2004confpaper exp NATO Specialist Team on Ship Cos

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Information about 2004confpaper exp NATO Specialist Team on Ship Cos
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Published on November 6, 2007

Author: Nevada

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Slide1:  NATO Specialist Team on Ship Costing ITS Maestrale FS de Grasse USS John C. Stennis USS Port Royal FS Charles de Gaulle HMS Ocean USS John F. Kennedy FS Sercouf ITS Durand de la Penne HMNLS van Amstel Irv Chewning Chairman, STSC Multi-National Deployment Operation Enduring Freedom (April 2002) SCEA Conference Los Angeles, CA 17 June 2004 Outline:  Outline NATO Organization Allied Naval Engineering Publication Development re Specialist Team on Ship Costing STSC Participants, History and Products ANEP-41 - Ship Costing ANEP-49 - Ways to Reduce Costs of Ships NATO Organization:  NATO Organization North Atlantic Treaty Organization (NATO) Public Policy Division Office of Security Division of Defense Policy and Planning Division of Defense Investment Civilian Structure Division of Operations Organizations & Agencies Military Structure Military Committee Allied Command Operations Allied Command Transformation Logistics Standardization Civil Emergency Planning Communication and Information Sys. Etc... Location of STSC within NATO Organization:  Location of STSC within NATO Organization Division of Defense Investment NATO Naval Armaments Group (NNAG) Current Chairman: ITN RADM Dino Nascetti US Rep.: OPNAV (N096) Naval Group 6 on Ship Design (NG/6) Current Chairman:Howard Fireman NAVSEA 05D Current US Rep: Jeff Hough NAVSEA 05D Specialist Team on Ship Costing (STSC) Current Chairman: Irv Chewning NAVSEA 0175 Current US Rep: Bob Ogrodnik NAVSEA 0175 Background Purpose of the STSC:  Background Purpose of the STSC Establish a common framework, definitions and work breakdown structure from which the participating nations can discuss costs in a transparent manner. Common understanding of approaches to cost analysis in support of national decision-making processes regarding the affordability of warships in an environment of budgetary constraints. Need for cost reduction in all areas of ship life cycle costs: Design, Acquisition, Operations & Support, and Disposal. Participants in ANEP-41 & ANEP-49 Development:  Participants in ANEP-41 & ANEP-49 Development Australia Belgium Canada France Germany Italy Netherlands Norway Portugal Spain United Kingdom United States US Coast Guard Work of STSC is typically Institutionalized via Creation or Updating of an Allied Naval Engineering Publication (ANEP):  Work of STSC is typically Institutionalized via Creation or Updating of an Allied Naval Engineering Publication (ANEP) An ANEP is a guidance document for use by NATO Allies in a collaborative program or project An ANEP does not bind any nation to its use Two ANEPs have been created by the STSC: ANEP-41 on Ship Costing ANEP-49 on Ways to Reduce Costs of Ships Process of Creation or Update of an ANEP: Working Group or Specialist Team chartered by NG/6 Nations intending to participate are identified and a Chairman selected Terms of Reference and Program of Work drafted by the Team and approved by NG/6 Working Paper drafted by the Team and presented to NG/6 with recommendations ANEP drafted and presented to NG/6 for approval and subsequently presented to NNAG for final release approval Slide8:  History - Ship Costing ANEP Development NG/6 (formerly IEG/6) ON SHIP DESIGN Ad Hoc Working Group (AHWG) ON SHIP COSTING (Working Paper - 1990) ANEP-41 July 1992 Specialist Team on Ship Costing (Working Paper - 1995) ANEP-49 January 1996 AIM Affordable Fleet! OBJECTIVE Coherent Approach and Guidance for Ship Designers, Cost Estimators, Decision Authorities, and Others involved in ship acquisition 8 History - Ship Costing ANEP Updates :  “Trends in Manpower Reduction and the Use of Commercial Standards, Practices and Contracting Strategies to Reduce Costs of Naval Ships,” June 1999 November 1997 Task as Directed by NG/6: Prepare Working Paper regarding Ship Cost Reduction Trends and Practices National Expertise: Contributions of 12 Nations Literature Survey: >70 Articles & Presentations 3 Focus Areas Commercial Standards & Practices Total Ownership Cost Manpower Reduction Two Working Papers ANEP-49 Edition 2 November 2000 