fleet over
the next two decades to retain its critical technical and manufacturing skills.
Army Aviation
The U.S. Army operates the world's largest fleet of helicopters outside of Russia. Their
current fleet consists of over 4,000 helicopters. The largest single type of helicopters
within the fleet is the UH-60 BLACK HAWK of which they currently have over 1500
with requirements for an additional 300 or more aircraft. The BLACK HAWK has been
used in almost all operations the United States Army has been involved with since the
early 1980's including Grenada, Panama, Somalia, Dessert Storm, Yugoslavia, and
recently East Timor.
UH-60 Program
In 1972 the Army awarded the Utility Tactical Transport Aircraft System (UTTAS)
contract to Sikorsky to design and test a new troop transport helicopter to replace the UH1 "Huey" fleet. Sikorsky built three flying prototypes and a ground test article. The
aircraft was designated the S-70 by Sikorsky (its commercial designation) and the YUH60A by the Army. The YUH-60A had its first flight on October 17, 1974. Two
GENERAL ELECTRIC T700-GE-700 engines powered the aircraft. After a "fly off'
16
competition against the Boeing prototype the YUH-61A Sikorsky was awarded the
production contract in 1976 and made the first production deliveries in 1978.
UTTAS requirements for increased speed, payload, ballistic tolerance, crashworthiness,
and reliability versus the UH- 1 resulted in the Army concluding that 15 UH-60 BLACK
HAWK aircraft were more combat effective than 23 UH-1 Huey's. The Army
subsequently reduced the basic aircraft company (squadron) size from twenty three to
fifteen aircraft when the H-60 was fielded.
Over the past twenty years, through a series of multi-year contracts, Sikorsky has
delivered over 1500 BLACK HAWKs to the Army. Sikorsky has also delivered a variety
of derivatives for all the other branches of the Department of Defense (DoD), the Coast
Guard, Customs Service, Drug Enforcement Agency, and over twenty-five foreign
countries. The President of the United States flies on a specially designed variant called
the VH-60.
UH-60L Model
From 1978 until 1989 Sikorsky delivered over 900 UH-60A models. In 1989 the UH-60L
replaced the UH-60A as the standard production configuration of the BLACK HAWK.
The UH-60L contained an upgraded engine the T700-GE-701 C with 24% more power
and an upgraded transmission that increased the allowable torque transmitted to the rotor
system. It also added a Infrared Suppression system called the Hover Infrared
Suppression System (HIRSS), strengthened flight control components, and several other
17
smaller changes. The changes resulted in a increase in maximum payload from about
1500 pounds at 4000 foot altitude on a 95 degree Fahrenheit day, the Army "hot and
high" design conditions and an increase in maximum speed of about 12 knots. The
increased effectiveness of the UH-60L configuration has been widely noted in the Army
and the front line aviation companies have for some time demanded the more powerful
UH-60L variant.
Army Aviation Modernization Plan
The Army Aviation Modernization Plan (AAMP) is published every year and provides a
twenty five year look ahead at the future of Army aviation's major assets. The AAMP
shows the Army plans to operate the H-60 fleet at it current size until 2025. This is due
to both funding constraints and a general belief that the H-60 is still a effective troop
transport and general utility aircraft for the Army mission. Assuming a twenty-year
production run for the eventual replacement, currently called the Future Utility Rotorcraft
(FUR), the last H-60 will be flying in the Army in at least 2045. Recognizing this fact and
that the age of the oldest H-60s are already over twenty years old the Army has developed
a modernization strategy that involves remanufacturing the UH-60A fleet into a
modernized version of the UH-60L called the UH-60L+.
The effectiveness increase of the UH-60L and the age and condition of the older UH60As has formed the basis for the first part of a two step modernization program the
remanufacturing of the UH-60A fleet into the UH-60L+ configuration. The second step a
18
more technically ambitious alternative called the UH-60X involves replacing the rotating
dynamic components on the H-60 with a similar but more powerful set from the Sikorsky
commercial S-92 program and developing a new engine to double the payload of the
original UH-60A model. This configuration is paced by the development of the engine
and not scheduled to enter production until the 2008 timeframe.
Construction of Major Components
The BLACK HAWK is airframe is built from traditional aluminum skin and stringer
construction. The airframe is developed in a sequential assembly process combining ever
larger sub-assemblies into four major components the nose section, cabin, tailcone, and
tail. These major assemblies are then joined to manufacture a complete airframe. The
major assemblies are "stuffed" with wiring and components in a manor that balances the
ease of access for the component, the amount of work done at any one station, and the
need to add high value components late in the manufacturing sequence to minimize the
inventory costs.
The longest lead items on the aircraft are titanium forging found primarily in the main
rotor. The main rotor is made of a titanium spar wrapped in a honeycomb nomex-graphite
leading and trailing edge. The main rotor head is made from a forged titanium hub that
holds four elastomeric bearings that react the blade motions. The titanium-forged parts
have lead times between 18 and 24 months depending on the market conditions for
19
titanium. Sikorsky typically buys the forging and performs all the machining operations
itself.
The fuselage assembly sequence not counting the long lead items built up in back shops
is typically 60 to 65 days from the start of sub-assemblies to the completed aircraft rolling
into the hanger. Shop scheduling is based on an aircraft roll rate, which currently runs
about 4 days per aircraft but has been as low as 2.5 days per aircraft in the past.
Production is controlled by a Master Requirements Planning (MRP) system that utilizes
the aircraft Bill of Material (BOM) and preset lead times to issue orders that schedule
parts production and procurement to support planned delivery dates. The MRP system is
able to command, defer, expedite and cancel orders to coordinate changes in planned
work.
Future Plans / Remanufacturing Integration
The Army plans to procure newly built UH-60s for another decade to fill its outstanding
requirements of over 300 additional aircraft at its current production rates. The Army has
stated it plans to switch the line from the current UH-60L configuration to the UH-60L+
so it will be buying both new built and remanufactured aircraft in the future. This will
require the integration of the new and retrofit processes and some review of issues such as
tooling floor space capacity. Generally the capacity issues should be localized because the
facility produced over one hundred aircraft per year during peak production.
20
Chapter 3 Analysis of Remanufacturing Requirements
"Hassle free cost effective mission capability ... not disconnected objects and
services" Womack
Introduction
The first step towards defining a program that creates value for the customer is to define
what the end user, the aviator, and the overall Army's needs are for the remanufacturing
program. This definition of value, developed in this chapter, provides a reference point to
judge the contributions of various organizations and alternate approaches to meeting the
users needs. The reduction in the size of the Army and its civilian workforce has created
the need to minimize non-value added activities such as maintenance associated with
older aircraft. This has created the need for a remanufacturing program and provides a
basis for identifying value in terms of the users operations.
Program Goals
The Army's major objective's for the BLACK HAWK remanufacturing program can be
summarized into a few major areas. The Army plans to extend the life of the fleet until at
least the year 2025 and to upgrade its operational capabilities of the older UH-60A fleet
by increasing the payload-range capability and providing modern digital electronics.
21
The user of the aircraft also desires increased reliability, usually measured in terms of the
percent time the aircraft is characterized as mission capable, and a robust product support
system that provides cost-effective training, spare parts and repairs, and mission kits for
world wide operations. Additionally the Army desires to simplify their maintenance
practices and logistical support requirements by standardizing the fleet on single
configuration, the UH-60L+. By eliminating the older UH-60A version through
remanufacturing they can eliminate or reduce non-value added activities such as carrying
redundant inventories of similar but unique parts for the 60A and 60L configurations.
Standardizing the fleet will prevent the block obsolescence of the older, less capably 900
aircraft UH-60A aircraft that would eventually require replacement, a more expensive
option. From a programmatic perspective the Army desires to develop a simple business
model where they contract with a single prime vendor who inducts the older UH-60A into
the program and "recapitalizes" it into a UH-60L+ for significantly less than the cost of a
new aircraft. Figure 3 shows the normalized estimated costs of remanufacturing verses
new production. This savings provides a "lean" approach to meeting the users needs if
defined in terms of reducing the operating and support cost vicious cycle in a cost
effective manner.
22
Remanufacturing Versus New
Production Costs
1.4
1.2
Normalized
H-60 Unit
Savings vs
Replacement
0.8
Recurring
Cost
0.6
0.4
0.2
0
Remanufacturing
New Production
Figure 3 Remanufacturing Savings versus New Production
The older UH-60A fleet does not meet the Army operational readiness or availability
requirement of 80% and it costs approximately $500 per flight hour more than the newer
UH-60L that meets the readiness requirement. The UH-60A also lifts about 1500 pounds
less payload than the UH-60L. The differences are indicative of an aging system that
must be upgraded or will become obsolete with time as the UH-1 has. Remanufacturing
will also standardize the fleet that will reduce redundant part stockpiles, training,
manuals, and support equipment for similar but not identical versions of the BLACK
HAWK.
23
Remanufacturing Meets User's Needs By
Making User's Operations More Lean
- Eliminates Older System that Costs More to Do Less
- Eliminates, Minimizes, or Simplifies Non-Value Added
User Activities
- Maintenance
- Stock Piling Multiple Component Types
- Redundant Training, Manuals, and Support Equipment
- Increases Productivity, Minimizing Aircraft Required
- Higher Speed, Payload, and Reliability
- Digital Communication/Navigation allows Faster, More Precise
Battlefield Reaction
Figure 4 Remanufacturing Value Defined In Terms of Impact on User Operations
Figure 4 shows that a working definition of value or lean relative to the remanufacturing
plan may be thought of as how lean does it make the end user of the system. The parts of
the remanufacturing program that eliminate significant waste from the user's experience
will have the most value. It can also be seen that the more efficient or lean the proposed
program the more performance improvement and related productivity enhancement will
be affordable.
The remanufacturing program must not exacerbate problems it is intended to fix such as
aircraft not being available due to maintenance requirements. To establish a efficient or
lean program the time out of service for remanufacturing must be minimized. Figure 5
24
shows the impact of induction time on aircraft out of service. To support a steady state
flow of 60 aircraft per year coming out of remanufacturing the number of aircraft
inducted in the program at any one-time increases with the duration of the induction or
remanufacturing period. The Army currently has only bought about 1500 of the 1800 H60 BLACK HAWKs required to support ten active divisions and reserve requirements
due to affordability constraints. A nominal induction time of one year will remove about
5% of the currently available fleet from service, increasing the shortfall in lift the fleet
provides the entire Army to over 20% of the stated requirement. This can be minimized
with a short induction time and continued procurement of new aircraft to fill the gap
created by the remanufacturing program. A key component of value will be to minimize
induction time or the time period the aircraft is unavailable for operations.
