Weapon System Management in a Performance Based …academy.amccentre.nl/thesis/Thesis_P_Spitters.pdf(matrix organization), participating in weapon system logistic support organization,

Weapon System Management in a

Performance Based Logistics environment

The Role of the NL DMO Weapon System Department

Asset Management Control

International Masters School

Student: P.M.W. Spitters BSc

Supervisor: Dr. Ir. J. Stavenuiter

Supervisor: Ir. M.J.B.M. Lambrichs

Date: 20 June 2012




Master Thesis

Master of Science in

Asset Management Control

International Masters School

visor: Dr. Ir. J. Stavenuiter

.J.B.M. Lambrichs




Petrick Spitters AMC MSc

i


ii

Acknowledgement

With this Master Thesis I am completing my Master of Science in Asset Management

Control. The completion of this master thesis was an extensive effort which I could not have

completed by myself. Therefore I would like to thank everybody that supported me in this

process. First of all I would like to thank the Defense Materiel Organisation for providing me

the opportunity to follow this Master of Science course. Special thanks go out to Wil van Rijn

for starting this effort together. I would also like to thank the participants in the stakeholder

assessment, Marty van den Bersselaar, Arjan de Jong, Peter Verkoeijen, Tars Gijzen,

Marten Hendriksma and Donald Trouerbach for their views on the proposed design. I

especially would like to thank John and Henneke Stavenuiter. I would like to thank John for

his guidance and direction on my research and Henneke for the support during the course. I

would also like to thank Marcel Lambrichs for his advice and support on my research in this

very busy time in the F-16 Replacement project. Very special thanks to my family and

specifically Conny, Ivar and Yari for their support. Without the encouragement and patience

of Conny this Master Thesis would never have been completed.


iii


iv

Abstract The Netherlands Ministry of Defence (NL MOD) uses highly complex weapon system in

support of its armed forces. One category of these complex weapon systems are air-based

weapon systems. The sustainment of these weapon systems is cost intensive. One of the

materiel logistic processes is weapon system management (WSM), which intends to sustain

a weapon system in de most cost-effective way. Performance Based Logistics (PBL) is a

new system support concepts for air-based weapon systems in the NL MOD. The promise of

PBL, higher performance and lower life cycle costs, makes this system support concept

interesting. Future weapon systems, e.g. the Joint Strike Fighter (JSF), are supported by

PBL.

Literature indicates issues with the introduction of PBL concepts in relation to WSM. This

research is aimed at the effects of PBL might have on WSM especially from a NL DMO

perspective. The objective of this research was to provide recommendations to NL DMO for

organizing weapon system departments responsible for air-based weapon systems in a PBL

environment during the sustainment phase in order to control system cost-effectiveness. This

provided the following research question: ‘How to organize a weapon system department

within NL DMO for an air-based weapon system with a PBL support concept during the

sustainment phase capable of controlling weapon system cost-effectiveness?’

This research started with a literature and field study in order to identify issues with the

introduction of PBL concepts on WSM within the NL MOD. Various problems with the

introduction of PBL concepts and with WSM within the NL MOD are defined. The present

WSM approach limits effective control of weapon system cost-effectiveness. The WSM and

WSD organization structures do not support WSM effectively. WSM responsibility and

authority is not balanced and matched to organization functions. The WSM consultation

structure needs to be adapted to WSM in a PBL environment. Furthermore PBL affects the

required knowledge and skill to sustain effective WSM from a NL MOD perspective. Based

on the defined problems with the introduction of PBL concepts, Term of Reference (TOR) for

a future WSM organization in support of WSM in a PBL environment are defined. The TOR

state that controlling weapon system cost-effectiveness in a PBL environment requires an

Asset Management Control (AMC) approach, WSM is a PBL environment requires a

horizontal organization structure, that WSM responsibility and authority must be balanced

and assigned to one single actor, the consultation structure must be adapted to PBL and

WSM responsibility and authority and that measures must be taken to sustain WSM

knowledge to effectively manage a weapon system in a PBL environment.


v

The TOR’s are tested in a case study. Because the Joint Strike Fighter (JSF) is the first air-

based weapon system with a ‘full’ PBL support concept the JSF is used as a case study. The

case study developed a conceptual design of the JSF Weapon System Management and the

associated WSM and WSD organization. WSM stakeholders assessed the conceptual

design in a SWOT analysis. The stakeholder assessment concluded that the conceptual

design needs more refinement specifically in the area of planning and risk management. The

case study revealed that the defined TOR’s are supported. AMC can be used to control

system cost-effectiveness in a PBL environment however this will require adaptation of the

LCM models used in AMC. The availability of, and insight in, cost information requires

special attention in relation to managing LCC and cost drivers. The matrix organization

structure can support WSM in a PBL environment. The proposed structuring of WSM

responsibility and authority to the Operational Commander (OPCO) might find limited support

within the NL DMO. The international environment in which JSF WSM takes place adds to

the organization and management complexity of WSM and requires coordination with

international weapon system management organization.

This research comes to following conclusions:

• Controlling cost-effectiveness in a PBL product support construct requires approaches

like AMC for effective WSM over the total life cycle of the weapon system in order to

minimize risks (i.e. weapon system effectiveness and LCC) for the NL MOD.

• A matrix organization structure consisting of the WSM actors is required to effectively

support Weapon System Management within the NL MOD.

• WSM responsibility and authority need to be balanced and assigned to one single entity,

the OPCO.

• The WSM consultation structure needs to incorporate the Product Support Integrator

(PSI) and needs to be adapted to the structuring of WSM responsibility and authority.

• Effective WSM requires knowledge of PBL, the weapon system, its utilization and logistic

support. WSM knowledge can sustained by organizing WSM in cross-functional teams

(matrix organization), participating in weapon system logistic support organization,

obtaining PBL knowledge and experience in an early stage and executing depot level

maintenance activities.

With regards to the research question the main conclusion is that the role of the Weapon

System Departments is to set and maintain the technical system framework as the Military

Type Certificate Holder as related to the airworthiness of the weapon system, and to provide

weapon system technical knowledge in the WSM matrix organization structure.


vi

Table of Contents

Acknowledgement .................................................................................................................. ii

Abstract ................................................................................................................................. iv

1 Introduction ........................................................................................................................ 1

1.1 Performance Based Logistics ................................................................................. 1

1.2 Weapon System Management within NL DMO ...................................................... 2

1.3 Weapon System Cost-Effectiveness ...................................................................... 3

1.4 Problem Indication ................................................................................................. 5

1.5 Objective and Research Question .......................................................................... 7

2 Research Method ........................................................................................................... 8

2.1 Introduction ............................................................................................................ 8

2.2 Research Scope .................................................................................................... 8

2.3 Research Approach ............................................................................................... 9

2.4 Research Model ....................................................................................................11

3 Literature review and field study ....................................................................................12

3.1 Introduction ...........................................................................................................12

3.2 Performance Based Logistics ................................................................................12

3.3 Asset Management Control ...................................................................................16

3.4 Organization Theory .............................................................................................19

3.5 NL MOD WSM Field Study....................................................................................24

3.5.1 MOD policy, requirements and procedures .......................................................24

3.5.2 WSM Characteristics and the NL DMO Organization ........................................30

4 Problem Definition .........................................................................................................32

4.1 Introduction ...........................................................................................................32

4.2 Analysis ................................................................................................................32

4.2.1 Controlling Weapon System Cost-Effectiveness ...................................................32

4.2.1.1 Weapon System Cost-Effectiveness in PBL ..................................................32

4.2.1.2 WSM Production Process ..............................................................................36

4.2.1.3 Analysis and Control Tools ............................................................................38

4.2.2 WSM organization structure ..................................................................................40

4.2.2.1 LCM Team ....................................................................................................40

4.2.2.2 Contingency factors .......................................................................................41

4.2.2.3 Organization Structure ..................................................................................43

4.2.3 WSM Responsibility and Authority ........................................................................44

4.2.4 WSM Core Competence .......................................................................................46

4.2.5 WSM Organization Culture ...................................................................................47

4.2.6 WSD Organization ................................................................................................49


vii

4.3 Problem Specification ...........................................................................................50

4.4 Terms of Reference ..............................................................................................52

5 Design ...........................................................................................................................56

5.1 Introduction ...........................................................................................................56

5.2 Organizing F-35 WSM ...........................................................................................57

5.2.1 Get Organized ...................................................................................................57

5.2.1.1 F-35 Air Vehicle (AV) Functional Breakdown Structure .................................57

5.2.1.2 Logistic Process Structure .............................................................................58

5.2.1.3 F-35 LCM Team ............................................................................................59

5.2.1.4 Information and Communication ....................................................................60

5.2.2 Get Oriented .....................................................................................................65

5.2.3 Get Practiced ....................................................................................................67

5.2.4 Get Real ............................................................................................................69

5.2.5 Get Across ........................................................................................................71

5.2.6 Get Grip ............................................................................................................72

5.3 NL F-35 WSM organization ...................................................................................74

5.3.1 Design Pre-Conditions ......................................................................................74

5.3.2 NL F-35 WSM concept and process ..................................................................76

5.3.2.1 NL F-35 WSM concept ..................................................................................76

5.3.2.2 NL F-35 WSM process ..................................................................................78

5.3.3 NL F-35 WSM organizational functions .............................................................79

5.3.4 WSM organization structure ..............................................................................80

5.4 Organizing the F-35 WSD .....................................................................................84

5.5 Stakeholder Design Assessment...........................................................................90

5.5.1 Approach ..............................................................................................................90

5.5.2 Results ..................................................................................................................90

5.5.2.1 WSM design SWOT analysis .............................................................................90

5.5.2.2 WSD design SWOT analysis .............................................................................92

6 Conclusions and Recommendations .............................................................................93

6.1 Conclusions ..........................................................................................................93

6.2 Recommendations ................................................................................................95

Bibliography .........................................................................................................................97

List of Abbreviations ........................................................................................................... 104

List of Figures ..................................................................................................................... 108

List of Tables ...................................................................................................................... 109

Annex(s) ............................................................................................................................. 110


1

1 INTRODUCTION

The Netherlands Ministry of Defence (NL MOD) uses highly complex weapon system in

support of its armed forces. One category of these complex weapon systems are air-based

weapon systems. The sustainment of these weapon systems is cost intensive. One of the

materiel logistic processes is weapon system management (WSM), which intends to sustain

a weapon system in de most cost-effective way. Advanced system support concepts are

introduced in order to sustain existing and new air-based weapon systems. Performance

Based Logistics (PBL) is one of these system support concepts. The promise of PBL, higher

performance and lower life cycle costs, makes this system support concept interesting.

Future weapon systems, e.g. the Joint Strike Fighter (JSF), are supported by PBL NL DMO,

1998]. PBL might have an effect on the way weapon systems are managed. This research is

aimed at the effects of PBL might have on the WSM process especially from a NL DMO

perspective. The Netherlands Defence Materiel Organisation (NL DMO) is the materiel

logistic service provider for armed forces in the Netherlands. Literature indicates several

issues with the introduction of PBL support concepts within government. This chapter will

introduce these issues and subsequently provides the reason to conduct this research. First,

the issues related to PBL are discussed. From there the focus is pointed to the organization

and issues related to WSM within the NL DMO and the importance of weapon system cost-

effectiveness. This leads to the problem indication and the definition of the research

question.

1.1 Performance Based Logistics

In de last decade it seems that, Performance Based Logistics (PBL) has gained more

interest as a product support concept for weapon systems. The decrease in the development

of new complex weapon systems (fighter aircraft) drew the focus of weapon system

developers to other life cycles phases. Research shows that, depending on the complexity of

a weapon system, around 70% of the life cycle costs are generated in the sustainment phase

against 30% to the development and production phase [Atkinson et al, 2007 and Berkowitz et

al, 2004 and Klein et al, 2007]. This makes the sustainment phase interesting for industry

from a business perspective. The US DOD Office of Inspector General [2006] defines PBL as

a “strategy for weapon system life-cycle sustainment that links product support to weapon

system performance. The goal is to optimize total system availability while minimizing cost

and logistic footprint”. With PBL, product support is outsourced to a Product Support

Integrator (PSI) and is contracted based on weapon system performance instead of services

(e.g. repair and maintenance contracts).


2

Shrinking defense budgets forced defense organization to not only focus on the effectiveness

of their weapon systems but also on the weapon system life cycle costs. The promise of

PBL, higher availability against lower costs, makes this support concept interesting for

Defense organizations were traditionally the support of weapon systems is the responsibility

of the Defense organization itself. PBL transfers this responsibility to the PBL provider, the

PSI. Within The Netherlands Defense Materiel Organisation (NL DMO) limited experience

exists with managing major complex weapon systems (e.g. ships, tanks, aircraft etc.) in this

environment.

1.2 Weapon System Management within NL DMO

In recent years, the importance of weapon system cost-effectiveness within The Netherlands

Ministry of Defense (NL MOD) increased [NL DMO, 2005 and 2009, AMC Seminar, 2009].

The decrease in numbers of weapon systems due to the end of the cold war, the

development in weapon system technology and shrinking defense budgets focused the NL

MOD on improving weapon system effectiveness and reducing life cycle costs. Recent

organizational restructuring (and downsizing), a further decreasing defense budget, the

introduction of new business management software (SAP introduction) and an increased

interest from within the NL MOD in weapon system life cycle costs have led to the

development of a WSM policy and the start of several pilot projects to professionalize WSM

[NL DMO, 2007 and 2008].

WSM within the NL MOD is organized as a tri-partite consultation process between the

operator (Operational Command), maintainer and system manager (both in the NL DMO).

Annex A provides a detailed NL MOD organization description. The aim of WSM, as defined

within the NL MOD, is to control the performance, availability and reliability of the weapon

system against the lowest possible life cycle costs within the set preconditions (regulations,

operational need) [Moll, 2008] or i.e. to be in control of the cost-effectiveness of the weapon

system. Each actor has a specific role. The operator formulates availability and user

requirements. The maintainer is responsible for providing support in order to restore weapon

systems into a serviceable state. The weapon system departments (WSD) within the NL

DMO Weapon System Directorate are responsible for the framework (standards) in which the

operator and maintainer have to act. The organization of WSM within the NL MOD is aimed

at controlling materiel logistic processes by the three actors [HLD MATLOG, 2008].


3

1.3 Weapon System Cost-Effectiveness

As stated cost-effectiveness is (should be) the driving factor in sustaining a weapon system.

Juran defines cost-effectiveness as the value received for the resources expended, the ratio

of cost to (system) effectiveness [Stavenuiter, 2002] and can be presented as in figure 1.1.

Figure 1.1 Cost-effectiveness according Stavenuiter (2002)

In his research to a more integrated life cycle management (LCM) approach Stavenuiter

developed an Asset Management Control (AMC) approach to be able to get and keep in

control of weapon system (asset) cost-effectiveness. Stavenuiter (2002) defined Asset

Management Control as a management approach to manage all processes (specify, design,

produce, maintain and dispose) needed to achieve a capital asset capable to meet the

operational need in the most cost effective way for the customer/user. To achieve this,

Stavenuiter identified ten improvement factors:

1. Well-specified objectives

2. Transparent (technical) system breakdown structure

3. Transparent (logistics) process structure

4. System effectiveness measurers

5. (life cycle) cost measurers

6. Key performance indicators

7. System knowledge

8. Logistic knowledge

9. Management control knowledge

10. Information and communication technology


4

The primary objective of AMC is to get and keep a grip on logistic processes and by that the

technical system (weapon system). Based on the ten improvement factors Stavenuiter

developed an improved AMC control system that can be applied to any organization, asset or

life cycle (figure 1.2).

Figure 1.2 Asset Management Control System according to Stavenuiter (2002)

In AMC, the following components are considered as essential:

- a through-life asset management program, to provide well specified objectives

- staff (managers and Engineers) throughout the life cycle, indicated as LCM teams, to

provide professional management control

- analysis and control tools to enable cost/performance control

- computer applications on a wide area network, to meet information and communication

needs

Limited research is available on applying AMC to military assets with a PBL support concept.

Sinay (2008) did research on the arrangement of Performance Based In-Service Support

cooperation’s. Sinay concluded that ‘no size fits all’ solution is available in structuring this

cooperation between the Operational Commander and the Product Support Provider.


5

1.4 Problem Indication

It is noticed that, within the NL MOD experience with advanced product support concepts like

PBL is limited. Inquiry learns that (only) the Transport trucks of the NL MOD are supported in

a (full) PBL concept. However, none of the major complex weapon systems within the NL

MOD are supported by PBL.

The lack of PBL experience could be a problem because the main candidate to succeed the

F-16 fighter aircraft is the Joint Strike Fighter (JSF) for this moment. The JSF (or F-35)

comes with a full PBL support approach and will be the first major complex weapon system

within the NL MOD with such a logistic support approach. It is estimated that the sustainment

costs of the F-35 (based on the NL requirement for 85 aircraft) over the next 30 years will

equal around 11,3 billion euros [NL MOD, 2011]. Being in control of these sustainment costs

and the effectiveness of the weapon system, seen from an organizational as well as a

political perspective, is of the utmost importance. It is assumed that the introduction of a

major weapon system like the JSF with a PBL support approach will have huge influence on

the organization of WSM within the NL MOD from a WSD perspective.

In general, literature identifies several issues with introducing PBL support approach in

government:

- the role of government changes from transaction management in the traditional support

environment to performance management in the PBL environment [Beggs et al, 2005]

- PBL requires structural and cultural changes [Berkowitz et al, 2004 and Beggs et al, 2005

and DeVries, 2005]

- functions within government required in the traditional support environment are

transferred to the PBL provider [Beggs et al, 2005 and Koevoets, 2008]

- processes and procedures in government need to change [Beggs et al, 2005]

- commitment of stakeholders for PBL [Koevoets, 2008]

- knowledge (PBL, utilization, weapon system) which is required [Koevoets, 2008]

- reliable information system for operational, logistic and financial data [Beggs et al, 2005

and Koevoets, 2008]

- financing structure defense organization (“colors of money”, flexibility) [Beggs et al, 2005

and DeVries, 2005 and Ploos van Amstel, 2006]

- clear responsibilities [Berkowitz et al, 2004 and Ploos van Amstel, 2006]

- single face to the war fighter [Ploos van Amstel, 2006]


6

- program management and consultation structure [Ploos van Amstel, 2006]

- management of relationship with stakeholders [Berkowitz et al, 2004].

As there are issues with introducing PBL support concepts within the government literature

also indicates issues with controlling weapon system cost-effectiveness. In a policy study [NL

DMO, 2009] on WSM NL DMO determined several issues for improving WSM (in NL MOD):

- clarity in WSM related concepts/ideas

- WSM requires an improved control concept

- decision criteria for WSM activities and the organization of WSM activities

- planning model for logistic support

- insufficient qualitative control

- insufficient information sharing

- insufficient insight in integral costs of a weapon system.

AMC indicates the following issues with organizing management control of capital assets

(weapon systems) in order to achieve cost-effectiveness:

- well-specified objectives

- a model of the technical system and (logistic) processes is required

- appropriate cost-effectiveness measures need to be defined

- appropriate key performance indicators need to be defined

- knowledge of system, logistics and management control is required

- information and communication technology.

The intent of this research is to study the effect of PBL support concepts on the organization

of the WSD’s within the NL DMO Weapon System Directorate (NL DMO/WS). The above-

mentioned issues on PBL, WSM and AMC, indicate that changes to the present way of

organizing WSM might be required in order to get and keep control over the cost-

effectiveness of weapon systems in such an environment.


7

1.5 Objective and Research Question

From the previous paragraphs, the following objective for this research is derived:

Provide recommendations to NL DMO for organizing weapon system departments

responsible for air-based weapon systems in a PBL environment during the sustainment

phase in order to control weapon system cost-effectiveness.

From the objective, the following research question is formulated:

How to organize a weapon system department within NL DMO for an air-based weapon

system with a PBL support concept during the sustainment phase capable of controlling

weapon system cost-effectiveness?


8

2 RESEARCH METHOD

2.1 Introduction

This chapter explains the research scope and applied method. Based on the research

question a research approach is determined. The research domain is established and the

research model is constructed.

2.2 Research Scope

The research problem initiates from the introduction of new weapon systems with a PBL

support concept (like the JSF) within the NL MOD. This research intends to provide

recommendations for organizing a weapon system department within the NL DMO Weapon

System Directorate Air Systems Branch (DMO/WS/ASB). The DMO/WS/ASB is responsible

for the framework (standards) in which the operator and maintainer have to act for air-based

weapon systems. From this perspective, this research is conducted.

According to the NL MOD present plans the F-35 (JSF) will be the first air-based weapon

system with a PBL support concept. In this concept product support is provided by industry

based on an agreed level of performance. The F-35 weapon system is used as a case study

performed to support this research.

Weapon systems, as complex and expensive systems, have different life cycles. For this

types of systems/assets Blanchard (1998) identifies six life cycle phases: (1) conceptual

design, (2) preliminary system design, (3) detailed design and development, (4) production

and or construction, (5) utilization and support (sustainment) and (6) phase out and disposal.

In most cases the sustainment (or system utilization phase) is the main part of the system life

cycle and incurs the main part of the life cycle costs as mentioned previously. This research

is limited to the sustainment (operational) phase of the weapon system.

The intended outcome of this research is a set of recommendations to organize a weapon

system department capable of controlling weapon system cost-effectiveness. For the

management of capital assets Stavenuiter (2002) developed an approach to get and keep

control over system cost-effectiveness. The tenets of this approach are used for controlling

weapon system cost-effectiveness. The AMC approach from Stavenuiter (2002) is used as a

basic pre-requisite.


9

The literature on organizing, organizations and organizational design is extensive and varied.

The aim of this research is to design an effective organization (weapon system department)

capable of controlling weapon system cost-effectiveness in a PBL environment. In his

research on AMC, Stavenuiter used the management control system of De Leeuw (1990) as

a basis for the improved Asset Management Control System (figure 2.1).

Figure 2.1 Management Control System of De Leeuw (1990 and 2002)

De Leeuw uses this basic management control system in organizing effective organizations

making it interesting with respect to this research. This system theory approach from De

Leeuw (1990) is assumed to be most promising because it provides a practical and

interdisciplinary approach which takes into account the cohesion between different elements.

The approach from De Leeuw is therefore used a basic approach with respect to

organizational aspects in this research.

This research will not incorporate the actual change process to the new organization but

provides a framework for a future organization.

2.3 Research Approach

The intent of this research is to resolve a practical (organizational) problem. As defined by

Verschuren and Doorewaard (2004) practical research is intended to perform an intervention

in order to resolve an existing practical situation. Practical research consists of five basic

steps: problem indication, diagnosis, design, intervention (implementation) and evaluation

[Verschuren and Doorewaard, 2004]. For resolving organizational problems, De Leeuw

defines a similar approach (diagnosis, design and implementation). In the diagnosis and

design phase specific elements from the approach from De Leeuw (2002) are used.


10

Problem Indication

In Chapter 1 (Introduction) issues were identified in relation to the introduction of PBL

support concepts in government and with controlling weapon system cost-effectiveness

providing the trigger to perform this research.

Diagnosis

This phase of the master thesis intends to analyze the ‘problem’ based on the problem

indication. The diagnosis phase consists of a literature review, the analysis of the results, to

work out a problem definition and define Terms of reference (TOR’s) for the future

organization (Chapter 3 and 4). The diagnosis phase starts with a literature review and field

study (Chapter 3). The literature study provides the theoretical background of this research.

From the research objective, research question and scope, three main subjects can be

derived: Performance Based Logistics as a product support concept, controlling weapon

system cost-effectiveness and organizing. Based on these research subjects the following

literature is assessed: Asset Management Control, Performance Based Logistics and

Organization Theory. The research environment is the NL MOD organization. In addition a

field study is conducted. In order to determine the role of the WSD the effects of PBL on NL

MOD WSM are determined. The field study aims at the organization of WSM within the NL

MOD and the role of the WSD’s in the NL MOD WSM concept. The problem definition

(Chapter 4) starts with an analysis of the literature review and field study results. The

analysis provides the key findings with implementing PBL product support concepts on the

organization of WSM and the WSD’s within the NL MOD. From these findings a problem

specification is developed. The final step in the diagnosis phase develops the Terms of

Reference for the organization of WSM and WSD in a PBL environment.

Design

The diagnosis phase defined the TOR on which the actual design of the weapon system

department is made. The design phase (Chapter 5) starts with establishing the design

approach followed by a case study. Because the research problem initiates from the

introduction of a new fighter aircraft, with a PBL support concept, the future weapon system

department for the F-35 is used as a case study. Involvement of stakeholders in the design

process is essential [De Leeuw, 2002]. In the design phase a review with stakeholders is

planned to validate the conceptual WSM and WSD design.


11

Intervention (Implementation) and Evaluation

Usually the design (‘new organization’) is implemented and evaluated in this phase. At this

time none of the major weapon systems within the NL MOD have a PBL support concept. It

is expected that the F-35 will replace the F-16 in the future. The F-35 might be the first

weapon system with a PBL product support concept but is not introduced within the RNLAF

before 2019. Therefore, the actual realization of the F-35 weapon system department within

the NL DMO cannot be validated. The design solution is reflected with stakeholders to obtain

insight in the validity, completeness and feasibility of the design (Chapter 5).

Research validation is an important aspect in research and is used to check the accuracy

and credibility of the findings. Various methods are used for validation purposes throughout

this research:

- Triangulation: different sources of data will be used (literature and field study)

- Member checking: data, interpretations and conclusions are tested with stakeholders.

2.4 Research Model

Based on the research question and approach a research model is constructed. Three prime

phases are identified: problem indication, a diagnosis phase and the design phase.

Figure 2.2 Research Model


12

3 LITERATURE REVIEW AND FIELD STUDY

3.1 Introduction

This chapter contains the results of the literature review and field study. From the research

objective and question three main subjects are derived: PBL, controlling cost-effectiveness

and organizing. The literature review focuses on these three subjects. The results of the PBL

literature review are described in paragraph 3.2. From a research interest perspective AMC

is chosen as a basis for controlling weapon system cost-effectiveness. The results of the

literature review concerning AMC are discussed in paragraph 3.3. In paragraph 3.4 the

basics on organization theory with respect to organization structural aspects are

summarized. Finally paragraph 3.5 contains the results of the field study on the organization

of WSM within the NL MOD including the role of the WSD’s.

3.2 Performance Based Logistics

3.2.1 Introduction to PBL

Chapter 1 defines PBL as a strategy for weapon system life-cycle sustainment that links

product support to weapon system performance. PBL is about buying results or outcomes

(performance) instead of initiating and managing transactions. Key tenets of PBL are an

improved level of readiness, lower support costs and a smaller logistic footprint [DOD Office

of Inspector General, 2006]. It is assumed that a PBL can deliver these tenets. The

knowledge base, flexibility and economies of scale are the basic principles for improving

product support under a PBL concept [Vos et al., 2011]. Product support is a package of

logistic support functions necessary to maintain the readiness and operational capability of a

system or subsystems [Raymond et al, 2003].

