Homeland
Security
United States
Coast Guard
U.S. Coast Guard
Logistics Transformation
Mr. Jeffery Orner
Deputy Assistant Commandant for Engineering and Logistics
Remarks for
NDIA Logistics Committee
January 12, 2007
Assistant Commandant for
Engineering and Logistics (CG-4)
Homeland
Security
Briefing Outline
United States
Coast Guard
• Coast Guard Logistics Today: The Case
for Change
– Where we are today and the challenges we
face
• Logistics Transformation
– The Path Ahead
• Logistics Organizational Alignment
– Commandant’s Intent Action Order #4
Assistant Commandant for
Engineering and Logistics (CG-4)
2
Homeland
Security
•
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•
•
Typical Coast Guard Day
United States
Coast Guard
Save 15 lives & Assist 117 people in distress
Conduct 90 search and rescue missions
Protect $2.8 million in property
Enforce 129 security zones
Interdict and rescue 15 illegal migrants at sea
Board 4 high interest vessels
Board 192 vessels of law enforcement interest
Board 122 large vessels for port safety checks
Seize 71 lbs of marijuana and 662 lbs of cocaine with a street value of
$21.1M
Conduct 317 vessel safety checks and teach 63 boating safety courses
Conduct 19 commercial fishing vessel safety exams
Respond to 11 oil and hazardous chemical spills
Process 280 mariner licenses and documents
Service 140 aids to navigation
Monitor the transit of 2,557 commercial ships through U.S. ports
Investigate 20 vessel casualties - collisions, allisions, and groundings
Assistant Commandant for
Engineering and Logistics (CG-4)
3
Homeland
Security
CG Assets Supported by Logistics
United States
Coast Guard
¾ 255 Cutters (65 to 420 feet in length)
¾ 1400 (approx.) Boats
¾ 211 Aircraft (rotary & fixed wing)
¾ 8000+ buildings and ~ 30-million sq ft
¾ Deepwater Program will be delivering or
modifying 93 Cutters and 206 aircraft
Assistant Commandant for
Engineering and Logistics (CG-4)
4
Homeland
Security
Logistics Transformation
Objectives
United States
Coast Guard
Logistics Transformation Mission: Develop and implement
transformational concepts, policies, processes, and systems to deliver
dependable, effective and efficient logistics.
Logistics Transformation Objectives:
• Meet USCG mission availability requirements while lowering Total
Ownership Costs
• Become a data driven logistics organization to drive continual
improvements
• Establish a culture of preventative vice corrective (response)
maintenance
• Link logistics efforts to operational performance and financial savings
• Meet all statutory compliance requirements (GPRA, CFO Act, Etc.)
Assistant Commandant for
Engineering and Logistics (CG-4)
5
Homeland
Security
What is Logistics?
United States
Coast Guard
Definition
Definitionof
ofLogistics
Logistics
Logistics
Logisticsencompasses
encompassesall
allthe
theprocesses,
processes,products
productsand
andservices
services
needed
neededto
toensure
ensurethat
thatour
ourassets
assetsmeet
meetmission
missionperformance
performance
requirements,
requirements,and
andcan
canbe
beeffectively
effectivelysupported
supportedthroughout
throughoutthe
the
life
lifecycle
cycle(i.e.
(i.e.the
the10
10elements
elementsof
oflogistics).
logistics).
Assistant Commandant for
Engineering and Logistics (CG-4)
6
Homeland
Security
Today’s Logistics
Assistant Commandant for
Engineering and Logistics (CG-4)
7
United States
Coast Guard
Homeland
Security
Current State of Logistics
Key Characteristics
United States
Coast Guard
We propose a logistics business model with centralized planning and control and
distributed execution.
Coast Guard
Logistics Community
Centralized
Shore Facilities
Cutters
Electronics
Boats
Aviation
Aviation
Assistant Commandant for
Engineering and Logistics (CG-4)
8
Logistics
Logistics
Management
Management Distributed
&&Control
Control
Homeland
Security
Case For Change
United States
Coast Guard
A Distributed Business Model tends to be weaker in the planning and control areas, resulting in a more
reactive logistics process.