Induction Time vs Number Of
Aircraft Out Of Service
120 100 Number 80 Of Aircraft 60
Out Of
Service 40 20 0
0
6
12
18
24
Remanufacturing Induction Period
(Months)
Figure 5 Induction Time Impact on Aircraft Availability
25
This model of defining acquisition program value in terms reducing waste or
inefficiencies of user operations is consistent with the recognition by the Army that they
are really in the defense business not the procurement business.
Related Trends and Opportunities
Because of reductions in DoD civilian personnel since the end of the Cold War and the
emphasis on moving to commercial practices, the military services have had to rely more
on private industry to execute services traditionally performed by the government. The
Army for instance may turn over much of the airworthiness qualification assessment to
Sikorsky for the UH-60L+ making it more similar to the Federal Aviation Administration
process. Another major issue facing the Army and DoD is the use of more extensive
contractor logistics support. This has been driven by two complementary factors, the
reduction in civilian personnel and the belief that the civilian sector can provide
significant savings primarily through what is referred to as velocity management of parts
removed from aircraft. This concept, while not the subject of this paper, is based on the
same principles as the lean manufacturing movement and provides a opportunity for
significant reduction in operating and support costs and further integration of the goods,
the aircraft, and the services, the support for modem aircraft and weapons systems.
26
Technical Requirements
The UH-60X Operational Requirements Document (ORD) defines the technical
requirements for the future upgraded BLACK HAWK fleet. This document is published
by the user and routed throughout the Army for comment and approval and is the
coordinating mechanism for future new and modified aircraft systems. It is through the
ORD approval process that the customers of Army aviation, that is the ground
components of the Army such as infantry and artillery, assure that their future needs will
be met. Their primary concern is that the lift capability of aviation systems is sufficient to
move the vehicles and weapon systems they plan to operate in the future. The weight
growth of these systems over the last twenty years is the underlying rationale for the UH60X ORD. In addition to the ORD there are many more detailed requirements in the
current UH-60L systems specification. The ORD and systems specification combine to
form the basis for the UH-60L+ requirement definition. A summary of the more
important new requirements that will impact the remanufacturing process is defined in the
table below.
27
,60L+ Requirements Growth Summary
28
Chapter 4 Organizational Interests and Influences
Organizational Decision Making
Governmental decision making processes must balance conflicting technical, cost, and
political considerations which are not easily reducible to a common denominator such as
dollars. To understand and frame such decisions we must define the decisions to be made,
who the decision makers are, what organizations interests and priorities or needs are
affected, and what influence these organizations have over the decisions. To develop a
efficient or "lean" manufacturing program one must align the needs of the multiple
organizations involved and integrates them in a manner that creates value for the
customer. The alignment of these organizations into a system that meets the customers
needs should increase the probability that each organization's needs will in turn be met.
This is achieved by aligning their interests with others in a manner they believe has the
best chance of meeting the customers needs relative to any alternatives. This thesis
postulates a definition of the long term interests of the various organizations involved,
develops a recommended remanufacturing plan, then analyses the expected outcome of
that plan in terms of how well if fulfilled the users needs as well as those of the other
organizations involved.
29
Government Agencies and Decision Making Responsibilities
To analyze the alternate approaches and their likely acceptance by the decision-making
organizations involved a description of each organization relative to the remanufacturing
program is developed below. A description of the decision making power, interests,
authority and influence, and restraints is developed for each major organization involved.
The central issue is how to allocate manufacturing functions and the economic benefits
that come with them. The program must minimize cost and schedule while observing
legal procurement constraints and the political perspectives of the problem.
Congress
Decision Making Responsibilities
" Funding of Defense Department
* Procurement Laws and Regulations
" Depot 60/40 Funding Law (Insuring Government Depots maintain 60% of
overhaul and maintenance work)
" Where funding is spent
The primary decision Congress makes is the global funding level of the Department of
Defense as well as approval of the funding of individual programs including the
remanufacturing of the BLACK HAWK fleet. Congress is also responsible for passing
30
procurement laws and regulations that govern the authority to obligate or spend money
with in the department. Of particular interest in this case study is the Depot 60/40
Funding Law which insures the Government maintenance depots maintain 60% of the
Operations and Maintenance, Army (OMA) account which is used to maintain weapon
systems. There have been significant efforts in the past in Congress to overturn this law
without success. The law has the effect of allowing the depots to operate in a sole-source
environment for extended periods of time.
Interests
Presumably the general interest of the majority of congress is to extend the life of the
BLACK HAWK fleet life and increase its capabilities for a minimal expenditure of
dollars. This is consistent with many other fleet overhaul and upgrade programs Congress
has supported. The individual members however would like to insure whatever DoD
funding can feasibly be spent in their own districts is spent there. The members with
depots in their districts have formed a coalition called the depot caucus whose objectives
are to maintain the depot funding law and see as much work as possible enter the depots.
The members that support the Army aviation deport at Corpus Christi, Texas have been
very successful over the years ensuring sufficient work goes into the facility to maintain
employment levels.
31
Influence and Authority
Congress holds the ultimate power to choose to fund or not fund any particular DoD
program. With regard to a remanufacturing program they can exert influence over the
program through the type of money that is used to fund the program. If a remanufacturing
program is funded with Operations and Maintenance, Army (OMA) account then the
control of the money flows to the depot who can choose to do much of the work
themselves if they are capable. If the program is funded through the Army Procurement,
Aircraft (APA) account then control of the funding is given to the material developer, in
this case the Utility Program Management Office (PMO Utility) at AMCOM who decides
how and where to spend the money.
Restraints
Congress receives a funding request from the service including a recommended type of
funding. Generally the services will have developed detailed procurement strategies to
support their funding requests that have gone through numerous review cycles prior to
submittal to Congress. Budget requests or programs also come with interested parties that
have significant ties to Congress to support them as they are constructed. Therefore
Congress often may have conflicting interests among individual members that may offset
each other and limit their ability alter the services request.
32
Department of Defense and Department of the Army Leadership
Decision Making Responsibilities
" Need for Refurbishment of the Army UH-60 fleet
" Gross Remanufacturing Funding Level - Reflection of Program's Relative
Priority
" Maintaining long term industrial base
The Department of Defense provides defense planning guidance to the individual services
that defines each services roles and missions and establishes annual budget levels. The
leadership of the Army to create and prioritize individual program plans refines these
global objectives and budget constraints. The utility helicopter function in the Army has
been performed for over twenty years by the BLACK HAWK and a Service Life
Extension Program (SLEP) including an upgrade of lift capabilities and electronic
systems has been widely supported.
Interests
Like Congress DoD is interested in extending the life of the fleet while expending the
minimal dollars possible. This general dictum of good financial stewardship is required to
retain political support for DoD programs in Congress. DoD and the Army leadership
answer to and are also acutely sensitive of the interests of key congressional groups like
33
the depot caucus. Army aviation is currently studying the long-term work load and
capitalization requirements of the Corpus Christi Army Depot (CCAD). The Army's
interest in assuring robust fleet maintenance and repair capability appears to align with
their interest in maintaining congressional support for the Army. The Congress, Defense
Department, and Army all have a long-term interest in maintaining the industrial base as
well, this can broadly be interpreted to include both the contractor base and the organic
depot base.
Influence and Authority
The DoD and the Army leadership have significant formal authority in their ability to
define priorities and control resources. Their link to Congress in the budgeting process
also increases their influence. With regard to the remanufacturing program the key
influence is the ability to accept or reject particular program plans based on their
perception of value or cost-effectiveness and what will be politically palatable with
Congress.
Restraints
Most of the major organizations involved, primarily the contractor and the Army depot
have the ability to speak directly to Congress to influence the money spent and the
specificity of the program direction that comes with the money.
34
Material Developer (Program Management Office - PMO)
Decision Making Responsibilities
" Integration of User Requirements and Funding Constraints
*
Acquisition Strategy (i.e. Competitive vs Sole Source, What Development is
required, Major Program Milestones, Schedule, etc.)
" Contract Management With Prime Contractor
*
Management Of Other Interested Government Organizations
*
Fielding and Supportability of Upgraded Configuration
The Utility Helicopter Program Management Office (PMO) which is part of the Aviation
and Missile Command (AMCOM) at Redstone Arsenal in Huntsville, Alabama is
responsible for developing and executing the BLACK HAWK remanufacturing program
plan for the Government. This requires the integration of many key issues into an
executable plan. The basic conflict that must be resolved is the alignment of the user's
requirements and the program funding constraints. The program management office is
responsible for developing the acquisition strategy including defining the need for
competition, deciding what development is required and appropriate, and what the
program schedule and major milestones should be in accordance with procurement
regulations. The PMO is responsible for negotiating and managing a contract with the
prime contractor and any other contractors he chooses to use directly. The PMO is also
35
the focal point for the operator or user, the Army and DoD leadership, and is responsible
for the fielding and supportability of the upgraded configuration.
Interests
The PMO's primary interests are in developing an affordable, low risk program to meet
the users needs. The PMO must be able to balance political support, technical risk, and
cost and schedule issues to assure a program plan will remain viable over the long life
cycle that is typical of DoD aviation programs. The BLACK HAWK PMO is well aware
of the Depot's interest in participating in the modernization program and the support that
exists for the Depot in Congress. The PMO and the Army are also interested in preserving
their industrial base which they have spent billions developing over many decades to
meet their unique requirements.
Influence and Authority
The PMO is delegated by law the authority to obligate any procurement (APA) funding
used for the remanufacturing program. The PMO is also the primary architect of the
decision whether the program should be competed or let as sole source. Given the
probable use of procurement funding, the PMO is the primary arbitrator of if and how the
Depot should be involved in the remanufacturing process.
36
Restraints
As discussed above the primary constraint on the PMO is the political power of the other
parties interested in participating in the remanufacturing program. Both the contractor and
the Depot are able to turn to their supporters in DoD and Congress and potentially
influence the direction of the remanufacturing program.