The goal of PBL is to optimize ‘total system while minimizing cost and logistic footprint. The

Defense Acquisition University (DAU) states that the cornerstone of PBL is the purchase of

weapon system sustainment as an affordable, integrated package based on output

measures such as weapon system availability, rather than input measures such as parts and

technical services. The application of PBL will differ from program to program, or system to

system, because each has unique characteristics that influence the design and

implementation strategies [Mendoza and Devlin, 2005]. It depends on the level of risk that

the government is willing to transfer to the industry as visualized in figure 3.1. LM Aero


13

(2007) for example defines 4 levels of PBL: (level 1) parts and engineering services, (level 2)

fill rates, (level 3) Subsystem availability and (level 4) platform availability.

Risk Transfer under PBL

All

All Support

Some Support

Assist w/ Support

Minimal

Government

Ri sk

Minimal

Assist w/ Support

Some Support

All Support

All

Contractor

Ri sk

Figure 3.1 Risk Transfer with different product support options

[PBL Support Guidebook, 2002]

Literature identifies three basic roles in a PBL construct: the war fighter (customer), the

Product Support Manager (PSM) and the Product Support Integrator (PSI) [DAU, 2005]. The

war fighter is identified as the user of the system, the PSM is responsible for system

performance and the PSI is responsible for system product support and accountable for

system performance. A Performance Based Agreement (PBA) between the war fighter and

the PSI identifies the war fighters expected performance goals and objectives, such as

availability and cost, and establishes a target price based on the desired level of

performance [DOD IG, 2006]. Incentives for a predefined level of performance are

incorporated in the PBA. Performance must be tracked, measured and assessed. For PBL

performance is defined in terms of military objectives using operational availability,

operational reliability, cost per unit usage, the logistics footprint and logistics response time

[DOD IG, 2006]. These PBL performance goals are defined as metrics. Metrics must be

understandable, economical, field-tested, highly leveraged, timely, improvement-oriented,

applied to all life cycle phases, useful at multiple levels. Metrics must be tied to risk and

problem areas, are only as good as underlying data, may evolve with the program, use

multiple metrics but do not measure everything [Raymond et al., 2003]. Data management

(real time or near real time) is essential for overall effectiveness of logistic processes in

contributing to weapon system availability and LCC factors (DAU, 2005).


14

Beggs et al (2005) supports the importance of data management and the relation between

effective data management and establishing reliable performance metrics. Raymond states

that metrics should be tied to risk and problem areas, are only as good as underlying data,

multiple metrics are required and do not measure everything [Raymond et al, 2003].

3.2.2 PBL from a government perspective

This paragraph identifies findings in PBL literature from a government perspective. In a PBL

environment, roles of actors in the sustainment phase change. Within the US DOD approach

three basic roles can be identified [PSM Guidebook, 2011]: the program manager acts as a

total life cycle systems manager, the Product Support Manager (PSM) has an oversight role

of monitoring and assessing performance against the PBA and the PSI is a single point of

accountability for support and may be from the government or private sector. Figure 3.2

shows the management concept as defined by the US DOD within a PBL construct.

Figure 3.2 The Product Support Business Management

highlights [PSM Guidebook, 2011]

In order for the PSI to be accountable for weapon system performance the PSI needs to

have sufficient responsibility and authority over product support processes. When introducing

PBL support concepts, product support functions usually performed within the government in

a traditional logistic support concept, are transferred to the PBL provider [Beggs et al, 2005,

Mendoza and Devlin, 2005 and Koevoets, 2008]. In a traditional logistic support concept the

government is contracting logistic support elements themselves (DAU, 2011). The product


15

support functions that are transferred are logistic support processes related to Supply Chain

Management (SCM), engineering, maintenance and technical management [Claiborne 2004,

Beggs et al 2005, Mendoza and Devlin 2005]. Functions that are transferred depend on the

level of PBL i.e. which risks are transferred to the PBL provider (PSI) [Mendoza and Devlin,

2005 and PBL Support Guidebook, 2002]. The transfer of organization functions to the PSI

changes the role of the government. With the transfer of traditional support functions to the

PSI the role of the government changes to an oversight role by monitoring outcomes and

ensuring alignment between the war fighter (operator) and the PSI [Beggs et al, 2005]. Also

responsibility and authority within a PBL construct changes. The PSI is the single point of

accountability for support of the weapon system in a PBL construct [Mendoza and Devlin,

2005]. Retaining to much responsibility and authority within the government in relation to the

product support function (transferred to the PSI) will have an adverse effect on the

possibilities of the PSI to increase cost-effectiveness [Beggs et al, 2005]. Responsibilities

must be clearly structured between the PSI and the government [Berkowitz et al, 2004 and

Ploos van Amstel, 2006].

Literature also indicates the effects of PBL on the budgeting process. Beggs et al (2005)

state that budget flexibility is limited in a performance based support concept. Funding

instability is a potential risk for the performance based support contracts in relation to the

required performance of a system. The fragmentation of defense budgets (sustainment vs.

new requirements) will require a different approach on budgeting from a government

perspective (colors of money) [Beggs et al, 2005 and DeVries, 2005 and Ploos van Amstel,

2006].

The nature (and advantages) of PBL requires long term contracts between the user and PBL

provider (PSI) [Beggs et al, 2005, US DOD, 2011]. The longer the scope of the contract, the

more investments the PBL supplier can make to improve the performance of the system [Vos

et al, 2011]. Contractors say a three- to five-year PBL arrangements are the most cost-

effective because they can invest in supplies [DefenseNews, 2011].

Literature also indicates the requirement for a cultural change. This cultural change comes

from the focus of PBL on performance. A performance management culture is required and

this requires a change in organization culture [Beggs et al, 2005]. Marshall supports this

conclusion by stating that a performance driven and continuous improvement culture is

required [Marshall, 2009]. This cultural change also effects the government. The role of the

government to a more oversight role government changes the focus from transaction to

performance management [Beggs et al, 2005]. Another effect from the implementation of

PBL support concepts is the requirement for a close cooperation with PSI in a PBL


16

environment [Ploos van Amstel, 2006]. An atmosphere of trust and commitments with both

customer and PSI is required [Berkowitz et al, 2004]

The introduction of advanced support concepts like PBL requires different skills and

knowledge within the government. Knowledge of PBL and PBA’s is essential for successful

implementation of PBL support concept [Mendoza and Devlin, 2005 and Koevoets, 2008].

Mendoza and Devlin (2005) argue that this knowledge must be distributed through the entire

organization (government). A basic requisite of PBL is the close cooperation between the

government and the PSI, which should be based on mutual trust. Knowledge and skills

concerning teaming and managing alliances are essential to manage PBL support concepts

[Ploos van Amstel, 2006]. Maintaining weapon system knowledge in a PBL environment from

a government perspective is a concern. Koevoets (2008) argues that knowledge of PBL,

weapon system utilization, and the weapon system itself, is required from a government

perspective. In addition, knowledge on performance management is required [Beggs et al,

2005]. USAF is retaining nucleus logistic skills in the areas of depot maintenance to retain

sufficient supply and technological expertise [Claiborne, 2004].

3.3 Asset Management Control

AMC aims to optimize the management control and logistic support (sub) systems

throughout the life cycle with respect to the functionality of the technical system [Stavenuiter,

2002]. AMC has four main objectives: (1) specify the system functionality, (2) acquire the

system functionality, (3) achieve cost-effectiveness and (4) justify phase out [Stavenuiter,

2002]. The AMC system approach aims to stimulate all logistic actors to fulfill their part in the

most cost-effective way by telling them what the result should be and to show them the

impact of their contribution to the whole system [Stavenuiter, 2002]. The Logistic Process

Cycle is used to establish a relationship between costs and system effectiveness. The

material logistic process is subdivided into eight process steps; the Logistics Process Cycle

(LPC) in figure 3.3. Each step has to be in balance with the preceding and subsequent steps

in the cycle, all related to the Integrated Logistics Support (ILS)/LCM analysis. Important for

this research is the control direction, which is counter clockwise!


17

Figure 3.3 The Logistic Process Cycle

The elements of AMC are the technical system, logistic processes and the operational

environment. During the assets life cycle the LPC must be kept in balance. The materiel

logistic processes are divided into 4 subsystems: the operational system (asset user),

management control system (LCM team), logistic support system (logistic processes) and

the technical system (the asset itself). These four subsystems construct the Asset

Management Control System (AMCS) in figure 3.4.

Figure 3.4 Asset Management Control System according to Stavenuiter (2002)

The management control system (LCM team) has a pivotal role in the AMCS because it

translates requirements into directives for the logistic processes and controls the results. In

order for the management to control the performance and costs, a logistic program is


18

required based on an ILS analysis. For a management control system, the following

components are essential [Stavenuiter, 2002]:

� A through life asset management program, to provide for well specified objectives

� Staff (managers/engineers) throughout the life cycle, indicated as LCM teams, to provide

professional management control

� Analysis and control tools to enable performance and cost control

� Computer applications on a wide area network to meet the information and

communication needs

A through life asset management program is required. AMC states that clear procedures and

guidelines are required to get and keep grip on cost-effectiveness and to bring across

different actor roles. In AMC, each actor is informed of their role in the logistic process and

their contribution to the system performance in relation to key performance indicators. This

requires a transparent technical system breakdown structure and a transparent (logistic)

process structure as agreed through a life management program. The Logistic Program

contains all data and information necessary to manage logistic processes in the most cost-

effective way [Stavenuiter, 2002]. The logistic program includes: asset requirements, the

system structure, logistic plans and cost estimates/budget. The LPC is the basis for setting

up the requirements as stated in the logistic program.

AMC requires a permanently appointed LCM team. The LCM team consists of

representatives from operations, design and maintenance. In the sustainment phase,

achieving and controlling cost-effectiveness is the main objective and is the function of the

LCM team. This is achieved by getting and keeping grip on the logistic processes and by that

on the technical system (asset) [Stavenuiter, 20020]. Stavenuiter proposes a matrix or

project organization with personnel from different actors (operator, maintainer and designer)

for effectively performing asset management control. The LCM team must be able to

translate operational requirements into directives and controls into accounts. Responsibility

and authority of actors (including the LCM team) depend on the organization structure and

are laid down in the activity diagrams (based on IDEF0 process diagrams). Managing and

controlling a technical system and its logistics processes in complex situations requires well

trained actors and skilled teams for effective management control. Knowledge and skill in

team management, system (support) engineering and process management, is required as

management control knowledge.


19

In AMC, the technical system and logistic support system are incorporated in an LCM model.

Effective management control requires the use of an LCM model for monitoring, analyzing

and controlling system performance (support decision-making). This system model consists

of function diagrams, installations diagram and activity diagram and provides insight in the

performance of the asset. Stavenuiter (2002) has defined a conceptual LCM dataset.

AMC requires computer applications on a wide area network to meet information and

communication needs. Information management is pivotal for AMC. Availability of reliable

and relevant information over the lifecycle of the asset is essential for control as are analysis

and control tools. The communication is structured around Asset Management Information

and Communication (AMICO) system, LCM meetings and bilateral communication.

3.4 Organization Theory

The focus of this research is organizing a department which has a role in the WSM of an air-

based weapon system. The review on organization theory focuses on the characteristics of

organizing and organization structures. As indicated in chapter 1, literature on organization

theory is extensive. For this research the theory of De Leeuw (1990 and 2002) is selected

because it forms the basis for AMC and the AMCS.

De Leeuw (1990) approaches organizations as complex systems. An organization is a

system of (simple or complex) positions (roles, functions) performed by employees supported

with resources required for the physical operational processes [De Leeuw, 1990]. The basic

system (or organization) according to De Leeuw is visualized as in figure 3.5. The basic

organization consists of a system to be managed and a managing body in relation to the

environment. According to De Leeuw (2002), organizing is selecting the right organization

structure taking into account the organization environment and goals.

Figure 3.5 Organization according to De Leeuw (1990)


20

Organization Structure. De Leeuw (1990 and 2002) views organization structure in a broad

perspective. Organization structure is the whole of relationships the:

- creation of functions, departments and their relations (subsystem dimension),

- control and budgeting system,

- decision-making procedures concerning planning, methods and policy.

De Leeuw refers to structure in this respect as position structure and procedure structure.

Position structure is the relation between positions and departments. Procedure structure is

the relation between processes in the organization.

De Leeuw defines three groups of organization structural parameters: division of labor,

connection parameters and control characteristics in relation to the formal structure of an

organization (Table 3.1).

Table 3.1 Structural Parameters

Group Structural Characteristic Remarks

Division of

labor

Unit grouping Grouping of activities in subsystems

Centralization Degree of dependency in work

processes between organization

subsystems

Task and function Grouping of tasks on an individual level

Specialization Degree of limitation in corresponding

sub-activities

Connection

parameters

Authority and

responsibility

Decision power over control measures

(authority) and accountability

Delegation Delegating authority and responsibility

to a lower level in the organization

Functionalization of

command

Separation of command to aspects

Participation Participation in decision making

Control

characteristics

Standardization Programming behavior

Uniformity Analogy in behavior

Formalization Capture behavior


21

There is no one perfect structure for an organization. The contingency theory states that

structure depends on the environment in which it operates, the strategy (goals) of the

organization and the technology it uses to accomplish its primary process. In the generalized

contingency approach from De Leeuw (2002) three factors affect the management system:

strategy and goals, complexity of the environment and the complexity of the primary process.

Figure 3.6 shows the generalized contingency approach from De Leeuw.

Figure 3.6 Generalized Contingency Approach [De Leeuw, 2002]

Strategy. The strategy and goals of an organization affect the management system

characteristics and scopes the organization environment. The organization structure

depends on the strategic focus of the organization. A more external strategic focus requires a

more decentralized (or horizontal) organization structure [Mintzberg, 1989 and Daft, 2007].

The strategic focus also affects the environment of the organization as it determines the

organization boundaries. On the other hand organization goals determine the cohesion and

meaning of the management system [De Leeuw, 2002].

Organization environment. The organization structure (configuration) depends on the

complexity and stability of the organization’s environment [Mintzberg, 1989]. Figure 3.7

visualizes the effects of the organization environment on the organization structure.


22

Figure 3.7 Organization environment

Primary process. The primary process is essential in the system theoretical approach and is

the transformation (and transaction) process directly related to the strategy (and goal) of the

organization (De Leeuw, 2002). This primary process is directly connected to the

organization environment. Important for defining the primary process is the system boundary

(between system and environment). More than one primary process is possible in one

organization. As mentioned previously in this paragraph technology is one of the

contingencies affecting the organization’s structure. Technology refers to the work

processes, techniques, machines and actions used to transform organizational inputs

(materials, information, ideas) into outputs (products) [Daft, 2007]. This is the way the

primary process is executed. Thompson refers to technology in relation to interdependence

[De Leeuw, 2002 and Daft, 2007]. “Interdependence is the extent to which departments

depend on each other for resources and materiel to accomplish their tasks” [Daft, 2007].

Thompson defines pooled, sequential and reciprocal interdependence. Pooled

interdependence requires a centralized organization configuration while reciprocal

interdependence requires a decentralized organization configuration.

Management. Management is the whole of directing, organizing or controlling processes in

which organization members take part [De Leeuw, 2002]. In the system theoretical approach

management is a subsystem. As the organization structure the management form depends

on the strategy, environment and the system to be managed (figure 3.8).


23

Figure 3.8 Management Context

In order to effectively control the system De Leeuw (1990 and 2002) defined specific

requirements:

- clear goals must be established

- a model of the system to be managed is required

- information about the environment and state of the system is required

- sufficient control measures must be available

- sufficient capacity for managing information.

In addition, the controllability of the system is a factor. Are effective control measures

available to control the system!

Culture. Organization culture is an important aspect in organizing and management.

Hofstede defines organization culture as the collective mental programming and

demonstrates itself through the behavior of individuals in the organization [De Leeuw, 2002].

Culture is the controlling mechanism behind the behavior of people in an organization.

Culture is therefore a system (organization) characteristic. Organization culture should

reinforce the strategy and structure of an organization so the organization can be effective

within its environment [Daft, 2007]. Two dimensions are important in characterizing

organization culture: the extent to which the organization environment requires flexibility or

stability and the extent to which the organization strategic focus and strengths are internal or

external (figure 3.9).

Within an organization culture, subcultures within teams or departments can exists which

differ from the overall organization culture. They reflect the common problems, goals and

experiences within that teams or department. Organization culture is difficult to measure and

to change [De Leeuw, 2002 and Boonstra, 2006]


24

Str

ate

gic

Focu

s

Figure 3.9 Organization Culture

3.5 NL MOD WSM Field Study

In this paragraph Defense policy, regulation and requirements related to the research subject

are evaluated. For this research the Defence Governance Model, High Level Design Materiel

Logistics (HLD MATLOG), the WSM policy vision and Military Airworthiness Regulations

(MAR’s) are applicable (paragraph 3.5.1). Also the effects of the recent budget cuts on the

Defence organization are discussed. In addition, the present structuring of WSM and with a

specific focus on the NL DMO role (WSD), and their tasks and responsibilities are described

(paragraph 3.5.2).

3.5.1 MOD policy, requirements and procedures

Defence Governance Model. In 2003, a new Defence Governance Model (DGM) was

established. This governance model focuses on output and establishes a clear division in

responsibility between policymaking, execution, oversight and support. The emphasis in the

governance model is on output and clearly states the ambition for performance based control

(management). In this construct, the operational commanders (OPCO) are responsible for

the readiness of operational units and the Defence Materiel Organisation (DMO) is

responsible for all materiel logistics. The agreement between the OPCO and DMO on the

materiel logistic support is laid down in a ‘Dienstverleningovereenkomst’ (DVO). The DVO is

a form of a Service Level Agreement (SLA). It contains the provided services and the budget

for materiel logistics activities provided under the DVO. The Defense organization structure,

processes, responsibility and authority are based on this Governance model.


25

Policy, Planning and Budgeting Procedure. The Policy, Planning and Budgeting Procedure

(Beleid-, Planning- en Begrotingsprocedure BPB-procedure), is the essence of the Defense

management process. The BPB-procedure assures the relation between the ambition of the

Defense organization, the required resources and the management of those resources. The

procedure provides insight in the relation between ambition, objectives and goals, activities

and resources. The BPB-procedures consists of a four-year cycle and a year cycle. The year

cycle starts with determining the required budget and multi-year-estimates with the

framework defined in the four year cycle. The starting point is the Defense Plan

Memorandum (DPM) and the AGCDS. The basis of the planning process is the ambition of

the Netherlands and International commitments translated in the ‘Aanschrijving

Gereedstelling Commandant Der Strijdkrachten’ (AGCDS) to general goals and objectives

and the business plans. In turn the AGCDS forms the basis for the year cycle. The Chairmen

of the Joint Chiefs of Staff (CDS) is, as corporate planner, responsible for the Defense Plan.

The Head of Financial Control (HDFC) is responsible for the budgetary framework and the

validation of the AGCDS to this budgetary framework. Two planning documents are relevant

for this research. The AGCDS provides the operational need and the Defence Exploitation

Plan Weapon systems (DEP-W) because it contains the sustainment of weapon systems.

For air-based weapon systems, planning is performed within the operational command

(OPCO) and is laid down in the weapon system roadmap. The basis of the planning process

is the AGCDS. The goals and objectives are then translated in the operational need. The

operational need is translated in an operational planning (flying program), required

performance and required (or provided) budget and is laid down in the business plans, SLA’s

and the Road Map (per weapon system). The roadmap is managed in the WSM tri-partite

consultation structure. The planning cycle for sustaining a weapon system is managed by the

‘road map’.

HLD MATLOG. For the introduction of new business management software (SAP) the

materiel logistic support environment within the Defense organization was laid down in the

High Level Design Materiel Logistics (HLD MatLog). The HLD MatLog is based on the

Defense Governance Model. The process scope of the HLD MatLog encompasses system

logistics (weapon system management, maintenance and materiel readiness), supply chain

logistics, projects/procurement and disposal.

System logistics focuses on the availability of weapon systems. The operational need is a

pre-condition. Cost-effectiveness is the basic paradigm with a total life cycle perspective.

WSM is performed by three actors: operator, maintainer and standards counter. The


26

standards counter will be referred to as system manager in this research. Each actor has a

different but equal role. The sustainment activities are aligned in the WSM tri-partite

consultation between the operator, maintainer and system manager. The WSM triangle

seeks integral alignment and planning, central control over scarce capacity and resources,

achievement of collective agreed goals and the influence of system logistic standards based

on operational planning. The sustainment of weapon systems is laid down in Integrated

Logistic Support (ILS) or system plans.

The HLD MatLog defines two different models: green and orange. The green model

represents the present structuring of the materiel logistic support environment. In the green

model, the availability requirements are based on the intended activities related to the

required and available budget. Management is pro-active and standards are defined and

controlled. There is an integral insight in costs.

The orange model defines the future (>2013) ambition. The orange model has a performance

based management perspective. Weapon system performance is actively monitored,

assessed and controlled, in the WSM consultation structure between the operator,

maintainer and system manager. The ILS/system plan, maintenance and operational

standards are up to date. Modifications to improve system performance are pro-actively

translated into the weapon system design. The system manager also has an audit function to

maintain standards. This audit function implies the domain of the operator and maintainer.

WSM Policy Vision. The WSM structure within the Defence organization is based on the

Defence Governance Model and HLD MATLOG (green variant). In the introduction WSM

was defined. Cost effectively achieving the availability requirement is jointly and structurally

managed by the operator, maintainer and system manager in a WSM tri-partite consultation

structure. This requires alignment between management of operational readiness (operator)

and management of logistic support (system manager and maintainer). ILS and Life Cycle

Costs (LCC) play an important role in WSM. The starting point in the sustainment phase is

the standards framework laid down in the ILS/system plan.

WSM requires different management expertise: product management, configuration

management, ILS management, contract management, quality management, financial

management, project management, information quality management and administration. The

NL DMO WSM concept is presented in figure 3.10.


27

Figure 3.10 WSM Ideal Model according to NL DMO

The WSM policy vision acknowledges that WSM is differently structured for different weapon

systems (contingency theory). One of these contingencies is the complexity of the weapon

system and its sustainment processes. Different levels of WSM are established related to

weapon system characteristics [NL DMO, 2009]. Prime weapon systems, which attain

directly to land, sea or airpower, e.g. a fighter aircraft, are category A systems and require,

depending on the complexity of the system and sustainment, level 1 WSM. Level 1 WSM is

characterized by rigorous configuration management, a tri-partite consultation structure,

maintenance concept, pro-actively performing maintenance analysis, available roadmap (mid

and long term planning) and a portal to communicate to all stakeholders. For other category

weapon systems (B and C) level II en III WSM is applicable (less stringent then level 1).

Military Airworthiness Regulations. To sustain safety in military aviation the NL MOD is

introducing Military Airworthiness Requirements (MARs) based on the ‘Total Aviation Safety’

approach. The MAR’s not only cover the airworthiness certification of the technical design

but also the production, operations, maintenance, training, air traffic management etc. The

MAR’s are derived from the regulations for civil aviation but are adapted to the military

environment. Figure 3.11 shows the structure of the airworthiness regulations within the NL

MOD.


28

Figure 3.11 Structure of Airworthiness regulations

With respect to this research the MAR’s for the operator, maintainer, supply organization and

designer are relevant. For operating the aircraft, the operator has to comply with the

requirements of the MLE-OPS, the maintainer with the MLE-145, the supply organization

with the MLE-DSO and the designer with the MLE-21. This research focuses on the weapon

system departments within the NL DMO which, in relation to the MAR’s, is seen as the

design organization (MLE-21). In the MAR-21, the type design organization is responsible for

the type design (or type configuration) and continued airworthiness. The design organization

is the holder of the Military Type Certificate (certifying airworthiness of the design of the

aeronautical product). Continued Airworthiness can be defined as all tasks and processes

that ensure that the initial (airworthiness) certification baseline, once granted, is maintained

through life within an acceptable level of risk [ICAO, 1998]. The introduction of the MAR’s

influenced the structure of the Defence organization in relation to the function, tasks,

responsibility and authority of parts of the organization. The MTCHO also performs a limited

number of MLE-OPS/Subpart M (Maintenance Management) and MLE-145 tasks (laid down

in the SLA between the operator and system manager).

Military Aviation Authority

MAR-OPSOperator

MAR-FCL'sTrainer flight crew

MAR-145Maintainer

MAR-147Trainer technicians

MAR-21Military Type Certificate Holder

Subpart M

AirworthinessCriteria &

Requirements

MAR-66 MAR-STD

Holder

+

MTHOE

MTHOA

MME

MOEMTOE

MAOC

MOAMTOA

FTOE

FTOA

TRTOE

TRTOA

OM

Type Design

aircraftmaintenance

licence

Certif icate ofAirworthiness

��

�� Release toService

crewlicences

Statement ofConformity

�

TypeInvestigation

Military TypeCertif icate

Certif icate ofRegistration

Registration

DRsDRs

O&ARs

DRs

DRs

SBsADsODs

ADs

SBs

ODs

ADs & ODs


29

Development of Cost Models. As a result of different pilot projects to improve control over

weapon system life cycle costs the NL DMO started a pilot project to develop a cost model.

This pilot project aims at developing a cost model for major weapon systems (CAT A) for

predicting sustainment costs as a factor in support of decision making related to availability

and performance of weapon systems during operations. First results of the pilot show that

insight in sustainment costs per weapon system is possible but with present legacy

information systems it is difficult to accurately predict costs. The basis for the cost model is a

high-level form of Activity Based Costing. At this time, the model only attributes costs to the

weapon system level (top level).

NL DMO Vision of PBL. In 2010, a vision is developed on the use and applicability of PBL

support concept from a contracting perspective within the NL DMO. This document describes

the advantages and disadvantages of PBL in relation to traditional support concepts and

strategic sustainment capacity and knowledge.

NL MOD Restructuring. Due to budget cuts the NL MOD is restructuring the Defense

organization [Hillen, 2011]. This incorporates a reduction in materiel and a restructuring of

the organization specifically in the materiel logistic field. The following aspects of the

restructuring might affect the WSM within the NL MOD:

- introduction of the management paradigm: ‘Je bent er van, dan ga je er over’. In essence

this means that responsibility and authority should be aligned.

