The Link: Australian Defence Logistics Magazine

the linkAustrAliAn defence logistics mAgAzine

Signing of New Global Freight Contract

Joint logistics Command leads the Way Towards Transitioning Out the AO

effective Collaboration: Alignment, Trust and Information

Sharing in Collaborative Supply Chain Management

the link

AustrAliAn defence logistics mAgAzine is a professional logistics journal published twice annually in hard copy and online by Joint logistics command.

its objectives are:

• Topublisharticlesinengaging,non-technicallanguagethataddtothelogisticsbodyofknowledge,andenhancetheprofessionoflogisticsandtheimageoflogisticians;

• ToinformtheDefenceandwidercommunityofthestrategicroleandscopeoflogisticsinsupportingoperationsandtheraise,train,sustainfunctionsoftheAustralianDefenceForce;

• TohighlightadvancesandachievementsinDefencelogistics;and

• TosupporttheprogramoflogisticsreformintheAustralianDefenceOrganisation.

SubmissionsforThe Linkaremostwelcome.Writers’guidelinesareontheJointLogisticsCommandintranetsiteorcanberequestedfromtheeditor.

TheviewsexpressedinThe LinkarethecontributorsandnotnecessarilythoseofJointLogisticsCommandortheDepartmentofDefence.

MrsPatriciaCliffordEditor,The Link

POBox7913CANBERRABCACT2610

E-mail:[email protected]

the linkAustrAliAn defence logistics mAgAzine

[email protected]

AustrAliAn defence logistics mAgAzine 1

IwelcomeyoutotheJune2013editionofThe Link.InthisissuewefocusonLogisticsreformandtransformation,andsupporttooperationsincludingforwardandreversesupplychains.

LogisticsunderpinsalltheAustralianDefenceForceachievesinoperationsathomeandoverseas.In2013,supportingoperationsis,asalways,theCommand’snumberonepriority.Thisincludesensuringthatnationalsupportbaseinfrastructurecontinuestoenable,supportandenhanceoperations,andassistanceintheplanningandimplementationofAustralia’sdrawdownofpersonnelandequipmentfromAfghanistan.

ThearticlescontributedforthisissueofThe LinkhaveagainremindedmeoftherangeoftalentedandintelligentpersonnelatalllevelswithintheAustralianDefenceOrganisation.Ourfeaturearticleisathoughtprovoking(andsomemightevensuggestcontroversial)analysisofthepotentialbenefitsofTechnicalRefreshmentandEvolutionaryAcquisitionofLandMaterielwrittenbyLTCOLBandLTCOLCfromSpecialOperationsCommand.

LEUTCameronMathesonhasprovidedaninsightfularticleonJointLogisticsCommand’skeyinvolvementintransitioningoutofAO.JayneMelling’sarticleoutlinestheincreaseinlogisticslearningoptionssoontobeavailableonDefence’snewlearningsolution,Campus Anywhere,providinguserswiththeabilitytoaccessup-todatelogisticstrainingevenwhendeployedoverseas.

WGCDRNeilCollie’sarticlediscusestheimportanceofeffectivecollaborationinsupplychainmanagement,andDavidClarkeprovidesdetailsontheNationalAssetandInventorySample.Withthe20December2012signingoftheGlobalFreightForwardingandCustoms

ClearanceServicescontractwithDHL,PhillipFrancis’timelyarticleprovidesfurtherdetailsonacontractwhichwilldelivermoreefficientlogisticsupportservicestoDefence.

IwouldliketothanktheauthorsfortheircontributiontowhatIbelieveisanotherthoughtprovokingissueofThe Link.IencourageyoutoreadtheeleventheditionofThe Link,andwelcomeyourcontributionsandthoughtsforfutureissues.

Regards,

Rear Admiral Clint Thomas, AM, CSC, RANCommanderJointLogistics

AustrAliAn Defence logistics MAgAzine 3

ContentS

loGiStiCS leARninG OPTIONS INCREASED 4

eFFeCtiVe CollABoRAtion: ALIGNMENT, TRUST AND INFORMATION SHARING IN COLLABORATIVE SUPPLY CHAIN MANAGEMENT 5

SIGNING OF NEW GloBAl FReiGht ContRACt 8

Joint loGiStiCS CoMMAnD leADS the WAY TOWARDS TRANSITIONING OUT OF THE AO 10

nAtionAl ASSet AND INVENTORY SAMPLE 13

the FoRGotten link 16

AN ESSAY ON teChniCAl ReFReShMent AnD eVolUtionARY ACQUiSition oF lAnD MAteRiel 17 8

5

13

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LogisticstrainingwillformakeypartoftheDefence-specifictrainingavailableviathenewlearningsolution,Campus Anywhere.

Campus AnywhereisanunclassifiedversionofCampusthatwillallowpeoplefromtheDefencecommunitytoaccesscorporate,web-basedtrainingwhennotconnectedtotheDefenceRestrictedNetwork(DRN).

JointLogisticsCommandhasreviewedtheLogisticse-learnsuiteofcourses,ensuringtheyareappropriateforanunclassifiedtrainingenvironment.

FourofthecorefoundationlogisticscoursesarecurrentlyavailableonCampusandviaCampus Anywhere.Thesecoursesare:CoalitionLogisticsEducationPackage;IntroductoryModuleonLogisticsinDefence;LogisticsSupporttoCapability;andLogisticsSupporttoOperations.

Additionally,arecentlyreleasedlogisticse-learnproduct,theADFSupplyChain,willbeaddedtoCampusAnywherein2013.CommanderJointLogistics(CJLOG),RADMClintThomas,commissionedthise-learnproducthavingrecognisedtheimportanceofthesupplychaininenablingoperationalsuccess.HealsoendorsedthereleaseofCampus Anywhere,recognisingthebenefitsthatcomefromhavingonlinelogisticstrainingavailabletouserswithoutDRNaccess.

loGiStiCS leARninG OPTIONS INCREASEDJayne MellingVCDFG & HQJOC Learning Business Partner Defence Learning Branch Vice Chief of the Defence Force Group

CJLOGstated,‘Theabilitytoprovideup-todatelogisticstraining,andtheabilityforeasyaccesstorefreshandrevise,isimportantfordeployedpersonnel’.Forexample,personnelalreadyin-situoverseaswillbeabletoaccessthisnewlogisticstrainingpackagewhenitisreleasedtoCampus Anywhere.

Asshowninthetablebelow,therewere860completionsacrossthesefourlogisticscoursesavailableviaCampusin2012.CompletionsareexpectedtoincreaseonceCampus Anywhereisoperational,anditwillbeeasierformemberstoaccessthiskeytraining.