Corpus Christi Army Depot (CCAD)
Description
The Army Depot at Corpus Christi, Texas is the only Depot level repair facility for
helicopters within the Army. They perform standard overhauls called phase inspections,
and major component overhauls on multi-aircraft common equipment such as engines,
Auxiliary Power Units (APU), and electronics. The Depot also performs repairs of
damaged aircraft and major components. The Depot does not have the capability by
charter and in most cases the expertise to manufacture new aircraft components. They can
however perform all of the disassembly required and many if not all of the assembly steps
normally done during initial manufacturing. These areas of the remanufacturing process
will be examined in greater detail and their allocation to one facility or another will be the
major manufacturing decisions that determine how "lean" the remanufacturing process
becomes.
37
Decision Making Responsibilities
0
Overhaul and repair of fielded aircraft decisions
The Depot becomes involved in the decision making process due to the required
integration of scheduled overhaul work on existing aircraft in the field with the
remanufacturing process. Many parts and components they overhaul for fielded aircraft
will be required to support the remanufacture line as well.
Interests
The primary interest of the Depot is to remain the long-term primary supplier of overhaul
and repair services to the Army and other aviation customers. To do this they need to
assure their workload remains sufficient to make efficient use of their facilities and
expertise. Because of the size and duration of the BLACK HAWK remanufacturing
program the Depot will be highly interested in participating and seeing their resources be
as fully utilized as possible.
Influence and Authority
Assuming the remanufacturing program is paid for primarily with Army Procurement,
Aircraft (APA) funding, and remains in the control of the PMO, the Depot will not have
much formal authority in the decision making process of what steps of remanufacture are
performed at what location. The preliminary program plans call for the prime contractor
be given authority to define the process by performing a study as part of the RTD&E
38
program as to how to best utilize the Depot. While the depot's authority would appear to
be limited, its influence through the political process, its facilities, and its overhaul
expertise are significant.
Restraints
The Depot is restrained by both its core competencies to perform overhaul but not new
manufacturing work and its limited authority in the financial decision making process
with the Army.
Prime Contractor (Sikorsky)
Decision Making Responsibilities
" Transformation of Requirements into a Configuration and Manufacturing Plan
" Proposed Price Of Remanufactured Aircraft
" Allocation of manufacturing functions to potential facilities
The prime contractor for the remanufacturing program is tasked with the transformation
of requirements into a configuration and with developing a manufacturing plan to
produce the recommended configuration with the cost constraints identified by the
material developer or PMO.
39
Sikorsky has developed a baseline configuration that meets the requirements defined in
the performance specification. It is also tasked with developing studies to further improve
the performance where cost-effective improvements can be demonstrated. One method of
making the additional changes affordable will be to perform certain manufacturing
operations at facilities with lower labor rates than the main Sikorsky plant in Stratford,
Connecticut. The Government depot or the Sikorsky plant in Troy, Alabama as well as
other Government and private sites are potential sites.
Interests
Sikorsky's primary interest is to remain the Army's long term supplier of medium lift
helicopters and related services. The key issues relating to the remanufacturing plan are
what areas of manufacturing expertise should be retained and performed in house.
Because of the duration of the remanufacturing program, anticipated to be fifteen to
twenty years, the opportunity to decide which manufacturing technologies or processes to
retain at Sikorsky is of strategic importance. With few major new start programs and
demand in general in a lull since the cold war the opportunity to retain manufacturing
skills is significant.
The following table provides a strategic overview of the top level manufacturing
technologies or processes required to perform the remanufacturing program. The three
strategic questions form a framework for defining what roles in the remanufacturing
process Sikorsky should attempt to perform themselves and which they may consider
40
letting others perform for them. Where the answer to all three questions is yes there is a
compelling case for Sikorsky to retain those capabilities as core competencies.
Induction, Disassembly, Overhaul
Many service companies routinely do the process of inducting aircraft, disassembly, and
overhaul of components today. This is especially true for an old aircraft that has been in
Army service worldwide for twenty years. The Army lets many maintenance support
contracts and while the work requires qualified mechanics and a quality assurance system
it is not considered particularly difficult and has few significant barriers to entry. The
work by nature conforms to a standard leaving little other than price and schedule as a
basis for competition. Sikorsky can and has competed successfully in the after market
services business but does not have a consistent record of winning such competitions and
could not compete from the Stratford plant for such work due to high labor rates and
overhead.
New Component Manufacturing
Sikorsky being an OEM has the technical capabilities to make all the new components
required to support remanufacturing except electronics which it has the ability to procure
and integrate. The new components provide decisive value because they are necessary to
meet the performance requirements shown in figure 6. The new blades and transmissions
allow the aircraft to meet the speed, payload, range, and maneuver requirements. The new
cabin allows the life to be extended until at least 2025 as required. Sikorsky has the
41
ability to do the work in that it is similar to current production requirements. Sikorsky is
also the sole source supplier of many of these components and should remain so through
out the remanufacturing program.
Final Assembly, Flight Test, & Delivery
Final assembly, flight test, and delivery are critical skills relative to Sikorsky's long term
objective of remaining a preeminent supplier of rotorcraft. The key function they provide
relative to customer value is quality assurance. As discussed in chapter two Sikorsky has
a fifty-year history of rotorcraft manufacturing and has always performed these functions.
The capability exists at both the Stratford and Troy facilities but in much more limited
fashion at Troy. While not as unique as rotating component manufacturing which is high
precision work, the final assembly, test, and delivery skills are competitive at the current
Sikorsky pricing structure.
42
Figure 7 Sikorsky Strategic Manufacturing Task Analysis
43
The conclusion from the analysis in figure 7 is that the induction, disassembly, and
overhaul work is a lower skill job compared to new component manufacturing and final
assembly. Sikorsky would have a difficult time competing at this given their overhead
structure required to be a Original Equipment Manufacture (OEM). The up front work is
the appropriate task to be done at Troy or allocated to a supplier from the Sikorsky long
term viewpoint.
Influence and Authority
Sikorsky has opportunities to influence the shape of the program due to its technical
expertise, existing manufacturing facilities, and DoD market knowledge. Sikorsky's
formal authority is limited to that which the PMO gives it but through a the development
program depot study it is provided a opportunity to makes its views known on most
subjects including the allocation of remanufacturing functions.
Restraints
The prime contractor's ability to influence the major manufacturing decisions is
constrained by his own pricing structure and the Governments need to insure it has gotten
the best value for its money by holding open competition where possible.
44
Chapter 5 Organizational Decision Making
Organizational Decision Making Analysis
The objective of this thesis is to show that an efficient or lean program is one that
considers the needs of the multiple organizations involved in a complex decision making
environments required to develop a program plan that creates value for the end user of the
system.
To define such a program that integrates the needs of the organizations identified in
chapter four an analytical approach must be developed to relate the key issues to all the
interested organizations.
The focus of the effort is to identify the areas where the organization interests align and
conflict and to provide visibility into the likely outcome of the areas of conflict. The
definition of a program can be thought of as a series of related decisions by the decision
making organization which may be influenced by other affected parties or organizations.
The objective is to plan a program on a series of likely future decisions to minimize the
risk of unnecessary rework that can be considered a form of waste.
45
Impact on End User Needs
The second issue to consider is the relationship between the major program decisions and
the definition of value creation for the end user of the system. The user goals, as stated
chapter 3, include extending the life of the systems, upgrading its performance, and
minimizing the maintenance costs and downtime. Time and money spent on maintenance
and extra aircraft used to make up for performance shortfalls can be considered waste.
The other form of waste is spending unnecessary resources, primarily time and money,
procuring a system or related services required for it to perform its intended mission.
Procurement and support costs can always be expended to fulfill other unmet user needs
therefore unnecessary expenditures are non-value added to the user and to be minimized.
It is from this perspective that major programmatic decision should be considered as
serving the needs of the user.
Organizational Decision Making Analysis Approach
A systematic approach for assessing the impact of major decisions on the affected
organizations can be utilized to develop a program plan that both meets the major needs
of most organizations and provides a high likelihood of being adapted. By aligning
common interests where possible and analyzing the influence and authority of parties
with conflicting interests we can predict what decisions will be rather straight forward
and what decisions require more in depth analysis to predict their likely outcome.
46
The first step is to sequentially define the major decisions to be made. Next these
decisions can be sorted into those where the impacted parties interests align and those
where there is a conflict. Where there is a conflict these decisions can be considered from
the strategic point of view as to what party has the greater authority and influence to
predict a likely outcome. The areas of conflict where the parties have roughly equivalent
authority and influence should be subjected too more detailed analysis to improve the
predictive nature of this approach.
This approach to decision making combine's classic sequential decision tree analysis with
elements of strategic planning. It allows for the identification of both the broad
perspective of all the major decisions required and a method of quickly focusing on
difficult decisions that require more analysis.
This process may be thought of as an approach to lean decision making or strategic
planning due to the focus it provides. The early stages of program planning or
development typically begin with small staffs, often initially an individual who often
make critical decisions on limited information that are costly to correct later on. There is
usually a multitude of apparent issues, data, and conflicting interests requiring attention.
Some but not all require immediate attention and warrant the time and cost associated
with detailed analysis.
This approach, summarized in figure 8, provides a framework to judge the major BLACK
HAWK remanufacturing decisions in terms of the needs of the interested organizations.
This will identify what areas or decisions are readily predictable and which require
further study.
47
Systematic Decision Making or
Strategic Planning Approach
1) Develop Sequential Decision Tree Of Key Issues
2) Identify the Decision Maker and Interested Parties for Each Decision
3) Segregate The Decisions Into Those In Which the Affected Parties
Interests Align And Those Where They Conflict
4) Where Conflicts Exist Determine Which Party Has the Most Authority
and Influence
5) Focus On Decisions Where The Conflictings Parties Influence Is Equal
- Perform More In Depth Analysis of These Areas as Required
Figure 8 Organizational Decision Making Analysis Approach
BLACK HAWK Remanufacturing Analysis
If we review the major decisions associated with the remanufacturing program from the
viewpoint of the affected organizations and their interest as well as their impact on user
value we can gain insight into the probable course of events and identify areas warranting
further study.
There are three initial, high level decisions that will be made by DoD and Army
acquisition officials that set the fundamental direction of the program and define who has
48
decision authority for the remainder of the program. These are formally acknowledging
the need for the program by funding it, determining what type of funding will be used
which indicates who will manage and control the program, and declaring whether the
program will be competitive or sole source procurement. A decision tree showing the
sequence and potential outcomes of these decisions is shown in figure 9 and the rationale
for the likely outcomes is discussed in the following sections.
Initial BLACK HAWK Remanufacturing Decision Tree
Sole
Source Contract
Sole Source
New
or
Wrsk
Procureme
Competitive
(AProcurement?