- management relations and processes are simplified by clustering responsibilities and

establishing roles consistency,

- CDS provides budget to NL DMO and OPCO for operational task,

- NL DMO has advice function on outsourcing decisions (related to OPCO),

- OPCO determines the services required from NL DMO in relation to the operational task

and available budget,

- accountability of NL DMO to CDS, HDFC is responsible for budget oversight,

- outsourcing can contribute to the reduction of management complexity,

- outsourcing might affect core competence of the organization (balancing),

- the logistic establishments of NL DMO (for air-based weapon systems the LCW) will

transfer to the respective operational commander (OPCO),

- DWS and DP&V will transfer to the Secretary General (SG) organization of the NL MOD,

- a reduction in personnel of approximately 30% for NL DMO


30

3.5.2 WSM Characteristics and the NL DMO Organization

WSM Characteristics. The Defence Governance Model, HLD MatLog, WSM policy and

related present structure of the organization, are the basis for the WSM structure. In order to

sustain the aircraft cost-effectively the air-based weapon systems are managed in a tri-partite

consultation process (see figure 3.12) between the aircraft operator or user (RNLAF), the

maintainer (RNLAF and LCW) and the system manager (Air Systems Branch) [NL

DMO/Directorate of Materiel Policy, 2005]. Coupled to the WSM responsibilities are the

MAR’s as discussed previously.

Figure 3.12 Weapon System Management Triangle

The tasks and responsibilities of this tri-partite consultation structure and respective actors

are described in annex A. No single actor has authority over WSM. The 3 actors execute

authority on an equal basis in the WSM consultation structure.

NL DMO Organization. Annex A provides an overview of the NL MOD and NL DMO

organization. The department relevant to this research is the Directorate of Weapon Systems

(DWS). The DWS consists of 3 different branches: Sea System Branch, Land Systems

Branch and the Air Systems Branch (ASB). The Air Systems Branch is responsible for the

‘system management’ function and the MTCH function for air-based weapon systems. The

branch director is the MLE-21 Accountable Manager and MTC Holder. The ASB is divided in

three different departments based in weapon system type: helicopters, transport aircraft and,

fighter and training aircraft. These departments are divided in sections; system management,

type management, maintenance engineering and foreign liaisons, depending on the type of

product support that is required for the aircraft type. Annex A provides the functions that are

performed within the various sections. Concerning the MAR-21 environment the WSD is the

mandated MTC holder and is responsible for the MTC and sustaining the MTC.


31

Other directorates that contribute to the processes performed by the ASB are the Directorate

of Planning & Control (DP&C), the Directorate of Personnel and Organisation (DP&O) and

the Directorate of Requirements, Policy and Plans (DOBBP). The DP&C is responsible for

setting up the operational processes, managing policy planning, operational planning and the

budgetary process and providing financial support (process design, drawing up operating

plans, drawing up monthly reports for the central staff and drawing up management reports,

draws up budget). Financial Control is responsible for all measures aimed at the legitimate,

efficient and effective assignment and spending of government resources, which are

assigned to the NL MOD. DP&V is responsible for the process of providing materiel that

consists of procurement and project management, all procurement activities on a functional

level and government quality assurance. DP&O provide products and services to build up

and maintain the organization, oversees process of intake, throughput and outflow of

personal. DOBBP is responsible for corporate planning and operational requirements.

In the context of this research, the DWS Air Systems Branch is responsible for system

management of air based weapon systems (system manager) and is the Military Type

Certificate holder in relation to the Netherlands Military Airworthiness Requirements.


32

4 PROBLEM DEFINITION

4.1 Introduction

The problem definition starts with an analysis of the findings from the literature review and

field study (paragraph 4.2). Paragraph 4.3 identifies the key issues and develops the problem

specification. Based on the problem specification, TOR’s are derived for developing a

conceptual WSD organization in the design phase of this research (paragraph 4.4).

4.2 Analysis

The bases for the analysis are the findings from the literature review and field survey. First

the effects of PBL on controlling weapon system cost-effectiveness are discussed

(paragraph 4.2.1). Paragraph 4.2.2 analyses the findings related to the WSM organization

structure in a PBL environment. In paragraph 4.2.3 WSM responsibility and authority are

discussed. PBL has effects on the core competence of the WSM organization. This is

discussed in paragraph 4.2.4. PBL and AMC concepts also affect the WSM organization

culture which is discussed in paragraph 4.2.5. Paragraph 4.2.6 provides the analysis results

of the impact of PBL on the WSD organizational function, organization structure and

responsibility and authority.

4.2.1 Controlling Weapon System Cost-Effectiveness

4.2.1.1 Weapon System Cost-Effectiveness in PBL

The goal and objective of AMC is to control system cost-effectiveness. How weapon system

cost-effectiveness is achieved depends on the management control strategy. De Leeuw

[2002] defined requirements for an effective management control system. These

requirements are the basis for AMC. In AMC control over cost-effectiveness is achieved by

the LCM systems approach. Control over system logistic process (or product support

processes) results in control over system cost-effectiveness.

The products support strategy for weapon systems can vary between the traditional

approach (transaction based) at one end and Performance Based Logistics (buying

outcomes: weapon system performance) on the other end. In the traditional approach logistic

processes are performed within the government (internal focus). From a government

perspective, the PBL product support strategy has an external focus by contracting weapon

system performance and outsourcing the product support functions to a contractor, the PSI.


33

With a PBL product support concept control over system cost-effectiveness is achieved by

the way PBL is contracted. By making the PSI accountable for weapon system performance

and incentivizing performance it is assumed that the PSI decision-making process is aimed

at achieving these performance levels in the most cost-effective way over the total life cycle

of the weapon system. This should lead to increased availability and lower costs. From a

government perspective the following should be considered:

� PBL contracting period. PBL requires long term contract between the customer and

the PSI to assure long term investment in the cost-effectiveness of the weapon

system [Beggs et al, 2005]. Literature also indicates that industry proposes 3 to 5

year contracts. This limited period, from a weapon system life cycle perspective, is

coupled to the general Return on Investment (ROI) periods in industry. This might

conflict with the total life cycle perspective (system cost-effectiveness) of AMC. PSI

decision-making should be based on system cost-effectiveness over the total life

cycle (utilization) and not over the contracting period (3 to 5 yrs.). The government

needs to assure that decision-making on weapon system product support takes into

account weapon system performance and LCC over the total life cycle of the weapon

system which is usually more than 30 yrs. for complex systems like an air-based

weapon system.

� Dependency. Due to the complexity and the procurement costs of an air-based

weapon system the design organization has the knowledge concerning the weapon

system, its logistic support concept and has the data-rights. The high financial volume

for sustaining air-based weapon systems has increased the interest of industry in the

sustainment of these platforms which in turn has generated their interest in PBL

support concept. This has resulted in a limitation in product support options and

results in dependence one single contractor (PSI) for product support in a ‘full’ PBL

product support strategy.

� Sustainment Costs. The high costs of sustaining complex weapon systems (fleet of

military aircraft) results in a requirement to have control over these costs. As

mentioned in the introduction of this research the sustainment costs of complex

weapon systems over their total life cycle is more than 4 or 5 times the development

and production costs. The government needs to control costs for its taxpayers,

furthermore high taxpayer costs generates political interest.

Considering the above mentioned issues the owner’s risks, in this case the government and

specifically the NL MOD, must be minimized. The AMC approach provides insight in system

cost-effectiveness over the total system life cycle and can provide the required control over

system cost-effectiveness and by that minimize the risks on the government.


34

In a PBL environment the logistic support process are primarily managed by the PSI. In this

context the government must be able to control weapon system cost-effectiveness. Owners

risk must be minimized by effectively managing and controlling PBL. The AMC approach is

used to provide effective management control. The LPC (figure 4.1) is the basis.

Figure 4.1 AMC in a PBL product support concept

The focus of PBL is customer satisfaction by delivering installation performance within the

available budget. The Performance Based Agreement (PBA) is the basis. The PSI is

managing all logistic support processes and is accountable for installation performance and

by that for system functionality. The focus of AMC is optimizing the balance between the

operational need, and the system functionality and budget. The WSM focus is on system

cost-effectiveness, installation performance and quality of the provided products and

services. By managing performance killers, cost drivers and subsequent change proposals

for improvement, system cost-effectiveness is controlled. The AMC essential requirements

as described in chapter 3 form the basis for the above mentioned approach.

Within the NL MOD, WSM defines the strategy to control weapon system cost-effectiveness.

The definition of WSM indicates that the focus is on realizing system effectiveness against

the lowest possible life cycle costs. In practice the management control strategy within the

NL MOD focuses on controlling logistic processes (HLD MatLog) and foremost budget

expenditure. An LCM systems approach is not used. A performance based management

approach is a future objective for managing NL MOD weapon systems [HLD MatLog, 2008].

The field study also indicates that the traditional product support strategy is dominant within


35

the NL MOD with regards to air-based weapon systems (Cat A systems). Some experience

exists with PBL concepts for land vehicles (Cat B system).

The HLD MatLog is the basis for NL MOD WSM process (System Logistics): Sustaining

Materiel Readiness Management. Sustaining Materiel Readiness Management (or WSM) is

a tri-partite responsibility: system manager (WSD), maintainer (LCW) and the Operator

(RNLAF). The objective of WSM is controlling weapon system cost-effectiveness. The basis

is the Roadmap which provides insight in the requirements for weapon system performance,

operational and logistic planning and budget. Weapon system performance is measured at a

top level together with budget expenditure. As the LPC is the basis an assessment is made

based on the, for PBL, relevant LPC elements. The following is noticed when assessing the

NL MOD WSM process:

� Operational Need. The operational need of the defense organization is defined in the

AGCDS. The specifics for a weapon system are defined in the Roadmap and are

controlled by the tri-partite consultation structure.

� Budgets. The NL MOD has a strict separation between budget types. For WSM the

budget for investments (DIP), sustainment (DEP) and personnel are relevant. Control

over the investment budget is exercised by DOBBP, RNLAF and NL DMO for the

sustainment budget and HDP for personnel budget. HDFC has final authority over all

budgets and is responsible for financial control. Because WSM does not have control

over the WSM relevant budgets, WSM actors are restricted in increasing weapon

system cost-effectiveness. They do not control the decision-making process.

� Installation Performance. There is limited insight in performance killers and cost

drivers. At this time only top-level (weapon system level) insight in installation

performance is available. An information system to provide insight in system

performance (Logistic Decision Support System) is in development.

� Logistic Products and Services and Resources .The present process structure

focuses on traditional product support concepts. The HLD MatLog is not adapted to

PBL concepts.

Analysis Results:

� Goals and objective of AMC and WSM are identical. WSM is the military variant of

AMC.

� A weapon system in a PBL environment requires a management control approach

with a total life cycle perspective.

� Focus of AMC in a PBL product support environment is balancing the operational

need and the system functionality and budget.


36

� Within the NL MOD traditional product support concepts are dominant, no experience

with PBL concepts with air-based (Cat A) weapon systems.

� NL MOD management control strategy focuses at controlling logistic processes and

budget expenditure.

� NL MOD WSM processes are structured on traditional product support concepts

� The NL MOD has limited attention for cost drivers and LCC, sufficient attention for

performance killers.

4.2.1.2 WSM Production Process

The previous paragraph defined the WSM process in a PBL environment based on the LPC.

The Asset Management Program specifies the objectives. The LCM systems approach is the

basis for the Asset Management Program. Based on the AMC objective the Logistic Program

is established. The Logistic Program contains all data and information to manage the logistic

process in the most cost-effective way [Stavenuiter, 2002]. This includes weapon system

requirements, weapon system structure, logistic plans and cost estimates. By specifying and

planning the required products, processes, actors, resources and budget, the logistic

processes are managed. The LPC is the basis. The PBL concept effects the programming

method as follows:

� Processes. The following processes are relevant: the logistic support process and

management control process. The PSI is responsible for the logistic support

processes. In a ‘full’ PBL concept product support is transferred to the PSI including

responsibility and authority over these processes. For an air-based weapon system,

logistic processes like weapon system operational readiness preparation, certain

maintenance processes and supply processes remain the responsibility of the

government. These processes have a direct relation with the operational output and

are, from a strategic perspective, not outsourced. Integration of these processes

between the PSI and the government is essential. The role of the government

changes to an oversight role, the management control process aimed at directing and

controlling system cost-effectiveness. The AMC production process is used as the

basis. Figure 4.2 shows the AMC production process adapted to the PBL

environment, from a government perspective.


37

Figure 4.2 AMC in PBL production process

� Products. The prime product in a PBL construct (‘full’ PBL) is weapon system

performance. This is the objective of PBL. To achieve effective management control

the government requires insight in installation performance, product quality, PSI

service level, performance killers, cost drivers and change proposals to improve SCE.

The PBA must incorporate these requirements.

� Actors. In a PBL construct the actors and role of actors change. Paragraph 4.2.2

described the effects of PBL on the WSM actors, actor roles and WSM organization

structure.

� Resources. The PSI is primarily responsible for resourcing the logistic support

processes. For air-based weapon system resourcing on equipment maintenance, on-

base supply and operational readiness processes is the responsibility of the operator.

� Budget. Budget is provided by the government based on the operational need and

the costs per unit usage. For air-based weapon systems this is typically based on the

cost per flight hour (for a certain level of weapon system availability). PBL constructs

do affect budgeting form a government perspective: colors of money, limiting

budgeting flexibility. The unit usage is the basis for the budget which makes

budgeting straight forward and transparent compared to a traditional product support

environment.

The asset or WSM program in the NL MOD for air-based weapon systems is focused on

traditional support concepts. The Logistic Program within the NL MOD is laid down in several

documents. The bases are the policies and directives which are established to structure the

management of weapon systems: Defence Governance Model, HLD MatLog, WSM Policy

and WSM TOR’s. The System Plan contains the asset requirements and structure [NL DMO,


38

2010]. The weapon system Roadmap contains the logistic plans and cost estimated/budgets

[RNLAF, 2011]. The System Plan en Roadmap is considered an adequate basis for WSM in

a PBL environment.

Air-based weapon systems require processes to maintain operational readiness which are

performed on a Main Operating Base (MOB) resorting under the OPCO (RNLAF). These

processes focus on preparing operational ready aircraft (servicing and weapon loading), on-

equipment maintenance (maintenance executed on an airbase) and on-base supply

processes. These processes are resourced by the RNLAF.

Weapon system requirements are determined in the planning and budgeting process. The

basis is the AGCDS which leads to Business Plans and a DVO between the operator

(RNLAF) and the service provider (NL DMO). Sustainment and investment (capabilities)

budget is assigned based on this process to NL DMO. Weapon system requirements are laid

down in the Roadmap. Management of the Roadmap is performed in the tri-partite

consultation structure between the operator, maintainer and system manager. The HLD

MatLog describes role in the WSM process. The LCM system approach is not adopted within

the NL MOD WSM approach.

Analysis Results:

� Weapon system performance is the prime product of the Asset Management

Program.

� Directing and controlling weapon system cost-effectiveness is the primary process for

the government.

� Asset Management Program within NL MOD has a traditional focus.

� The NL MOD System Plan and Roadmap are considered adequate in a PBL

environment.

4.2.1.3 Analysis and Control Tools

Effective management control requires sufficient insight in weapon system performance as in

performance killers and cost drivers. The LCM model approach (AMC) plays an essential

role as it provides the insight to control system cost-effectiveness. To secure system cost-

effectiveness and minimize the risk of the weapon system owner this approach is applied in

the PBL construct as described in paragraph 4.2.1.1. Effective management control requires

a model of the system (system to be managed and the management control system). In case

of managing weapon systems the LCM model provides insight in weapon system

performance and the performance of logistic processes (cost-effectiveness) as defined by


39

Stavenuiter. The objective is controlling weapon system cost-effectiveness (figure 4.5).The

LCM model has a transparent breakdown of technical system and logistic processes.

Analyses tools must be available to assess weapon system performance and LCC. The

methods used must be agreed to by the actors. To assure that PSI decision-making is done

in a total life cycle perspective these analysis tools should provide insight in system

performance and LCC. AMC and PBL literature state that the information regarding weapon

system performance must be relevant and reliable and should be agreed upon by all

stakeholders. It must be based on an LCM model that provides a transparent breakdown

structure of the technical system and logistic processes. Figure 1.1 shows the required

information on a top-level.

Information and communication technology must provide insight in weapon system

performance to all stakeholders [Stavenuiter, 2002]. Stavenuiter defined an LCM dataset as

the basic information that is required. AMC uses Internet communication and information

technology as a basis.

Within the NL MOD the LCM model approach is not adapted. The weapon system roadmap

defines the baseline performance and budget. An LCC baseline is not established as WSM is

focused on budget expenditure. Performance is reported through monthly and quarterly

reports by NL DMO and RNLAF. Although cost models are in development to provide insight

in LCC in future, at this time rudimentary insight in LCC is only provided at a top level

(weapon system). The Logistic Decision Support System (LDSS) is in development to

provide insight in performance (availability reliability and maintainability) to a system and

subsystem level. Cost models and LDSS use legacy information system data. At this time

new business management software (SAP) is rolled out.

The NL DMO introduced SharePoint information portals to communicate information to all

relevant stakeholders (as a result of various WSM studies within the NL DMO). The portal

contains information like the Road Map, Service Level Agreements, performance reporting,

configuration management information, projects and budget information. NL DMO developed

a standard for system information portals. Business Management software for air-based

weapon systems is scattered over different information system prohibiting an integrated

overview of information (separate configuration management, maintenance management,

logistic and financial information systems). Based on the HLD MatLog new business

management software (SAP) is introduced that could provide relevant WSM information. The

capability of SAP pertaining to WSM is not known at this time.


40

Analysis Results:

� Effective WSM requires an LCM model of the technical and logistic system to control

system cost-effectiveness.

� LCM models are not in use within the NL MOD for air-based weapon systems.

� Providing relevant and accurate information on weapon system performance is limited

because of the scattered information systems for business management within the

WSM field.

� LDSS provides insight in performance killers. Cost models are in development to

provide insight in LCC.

� There is no structured approach to identify cost drivers.

� Baseline performance metrics (weapon system performance) are available on a top-

level (Roadmap).

� The use of SharePoint satisfies AMC essential requirements with regards to

information and communication technology.

4.2.2 WSM organization structure

This paragraph contains the analysis on the WSM organization structure. The findings show

that the WSM organization structure depends on the actors in the LCM team and the

contingency factors as defined in organization theory literature.

4.2.2.1 LCM Team

AMC requires a permanently assigned LCM team to control weapon system cost

effectiveness. In the AMC approach, the LCM team consists of the designer, maintainer and

operator. The roles of actors in a PBL construct change. Based on the PBL management

concept of the US DOD the LCM team concept needs to be adapted to this concept. In a

PBL construct three prime roles are identified: Operator, PSI and PSM. These actors

manage all logistic support processes. In the AMC context, the designer and maintainer roles

are affected with the transfer of logistic support functions to the PSI. Annex B provides

insight in the transfer of logistic support function in the AMC field when introducing PBL

concepts. The basis is the required organizational functions in the sustainment phase.

Within the NL WSM concept no permanent LCM teams are assigned. WSM takes place in

the tri-partite consultation structure between the operator, system manager and maintainer.

WSM is exercised by these three prime actors: operator (RNLAF), maintainer (RNLAF and

LCW) and system manager (NL DMO/DWS/ASB). Support functions are provided within the

defined organization functionality. The introduction of PBL concepts also affects the WSM

actors. When product support functions are outsourced like in a PBL concept, organization


41

functions are transferred from the NL MOD to the PSI. Based on the assessment of

organizational function transfer in the AMC field this assessment is also provided in the WSM

field. Annex B provides this assessment.

4.2.2.2 Contingency factors

The organization structure is affected by the contingency factors. Literature identifies three

factors: the organization strategy to realize the organization goal and objective, the

organization’s environment and the primary process.

Strategy. The organization structure must support achieving the organization goal and

objectives. In the case of managing a complex weapon system the product support strategy

will affect the structure of the government organization responsible for managing the weapon

system. A traditional product support strategy requires different organizational functions and

structure then a PBL product support strategy where organizational functions are transferred

to a PSI (Annex B).

Environment. In general the management of complex weapon systems is both complex in

technology as in organization and management [Ben-Ari and Chao, 2009]. Also Stavenuiter

(2002) indicates that the management of a capital asset is complex. This also applies to a

weapon system with a PBL product support concept. With a PBL product support strategy

the complexity of the AMC environment, from a government perspective can be reduced

depending on the level of PBL. With a ‘full’ PBL product support concept product support

risks are transferred to the PSI. With this transfer also product support functions are

transferred to the PSI. By transferring these products support processes, organization and

management complexity from a government perspective is reduced. When looking at the

overall AMC environment, this complexity still exists.

The AMC environment complexity affects the AMC management control system and the

management organization. Approaches like AMC are required to control weapon system

cost-effectiveness in a complex environment. By modeling the system, the weapon system

and logistic support system (LCM model), complexity is reduced (De Leeuw, 2002 and

Stavenuiter, 20020). A complex environment has a high demand on horizontal coordination

(between organization and departments) and requires decentralized decision-making [De

Leeuw, 2002, Mintzberg, 1994].

The NL MOD field study supports the findings from AMC and PBL literature. Air-based

weapon systems are characterized as complex systems from a technology perspective. This


42

also applies to organization and management complexity within the NL MOD. As indicated in

paragraph 4.2.1 traditional support concepts are dominant within the NL MOD. For the main

air-based weapon systems (fighter aircraft and helicopters) product support functions are

performed within the NL MOD. A multitude of support contracts are managed as are internal

processes like System Support Engineering (SSE), Supply Chain Management (SCM),

intermediate and depot level maintenance. The number of actors involved in WSM is multiple

as indicated in figure 4.4. It shows the actors from a WSM perspective divided in the three

prime WSM actors: the operator (RNLAF), maintainer (LCW) and System Manager (WSD).

Figure 4.3 Actors in NL MOD WSM

From an organization and management perspective the NL MOD WSM environment can be

characterized as complex.

Process. The WSM process is characterized as a reciprocal technology (organization

technology). According to Thompson [De Leeuw, 2002 and Daft, 2007] reciprocal

interdependence occurs when providing various products or services in combination to a

customer. The management of a weapon system provides various products (spare parts,

engineering support etc.) to the operator of a weapon system. Reciprocal interdependence

requires high demand on horizontal coordination and mutual adjustment as a coordinating

mechanism. This requires a horizontal organization structure [De Leeuw 2002, Daft 2007 and

Mintzberg, 1989].


43

Analysis Results:

� AMC environment is complex from a technical, organizational and management

perspective.

� NL MOD WSM environment is complex from a technical, organizational and

management perspective.

� The transfer of organization functions and management functions with a PBL product

support strategy can reduce organization and management complexity from a NL

MOD perspective,

4.2.2.3 Organization Structure

As concluded in the previous paragraph the LCM team in a PBL construct consists of the

Operator, PSM and PSI. Two of these actors are the government actors: operator and PSM.

As AMC states a permanently assigned LCM team must be established to support effective

AMC. Stavenuiter (2002) proposes a matrix or project organization structure to support AMC.

The organization structure depends on the contingency factors strategy, environment and the

primary process. The PBL product support strategy results in a transfer of functions to the

PSI. Furthermore it transfers the focus from managing the internal environment to an

external environment. Literature indicates that an organization strategy focused on the

external environment is best supported by horizontal organization structures. The complexity

of the WSM environment results in a high demand on horizontal coordination (between

actors) and decentralized decision-making [Mintzberg 1993 and De Leeuw 2002].

The WSM process was characterized as reciprocal requiring extensive coordination between

actors. The organization structure needs to support horizontal coordination and decentralized

decision-making. According to Mintzberg (1993), De Leeuw (2002) and Daft (2007) a

complex environment is effectively supported by a horizontal organization structure like a

project, matrix or network organization structure. Also the introduction of integration functions

and vertical information system support the requirement for horizontal coordination and

decentralized decision-making [Daft, 2007].

NL MOD organization structure. The DGM is the basis for the organization structure. The

main (top) structure is functionally based: policymaking, execution (Operational Command),

financial oversight (HDFC) and support (NL DMO and CDC). NL DMO has different

directorates which have a divisional structure (Logistic Establishments and Weapon

Systems). The Weapon System Directorate has a divisional structure (Land, Sea and Air

branch). The WSD’s consists of a system management, type management and

maintenance-engineering department. Most WSD´s have liaison functions at OEM and/or


44

partner nation sites for logistic support. Required functions in support of the WSD functions

are provided by various departments within the NL DMO and CLSK. The WSD has a

functional organization structure. The organization structural configuration is characterized as

a vertical organization structure.

NL MOD WSM structure. The three prime actors in WSM of air-based weapon systems are

the operator (CLSK), the maintainer (LCW) and the system manager (WSD). Each actor

fulfills its function in WSM. CLSK operates the aircraft and sets the operational requirements.

LCW is functioning as the maintenance (intermediate and depot level) organization and

provides a supply chain management (SCM) function. The WSD is responsible for the

logistic support and weapon system standards framework (maintenance, logistics and

configuration). The NL MOD WSM structure is characterized as a vertical structure.

Furthermore the organization structure is adapted to traditional product support environment.

The introduction of PBL will affect the product support functions currently performed within

the NL MOD WSM actors. Maintainer and system manager product support function will

transfer to the PSI in a PBL construct.

Analysis Results:

� WSM requires an organization structure that support high demands on horizontal

coordination and decentralized decision-making. This requirement can be supported

by horizontal organization structure like project or matrix organization, information

systems and by establishing integration (liaison) functions.

� LCM team in a PBL concept should include: the operator, PSI and PSM.

� The transfer of organizational functions affects the NL MOD organizations involved in

WSM. Product support functions are transferred to the PSI.

� Permanently assigned LCM teams do not exist within NL DMO.

� The NL MOD organization has a vertical organization structure.

� The introduction of PBL within the NL DMO will affect the organization structure

because product support functions will transfer from NL MOD to the PSI.

� PBL affects the organization structure because of the transfer of product support

functions from the government to the PSI.

4.2.3 WSM Responsibility and Authority

PBL literature specifically references responsibility and authority as an important organization

structural characteristic that is affected by PBL. Let’s first define the terms responsibility,

authority and accountability. The Business Dictionary (2011) defines these terms as follows:


45

- Responsibility. A duty or obligation to satisfactorily perform or complete a task that one

must fulfill and which has a consequent penalty for failure.

- Authority. Power that is delegated formally. Institutionalized and legal power inherent in a

particular job, function or position that is meant to enable its holder to successful carry

out his or her responsibilities.

- Accountability. The obligation of an individual or organization to account for its activities,

accept responsibility for them, and to disclose the results in a transparent manner.

First the PSI needs sufficient responsibility and authority over logistic support processes for

PBL to be effective. Secondly literature indicates that prime responsibility should be assigned

to one actor, in PBL this actor is referred to as PSM. The PSM is accountable for weapon

system performance. Organization literature supports this statement. De Leeuw (2002)

states that for an effective organization the responsibility and authority of the organization

must be balanced. When responsibility and authority are not balanced and matched to the

organizational functions the effectiveness of the organization is affected in a negative way.