Characteristics
Characteristicsof
ofDistributed
DistributedLogistics
LogisticsResponsibilities
Responsibilities
Higher inventory costs . . . .
Not tightly linked to business needs (false sense of security)
Higher purchasing costs . .
Due to local buying and non-standard purchases
Higher personnel costs . . .
To handle exceptions, coordination between organizationally
distributed logistics providers & unnecessary expediting higher
Infrastructure costs .
Handling & storage costs for unneeded parts
Reduced capabilities . . . . .
Poorly documented & controlled maintenance leads to lower
asset availability
Increased total ownership cost.
Additional assets to cover lower availability
Local buying, lack of CM discipline result in lack of
equipment standardization and thus increased TOC.
CFO Compliance Unlikely
Supply & maintenance spending is widely distributed &
unfocused, making CFO compliance unlikely
Assistant Commandant for
Engineering and Logistics (CG-4)
9
Homeland
Security
Case for Change
USCG CFO Audit
CFO Audit Findings re USCG Operating
Materials and Supplies:
– You don’t know what you have
• Accuracy and Completeness
– You don’t know why you have it
• What equipment your parts go to
– You don’t know the value or condition
• Local units expected to record and track
– You don’t properly classify it
• PP&E vs OM&S
Assistant Commandant for
Engineering and Logistics (CG-4)
10
United States
Coast Guard
Homeland
Security
Case For Change
United States
Coast Guard
CGC MELLON Example
Weight
Removed
Situation
Situation
• • Excess
Excess
inventory
inventory
Repairable
Value
Consumable
Value
Parts Removed
Impact
Impact
• • Difficult
Difficultto
to
find
parts
find parts
actually
actuallyon
on
board.
board.
• • Some
Somevessel
vessel
classes
classesare
are
weight
weight
constrained
constrained
Assistant Commandant for
Engineering and Logistics (CG-4)
11
40,747 lbs
$132,000
$4.9 million
41,000
Impact
• Less than 6% of demand inventory
is on the allowance
• More than 46% of the parts carried
by the unit have no/low-demand
and are not on the allowance.
• Difficult to find parts actually on
board.
• Some vessel classes are weight
constrained
• CGC MELLON alone had over 20tons of no demand parts removed
at a value of $4.9M.
Homeland
Security
Current State of Logistics IT
Same Functions – Different Process Flows
United States
Coast Guard
Coast Guard logistics is characterized by “stove-pipes” between current communities, who
perform the same functions in different ways.
les
p
m
Exa
LEGACY
VESSELS
LEGACY
AIRCRAFT
SHORE
FACILITIES
DEEPWATER
ASSETS
VLS
ALMIS
SAM
LIMS
¾ Acquisition Logistics
¾ Maintenance Mgmt.
¾ Supply Management
¾ Acquisition Logistics
¾ Maintenance Mgmt.
¾ Supply Management
¾ Acquisition Logistics
¾ Maintenance Mgmt.
¾ Supply Management
¾ Acquisition Logistics
¾ Maintenance Mgmt.
¾ Supply Management
Centralized Policy
Decentralized Control
Distributed Execution
Centralized Policy
Centralized Control
Mix of Centralized and
Distributed Execution
Centralized Policy
Decentralized Control
Distributed Execution
No Configuration Mgt
No Inventory Mgt
Vision is
Centralized Policy
Centralized Control
Execution TBD
. . .and None of These Families of Logistics IT Systems are Seamlessly
Linked with CG Financial Management Systems.