Develop
Diouaeentest
Typeof
Competitive
Competitive
Funding
?
OcaUsed
RFP
Remanufacturing
r
Program ?
Overhaul
Sole Source
(OMA $)
or
Is
< o
Stop
Competitive
Procurement ?
Decision Makers
Deo
tor
tra Cuu
Interested
Parties
OtheeCoDeo
DoD and Army
Congress
Aquisition
Army H-60 PMO
Sikorsky
Depot / Depot Caucus
Other Contractors
Officials
Figure 9 Initial Remanufacturing Decision Tree
49
Need for Program
The first important decision is the need to remanufacture the H-60 fleet at all. The
decision-making organization is primarily the Army and DoD and Congress were they to
disagree with DoD recommendations. As the program goals identified in chapter 3, the
remanufacturing program is significantly less expensive than procuring new aircraft,
provides significant reductions in operating costs, and allows the aircraft to remain in
service for another twenty five years. These attributes align with the primary interests of
The Army, DoD, and Congress. They are interested in continued cost-effective
fulfillment of the utility transportation mission role provided by the BLACK HAWK
today and if convinced this is the best approach to that goal will support it. They have
demonstrated their support for controlling the operating and support costs of aviation and
weapon systems by approving other life extension and upgrade programs in the past.
They also have a interest in preserving the industrial base that provides such systems.
Sikorsky, the depot, and the depot caucus in Congress all have obvious economic
interests that align with the need for such a program. The users needs have been identified
and will be met by standardizing the fleet, improving its mission capability, and reducing
the maintenance burden as discussed earlier. The interests of all the relevant parties align
on the need for the program and no further analysis is warranted.
50
Funding Alternatives
The next decision is the type account or "color" of money used to fund the program that
impacts who within the Army controls the money. The ultimate decision authority here is
Congress who will likely endorse the recommendation they get from DoD. The
Department of Defense will most likely concur with historic precedent and recommend
using procurement or Army Procurement, Aircraft (APA) funding to retain control of a
program of this size in the traditional program management office chain of command that
has the most organizational expertise. This approach also allows for the support of the
private industrial base, another DoD interest. The program management office (PMO) in
the Army and the prime contractor who typically works for the PMO would clearly
support this approach. The government depot and the depot caucus would prefer the
program be funded with the Operations and Maintenance, Army (OMA) as a smaller
overhaul program typically might be so they would control the funding and manage the
program. They have many of the basic manufacturing skills and a significant workforce
to try and keep employed.
The BLACK HAWK remanufacturing program begins with a Research, Development,
Test, and Engineering (RDT&E) phase to define and qualify the new configuration that
will be managed by the PMO. The organizational infrastructure, personnel expertise, and
planning during the RDT&E program will carry over to the remanufacturing phase of the
program. There is no similar RDT&E expertise in the depot, which creates little
opportunity and large obstacles for the transfer of program management to their control.
51
This expertise creates an organizational inertia which prevents the depot from gaining the
experience they would need to convince the senior decision makers in the Army and DoD
that their managing a large remanufacturing program would entail no more risk than the
PMO organization. They therefore probably will not gain the expertise any time soon to
cause the funding to shift primarily to the OMA account. The users only interest is to not
see money wasted and therefore they are best served by pursuing the lowest risk approach
which is using procurement dollars and the PMO. Even though there is a conflict of
interests here there is little reason to believe a program of this size and complexity would
be done using overhaul funding accounts or under the management of the depot so no
further analysis is required.
Sole Source Acquisition
The next important decision is whether to award the contract sole source to Sikorsky or
compete it. The H-60 program management office develops a recommendation that is
forwarded to the Department of the Army and DoD for approval. The DoD and the Army
are in the business of providing for the national defense and managing procurement
programs is really just a means to that end. Viewed from this light the sole source
selection can be viewed as meeting their needs by simplifying the procurement process
and their supply chain. The prime contractor with broad knowledge of the system and the
resources to manage many complex sub-system designs and related support issues
provides as close to "one stop shopping" as possible. The commercialization of DoD
52
procurement practices over the last decade and the reduction in civilian personnel has
increased the dependency of the services on the private industry expertise. This has made
the selection of the incumbent prime contractor versus a open competition, which
requires management by the government and a significant amount of time and money, an
easier decision that it might have been a decade ago. The depot and their supporters might
prefer to be considered for this role but have no RDT&E experience on programs of this
magnitude and little formal authority status in this matter. Other prime contractors might
be interested but would be dissuaded by the prospect of spending a lot of money to bit
against the prime contractor. Due to OEM expertise the historic precedent for other
remanufacturing programs has been to award them sole source and there is little evidence
to suggest a different outcome here. The users needs are once again best served by the
approach that has the highest probability of delivering the rebuilt aircraft for the least
money in the shortest period of time. There would appear to be significant alignment of
interests or at least no clear alternatives to awarding the contract sole source to the prime
contractor.
DoD Support for Sikorsky and Depot Long Term Goals
Although it does not constitute a specific decision it is worth considering the support the
prime contractor and depot have for their long-term goals of remaining as major suppliers
of helicopters and overhaul services. It is important to note there is wide spread support
among the Army, DoD, and Congress of retaining a manufacturing and support industrial
53
base although some would question the value of organic depot support versus
privatization. This support is one facet of the likely sole source declaration.
To summarize a look at the above decisions relative to the defined organizational
decision making analysis approach is required. While the above decisions are critical to
the shape of the remanufacturing program, due to the general alignment of interests of the
affected organizations, clear decision authority and historic precedent, the outcomes can
be considered predictable and do not warrant further analysis.
Army Program Management Office Decisions
As discussed above the declaration by DoD and the Army that the fundamental funding
will be from the Army procurement account also means that the Army BLACK HAWK
Program Management Office (PMO) will be tasked with managing the program. The next
series of important decisions required to execute the remanufacturing program are
essentially made by the PMO with concurrence from Army and DoD leadership.
Technical Requirements, Configuration, Development and Test, and Logistics Plan
Definition
The first decision by the PMO is to develop a configuration that meets the essential user
technical requirements while remaining affordable relative to the expected funding. The
requirements analysis process is essentially a negotiation between the user and the PMO
54
on how much of the users stated requirements could be meet with available funding. This
process and the related configuration definition have taken place and resulted in the
requirement definition shown in figure 6 at the end of chapter 4. This defines the
configuration changes from the current UH-60L. The resulting development and test, and
logistics plans require some similar negotiations between the PMO and interested
technical and support organizations but are fundamentally shaped by the need to be
consistent with past Army or H-60 standard processes and accepted procedures. With the
exceptions of a few specific test areas the overall scope and direction of the configuration,
development and test, and logistics plan decisions are either established or relatively
predictable and don't require further analysis.
The remanufacturing plan unlike the other program issues dealt with by the PMO will
define what potential suppliers, including the depot, and regions of the country gain
significant economic benefits and will therefore draw Congressional interest. This in turn
will draw the interests of senior Army and DoD policy makers. It is also where the
majority of the costs of the program will be incurred over a twenty year period which will
define how efficient or lean the program becomes.
Remanufacturing Analysis
The manufacturing plan relative to the interested organizations becomes a series of task
allocation decisions that will be made primarily by the prime contractor with PMO
concurrence. In the strategic or organizational framework they are not straightforward.
55
The central issue is developing a analysis of the technical manufacturing issues such as
cost, capacity, schedule, and quality and integrating that analysis with the business and
political implications. Performing all the work at Sikorsky would maximize revenue and
control of the process but utilizing the Army depot would expand political support for the
program at the expense of added managerial complexity. The analysis of the political
influence of the parties involved is not straight forward nor some of the technical
implications therefore the allocation decisions warrant further study and are developed in
the following chapter.
56
Figure 10 summarizes the major strategic decisions associated with the remanufacturing
program and their alignment with the interests of the affected organizations.
Will
Price?
Price?
Will
support
On Time
On Time
support
work split
Deliver?
Delivery?
work split
Figure 10 Major Decision Alignment with Impacted Organizations Interests
57
Chapter 6 Analysis of Remanufacturing Alternatives
Introduction
The definition of the remanufacturing approach provides another opportunity to assess
how the major organizations involved make and influence decisions. Unlike many of the
other technical decisions and plans, the definition of who performs what tasks and where
determines where most of the money in the program will be spent and what
organizations, facilities, and regions of the country will reap the benefits of twenty years
of work.
The RDT&E program that commands much current attention will only modify four
prototypes and the scope and location of the effort is mostly fixed. The development
issues will not command the attention of Congress, DoD, Army leadership, and the depot
that are the focus of this analysis.
Congress, DoD, and Army leadership have basic fiduciary responsibilities to the
taxpayer, many competing programs, and are consequently looking for assurance that
proposed remanufacturing program is cost-effective.
Because the lean or economically efficient organization has an economic advantage they
gain a related political advantage by being able to present a cost-effective approach that
minimizes the chance of alternate plans gaining significant support. Lean or economic
efficiency also may take several forms including current process capabilities, current
usable facilities, or low labor costs. All have some value to the end product and can be
58
found in different combinations in the facilities under consideration at Sikorsky and the
depot.
The risk of not examining the alternatives, defining a lean approach, and examining its
likely fate with decision making organizations is to invest then have to rework the
remanufacturing plan if an alternative later proves economically or politically more
suitable.
Finally the opportunity for synergy rather than competition with depot exists which
would enhance the political standing of the program, but it cannot be at the expense of an
efficient or cost-effective approach.
Strategic Decisions and Organizational Needs
To assess the feasibility and efficiency of the remanufacturing approach we need to
consider it from the point of view of the interested organizations needs and interests.
Congress, DoD, Army Leadership, PMO, and User Interests
The first strategic issue is for Sikorsky to determine, if possible, a cost-effective way to
incorporate CCAD in the program. All of the interested parties have a common need for
a cost-effective remanufacturing program and they generally desire to have the depot,
CCAD, involved in some manner because it fulfills their need of providing sufficient
work to CCAD for a number of years. Congress, DoD, Army leadership, and the PMO
59
have financial responsibilities to meet and the user has unmet needs that may be fulfilled
if the base aircraft price is low enough.
The second related issue is to determine if a satisfactory working relationship between
Sikorsky and the depot can be established. The depot will act as both a partner and a
supplier and may perform the same work as, and act in parallel with, the Sikorsky Troy
facility.