Within the NL MOD, responsibility and authority are coupled to the functional structure of the

organization and is dispersed throughout the NL MOD organization. Responsibilities related

to WSM activities are based on the function of a department in the organization. The HLD

MatLog provides the structure (Annex A). Managing the sustainment of materiel readiness is

a WSM (three party: operator, maintainer and system manager) responsibility as far it relates

to the logistic support processes. The System Manager (the WSD) is contributing to the

WSM process by managing the logistic support and technical system standard framework of

the weapon system. The responsibility and authority of the WSD is further discussed in

paragraph 4.2.6. Not all authority and responsibility lies with the three actors in the WSM

construct. Planning and control, personnel, financial control and procurement are a

responsibility of other directorate in the NL MOD.

Analysis Results:

� Within the US DOD concept one single entity, the PSM, is accountable for the WSM

process (directing and controlling system cost-effectiveness).

� For an organization to be accountable the organization’s responsibility and authority

must match and be in balance.

� Within the NL MOD WSM concept WSM is a tri-partite responsibility

� Responsibility and authority are not in balance in the WSM field.


46

4.2.4 WSM Core Competence

AMC requires skilled LCM teams with skilled actors. Knowledge in team management,

system (support) engineering, process management and management control is required

[Stavenuiter, 2002]. In a PBL support environment, knowledge of PBL and PBA´s is

essential. This knowledge must be distributed through the entire organization. A basic

prerequisite for PBL is the close cooperation between the government and the PBL provider.

Team management is therefore also of importance to PBL. The PBL support concept is a

performance based environment. Knowledge concerning performance management is

required to effectively manage the PBA and the PBL provider. The transfer of organizational

functions in relation to logistic support processes in a PBL environment has an effect on the

knowledge and skill within the government. According to Koevoets (2008) also in a PBL

environment knowledge concerning PBL, weapon system utilization, and the weapon system

itself, is required from a government perspective. Sufficient knowledge of the weapon system

and its utilization within government must be maintained in order to be effective.

Earlier research within the NL DMO in the required knowledge and skill to manage a weapon

system concluded that insufficient academic knowledge on logistic engineering was available

within the NL DMO [WSM Pilot Program, 2007]. Further research (WSM Pilot Part 2, 2009)

within the NL DMO to the required knowledge and skills concluded that at least knowledge

and skills are required in 10 different areas. WSM, financial management and configuration

management are indicated as most important. Different competence levels are defined (4)

ranging from a level able to apply the defined knowledge/competence area’s to an academic

level. In 2010 an introduction WSM training program was established based on the WSM

pilot results [Introduction WSM training, 2010]. This training program does include PBL

support concepts but is very limited. As PBL effects the entire organization and required

knowledge PBL should have a more prominent role.

When assessing the effect of PBL on the core competence of the organization three aspects

seem relevant: PBL knowledge and experience within the present organization, the effects of

PBL on the core competence of the organization and the effects of PBL on MAR-21

requirements.

PBL Knowledge and Experience. At this time none of the air-based weapon systems or

subsystems has a PBL support concept. Experience in other DWS branches with PBL (on

Category A systems) is also limited [PBL Vision Document, 2010]. There is only theoretical

knowledge in PBA constructs as in managing (management control) cost-effectiveness in

such an environment.


47

Effect of PBL on Core Competence of organization. By outsourcing a significant part of

logistic processes and support functions there is a risk that the required level of skill in

relation to these support functions is no longer available within the government. As

Stavenuiter (2002) argued a certain level of knowledge is required to be able to effectively

manage weapon systems also in a PBL support environment. A minimum level of knowledge

is required to act as a competent operator of air-based weapon systems. The NL MOD has

aspiration to act as smart buyer/smart maintainer/smart operator [WSM Vision, 2009 and

TNO, 2007]. A certain level of knowledge is required to guarantee the system safety,

maintain control in the outsourcing process, maintain an equal position with the PSI in a PBL

construct, keep options open for alternative support strategies and support the operational

environment [PBL Policy Vision, 2010].

Effect of PBL on MAR-21. The MAR-21 is responsible for the weapon system type design.

The MAR’s require a certain level of knowledge and skill in the MTCHO to fulfill the MAR-21

requirements (MAR-21-237). This pertains to knowledge about the technical system

(aircraft), its support system and airworthiness of the system. The MAR’s specifically refer to

knowledge concerning human factors in relation to the aerospace field. An investigation into

the crash of a UK Nimrod aircraft showed that insufficient knowledge on the part of the

government (departments responsible for airworthiness of the aircraft) contributed to the

causes of this crash. In this case system support engineering functions were outsourced

which resulted in insufficient knowledge on the government part to adequately address

airworthiness issues.

Analysis Results:

� Managing a weapon system in a PBL environment requires skilled actors (operator,

system manager) in the weapon system (technical system), its utilization, system

support engineering, PBL, team management and management control.

� NL WSM knowledge focuses on traditional product support approaches

� Maintaining sufficient knowledge within the government in a PBL construct is a

challenge

4.2.5 WSM Organization Culture

The organization culture must support the organization structure and environment [Cameron

and Quinn, 1999]. Within an organization culture, subcultures within teams or departments

can exists which differ from the overall organization culture. In the context of this research

the organizational culture of the government is considered as important and specifically the


48

government entity which has WSM responsibilities. Typically, government organizations are

dominated by a hierarchy culture [Cameron and Quinn, 1999]. The hierarchy culture is

characterized by a large number of standardized procedures, multiple hierarchical levels and

an emphasis on rule enforcement [Cameron and Quinn, 1999]. Typical characteristics of

AMC, in relation to cultural dimensions, are: learning organization, (LCM) team approach,

and the use of skilled and experienced actors. These characteristics require a more

clan/group dominated culture [Cameron and Quinn, 1999]. Other characteristics of AMC

direct a more market oriented culture like the emphasis on control/results. The focus on

information (management) and complex, cost intensive assets in a complex environment

direct a more adhocracy cultural type. The focus in PBL is on performance (results) which

supports a more market cultural type. In PBL, cooperation (trust) between the PSI and the

government is essential. This can be effectively supported by a clan dominated culture.

The NL MOD is a military organization. Typically, a government/military organization is

dominated by a hierarchy culture [Cameron and Quinn, 1999]. Evidence for a hierarchy-

dominated culture is the large number of standardized procedures and multiple hierarchy

levels. The NL MOD is a large (70.000 people) organization with multiple hierarchy levels

(6+) and a large number of standardized procedures. Based on these characteristics it can

be concluded that a hierarchy organization culture is dominant within the NL MOD. The

findings show that a more market and clan cultural type is required to support the objective of

WSM for weapon systems with a PBL support concept. WSM in a PBL environment is a

cooperation of different government organizations and industries with their own cultures.

Organization culture is very specific for an organization, it is difficult to characterize and

difficult to change [Boonstra, 2006]. A preliminary conclusion can be drawn that a cultural

change is required (hierarchy to a more market/clan dominated culture). When introducing a

PBL concept the existing culture and required organization should be characterized.

Because organization culture is difficult to assess, further research is recommended in

determining the existing and required organization culture in support of WSM in a PBL

environment.

Analysis Results:

� Organization culture needs to support the organization strategy and organization

structure.

� The analysis indicates that a more market and clan dominated organization culture is

required.

� A preliminary assessment of the NL MOD organization culture indicates a hierarchy

dominated culture.


49

4.2.6 WSD Organization

WSD Function. Within the NL MOD WSM concept the prime objective of the WSD is

controlling materiel performance according to the HLD MatLog [2008]. The WSD is

responsible for the standards framework with respect to the weapon system, the logistic

support system and LCC. In the NL MOD WSM approach the system manager is not only

responsible for the standards framework but also for providing logistic products and services.

At present the WSD provides sustainment support contracts (services and materiel), system

support engineering services and project management services. Furthermore the system

manager is the MTCH and maintains the weapon system MTC. In the present WSM concept

a number of these logistic products and services are the responsibility of the operator.

Responsibility and Authority. Controlling materiel readiness implies that a process structure

is in place to support that process. An audit function for the WSD in the operator domain is

identified as a future objective of the HLD MatLog. As discussed previously WSM is a tri-

partite responsibility. The standards framework is set in the WSM tri-partite consultation

structure. The responsibility and responsibility for the MTCH function is clearly defined and

structured. The MAA grants privileges to the MTCH based on an MAA approved MTCH

Organization Exposition (MTCHOE). Responsibility for the MTC has to be structured within a

NL MOD organization as defined in the MAR-21. The MAR-21 requirements also affect the

PBL product support concept. Because the MAR-21 responsibility and authority can only be

assigned to a NL MOD organization prohibits the transfer of certain product support functions

to the PBL provider.

WSD organization structure. In a PBL concept product support functions are transferred from

the government to the PSI. This transfer of functions also affects the WSD because the WSD

is responsible for a number of support functions.

Analysis Results:

� WSD is responsible for the standards framework and the MTC.

� The WSD provides logistic products and services which are the responsibility of the

operator in the present WSD concept.

� The transfer of product support functions to the PSI affects the WSD.

� MAR-21 prohibits transfer of product support functions to PBL provider.

� MAR-21 responsibility and authority are clearly assigned and defined.


50

4.3 Problem Specification

Based on the findings in paragraph 4.2 the key issues are identified and a problem

specification is developed.

The analysis results show that LCM systems , as applied in the AMC approach, is required to

control weapon system cost-effectiveness in a traditional product support concept and as

well in a PBL product support concept. The requirements for effective control of De Leeuw

(2002) and for capital assets specifically the pre-conditions for effective control from

Stavenuiter (2002) are required to effectively manage a system (weapon system). The LCM

systems approach is not adopted in the existing NL MOD WSM concept. LCM models of the

weapon systems and its logistic support processes, based on the technical and logistic

breakdown structure are not in use, as a structured approach, to identify performance killers

and cost drivers. Insight in weapon system performance and costs is only available on a top

(weapon system) level. This leads to the following problem specification:

1. The lack of an LCM systems approach in the NL MOD WSM concept limits effective

control of weapon system cost-effectiveness

The environment and process for managing an air-based weapon system results in a high

demand in horizontal coordination and decentralized decision-making. Furthermore AMC

asked for a permanently appointed LCM team, preferably in a project or matrix organization

structural configuration. The NL MOD organization structure has a vertical organizational

configuration (functional and divisional). This also applies to the way WSM is organized.

WSM teams are not permanently appointed teams as required in AMC. A vertical

organization configuration does not support the high demand on horizontal coordination and

decentralized decision-making which is required in a WSM environment.

2. The existing NL MOD WSM organization structure is not adapted to the WSM

environment and the WSM in PBL process and limits the effectiveness of the NL

MOD WSM organization.

Furthermore, the transfer of organization functions which comes with the introduction of PBL

product support concepts will affect the existing organizational functions in the WSM field

which are based on traditional support concepts for air-based weapon systems. This

specifically applies to the WSD organization. A significant part of the organizational functions

in the WSD will transfer to the PSI. This leads to the following problem specification:


51

3. The WSD organization structure is not adapted to a PBL product support concept.

Organizations in general and PBL specifically requires a balance between responsibility and

authority for an organization to be effective. Managing PBL requires a prime entity (within the

US DOD concept the PSM) that is responsible and has authority over weapon system

performance and is managing the PSI. In the NL MOD WSM concept, WSM authority is a

three party concept while responsibility is connected to organizational functions.

4. Responsibility and authority in the WSM field is not balanced leading to decreased

effectiveness of the WSM organization.

The WSD is responsible for a significant part of the product support functions in the NL MOD

WSM concept while the WSD has no authority over these product support functions.

5. The WSD authority and responsibility is not adapted to the PBL product support

concept.

In addition the PSI requires sufficient responsibility and authority over logistic processes to

effectively managing PBL. The MAR-21 provides restrictions with structuring responsibility in

a PBL construct. Delegation of MAR-21 responsibilities to an organization outside the NL

MOD organizational is not allowed.

6. The MAR-21 requirements prohibit the transfer of product support functions with

corresponding responsibility and authority to the PSI.

The PBL concept will change the roles within the NL MOD WSM tri-partite construct requires

a different set up of the consultation structure within the NL MOD WSM approach. The

existing WSM concept and consultation structure is constructed on traditional product

support concept and has an internal focus. In a PBL concept the maintainer role within the

NL MOD is fully integrated in the PSI role. WSD and operator (MAR-OPS/Subpart M) product

support functions are partly transferred to the PSI as well. The PSI has a prime role in PBL

and needs to be incorporated in the consultation structure. Prime responsibility in the tri-

partite consultation structure must be assigned to the prime entity responsible for managing

the PSI.


52

7. The existing WSM consultation structure is not adapted to a PBL product support

concept.

WSM in a PBL product support concept requires skills in PBL concepts and management

control. Within the NL MOD, specifically in the air-based weapons system field, the

experience with PBL concepts is limited. Management control (controlling system cost-

effectiveness) is limited to traditional support concepts.

8. There is insufficient knowledge and experience in PBL concepts for air-based

weapon systems within the NL MOD.

With a PBL product support concept, product support functions are transferred to the PSI. As

a result of this transfer of product support functions also the subsequent skill to execute

these functions is transferred to the PSI. The government must retain sufficient knowledge

and skills to effectively manage weapon system performance and to comply with the

applicable MAR. Within the NL MOD retaining knowledge and skill refers to the smart

buyer/smart maintainer concept. Maintaining sufficient knowledge and skill in a PBL

environment is a challenge. For the WSD specifically knowledge of the weapon (technical)

system is required to manage the weapon system MTC.

9. Maintaining sufficient knowledge and skills on the weapon system, its utilization and

logistic support within the NL MOD for WSM in a PBL product support concept is

difficult.

Considering the identified key issues the following improvement factors can be identified for

managing an air-based weapon system with a PBL product support concept:

1. effective control of weapon system cost-effectiveness

2. effective WSM and WSD organization structure

3. responsibility and authority structure

4. WSM consultation structure

5. WSM knowledge and skills.

4.4 Terms of Reference

The previous paragraph identified the key issues and the subsequent improvement factors in

relation to the research question. The assessment of the TOR’s is based on the analysis and

problem specification in the previous paragraphs. The TOR’s contain the requirements that a


53

future WSM and WSD organization design within the NL MOD must meet to effectively

control weapon system cost-effectiveness in a PBL environment. The objective is controlling

weapon system cost-effectiveness. The TOR’s are structured based on the improvement

factors as defined in the problem specification.

1. Effective Control Weapon System Cost-effectiveness

The problem specification determined that the lack of an LCM systems approach limits the

control of weapon system cost-effectiveness within the NL MOD WSM concept. As the

analysis indicated AMC can be applied to control weapon system cost-effectiveness in a PBL

environment. To control system cost-effectiveness an LCM systems approach is required to

provide insight in system effectiveness and cost. A program must be established to

determine performance killers and cost drivers for improving weapon system cost-

effectiveness.

� Adopt AMC approach to manage weapon system cost-effectiveness

2. Effective WSM and WSD Organization Structure

The existing NL MOD organization structure is not adapted to the high demands in horizontal

coordination and the requirement for decentralized decision-making that the WSM

environment and the WSM process require. The existing organization has a hierarchical set-

up. This hierarchical configuration is required to manage a large organization like the NL

MOD [De Leeuw, 2002]. The NL MOD WSM organization structure needs to be adapted.

This can be done by creating integration functions between organizations, information

systems or creating a horizontal organization structure like a matrix or project structure. In

this organization structure essential WSM organizational functions should be incorporated.

Also adapt the organization to support weapon systems with a PBL product support concept

taking into account the requirement for PSM functionality and a transfer of product support

functions to the PSI.

� Adopt a horizontal WSM organization structural configuration to support WSM in a

PBL construct.


54

WSM in a PBL construct requires coordination between the PSM, PSI and operator. These

actors operate in the same complex WSM environment and process that puts a high demand

on horizontal coordination and decentralized decision-making. The coordination between the

government entity (PSM and operator) and the PSI can be supported by creating integration

function.

� Create integration functions to support coordination between the government and the

PSI.

The role of the WSD depends on the WSM concept and the organizational function that are

transferred to the PSI. The WSD function depends partly on the selected WSM concept and

can differ per weapon system. The WSD organization structure should support its intended

function within the NL MOD WSM construct.

� Adapt the WSD organization structure to the intended function in the NL MOD WSM

concept

3. Responsibility and Authority structure

The problem specification states that one single organization entity should have the

responsibility and authority to direct and control weapon system cost-effectiveness in a PBL

product support concept (in the US DOD concept the PSM). For this organization entity to be

effective, responsibility and authority should be balanced and matched to the functionality of

this organization. Therefore WSM responsibility and authority should be assigned to one

single actor within the NL MOD WSM organization.

� Assign WSM responsibility and authority to one single actor within the NL MOD WSM

concept

Depending on the role of the WSD in the NL MOD WSM approach the WSD responsibility

and authority need to be balanced and matched to the function of the WSD organization.

� Assign and match the WSD responsibility and authority to the WSD organizational

function.

4. WSM Consultation Structure

The present WSM tri-partite consultation structure has an internal focus. In PBL, the PSI role

can be executed by a contractor as well as the government. The WSM consultation structure


55

should incorporate the PSI role. Prime responsibility and authority in this consultation

structure must be assigned to one single actor in accordance with the previous TOR. Adapt

tri-partite consultation structure (and underlying consultation structure) to the WSM in PBL

environment by incorporating PSI and assign responsibility and authority to one single actor.

� Adapt the NL MOD WSM consultation structure to the PBL environment. Include the

PSI in the WSM consultation structure and assign WSM responsibility and authority to

one single actor.

5. WSM knowledge

Managing a weapon system in a PBL construct requires additional skills: PBL/PBA and

management control knowledge. These subjects should be made an integral part of the

WSM training classes which are provided at this time.

� WSM actor skills in PBL and PBA concepts and in management control in a PBL

concept are required.

Maintaining knowledge on the weapon system, its utilization and logistic support is a

challenge in a PBL environment. NL DMO should maintain a proficiency level in the weapon

system, weapon system utilization, system support engineering and logistic support

engineering. Organize the WSM field to maintain WSM core competence in a PBL

environment.

� The NL MOD WSM field must be organized to maintain skill in the weapon system

(technical), weapon system utilization, system support engineering and logistic

support engineering in a PBL product support concept

Organization Culture and Style are relevant for an effective organization. Because

organization culture is difficult to assess and change, organizational cultural aspect not in the

scope of this research and are recommended for further research.


56

5 DESIGN

5.1 Introduction

This chapter contains the conceptual design of the WSD organization for an air-based

weapon system with a PBL support concept within the NL MOD. In order to design the WSD

the role of the NL DMO and subsequently the role of the WSD within the NL MOD WSM

concept must be defined. As mentioned in Chapter 2, the F-35 (Joint Strike Fighter) might be

the first Cat A weapon system within the NL MOD with a ‘full’ PBL support concept and is

used as a case study subject in this research. Paragraph 5.2 determines the design

approach. The design phase starts with developing the F-35 WSM concept focusing on the

objective of WSM, controlling weapon system cost-effectiveness (paragraph 5.3). The F-35

WSM concept provides the input to develop the NL MOD WSM organization (paragraph 5.4).

The role of the WSD is determined in paragraph 5.5. One of the design principles and

requirements of De Leeuw is the participation of stakeholders in the design [De Leeuw,

2002]. Paragraph 5.6 contains the reflection with stakeholders of the conceptual WSM and

WSD design.

The introduction of the F-35 within the NL Defense organization is expected around 2019

pending the final decision to replace the F-16 fighter. The F-35 is in the System Design

Development (SDD) phase as in the Production Sustainment and Follow-on Development

(PSFD) phase. This concurrency in life cycle phases is also applicable in the development of

the F-35 sustainment concept. As the first aircraft start operations at this time the

development of the system and sustainment concept is still in progress. The fact that the

sustainment concept has not fully materialized affects the design of the conceptual NL F-35

WSM concept and WSD organization. This case study will also identify recommendation to

support the development of the F-35 sustainment concept.

The F-35 Air System (AS) consists of a weapon system but also a training and support

system including the F-35 business management and support software (Autonomic Logistic

Information System). This research focus of WSM is on the weapon system (Air Vehicle)

itself and does not include the training system. It is recognized that the AS also incorporates

the training system and that the training system could be incorporated in the WSM approach

according to the proposed enlarged AMC scope as mentioned by Stavenuiter (2002). An

enlarged WSM scope for the F-35 Air System is proposed as further research.


57

The requirements in the TOR are the basis for the design phase. The WSM and WSD design

uses AMC as the starting point. As identified in the TOR’s, AMC is applied to control weapon

system cost-effectiveness in a PBL environment. Annex D shows the AMC business

realization. This six step approach is used to organize WSM for the F-35 weapon system.

5.2 Organizing F-35 WSM

5.2.1 Get Organized

The system elements and data and products flow for managing the F-35 weapon system

need to be structured. Stavenuiter (2002) defines four elements:

1) Functional Breakdown structure of the technical system (paragraph 5.3.1.1)

2) The Logistic Process structure (paragraph 5.3.1.2)

3) Structuring the LCM team (paragraph 5.3.1.3)

4) The information and communication system (paragraph 5.3.1.4)

5.2.1.1 F-35 Air Vehicle (AV) Functional Breakdown Structure

This step requires a functional breakdown of the AV. A functional breakdown of the AV is

already in development within the F-35 program. In the F-35 program, the Operational

Requirements Document (ORD) defines the required missions to be executed with the F-35

[US Services, 200X]. Based on these missions the mission types are defined. To define the

Mission Capability of the AV a Mission Essential Function List (MEFL) is developed. This

MEFL couples F-35 systems, subsystems, function level, Line Replaceable Component

(LRC) and sub-LRC to a mission type with Equipment Operational Capability (EOC) codes.

The following mission types are defined:

� Optimum Performance Capable (OPC) Mission

� Full Mission Capable Mission

� Air to Air Mission

� Air to Ground Mission

� Strike Fighter Mission

� Expanded Mobility Mission

� Instrumental Meteorological Conditions (IMC) Mission

� Safely Flyable (Visual Meteorological Condition, VMC) Mission

Information from the Off Board Prognostic Health Management (OBPHM) system and the

Computerized Maintenance Management System (CMMS) is provided to the MEFL structure

to determine mission capability. Mission capability status links to the performance metrics as

defined in the PBA. Performance is measured and monitored by the Sustainment

Performance Management System (SPMS).

Petrick Spitters

The basic MEFL and the mission capability types are still in development as is the MEFL per

F-35 variant. The MEFL provides a structured appr

structure of the AV. The MEFL must be scoped for the purpose in this case WSM in a PBL

construct concerning the depth of the breakdown structure. The AV subsystem level

(installation performance) is sufficient for the purpo

the weapon system.

Design Results:

� The MEFL concept must

F-35 weapon system (Air Vehicle).

5.2.1.2 Logistic Process Structure

This step defines the Logistic Proce

defined per installation/system level. In the PBL concept the logistic process structure is

simplified compared to traditional support concepts. The actors in the F

management approach are based on the US DOD PBL product support business model as

described in figure 3.2. The JSF Program Executive Officer (PEO) has the program manager

role and the JSFPO Director of

the PSI’s for respectively the propulsion system and Air Vehicle. Both PSI’s are supported by

Products Support Provider’s (PSP). These PSP’s can be from industry or a government

depot facility (global). Based on this concept an Actor Relation Definition is constructed. In

the F-35 program two prime actors are defined: LMAero (PSI for the Airframe) and P&W (PSI

for the propulsion system). Two support actors are identified: the

PSI’s) and the operator of the aircraft related to aircraft operational readine

activities, organizational level maintenance and on

control actor is the PSM (JSFPO). The actor relationship model for the F

system is defined as in figure 5.

58


35 variant. The MEFL provides a structured approach to the functional breakdown



is sufficient for the purpose of the MEFL in relation to managing

must be used to develop a functional breakdown structure of the

35 weapon system (Air Vehicle).

Logistic Process Structure

This step defines the Logistic Process Structure. The prime, control and support actors are


simplified compared to traditional support concepts. The actors in the F-35 sustainment

are based on the US DOD PBL product support business model as


role and the JSFPO Director of Sustainment (DoS) has the PSM role. P&W and LMAero are

ctively the propulsion system and Air Vehicle. Both PSI’s are supported by



35 program two prime actors are defined: LMAero (PSI for the Airframe) and P&W (PSI

for the propulsion system). Two support actors are identified: the PSP’s (managed by the

PSI’s) and the operator of the aircraft related to aircraft operational readine

activities, organizational level maintenance and on-base (last mile) supply activities. The

control actor is the PSM (JSFPO). The actor relationship model for the F-35 Air Vehicle

system is defined as in figure 5.1.

Figure 5.1 Actor Defi

AMC MSc


oach to the functional breakdown



se of the MEFL in relation to managing

be used to develop a functional breakdown structure of the

ss Structure. The prime, control and support actors are


35 sustainment

are based on the US DOD PBL product support business model as


role. P&W and LMAero are

ctively the propulsion system and Air Vehicle. Both PSI’s are supported by



35 program two prime actors are defined: LMAero (PSI for the Airframe) and P&W (PSI

(managed by the

PSI’s) and the operator of the aircraft related to aircraft operational readiness preparation

base (last mile) supply activities. The

35 Air Vehicle

Actor Definition Model F-35


59

The logistic process structure requires a cost structure. The cost structure for the F-35 is

based on the PBL arrangement: cost per flight hour for an agreed level of performance

(PBA). Assigning costs in a PBL concept to a system/installation is difficult because the PSI

is contracted based on a cost per flight hour for the F-35 weapon system. To ensure cost-

effectiveness (over the total life cycle) of the F-35 weapon system is necessary to gain

insight in cost drivers and subsequently it is required to assign costs, which an actor

generates, to a system/installation. The PSI (PBL provider) needs to provide this insight in

costs. The cost structure is further explained in paragraph 5.3.1.4.

Design Results:

� A general actor definition model is determined based on the PBL product support

approach.

� Assigning costs an actor generates to a system/installation needs a special

arrangement with the PSI’s.

5.2.1.3 F-35 LCM Team

The F-35 sustainment concepts defines the roles and responsibilities of the different actors

based on the US DOD PBL management approach [PSM Guidebook, 2011]. The NL MOD

WSM approach must adapt to the F-35 sustainment management. Annex E of this research

discusses the role of the JSFPO concerning F-35 sustainment management. In the F-35

performance-based management concept JPO has the program management and PSM role

for the global F-35 fleet. The F-35 program management governance structure secures the

involvement of the partners in the program and their influence on sustainment management,

strategies, policy and plans through the advisory groups and councils (SAG, ALAC and

JESB). The JSFPO Director of Sustainment (DoS) is the F-35 PSM and is accountable for

weapon system performance. The PSM directs and controls weapon system cost-

effectiveness. Figure 5.2 shows the F-35 global fleet LCM team from a sustainment

perspective.