ANEP 41 Edition 3 December 2003 “Total Ownership Cost Concept,” December 2002 History - Ship Costing ANEP Updates 9 ANEP-41 on Ship Costing:  ANEP-41 on Ship Costing Provides a framework and overall process for discussing, comparing or developing ship cost estimates consisting of: A comprehensive list of known ship cost elements in terms of a NATO Ship Cost/Work Breakdown Structure; A Hierarchy of Ship Cost Terms extending from the NATO Ship Cost/Work Breakdown Structure up to the total program cost; and Broad guidance on the use of Ship Cost Models Edition 1 March 1991: Contains CWBS, Terms and Definitions and NATO Ship Cost Hierarchy Edition 2 July 1992: Validates process outlined in Edition 1 by costing a common ship design Edition 3 December 2003: Incorporates TOC Concept together with framework and definitions of elements that make up Life Cycle Cost, Total Ownership Cost, and Whole Life Cost. Contents ANEP-41 Edition 3:  Contents ANEP-41 Edition 3 Foreword Chapter 1 Introduction Chapter 2 Ship Cost Terms and Definitions Chapter 3 NATO Ship Cost/Work Breakdown Structure Chapter 4 Total Ownership Cost Chapter 5 Costing Methodology Chapter 6 Multinational Considerations Chapter 7 Implementation Guidelines List of References, List of Acronyms Annex A NATO Ship Cost-Related Terms and Definitions Annex B Expanded Ship Work Breakdown Structure Title Index Annex C NATO Ship Programmatic Cost Element Index Annex D Allocation of NATO Ship CWBS to LCC Composition Annex E NATO Alternate O&S Cost Categories for Ships Annex F NATO Elements of Manpower Cost for Ships Annex G Cost Models NATO Ship Costing Components:  NATO Ship Costing Components NATO Ship CWBS Multidimensional Aspect (Top Level) :  NATO Ship CWBS Multidimensional Aspect (Top Level) Costs separated by: Common among nations Unique to a nation NATO Ship CWBS Multidimensional Aspect (Detailed) :  NATO Ship CWBS Multidimensional Aspect (Detailed) WBS similar to US Expanded Ship Work Breakdown Structure Program Phases per NATO Phased Armaments Programming System (PAPS) NATO Ship Cost/Work Breakdown Structure (Level 3 Elements) :  NATO Ship Cost/Work Breakdown Structure (Level 3 Elements) LEVEL 1 LEVEL 2 LEVEL 3 DESIGN & SUPPORT SERVICES SOFTWARE HARDWARE PROGRAMMATIC HARDWARE SOFTWARE DESIGN & SUPPORT SERVICES PROGRAMMATIC COMMON ELEMENTS UNIQUE ELEMENTS TOTAL PROGRAM NATO Ship Cost/Work Breakdown Structure (Level 4 Elements) :  NATO Ship Cost/Work Breakdown Structure (Level 4 Elements) UNIQUE ELEMENTS SOFTWARE HARDWARE DESIGN & SUPPORT PROGRAMMATIC GROUP 100 HULL STRUCTURE GROUP 200 PROPULSION PLANT GROUP 300 ELECTRIC PLANT GROUP 400 COMMAND & SURVEILLANCE GROUP 500 AUXILIARY SYSTEMS GROUP 600 OUTFITTING & FURNISHINGS GROUP 700 ARMAMENT GROUP 100 HULL STRUCTURE GROUP 200 PROPULSION PLANT GROUP 300 ELECTRIC PLANT GROUP 400 COMMAND & SURVEILLANCE GROUP 500 AUXILIARY SYSTEMS GROUP 600 OUTFITTING & FURNISHINGS GROUP 700 ARMAMENT GROUP 000 GUIDANCE & GROUP 800 INTEGRATION & ENGINEERING GROUP 900 ASSEMBLY & SUPPORT SERVICES BUDGETING PRACTICES ESCALATION LAW & GOVERNMENT REGULATIONS CONTINGENCIES GOVERNMENT SUPPORT ACTIVITIES NATO PROGRAM OFFICE ACTIVITIES SHIPBOARD LOAD - OUT ITEMS DISPOSAL LEVEL 2 LEVEL 3 LEVEL 4 COMMON / UNIQUE SOFTWARE HARDWARE DESIGN & SUPPORT PROGRAMMATIC GROUP 100 HULL STRUCTURE GROUP 200 PROPULSION PLANT GROUP 300 ELECTRIC PLANT GROUP 400 COMMAND & SURVEILLANCE GROUP 500 AUXILIARY SYSTEMS GROUP 600 OUTFITTING & FURNISHINGS GROUP 700 ARMAMENT GROUP 100 HULL STRUCTURE GROUP 200 PROPULSION PLANT GROUP 300 ELECTRIC PLANT GROUP 400 COMMAND & SURVEILLANCE GROUP 500 AUXILIARY SYSTEMS GROUP 600 OUTFITTING & FURNISHINGS GROUP 700 ARMAMENT GROUP 000 GUIDANCE & ADMINISTRATION GROUP 800 INTEGRATION & ENGINEERING GROUP 900 ASSEMBLY & SUPPORT SERVICES BUDGETING PRACTICES ESCALATION LAW & GOVERNMENT REGULATIONS CONTINGENCIES & RESERVES GOVERNMENT SUPPORT ACTIVITIES NATO PROGRAM OFFICE ACTIVITIES SHIPBOARD LOAD - OUT ITEMS DISPOSAL NATO Ship Program Phase CWBS Correlation :  NATO Ship Program Phase CWBS Correlation NATO Ship Life Cycle Cost Hierarchy :  NATO Ship Life Cycle Cost Hierarchy OPERATIONS INITIAL CONSTRUCTION COST: • PROJECT MANAGEMENT • HARDWARE (e.g. Structure, Propulsion, and Electric Plant) • START-UP (e.g. Tooling, Jigs, and Fixtures) • ALLOWANCE FOR CHANGES e.g. Design, Schedule) • TEST AND TRIALS • INITIAL OUTFIT (onboard Spares, Repair