The third issue is whether the combining of overhaul and procurement funding, not
normally budgeted or spent in a closely coordinated manner, provides enough benefit and
has sufficient support from the interested organizations to be worth the added complexity.
Following a summary of other DoD helicopter remanufacturing programs a more detailed
analysis of the manufacturing allocation decisions is developed to identify an efficient
approach relative to the interests and capabilities of the interested organizations, Sikorsky
and CCAD. Both parties presumably desire to perform as much of the work as possible
and each have significant capabilities and influence in the process. A review of the
capacity, cost, schedule, and technical issues provides a framework for assessing the
efficiency or "leanness" of the alternatives. The alternatives are then considered from the
point of view of the relevant organizations involved and their needs to determine if the
recommended approach will be acceptable. The objective of considering both these
frameworks early in the process is to increases the probability of identifying a costeffective approach that will have the minimum change of being overturned downstream
when the cost and schedule impacts of a significant redirection would be higher.
60
Other Remanufacturing Program Approaches
A series of Department of Defense helicopter remanufacturing programs have been
completed and several are ongoing which provide some insights into potential contractor
and depot cooperation and manufacturing functional allocation. This provides an initial
feasibility check that proposed BLACK HAWK alternatives have some basis and can be
considered low to moderate risk. Currently the Navy is defining the remanufacture of the
SH-60B into the SH-60R and the Marines are developing plans for a SLEP for the
Sikorsky CH-53E heavy lift helicopter. The Army has already begun the remanufacture
of the AH-64A Apache into the AH-64D and the conversion through remanufacturing of
the CH-47D Chinook into the CH-47F. These programs offer a general framework for
comparison but detailed information is generally scarce and has not been found to be
directly applicable. The table in figure 11 provides a summary of who performs the major
tasks of the remanufacture program. In all cases the prime contractor is the OEM and the
OEM or their suppliers manufacture new components required. In at least one program,
the Marines Corps and Sikorsky CH-53E all the work except the new component
manufacturing is being performed by the Navy depot. In no cases is the induction,
inspection, and disassembly work being done inside a prime contractor or OEM's major
production facilities. These constraints are considered in the BLACK HAWK analysis of
alternatives that follows and consistent with the recommendations resulting from the
61
analysis. A detailed description of the SH-60R remanufacturing program and the depot
role in the AH-64D program can be found in the appendix.
Navy /
Sikorsky SH-60R
Marines /
Prime/Subs
Prime/Sub.
(At Troy)
(At Troy)
Navy Depot
Navy Depot
Prime/Subs
Navy Depot
TBD -
TBD -
Prime/Subs
TBD -
Development
Development
Development
Only
Only
Only
CCAD
CCAD
& Private Subs
& Private Subs
Sikorsky CH-53E
(Public-Private
Partnership)
Army /
Boeing CH-47F
Army /
Boeing AH-64D
Prime/Subs
Figure 11 Other Programs Remanufacturing Task Allocation Summary
62
Prime
BLACK HAWK Remanufacturing Alternatives
Consistent with the table summarizing other programs approaches the industrial facilities
that can perform major tasks of the BLACK HAWK remanufacturing process have been
identified by the tasks they currently perform. Figure 12 below identifies the tasks in the
order they will need to be accomplished. This allows defining the flow of parts through
facilities for each option considered. Sikorsky's main plant in Stratford, Connecticut has
been ruled out for induction, inspection, and disassembly work due to its high labor rates.
Because other facilities perform similar work less expensively Sikorsky does not see that
type work as a future manufacturing core competence and would not attempt to perform it
in Stratford on a recurring basis. Sikorsky does have a less expensive facility in Troy,
Alabama that currently performs overhaul and repair work and could perform these tasks
as they are on the SH-60R program. The Troy facility has also done final assembly and
delivery of Air Force BLACK HAWKs from major assemblies built in Stratford. Using
the Corpus Christi Army Depot (CCAD) or Troy facility for either the front end activities
or final assembly and delivery provides the potential to leverage down the recurring
aircraft costs of the remanufacturing program. The only portion of the program that can
only be done in one place is the manufacture of new components, which are currently
only made in Stratford, or by Sikorsky suppliers.
63
Induction,,
Yes
To Expensive,
Yes
Inspection,
Core
Not a Core
Core
Disassembly
Competence
Competence
Competence
Rework Of
Yes
Yes
Yes
Usable
Core
(Overhaul &
Core
Competence
Repair Group)
Competence
Assembly,
Yes
Yes
Yes
Paint, Test,
Core
Core
Core
Competence
Competence
Competence
Components
Delivery
Figure 12 Remanufacturing Facilities Alternatives and Their Capabilities
64
Sikorsky and CCAD Interests
Table 11 shows both Sikorsky at Troy and CCAD capable of performing the induction,
inspection, disassembly, and component rework. They both desire the workload, Sikorsky
for the revenue and CCAD for the workload. To met both their needs and maximize the
Congressional interests a work split is a logical option.
User Value Impact
The primary objective of establishing a comparison of each organizations capabilities to
establish as low a risk baseline program approach as possible by utilizing existing
expertise. This meets the user definition of value as defined by helping to establish a
program plan with minimal risk of unexpected cost growth. That cost growth would, of
course, diminish the user ability to meet other needs and diminish the relative value of the
remanufacturing program.
Since both the Depot and the Sikorsky facility at Troy can perform the induction,
inspection, and overhaul of reusable components and these are the first three jobs in the
remanufacturing flow they can be grouped together as shown in figure 13. This allows
considering the program from a multi-site allocation of tasks point of view. Similarly, all
three facilities can perform assembly, paint, test, and delivery functions so those can be
grouped as well. This grouping minimizes obvious inefficiencies associated with moving
aircraft parts unnecessarily between widely separated facilities. The new components
65
from Stratford or Sikorsky suppliers will be shipped to the final assembly point if other
than Stratford.
Given these considerations the major remanufacturing alternatives can be summarized
into the following alternate flow plans.
Alternative Aircraft Component Flow
Alternative
#1
CCAD
Stratford
#2
CCAD
Troy
#3
Troy
Stratford
#4
#5
New Parts (Stratford - All Options)
Figure 13 Aircraft Flow Alternatives
66
Operator
Manufacturing Task Allocation Decision Analysis
To assess the potential efficiencies of alternate manufacturing approaches a allocation of
tasks to the facilities in each alternative must be performed and the value of each
alternative considered. Multi-plant operation is required because the overhead structure
associated with new aircraft production at the Sikorsky plant at Stratford makes it noncompetitive for the induction and disassembly work and it is the only facility that can
build new components. Neither Sikorsky at Troy or the Corpus Christi Army Depot is
able to produce the new components required which eliminates a single plant approach.
The decision to be made is which facilities should perform which tasks. Additionally
there are opportunities to have multiple facilities perform the same work in parallel and
either allocates the work through a centralized process or by some form of competition.
The advantage of a multi-site, multi-state operation for a government program is the
increased political capitol that results from increasing the number of states involved. By
teaming with the depot, through the public-private partnership, the depot caucus and
some of the Texas delegation may become a supporter of the program in Congress and
factions of the Army responsible for putting work into the depot will more easily become
supporters of the program.
67
Decision Variables
Some of the major decision variables to be considered are plant capacity, labor cost,
political budgetary influence, schedule impact, the prime contractors ability to control the
final products delivery schedule and quality, and an aircraft shipping impact assessment.
Plant Capacity
The facilities being considered have significantly different capacities and capabilities.
The Sikorsky Stratford facility is by far the largest with over 3 million square feet of
manufacturing floor space and a blue-collar workforce of about 3000 people as shown
below. The CCAD facility is also quite large with about 2 million square feet of
manufacturing floor space and a blue-collar workforce of about 2000 people. The
Sikorsky facility in Troy, Alabama is the smallest of the three with approximately
200,000 square feet of manufacturing floor area and currently a workforce of about 100
employees. Both the Troy and CCAD facilities perform a variety of work that is
equivalent in nature to the induction, disassembly, and component overhaul work they
would be expected to perform during remanufacturing.
68
Manufacturing Plant Capacity
3.5.
3
Factory Space
Millions Ft2
2 Shop Labors
Thousands
2.5V
1.5V
1V
0.5.
0
Stratford
Troy
CCAD
Figure 14 Plant Capacity
Troy and CCAD also perform crash damage repair work. This activity requires a facility
to be able to repair or replace any part of the aircraft and perform reassemble from
whatever state of disassembly is required. The skills in general mimic final assembly
skills but the nature of the work is one of a kind, not repetitive like a final assembly line.
This means, for instance, possibly stopping the process while waiting for a long lead part
to be manufactured that can't be repaired. This is acceptable for a single aircraft that
would cost more to replace, or may be out of production, but not for a production line.
Troy has some limited experience with final assembly on a Air Force H-60 program.
Eleven aircraft were manufactured up to the major assembly level in Stratford then
trucked to Troy for final assembly and delivery. The Air Force program quantity was
69
limited compared to the sixty aircraft a year the Army plans to remanufacture. Troy also
relied on a significant number of temporary people from Stratford to handle the workload.
Both Troy and CCAD have assembly tooling for conventional H-60 major assembly
joining but the capacity of the tooling would need to undergo a detailed capacity study if
either are selected for final assembly during the remanufacturing program.
Plant Capacity Assessment
To develop insights into the relative ability of each existing plant to absorb the additional
work required for the remanufacturing program a initial task flow chart and estimate of
labor hours for the major tasks was developed. Since a strong correlation between facility
size and current workforce size exists and two of the three facilities have histories of high
past peak workloads workforce size was selected to representative of capacity issues.
This approach also facilitates an initial analysis of the economic and thus political
significance of the workload to the existing facility. Future studies will be required to
analyze specific facilities like final assembly hanger space and the number of engine test
stands. The initial flow and task assessments allows allocation of specific tasks to each
facility and a percentage of current workforce metric to be developed for relative
comparisons of the impact of remanufacturing on that facility. Figure 15 shows the
remanufacturing flow for the UH-60A to UH-60L+ remanufacturing program with the
hours normalized slightly and rounded off to make final assembly equal to 1000 hours.
The hours, while not exact, are close enough to depict the relative impact on capacity of
each of the three facilities of any work allocated to them. The first process includes the
70
induction, inspection, disassembly, and overhaul of reusable parts which totals 5000
hours per aircraft. Manufacture of new components, which can only be done at Stratford,
totals about 5000 hours per aircraft. Final assembly, test, paint, hanger, and delivery tasks
total approximately 2000 hours per aircraft.