Figure 5.2 F-35 LCM team

JSFPO/DoS

Participant LMAero and P&W


60

LMAero and P&W are identified as the PSI’s and are accountable for weapon system

performance. The participants are the Services operating the F-35 weapon system.

The NL MOD is responsible for WSM of the NL F-35 fleet. This responsibility is exercised

through the JPO. The NL F-35 WSM organization and integration with the global sustainment

organization is described in paragraph 5.4.

Design Results:

� The global F-35 fleet LCM team consists of the JSFPO PSM, the PSI’s and the

respective F-35 weapon system operators.

5.2.1.4 Information and Communication

The required management information is defined and the way this information is

communicated. Information systems can support the high demand on horizontal coordination

and decentralized decision-making in a WSM environment.

Information. From an AMC perspective the following information needs to be available for

WSM:

o Weapon System Effectiveness

o Costs

o Performance Killers

o Cost Drivers

o Change Proposals

o Actor Performance (products and services)

Weapon System Effectiveness. The F-35 information system is part of the Air System and

highly integrated with the AV. The Autonomic Logistic Information System (ALIS) supports

the mission planning, mission preparation, maintenance and supply chain management

processes. The basis is the AV Prognostic Health Management (PHM) and Off Board PHM

(OBPHM) system. The AVPHM system generates Health Reporting Codes (HRC) and

system health data. This data feeds to the OBPHM system to determine weapon system

status and health. Data from the CMMS and the PHM system is used to measure, monitor

and improve reliability and maintainability (R&M) of F-35 systems, sub-systems and LRC’s.

The basis is the data ALIS provides to the Sustainment Performance Management System

(SPMS). SPMS uses this data to determine the performance metrics in different tiers (to a

sub-system level). The focus is on PBL metrics as agreed to in the PBA. The following

performance metrics are defined in the F-35 program so far:


61

- Readiness and Availability

� Air Vehicle Availability (AVA)

� Mission Capable (MC)

� Full Mission Capable (FMC)

- Mission Effectiveness (ME)

- Sorties Flown

� Percentage Sorties Flown (PSF)

� Percentage Flight Hours Flown (PFHF)

- Logistic Level of Effort

� Cannibalization Per Thousand Flight Hours (CANSPTFH)

� Maintenance Man Hours per Flight Hour (MMH/FH) aggregate

� Maintenance Man Hours per Flight Hour (MMH/FH) subsystems

For the F-35 propulsion system additional metrics are defined:

- Readiness/Availability

� Engine Not Mission Capable (E-NMC)

� Time on Wing (TOW)

- Mission Effectiveness

� Engine Mission Abort Rate (EMAR)

These performance metrics comply with the basic information requirements as defined within

AMC with regards to system effectiveness. System effectiveness information is provided on

different levels (installation, system, subsystem level) providing sufficient information to

assess system effectiveness in relation to the PBA. However, the performance metrics focus

on the performance of the PSI’s in relation to the PBA. These metrics do not provide integral

insight in weapon system performance and cost-effectiveness. With regards to performance,

certain maintenance activities (depot level maintenance, government induced

cannibalizations) are excluded from the metrics as is the first-last mile transport in the supply

chain. Metrics need to be clearly defined and agreed upon to assign responsibility clearly and

transparently. Overall performance for the AV needs to be defined including the performance

outside the boundary of the PSI.

Costs. The basis for the cost structure in the F-35 program is the cost per flight (PBL). Within

the program a model is in development which provides insight in the costs per flight hour


62

($/FH). Table 5.1 provides the present cost structure. Defining sustainment costs in this

phase of the program is difficult. The F-35 program is in three life cycle phases: design,

production and sustainment (includes follow-on development). The design phase of the F-35

Air System is not expected to be finished before 2017. This also applies to the sustainment

concept. The sustainment concept will gradually change from a traditional approach to a full

PBA concept [PBL Transition Plan, 2010]. A full PBL support concept should be in place

around 2017. As the information in the table shows the way costs are assigned to a specific

fleet of aircraft is in development. Costs incurred by the operator regarding sustaining the F-

35 and the NL DMO for system management activities must be incorporated in the cost

structure to manage LCC. Furthermore, the main parts of costs are laid down in the cost per

flight hour. In the present cost structure these costs cannot be assigned to a specific

system/installation.

Table 5.1 Cost Structure F-35 Program

Program Element Partner Environment

Shared Mature Basis

Propulsion and Aircraft AV Lot Cost Partner Specific

Spares Common Yes TBD

Variant Specific Yes TBD

Sustainment Integration Yes Composite Share

Ration (CSR)

Training Equipment No Partner Specific

Support Equipment Non-pooled No Partner Specific

Pooled Yes TBD

ALIS Hardware No Partner Specific

ALS Manpower Yes TBD

DMS TBD TBD

Depot Stand-up Yes CONUS – US

OCONUS - Partners

Programming Lab Yes Equal Shares

Follow-On Development Design Yes CSR

Implement No Partner Specific

PBL TBD TBD

Performance Killers. In the F-35 sustainment concept performance killers are actively

identified. The basic maintenance concept of the F-35 is on-condition maintenance

[Maintenance Concept, 2008]. This is supported by an AVPHM and OBPHM system. Data

from the CMMS and the PHM system is used measure, monitor and improve reliability and

maintainability (R&M) of F-35 systems, sub-systems and LRC’s. The F-35 R&M program is


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defined in the Sustainment Management Strategy [JSFPO, 2010] and R&M Program Plan

[LMAero, 2006]. Force Life Management (FLM) programs for sustaining the AV and

propulsion system are being developed [LMAero, 2006].

Cost Drivers. The identification of cost drivers in the F-35 concept is not defined yet.

Basically identifying cost drivers and reducing sustainment costs is the responsibility of the

PSI’s in the PBL construct (incentive on $/FH target costs). As mentioned previously the LCC

perspective of WSM needs to assured in the PBL concept. At this time 3 yearlong PBL

contracts are foreseen in the F-35 program. Decisions with regards to weapon system

sustainment costs must be taken based on a total (30 yr.) life cycle perspective. To assure

that decision-making takes into account the total life cycle of the F-35, business rules must

be identified with the prime contractors (LMAero and P&W) on assigning costs, the

identification of cost drivers, the subsequent decision-making process and the effect on the

PBA.

Change Proposals. A change management program is defined [JSFPO Configuration

Management Plan, 2010]. Within the F-35 program change management concept,

Engineering Change Proposals (ECP) and Change Requests are identified. ECP’s and

change proposals are approved in the Joint Configuration Control Board (JCCB). Both are

boards are chaired by the JSFPO. The program partners have voting rights in both. The

impact of a change on the LCC of the F-35 is partly integrated in the change proposal

process. Propulsion related change proposals identify LCC and propulsion system

performance impacts. LCC and impact on performance information is limited in AV change

proposals. JSFPO plans do not require system performance and costs impact as a basic part

of the change proposal package at this time.

Actors Performance. In the previous paragraphs the different actors in the program are

defined. The PSI is measured and monitored inherently in the defined performance metrics.

If the PSI performance in the area of supply management is inadequate this will be reflected

in the PBA metrics. Other measures for actor performance are not defined at this time. The

support organization (ALGS and LST) is a combined government/industry organization. This

could lead to discussions on weapon system performance accountability. Clearly measuring

and monitoring performance of this organization and a clear structuring of responsibility are

required to manage this organization and the effect it has on weapon system performance.

The prime source for information is ALIS. Performance information is provided by SPMS.


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Communication. Information concerning the NL weapon system is communicated through

Weapon System Portals. Within the NL DMO standard WSM portals are defined. The content

of a Weapon System Portal is mandatory [NL DMO, 2010]. Figure 5.3 shows the standard

portal set-up.

Figure 5.3 NL DMO Weapon System Portals

The pre-described portal content includes:

o System Plan

o Roadmap

o Materiel Readiness

o Sustainment Costs

o Operational Plan

o Defence Staff

o Transfer Protocols

Based on this research the following information is included to the Portal:

o F-35 AV LCM model

o PK/CD information

o Airworthiness (Continuing Airworthiness information)

o Configuration Management

o Processes and Procedures

o Contract Information (SDD MOU, PSFD MOU, LRIP contract)

o Consultation Forums (Sustainment Performance Reviews etc.)


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Performance in relation to the PBA is available through the SPMS. It is foreseen that the

F-35 Weapon System Portal can link directly to ALIS and SPMS.

Design Results:

� There is sufficient information (ALIS and SPMS) to determine weapon system

effectiveness and to determine performance killers.

� The F-35 information system and program does not support the identification of cost

drivers. At this time the sustainment cost structure is immature.

� Change proposals are developed to improve system effectiveness and reduce LCC.

The supporting information regarding improving LCC are not always available

� Actor Performance is implicitly measured in the PBL performance metrics. More actor

performance metrics could be developed by measuring service levels (e.g. AR

throughput and turnaround time).

� SharePoint should be used to communicate information to stakeholders.

� SPMS is available to assess performance to the PBA agreed performance levels.

� The F-35 information system does not provide an integral overview of F-35 AV

performance.

5.2.2 Get Oriented

In this phase a qualitative analyses is made to establish the logistic baseline and

organization to manage the F-35 in the operational life cycle phase. The basis for the

analysis is the LPC.

Operational need. The AGCDS defines the operational need. Through the NL MOD Planning

and Budgeting process (MOD BPB Process, 2010) the operational need is translated in

operational requirements and the subsequent required budget. The F-35 Roadmap contains

the F-35 baseline and actual operational requirements. The Roadmap consists of

Operational Activity Calendar (OAK) and the Weapon System Business Plan (BP F-35). The

OAK contains the AGCDS activities related to the F-35 weapon system, Planned Flying

(JOP), Special Events (activities not specifically defined in the OAK or AGCDS) and holiday

planning. The BP-F-35 contains the specific requirements for materiel (flight hours, SGR,

Performance requirements and OTI), personnel (Aircrew and Maintenance) and finance

(budget). It must be noted that the performance requirements defined in the Roadmap are

not equivalent to the performance requirements in the PBA. The performance requirements

in the roadmap are translated by the NL PSM in PBA performance requirements and


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performance metrics for the non-PBL related actors like operational readiness, supply,

maintenance (O and O+), weapons and munitions.

Pre-conditions and limitations are established in the PBA related to the number and

qualifications of maintenance personnel, the user profile of the F-35 (flight envelope, mission

profiles) and logistic limitations (return times). These requirements are incorporated in the

Roadmap and managed by the NL WSM team.

System functionality and Installation Performance. The system functionality fulfills the

operational need. Stavenuiter (2002) defined an LPC short list for the operational life cycle

phase (Achieve cost-effectiveness). Based on the attributes identified in this short list the F-

35 system functionality is evaluated. System functionality is described by the system

definition data and system characteristics data. For an air-based weapon system

airworthiness certification is a legal requirement and has a significant influence on the

design. Airworthiness certification requirements are therefore added to the system

characteristics data. The results of the System/Installation Definition and Characteristics data

analysis are given in Annex F. Sufficient information is available to establish the baseline

system functionality and installation performance.

Logistic Products and Services, Activities and Actors. In the F-35 product support concept

(PBL) the PSI is responsible for logistic products, activities and services. Several support

processes remain the responsibility of the operator (RNLAF). The following products and

services are identified:

� aircraft readiness preparation (aircraft preparation, munitions, ordnance, fuel)

� operational maintenance (O and O+ level)

� supply processes (on-base, last-first mile)

� Armament preparation and maintenance

� Non-peculiar SE sustainment

Resources. In the F-35 product support concept the PSI is responsible for resources with the

exception of the logistic products and services the operator provides (operational readiness,

maintenance and supply). Personnel to support these processes are provided by the RNLAF.

Resourcing these logistic services, directly impacts weapon system performance. To assure

proper resources that need to be provided by the operator the PSI (LMAero and P&W) has

added requirements in the PBA. The NL WSM organization is responsible to monitor and

assess and control RNLAF performance to these requirements.


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Budget. In paragraph 5.3.1.4 the cost structure for sustaining the F-35 was presented. This

cost structure is still in development. In the program a transition phase is defined from a

traditional cost structure, based on products and services, to a PBL cost structure. This cost

structure depends on the PBL concept that is agreed upon in relation to the product support

risks that are (or will be) transferred to the PSI’s. This should be a balanced approach

meaning that with a transfer of risk to the PSI also the corresponding responsibilities should

be transferred to the PSI.

At this time the cost structure is a hybrid between PBL and a traditional approach. Costs are

calculated based on the $/FH, on CSR basis and for specific services (based on man-hours).

Within the NL MOD sustainment costs are part of the DEP budget. The DIP contains the

budget for new requirements (e.g. capability upgrades). Personnel costs are in the Personnel

budget. For a NL WSM to be effective the WSM organization should be able to control all

three budgets with respect to sustaining the F-35.

Design Results:

� The operational need (AGCDS) and operational requirements (Roadmap) can be

defined.

� System and installation definition data is available and sufficient to establish baseline

performance.

� PSI Logistic products and services are implicitly defined in PBL performance metrics.

� Operator logistic products and services are known and can be defined.

� Resources are primarily provided by the PSI. Operation support is provided by the

operator.

� Budget is based on the in the PBA agreed performance levels and subsequent costs

per flight hour. Because the program is in a transition phase to a ‘full’ PBL product

support concept, insufficient information is available to define baseline costs (LCC) at

this time.

5.2.3 Get Practiced

The objective of this phase is to provide a training program for the actors in the NL WSM

organization. As a result of the WSM pilot projects (phase 1 and 3) an education program is

established for actors in the WSM field [WSM pilot, 2009]. This education program should be

adapted based on the following:

PBL/PBA Knowledge. The level of PBL as introduced with the F-35 is one of the most

advanced forms of PBL: contracting weapon system performance. All actors within the NL

WSM team should have specific training in PBL/PBA concepts. The WSM Introduction


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course should include PBL/PBA concepts. At this time PBL/PBA is part of the Sourcing

element in this training course and is limited in scope. Specific training in PBL/PBA concepts

should be provided to F-35 system actors in the NL WSM team. As the introduction of the F-

35 is not expected for at least 8 years it is recommended to start with PBL concepts on a sub

system level on other air-based weapon systems to gain PBL experience

Management Control. The focus in a PBL product support concept, from a government

perspective, is increased management control. The training course should provide insight in

the requirements to achieve effective management control in a PBL environment. This

should include PBL management concepts including the responsibility and authority of the

various actors (PSI, PSM).

Weapon System and Weapon System utilization. Knowledge of the weapon system

(technical) and its utilization (operational) is essential to act as a smart buyer/smart

maintainer [GFR Smart Buyer/smart maintainer report, 2007].

Weapon system utilization knowledge is typically available in the operator field. Knowledge in

the utilization of the aircraft is required for managing weapon system requirements and

capabilities. Weapon system utilization directly links to performance metrics agreed to in the

PBA. Therefore this knowledge is not only required on an operator level but also at WSM

level. By working in a cross-functional team (like the proposed WSM organization structure)

this knowledge is shared in the WSM team.

Knowledge on a weapon system technical level is required in WSM and specifically for the

Military Type Certificate Holder. The F-35 program should develop a training program on an

academic level to provide the F-35 WSD with sufficient weapon system technical knowledge.

To maintain skill in the technical system certain NL personnel must be positioned within the

F-35 program (JSFPO and ALGSo) in this field as a Cooperative Partner Position (CPP) as

agreed upon in the PSFD MOU.

Logistic Support Engineering. WSM requires Logistic Support Engineering on an academic

level (identified as a key knowledge area in the WSM pilot). This knowledge is also required

in the smart buyer/smart maintainer perspective [GFR Smart Buyer/smart maintainer report,

2007]. Within the F-35 program a specific F-35 training program in logistic support

engineering should be developed. To maintain skill in logistic engineering NL personnel must

be positioned in the F-35 program (JSFPO and ALGSo) in this field as a CPP as agreed

upon in the PSFD MOU.


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Knowledge Sustainment in a PBL environment. Maintaining knowledge in a PBL product

support concept is a challenge because product support functions are outsourced to the PSI

as is the case for the F-35. This could result in less effective management control from a

government perspective. Skilled WSM team actors are a requirement in cost-effective

management of a weapon system. To mitigate this possible gap in knowledge the following

can be considered (further research is required):

- CPP positions: identify CPP position critical to sustaining the F-35. The above mentioned

elements are the basis.

- PBL management positions: identify key position in managing the F-35 and position NL

liaison positions. Key positions are the PSM, operations, LST, airworthiness, Fleet

Management, financial and contracts.

- Research Institutes: involve research institutes like NLR and TNO in key niche

knowledge areas (weapon system capabilities, PBL, Force Life Management)

- Depot level Maintenance: technical knowledge of the weapon system is gained when

performing depot level maintenance [USAF, 2005]. Consider this when the strategic

position on the NL sustainment ambitions is determined.

- SharePoint: use SharePoint as a knowledge management portal for the F-35 (SharePoint

as a central point for F-35 information and knowledge).

- Concentration of knowledge: by concentrating the NL WSM organization to one location

the core competence of the WSM organization is increased (cross-functional teams).

Design Results:

� Adapt existing education programs to include PBL/PBA knowledge, Management

control, weapon system and weapon system utilization knowledge and logistic

support engineering knowledge.

� More research is required to maintain knowledge levels in a PBL environment.

Courses of action are proposed to maintain competence levels.

5.2.4 Get Real

This phase provides a qualitative Logistic Program based on the analysis in the get oriented

step. The F-35 Roadmap is key to define the logistic program as discussed in the analysis

phase. The Roadmap provides the operator requirement for F-35 weapon system

performance. The NL WSM organization translates these operational requirements in

performance requirements for JSFPO and to performance requirements within the NL MOD

organization with regard to operational support functions as described previously.


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The weapon system performance requirements and the operational planning are provided to

the JSFPO in the LRIP contracting process as provided in annex E. The NL WSM

organization defines a Partner Procurement Request (PPR). Based on these requirements

the JSFPO consolidates all the program participant’s requirements in a Consolidated

Procurement Request (CPR) to contract weapon system performance with the PSI’s. The

partner requirements are laid down in a bilateral PBA. In addition the JSFPO has

requirements regarding NL MOD support. Based on the PSI requirements to support weapon

system performance, requirements are set to the operator regarding the execution of O and

O+ level maintenance, the quantity and quality of maintenance personnel and supply

activities. These performance indicators need to be clearly defined in the Roadmap and be

monitored, assessed and controlled by the NL F-35 WSM organization.

Asset requirements are defined in the F-35 Roadmap. To define the Logistic Program AMC

starts with defining the status category and year periods. Based on this the Active Time, and

Mission Time is defined. The status category for the F-35 is Operations (sustainment phase).

Defining the year periods should be coupled to the PBA Period of Performance (PoP) (one

year contract with a 2 year outlook). In this way PBA performance and weapon system

performance are coupled. The F-35 weapon system has an on-condition based maintenance

concept. Large scale preventive maintenance is not required. The Active Time is therefore

defined as 365 days per year. The mission time is the average sortie time.

The basis for defining air-based weapon system performance is the required number of flight

hours, weapon system availability and capability. Flight Hours are based on the required

hours for pilot training (JOP) and planned combat operations. The Roadmap will define these

requirements. Mission capability is defined in the PBA in deployed and non-deployed

situations. Availability is defined on a 24/7 hr. basis matching the active time.

Maintainability and reliability per system or installations level can be based on baseline

performance requirements set within the F-35 program. These baseline requirements also

form the basis for the SPMS model.

Budget is based on the cost structure as discussed in de previous paragraph. The cost

structure and assigning costs to partners is not determined yet.

Design Results:

� It is expected that the required information to determine a Logistic Program is

available at the end of SDD.


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� The cost structure is too immature at this time to provide input to the Logistic

Program.

� At this time not all information is available because of the status of the program (end

SDD phase expected in 2017).

5.2.5 Get Across

To effectively manage the F-35 weapon system an LCM model is required. At this time no

LCM model of the F-35 system is foreseen within the program (not for the F-35 global fleet

as for the NL F-35 fleet). A model to measure and monitor system effectiveness is being

developed. This model provides the performance metrics to the SPMS. This model has its

limitations. It is purely constructed to support the management of the PBA. It does not

provide an integrated overview of weapon system performance. Secondly it does not include

insight in LCC.

An LCM model of the F-35 Air Vehicle can be constructed according to the following steps:

� Defining the system entities and attributes

� Function Diagrams

� Installation Diagrams

� Activity Diagrams

System entities and attributes. The LCM model must be able to adapt the key system

attributes for air-based weapon systems: flight hours, Sortie Generation Rate. Baseline and

actual performance information is required on a system and installation level. This

information is available in ALIS and in SPMS.

Function Diagrams. Function diagrams can be based on the MEFL concept used for the F-

35. The MEFL is based on the F-35 functionality and is linked to the AV installations and

systems.

Installation diagrams. The installation diagrams can be constructed based on the present

structuring of the AV based on the MEFL and the Logistics Control Number (LCN).

Activity diagrams. Activity diagrams in a PBL product support concept are highly simplified

according to a traditional product support concept. Paragraph 5.3.1.2 described the basic

activity diagram. The activity diagrams must model the overall activities including the

activities of the F-35 management organization and the operator. Coupled to the activity

diagrams are costs. Because the main part of the cost structure consists of the $/FH


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component assigning these costs to activities on an installation level is not possible. This will

limit the possibility to determine cost drivers and overall LCC. A method needs to be

developed to provide insight in these costs to assure the LCC perspective as discussed in

the previous paragraphs. A possibility would be to use relative costs (based on the $/FH) but

this will require more research.

Design Results:

� LCM model must incorporate air-based weapon system attributes

� Incorporating cost information in the LCM model is not possible at this time

� More research is required to assign PBL costs to actors in the activity diagram (within

LCM model) in order to manage LCC and determine cost drivers.

5.2.6 Get Grip

To get grip on logistic process and by that on the cost-effectiveness of the F-35 weapon

system the pre-conditions to control need to be fulfilled. Because the F-35 weapon system

will not be introduced before 2019 the actual implementation of the design as described in

the previous paragraphs cannot be evaluated at this time. The effectiveness, suitability,

feasibility and support for this conceptual design are reflected with stakeholders. This

paragraph focuses on the issues, identified in the design, that need to be resolved in order to

get grip on weapon system cost-effectiveness. The basis is the pre-requisites as defined by

Stavenuiter (2002):

Fulfillment of the pre-conditions for control

Permanently appointed LCM team. The global F-35 LCM team consists of the JSFPO PSM,

the PSI’s and the F-35 Operators. Paragraph 5.4 will provide the proposed WSM

organization to support the F-35 global fleet and specifically the NL F-35 fleet.

Availability of relevant and reliable product data. The F-35 weapon system information

structure (ALIS) provides the required system effectiveness information. The provided

information concerning weapon system performance (SPMS) is focused on PSI performance

management (PBA metrics). It does not present insight in the performance of the integral F-

35 logistic support system. The F-35 sustainment cost structure is in development. Because

of the PBL construct costs are directly related to performance ($/FH) which makes budgeting

transparent. However it provides insufficient insight to identify cost drivers and to support

LCC decision-making.


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Presence of skilled and experienced actors. NL WSM actors need to be trained in PBL/PBA

concepts, weapon system, weapon system utilization and logistic engineering. Maintaining

these skills is the challenge in a PBL environment because the majority of the product

support functions are executed by the ALGS and JSFPO organization. Integrating NL WSM

actors in the global sustainment organization on key positions (liaison and CPP positions)

and the WSM organization structure supports the retaining the required knowledge and skills.

Maintaining skills in a PBL concept must be taking into account when determining future NL

F-35 sustainment ambitions.

Logistic program accepted by all actors. The Roadmap concept in use for air-based weapon

systems to define the logistic program and to communicate this with required actors supports

this pre-condition for control.

Operational LCM model. The LCM model is essential to achieve effective management

control. The LCM model must be adapted to the weapon system entities and attributes of an

air-based weapon system. Furthermore, the LCM model requires an interface with the F-35

information system structure (ALIS and SPMS) to provide cost and performance information.

Structuring costs in the LCM model within a PBL concept requires more research. At present

the LCM model in AMICO does not support air-based weapon system entities.

AMICO for all parties. The SharePoint information portals is use within the NL MOD as

weapon system portals provide the required access to F-35 weapon system information by

all actors.

What if analysis

On a program level a ‘what if’ analysis on the F-35 product support strategy is conducted

every 5 years. In this business case analysis (BCA) the product support strategy is

evaluated. The starting point is the Weapon System Planning Document (WSPD) [WSPD,

2011]. In a PBL concept the PSI is responsible for evaluating performance killers and cost

drivers to achieve the performance requirements as defined in the PBA. The focus of the PSI

is on the PBA contracting period (Period of Performance) while the focus of WSM is on the

total life cycle of the F-35. At this time the program has insufficient tools to support what if

analysis in support of directing and controlling weapon system cost-effectiveness. The LCM

model should facilitate ‘What If’ analysis. Programs should be established to incorporate

performance killer and cost driver analysis in the F-35 sustainment management structure.


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In the F-35 change proposal process LCC analysis are incorporated in the propulsion system

change proposals. The AV change proposals lack such an analysis. Further programs to

improve system effectiveness and reduce LCC need to be defined.

Organizing LCM meetings and bilateral communication

The NL MOD consultation structure must be adapted to weapon systems with a PBL support

concept. The NL WSM organization approach as proposed in the previous paragraph and

the PBL concept limits the requirement for an extensive consultation structure because all

relevant organization elements are an integral part of the WSM organization. The focus is the

interface with the JSFPO as the PSM, LMAero and P&W as the PSI and the operators within

the RNLAF (MOB’s). Sustainment Performance Reviews are the basis for reviewing F-35

weapon system performance between the customer and JSFPO/ALGSo. Bilateral

communication takes place on different levels: within the JSFPO and LST supported by the

NL liaison functions and within the NL WSM organization.

Design Results:

� A permanently assigned LCM team is structured in the program based on the US

DOD PBL concept. NL involvement in this LCM team needs to be assured.

� Constructing an LCM model that supports air-based weapon system requires more

research.

� An interface between the LCM model and the F-35 information system is required to

provide cost and performance information.

� The F-35 cost structure is too immature to provide relevant cost information in support

of controlling weapon system cost-effectiveness.

5.3 NL F-35 WSM organization

This step defines the NL WSM organization and the role of the WSD herein. Paragraph 5.4.1

discusses the pre-conditions for the design. In paragraph 5.4.2 the NL F-35 WSM concept

and process is discussed. The required organization functions in support of the NL WSM

concept for the F-35 are defined in paragraph 5.4.3. The required organization structure to

support F-35 WSM is defined in paragraph 5.4.4.

5.3.1 Design Pre-Conditions

The NL MOD WSM approach needs to be adapted to the F-35 sustainment management

approach taking into account the TOR’s. When (re)designing an organization the design

principles, as defined by De Leeuw (2002) must be taken into account (annex C).

