Dave McGahey, Defence Logistics Transformation Program - The Defence Logistics Transformation Program and its impact in northern Australia

JOINT LOGISTICS COMMAND

Northern Australia Defence Summit

Presentation by Mr David McGahey

Program Director

Defence Logistics Transformation Program

30 Oct 13

JOINT LOGISTICS COMMAND Defence Logistics Reform: Logistics to train, fight and win

Objective

Defence Logistics Transformation Project:

• How will it more effectively and efficiently deliver

support to the Australian Defence Force in

northern Australia

• Joint Logistics working smarter

• Build on NT Defence and Industry relationship

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JOINT LOGISTICS COMMAND Defence Logistics Reform: Logistics to train, fight and win 3

Program Overview

DLTP is focused on transforming the Defence logistics network via:

A new business service delivery model leveraging commercial ‘better

practices’ adapted for Defence’s unique operating environment

Two new national performance based logistics service contracts

Collaborative service delivery and improved service levels

Over $750 million of purpose built infrastructure, rationalising 24 sites to

7 primary sites (including in regional areas)

New technologies and systems

Significant training and reskilling of the workforce

The Defence Logistics Program (DLTP) is a once in a generation

opportunity to transform the provision of logistics services to support

the 2030 vision for the Australian Defence Force and realise

Strategic Reform Program (SRP) mandated savings.


Logistics – ‘To-Be’ Business Model

4

Defence logistics services to be delivered under

two national based contracts:

• Warehousing and Distribution (W&D)

• Land Materiel Maintenance (LMM)

Defence leading the planning and managing

of maintenance, warehousing and

distribution – supported by contracted

technical and specialist workforce

Leverages commercial capability to support

operational logistics service delivery

requirements through ‘collaborative innovation’

At the JLU level, service provider staff will be

responsible for performance to the

Commanding Officer against agreed measures

and KPIs

Greater focus on regional logistics capability

Main

ten

ance

Service Delivery

Ma

inte

na

nc

e

Warehousing and

Distribution

Contractor

Wa

reh

ou

sin

g

Dis

trib

uti

on

Supply Chain

Branch (SCB)

Joint Logistics

Units (JLU)

CJLOG

Inter-dependent

Services & Support

Maint.

Service

Provider

Maint.

Contractor


COLLABORATIVE INNOVATION

5

Tenderers were invited to provide their approach in an RFT which covers:

Innovation and continuous improvements of the logistics system, such

that levels of service are maintained or improved, while the total cost

to serve is lowered over time;

Bring commercial logistics experience, knowledge and input, as it is a

key driver to bring innovation into the operation of the logistics network;

Work collaboratively with Defence to identify, implement, measure and

sustain any improvements; and

Share knowledge to develop Commonwealth’s capacity to manage the

delivery of logistics services.

‘Collaborative Innovation’ is a culture that embraces

innovation and continuous improvement in the management

of the transformed Defence logistics network.


Infrastructure

6

Infrastructure investment:

Over $750m of construction works

3 greenfield sites (includes Darwin),

5 redevelopments

Construction started 12 Dec 12

Construction is planned to complete

Nov 16

Robertson Barracks

May 13 – Dec 14 Lavarack Barracks

Mar 14 – Nov 16

RAAF Base Amberley

Apr 13 – Feb 15

DNSDC, Moorebank

Dec 12 – Oct 14

Bandiana

Jun 14 – Jul 15

RAAF Base

Edinburgh

Nov 13 – Mar 15

HMAS Stirling

and Guildford

Jul 14 – Jul 15

Proposed General Storage Warehouse at Joint Logistics Unit (North), Robertson Barracks

Over $750m in Infrastructure investment will ensure that the Joint

Logistic Command’s warehousing, distribution and maintenance

services for the future will be delivered in modern purpose built

wholesale logistics facilities.


Transition & Site Migration

7

J

Logistics

Services

Program

Phase

Phase 2 - Logistics Services Transition

LMM Services Transition Period

2015

J

2013 2014

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

Facilities

Stock

Migration

ICT

Stock Migration Period

WMS Implementation

Facilities Delivery

Phase 3 - Site Migration

DLT

PN

etw

ork

En

ab

ler

LMM ContractorTransition

M A

W&D Services Transition Period

W&D ContractorTransition

Land Material Maintenance (LMM)

Transfield Services Australia is the ADFs

new LMM services contracting partner

LMM Transition is now complete with all

sites now working to the new business

model

Currently ‘bedding in’ new processes prior to

site migration

Site migration planning currently underway

Warehouse and Distribution (W&D):

The evaluation phase of the W&D Services

Request for Tender (RFT) is now complete.

Commercial-In-Confidence negotiations with

the preferred tenderer for the W&D Services

contract has commenced.

It is anticipated that transition to the new

contract will commence by 30 June 2014.

Site migration planning currently underway


Achievements to date

Significant achievements under DLTP to date include:

Defence endorsement for the proposed Logistics Services Business

Model and consultation with the JLC workforce;

The release and evaluation of two Requests for Tender for Logistics

Services in June 2012 and separate Ministerial approval to proceed

with the procurement of logistics services;

Signing of the Land Materiel Maintenance Contract with Transfield

Services (Australia) in May 2013, with the new Contract

commencing in July 2013;

Government approvals for infrastructure and transition investment

funding;

Finalisation of over $750m in Infrastructure contracts, with

construction underway or due to commence at all sites; and

Preferred tenderer for Warehouse & Distribution has been selected

and now entering contract negotiations.

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JOINT LOGISTICS COMMAND Defence Logistics Reform: Logistics to train, fight and win 9

JLU(N)

Robertson

Benefits for Northern Australia

Benefits DLTP reforms will provide to Northern

Australia include:

Mounting joint forces to deploy and return

through Darwin by sea and air

Darwin one of two primary mounting or staging

points (Darwin and Townsville) for any new

operation into SE Asia / SW Pacific for disaster

relief operations

Modern, co-located, efficient, commercial and

purpose built facilities at Robertson Barracks –

increase in scale and fitness for purpose

Genuine base logistics infrastructure in the

North to directly support manoeuvre brigade

and visiting units

Full integration with the local / regional support

infrastructure


Investment in modern, commercial and

purpose built facilities at Robertson Barracks

10

Key Works Package stats:

1,215 personnel employed (directly

and indirectly), estimated to

contribute around $127m to the

Gross Regional Product in the

Darwin region at the peak of

construction

Initial construction contract value:

$113m

Construction: May 13 – Dec 14

Project Manager – SKM

Design Consultant – Trapp

Architects

Head Contractor – John Holland

General Store


Infrastructure progress at JLU (N)

11

Works Package 4 (JLU-N Darwin) – Construction started in May 2013.

Approximately 10% complete as at mid Oct.

SOD Turning on 13 June 2013

Loan and Repair Warehouse Western Access Road


Defence needs support from local

industry and infrastructure

Need industry support to achieve:

– Equipment Maintenance and Distribution

– Infrastructure Construction

Defence Outcome:

– Mounting joint forces to deploy and return through

Darwin by sea and air

– Darwin is one of two primary mounting or staging

points (Darwin and Townsville) for any new operation

into SE Asia / SW Pacific for disaster relief operations


Way Forward

• Site migration of Joint Logistics Unit (North) from multiple Darwin sites to

Robertson Barracks - fully operating concept 1st QTR 2015

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JOINT LOGISTICS COMMAND Defence Logistics Reform: Logistics to train, fight and win Defence Logistics Reform: Logistics to train, fight and win

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CONCLUSION AND

QUESTIONS