AccesstoCampus AnywherewillberolledoutgraduallyacrossDefenceduring2013.Reservememberswillbetargetedinitially,andothermemberswillsubsequentlybeabletoregistertheirinterestandbeallocatedanaccount.UpdatesandfurtherinformationonCampus AnywherecanbefoundontheDefenceintranetathttp://intranet.defence.gov.au/vcdf/sites/LearningSolutions/ComWeb.asp?Page=91462

Name PMKeyS2012 completions(sourcedfromCampus)

CoalitionLogisticsEducationPackage 209788 133

IntroductoryModuleonLogisticsinDefence 202745 495

LogisticsSupporttoCapability 206366 134

LogisticsSupporttoOperations 204557 98

860 total


eFFeCtiVe CollABoRAtion: ALIGNMENT, TRUST AND INFORMATION SHARING IN COLLABORATIVE SUPPLY CHAIN MANAGEMENTWGCDR n.R. CollieCommanding Officer Joint Logistics Unit (South) Joint Logistics Command

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IntroductionStudiesconductedin2004concludedthat

thesupplychainofthefuturewouldneedto

demonstratethreecharacteristics;synthesis,

velocity,andcollaboration.Thisarticlewill

confineitselftoadiscussionastothenatureof

effectivecollaborationanditsrelevancetothe

contractualrelationshipsthatexist,orwillsoon

exist,inJointLogisticsCommand(JLC).

JLCwillenterintonewWarehousingand

Distribution(W&D)andLandMateriel

Maintenance(LMM)LogisticsServices

Contractsin2013.Theintentionisthenew

businesspartnershipthatwillexistbetweenJLC

andthecontractorwillbebasedonprinciplesof

collaboration.

The Nature of Collaborative Supply Chain ManagementCollaboration,itisargued,isachievedthrough

properapplicationoftechnologyandtrue

partnerships.Technologyisclearlyofgreat

importanceinprovidingthelinkagesrequired

forsupplychainstakeholderstocollaborate,

however,itiswiththehumandimensionof

collaborativeSupplyChainManagement

(SCM)—howthestakeholderswithinthe

collaborativeSCMpartnershipbehavetowards

eachother—thatweareconcerned.

Ofthedistinguishingfeaturesofa‘true

partnership’inproperlycollaborativeSCM,three

standout:trueunderstandingandalignment

withapartners’business;commitmenttolong-

termrelationshipsbasedontrust;andbeliefin

sharinginformation.

Alignment in Collaborative SCMAlignmentofallthestakeholdersinthesupply

chainallowseachstakeholdertomaximise

theirowninterests,whilstoptimisingthe

supplychainasawhole.Inasituationwhere

expectationsarepoorlyaligned,therisks

oftherelationshipquicklyencountering

problemsimmediatelyafterthepost-signature

honeymoonperiodarehigh.Atworstthese

problemsmightde-generatetoapointwhere

severecompromiseorcatastrophicbreakdown

ofthepartnershipoccurs.

Theconditionofalignmentthenisakey

featureinthesuccessofcollaborativeSCM.It

isachievedbyplacingemphasisontwoareas

ofthepre-signaturecontractnegotiation,

clarificationandalignmentofstakeholder

roles,andresponsibilitiesandalignmentof

stakeholderincentives.Intheinitialstagesofa

collaborativeSCMrelationship,therequirement

toclarifyandalignrolesandresponsibilities

demandsthatthoserolesandresponsibilities

aredrawnfromcompatibleobjectives.

Alignmentduringthiskeyperiodmayoften

bethreatenedbydifferentperceptionsofhow

thegoalsshouldbeachieved.Significanteffort

mustbeexpendedup-frontindeterminingand

mutuallyclarifyingthosecompatiblebusiness

objectivesorgoals,andestablishingand

clarifyingclearincentivesforallpartieswhere

roles,responsibilities,rewardsandremuneration

detailsarecompletelyunderstood.

DeterminationandalignmentofbothJLC’sand

thecontractor’sgoalsandbusinessobjectives

duringfinalcontractnegotiationsforthenew

LogisticsServicescontractswillbecrucialin

thisregard,andshoulddemandaconsiderable

amountofattentionfromcontractnegotiators.

Onlyfromthisfoundationalbaselinecantrust

begintodevelopasanecessarypartofthe

collaboration.

Trust in Collaborative SCMTrustisrecognisedasacharacteristicrequired

inanysuccessfulrelationship,andtrustis

thekeycharacteristicrequiredtopromote

collaborativebehaviourwithinamutually

beneficialandalignedbusinesspartnership.

Thedevelopmentoftrustmustcomefirstinthe

newcontractualarrangementasaprecursorto

informationsharing.

Recentresearchsuggeststhatrelationshipand

trustissueswerefoundtobemoreimportant

toeffectiveinformationsharingthansystems

andtechnology,thatface-to-faceinteractions

areessentialforbuildingtrust,andthatnothing

canreplacethisduringtheearlystagesofa

relationship.Thispointonissuesoftrustisof

particularrelevancetoJLCaspreparationsand

negotiationsforthenewcontractingjourney

gatherpace.Theimportanceofmaintaining

andpromotingtheface-to-faceelementof

collaborativerelationshipsatalllevels,from

CommandHQtotheinterplaybetween

membersoftheJLCBusinessUnits(BUs)

andcontractorpersonnelonsite,cannotbe

overstated.Significanteffortatalllevelsof

JLCandcontractorenterprisesneedstobe

expendedinbuildingthistrust.Thiscanbe

achievedthroughearlyandqualitydialoguefor


bothpartiestoachievemutualsuccessesand

toestablishtheleveloftrustandtransparency

neededtofostereffectiveinformationsharing.

Information Sharing in Collaborative SCMGoodqualityinformationsharingin

collaborativeSCMenablesoptimisationofthe

supplychaintoreachfurtherupstreamand

downstreamthanthelimitedlocaloptimisation

thatmightbeavailablewhereinformationflow

ispoor.Sharedinformationencompassesthe

provisionofdemand,inventory,maintenance

andotherlogisticsdatatoallstakeholders.

Whereinformationisoverlyorunnecessarily

protectedanddoesnotflowtowhereitneeds

to,stakeholderswillberestrictedtointernal

andlocalplanningandproblemsolving.Local

orinternalplansmaywellbeinconsistentwith

theplansofotherstakeholdersandsupply

chainvisibilitymaybeseverelycompromised,

leadingtorestrictedsupplychainagilityand

lackofvelocity.Universalknowledgemakes

forfarmoreeffectivejointplanning,problem

solving,supplychainvisibilityandperformance

measurementtooccur.Thiswillresultin

superiorlevelsofintegrationofplansalongthe

supplychain,andhighlevelsofvisibility,agility

andvelocityinthesupplychain.

ConclusionWhilstthetechnologythatwillprovidethe

linkagesnecessaryforsupplychainstakeholders

tocollaborate,itisthehumanor‘soft’aspect

ofeffectivecollaborationthatisofequal,ifnot

superiorimportance.

Therelativenationalandregionalsuccessofthe

newW&DandLMMLogisticsServicesContracts

willdependonthelevelofcommitmentwithin

theJLCBUenvironment,andintheContract

ManagementenvironmentinHQJLCSupply

ChainBranch,toestablishthecriticalconditions

forcollaboration.Earlyworkinthisregardmight

beachievedafterthesuccessfultenderersfor

eachcontracthavebeenannouncedandbefore

thecommencementofbothcontracts.

Effortmustbeexpendedtoalignincentives

duringfinalcontractnegotiations,andestablish

trustthroughfrequent,honestandopen

dialogue.Centraltothisdialogueneedstobea

genuinedeterminationtodevelopandestablish

abasisoftrustwiththenewcontractoratevery

level,fromnationallevelcontractmanagement

tolocallevelservicedelivery.Thisrelationshipneedstobecharacterisedbytransparencymaintainedthrougheffectiveinformationsharingandconsistencyinwordanddeedintothefuture.