Furthermore the upcoming restructuring of the NL MOD (Hillen, 2011) and the subsequent


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Blue Print MatLog (2011) define future objectives within the NL MOD organization with a

specific focus on materiel logistic processes. In addition there are general pre-condition like

the MAR requirements and the F-35 sustainment concept. From the above mentioned

subjects the following pre-conditions can be derived for the NL MOD WSM organization

design:

Terms of Reference

� Organization structure adapted to the high demand in horizontal coordination and

decentralized decision making (WSM environment and WSM process).

� Create integration functions to support coordination between the government and

PSI.

� One single actor with WSM responsibility and authority.

� Incorporate the PSI in the WSM consultation structure.

� Organize WSM to maintaining organization core competence.

Design Principles

� Consistency: (sub)organization design must be consistent with existing organization

structure [De Leeuw, 2002].

� Organization must be able to operate as an autonomous system [De Leeuw, 2002].

Balance of responsibility and authority.

Blue Print MatLog

� More control Operational Commander (OPCO) over weapon system sustainment

� ‘Je ben er van, dan ga je er over’ which is explained as responsibility and authority

matched to organizational functions.

General

� Military Aviation Requirements put requirements on organization’s responsibility and

authority.

� Design must interface effectively with F-35 Global Sustainment concept.

The design follows three basic steps as defined by De Leeuw (2002):

1) What has to happen? This step defines the NL WSM concept for the F-35 and the NL

WSM process (the primary process).

2) How can this be divided? Based on the primary process organizational functions are

defined.

3) How can the separated parts be connected? The organizational functions are

structured taking into account the previously defined pre-conditions.


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5.3.2 NL F-35 WSM concept and process

5.3.2.1 NL F-35 WSM concept

The upcoming reorganization of the NL MOD will bring changes to the NL WSM concept as

defined in the Blueprint MatLog [NL MOD, 2011]. The most important elements are covered

in the TOR’s: (1) more control operator over sustainment and (2) matching responsibility and

authority for transparent decision-making. For the AMC Portal Game in support of the WSM

master class development, Stavenuiter (2012) developed a WSM framework. Figure 5.4

provides the WSM framework adapted to the directives in the BluePrint MatLog [Stavenuiter,

2012].

Figure 5.4 WSM approach from a Blueprint MatLog perspective

This approach defined three teams in support of WSM: the OPCO team, WSM team and

Sustainment team. The focus of the OPCO team is overall weapon system performance. The

WSM team consists of the Asset Manager (AM), the Standards Framework Manager (NS)

and the Sustainment Manager (SM). The WSM team controls and directs weapon system

cost-effectiveness: the WSM production process. The WSM team is the tri-partite construct.

The Sustainment team manages the daily sustainment activities.

This approach needs to be adapted to the F-35 sustainment concept and the PBL approach.

In the F-35 sustainment concept the PEO has the program management role and the PSM is

responsible for managing weapon system cost-effectiveness. The PSI is responsible for

weapon system performance. See figure 5.5.


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Figure 5.5 F-35 Sustainment concept

Paragraph 5.3.1.3 defined the LCM team for the F-35 from a global perspective. In the F-35

sustainment concept the LCM team consists of the PSM, PSI and the Services. The PSM

and Services are the government element in the F-35 LCM team. NL WSM is exercised

through the F-35 sustainment concept as described above and needs to effectively interface

with this concept.

As defined in the TOR’s the WSM responsibility and authority must be assigned to one actor

to ensure effective management control. In the PBL concept this is the PSM. After the

restructuring of the NL MOD, two prime WSM actors remain: the OPCO and the NL DMO.

When taking into account the pre-conditions from the Blue Print MatLog, the presented

structure in figure 5.6 and the PBL concept NL WSM responsibility is assigned to the OPCO,

in case of air-based weapon systems to the RNLAF. It provides the RNLAF with more control

operator over sustainment, the RNLAF is the asset owner and has the central role in the NL

total aviation safety concept as the Operator (MAR-OPS). From a core competence

perspective the RNLAF has the weapon system utilization knowledge which is a pre-requisite

for effective WSM. By assigning WSM responsibility and authority to the RNLAF the

functionality of the operator in the sustainment domain and the subsequent responsibility and

authority are balanced. To separate roles (operations and sustainment) WSM responsibility

should be assigned to DML. Figure 5.6 provides a view of the NL WSM approach in a PBL

environment.


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Figure 5.6 Conceptual NL WSM approach in a PBL environment

Program Management: The Directorate of Operations (DO) is the AO. The NL DMO is

responsible for WSM policy and directives. The NL DMO provides the pre-conditions for

WSM (e.g. approach, methods, and guidelines). DML is responsible for WSM and has WSM

authority.

Weapon System Management. The WSM team consists of the DML as the Weapon System

Manager. The DML organization has an F-35 Sustainment Manager responsible for the PSM

role. Together with the MTCH, responsible for the Military Type Certificate (design authority),

these actors form the traditional WSM tri-partite structure.

Sustainment Management. The SM manages weapon system cost-effectiveness supported

by product management (PM) teams. The product management functions are defined in

paragraph 5.4.3.

5.3.2.2 NL F-35 WSM process

Directing and controlling NL F-35 weapon system cost-effectiveness is an NL responsibility

and the prime objective of WSM. In essence this responsibility is exercised through the

JSFPO. As discussed previously the JSFPO/DoS has the PSM role and is directing and

controlling weapon system cost-effectiveness for the global F-35 fleet. The WSM process is

derived from the AMC and WSM production process as described in this research. The NL F-

35 WSM production process is visualized in figure 5.7.


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Figure 5.7 NL F-35 WSM production process

5.3.3 NL F-35 WSM organizational functions

The following functions are required to support the WSM production process:

� Operations. The operational need (operational requirements and planning) is the

input for the WSM process and is defined by Directorate of Operations (Fighter

Operations) within the RNLAF. Furthermore in the NL Total Aviation Safety concept

the central role for safe and cost-effective operation is structured in the MAR’s for the

operator (RNLAF).

� Logistics. The operational requirements as defined by the operator are managed

through the Roadmap. Furthermore operational logistics is an essential function in

wartime operations. Within the F-35 concept operational logistics remains a NL MOD

responsibility. Operational logistics is executed by the RNLAF Directorate of Material

(DML).

� Engineering. The MAR-21 defines the requirements for the MTC and MTCH. The

MAR responsibility cannot be delegated to an entity outside the NL MOD. Within the

NL MOD the WSD departments act as MTCH for a specific weapon system. In

addition the MAR-OPS/Subpart M identifies a technical support function requirement

to support the operator.

� Contracts. The PBA defines the relationship between the actors in a PBL concept.

The scope and the financial volume of the PBA require effective contract

management. Furthermore on a program level the PSFD MOU is the vehicle

describing the relation between the US Government and the Partners governments in

the F-35 program. The MATLOG directorate within the NL DMO is the central entity

for contract management.


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� Financial Control. The high financial volume of F-35 sustainment and the contract

value of the PBA require rigorous financial control. HDFC is responsible for financial

control.

� Information management. Business management software is an integral part of the F-

35 support structure. NL DMO/Joint IV Command (JIVC) is responsible for Business

Management software.

5.3.4 WSM organization structure

The next step is structuring these organizational functions and entities to an effective WSM

organization: the permanently assigned LCM team from an NL perspective. As well the NL

WSM organization as the integration and relation with the JSFPO must be taken into

account. Horizontal coordination and decentralized decision-making must be assured in the

overall F-35 sustainment environment. The interfaces between the NL WSM organization

and the F-35 sustainment construct must be established. First the NL WSM organization

structural configuration.

NL WSM Organization Structural configuration. An organization structure that supports high

demands on horizontal coordination and decentralized decision-making is required (TOR).

Organization structures that support this requirement are horizontal organization structure

like a project, matrix organization, a structure based on the primary process and network

organizations [Mintzberg, 1993 and Daft, 2007]. As concluded in the analysis phase the NL

MOD organization structure has a vertical structural configuration. This is typical for large

(military) organizations. A hierarchical (vertical) organization structure is required to manage

large organizations [De Leeuw, 2002].

The matrix organization structure is seen as most suitable because:

� It supports the requirements in the TOR: Supports high demand on horizontal

coordination [De Leeuw, 2002].

� Fits to the existing organization [De Leeuw, 2002]. Can fit into an overall vertical

organization structure and maintain hierarchy in the NL MOD organization.

� And additionally it supports maintaining skill in PBL construct. Cross-functional teams

integrates and synthesizes knowledge across different areas of expertise and serves

as a bridge between the individual and the organization [Boonstra, 2006]

There is an inherent disadvantage with matrix organization structures. In a matrix

organization structure the balance between the functional line and the hierarchical line is


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sensitive. Participants need to understand the dual authority in this construct and will require

interpersonal skills and extensive training [Daft, 2007].

Integration with F-35 sustainment management organization

As discussed previously control over weapon system cost-effectiveness is exercised through

the F-35 sustainment organization. The high demand on horizontal coordination and

decentralized decision-making also applies to the relation between the NL WSM organization

and the F-35 sustainment management organization (JSFPO and ALGSo). This applies to all

the functional elements that are identified in the NL WSM organization. For the NL WSM

organization to support horizontal coordination and decentralized decision-making in this

environment integration functions (liaison functions) must be created. The F-35 sustainment

management concept is provided in figure 5.6. For the key functional elements integration

functions are defined.

The key functional elements are:

- Program Management. Supports involvement of NL in program management (program

objective, policy, strategy and planning). Assured by National Deputy (ND) and Assistant

National Deputy (Assistant ND). This responsibility is exercised through the JSFPO

based on the governance structure as defined in the Production Sustainment and Follow-

on Development (PSFD) Memorandum of Understanding (MOU). The involvement in the

F-35 governance structure is ensured by participating in the advisory groups, councils

and boards (Annex E).

- Weapon System Management. Assure involvement NL in F-35 WSM to secure weapon

system cost-effectiveness. Assured by NL PSM representative in DoS organization and

the NL Class Desk under the Director of Weapon System Program Management

(DWSPM).

- Product Management. Assure involvement in key product management functions:

o Airworthiness. Assure the NL can comply to MAR (Flight safety, airworthiness

certification, continuing airworthiness) and manage the NL F-35 MTC. Assured by

NL Class Desk, NL Delegated Airworthiness Agent (NL DAA) and NL LST

representative.

o Contracting. JSFPO is contracting sustainment on behalf of partners. Assure

involvement of NL in contracting process to ensure NL interest.

o Fleet Management. Assure NL involvement in fleet management with regards to

MAR-OPS responsibility role operation, supply chain management (last-mile).

Assured by NL Class Desk and NL LST Fleet Management.


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o Operations. Ensure involvement in defining weapon system capability

requirements, operational planning, OTI’s). Assured by NL Assistant ND and

position CPP in Air System Requirements (ASR) IPT.

o Information Management. Ensure involvement in ALIS sustainment and

development to integrate ALIS business management software functionality in NL

MOD information management structure. Position CPP in ALIS IPT.

o Financial Control. Assure NL interest because of financial dimensions of the

program, F-35 sustainment costs and sustainment costs of NL F-35 fleet.

Proposed NL WSM organization. The starting point of the WSM organization is the WSM

approach in figure 5.7. DML has prime responsibility and authority over WSM in a PBL

construct. DML also contains the NL F-35 PSM functionality. To make WSM effective the

functional elements defined in the previous section are integrated in the matrix organization

structure. This leads to the organization structure as proposed in figure 5.8.

Figure 5.8 NL WSM matrix organization including integration functions in F-35

sustainment organization

The function and responsibilities of the WSM organizational elements are as follows:


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Weapon System Management (RNLAF/DML) - WSM function and Logistics function

- Directing and controlling system cost-effectiveness (PSM role)

- Operational Logistics/Logistic Support Engineering

- Defining operational requirements (concept PBA)

- Managing F-35 Roadmap

- Manage relationship with JSFPO, the PSI’s and the partners in the program

Operations (DO/Fighter Operations) – Operational function

- Defining operational need (AGCDS, business plan)

- Operational planning

- Organization level maintenance (MAR-145)

- MAOC holder (MAR-OPS)

Military Type Certificate Holder (NL DMO/MATLOG) – Engineering function

- Manage F-35 Military Type Certificate (MAR-21)

- System Support engineering function (technical system knowledge)

- Technical support function (MAR-OPS/Subpart M)

Financial control (HDFC/DF&C) – Financial Control function

- Budget and cost control

Contracting (NL DMO/MATLOG) – Contracting function

- PBA contracting

- MOU management (SDD, PSFD)

- Contract management (LRIP/FRP including F-35 sustainment)

Information Management (NL DMO/JIVC) – Information Management function

- functionality ALIS

- ALIS and SPMS integration in information management structure NL MOD

Design Results:

� WSM takes place in an international environment

� The WSM organization consists of the functions operations, logistics, engineering,

contracting, financial control and information management.

� The matrix organization structural configuration is seen as most effective for

managing NL F-35 weapon system cost-effectiveness.


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� WSM responsibility and authority is assigned to the OPCO (RNLAF).

� Liaison functions (integration in F-35 global sustainment organization) are established

to support coordination between the NF-35 WSM organization and the F-35 Global

sustainment organizations. Functions are dedicated for NL WSM.

� Specifically to support WSM a liaison position should be created in the DoS

organization (JSFPO/PSM)

5.4 Organizing the F-35 WSD

Paragraph 5.4 defined the role of the WSD in the NL F-35 WSM concept. The WSD provides

the MTCH function and the weapon system technical knowledge within the NL F-35 WSM

construct. To organize the WSD a similar approach is taken as for the WSM organization.

First the requirements for the WSD organization are set. Then the WSD process is defined

followed by the WSD organization structure.

WSD Requirements. This research focuses on the sustainment life cycle phase. An F-35

MTC is issued by the NL MAA. The objective of the F-35 WSD in the sustainment phase is to

maintain the F-35A CTOL MTC and Military Supplemental Type Certificates (MSTC).

MSTC’s are used for additional mission equipment not included in the basic MTC (i.e. new

weapons). The basic process is to sustain the certification basis of the aircraft. The MTC

products and services are described in the MAR-21 and the MTCHOE [MTCHOE, 2010].

The MAR-21 provides the basis for the MAR-21 organizations. Oversight is executed by the

NL Military Aviation Authority (MAA). The regulations stipulate that only an NL MOD

organization entity can be approved as an MAR-21 organization. At present time the MAR-21

organization is structured in the NL DMO Weapon System Directorate. The Air Systems

Branch is the MAR-21 organization. The Deputy Director Weapon Systems is the MAR-21

Accountable Manager and Military Type Certificate Holder. Within the ASB weapon system

departments are the mandated Military Type Certificate Holder. The ASB has a Fighter and

Training Aircraft Division responsible for the F-16 fighter and PC-7 training aircraft. As the F-

35 is potentially replacing the F-16 the F-35 will integrate in Fighter and Training Aircraft

department within the ASB.

WSD Process. The MTCHO is responsible for maintaining the F-35 MTC in the sustainment

phase. The MTCH organization generates approved data that the operator (MAR-OPS) and

maintenance organization (MAR-145) can use to operate and maintain the aircraft. Approved

data is design data from a design organization that is approved by the NL MAA and within

the scope of that organization [MTCHOE, 2009]. Design data consists of the design data for


85

the initial MTC, MSTC’s, aircraft modification, repairs, aircraft documentation (flight manual,

maintenance manuals) and airworthiness directives. Furthermore the MTCHO is responsible

for reporting occurrences to the NL MAA as a result of discrepancies to the type design. The

MAA and the MAA approved MTCHO organization are the only organizations that can

produce approved data. Figure 5.8 shows the basic process. When the MTCHO is approved,

privileges are granted by the NL MAA for approving changes to the type design. Table 5.2

provides an overview of the MTCHO privileges [MAR-21, 2009].

Table 5.2 MTCHO privileges

According to the MAR-21 there are two ways to produce approved data: certification by

verification and certification by validation. In the certification by verification process the

certification basis is defined by the MTCHO and a certification process is conducted to show

compliance with the applicable airworthiness requirements. In the verification by validation

process certification data approved by an NL MAA recognized aviation authority is used in

the certification process. In the validation process acceptable data (data approved by an NL

MAA recognized authority) is validated by the MTCHO. Figure 5.9 shows the basic process.

The validation process determines if design data comes from a recognized authority, is

applicable to the NL configuration and has no possible effect on an NL specific configuration.

The use of acceptable data (from an approved authority) is more effective and therefore the

preferred option. The MAA Recognition and accreditation position paper provides the policy

for recognizing aviation authorities [MAA-NL-PP, 2011]

Classification Approve Direct

verificationvalidationcombination

Airworthiness Directives not issued by NL MAARemarks:green = privilegeorange = no privilege, MAA approval required yellow = not applicable

minorChanges

Repairs

major

minormajorwithin MTC limitsall other changes

Documentation


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Syste

m

Info

rmation

Port

al

Syste

m

Pla

n

MT

CH

OE

WS

D P

rocedure

s

Appro

ved F

ore

ign

Airw

ort

hin

ess A

uhority

MA

R-2

1

F-3

5 W

MS

(AR

pro

cess)

ALIS

Figure 5.9 Basic WSD process

In the introduction of this chapter the JSFPO was assigned with program responsibility.

JSFPO does not have any airworthiness authority over production aircraft. Technical

Airworthiness Authority (TAA) for Military aircraft is by US law (Title 10) assigned to the

USAF (Air Force), NAVIAR (Navy) or the AED (Army). In this respect the USAF and

specifically the Aeronautical System Command/ Engineering (ASC/EN) has TAA for the F-

35A CTOL aircraft. In this construct the JSFPO with its two prime contractors (LMAero and

P&W) is seen as the design organization and is responsible for compliance showing and

ASC/EN is responsible for the compliance finding. ASC/EN conducts an independent check

on the design and certification data the JSFPO is providing within its program

responsibilities.

To use this construct effectively ASC/EN needs to be approved by the NL MAA as a

technical airworthiness authority. Within the USAF construct the F-35 Life Cycle Support

Office (LCSO) is the USAF MTCH and is structured under ASC within the Fighter and

Bomber directorate. The LCSO is responsible for managing the USAF F-35 type certificate.

For the NL to use all required data (e.g. also individual aircraft repairs or specific NL

configuration items) also the NL configuration needs to be managed by ASC/EN in

combination with the LCSO. As the JSFPO has the program management role JSFPO will

develop a Memorandum of Agreement (MoA) in which the ASC support for a partners

specific configuration is arranged. Figure 5.10 show the airworthiness constellation construct.


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Figure 5.10 F-35A CTOL Airworthiness Constellation

WSD Organization Structure. The F-35 WSD structure must be consistent with the structure

of the MTCH organization as described in the beginning of the paragraph. The prime function

is to manage the F-35A NL MTC. The MAR-21 prescribes basic functions. The organization

needs to contain an Accountable Manager and MTC holder. The current ASB has chosen to

concept of a combined AM and MTCH and mandated MTC holders for the various weapon

systems or combination of weapon systems. This is accepted by the NL MAA. Furthermore a

Post Holder Engineering (PHE) function is required. The PHE is responsible for all required

engineering activities. The activities to maintain the MTC are highly technical and require

specific skill in that specific technical function. A functional organization structure is expected

to be most effective. The technical functions that are also applied in the maintenance

organization to specify maintenance functions can be used: airframe, propulsion, avionics,

weapons and flight safety equipment. Because propulsion has a special position in the


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program (is separately contracted and supported) propulsion is a specific functional element

in the WSD.

Interface F-35 Sustainment Organization. Managing technical products is a functionality of

the Weapon System Program Manager Directorate (D-WSPM) and is supported by the

Lightning Support Team. The D-WSPM has a Class Desk function for each variant

responsible for the technical configuration of the respective variant. The Class Desk is

responsible for technical products and the related airworthiness certification requirements.

The Class Desk is also responsible for the logistic support in relation to the technical

products. For this element the Class Desks interfaces with the DoS as the PSM.

The LST is the entry point for technical issues from the F-35 fleet. The starting point is the

Action Requests generated within the Customer Relation Management (CRM) tool in ALIS

(AR’s). Documentation changes, repairs and inspections are developed and released under

the responsibility of the LST. Before these technical products can be released they need to

be approved by the MTCHO. The LST contains partner positions in support of managing the

partner fleet. The LST function is seen as a part of the WSD.

As mentioned in figure 5.9 the JSFPO together with the PSI’s (LMAero and P&W) is

considered as the design organization. To oversee airworthiness activities and ensure the

quality of the delivered products the engineering directorate contains participant Delegated

Airworthiness Agent (DAA) for each participant. In the sustainment phase changes to the

type certificate (major modifications) and the subsequent airworthiness certification process

is managed by the JSFPO. Airworthiness management within the JSFPO takes place in the

Engineering directorate where also the DAA’s are located. The DAA (with partner DAA’s) is

involved in this process. The NL DAA function is therefore seen as an integral part of the

WSD.

To support a fleet of aircraft it is common practice from an OEM perspective to provide Field

Support Engineers (FSE) to a user. The FSE provides technical support and a direct

interface with design and sustainment engineers in the OEM organization. At this time the

JSF program intents to assign FSE’s to each user. Because providing technical support is

the key function of the FSE, the FSE can be included in the F-35 MTCH organization (blue

block in figure 5.11).

Figure 5.11 shows the proposed WSD organization structure.


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Figure 5.11 The F-35 WSD organization structure

WSD Responsibility and Authority. The WSD requires sufficient authority to effectively

perform the assigned roles. Also the responsibility for these functions must match the

authority provided to the WSD. The basis is the privileges granted by the NL MAA to the

WSD as the F-35 MTCHO. Table 5.6 provides these privileges. The responsibility and

authority of the WSD are in line with this construct.

Furthermore the WSD is responsible for providing technical support/advice to the weapon

system manager and/or PSM. Authority is assigned to the PSM with the exception of the

authority connected to the MTCHO function. This authority resides with the WSD as the

MTCHO.

Design Results:

� F-35 WSD is responsible for sustaining the NL F-35 MTC and providing weapon

system engineering knowledge in the NL WSM organization

� Use of foreign approved aviation or airworthiness authority ensures that the

‘certification by validation’ method can be applied

� The PHE is responsible for all MAR-21 related engineering activities

� A functionally organizational configuration supports the WSD prime roles.

� Integrated in WSM matrix organization.


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5.5 Stakeholder Design Assessment

An initial assessment of the proposed WSM and WSD design is carried out. The purpose of

this assessment is three folded [De Leeuw, 2002]. The main purpose is to capture the

perspective of stakeholders of the WSM and WSD conceptual design. Secondly it is

important to involve stakeholders in the design process. Participation is one of the design

principles of De Leeuw (2002). Finally the involvement and perspective of stakeholders

prevents a possible biased view of the researcher.

5.5.1 Approach

As mentioned, the objective of the assessment is to capture the perspective of stakeholders

on the conceptual WSM and WSD design and to which extend the design is capable of

controlling weapon system cost-effectiveness. The stakeholder assessment is intended as a

first preliminary assessment of the design. Further refinement of the design requires more in-

depth participation of specific stakeholders and is proposed as further research.

The basic approach is gathering the perspective of stakeholders based on a Strength,

Weakness, Opportunity and Threat (SWOT) analysis of the design. By using the SWOT

analysis, stakeholder information is structured and can be analyzed. The design is presented

to the stakeholder in a briefing by the researcher. This provides to opportunity to discuss and

clarify the design. After this briefing, the SWOT analysis is conducted. Annex G contains the

structure of the assessment, the selected stakeholders and the results of the assessment.

5.5.2 Results

This paragraph summarizes the results of the SWOT analyses. Paragraph 5.5.2.1 contains

the results of the conceptual WSM design. The results of the WSD design are summarized in

paragraph 5.5.2.2.

5.5.2.1 WSM design SWOT analysis

Table 5.3 summarizes the view of stakeholders captured in the SWOT analysis of the

conceptual WSM design.


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Table 5.3 WSM Design Stakeholder Assessment Results

Strengths

� WSM matrix organization structure

� NL Integration functions within JSFPO

� Structuring of WSM responsibility and authority

� Concept to control weapon system cost-effectiveness in a PBL environment

Weaknesses

� Separation of responsibilities between asset owner and user

� Clarity on WSM organization structure versus WSM tiered approach

� Matrix organization top structure is identical to structure of organization substructures (departments)

� Clarity on relation between NL WSM organization and external organizations

� Management of operator logistic activities

� Influence the WSM organization has on human resources policy and budget

� Coordination with F-35 sustainment organization due to time difference

� Flexibility of the design to adapt to customer/supplier relation in the PBL environment

� The proposed WSM design is unique solution for the F-35

� Release ability of required WSM information (USG National Disclosure Policy)

Opportunities

� The matrix organization WSM structure provides flexibility and efficient use of (rare) core competence

� Human resource management with WSM team approach

� Spin-off of the design on future restructuring of NL MOD WSM organization and business operations

� Improved insight in WSM control elements

Threats

� Facilitation of continuous improvement in the proposed WSM design

� Lack of a planning function (short, medium and long term) in the proposed design

� Upcoming restructuring of the NL MOD and the direction to outsource WSM related activities

� Stability of F-35 sustainment concept

� WSM responsibility and authority assigned to OPCO for the NL DMO

� Remaining a smart customer in a PBL product support concept

� Dual line of responsibility in a matrix organization structure

In general it can be concluded that stakeholders support the proposed WSM matrix

organization structure, the use of liaison functions to support coordination between the NL

WSM organization and the F-35 sustainment organization. The analysis also shows support

of the LCM systems approach to control weapon system cost-effectiveness in a PBL

environment. Stakeholders indicate that the program management layer in the WSM

approach is not defined in an adequate manner and that the design lacks a planning

function. The relation (responsibility and authority) between the NL WSM organization and

the external PSM organization is not clearly defined in the view of a limited number of

stakeholders. Stakeholders indicate that the proposed way to control weapon system cost-

effectiveness can provide the insight WSM requires and that the proposed design can

support future restructuring of the WSM construct. The possible lack of support of NL DMO


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with regards to structuring WSM responsibility and authority (OPCO) is seen as the major

threat for the proposed WSM design. Several stakeholders indicate that primarily the

structuring of WSM responsibility and authority and the relation with external organizations

(PSI, sustainment management) needs to be further refined. The results show the different

perspectives of the stakeholders on WSM.

5.5.2.2 WSD design SWOT analysis

Table 5.4 summarizes the view of stakeholders captured in the SWOT analysis of the

conceptual WSD design.