Parts, Tools, and Fuel) SAIL-AWAY COST • DESIGN • DEVELOPMENT • SOFTWARE (e.g Computer programs, Coding) • TECHNICAL DATA • PUBLICATIONS • SUPPORT EQUIPMENT • TRAINING EQUIPMENT • INITIAL SPARES (Shore Based) • FACILITY CONSTRUCTION • PROJECT LEAD-SHIP OVERCOST • OPERATIONS & SUPPORT DISPOSAL PLUS: PLUS: PROGRAM ACQUISITION COST TOTAL LIFE CYCLE COST ( PLCC+LINKED VARIABLE INDIRECT) TOTAL OWNERSHIP COST ( TLCC + LINKED FIXED INDIRECT) • COMMON SUPPORT ITEMS& SYSTEMS • INFRASTURE COST FOR PLANNING, MANAGING, OPERATING, AND EXECUTING PLUS: PROGRAM LIFE CYCLE COST (LINKED DIRECT) PLUS: MANPOWER ­ RECRUITING ­ ACQUISITION ­ TRAINING ­ MEDICAL SUPPORT WHOLE LIFE COST (TOC + NON-LINKED) PLUS: ITEMS NOT AFFECTED BY THE EXISTENCE OF THE SHIP/WEAPON SYSTEM - CEREMONIAL UNITS - SHORE-BASED TRAINING - HOSPITALS - NAVY STAFF LOAD- OUT ITEMS - MILITARY ACADEMIES NATO PROJECT MANAGEMENT OFFICES • Total Ownership Cost Concept:  Total Ownership Cost Concept Total Ownership Cost includes all linked-direct costs associated with the research, development, procurement, operation, logistical support and disposal of an individual weapon system (e.g., ship) plus the linked-indirect costs of: the total supporting infrastructure that plans, manages and executes that weapon system program over its full life… and the cost of requirements for common support items and systems that are incurred because of introduction of the weapon system… but, excluding the “non-linked” Navy infrastructure costs that are not affected by individual weapon systems development, introduction, deployment or operations Ship TOC Cost Domain:  Ship TOC Cost Domain Maps Cost Types to NATO Ship LCC Hierarchy Linked Direct: Costs specifically associated to the development, procurement, operation and support of the individual ship or ship’s systems Linked Indirect: Costs related to other programs, ships or weapon systems, in addition to the given ship or ship’s systems Non-Linked: Costs of Navy operations not associated to individual ship or ship’s systems Permits flexible approach to selecting desired level of LCC in a given collaborative program ANEP-41 Implementation Guidelines:  ANEP-41 Implementation Guidelines 1. The baseline ship design and technical requirements and configuration must be established.  2. The acquisition strategy must be defined for all phases of the program.  3. Agree to a CWBS and cost element definitions for use as the common basis for costing the proposed ship for comparison to the agreed cost target.  4. All cost elements must be identified at the agreed level of the NATO Ship LCC Hierarchy.  5. Each cost element identified must be assigned to the applicable life-cycle phase(s) of the NATO program. 6. The cost elements identified must be placed within the structure of the CWBS. 7. Each identified element must be designated as either common or unique. 8. Cost models and databases for use in the development of Cost Estimating Relationships must be established and agreed upon. 9. Cost estimates must be developed for each phase of the NATO ship program using the CWBS format and agreed cost model(s). 10. The above process should occur at the beginning of all NATO ship programs in order to provide a frame of reference for all ship design and cost decisions. History ANEP 49 Development:  History ANEP 49 Development Literature Survey Compilation of 45 Papers or Presentations ANEP 49 on Ways to Reduce Cost of Ships Executive Summary Introduction 7 Chapters Conclusions & Recommendations 4 Appendixes “Topics” National Expertise of Participating Nations Literature Synthesis Salient Point Summaries Document Analysis by PAPS Phases “Topics” Identification of 28 Topics 28 Point Papers 3 Major Working Papers 22 ANEP-49 on Ways to Reduce Costs of Ships:  ANEP-49 on Ways to Reduce Costs of Ships Provides emphasis and guidance to ship designers, naval staff planners, project managers, decision authorities and others on potential areas for cost reduction in naval ship acquisition, ownership and operation, that they may influence. The document is a guide only and thus should not be interpreted in an absolute fashion. It emphasizes that national cost specialists or experts should be utilized as an inherent part of the decision process. Edition 1 January 1996: Outlines considerations and opportunities for cost reduction by program phase Edition 2 November 2000: Incorporates