ReferencesFawcett, S. E., Magnan, G. M. & McCarter, M. W. (2008). Benefits, Barriers, and Bridges to Effective Supply Chain Management, Supply Chain Management: An International Journal, Vol. 13 No. 1, 35-48.

Klappich, D. (2012) Collaboration, Cloud and Evolving Strategies will Drive Global Logistics in 2013, MHD Supply Chain Solutions, Vol 43 No. 1, 30-32.

Lee, H. L. (2004), The Triple-A Supply Chain. On Point Article for Harvard Business Review, Boston, MA: Harvard Business School Publishing Corporation.

Myhr, N. & Spekman, R. E. (2005). Collaborative Supply-Chain Partnerships Built Upon Trust and Electronically Mediated Exchange. Journal of Business & Industrial Marketing, Vol.20 No. 4/5, 179-186.

O’Byrne, R. (2012) Logistics Outsourcing Tips: A Practical Guide – Part 3, MHD Supply Chain Solutions, Vol 43 No. 1, 34-35.

Sheu, C., Yen, H.R. & Chae, B. (2006).Determinants of Supplier-Retailer Collaboration: Evidence from an International Study.International Journal of Operations & Production Management, Vol. 26 No. 1, 24-49.

Tomasini, R. & Van Wassenhove, L.N. (2009). Humanitarian Logistics. Basingstoke: Palgrave Macmillan.

Tompkins, J.A. (2004). Partnerships in the Supply Chain. In J. A. Tompkins and Harmelink (Ed), The Supply Chain Handbook. Raleigh, NC: Tompkins Press.

Tompkins, J.A (2004). The Supply Chain: Past, Present, and Future. In J. A. Tompkins and Harmelink (Ed), The Supply Chain Handbook. Raleigh, NC: Tompkins Press.

Wisner, J. D., Tan, K. & Leong, G. K. (2008). Principles of Supply Chain Management: A balanced approach. (2nd ed). USA: South-Western Cengage Learning.

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FollowingthereleaseofaRequestforTender(RFT)on5May2012,andsubsequentevaluationandsuccessfulcontractnegotiation,anewcontractfortheProvisionofGlobalFreightForwardingandCustomsClearanceServiceswassignedon20December2012withGlobalForwardingAustralia(DHL).

Thecontractisforaninitialperiodoffouryears,withoptionsforafurtherfouryears,andwillbetheprimarymeanstosupporttheinternationalmovementof:

• goodsprocuredcommerciallyfromitsinternationalsuppliers,

• goodsprocuredthroughtheUSForeignMilitarySales(FMS)program,

• goodsforrepairandreturn,

• Defenceassetsusedtosupportmanufacturingandtesting,and

• Defenceassetsusedtosupportoperationsandexercises.

DHLhaveover30year’sexperienceintheshippingofDefencematerial,andalsoholdscontractswiththeNewZealandDefenceForceandUKMinistryofDefence.DHL’svastglobalnetworkofofficesmakesthemanidealsupplieroftheseservices.

ThecontractwilldelivermoreefficientlogisticsupportservicesbyincorporatingmoreflexiblearrangementswhichallowDefencetotakeadvantageofmarketopportunitiesarisingfromtheverycompetitivenatureofthefreightforwardingbusiness.Thecontractalsointroducesmoreeffectivegovernancearrangementsinordertomitigatecontractualcostsandrisks.

SIGNING OF NEW GloBAl FReiGht ContRACt Phillip FrancisSO1 International Freight Supply Chain Branch Joint Logistics Command

ThesigningofthiscontractextendsDefence’srelationshipwithDHLtoalmost30years,duringwhichthecompanyhassupportedDefenceanditspersonnelonaglobalbasis,providingarangeofservices,includinginternationalairandoceanfreightservices,charterservicesandcustomsclearanceservices.Todate,DHLhassupportedDefenceinover250locationsaroundtheworld,includinglocationssuchasAfghanistan,Angola,IcelandandSudan.DHLhasbeenrequiredtoarrangeforthemovementofDefenceequipmentdirectfromourinternationalsuppliersinNorthAmericaandEuropetoAfghanistanbybothregularcommercialflightsandcharteraircraft.

FollowingcontractsignatureatVictoriaBarracksinMelbourne,BRIGPeterDaniel,DirectorGeneralSupplyChain,commented,‘DHLwasselectedfollowinganopenapproachtotheindustry.DHLwasabletodemonstratetotheprojectteamthattheycoulddeliveranefficientandeffectivefreightforwardingservicetoDefence.TheservicestobeprovidedunderthiscontractareextremelyimportanttoDefenceandwelookforwardtocontinuingthestrongrelationshipwithDHLGlobalForwarding.WeareexcitedabouttheopportunitiesthiscontractwilldelivertoDefence’.

Thenewcontractcameintoeffecton1March2013,andwillbemanagedbyJLC’sInternationalFreightoffice.Whilethemanagementofthiscontractisakeyactivityoftheoffice,theofficealsoprovidesadvicetothewiderDefencecommunityontherangeofissuesrelatedtotheimportandexportofDefencegoods,includingimport/exportlicensing,importtariffsandGSTonimports.


TheInternationalFreightOfficehasbeenabletoachievesignificantsavingsforDefenceandDMOtominimisedutyliabilityonDefenceimportsbytheuseoftheTariffConcessionschemeandvariousFreeTradeAgreementsbyimplementingbestpracticeintheconsolidationoffreight.TheInternationalFreightOfficeisavailabletoassistDefenceandDMOstaffinminimisingtheirdutyandfreightliabilities.

DefenceisrequiredtocomplywithAustralianlegislationgoverningtheImportation/ExportationofgoodsacrosstheAustralianBordertostreamlinetheimportclearanceofgoods.TheInternationalFreightofficehassuccessfullynegotiatedwithAustralianCustomsandtheAttorney-General’sDepartmenttoobtainon-goingimportapprovalsforweapons,ammunition,explosives(includingImprovisedExplosiveDevice’s)andgeneralwarfareitems.

TheInternationalFreightOfficecanprovideadviceonallimport/exportcontrols.Ifyouhavequestionsorrequireanyinformationonissuesrelatingtotheinternationalmovementoffreight,pleasecontacttheDefenceInternationalFreightOfficeon0392826937oremailado.customs@defence.gov.au

Contract Signing

left to Right Front Row: Mr Phil Lumsden - General Manager NSW DHL, Mr Tony Boll - CEO (South Pacific) DHL, BRIG Peter Daniel - Director General Supply Chain, Mr David Frith - Director Supply Chain Contracts. Back Row: Mr John Walker - Account Manger DHL, Mr Dean Herbert - Director Domestic Contracts, Mr Phillip Francis - Global Freight Contract Manager.