Table 5.4 WSD Design Stakeholder Assessment Results

Strengths

� Reliance on approved design/certification organizations

Weaknesses

� Role of ASC/EN versus LCSO seems inefficient

� Extensive WSD organization despite reliance on approved foreign airworthiness authority

� Approval of the MTCH organization by the NL MAA

� WSD design does not take into account the Air System (training system) approach of the F-35

Opportunities

� Efficient WSD organization by relying on approved foreign airworthiness authority

Threats

� The proposed design seems to have no synergy between MAR-OPS/Subpart M and MAR-21

functionality within WSM construct

The analysis shows a limited response of stakeholders on the WSD design. In the proposed

design the prime function of the WSD is sustaining the MTC. The MAR-21 requirements play

an essential role in organizing the WSD. For a stakeholder to assess the proposed design

requires in-depth knowledge of the MAR-21 requirements which might be the explanation for

the limited response on the WSD design. The stakeholders that provided input support the

strategy to sustain the MTC, certification by validation, which requires and approved foreign

airworthiness authority. Weaknesses of the design specifically focus on the size of the

organization and the scope. Synergy within the NL WSM organization could be achieved by

including MAR-OPS/Subpart M (maintenance management tasks) in the WSD function. The

WSD contains the technical knowledge within the WSM construct. This could be utilized to

perform MAR-OPS/Subpart M functions. This might lead to role inconsistency between the

operator and the MTCHO.


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6 CONCLUSIONS AND RECOMMENDATIONS

6.1 Conclusions

The objective of this research is to provide recommendations to the NL DMO for organizing a

WSD responsible for air-based weapon systems in a PBL environment during the

sustainment phase in order to control weapon system cost-effectiveness. During the

execution of this research it became obvious that organizing the WSD highly depends on the

way WSM is organized within the NL MOD. This research revealed five area’s for

improvement:

Effective control of weapon system cost-effectiveness

This research revealed that WSM requires an AMC approach to effectively control weapon

system cost-effectiveness in a PBL product support environment. The high financial volume

for sustaining an air-based weapon system, the dependency on the PBL provider and the

limited perspective of the PBL provider on cost-effectiveness (the PBA contracting period)

over the total life cycle of the weapon system requires the NL MOD to reduce risks on the

government part. This can be achieved by using AMC to control weapon system

effectiveness and costs. The case study revealed that implementing AMC is possible. One of

the major issues with applying AMC in a PBL environment is providing insight in cost drivers.

The cost structure in a PBL environment is based on the cost per flight hour. Managing these

costs is the responsibility of the PBL provider. To support WSM, more insight is required in

the cost structure of the PBL provider in order to identify cost drivers affecting the LCC of the

weapon system. In addition the AMC LCM model needs to be adapted to the specific system

entities and characteristics of air-based weapon systems.

Effective WSM and WSD organization structure

This research indicates that WSM within the NL MOD is effectively supported by a matrix

organization structural configuration. The WSM environment is highly complex which results

in extensive horizontal coordination and decentralized decision-making. This is best

supported by horizontal organization structures like a matrix organization. Prime

responsibility for WSM should be assigned to the OPCO. WSM requires a multi-disciplinary

approach. The WSM matrix organization structure should incorporate the required WSM

functional elements; operations, logistics, engineering, information management, financial

control and contracting. From a NL MOD perspective, the international environment in which

air-based weapon systems are managed requires integration (liaison) functions to be

established in the international sustainment organization to increase coordination with this


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organization and to secure NL MOD interests in sustainment of the weapon system. This

includes the NL PSM role in the PBL product support concept.

Clear responsibility and authority structure

Effective WSM requires responsibility and authority to be balanced and matched to the

function of the organization. The PBL environment requires a clear structure of responsibility

and authority for PBL to be effective. Because the PSI is primarily responsible for

sustainment of the weapon system and the sustainment is managed on the basis of weapon

system performance the WSM role is focused on ensure weapon system cost-effectiveness

over the total life cycle by overseeing the PSI and operator activities and performance. This

research indicates that WSM responsibility and authority should be assigned to the OPCO in

the NL MOD WSM construct. Managing the sustainment of air-based weapon systems takes

place in an international environment which requires integration with the NL MOD WSM

construct and a clear structure of responsibility and authority between these organizations.

WSM consultation structure adapted to PBL

This research revealed that the WSM consultation structure needs to adapt to the PBL

product support concept. WSM consultation is a tri-partite consultation between the PSI,

operator and PSM. The PSM has responsibility and authority in this construct, in case of NL

WSM this is the role of the OPCO.

Sustained WSM knowledge

In support of WSM, knowledge in PBL/PBA concepts, management control, weapon system

(technical), weapon system utilization and logistic support engineering is required. In addition

the matrix organization structure requires organizational members trained in working in a

matrix organization environment (dual lines of responsibility). In a PBL product support

concept a main part of the sustainment activities are outsourced to the PBL provider. This

could lead to a decrease in WSM knowledge required to act as a smart customer. This can

be countered by several measures like the organization structure (matrix organization as a

cross-functional team), creation of integration positions (liaison function) in an international

sustainment organization, performing depot level maintenance under the PSI and involving

NL research institutes in key niches of sustainment (e.g. force life management, PBL and

weapon system utilization).


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Main Conclusion

With regard to the research question and considering the conclusions this research indicates

that, in the proposed WSM construct, the function of the WSD is to sustain the Military Type

Certificate and to provide the weapon system technical knowledge. It seems that this is best

supported by a divisional WSD organization structure. The WSD is responsible for sustaining

the MTC and supporting the WSM construct with weapon system technical knowledge. WSD

responsibility and authority depends on the privileges granted by the NL MAA based on the

MTCHOE.

6.2 Recommendations

Based on the research results achieved, the following recommendations are made with

regard to organizing WSM and the WSD for air-based weapon systems with a PBL product

support concept:

Weapon System Management

� Adopt the AMC approach to control weapon system cost-effectiveness in a PBL

environment. Construct an operational LCM model in support of WSM suitable for air-

based weapon systems.

� Make arrangements with PSI to gain access to cost information in support of the LCM

model.

� Organize WSM in a matrix organization structure.

� Assign WSM responsibility and authority to one single actor.

� Adapt the WSM consultation structure to the PBL environment by incorporating the

PSI in the NL WSM consultation structure.

� Add PBL/PBA concepts and management control knowledge to the WSM master

class. Gain experience with PBL/PBA arrangements for air-based weapon systems

before introducing this support strategy for a complete weapon system.

� Take measures to sustain WSM knowledge in the organization in order to maintain a

smart customer.

\Weapon System Department

� Assign the MTCH function to the WSD making the WSD responsible for sustaining

the MTC.

� Adapt a divisional organization structure for the WSD.

� Integrate WSD organization in WSM matrix organization structure.

� Approve a foreign aviation authority and/or accredit a design organization to support

the certification by validation process.


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F-35 Weapon System Management

� Create liaison position in JSFPO Director of Sustainment organization to coordinate

and ensure PSM on NL F-35 fleet.

� Ensure adequate insight in the F-35 sustainment costs and cost framework in support

of an operational LCM model.

The following subjects are recommended for further research:

� An effective organization culture to support WSM within the NL MOD.

� Enlarged WSM scope with a focus on the F-35 Air System (training system and

support system).


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BIBLIOGRAPHY

� Atkinson A., Kaplan R., Matsumura E. and Young M., 2007, Management

Accounting, Pearson Prentice Hall, Upper Saddle River, New Jersey,

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104

LIST OF ABBREVIATIONS

AD Airworthiness Directive

AED Army Engineering Directorate

AGCDS Aanschrijving Gereedstelling Commandant der Strijdkrachten

ALAC Autonomic Logistics Advisory Council

ALGS Autonomic Logistics Global Sustainment

ALGSo ALGS organization

ALIS Autonomic Logistics Information System

AM Asset Manager

AMC Asset Management Control

AMCS AMC System

AMICO Asset Management Information and Communication

AO Asset Owner

AR Action Request

AS Air System

ASB Air System Branch

ASC/EN Aeronautical System Command/Engineering

ASR Air System Requirements

AV Air Vehicle

AVA AV Availability

AVPHM AV Prognostic Health Management

BP Business Plan

CANSPTFH Cannibalizations Per Thousand Flight Hours

CD Cost Drivers

CDS Commandant Der Strijdkrachten

CMMS Computerized Maintenance Management System

CP Change Proposal

CRM Customer Relationship Management

CPP Cooperative Participant Position

CSR Composite Share Ratio

DA Design Authority

DAA Delegated Airworthiness Agent

DAU Defense Acquisition University

DEP Defence Exploitation Budget

DGM Defence Governance Model


105

DMS Diminishing Manufacturing Sources

DO Directorate of Operations

DoS Director of Sustainment

DVO Dienstverleningsovereenkomst

DPM Defence Planning Memorandum

DWS Directorate of Weapon Systems

D-WSPM Director Weapon System Program Manager

ECP Engineering Change Proposal

EMAR Engine Mission Abort Rate

E-NMC Engine Not Mission Capable

FMC Full Mission Capable

FRP Full Rate Production

FSE Field Support Engineer

HDFC Head Directorate Financial Control

HLD MATLOG High Level Design Materiel Logistics

HDP Head Directorate Personnel

ILS Integrated Logistics Support

IMC Instrumental Meteorological Conditions

JCCB JSF Configuration Control Board

JCS JSF Contract Specification

JESB JSF Executive Steering Board

JIVC Joint IV Command

JOP Training Program

JSF Joint Strike Fighter

JSFPO JSF Program Office

LCC Life Cycle Cost

LCM Life Cycle Management

LCN Logistic Control Number

LCSO Life Cycle Support Office

LCW Logistic Centre Woensdrecht

LDSS Logistic Decision Support System

LMAero Lockheed Martin Aeronautics

LPC Logistic Process Cycle

LRC Line Replaceable Component

LRIP Low Rate Initial Production

LST Lightning Support Team

MAR Military Aviation Requirements


106

MC Mission Capable

ME Maintenance Engineering

MEFL Mission Essential Function List

MMH/FH Maintenance Man Hours per Flight Hour

MoA Memorandum of Agreement

MOU Memorandum Of Understanding

MSTC Military Supplemental Type Certificate

MTC Military Type Certificate

MTCH MTC Holder

MTCHO MTCH Organization

MTCHOE MTCHO Exposition

NAVAIR NAVal Air

NCCB National Configuration Control Board

ND National Deputy

NL The Netherlands

NL DMO NL Defence Materiel Organisation

NL MAA NL Military Aviation Authority

NL MOD NL Ministry of Defence

NS ‘Normsteller’ Standards Framework manager

OAG Operation Advisory Group

OAK Operational Activity Calendar

OBPHM On Board Prognostic Health Management

OEM Original Equipment Manufacturer

OPCO Operational Commander

OPM Optimum Performance Mission

ORD Operational Requirements Document

OTI Operational Tempo Increase

PBA Performance Based Agreement

PBL Performance Based Logistics

PEO Program Executive Officer

PFHF Percentage Flight Hours Flown

PHE Post Holder Engineering

PHM Prognostic Health Management

PK Performance Killer

PM Product Management

PSF Percentage Sorties Flown

PSFD MOU Production Sustainment and Follow-on Development MOU


107

PSI Product Support Integrator

PSM Product Support Manager

PSP Product Support Provider

P&W Pratt and Whitney

RNLAF Royal Netherlands Air Force

ROI Return On Investment

SAG Sustainment Advisory Group

SCE System Cost Effectiveness

SCM Supply Chain Management

SDD System Design and Development

SLA Service Level Agreement

SM Sustainment Management

SPMS Sustainment Performance Management System

SSE System Support Engineering

SWG Senior Warfighters Group

SysCom System Commands

TOR Terms Of Reference

TOW Time On Wing

US DOD United States Department Of Defense

VMC Visual Meteorological Conditions

WSD Weapon System Department

WSM Weapon System Management


108

LIST OF FIGURES

Figure Page

Figure 1.1 Cost-effectiveness according to Stavenuiter (2002) 3

Figure 1.2 Asset Management Control System according to Stavenuiter (2002) 4

Figure 2.1 Management Control System of De Leeuw (1990 and 2002) 9

Figure 2.2 Research Model 11

Figure 3.1 Risk Transfer with different product support options

[PBL Support Guidebook, 2002] 13

Figure 3.2 The Product Support Business Management highlights

[PSM Guidebook, 2011] 14

Figure 3.3 The Logistic Process Cycle 17

Figure 3.4 Asset Management Control System according to Stavenuiter (2002) 17

Figure 3.5 Organization according to De Leeuw (1990) 19

Figure 3.6 Generalized Contingency Approach [De Leeuw, 2002] 21

Figure 3.7 Organization Environment 22

Figure 3.8 Management Context 23

Figure 3.9 Organization Culture 24

Figure 3.10 WSM Ideal Model according to the NL MOD 27

Figure 3.11 Structure Airworthiness Regulations 28

Figure 3.12 Weapon System Management Triangle 30

Figure 4.1 AMC in a PBL product support concept 34

Figure 4.2 AMC in PBL production process 37

Figure 4.3 Actors in NL MOD WSM 42

Figure 5.1 Actor Definition Model F-35 58

Figure 5.2 F-35 LCM Team 59

Figure 5.3 NL DMO Weapon System Portal 64

Figure 5.4 WSM approach Blueprint Matlog perspective 76

Figure 5.5 F-35 Sustainment Concept 77

Figure 5.6 Conceptual NL WSM approach in a PBL environment 78

Figure 5.7 F-35 NL WSM Production Process 79

Figure 5.8 NL WSM matrix organization 82

Figure 5.9 Basic WSD Process 86

Figure 5.10 F-35A CTOL Airworthiness Constellation 87

Figure 5.11 F-35 WSD Organization Structure 89


109

LIST OF TABLES

Figure Page

Table 3.1 Structural Parameters 20

Table 5.1 Cost Structure F-35 Program 62

Table 5.2 MTCHO Privileges 85

Table 5.3 WSM Design Stakeholder Assessment Results 91

Table 5.4 WSD Design Stakeholder Assessment Results 92


110

ANNEX(S)

A – NL MOD

A.1 NL MOD Organization

A.2 Functions Air System Branch departments

A.3 Tasks and responsibilities WSM

A.4 HLD MatLog System Logistics

B – Organization functions

B.1 Organization functions in AMC (Sustainment phase)

B.2 Organizational function analysis

B.3 Organizational functions, responsibilities and authority within the WSM field

C – Design principles of De Leeuw

D – AMC Business Realization design approach

E – F-35 Sustainment Management System Characteristics

F – F-35 System Definition and Characteristics Data

G – Stakeholder Assessment

F.1 Stakeholder Assessment Set up

F.2 Stakeholder Assessment Presentation

F.3 Stakeholder Assessment dry-run results

F.4 Stakeholder Assessment Individual Results


1

A – NL MOD






After the introduction of the Defence Governance Model in 2003 the Defence organization

restructured which has led to the present organization structure. The NL DMO is part of the

Netherlands Ministry of Defence (NL MOD). Figure 1.1 shows the NL MOD organization.

Figure A.1 NL MOD [MOD intranet, 2009]

The NL DMO (figure A.1) is a service center that is responsible for materiel used by the

Defence organization throughout its life: from procurement to major maintenance to

disposal. The NL DMO is also responsible for formulating internal materiel policy for the

NL MOD [NL DMO Communication Section, 2009].

Minister of Defence

State Secretary for

Defence

Secretary-General

Inspector-General

of the Armed

Forces

Director-General

of Finance and

Control

Director-General

of the Defence

Materiel

Organisation

Chief of DefenceDirector of

Personnel

Director of

General Policy

Affairs

Defence Materiel

Organisation

Commander of the

Royal Netherlands

Navy

Commander of the

Royal Netherlands

Army

Commander of the

Royal Netherlands

Marechaussee

Commander of the

Royal Netherlands

Air Force

Commander of the

Support Command


2

Figure A.2 NL DMO [DMO Communication Section, 2009]

The Directorate of Projects and Procurement (DP&V) is responsible for the process of

providing materiel which consists of procurement and project management. The project

branch is responsible for carrying out category 1 materiel projects. Category 1 materiel

projects have a large financial scope and, potentially, political sensitivity [NL DMO

Communication Section, 2009]. In the context of this research DP&V has the responsibility

for the project ‘Replacement of the F16 Fighter Aircraft’ (VF-16).

The Directorate of Logistic Agencies consists of the Naval Maintenance and Service Agency,

National Supply Agency (primarily Army oriented) and the Woensdrecht Logistic Agency (air-

based systems oriented). The Woensdrecht Logistic Agency (LCW) provides all aircraft

related materiel (consumables and repairables) to the operator and provides intermediate

and depot level maintenance to the aircraft and or aircraft systems. With respect to the

MAR’s LCW has an MLE-145 (maintenance organization) and MLE-DSO (supply

organization) approval. In the MOD WSM concept LCW has the role of the maintainer. The

Logistic Agencies are transferred to the Operational Commanders under the current

reorganization effort.

The Directorate of Weapon Systems (DWS) consists of 3 branches; Sea Systems, Land

Systems and Air Systems (figure A.3).

Director Defence Materiel Organisation

Directorate of Weapon Systems

Directorate of Logistic

Establishments

Transition Manager

Directorate of Projects &

Procurement

Directorate of Planning & Control

Directorate of Materiel Policy

General Support Branch

Directorate of Personnel & Organisation


3

Figure A.3 DMO/Weapon Systems

The DWS Air Systems Branch ensures the availability of weapon systems (mainly air-based

systems) that are suitable for the mission, that function properly, the airworthiness of that

materiel, the safe use of weapon systems and the upkeep of weapon systems [NL DMO

Communication Section, 2009]. The main tasks include product management, WSM

(including configuration management and Integrated Logistics Support), support for contract

management and being the holder of the Military Type Certificate. Product Management is

concerned with the operational units and their requirements for new materiel or for the

upkeep of existing materiel [NL DMO Communication Section, 2009]. WSM is concerned

with the cost-effective sustainment of the weapon systems within the set pre-conditions [Moll,

2008]. Within NL DMO Configuration Management and Integrated Logistics Support is part of

WSM. Integrated Logistics Support (ILS) is a composite of all support considerations

necessary to assure the effective and economical support of a system or equipment at all

levels of maintenance for its programmed life cycle [Blanchard, 2004]. Configuration

Management identifies the functional and physical characteristics of an item, controls

changes to those characteristics, and records and reports change processing and

implementation status [Blanchard, 2004]. With the implementation of the Military

Airworthiness Requirements the DWS Air Systems Branch is designated as the holder of the

Military Type Certificate (MTC) and performs the tasks necessary to sustain the MTC

[MTCHOE, 2007]. The MTC is granted by the Military Airworthiness Authority (MAA) and is a

declaration that the aircraft type complies with applicable airworthiness requirements

[MTCHOE, 2007].


4


Section System Management

� Integrated Logistic Support function

- sustainment concept

- ILS plan

- standard framework logistic support chain

- weapon system related policy and regulation

� Planning & Control function

- monitor of system and logistic support standards

- system and logistic support analysis

- advising efficient exploitation of weapon system

- business plan and budget plan (input SLA with operator)

- draft department plans and weapon system reports

� Quality Management (intern department)

- maintaining department quality system

- POC for MAA and Operator

Section Type Management

� Product management

- Determine functional and technical specifications

- modification proposal

� Configuration Management

- responsible for configuration baseline

- configuration identification and control for new (sub)systems

� Project management

- project manager of mandated projects

- advising operator operational requirements

� Quality Management

- initiate, execute and control all required activities to maintain a (S)MTC


5

Section Maintenance Engineering

� Product Management

- manage functional system design

- analyze safety reports (technical), incidents and mishaps

- manage and draft system documentation

� Configuration Management

- configuration identification and control of present system configuration

- configuration status accounting

� Project Management

- Support Type Management with project

- project management of small sustainment projects

� Quality management

- propose improvements regarding system performance and logistic support

performance

� ILS management

- analyzing system and logistic support performance

Section Liaison Function

� Intermediary at OEM and/or Partner Nation

� Representation NL at OEM/Partner Nation


6


Staff RNLAF

• On behalf of C-RNLAF decision-making authority of the weapon system Roadmap;

• Incorporating AGCDS requirements in RNLAF Business Plans;

• determine customer demand NL DMO

• draft concept SLA (RNLAF part);

• contracting SLA with NL DMO;

• Manage Roadmap;

• budget-holder RNLAF (sustainment) budget;

• determine requirements bandwidth projects;

• determine priorities and coordinate changes of Roadmap;

• draft accountability report when deviations from standard;

• providing advice procurement process;

• Optimize RNLAF maintenance processes.

RNLAF Base Commander

• Perform mission assignment (derived from RNLAF Business Plans and SLA’s);

• Perform preventive and corrective maintenance;

• draft accountability report;

• provide advice on Roadmap;

• Identify and provide issues.

NL DMO (Weapon System Departments)

• Setting standards MATLOG (maintenance and supply);

• Provide information regarding Roadmap (status projects, modifications, internal

programs, financial and personnel aspects);

• draft accountability report SLA ;

• budget-holder NL DMO (sustainment) budget;

• Providing technical advice;

• draft concept SLA (DVO), NL DMO part;

• Execute SLA (DVO);

• Manage investment projects (bandwidth and DMP);

• Determine configuration baseline MLE-21 (Configuration Management);

• Manage Military Type Certificate (MTC);


7

• Prepare modifications (pre-conditions, project management, certification);

• draft and manage system plan;

• Analyze ILS (improvement proposals, data collections);

• Provide information on obsolescence.

• Provide technical advice (sustainment knowledge).

NL DMO (Logistic Center Woensdrecht)

• provide serviceable repairables and non-repairables (consumables);

• perform preventive and corrective maintanace;

• Maintain (internal and external);

• Perform modifications;

• Provide information regarding Roadmap (status projects, modifications, internal

programs, financial and personnel aspects);

• Manage stock (Supply Chain Management);

• Manage distribution process;

• Manage sustainment knowledge;

• Provide Quick Reaction Teams;

• draft SLA (DVO) LCW part;

• Execute SLA (DVO).


8



9

Annex B – Organization functions in AMC (Sustainment phase)

B.1 Organization functions in AMC (Sustainment phase)

Engineering and logistics management

System support engineering

Maintenance engineering

Financial engineering

Utilization feedback

Project management

Program management

Project planning

Program planning

Information management

Documentation management

Risk management

Quality management

Product purchase control

Configuration management

Change management

Supply and store policy management

Resource planning and control

Facility policy and management

Purchasing

Training

Maintenance

Operational

Intermediate

Depot


10

B.2 – Organizational function analysis

Figure D.1 Theoretical Perspective

PBL Support environment

Designer Maintainer Operator PSI

Controlling Weapon System Cost-effectiveness x x x PGovernment maintains an oversight role (Product Support Manager)

System Support Engineering X FMaintenance Engineering X X FFinancial Engineering X X P Operator keeps financial control over PBAUtilization Feedback X Project Management X X P Maintainer role is transferred to PSIProgram Management X X P Maintainer role is transferred to PSIProject Planning X X P Maintainer role is transferred to PSIProgram Planning X X P Maintainer role is transferred to PSIInformation Management X X P Maintainer role is transferred to PSIDocumentation Management X X FRisk and Quality Management X X X P Maintainer role is transferred to PSIProduct purchase control X FConfiguration/Change management X X FSupply/Store policy management X X FResource planning and control X Ffacility policy and management X X

X X F

X X F

Operational X

Intermediate X X PIntermediate level maintenance by operator is possible

Depot X X F

Remarks

Purchasing

Training

Maintenance

Organizational Functions and Tasks

Engineering and Logistic Management

Traditional Logistic Support environment


11

Figure D.2 The NL DMO Perspective

System Manager Maintainer Operator WSMControlling Weapon System Cost-effectiveness x

System Support Engineering XMaintenance Engineering XFinancial Engineering X X XUtilization Feedback XProject Management X X XProgram Management X X XProject Planning X X XProgram Planning X X XInformation Management X Documentation Management X Risk and Quality Management X X Product purchase control X XConfiguration/Change management X Supply/Store policy management X X XResource planning and control X X X Xfacility policy and management X X

X X

X X X X

Operational XIntermediate X XDepot X X

Purchasing

Training

Maintenance

Organizational Functions and TasksNL MOD Logistic Support environment

Remarks



12

B.3 – Organizational functions, responsibilities and authority within the WSM field

Figure D.3 Responsibility and Authority

Responsibility AuthorityControlling Weapon System Cost-effectiveness WSM CLSK Operator (CLSK) has final authority

System Support Engineering WSD WSD and MAA WSD has delegated authority depending on privileges provided by MAA

Maintenance Engineering WSD WSD and MAA WSD has delegated authority depending on privileges provided by MAA

Financial Engineering DOBBP, CLSK, DF&C DF&CUtilization Feedback CLSK CLSK

Project Management WSD, LCW and DP&V WSD, LCW and DP&VDP&V is responsible for category 1 materiel projects, WSD for mandated projects and LCW for sustainement projects (up to a certain financial size)

Program Management CLSK and WSD WSMProject Planning WSD, LCW and DP&V WSMProgram Planning CLSK and WSD WSMInformation Management DIO, !VENT DIO, !VENTDocumentation Management WSD WSD

Risk and Quality Management CLSK, MAA and QAD CLSK, MAA and QAD

Operational Risk Management (ORM) is responsibility of operator (CLSK), risk involving airworthiness is the MAA and quality management is the responsibility of the Quality Assurance Departments within CLSK or DMO. Quality Assurance related to support contracts is the responsibility of TDL.

Product purchase control LCW and DP&V LCW and DP&V

Configuration/Change management WSD, NCCB WSD, NCCB, WSMPrime responsible is the WSD as chairman of the National Configuration Control Board (NCCB).

Supply/Store policy management WSD and LCW WSM WSD is responsible for the standards frameworkResource planning and control CLSK, WSD, LCW WSMfacility policy and management DVD DVD

Operational CLSK CLSKIntermediate CLSK and LCW CLSK and LCWDepot LCW and industry LCW

LCW and DP&V

Maintenance

Organizational Functions and TasksNL MOD Logistic Support environment

Remarks


Purchasing

Training CLSK CLSK

LCW and DP&V


13

Annex C – Design principles of De Leeuw

Design principles of De Leeuw

a. Decomposition principle

Organizations (or subsystems) must consist of autonomous subsystem (in relation to

decentralization and functionalization)

b. Consonance principle

When designing an organization the new structure of a subsystem must be consistent

with the remaining or existing structure and culture

c. Flexibility principle

Organization flexibility must relate to the unpredictability and uncontrollability

d. Hierarchy principle

Complex organization must have a hierarchical structure

e. Delegation principle

Maximum delegation but not further then the coordination need requires

f. Standardization principle

Standardize as far as predictability requires (be aware of the required flexibility)

g. Formalization principle

Formalization is a possible form of standardization and should be applied when

predictability is high.

h. Participation

Involve stakeholders in the design process.

i. Division of labor

See Mintzberg

j. Authority and responsibility

Authority and responsibility in the actual structure must be in balance

k. Task and function

Relation with the division of labor (i) and must be consistent.