UH-60L+ Remanufacturing Flow
Induction &
Inspection
500 Hrs
Disassemly
2500 Hrs
Overhaul
Reusable
Components
2000 Hrs
Final
Assembly
1000 Hrs
Paint,
Test,
Hanger,
Delivery
1000 Hrs
Manufacture
New
Components
5000 Hrs
Hours Approximate (Normalized To Final Assembly = 1000 hrs)
Figure 15 Baseline UH-60L+ Flow and Facility Choices
The analysis assumes 75 aircraft per year, slightly above the Army plan of 60 per year to
provide some capacity margin for unique special mission modifications beyond the basic
configuration and for other H-60 customers. A summary of the impact of increase in
workload shows the largest impacts when Troy, the smallest facility is selected for both
the disassembly and final assembly work. This would result in over a two hundred and
fifty percent increase above their current workload and zero work entering CCAD. The
71
other extreme performing all disassembly and final assembly work at CCAD results in a
21% increase in CCAD workload and no effort at Troy. The Stratford workload increase
remains relatively constant, between 5% and 7% throughout all options. A 75/25 split of
the disassembly work between CCAD and Troy results in a reasonable balance of the
options considered, assuming Sikorsky is willing to expand Troy.
Political and Financial Considerations
Besides the load balancing, this approach maximizes the political interests in the program
and provides a second source of "suppliers" for disassembly.
The Troy facility would require a commitment to expansion to perform the disassembly
and overhaul labor and a local economic study to determine if the region can provide
sufficient personnel. CCAD has the capacity to absorb the disassembly work but will
have to improve its internal processes to become a reliably supplier for a task of this
magnitude. Sikorsky will have to review the impact on revenues and profit of trying to
perform the work itself presumably by investing in Troy or allocating the work back to
CCAD, or possibly looking for other private third parties to perform the disassembly
work. The combination of Troy and CCAD splitting the work expands the political base
of support for the program while reducing Sikorsky's dependence on CCAD as a sole
source supplier. This rationale along with the limited current capacity at Troy provides
the basis for recommending a split of the disassembly work between the two facilities.
72
Final Assembly, Hanger Operations, Delivery
Both Stratford and CCAD have sufficient capacity to absorb the final assembly, hanger,
delivery, and related tasks. The issue for Sikorsky is they will be the prime contractor
with contractual liabilities associated with on time delivery. Even if Sikorsky were able to
delegate the task to CCAD and make the same profit as performing it themselves, they
would have significantly less control over the delivery process. At this time there would
appear to be no advantage to allocating final assembly to CCAD and it will not be
considered as an option any further in this analysis.
Troy could arguably perform the function and has on a very limited basis but given the
magnitude of the program, the expertise residing in Stratford, and the potential increase to
the Stratford overhead rates of removing this work it appears the best choice for final
assembly is currently Stratford.
73
Plant Capacity - Summary
Facility
Disassembly /
Final Assembly
CCAD/
Percent
Current Capacity
Required For
Percent
Current Capacity
Required For
Percent
Current Capacity
Required For
75 A/C per Yr.
DISASSEMBLY
75 A/C per Yr.
FINAL ASSEMBLY
75 A/C per Yr.
NEW COMPONENTS
(MMH/Yr.)
(MMH/Yr.)
(MMH/Yr.)
15%
2%
Stratford
CCAD/
Troy
15%
Troy/
Troy
187%
Troy/
Stratford
187%
CCAD/
CCAD
15%
5% of Stratford
All Options
75%
75%
2%
6%
Figure 16 UH-60L+ Plant Capacity Summary
Figure 16 shows the combined impact of the alternative manufacturing approaches on the
related facilities. Figure 17 shows the weighted average of the capacity impact for each
alternative considered. The Troy/CCAD mix is illustrative of the potential load balancing
that could take place if both facilities are used for disassembly and related activities. It is
not meant to be a final recommendation on work split.
74
Plant Capacity - Summary
Facility
Disassembly /
Percent Workload Increase
CCAD
Troy
Stratford
Final Assembly
CCAD/
Total
Weighted
Average
15%
0
7%
10%
15%
75%
5%
21%
0
262%
5%
155%
0
187%
7%
82%
CCAD/
CCAD
21%
0
5%
14%
25%Troy, 75%CCAD
11%
56%
7%
14%
Stratford
CCAD/
Troy
Troy/
Troy/
Troy/
Stratford
/ Stratford
Figure 17 UH-60L+ Plant Capacity Impact - Weighted Average
In summary, based on capacity and related existing expertise, it is recommended that
Troy and CCAD split the induction, inspection, disassembly, and component overhaul
work and Stratford perform the new component manufacturing, final assembly, and
delivery.
75
Labor Costs
A relative comparison of the labor rates of the facilities was developed to assess the labor
cost impact of plant allocation decisions. The normalized manufacturing labor hour costs
of the potential facilities are shown below. The Stratford plant has significant
manufacturing overhead costs associated with managing its diversified capabilities. The
Stratford plant includes a machine shop that makes precision rotor and transmission parts
and complete major assemblies, titanium main rotor blade processing, composite rotor
blades and airframes, aluminum airframe components, airframe assemblies and final
assembly capabilities, hanger, flight test and delivery operations, and complete test
facilities including experimental flight test as well. The resulting overhead from
managing and integrating this capability makes it difficult to cost effectively perform
tasks of lesser complexity such as disassembly and overhaul. Troy direct costs and
overhead rates are significantly lower and result in a fully burdened labor hour rate of
slightly less than half of Stratford. CCAD rates were not available for comparison but are
believed to fall in between the Stratford and Troy rate.
76
Sikorsky-Troy, Al Facility
Reduced Labor Rate Comparison
1.4
0 Shop Labor
Hour Cost
1.2
1
Normalized
0.8
Shop Labor
0.6
0.4
Hour Costs
CCAD Rate Unknown Closer to Stratford Than
0.47
and Troy
0.2
Stratford
0
Sikorsky
Sikorsky
Stratford,
CT
Troy, Al
CCAD
Figure 18 Labor Cost Comparison
The difference in labor costs and the alignment with current capabilities supports
performing the induction, disassembly, and overhaul work in Troy or CCAD and the final
assembly work at Stratford.
Increasing User Value - Cost Reduction To Meet Additional Requirements
To provide the user additional value in the form of additional aircraft features or
capabilities the aircraft price must be reduced or the dollars available increased. Using
Stratford labor rate pricing as an initial basis the aircraft recurring costs are as much as
15% above the Army target price for a remanufactured UH-60L+ with no margin for
several desired improvements to the baseline configuration. To assess the value of each
77
disassembly alternative a decision tree was developed identifying the required end states
and resulting issues to be addressed if that approach is pursued. Figure 19 shows a
decision tree identifying two approaches to meeting additional user requirements by
either gaining additional OMA funding or reducing Sikorsky cost using more Troy and
less Stratford labor. The following sections examine the benefits and issues with each
approach.
Cost vs Requirements Decision Tree
Issue
Money Required For Design Features Unavailable With Sikorsky Only Pricing
CCAD Disassembly
OMA/APA S
Synergy
UHI-60L+
Funding
so st
Diselye
(Troy or
Pbrivate
Other)
Both
Neither
Reliable Supplier__
AtCA (?
Insufficient Quality
/Quantity Parts
Sufficient Savings
Insufficient Savings
Competition/
Flexibility/
Capacity
Limited Configuration
Figure 19 Cost versus Requirements Alternatives
78
-
Overhaul and Procurement Funding Accounts
CCAD H-60 OCM/RECAP Plan
CCAD currently perform a BLACK HAWK on-condition maintenance (OCM) program
to overhaul aircraft based on a conditional assessment performed on fleet aircraft. The
program includes some disassembly, corrosion control, standard 500-hour phase
maintenance, performing any deferred maintenance, and repair or replacement of
components beyond their time between overhaul (TBO) criteria. A plan is being
developed to expand the definition of this program and rename it the recapitalization
(RECAP) program. The major difference would be the RECAP plan will expand the
replacement of aging or worn components to "zero time" them so the aircraft would not
require scheduled maintenance for a fixed period of time following this program.
Army Leadership Interest
The Army leadership is interested in the potential to synchronize this program with
remanufacturing to leverage their investments in fleet maintenance. Both the OCM and
RECAP programs are paid for with Operations and Maintenance, Army (OMA) funding.
This will not provide cost savings but could allows the program to use a second source of
funding from the Operations and Maintenance, Army (OMA) account to perform some of
the disassembly or overhaul work at CCAD. Figure 20 shows the potential synergy of
79
utilizing overhaul (OMA) and procurement (APA) funding in a coordinated manner. The
two different "colors of money" could be combined to expand the recurring money
available. This approach would coordinate the normal periodic overhaul of aircraft with
the remanufacturing process thus preventing the waste associated with performing 500
hour phase maintenance, returning the aircraft to flight status, then taking it apart again
for remanufacturing. This use of OMA money to perform "pre-mod" work results in a
disassembled configuration ready for remanufacturing. There are two risk involved in
doing this. The first is having to coordinate a program broken into two separate major
financial account over a twenty year period which the remanufacturing process is
expected to last. The second is limited control over OMA funding which is not under the
direct control of the H-60 program manager or Sikorsky.
The advantages of combining OMA and APA funding can be seen in figure 20 which
shows the impact of combining the planned baseline APA recurring funds with what is
currently spent per aircraft under the On Condition Maintenance (OCM) program. The
addition of OCM funds from the OMA account allows potentially up to another 15% per
aircraft to be available which would cover the costs of the most significant upgrades
desired by the end user. The largest variant in the trade studies is the alternative
considered providing an all-new cabin similar to the SH-60R approach or a more limited
new upper deck only. Both alternatives would fit with the additional 15% OMA funding.
80
OMA/APA Synergy
Current CCAD
On Condition Maintenance
(OCM) Budget
(OMA $)/
.A/
1.4
Normalized
H-60
1.2
I
Remanufacturing
0.8
Unit
Recuring
0.6
Cost
Base
Budget
(APA$)
0.4
Wt
Reduction
/ Active Vib
Control
1 Composite
Stabilator
*Other
/
sComposite
Tailcone
* New Fuel
0.2
Tank
0
New Top
New
Deck
Cabin
*Basic
Refurb
Figure 20 Benefits of Combined OMA and APA Account Funding
Organizational Alignment
There is significant alignment of user interests due to the opportunity to fulfill unmet
requirements and Army leadership interest in being able to leverage their maintenance
and procurement funding and not waste money on overhauls only to then remanufacture
the same aircraft. If the Army can manage the coordination of the budgets then the DoD
and Congress should concur with the value of this approach.