TOC Concept together with expanded discussion of commercial standards, practices and contracting strategies Contents ANEP-49 Edition 2:  Executive Summary Introduction Chapter A Mission Needs and Requirements Chapter B Technologies Chapter C Design Chapter D Acquisition Process Chapter E Production Chapter F Operations and Support Chapter G Cost Management Conclusions and Recommendations Appendix I Chronology of Development Appendix II Glossary of Terms and Definitions Appendix III Selected Information on National Experiences Relevant to Ship Cost Reduction Appendix IV Value Engineering Process Steps Contents ANEP-49 Edition 2 ANEP 49 Topic Areas:  ANEP 49 Topic Areas Requirements (Mission) Procedures/Process to Establish Requirements Commercial Vs. Military Standards Design-to-Cost Common Procurement/Purchases Technology Innovations Time and Decisions Contracting Practices Commonality Specifications/Project Definition Operations and Support Considerations Cost Management Value Engineering Eliminate/Reduce Change Total Ownership Cost Crew Reduction Vs. Automation Contractor Data Requirements Design and Production Processes Reliability Analysis Risk Acceptance Level Margin Policy International Cooperation Standardization of Cost Effective Solutions Learning Curve Maximization Industrial Base Productivity, Competitiveness and Reliability Design/Cost Tradeoffs (Affordability Analysis) Use of Competition vice National Concerns Environmental Impacts 28 Topics and Three Working Papers: ANEP-49 Ways to Reduce Costs of Ships Design Phase:  Cost-Oriented Design Product-Orientation Modularization Standardization Group Technology Commonality Design Tradeoffs: Commercial versus Military Standards/Practices Margin Policy Technologies Joint-ness Interoperability International Cooperation Integrated Design Design-for-Production Investment for Life Cycle In-Service Flexibility Process Simplification ANEP-49 Ways to Reduce Costs of Ships Design Phase ANEP-49 Ways to Reduce Costs of Ships Acquisition Phase:  ANEP-49 Ways to Reduce Costs of Ships Acquisition Phase Lead Ship Acquisition Activity Could Involve 10 Years or More Requirements changes Technological changes Acquisition Strategy a Significant Factor: Contracting practices Type of contract Contractor incentives International cooperation Political & socioeconomic aspects Risk mitigation ANEP-49 Ways to Reduce Costs of Ships Production Phase:  Production Costs Affected By: Acquisition strategy Industrial policy/technology Scheduling Design changes Quantity ordering and learning curve Technological innovation/requirements Material changes Environmental hazards and compliance Design for Production Critical Cost savings from 10 to 15% can be realized from product-oriented or integrated design and construction methods. ANEP-49 Ways to Reduce Costs of Ships Production Phase Slide29:  In-Service Phase Costs May Constitute 60 - 80% of LCC Costs Heavily Dependent On: Peacetime and Wartime operational scenario and tempo Mission and Policy requirements Cost Drivers Connected To: Personnel Cost (Manning) and Training Early design stage planning Up-front investment Level of automation Equipment standardization/ Configuration control Continuous acquisition and life-cycle support Integrated logistics support Design flexibility provisions Ease of maintenance and upgrade Environmental compliance ANEP-49 Ways to Reduce Costs of Ships In-Service Phase ANEP-49 Ways to Reduce Costs of Ships Summary:  Thorough up-front engineering and design work is essential to maximizing cost reductions Careful consideration and scrutiny should be given the following major areas: Mission needs and capability requirements Cost-conscious decision-making process Technology advances Commercial standards and practices Manpower reduction Design specifications, acquisition practices and construction methods Cost management techniques Cooperation and teamwork between government and industry and between governments Forward-looking program planning and management An ingrained process that provides transparency of costs and cost driver understanding is essential ANEP-49 Ways to Reduce Costs of Ships Summary Shared View of NATO Allies:  Shared View of NATO Allies Identify Cost Drivers versus mission needs Aim to make all “affected” costs transparent for decision-making

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