Assistant Commandant for
Engineering and Logistics (CG-4)
12
Homeland
Security
Logistics Transformation
United States
Coast Guard
• A transformation of our business
processes, Coast Guard-wide is underway
– Will improve effectiveness & efficiency of our
logistics processes & outcomes
&
– Will contribute to accountability/CFO Act
Compliance
Assistant Commandant for
Engineering and Logistics (CG-4)
13
Homeland
Security
Logistics Transformation Implications
Status Quo: Outside of Aviation, we have:
• High degree of reactive support by logistics
providers to individual requirements of unit,
District & Area Commanders
• Spending is not directed at measurable
readiness metrics or enterprise-level
priorities
–
•
•
•
•
•
•
•
No clearly developed or articulated
enterprise-level readiness priorities
Largely decentralized priorities, decision
making, & spending in maintenance &
supply
Lack of configuration control
Non-standard & poorly documented
maintenance practices
Configuration data, maintenance & supply
not linked
Lack of formal accountability (non-CFO
compliant)
Highly agile, adaptable & reactive logistics
at unknown cost
No single entity responsible for Life Cycle
Management of Assets
Assistant Commandant for
Engineering and Logistics (CG-4)
In the New Logistics Business Model we will
have:
• A set of CG-enterprise-level requirements
(readiness-driven)
• Life Cycle Management
• A formal requirements process to weigh &
prioritize local needs
• Decisions based on DATA!
• Spending & priorities driven by enterpriselevel requirements
–
•
•
•
Process discipline: Compliance Program
Logistics providers accountable for
providing assets & support IAW
enterprise-level requirements
Little discretion at the local level over
investment & logistics spending
–
•
Logistics $’s centrally controlled. Spent by
the logistics organization on enterprise
requirements
Standard Supply, Maintenance & CM
–
14
United States
Coast Guard
Local desires/priorities subordinate to
enterprise-level priorities.
However, we have to ensure the ability of
the enterprise to quickly respond/adapt to
changing conditions at the local level
Homeland
Security
Maintenance: The Missing Link
United States
Coast Guard
Why Improve Maintenance Planning?
– Reduce burden on field units
• Reduce time/effort to conduct maintenance
– Drive our inventory requirements & improve
accountability
1 8 ,2 7 6
U s a g e in 3 y rs A llo w a n c e
• Remember this?
9 2 ,0 2 8
1 4 1 ,8 2 6
N o U s a g e in 3 y rs A llo w a n c e
U s a g e in 3 y rs - N o
A llo w a n c e
N o U s a g e in 3 y rs - N o
A llo w a n c e
5 3 ,0 2 1
– Increase Safety
• RB-S MISHAP Report: “DISCOVERED THE WIRING HARNESS HAD BEEN INSTALLED INCORRECTLY DURING
LAST ENGINE CHANGE OUT WHICH CAUSED THE ENGINE WIRING TO CHAFF AND GROUND OUT TO THE ENGINE
BLOCK.”
– Improve Reliability/Availability
• Reduce maintenance-induced failures
– Reduce Cost
• Preventive is cheaper than Corrective
Assistant Commandant for
Engineering and Logistics (CG-4)
15
Homeland
Security
Improving/Standardizing Maintenance:
Back to Basics!
United States
Coast Guard
Inconsistent Maintenance Procedure Cards (MPC):
Example:
378 MPC- Change Bow Thruster
Hydraulic Oil & Filter
Situation
Situation
• • Different
DifferentMPC
MPCstandards
standardsfor
for
each
community
each community
• • Some
Somenon-aviation
non-aviationMPCs
MPCsare
are
vague
vague
• • does
doesnot
notsay
say“what”
“what”
systems
to
tag
systems to tagout)
out)
• • Some
non-aviation
MPCs
Some non-aviation MPCsdo
do
not
quantify
inventory
not quantify inventory
requirements
requirements
Impact
Impact
• • Chance
Chancefor
formishaps
mishaps
• • Chance
for
self-induced
Chance for self-induced
CASREPs
CASREPs
• • Allows
Allowsfor
fornon-standard
non-standard
maintenance
maintenance
Assistant Commandant for
Engineering and Logistics (CG-4)
16
Homeland
Security
Maintenance Tomorrow
Aviation-Style Maintenance Procedure Cards
United States
Coast Guard
Specific Tools
Specific Inventory
Collect Data
Clear Cautions
Detailed
Procedures
Assistant Commandant for
Engineering and Logistics (CG-4)
Detailed
Graphics
17
Standardizing Maintenance
will improve Supply Chain Mgt,
CM, etc. and will help ensure
safe operation and should
lower maintenance costs
Homeland
Security
Process Model
Documenting Our Best Practices
United States
Coast Guard
• Workforce Performance Model (WPM)
– 150 key outcomes identified (of 800 documented) in
the Aviation Model
– Key outcomes diagrammed and linked to
• Best practices
• Requirements
• Policy Documents
• Majority of Key Outcomes in Acquisition
• Work groups analyzed and commented on
– Outcomes
– Processes
– Best practices
Assistant Commandant for
Engineering and Logistics (CG-4)
18
Homeland
Security
Business Processes First
United States
Coast Guard
New Logistics Business Model
(Standard Best Practices)
Property - Acquisition – Environmental – Configuration - Maintenance – Supply – ILS
Single CG Logistics IT Backbone
Integrated with FM
First We Get the Needed Business Processes in Place
(There isn’t an IT Magic Pill)
Assistant Commandant for
Engineering and Logistics (CG-4)
19
Homeland
Security
Sector-based Standard Boat Pilot
How do we assure success?