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Joint loGiStiCS CoMMAnD leADS the WAY TOWARDS TRANSITIONING OUT OF THE AO Cameron Matheson leUt, RAn Reverse Supply Chain Supply Chain Branch Joint Logistics Command


IntroductionThisyearhasseensomesignificantstructure

changesfortheDirectorateofSupplyChain

OperationsandPlans(DSCOP).Regionaland

nonRegionalOperationshastransformedinto

Operations(forwardandreversesupplychain)

andPlans.DSCOPstillmaintainstheprimary

roleofcoordinatingdesignatedlogisticssupport

tocurrentoperations,exercisesandactivities

throughouttheend-to-endoperationalsupply

chain,however,thefocusisshifting.This

transformationhasbeenmadeoutofnecessity

duetothereallocationofOperationalpriorities.

Closingdownortransitioningoperations

designatesastrongeremphasisontheReverse

SupplyChain(RSC)cell,forbothmanning

withinJointLogisticsCommand(JLC)and

deliveringsuitableresourcesincountry(suchas

LiaisonOfficers),toensureadequatecoverage

duringthishightempoperiod.

OP ASTUTEAtthetimeofwriting,theongoingAustralian

DefenceForce(ADF)operationalsupportfor

stabilisationandsecurityoperationswasdueto

concludeinApril2013.Logisticallyspeaking,

thiscouldbeconsideredasmalleroperationdue

tothequantitiesinvolvedandlocationrelativeto

Australia.Therefore,thishasprovidedaunique

opportunitytotrialseveralnewinitiatives,

includingGlobalPositioningSystemtagtrialand

directfreightforwardingtotheenddestination.

ThefirsttrialwasbasedontheRadioFrequency

Identification(RFID)system,currentlywell

establishedwithintheSupplyChain.Withthe

keylimitationidentifiedasthelevelofcoverage

duringtransitsituations,theconceptwasto

‘leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. in other words, you must win through superior logistics.’

Tom Peters - Rule #3: Leadership Is Confusing As Hell, Fast Company, March 2001

utiliseGPStransponderstopinpointlocationof

cargo,facilitatingefficiencygainstosupporting

agencies.Timelyandaccurateinformationon

thestatusandlocationofstockinthesupply

chainresultsinahigherlevelofefficiencyin

preparednesstoreceipttheitemswithinports

andBusinessUnits(BU).

Thesecondtrialinvolvedfreightforwarding

totheendlocation.Itrequiresahigherlevel

ofplanning,followedbydeliberatestuffingof

thecontainersdirectlyforthePrimaryStorage

Unit(PSU),i.e.JLCBU.Allcontainersarethen

transportedtoamajorshippinghub(inthis

caseviaSingapore)beforebeingpushedto

thePSU’sclosestport(Brisbane,Melbourneor

Sydney)forconsolidationintothestoressystem.

Thisprocesshastheaddedpositiveresultof

reducingtheprocessingburdenofCustoms

andDepartmentofAgriculture,Fisheriesand

ForestryBiosecurity(DDAFF-B),andreduces

thecosttoDefenceintheformofstorage,

lengthoftimecontainersarehired,lengthof

timeitemsareunavailableforissue,etc.

OP ANODE WiththeADFcontributiontotheAustralian-

ledRegionalAssistanceMissiontoSolomon

Islands(RAMSI)comingtoaclose,planning

iswellunderwayforextraction.Withdrawal

willcontinuethroughtoJune2013,afterwhich

timeequipmentwillberepatriated,bases

closedandpropertyandbuildingsreturned

totheGovernmentofSolomonIslands.Both

HQJointOperationsCommand(JOC)and

JLCarewellpositionedfromtherecentOP

ASTUTEdrawdowntobuildonlessonslearntto

effectivelyreturnequipmentandpersonnel.

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Theconsiderablequantityofequipmenttobe

RTAalsopresentsnewchallenges.Howdo

werelocatehundredsofshippingcontainers

andvehicles?Whatisthemostcosteffective

waytohiretheshippingcontainers?Arethey

certifiedforseamovement?Dotheintheatre

humanresourceshavethecapacitytoundertake

theassignedworkloadinthedesignatedtime

frame?Canthecontainersbemoveddirectlyto

enddestination,enablinglessmovementusing

theDefenceIntegratedDistributionSystem

uponRTA?Whatisthebest(consideringtime

andvalue)optionfortransporting?When

thecontainersarriveinAustralia,atwhatrate

canthecontainersbeprocessed?Itisclear

thatextensivecoordinationbymanyvaried

AustralianDefenceOrganisationswillbe

requiredtosuccessfullywithdrawfromthe

MEAO.

SummaryWhileJLCcontinuestoprovidehighlevelsof

customerdrivenservicetosustaintheforce,it

isclearthatJLChasplayedandwillcontinue

toplayasignificantroleinthesuccessful

drawdownandclosureofthreeverydifferent

andgeographicallydispersedOperations.

Lookingforward,extensiveplanningand

positioningofpersonnelwillensurethat

therestockingofthePrimaryStorageUnits

readyforsubsequenttaskingissuccessful–

maintainingthetoiletpaperandbulletsinthe

rightplaceattherighttime.

OP SLIPPER On12December2011,theMinisterforDefence

announcedaboosttoForceProtectionfor

troopsdeployedtoAfghanistan.Thisinvolved

theupgradeofProtectedMobilityVehicles

(PMV)toProductionPeriod4,andtheir

subsequentdeliveryintotheatreduring2012.

TherotationoftheupgradedPMVsinto

theatre,incorporationintoserviceandthe

extractionofthesupersededPMVsrequired

multi-agencysupportofwhichJLCwasa

significantcontributor.Thisrangedfrom

liaisonwithDefenceMaterialOrganisation

forscheduleupdates,tokeepingallagencies

informedofthePMVdeliveryschedule.JLC

BUshaveworkedcloselywithHQ1JMOVGPto

ensurethatPMVsarepresentedandreadyfor

shipmentinaccordancewiththemovement

plan.CoordinationbetweenJLC’sDirectorate

ofSupplyChainContractingOperational

ContractsandDAFF-Bhasbeencriticalto

thesmoothmovementofvehiclesthusfar.

Cleaningrequirements,subsequentinspection

andclearanceofvehiclespriortodeparture

fromtheatreandagainuponreturntothe

NationalSupportBasewithinAustraliahastaken

significanteffortfrommanyagencies.The

successfulrotationofthePMVfleetintothe

MiddleEastAreaofOperations(MEAO)fully

demonstratedthelevelofcommitmentand

professionalismthatJLCprovidestoAustralian

deployedforces.

PlansarewellunderwaytoReturnToAustralia

(RTA)thesignificantamountofequipmentand

personnelwithintheMEAO.Asoperations

arereducedorreassigned,considerableeffort

isgoingintotheprocessofdecidingwhere

andwhatADFassetsareneeded.Equipment

thatistobedisposedofincountryneeds

tobeidentified,locallynegotiated(attimes

internationalpartiesareinvolved),permission

soughtandthenadministeredtodisposal.


On4February2013,thefirstcountsoftheNationalAssetandInventorySample(NAIS)commencedattheBAESystemscontactorfacilitieslocatedatMawsonLakes,SouthAustralia.Overthenextfivemonths,4,069stockcodeswillbesampled,inbothWarehousesandSupplyCustomerAccounts,across83Defenceunitsandcontractorsites.Theselectedsamplewillrepresent15.6%byvalueofDefence’sMilitaryIntegratedLogisticsInformationSystem(MILIS)manageditems.