81
Reduction of Sikorsky Costs
The major alternative to using CCAD for the disassembly work is to use the Troy facility
or some third party supplier with similar capabilities and rate structures. To achieve a
viable alternative without using OMA dollars a significant portion of the work must be
done at labor rates lower than Stratford.
A baseline case assuming all Stratford labor shows the price of the remanufactured
aircraft to be about 14% higher than the target price. If the initial 5000 hours of labor is
performed at the current Troy rates the estimated costs drop to within three percent of the
target. If final assembly was done there an additional 3% could be saved but that
approach has been discarded due to the capacity and expertise that resident in Stratford.
Keeping the work priced to be affordable with just APA funding and performed by
Sikorsky provides a relatively simple program approach but has little margin for other
capability improvements. This approach probably requires investment in Troy for the
volume of work required and would forgo the financial and political support gained by
utilizing the depot.
82
Sikorsky-Troy, Al Opportunity
Impact of Reduced Labor Rate
1.4.
1.2 -
1.141.03
1
Normalized
I Aircraft Unit
0.8 Remanufacture 0.6 Costs
0.4-
Approximate
Cost
Target
0.2 -
0
All
Stratford
Corpus Christi Army Depot (CCAD) Rates Not Available
Troy /
Stratford
Troy /
Troy
Induction, Disassembly Site /
Final Assembly Hanger Site
Figure 21 Impact of Lower Cost Disassembly Labor vs Target
Both alternatives have merit and several opportunities and issues arise if both approaches
are used. The first benefit to utilizing both Troy and CCAD is the increase in throughput
capacity and the resulting programmatic flexibility. Given a work stoppage or other
priorities at one facility Sikorsky could perform some load balancing to meet their
delivery commitments. Secondly it offers the possibility of competition for the
disassembly work. This could provide incentives in terms of future work share split to
achieving on time delivery and high quality work. How this would take place in the form
of a public-private partnership or in terms of spending both OMA and APA funding in a
coordinated fashion will require further study. It is also possible to align the depot and
83
Troy in series in terms of workflow but this would imply that every part would be
shipped to three different facilities on its way back to the user where it started.
Schedule
Sikorsky has estimated the total time from induction to return to the field to be
approximately 9 months. This does not include lead times for certain components such as
a titanium forging which can be procured prior to aircraft induction using advanced
procurement funding, a normal procurement practice. The initial CCAD estimate for their
OCM program is 6 months, which is consistent given its smaller scope. The key issue
with CCAD will be improving their parts availability to improve the variance in their
delivery times versus plan. One approach to doing this is described below in the publicprivate partnership discussion. Only limited remanufacturing schedule information is
available precluding a detailed comparison of the relative efficiency of Sikorsky or
CCAD.
Prime Contractor Control of Quality and Delivery Schedule
Sikorsky as the prime contractor will be required to provide contractual guarantees for the
quality of work and on time delivery to meet its financial objectives. Sikorsky currently
warrantees initial quality for a fixed number of flight hours on new aircraft deliveries and
will be expected to on remanufactured aircraft as well. Current warrantees flow back to
suppliers and this would appear to be an appropriate contract vehicle to be employed
84
between Sikorsky and CCAD to insure initial product quality. To assure on time delivery
Sikorsky would utilize CCAD in areas where they have existing expertise so as not to
create unnecessary delivery or quality risks.
Public-Private Partnership
Public-Private partnerships have been utilized to support depot-level maintenance
activities for several years in all four services. Fifty-four separate agreements currently
exist which perform more than $500 million in work annually and as of September of
1999, 28 more are currently being planned. The objectives of these agreements are to
improve capacity utilization, reduce the cost of depot level maintenance, and to increase
readiness. The authority for the partnerships is provided for in several statutory areas
including several sections of Title 10 of the United States Code and the Federal
Acquisition Regulations. Many partnerships also exist as "work share" arrangements
under Memorandums of Understanding (MOU). In the non-contractual work share
arrangements each partner works separately to complete a portions of the work as
specified in the MOU. The MOU allows for each partner to contribute its capabilities in a
complementary manner to increase the effectiveness of the total process. Currently about
two-thirds of the existing partnerships exist under statutory authority and one-third under
MOU. Most partnerships have been found by DoD to have a positive impact on capacity
utilization and the cost of depot level maintenance, and a limited impact readiness. (From
85
Office of the Secretary of Defense, Public-PrivatePartnershipsfor Depot Level
Maintenance).
The Army Depot at Anniston (ANAD), Georgia which maintains ground systems,
including tanks, has 25 implemented partnerships with industry including several major
overhaul programs that resemble the H-60 remanufacturing program in nature. Anniston
is currently working with General Dynamics Land Systems (GDLS) to overhaul the
MiAl tanks, which the Army plans to sustain until 2025. The tank is disassembled at
ANAD then all components are rebuilt at the most cost-effective facility. The
components are shipped to the Lima Army Tank Plant for reassembly. Field tests have
shown the operating and support cost savings versus MiAl tanks that have not been
though the overhaul. The MIAI overhaul takes place under a work share arrangement but
many of the Anniston partnerships take place under either title 10 U.S.C. or FAR subpart
45.3 depending on the type of work. In the work share agreements reviewed the private
partner appears to work under a contract with the weapons system program manager and
the depot under a separate Army program. This approach provides the potential precedent
for CCAD to perform "pre-mod" work with OMA funding and Sikorsky to perform the
remanufacturing with APA funding in a coordinated manner.
Shipping Impact
One area that is potentially different than normal aircraft manufacturing programs is
shipping. The possibility of shipping sixty relatively large aircraft per year requires
86
consideration. The shipping requirements will be a function of the remanufacturing
approach utilized for the airframe. The other major components will be removed during
disassembly and are easily shippable in standard 18 wheel trucks. The cabin section is the
largest portion of the airframe and is the subject of a trade study to determine its
remanufacturing approach. If a all new cabin is built then the next decision is whether to
disassembly at the disassembly house or at Stratford. Sikorsky is concerned about the
quality of disassembly by a third party because of the possibility of damage being done to
the interfaces, particularly the rivet holes. Therefore a quality assurance program would
need to be implemented at the disassembly house to insure the integrity of the process.
This approach should be more cost effective given the expense of Stratford labor.
Should the new upper deck only approach be taken then a special shipping fixture needs
to be designed and the same quality assurance process need to be implemented. Sikorsky
manufacturing engineers interviewed believe the shipping fixture is a low risk approach if
the upper deck only approach is pursued. The cabin will need to be shippable in a covered
truck to prevent foreign object damage (FOD) which will dictate how much disassembly
is required. Figure 22 shows a decision tree summarizing the various shipping issues.
87
Shipping vs Cabin Modifications
Decision Tree
c
9
Disassembly By
Supplier
New Cabin
Disassembly At
Sikorsky
Cabin
Refurbishment
A pproach
New Upper
Disassembly By
Deck Only
(Refurbish
Rest of Old
Cabin)
Supplier
X*..pr
..r,.esS4\t
'.tuaneo
Disassembly At
Sikorsky
Figure 22 Shipping Decision Tree and Resulting Issues
Facility Strengths and Weaknesses
Sikorsky at either facility, based on current and past program performance appears to
have the major skills, facilities, and managerial systems in place required to manage the
program. Troy would clearly need to grow but Sikorsky has the industrial knowledge and
financial resources to exploit the lower costs of doing business they're assuming the
human resources are available in the local area.
A plant tour and interviews about current programs was conducted at CCAD to assess
their ability to perform the required tasks for remanufacturing. The one significant
finding was the lack of a modem, centralized Materials Requirements Program (MRP)
system. The facility has significant part fulfillment issues associated with having to order
88
their materials from the centralized Defense Logistics Agency (DLA) spare parts
management system. The DLA system is intended to serve worldwide multi-service
customers and must constantly balance conflicting priorities like keeping fielded aircraft
flying around the world and providing parts to overhaul facilities like CCAD. This
system puts CCAD in a position of having little control over its primary supplier. The
lack of a modem MRP system to provide visibility into total parts requirements, lead
times, and ordering and tracking provides a great disadvantage when the repair business
has more variability than new production due to the uncertainty of the condition of the
incoming aircraft and the resulting parts requirements. CCAD officials interviewed said
they had used a USAF system but found it had many incompatibilities with DLA systems
and eventually discontinued using it. They operate using several systems today, some of
which are more effective than others do but not able to perform the entire job. A search
for a true MRP system has been underway but with limited funding. The other noticeable
impact of the lack of a MRP or other control system was the appearance of significant
amounts of inventory throughout the facility. Related problems exist in their scheduled
time to perform work and field durability or time-on-wing of CCAD repair and overhaul
work relative to private industry. CCAD has requested Sikorsky help develop a process
improvement program at CCAD as part of the eventual public-private partnership. The
process improvement efforts need to focus on the above issues and can provide the
opportunity for Sikorsky to develop a working relationship with CCAD that mimics its
relationship with other suppliers. This would appear to be a area where significant gains
could be made through a Sikorsky-CCAD public-partnership.
89
Virtual Prime Vendor
The first phase of this partnership may take the form of a program called Virtual Prime
Vendor (VPV) which would allow direct shipment of parts kits for several major
components from Sikorsky to CCAD. The direct nature of the arrangement coupled with
a third party holding the inventory locally in Corpus Christi will greatly accelerate the
speed at which part shortages are alleviated. This approach provides a low risk initial
arrangement for both parties. Sikorsky is the supplier in this case and not contractually
dependent on CCAD for on time deliveries and CCAD can assess the value of the
partnership while solving or at least reducing the magnitude of a chronic parts supply
problem. This should provide a low risk environment to facilitate the team building and
trust required to develop a process improvement program at CCAD.
Recommendation
A summary of the various decision variables and remanufacturing program options is
shown below in figure 23. Based on the decision variables and information available to
date, it is recommended that both the Troy and CCAD facilities continue to be considered
for the induction, inspection, disassembly and overhaul work and the Stratford plant be
used for final assembly and delivery as well as new component production. The addition
of a third facility adds some complexity but also increases capacity, flexibility, and
political support. This arrangement allows for use of each plants current core
90
competencies or skills and provides both the labor rate advantage of Troy and the
possibility of utilizing OMA funding through CCAD. This arrangement if administered
through a partnership should also allow Sikorsky significant control over the delivery
schedule and product quality. Several remaining questions that relate to using both
facilities are discussed below.