Pilot effort to Transition RB-S and Standard Boat
Support
to the Aviation Support Model
Assistant Commandant for
Engineering and Logistics (CG-4)
20
United States
Coast Guard
Homeland
Security
Organizational Realignment
United States
Coast Guard
Commandant Intent Action Order #4 (CIAO 4)
directed the Assistant Commandant for
Engineering & Logistics (CG-4) to:
“Provide a plan for the development and
implementation of a mission focused support
structure modeled roughly on, but not limited by,
the notion of a Coast Guard Systems Command.”
From COMDT Intent Action Order #4, June 2006
Assistant Commandant for
Engineering and Logistics (CG-4)
21
Homeland
Security
CIAO #4 will be successful
when we have…
United States
Coast Guard
• A logistics organization designed to support operational
mission effectiveness at the lowest achievable costs.
• Improved control and accountability (while retaining
agility).
• Central control of depot maintenance and supply chain
management (with local delivery/execution), including
planning, funding and procurement, to achieve and
sustain affordable readiness.
• Achieved and sustained CFO compliance.
• A structure that will better facilitate the ongoing logistics
transformation to achieve the goals of the LTPIO.
From COMDT Intent Action Order #4, June 2006
Assistant Commandant for
Engineering and Logistics (CG-4)
22
Homeland
Security
Future Coast Guard
Support Construct
Aviation
Product Lines
“Pushed” Products & Services
Supporting Assets
Engineering support, technical authority,
supply chain management, technical
documentation, including:
Surface Forces Product Lines
• Spares, maintenance manual, tools &
test equipment, tech pubs
• Depot maintenance (scheduled &
unscheduled)
C4I
Product Lines
• Materiel condition reports
• Contract field teams (oversee PBL/CLS
support & procure spares)
Shore Infrastructure
Product Lines
Assistant Commandant for
Engineering and Logistics (CG-4)
United States
Coast Guard
• Time critical technical order
kit delivery
23
OPERATIONAL
UNITS
(Sector,
AIRSTA,
Cutter,
TRACEN
etc.)
Homeland
Security
Logistics Centers
Legacy Organization
United States
Coast Guard
Logistic Center
ARSC
Aviation Logistics Center
Facilities
Result of HPO (Shore Infrastructure
Logistics Center) *
C4I (C2CEN, TISCOM, OSC, etc) C4I Logistics Center **
ELC, Yard, & MLC Engineering
Surface Forces Logistics Center
•*HPO=High Performing Organization alternative
under the A-76 process. HPO planning is underway
for Civil Engineering/Facilities.
•**Nature and placement in organization to be
determined per CIAO 10.
Assistant Commandant for
Engineering and Logistics (CG-4)
24
√
Mission Support Organization
Homeland
Security
HQ vs Field Roles
Budget
Strategy
& Policy
Major Acquisitions,
Governance of Tech.
Authority, and
all Mission Support &
Lifecycle Mgt. Processes
Organizational-Level
Mission Support
Functions remain
within Operational
Units
United States
Coast Guard
Pushed
Support
HQ/Dep.
Commandant
HQ/ Mission Support
Organization
SYSCOM HQ
Logistics Centers with
Product Line Asset
Support Functions
(per SYSCOM Option), &
Service Centers providing functional
support (contracting, HR, etc.)