BACKGROUNDManagedbytheLogisticsAssuranceBranch(LAB)withinJointLogisticsCommand(JLC),theNAISisnowawellestablished,keylogisticsassurancetaskforDefence.ItenablesDefencetousestatisticalsamplingtoverify,adjustandsubstantiateourinventorymanagementrecordsandfinancialstatementsforMILISmanageditems.ItalsoallowsDefencetoprovidetheAustralianGovernmentwithanadditionallevelofassuranceoverourinventorymanagementpractices,proceduresandsystems.

Nowinitsthirdyear,theNAISwasfirstconductedin2011aspartoftheDefenceInventoryAssuranceStrategytoaddressthequalificationofDefencefinancialaccountsbytheAustralianNationalAuditOffice(ANAO).In2011,theANAOcontinuedtoconductauditsamplesathighmaterialitysites.TheyalsoobservedtheexecutionoftheNAISandcomparedtheresultswiththeirownauditsamples.TheoutcomewasthattheANAOweresatisfiedthattheNAISprovidedDefencewithasound,statisticallydeterminedmeasureofthepotentialerroradjustmentforDefencefinancialstatements.In2011,Defencemadeanetreductionof$36.5mtotheMILISmanageditemsbalancesintheDefenceFY2010-11financialstatementsonthebasisoftheNAISresults.

nAtionAl ASSet AND INVENTORY SAMPLEDavid Clarke SO Logistics Performance Analysis Logistics Assurance Branch Joint Logistics Command

Asadirectresultofthesuccessfulconductofthe2011NAISbyDefence,thefollowingyeartheANAOelectednottoconducttheirownindependentauditsofMILISmanageditems.ThiswasaconsiderableachievementforDefence.ItsignificantlyreducedtheauditandassuranceburdenplacedonDefenceunitsandDefencecontractorstomeettheassuranceandauditrequirementsofbothDefenceandtheANAO.

TheANAOremainedcloselyinvolvedinthedevelopmentandapprovalofthe2012NAISmethodology,andobservedtheexecutionoftheNAIScountsatamajorityofthehighmaterialitysites.TheANAOalsoconductedanauditofallthefinalNAISresults,includingthedetailedevidenceandcountsheets,andconfirmedthatitwasagainverysatisfiedwiththeresults.In2012,theoverallNAISresultsresultedinanetreductionof$23.31m(or0.31%)ofMILISmanageditembalancesintheDefenceFY2011-12financialstatements.

ANAO comments on Defence Ministerial Submission on MILIS

‘the successful execution of the nAiS program continues to be essential to Defence demonstrating the accuracy and completeness of inventory and asset balances and reducing the risk of an unqualified audit opinion.’

Ms Jocelyn Ashford, Executive Director, Assurance Audit Services

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Aftertheexecutionandreviewofthe2012NAIS,LABcommencedplanningforthe2013NAIS.AmoredetailedandcomprehensiveAdministrationInstructionwasissuedforthe2013NAISthataddressedanumberofissuesidentifiedinthe2012NAISpost-activityassessmentsandtheANAO2011-12FinancialStatementsAuditClosingReport.AlthoughANAOstaffwillobserveNAIScountsat12locations(covering37Defenceunitsandcontractors),theANAOwillnotbeconductinganyindependentauditcountsin2013andwillagainrelyontheNAISforitsassessmentofDefenceinventoryandfinancialstatements.

METHODOLOGYEachyear,DefenceisrequiredtoprovideassuranceoverthevalueofMILISmanageditemsreportedintheDefencefinancialstatements.TheaimofthestatisticalsamplingmethodologyusedbytheNAISistoprovideareliableestimateofthedollaradjustmentrequiredtotheMILISmanageditemsbalance.ThesizeofthatadjustmenttoDefence’sfinancialstatementsismadebyusingstatisticalextrapolationofquantityerrorsdiscoveredduringtheconductoftheNAISacrossthewholeofthevalueandmixofMILISmanageditems.

TheNAISmethodologywasdevelopedbyoneofAustralia’sleadingstrategicinformationandstatisticalconsultants,DataAnalysisAustralia(DAA).TheNAISassurancesamplingissplitbetweenRegister-to-Floor(R2F)samplesandBin-to-Register(B2R)samples,andcoversallMILISmanageditems(i.e.,RepairableItems(RI)andGeneralStoresInventory(GSI)).ThetwotypesofsamplingprovideDefencewithevidenceovertheaccuracyofMILISrecords(R2F)andthecompletenessofMILISrecords(B2R).

register to floor (r2f). TheR2Fsamplingmethodologyusesamixtureofstratifiedandclustersampling.MILISholdingsarestratifiedbetweenWarehousesandSupplyCustomerAccounts(SCA),betweenRIandGSIandbetweenhigh,mediumandlowvaluelocations.SCAsarealsofurtherstratifiedbetweenDefenceSCAsandthoseheldbythird-partycontractors.Theclustersamplingisatwostageprocess,wherearandomselectionofWarehousesandSCAlocationsareidentifiedandarandomselectionofstockcodesarethenidentifiedwithinthoselocations.The2013NAISwillsample18WarehousesforRIholdings,29WarehousesforGSIholdingsand54SCAholdings.

Bin-to-register (B2r).TheB2Rsamplingmethodologywasfirstutilisedinthe2012NAIStoaddressthelong-heldconcernsoftheANAOoverthecompletenessofDefenceinventoryrecords.ThepurposeoftheB2RsampleistodetecterrorsthattheR2FsamplecannotbyidentifyinganyinventoryitemsthatdonotappearonMILIS.AB2RsampleallowsverificationofthecontentsofaWarehousebinlocationtodetectanystockcodesthatshouldnotbepresentinthebin.The2013NAISwillsample1,087Binsacross39Warehouses.

exclusions.TheNAISsampleexcludesMILISholdingsinoverseasestablishments,onoperationaldeploymentandallHMAShips.

GSI RI SCA

Total Value $2,438,377,193 $2,569,525,220 $2,705,294,878

No.ofSites 632 467 8,253

No.ofStocklines 927,036 81,05 104,316

No.ofUniqueStockcodes

390,168 42,694 22,849

TotalStock-On-Hand(SOH)

111,069,429 722,928 525,323

AverageUOIPrice $22 $3,554 $5,150

Summary of MiliS Managed Defence inventory holdings

* (MILIS data as at November 2012)


EXECUTIONOncetheWarehousesandSCAstobesampledhavebeenrandomlyselected,LAB,inconsultationwithGroupsandServices,developsandpromulgatestheNAISscheduleofthestartdatesofthecountsatthenominatedsites.Oneworkingdaybeforeascheduledcount,LABstaffbuildthestocktakeprogramsinMILIS,allowingtheselectedunitstoprintthecountsheetsonthedayofthesamplecount.Thesampledunitshave20daystocompletethecount,resolveanydiscrepanciesandacquitthestocktakeinMILIS.AllrelevantdocumentationiscollatedintoNAISevidencepacksandforwardedtoLABviatheparentGroupandServicelogisticsgovernancesectionforreviewandaqualityassessment.Subsequently,theANAOconductsanauditofallevidencepacksforfurtherassessment,andthecumulativeresultsofthecountarethenforwardedtoDataAnalysisAustralia(DAA).