14

Annex D AMC Business Realization design approach

The requirements in the TOR are the basis for the design phase. The WSM and WSD design

uses AMC as the starting point. As identified in the TOR’s, AMC is applied to control weapon

system cost-effectiveness in a PBL environment. Figure 5.1 shows the AMC business

realization. This six step approach is used to organize WSM for the F-35 weapon system. A

basic prerequisite for the design is the F-35 sustainment concept. Annex D provides an

introduction in the F-35 sustainment management concept.

Figure 5.1 The AMC Business Realization [Stavenuiter, 2002]

1. Get Organized. This step provides the structuring of the weapon system, the LCM

team and the data and product flow (paragraph 5.3.1).

2. Get Oriented. This step analyzes the operational need, system functionality,

installation performance and budget/cost estimate (paragraph 5.3.2).

3. Get Practiced. The required training program for the various actors is defined in this

step (paragraph 5.3.3).

4. Get Real. This step defines the Logistic Program consisting of weapon system

requirements, system structure, logistic plans and cost estimation/budgets (paragraph

5.3.4).

5. Get Across. As discussed in the TOR’s an LCM model is required for effective

management control of an air-based weapon system (paragraph 5.3.5).

6. Get Grip. Control over weapon system cost-effectiveness is achieved by controlling

the logistic processes. This requires the preconditions for control to be met

(paragraph 5.3.6).


15

This six step approach contains the pre-conditions to fulfill the objective of WSM. The next

phase is designing the WSM organization and to determine the role of the WSD. The final

step is designing the WSD based on its role in the NL MOD F-35 WSM concept.

Petrick Spitters

Annex E F-35 Sustainment Management System Characteristics

One of the candidates to replace the F

fighter aircraft consists of the F

STOVL, and F-35C CV (Carrier Variant) variants. The intended replacement of the F

the F-35 CTOL. The F-35 Lightni

of Defense (US DOD), is a joint, multi

to the U.S. Air Force (USAF), U.S. Navy (USN), U.S. Marine Corps (USMC), eight

international Participants including The Netherlands, and future Foreign Military Sales (FMS)

customers [SMS, 2010]. The program is managed by the JSF Program Office (

"requirements pillars" - Survivability, Lethality, Supportability and Affordability

identified during the Concept Definition Phase that best represent the essential F

characteristics. Balanced implementation of these pillars ensures that the F

design meets war fighter requirements, as documented in the Operational Requirements

Document (ORD), at the most affordable cost.

The F-35 Air System. The F-35 Air System consists of the air vehicle, including the

propulsion system, and the autonomic logistics system (figure F.1). Team JSF consisting of

Lockheed Martin, Northrop Grumman en

Autonomic Logistics Global Support (ALGS) system. Pratt &

contracted by the JSFPO for the propulsion system (F135 engine).

F-35 logistics and support (ALGS)

Training, Information Systems and Support Systems. The F

16

35 Sustainment Management System Characteristics

One of the candidates to replace the F-16 fighter aircraft is the F-35. The F

fighter aircraft consists of the F-35A CTOL (Conventional Take-Off and Landing), F

35C CV (Carrier Variant) variants. The intended replacement of the F

35 Lightning II Program, established by the United States Department

of Defense (US DOD), is a joint, multi-national program that will deliver the F


ts including The Netherlands, and future Foreign Military Sales (FMS)

customers [SMS, 2010]. The program is managed by the JSF Program Office (

Survivability, Lethality, Supportability and Affordability

d during the Concept Definition Phase that best represent the essential F

characteristics. Balanced implementation of these pillars ensures that the F

requirements, as documented in the Operational Requirements

ument (ORD), at the most affordable cost.

35 Air System consists of the air vehicle, including the


Lockheed Martin, Northrop Grumman en BAE Systems develops the air vehicle and

Autonomic Logistics Global Support (ALGS) system. Pratt & Whitney is separately

for the propulsion system (F135 engine).

Figure F.1 The F

35 logistics and support (ALGS) will consist of an integrated system that consists of

Training, Information Systems and Support Systems. The F-35 Training System includes

AMC MSc

The F-35 family of strike

Off and Landing), F-35B

35C CV (Carrier Variant) variants. The intended replacement of the F-16 is

ng II Program, established by the United States Department

national program that will deliver the F-35 Air System


ts including The Netherlands, and future Foreign Military Sales (FMS)

customers [SMS, 2010]. The program is managed by the JSF Program Office (JSFPO). Four

Survivability, Lethality, Supportability and Affordability - were

d during the Concept Definition Phase that best represent the essential F-35

characteristics. Balanced implementation of these pillars ensures that the F-35 Air System

requirements, as documented in the Operational Requirements

35 Air System consists of the air vehicle, including the


BAE Systems develops the air vehicle and

is separately

Figure F.1 The F-35 Air System

will consist of an integrated system that consists of

35 Training System includes

Petrick Spitters

instructional courseware, training devices, a training management system, a training system

support center and a training center for pilots and maintainers. The Autonomic Logistics

Information System (ALIS) serves as: an information portal to F

systems; implementation of logistics processes; and provides sustainment/logistic decision

aids. Support Systems include support equipment, maintenance support, spares, supply

chain management, technical data and customer support services. The F

employs a two- level maintenance concept consisting of government organizational level

maintenance and government/industry partnership depot maintenance. Figure F.2 shows the

ALGS functionality.

Logistics and support is being acquired as an integral part of the F

is to design an F-35 logistics system that is proactive

and initiate the correct response "autonomically" (without human intervention). This will

greatly reduce the human actions required to maintain the F

the readiness and sustainability of the F

information technology and integrated logistics concepts, coupled with high reliability and a

robust PHM system, will facilitate a condition

taking advantage of cost efficiencies not available to previous weapons systems.

17


ining center for pilots and maintainers. The Autonomic Logistics

Information System (ALIS) serves as: an information portal to F-35-unique and external


Systems include support equipment, maintenance support, spares, supply

chain management, technical data and customer support services. The F-35 support concept

level maintenance concept consisting of government organizational level

nce and government/industry partnership depot maintenance. Figure F.2 shows the

Figure F.2 ALGS Functionality

Logistics and support is being acquired as an integral part of the F-35 Air System. The goal

5 logistics system that is proactive - a system that will recognize a problem


greatly reduce the human actions required to maintain the F-35 and more effectively mana

the readiness and sustainability of the F-35 fleet on a real-time basis. Innovations in


robust PHM system, will facilitate a condition-based support and maintenance scheme,


AMC MSc


ining center for pilots and maintainers. The Autonomic Logistics

unique and external


Systems include support equipment, maintenance support, spares, supply

35 support concept

level maintenance concept consisting of government organizational level

nce and government/industry partnership depot maintenance. Figure F.2 shows the

Figure F.2 ALGS Functionality

35 Air System. The goal

a system that will recognize a problem


35 and more effectively manage

time basis. Innovations in


nance scheme,



18

F-35 Sustainment. The sustainment concept for the F-35 is based on performance-based

lifecycle support that differs significantly from conventional legacy platforms. The overarching

strategy for F-35 JSF Sustainment is to deliver the most affordable, operationally suitable

and effective, performance-based sustainment solution to the United States (U.S.) and

International War fighters. The performance-based sustainment approach is jointly

implemented by the following stakeholders: Warfighter; JSF Program Office (JSFPO); Team

JSF (Lockheed Martin (LM), Northrop Grumman Corporation (NGC), and BAE SYSTEMS);

Propulsion System Contractors (PSCs) (Pratt and Whitney (P&W) and GE-Rolls Royce

Fighter Engine Team (GE-RR FET)); Global Industrial Base (Suppliers and Organic Depots/

Fleet Readiness Centers) [ALGS Implementation Plan, 2010]. The F-35 sustainment

approach is laid down in several key sustainment documents (figure F.3).

Figure F.3 F-35 Key Sustainment Documents

The key document is the F-35 Sustainment Management Strategy which provides the

sustainment concept. As an interface between the SMS and the sustainment policies and

instructions of the Services, Sustainment Operating Instructions are developed. (In the F-35

Program Performance-Based Logistics (PBL) is defined as a product life cycle support

concept that allows a customer to define levels of performance outcome for the entire F-35

Lightning II Air System during full-rate sustainment phase of the program and provides the

contractor with the authority and accountability to meet the contracted levels of performance

(figure F.4).

Petrick Spitters

A Product Support Arrangement (PSA) between the

required performance and operational planning of the participants in the program. The

JSFPO consolidates requirements of the participants and contracts the PSI’s for del

weapon system performance to the participants (Performance Based Arrangement). The

PBA identifies the performance metrics, the required level of performance (threshold) and

incentivized levels of performance (target). The following performance metr

a. Aircraft Availability

b. Mission Capability

c. Mission Effectiveness

d. Percent Sorties Flown

e. Percent Flight Hours Flown

f. Maintenance Man

g. Logistic Footprint Delta

h. Cannibalization Rate

PBA performance is measured and monito

Management System (SPMS).

19

Figure F.4 F-35 Performance

A Product Support Arrangement (PSA) between the war fighter and JSFPO


consolidates requirements of the participants and contracts the PSI’s for del



incentivized levels of performance (target). The following performance metr

Aircraft Availability

Mission Capability

Mission Effectiveness

Percent Sorties Flown

Percent Flight Hours Flown

Man-hours per Flight Hour

Logistic Footprint Delta

Cannibalization Rate

PBA performance is measured and monitored through the Sustainment Performance

Management System (SPMS).

AMC MSc

35 Performance-based process

JSFPO contains the


consolidates requirements of the participants and contracts the PSI’s for delivering



incentivized levels of performance (target). The following performance metrics are identified:

Sustainment Performance


20

F-35 Program Management. The JSFPO F-35 Program Executive Officer (PEO) has the

responsibility, authority, and accountability for the program. The F-35 PEO has responsibility

to plan, direct, control and use resources within the scope of his/her authority. The F-35

JSFPO will serve as the single government point of accountability for all sustainment

activities. The JSFPO structure consists of four prime directorates: International Directorate,

Directorate of Engineering, the Weapon System Program Manager and the Director of

Logistics. The program participants, NL MOD, have a representative (National Deputy

including an Assistant national Deputy) in the program which fulfills a liaison function. The

Director of Engineering is responsible for all engineering activities. The Weapon System

Program Manager is responsible for F-35 Air System development and production. The

Director of Logistics is responsible for F-35 Sustainment. Figure F.5 shows the organization

structure.

Figure F.5 JSFPO organization structure

The Lightning Support Team (LST) resides under the Director of Sustainment. The LST

fulfills the daily management of the F-35 fleet. The LST is responsible the release of

technical products (repair instructions, modifications, technical advice) and fleet management

activities. The LST organization is a contractor/government entity (figure F.6).


21

Figure F.6 LST organization

To direct the program, governance structure is developed for the US Services and partners

in the program (figure F.7). The Production Sustainment and Follow-on Development (PSFD)

Memorandum of Understanding (MOU) is the high level document that describes the

governance structure of the F-35 Program.

Figure F.7 F-35 Program Governance Structure

From a sustainment management perspective the following entities from the governance

structure are relevant:


22

The JESB is a Senior Flag and SES forum for discussion, consultation and decision-making.

The forum focuses on F-35 Program issues. The F-35 PEO serves as the JESB’s Executive

Secretary. Decisions of the JESB are made by consensus and are disseminated in decision

memoranda provided to the F-35 Lightning II Program Office for action.

The ALAC is a multi-Service, international 1-Star/2-Star forum established by the F-35 PEO

to provide updates on the JSF support & training solutions, business and implementation

strategy, and other technical matters necessary to assure the successful realization of the

Service’s JSF sustainment requirements.

The Sustainment Advisory Group (SAG) provides the War fighter and F-35 PEO with

oversight of lifecycle sustainment and delivery of validated ORD requirements.

Management of the PBL construct is based on the PSM Guidebook of the US DOD (2011).

The Program Manager’s role is assigned to the JSFPO PEO and the Product Support

Manager’s role to the Director of Logistics. Team JSF (Prime contractor is LMAero) and P&W

are the two Product Support Integrators (PSI).

Figure F.8 Product Support Business Model [DOD, 2011]


23

Annex F F-35 System Definition and Characteristics Data

Table F.1 F-35 System Definition data

Attributes Status/Remarks

General Description ORD/JCS/Design Documents

Functional Decomposition Design Documentation

Functional Interfaces and Criteria JCS

Environment Conditions ORD and JCS

Maintenance Plan JCS, On-condition, PHM, JTD (MSD)

System Adjustments (modifications) Change Management (CR, MVR, ECP,

TCTD), Follow-on development, CCDD

System Differences MVR, PSCN, differences JCS

Table F.2 F-35 System characteristics data


Performance Characteristics JCS, JTD (FSD)

Physical Characteristics JTD

Effectiveness Requirements PBA, MEFL, JCS

Certification Requirements TACC, Integration reports

Table G.3 F-35 Installation definition data


General Description JTD

Functional Decomposition Design Documentation

Functional Interfaces and Criteria JCS and JTD

Environment Conditions JCS

Maintenance Plan JTD (MSD)

System Adjustments (modifications) Change Management (CR, MVR, ECP,

TCTD), Follow-on development, CCDD

System Differences MVR, AR’s


24

Table F.4 F-35 Installation characteristic data


Performance Characteristics JTD

Physical Characteristics Design Documentation

Capability JCS and JTD

Reliability Design Documentation, JCS, SPMS

Availability Design Documentation, JCS, SPMS

Testability JTD

Maintainability JTD, MTA, FMECA

Safety and Risks JTD, Certification Reports


25

Annex G Stakeholder Assessment Questionnaire

G.1 Stakeholder Assessment Set up

G.2 Stakeholder Assessment Presentation

G.3 Stakeholder Assessment dry-run results

G.4 Stakeholder Assessment Individual Results

G.1 Stakeholder Assessment Set up

The preparation of a questionnaire requires the following steps [University of Leeds, 2012]:

1) Objective of the questionnaire

2) Target population

3) Develop question set

4) Run pilot questionnaire

5) Run main questionnaire

6) Analyze the data

Objective

As discussed previously the objective of the assessment is getting insight in the perspective

of stakeholders on the conceptual WSM and WSD design. The assessment results are used

to adjust the WSM and WSD design, to provide insight in the constraints of the design and to

identify possible problem areas for the implementation phase.

Approach

Verschuren and Doorewaard (2004) identify two possibilities to gather stakeholder

information: interview and questionnaire. Both have advantages and disadvantages. An

interview with a stakeholder can provide in-depth information regarding the perspective of

that stakeholder on the design. However the interview method is time consuming and the

analysis of the information is difficult [Verschuren and Doorewaard, 2004]. Gathering the

information through a questionnaire is less time consuming and the analysis of data can be

more effective. The questionnaire method has its limitations in getting in-depth insight in the

perspective of the stakeholders because it lacks the ability to ask deeper question on a

certain subjects if this is required [Verschuren and Doorewaard, 2004]. This research uses a

mixed approach.

Target population

The target populations for the questionnaire are the stakeholders in the conceptual WSM and

WSD design. For stakeholders to provide a relevant perspective requires a certain level of


26

knowledge in WSM, PBL, the NL MOD and the F-35 program. A previously conducted

stakeholder analysis was executed to gather information on the perspective of stakeholders,

throughout the NL MOD organization, on the impact of the F-35 program on their

organization [NL DMO/DP&V, 2010]. It was concluded that there was a gap in knowledge on

PBL and the F-35 program to indicate the effects it might have on certain NL MOD

organizational elements. The selection of stakeholders is made from the actors involved in

WSM. Stakeholders of the basic NL MOD WSM triangle are selected (operator, maintainer

and system manager). Furthermore actors in the proposed WSM approach are selected as

stakeholders: financial control, contracts and information management. In addition TNO and

NLR are requested to participate in the assessment to provide an outside (NL MOD)

perspective. Because it is a first assessment of the design the sample size is limited. The

required knowledge of stakeholders limits the selection of stakeholders and the required

sample size and subsequently the number of respondents. However selecting respondents

with sufficient relevant knowledge increases the quality of the questionnaire results.

Question Set

To gain insight in the perspective of the stakeholder the questions are open-ended. The

basis of the questionnaire is a SWOT analysis of the WSM and WSD design. The

stakeholder assessment is supported with a briefing on the proposed WSM and WSD design

as described in paragraph 5.1 through 5.5. In addition it provides background information on

the design including the improvement factors as defined in paragraph 4.3.

Pilot Survey

To test the stakeholder assessment approach a dry-run of the assessment is conducted with

two stakeholders. The results of the dry-run are described in annex H.3. The stakeholder

assessment starts with the background of the research. Before the presentation of the WSM

and WSD design starts, the stakeholder assessment form is presented to the stakeholder

making it possible for the stakeholder to gather feedback on the design. At the end of the

presentation the stakeholder is requested to provide feedback in the design by answering the

questions (SWOT analysis). If required (feedback in Dutch) the completed stakeholder

assessment form is reviewed by the stakeholder (member-checking).

The dry-run concluded that the assessment provides the required insight in the perspective

of stakeholders on the design. The results of the dry-run assessments are included in the

stakeholder assessment.


27

Main Survey

The main survey the following stakeholders:

Operations LtCol M. Hendriksma

Sustainment LtCol D. Trouerbach

MTCH LtCol M. van den Bersselaar (dry-run)

Financial Control LtCol T. Gijzen

External Mr. A. de Jong

Analysis

The results of the stakeholder assessment are summarized. These results are analyzed to

determine the impact on the proposed WSM and WSD design.

Questionnaire limitations

The use of a questionnaire has its limitations. First it is difficult to gain an in-depth

perspective of stakeholders. This is partly countered by using open-ended questions.

However a questionnaire does not provide the in-depth information that an interview does.

Further refinement of the design requires more in-depth participation of specific stakeholders

and is proposed as further research. Furthermore the sample size is limited because of the

required knowledge of stakeholders as described previously.


28

G.2 Stakeholder Assessment Presentation


29


30


31


32


33


34


35


36


37


38


39


40


41


42


43


44


45


46


47


48


49


50


51


52


53


54


55


56


57


58


59


60


61


62


63

G.3 Stakeholder Assessment dry-run results

Stakeholder Assessment (v1.0)

Name: LtCol M. van den Bersselaar

Date interview: 27-3-2012 (dry-run interview)

Functions in WSM: Military Type Certificate Holder (MTCH)

WSM Design

What are in your opinion the strengths of the propo sed WSM design?

It is a clear WSM approach within a new `full` PBL support concept. It also shows very

clearly the needed WSM organization. (F-35 NL WSM construct versus the F-35

sustainment management construct)

What are in your opinion the weaknesses of the prop osed WSM design?

Limited influence of the WSM organization on the human resources policy and budget.

Coordination with F-35 Sustainment organization (JSFPO and ALGS) due to time

difference (USA, NL)

What are in your opinion the opportunities related to the proposed WSM design?

New design supports restructuring of the NL sustainment management organization and

business operations


64

What are in your opini on the threats related to the proposed WSM design?

Upcoming reduction in personnel requires outsourcing of WSM tasks which will lead to

additional costs. This affects the required budgets for sustaining the weapon system.

US policy dictates that every 5 yrs. the effectiveness of the F-35 sustainment concept is

evaluated with a Business Case Analysis (BCA). This could lead to a change in the F-35

sustainment concept which in turn effects the NL WSM organization.

What additional comments do you have on the proposed WSM design?

Very useful WSM design to support manpower study on F-16 replacement acquisition

process (D-DMP).

Recommend to perform similar study for QA-organization within “Full” PBL support

concept


65

WSD Design

What are in your opinion the strengths of the proposed WSD design?

What are in your opinion the weaknesses of the prop osed WSD design?

Limited influence of the WSM organization on the human resources policy and budget.

Coordination with F-35 Sustainment organization (JSFPO and ALGS) due to time

difference (USA, NL)

What are in your opinion the opportunities related to the proposed WSD design?


66

Dry-run interview:

Is in your opinion the content of the briefing clear enough to obtain a clear understanding of the

proposed WSM and WSD design?

The briefing provides the required insight in the proposed WSM and WSD design. The following

suggestions are made to further clarify the designs;

- add a slide which explains the pre-conditions for both designs (e.g. F-35 sustainment

program of record,

- increase visibility of figures in different slides,

- further explain the function of ALIS and SAP with regards to WSM information,

- if possible, verbally explain the differences with the existing organization

- add definitions for different terms (e.g. WSM, cost-effectiveness).

Do the questions, based on the SWOT analysis, are sufficient to provide feedback on the proposed

design solutions?

Yes, the SWOT questions are sufficient to provide my insights on the proposed designs.

What are in your opinion the threats related to the proposed WSD design?

Approval of the F-35 MTCH organization by the NL MAA.

What additional comments d o you have on the proposed WSD design?


67

G.4 Stakeholder Assessment Individual Results

Name: Mr. Arjan de Jong

Date interview: 30-3-2012

Functions in WSM: external

WSM Design


The matrix organization, extending over multiple weapon systems is an interesting concept

that will make it easier for the MOD to act ”smart”. It creates the opportunity to standardize

policies, processes, skills and experience. It also connects experts from different parts of

the organization and creates economies of scale and scope. The multi-disciplinary

approach towards WSM is effective, in particular in combination with procurement and

financial control.

The use of PBAs is a structurally sound solution to manage suppliers, under in specific

circumstances. Involvement in the management of PBAs, especially in the procurement

coalition (JSFPO), may be particularly relevant to control costs and performance.


The WSM design does not separate the responsibilities of the asset owner and user. With

the user in control, ownership (asset value retention) will be neglected.

If the structure on slide 11 depicts the different layers of WSM, these clusters seem to be

missing in the organization chart on slide 14. It raises concerns about the responsibility of

the different WSM elements, the hierarchy within the WSM team, and its ability to make

decisions.

The WSM design is not very clear about the relationships between the different external

organizations. Insight in contract relationships (i.e. interorganizational boundaries) may

clarify this.


The WSM design provides the opportunity to maximize the ”smart” approach, provided that

the P policies are aligned and personnel have a career path through the WSM team.


68

What are in your opinion the threats related to the prop osed WSM design?

The WSM structure seems to lack measures to facilitate continuous improvement and to

handle disruptive events. The WSM team needs dedicated functions to anticipate on short,

medium and long term improvements and disruptive events. Additional product functional

elements may include planning, risk and quality management.

What additional comments do you have on the propose d WSM design?

LCM seems to focus cost allocation by system function. Further research into methods to

substantiate lifecycle cost analyses, the LCM model should be compared against

alternative approaches; consider for example workflow methods. A workflow method has

the advantage that it models activities and resource allocations.

A RACI chart may further align and clarify responsibilities within the WSM team.


69

WSD Design

What are in your opinion the strengths of the propo sed WSD design?

Certification by validation and reliance on incumbent design / certification organizations

seems effective.


The separation of tasks between LCSO and ASC/EN does not look efficient, it splits the

airworthiness responsibilities over two organizations.

Despite the reliance on other entities (i.e. JSFPO, LSCO and ASC/EN, the WSD

organization looks extensive.


The WSD design offers an opportunity to do more with fewer resources, benefitting from

the incumbent design / certification organizations.


70


Some WSD tasks, such as maintenance program development, reliability and

effectiveness of the program are under the responsibility of the user as maintenance

manager, and not the WSD. This may reduce the effectiveness of the WSD team. Maybe

the user should be included in the WSD design.

What additional comments do you have on the propose d WSD design?

A standardized total aviation system (for example, as envisioned by MAWA), supported

and implemented by all partners, may further reduce WSD costs.


71

Name: LtCol M. Hendriksma


Functions in WSM: Operator

WSM Design


The structuring of WSM responsibilities and authority.

The matrix organization structure as proposed for WSM.

The control of weapon system effectiveness and costs in the PBL environment.

The interface and use of the JSFPO organization to manage F-35 sustainment for the NL

fleet.

What are in your opinion the weaknesses of the prop osed WSM design ?

The flexibility of the design with regards to the customer/supplier relationship between the

DO and DML, and flexibility with regards to controlling sustainment in the PBL

environment.

What are in your opinion the opportunities related to the proposed W SM design?

Structuring of WSM responsibility and the matrix organization structure as an input to

future organization change process.


72

What are in your opinion the threats related to the proposed WSM design?

Supportability of the proposed WSM design within the NL DMO (acceptability of the WSM

role for the DML).

Required organization culture to support WSM design and support the change process.


Insufficient influence of the WSM organization on the DIP and P budgets in relation to

WSM.


73

WSD Design


The interface and use of the USAF organization to manage the F-35 MTC the NL fleet.

What are in your opinion the weaknesses of the prop osed WS D design?

The WSD does not take into account the Air System (including the training system)

perspective of the JSF program.



74




75

Name: LtCol D. Trouerbach


Functions in WSM: Sustainment

WSM Design


Clear visibility of WSM tasks and responsibilities.

Slide 13 (relation between the positions in the Netherlands and in the US)


Unique solution for the F-35. No synergy with the other CAT A weapon platforms.

Availability/releasability of WSM information (NDP issues)

Accountable for the WSM tasks (in total)


Better insight in the WSM control elements

Better focus on WSM aspects.


76


Ability of the DMO/Air Force to stay a smart customer in the future

Current discussion between the Air Force and DMO regarding WSM responsibility. I don’t belief

that the DMO will accept the transfer of WSM responsibilities and authority to the OPCO. I am not

sure if the OPCO aspires this?

The reduction of defense personnel and NF (Numerus Fixus) could be a treat for the WSM design

ambition.

The outcome of the JSF Business Case by AT KEARNY (possible transfer of SCM responsibilities

from the PSI to the US services)



77

WSD Design



What are in your opinion the opportunitie s related to the proposed WSD design?


78




79

Name: LtCol T. Gijzen


Functions in WSM: Financial Control

WSM Design


Tailor-made to the F-35 related PBL concept.

Takes into account the organizational changes the NLD MOD is facing.


It is not clear how (long term) flow-on development is dealt with.

The matrix layout of the WSM team might be hard to handle in an organization that has

the tendency to organize its departments identically.

It is not clear how the operator provided logistic activities are controlled/managed from a

WSM perspective.

What are in your op inion the opportunities related to the proposed WSM design?

The matrix layout of the WSM team provides flexibility and an efficient use of (rare) core

competences.


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The WSM team reports to the DML, however some of the team members have different

chains of command. This might lead to conflicts of interest or priority issues.


For the F-35 there could be differences in managing the weapon system between the F-35

fleet in The Netherlands versus the aircraft in the pooled training environment in a Pilot

Training Center (PTC).

Fuel is not taken into account in the cost section of the design.


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WSD Design

What are in your opinion the str engths of the proposed WSD design?


The functional relationships with other functions like operations, contracts, finance are

missing.



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