Depot Maintenance Execution:
Centrally Managed at Logistics Center/
Distributed Execution by Logistics Center Dets:
Yard, ESD’s, NESU’s, Industrial Activities, Contractors
& deployable Depot-Level support capability.
& on-site functional support as required.
Logistics Centers
& Service Centers
* Maintenance above unit level is provided by the logistics center
Assistant Commandant for
Engineering and Logistics (CG-4)
25
Logistics/
Service
Centers
Waterfront
detachments
Homeland
Security
Objectives of this Effort
United States
Coast Guard
• A proposed logistics organization designed to support
operational mission effectiveness at the lowest
achievable costs
• Improved control and accountability (while retaining
agility)
• Central control of depot maintenance and supply chain
management (with local delivery/execution), including
planning, funding and procurement, to achieve and
sustain affordable readiness
• Achieve and sustain CFO compliance
• A structure that will better facilitate the ongoing logistics
transformation to achieve the goals of the LTPIO
From COMDT Intent Action Order #4, June 2006
Assistant Commandant for
Engineering and Logistics (CG-4)
26
Homeland
Security
United States
Coast Guard
Mission Support Organizational Chart
FOC
Commandant
Commandant
Chief
Chief
Financial
Financial
Officer
Officer
JAG
JAG
Service
Service
Center
Center
Detailed CAO Org.
TBD per CIAO 1
Deputy
DeputyCOMDT
COMDT
for
Mission
for Mission
Support
Support
Staff Functions
Staff Functions
• Resources
• Resources
• Strategic Planning
• Strategic Planning
• Processes/Integration
• Processes/Integration
Chief
Chief
Shared/Matrix
Sustainment
Sustainment Logistics/Engineering
Officer
Officer
Support
Mission
Requirements
Operational
Enterprise
(Drives resources & priorities)
Executive
Executive
Director/COO
Director/COO
Chief
Chief
Acquisition
Acquisition
Officer
Officer
Service
Service
Center
Center
Logistics
Logistics
Centers
Centers
Assistant Commandant for
Engineering and Logistics (CG-4)
Chief
Chief
HR
HR
Officer
Officer
27
Chief
Chief
Information
Information
Officer
Officer
Service
Service
Center
Center
CIO Sustainment
Role & C4IT
Logistics Center
Structure TBD per
CIAO 10
Homeland
Security
Functional Organizational Concepts
United States
Coast Guard
COMDT
Headquarters
Perform
Mission
Strategy, Policy,
Funding,
Compliance
Mission Requirements
Support
Support Mission!
Provide Assets,
Logistics, People,
Infrastructure
OPERATIONS
Assistant Commandant for
Engineering and Logistics (CG-4)
28
Strategic Requirements
Strategic Requirements
Mission Needs
Requirements Validation & Verification
MISSION SUPPORT
Homeland
Security
Path Ahead
United States
Coast Guard
• WHAT
– Mission Support Organization formed around a core
asset-focused SYSCOM
– Logistics Centers based on product line management
– Bi-level maintenance philosophy
• WHY
– Organizational support of transformation process
efficiencies which will improve support across the
enterprise, and reduce TOC
– Data-driven decisions on readiness and support issues
– Sustainable CFO compliance
– Clear authorities and accountability
Assistant Commandant for
Engineering and Logistics (CG-4)
29
Homeland
Security
Logistics Transformation Strategic Overview
United States
Coast Guard
Transforming a Large Enterprise
• Emulate a best practice (not re-inventing wheel)
– Aviation Model
– Based on Government & private industry best practices
– Identify an urgency (Maintaining affordable readiness in face of
escalating costs/requirements . . . .CFO Audit &
Remediation/Affordable readiness)
• Model the best practice, and pilot
– For example, RB-S pilot
– Collect and incorporate lessons learned
• Continue in low rate production to IOC
– One cutter, probably an 87-footer
– One Deepwater asset, the MPA (CASA)
• Proceed to full production to achieve FOC
– Focus on single set of CG-wide requirements set by operational
enterprise
Assistant Commandant for
Engineering and Logistics (CG-4)
30
Homeland
Security
Questions?
Assistant Commandant for
Engineering and Logistics (CG-4)
31
United States
Coast Guard