AttheconclusionoftheNAIScounts,DAA,theANAOandDefenceresolveanyoutstandingdiscrepanciesandstatisticaloutliersinthesampleandproduceafinalreportthatmakesarecommendationforthedollaradjustmentofMILISmanageditemsbalancefortheDefencefinancialstatements.

2013 NAISThe2013NAISisunderwayandsamplecountswillbeconductedfromFebruarythroughtoJune2013.Amajorchallengefortheconductofthe2013NAISiscoordinatingthecountswiththeDefenceIntegratedDistributionSystem(DIDS)contracttransitionactivities.ToensurethatallNAIScountshavetheminimumimpactonDIDSmanagedsites,allcountsatDefenceNationalStorageandDistributionCentre(DNSDC)andJointLogisticsUnit(JLU)locationswillbeconductedinMay-June2013.ThefinalNAIScountswillcommenceon24June2013attheDNSDCwarehouseatRAAFBaseWilliamtownandJLU(North)inDarwin.

CONCLUSIONTheresultsoftheNAISreflectthecontinuingeffortsofallusersacrosstheADOtocomplywithMILISprocessesandprocedures.TheimprovingcompliancepicturesupportsDefence’sdirectiontostreamlineauditandassuranceacrossDefenceassetandinventoryholdingsandreducetheburdenonindividualunits.TheNAISresultsprovidetheCommanderJointLogistics(CJLOG)withvaluableperformanceinformationthatfeedsdirectlyintocriticalinvestmentdecisionsforfuturestaffing,technologyandsystems.

‘the nAiS has become a key assurance line of operation for Defence and the AnAo.it has played a critical role in ensuring Defence’s financial statements have not been qualified, and would not have been possible without the cooperation of all involved. the continued support of the logistics community in the execution of the nAiS is greatly appreciated.’

RADM C.W Thomas, AM, CSC, RAN Commander Joint Logistics

SGT Elvin Prasad (Air Force) and Ms Lorena Skipper (ANAO) conducting a NAIS Count at RAAF Base Amberley

Paradoxically,whileinventorydisposalsare

oneofthemostimportantactivitiesrelating

toLogisticReformandTransformation,they

havespentthelast20years,ifnotmore,being

largelyoverlooked.Despitetheoftenconfusing

andconvolutedprocessthatis“Disposals”,it

masksanimportantideology-wedon’twant

thesoldiers,sailorsandairmendependingon

ustobesentitemsthatshouldhavehitthe

scrapheapyearsago.Nolongercanweafford

fordisposalstobethe“forgottenlink”inthe

logisticschain.

Thereisnogreaterevidenceofthisthanthe

currentsituationenvelopingtheDefence

NationalStorageandDistributionCentre

(DNSDC).Atotalof39Defencewarehouses

fullofstocknowneedtobecondenseddown

intojustone.Inlinewiththis,animmense

disposalactivityhasalreadycommended.

BeginningalmostfiveyearsagoinApril2008,

theAcceleratedDisposalProjectbeganby

disposingof40,000linesofinventoryover

asixmonthperiod.Thiswasthenextended

to100,000lineswithinjustover12months.

Followingthisinitialspark,amyriadofdisposal

projectshaveflowedthroughDNSDC.These

includedtheDefenceAcceleratedDisposals

Program,MarineSupportDivisionDisposal

Project,disposaloftheB707aircraftplatform,

andmorerecentlytheF1-11,SeaKingand

Caribouplatformdisposalstonameafew.

Alongwiththisrationalisationcomesthe

changingnatureofDNSDC.Onceuponatime

thenationaldumpinggroundforDefence

inventory,thetransformationofDNSDCtoJoint

LogisticsUnitEast(JLU(E))isastarkreminder

thatdisposalsneedstobeaneverydaypriority,

andis,infact,anintegralpartofinventory

management.ThenewfacilitiesatWest

Wattlegrove,NSW,willnothavethecapacityto

functioninthesamemannerthatDNSDCdoes

now.Wewill,therefore,needtoworksmarter

inourapproachtomanagingourinventoryand

the FoRGotten linkSara Vila Disposal Clerk Defence National and Distribution Centre Joint Logistics Command

hencemanagingourdisposals.Bymaintainingandstocktakingonlywhatweneed,workinghand-in-handwithpurchasingareasasrequired,willnotonlyreducethecostoverheadforDefence,butsignificantlyreducetheriskofourpeoplereceivingandusingitemsthatarenotfitforpurposeandarepotentiallydangerous.

Atestamenttotheageofitems“firstfound”attheDNSDCaretheitemsfondlyreferredtoas“Collectables”.Suchitemshaveincludedbrasstelescopesdatingbacktothe1940s,sextantsdatingbackto1881,straightlinecompassesdatingbackto1910andleatherandsheep’swoolflyerscapsusedinWWII.TheAustralianWarMemorial,AustralianNationalMaritimeMuseum,SpectacleIslandandothermuseumshaveandwillcontinuetobenefitfromthesefinds.Surplusitemsarethenofferedforsaleinspecialisedcollectableauctions.Thispresentsaunique(andpotentiallyonceinalifetime)opportunityfortheAustralianpublictopurchasemilitarymemorabilia.

Inpartnershipwithournewandexistingcontractors,theexplorationofnewavenues(newtoDefence)fordisposals,suchasbroaderaudienceinternetauctions,specificitemtypeauctions(e.g.marineorplantequipment),shreddingweaponsratherthanthecostlysmeltingprocessorturninguniformsintopunchingbagstuffing,hasallowedforgreatervalueformoneytobeachieved.Insomecases,wehaveeventurnedthedisposalofitemsthatwouldhavebeenacosttoDefence,intorevenue.

AsDNSDCfacesthechallengesofthisnewageinstrategiclogistics,weareremindedthatdisposalsarenotamatterfortheback-burnerorthe“toohardbasket”.Theprocessisanintegralpartofwhatwedoandwhoweare,andthebenefitsgoingforwardaremoreefficientlogisticssystem,betterinventoryholdingsandimprovedsafetyforthoseveryimportantpeopleinthefieldthatitisourdutytosupport.

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‘if the individual’s wants are to be urgent they must be original with himself. they cannot be urgent if they must be contrived for him. And above all, they must not be contrived by the process of production by which they are satisfied. ... one cannot defend production as satisfying wants if that production creates the wants’ 1

John Galbraith, The Affluent Society

AN ESSAY ONteChniCAl ReFReShMent AnD eVolUtionARY ACQUiSition oF lAnD MAteRielltCol B and ltCol C Special Operations Command

IntroductionPopularlyregardedasattackingproductiongearedtowardsconspicuousconsumption,criticsofcapitalistconsumer-basedsocietieshaveoversimplifiedGalbraith’shypothesis.Galbraith’sargumentwasmoresubtleandcanbemadeagainsttheneedtoconducttechnicalrefreshment(TR)andevolutionaryacquisition(EA)ofMateriel.ThecurrentausterebudgetaryenvironmentreinforcesGalbraith’sargument,especiallywhenitisperceivedproductionofasuperioritemgeneratesaneed.ThosewithadolescentchildrenpossessingasoontobesupersedediPhonewillbealltoofamiliarwiththisconcept.