Task Allocation Decision Matrix
Disassembly/Final Assembly Site
CCAD/
Stratford
CCAD/
Troy
Troy/
Troy
Troy/
Stratford
CCAD/
CCAD
Troy &
CCAD
/Stratford
Number Of Facilities
2
3
2
2
2
3
Political Capitol/
Number of States
2
3
2
2
2
3
+10%
+21%
+82%
+18%
Decision Variables
Plant Capacities Avg. % Manpower Increase
+155%
+14%
Core Competencies
Yes
Yes
Yes
Yes
Yes/?
Yes
Plant Labor Rates
TBD
Good
Best
Good
TBD
Good
ONIA/APA Leverage
Yes
Yes
No
No
Yes
Yes
Prime Contractor Control Of
Quality and Delivery Schedule
Medium
Medium
High
High
Low
High
Risk Areas
Schedule
Schedule
Troy
Capacity,
Political
Troy
Capacity,
Political
Schedule
Schedule
Best
Alternative
New Components Manufactured At Stratford Plant In All Cases
Figure 23 Manufacturing Allocation Trade Summary
Strategic Organizational Interests
To complete the assessment of the manufacturing allocation questions we must review
the strategic questions postulated at the beginning of the chapter with respect to the
interested organizations.
91
The first issue is whether Sikorsky can define a cost-effective way to incorporate CCAD
in the program. All of the interested parties have a common need for a cost-effective
remanufacturing program and the depot supporters in Congress and DoD desire to have
CCAD involved because it meets their need of providing sufficient workload at CCAD
for a number of years. If done in a efficient manner depot involvement will help Sikorsky
maintain the long term support for the program required to have it funded over a number
of years. It appears possible for Sikorsky to utilize the depot through a public-private
partnership to perform induction, disassembly, and overhaul work. By also having the
Troy facility able to perform the same work Sikorsky should be able to maintain control
of the schedule and develop effective quality control measures and process improvement
through the partnership while assuring CCAD of significant long term labor content. This
would maximize the Congressional and DoD support for the program.
The second related issue is to determine if a satisfactory working relationship between
Sikorsky and the depot can be established. The depot will act as both a partner and a
supplier and may perform the same work as, and act in parallel with, the Sikorsky Troy
facility. Sikorsky and the depot must first establish a sound working relationship and then
deal with the potential work split for the remanufacturing program. To establish an
effective public-private partnership or organizational relationship requires developing
trust based on understanding of the organizational technical capabilities and cultures
involved and achieving mutually agreed to commitments. What the impact is of utilizing
Troy and CCAD in parallel, potentially in competition, with Sikorsky-Stratford in charge
requires significant study prior to implementation.
92
The third issue is whether the combining of overhaul and procurement funding, not
normally budgeted or spent in a closely coordinated manner, provides enough benefit and
has sufficient support from the interested organizations to be worth the added complexity.
This appears to be an attractive option at this time that would gain support among the
interested parties. This, however, requires further analysis of how each budget is put
together, what kind of work is legal under each budget, and whether their are any current
successful examples of this practice. A summary of these issues and the positions of the
relevant organizations is shown in figure 24.
93
Figure 24 Manufacturing Issues and Likely Positions of Interested Organizations
94
Chapter 7 Summary
There are two steps to creating a "lean" program in complex multi-organizational
decision making environments such as the Department of Defense. A program plan must
be considered from both the traditional economic efficiency perspective and from the
perspective or fulfilling most of the impacted organizations needs.
To create value for the end user or customer of a system, the system or proposed
improvements should be considered from the point of view of eliminating or minimizing
waste from the users operations. This thesis shows the requirements for the
remanufactured BLACK HAWK helicopter can be traced to eliminating or minimizing
inefficiencies in the end users maintenance and flying operations and should reduce the
costs associated with both. The remanufacturing process itself will be designed to
minimize the costs and the number of aircraft out of service by utilizing a cost-effective
mixture of private industrial facilities and the existing Army aviation depot through a
public-private partnership.
To address some potential barriers to implementation several areas are recommended for
further study. First the implications of potentially utilizing both overhaul and
procurement funds to pay for the remanufacture program. Second an approach to define
how to best allocate disassembly and overhaul work between the depot and private
95
facilities is needed. Finally the organizational relationship development that must take
place to successfully implement a public-private partnership needs to be explored.
To address the political perspective a lean decision making or strategic planning process
was developed to considering the needs and influence of impacted organizations. This
approach combines classic sequential decision tree analysis with elements of strategic
planning. This allows focus early in the process on those areas that warrant more detailed
analysis.
By combining economic and organizational analysis a program can be crafted that is lean
from a traditional efficiency point of view and has a high probability of being acceptable
to those impacted organizations that may have sufficient influence to stop or alter the
plan. Considering these needs early in the program development minimizes the
possibility of major program redirection after the program is underway. This
minimization of both the program costs and the possibility of major redirection combines
to provide a lean program development approach.
96
Bibliography
1. Womack, J.P. and Jones, D.T. and Roos, D. The Machine That Changed The World,
1990, New York, NY: HarperCollins Publishers
2. Womack, J.P. and Jones, D.T. Lean Thinking Banish Waste and Create Wealth in
Your Corporation, 1996, New York, NY: Simon and Schuster
3. Rother, M. and Shook, J. Learning To See Value Stream Mapping To Add Value and
EliminateMuda, 1998, Brookline, MA: The Lean Enterprise Institute, Inc.
4. Steiner, H.M. EngineeringEconomic Principles,Second Edition, 1996, New York,
NY: McGraw-Hill
5. Oster, S.M. Modern Competitive Analysis, 1994, New York, NY: Oxford University
Press
6. Pember, H. Seventy-Five Years of Aviation Firsts, 1998, Stratford, CT: Sikorsky
Historical Archives. Inc.
7. Gant, C. UH-60X OperationalRequirements Document, 1998 Ft. Rucker, AL: U.S.
Army Directorate of Combat Development Publication
8. Cochrane, D and Hardesty, V. and Lee, R. The Aviation Careers ofIgor Sikorsky,
1989, Los Angeles, CA: Perpetua Press
9. Nahmias, S. Production And Operations Analysis Third Edition, 1989: New York,
NY: McGraw-Hill
97
10. Office of the Secretary of Defense, Public-PrivatePartnershipsfor Depot Level
Maintenance, 9/99, Deputy Under Secretary of Defense (Logistics), Office of the
Secretary of Defense
11. Corpus Christi Army Depot web site, Corpus ChristiArmy Depot Facts, 1999,
http://www. ioc.army.mil/rm/iocfact/ccad2
12. Womack, J.P. Lean Thinkingfor Aerospace, 1998, Long Beach, CA: Briefing at
Aerospace Exposition
13. Army Aviation Modernization Plan, 1998, Ft. Rucker, AL: U.S. Army Directorate of
Combat Development Publication
14. Stern, S. Technology Strategy Class 15.932, Sloan Spring 1999: class notes
98
Appendix
SH-60R Remanufacture Program
The SH-60R program is meant to extend the life and upgrade the configuration of the
current Navy SH-60B fleet into the SH-60R through a remanufacturing process similar to
that planned for the Army UH-60A to UH-60L+. The major steps in the SH-60R program
are described below to provide a description of the detail steps required and the flow of a
remanufacturing process similar to that required for the BLACK HAWK.
Induction and Inspection
When the aircraft is inducted into the remanufacturing process and undergoes a through
checkout to assess its condition. The finding are recorded including any unique
configuration changes or damage that is beyond that which has been contracted to repair.
Any such variance in the configuration or condition is usually identified and the cost
estimated to repair under a separate contract line item called "over and above" items.
Typically this includes corrosion, crash damage, field repairs, or unique equipment
fielded for special missions.
Disassembly
The aircraft is disassembled by removing the main rotor blades, the main rotor pylon,
engines, main gearbox assembly, doors, windows, seats, landing gear, tail rotor blades
and vertical pylon or tail, and the Stabilator or horizontal tail. These parts enter a
99
Standard Depot Level Maintenance (SDLM) program which they would go through
periodically during normal maintenance. Since a new cockpit and cabin and wiring
harnesses are to be built the current ones are disposed of. The tailcone, vertical pylon, and
stabilator are the only aircraft structural components reused on the SH-60R. They are put
through a life extension program that is similar but more extensive than the normal
SDLM activities for those components.
New Construction
A new cockpit and cabin are built which have the same manufacturing interfaces as the
old cockpit and cabin. The are then wired with new harnesses to accommodate the latest
avionics equipment. New floors and interior soundproofing are also added.
The cost of the new construction is offset by the cost avoidance of having to rework
older, often corroded structure where each airframe has unique problems that must be
dealt with both technically and programmatically on a one aircraft at a time basis. This is
"over and above" the basic program account becomes a costly aircraft by aircraft
negotiation. The new cabin is considered "lean" in the sense that it avoids problems
associated with the variability in the condition of the incoming cabin structure and
minimizes deviations from the planned cost and schedule. The Navy has also been
offered a longer in service life after the remanufacturing process that it would get if the
older structure was overhauled instead of replaced.
Reassemble and Delivery
100
First the tailcone and landing gear are reinstalled. Next the vertical pylon, Stabilator,
doors, seats, and windows are installed. Third, the main and tail rotor pylons, main
gearbox/rotor head, engine and tail rotor blades are reinstalled. The aircraft is now
reassembled except for main rotor blades due to space limitations. The aircraft is then
masked and painted. A system checkout is performed, then the aircraft goes to the hanger
where main rotor blades and avionics are installed and ground runs and flight checks are
performed. The aircraft is then ready for delivery to Lockheed-Martin in Owego, NY
where the Anti - Submarine Warfare system is installed prior to delivery to the Navy.
CCAD Role in AH-64 Remanufacturing
The Army depot at corpus Christi (CCAD) has been performing the induction, inspection,
disassembly, and component overhaul functions on the Army AH-64 Apache
remanufacturing program. This is called pre-mod work and the tasks are similar to those
described in the SH-60R program. The depot has not been doing the pre-mod for all
aircraft however, a private company also performs this work in parallel. The depot
performs the work for the government program management office. The approach to
defining work share division between the depot and the private contractor is not known at
this time.
101