AimThisarticleseekstodefinefeasiblepathwaysthroughwhichArmycanimplementanddeliveracoherentprogramtosustainmaterielbysupplementingtraditionalacquisitionandsustainmentmethodologieswithplannedTRandEA.

Definitionstechnical refresh (tr).TRcanbedefinedastheperiodicinsertionoftechnologyorthereplacementofcommercialofftheshelf(COTS)andmilitaryofftheshelf(MOTS)componentsassociatedwithlargerADFsustainment dominated systems 2toassurecontinuedsupportabilityofthatsystemtoLifeofType(LOT)orinordertoextendthatsystem’sLOT.

evolutionary Acquisition (eA).EAcanbedefinedasthesustainmentofcapabilitythroughthereplacementoftechnicalorrapidlydevelopedcapabilitiesat,orinside,theirtechnicallife.EAischaracterisedbytheregularprocurementofsmallquantitiesofequipment,withlittleornorepairandattritionstockholdings.Forexample,acapabilitywithatechnicallifeof36monthsmightholdnilrepairandattritionstock,choosinginsteadarepairbyreplacementandpurchase20percentofthefleeteachyear.EAisbestsuitedtoCommercialoftheShelf(COTS)/MilitaryoftheShelf(MOTS)ormodifiedCOTS/MOTSmateriel.EAallowsCapabilityManagement(CM)stafftoprogramtechnologyrefreshesintheannualbudgetcycle,addingincreasedpredictabilitytosustainmentbudgets.AmatureEAstrategycouldhandoffsupersededtechnologytolowerpriorityformations,unitsorsub-unitswhenrefreshedwithinhigherreadinesselementsoftheforce.

1 Galbraith, J.K., The Affluent Society, pp 124

2 Systems whose long-term sustainment (lifecycle) costs exceed the original procurement costs for the system.

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OpportunityTRandEAenablestheCMandtheDefenceMaterialOrganisation(DMO)torespondquicklytochangesinoperationalneedsandprioritiesby:

• acknowledgingtherapidadoptionofcurrenttechnologysignificantlyreducestheresearchanddevelopmenttimelinesassociatedwithtraditionalblockreplacement;

• reducingintroductionintoservice(IIS)costsbecausethetechnicaldocumentationrequiredtoachievedesignacceptancecanbealignedtothatprovidedwithcommercialormilitaryequipment3;andbecauserepairbyreplacementmethodologyisoftenmorecosteffective,attritionstockandsparepartsholdingsarereducedsignificantly–furtherreducingwarehousingneed,associatedcostsandcorporategovernanceoverheads4;

• deliveringcurrenttechnology(orstate-of-the-art)equipmentsoonafteritbecomesavailable;and

• reducingprojectscheduleandcostrisksasonlyapercentageofthefleetisreplacedatanypointintime.

TR and EA driversAcoherentstrategyonTRandEArequiresanunderstandingoftheforcesthatnecessitatetechnologicalchange.Theseare:

• improved technical benefits/capability increase. Industryimprovementstoanexistingproductoftenyieldimprovementsineffectiveness,includinghigheroperationalavailability,lighterweight,improvedreliabilityandloweroperatingcostsagainstanexistinguserrequirement.

• obsolescence.Amanufacturermayceaseproductionofanitemorcomponent,renderingasystemineffectiveagainsttheuserrequirement.ThiscanbeovercomeatadisproportionallyhighcostorbyconductingTRviaanEAstrategy.

• evolving user requirement.Externalinfluences,includinglegislativechanges,evolvingthreatand/orfriendlyforceTactics,TechniquesandProcedures(TTP)orcapabilities,areknowndriversofrevisedornewrequirements.

ReturningbrieflytoJohnGalbraith’sobservationsregardinganurgentneedbeingcontrivedbytheprocessofproduction,CMstaffmight,asonemeasureofmitigation,considerarequirementtobesubjecttooneormoreoftheabovedriversbeforeapprovingTR/EAofaspecificcapability.

Case studiesobsolescence.Inextantfleets,obsolescenceisaprincipledriverofajustifiableneedtoengageinaprogramofTR,andArmyusesobsolescencetoengageinTR.Newmodelcommercialvehiclesarerefreshedasolderonesarenolongermanufactured.Forexample,anewermodel2012HoldenCommodorestaffcarreplaces2010FordFalconstaffcar.

Manyproductlinesarenotastechnicalasamotorvehicleandhaveaproductlifecycleofapproximatelythreetofiveyears,particularlyitemswithahighlevelofcommercialelectronicscontent.Paradoxically,thecombinationoftheCMandDMOdecisionandprocurementcyclesresultsinleadtimesinexcessof12monthsfromidentificationofarequirementthroughtoitseventualdelivery.Whereaproductlineisonewithahighrateoftechnicalrefresh,itislikelytobecomeobsoleteasitisdelivered.Anysubsequentprocurementislikelytoincuradditionalcoststore-manufacturethisobsoleteitem.

ItisreasonabletoconcludethatCOTS/MOTSitemswithashortproductlifecycleshouldbeapriorityareafortheCMtoapplyaTR/EAmethodology.Examplefleetsincludeinformationandcommunicationstechnology,sightingsystemsandweaponaccessories,all-terrainvehiclesandnightfightingequipment.Theseitemscanbe:

• readilyintegratedandhaveshortproductlifecycles,andthereforeshouldnotincurthecostoffulldesignacceptanceorintroductionintoservice;and/or

• procuredthrougharangeofsuppliersusingsimpleprocurementmethodologies.

3 Full IIS for repair by replacement items would not be required. Items would rarely if ever be required to undergo full Design Acceptance as detailed in the TRAMM-L, instead only undergoing Provisional Design Acceptance and being recorded within CES, ILSI and MILIS under generic nomenclatures and NSN.

4 The Defence Logistic Transformation Program (DLTP) will result in a rationalisation of warehousing space across the National Support Base. A reduction in Repair Pool and Attrition Stock holdings of suitable COTS/MOTS items that are better supported through a repair by replacement approach will support implementation of DLTP outcomes.


AguidingprincipalmaybethatTR/EAactivitydrivenbyobsolescenceshouldnotrequireredesignofahigher-levelassembly(thinkweaponsaccessoriesnotrequiringredesignofthesupportedweaponsystem)andthesubsequentre-certificationofthatsupportedhigher-levelassembly.Similarly,theCMcouldconsiderTR/EAwhereaProgramOfficeisrequiredtoengageaproductmanufacturertore-openproductionofanitem,oftenatsignificantadditionalcostoveranewer,betterproduct.

Perceived improved technical benefit. AsGalbraithsuggests,anewerversionofanexistingproductlineofferingalevelofimprovedeffectivenessisnot,onitsown,alwaysajustifiablebasisforperformingaTR/EAactivity.However,combinedwithasignificantdemonstratedcost-benefitimprovement,thisshouldbeadriverfortheconductofTR/EA.Forexample,SpecialOperationsCommand(SOCOMD)hasrecentlyidentifiedaCOTSretractablepistollanyardsignificantlycheaperthanthein-service“telephonecord”lanyard,anditmitigatesarecognisedsnagrisk.ThisitemisanidealcandidateforTR/EA.

Insomeinstances,thisformofTR/EAdrivermayrequiresomeformoflimitedredesignofthesupportedhigherassembly.Forexample,updatingtheinserviceMercury25HPOutBoardMotorwithaMulti-FuelEnginetosupporttheSOCOMDF470fleet.

A change in user requirement (ur).Staffinguserrequirementsisalengthyandinvolvedprocess.CMstaffshouldconsiderthelevelofdetailrequiredtofacilitatetheacquisitionandIISofnon-complexCOTS/MOTSitemthatmeetstheuserneeds.AnabbreviatedURmaybemoreappropriateandgosomewaytoaddressingobsolescenceasadriverofTR/EAinitsownright.A‘tickandflick’webformmaybeamoreappropriateavenuetostreamlinethisprocess,enablingCMandDMOstafftoeasilyreviewandproceedwithTRopportunities.

WhenaCOTS/MOTSitemissuperseded,anewURshouldnotberequired.Rathertwothingsshouldoccur:

• DMOproactivelyreviewthenewitemagainsttheexistingUR;includingthelevelofconformance,whetheritexceeds,meets,orfailstosatisfytherequirement.TheresultsofthisreviewarethencommunicatedtotheCM.

• CMstaffsubsequentlycommunicatestotheDMOagreementtoproceedwithTR/EAand/ortheacceptanceofidentifiedrisks.

A model for TR using EAAsalreadyhighlighted,manyCOTS/MOTSitemshaveathree-fiveyeartechnicalrefreshcycle.ItmaybefortuitousthatArmyhasdevelopeda36-monthForceGeneration(FORGEN)Cycle,enablingbroadalignmentofaTR/EAstrategyandFORGEN.AbasicTR/EAstrategycouldseesmalltranchesofthelatestgenerationofCOTS/MOTSitemsprocuredeachyeartosupportSOCOMD,theReadyBrigade5anditsassignedenablersinasimilarmannerasLand125iscurrentlysoldiercombatensemble.The“firstgeneration”itemis“sustained”6foracompletecyclebeforebeingupdatedwithlatergenerationequipmentmeetingtheendorsedUR.Firstgenerationitemsdeclaredobsoleteattheconclusionofthecycleeithercouldbewithdrawnfordisposalorre-issuedtolowerreadinesselementsintheenablingforce.TheSOCOMDCapabilityImprovementProgram(SCIP)demonstratesthatthismethodologycanbesuccessfulwithinSOCOMD.

TheopportunityexistsforArmytoinstituteaprogramofcontrolledhandbackofcapabilitiesintroducedbySOCOMDtoArmyinlinewiththeFORGENcycle.Figure1isastrawmanforhowthismaybeachieved.

5 Equipment subject to TR using an EA strategy would enter the FORGEN cycle at the Readying Brigade as it prepares for certification and ultimately designation as the ‘Ready Brigade’.

6 In the context of TR, selected items where TR is driven by ‘obsolescence’ and does not require higher assembly redesign, the item would be subjected to Provisional Design Acceptance (PDA) only on the basis it is a repair by replacement item with no endorsed repair strategy. They would be considered ‘in-use’ and not be subject to full introduction into service.

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Figure 1: Technical Refresh using Evolutionary Acquisition and its relationship to the FORGEN cycle

TheSCIPutilisesanEAapproachtoexploit,withinreason,industrydrivenTRtomaintainSpecialOperationscapabilityedge,enablingregularevaluationofsmallaffordablequantitiesofequipmentintrainingandonthebattlefield.TheopportunityexistsforArmytodevelopaprogramofcontrolledtransferofselectedSOCOMDcapabilitiestoFORCOMD.Exemplarcapabilitiesmayincludeaccessoriesforsmallarmsandheavyweapons.

Managing TR/EA through sustainmentTheCMarticulatesitsguidancetosupportingtheDMOthroughtheMaterielSustainmentAgreement(MSA)andamendsguidancethroughtheMSAChangeProposal(MSACP).TheMSAremainsthemostappropriatemeanstocommunicateTR/EArequirementsidentifiedthroughproductschedule(PdS)reviews,changesinrequirementsorduringnormalfleetmanagementactivities.SpecificTR/EAguidancecouldtakeanumberofforms:

• Annual ‘rolling replacement’ of a percentage of a product line.Balancedagainstobsolescenceandimprovedtechnicalbenefits,aprogramofannualrollingreplacementwouldworkbestinPdSwithalimitednumberofproductlineswheresupportedhigherassembliescanbesustainedandrefreshedbycontinuousreplacementofnon-technicalCOTSitemsthataredesignatedas‘repairbyreplacement’.

• targeted refresh.ManagedbetweentheCManditssubordinatestakeholders,targetedrefreshmightyielditsgreatestbenefitinresponsetoTR/EAdrivenbyaperceivedimprovedtechnicalbenefitand/orachangeinuserrequirement.TheapplicationofMulti-FuelEngineTechnology,developedbytheUnitedStatesSpecialOperationsCommandandEvinrude,totheADFF470ZodiacSmallCraftfleetisanactivitywhichcouldbeconductedasatargetedTR/EAactivityinresponsetoaperceivedtechnicalbenefit(newtechnologyusedtoremediateacapabilityshortcoming:Un-leadedPetrolprohibitiononRANvessels).

RefinementofMSAsandPdSdocumentationtoincorporateandresourceTRandEAguidancecouldbethesubjectofadiscussionpaperinitsownrightorongoingimprovementtotheArmysustainmentprogram.

ConclusionAperceptionexiststhatthesystemistooslowtorespondtourgentneeds.TR/EAmethodologycanmakeapositivecontributiontothetimelyrefreshofmateriel.IfCMstaffaretoensurevitalresourcesarenotwastedoncontrivedneeds,itiscriticaltounderstandtherolesofobsolescence,technologyevolutionanduserneedasdriversofTR/EA.Thisiscriticaltodeterminingtheproductlinesthismethodologycouldsupport.TheopportunitiestoreducecostsandshortenprocurementtimelinesassociatedwitharigorousandmatureTR/EAprogrammakethecaseforchangecompelling.EvenMrGalbraithmightagree.


BibliographyDepartment of Finance and Deregulation (Financial Management Group),1 July 2012, Commonwealth Procurement Rules – Achieving Value for Money, Commonwealth of Australia

Galbraith, John Kenneth, 1958, The Affluent Society, Mariner Books New York

Haines, Linda, 2001, Technology Refreshment within DoD, Defence Resources Management Institute, viewed 10 October 2012,

http://www.dau.mil/pubscats/PubsCats/PM/articles01/haim-a.pdf

Stavash, Jeffrey; Sharma, Shanti and Konicki, Thad, 2004, Technology Refresh: A System Level Approach to Managing Obsolescence, Lockheed Martin Advanced Technology Laboratories, New Jersey, viewed 10 October 2012,

http://www.atl.lmco.com/papers/1236.pdf

Wood, Greg, 2004, Technology Refresh Planning Aids in Sustainment of Military Systems, American Competitiveness Institute, November 2004, Philadelphia, viewed 10 October 2012,

http://www.empf.org/html/emphasis/nov04.pdf



http://www.atl.lmco.com/papers/1236.pdf

http://www.empf.org/html/emphasis/nov04.pdf

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Documents

The Link: Australian Defence Logistics Magazine