Performance-Based Logistics

1. Performance-Based Logistics Status Report 2 March 2004

2. Weapon System Support Challenges Operational Challenges • Availability of parts • High maintenance levels • Retention/turnover of maintenance personnel • Large maintenance/supply footprint Implications for Transformation Mid-Term Solutions • Will not support rapid force projection • Large footprint(people and equipment) • Complex, disjointed logistics chains • Limited asset visibility • Total Life Cycle Systems Management • Performance-Based Logistics • Depot Partnering • Conditioned-Based Maintenance + Structural Challenges • Equipment designed to 75-85% availability • Disjointed acquisition and logistics processes and accountability • $67B per year in cost; no link to output • Disjointed, functional support structure • 16-day CWT for high priority parts • 50% of cost tied to maintenance; vast majority at O&I level • Aging organic depot infrastructure Integrated strategy to achieve end-to-end accountability for weapon system support that meets transformation goals and requirements.

3. Performance-Based Logistics JACG DoD 5000 Policy A joint, disciplined program to successfully implement PBL! Oversight via DAB/DAES Oversight via R-TOC Forum New program implementation 30 Pilot Programs Quadrennial Defense Review Reengineer Product Support • Performance-Based Logistics • Legacy Systems • FY03 DPG • Service Implementation Schedules Lessons Learned Operational Demonstrations Adjustments • CY02/03 PEO/SYSCOM • PM Roundtables • AIA Product Support • Industry/Government Tiger Team

4. Future System Sustainment Ensure system is sustained at optimum level Real-TimeSystem Status (CBM+) Industry/Government Performance- Based Logistics Weapon System Manager Force Provider Partnerships Performance Agreement Performance Agreement Provide continuous, reliable, affordable support Acquisition Sustainment Disposal Visibility into cost/risk decisions across life cycle Providing operational availability; not parts.

5. PBL FY03 Accomplishments • Policy and workforce development in place • Program migration on schedule • Documented $15B in savings in PBBE 05 • Demonstrated best in class readiness during OIF • Initiated PBL Roadshows • Established Logistics Community of Practice (DAU) • Completed DBB Review

6. Logistics Response Time* • C-17 • Sentinel Days • F-18 E/F • APU PBL Programs • MCRS • F-117 • HIMARS (To date) Calendar Year *National level fills, all requisitions PBL programs providing significantly improved response times.

7. PBL Logistics Response Time Aircraft And Equipment Pre-PBL and PBL Logistics Response Times (LRT’s) Availability Improvements F/A-18 Stores Management System (SMS) Pre - PBL LRT = 42.6 Days PBLLRT = 2 Days CONUS 7 Days OCONUS F-14 LANTIRN Pre - PBL LRT = 56.9 Days PBL LRT 5 Days Tires Pre - PBL LRT 28.9 Days PBL LRT = 2 Days CONUS 4 Days OCONUS H-60 Avionics Pre - PBL LRT = 52.7 PBL LRT = 8 Days ARC-210 Pre - PBL LRT = 22.8 Days PBL LRT = 5 Days APU Pre-PBL = 35 Days PBL PBL LRT = 6.5 Days Achieving Commercial Standards through PBL.

8. Programs Contributing to GWOT* C-17 F-117 Common Ground Station AWACS JSTARS B-2 F/A-18 E/F Delivering Capability NOW! * PBL programs readiness exceeded traditional support; several achieved historically high availability!

9. GWOT PBL Results Availability on Demand

10. Common Ground Station • PM is life cycle manager • Government led PBL strategy • Tobyhanna is product support integrator • Deployed 30 CGS to support OIF • Streamlined maintenance flow • Achieved 99% Ao during OIF • Forward-located repair activity at Baghdad International Airport • Achieved real-time fleet management/asset visibility

11. DBB Recommendations

12. Weapon System Sustainment Roadmap Number of Partnerships(1998 & 2002) Number • PM accountable for life cycle • JROC established sustainment requirements • Enabling Depot legislation • Revised Maintenance Policy • Industry Supply Chains • Reengineered Training • Joint Strike Fighter • Future Combat System • Advanced Amphibious Assault Vehicle • Historic • Suppressed Readiness • Marginal reliability • Fractionated Accountability • $67B/year • Huge footprint • Warfighter-driven readiness • Ultra-reliability • Clear PM accountability • Minimal Footprint s • Financial Reform (PR05) • Single-line Accounting • Life Cycle Cost Management • Operational requirements synchronized with PBBS 2000 2005 2015

13. FY 04 PBL Acceleration • Strategic Planning Guidance • Directs assessment of PBL at system level for all ACAT I and II programs • Management Initiative Directive • Lead programs for single-line accounting • OSD Special Interest Programs • Application of commercial supply chain practices • Weapon System Support Metrics • Implemented via Logistics Balanced Scorecard • Government/Industry Tiger Team • Monthly meeting to eliminate barriers

14. PBL Road Ahead TLCSM WG JROC Adjustments 5000 Series Updates Revised WSM Logistics Curriculum Workforce Development Service PBL Schedules Program Transition per Service Schedules Enabling Financial Mechanisms Still On Schedule!!

15. We Must . . . FIELDED CURRENT FUTURE JSF F-18 E/F F-18 C/D DDG LPD-17 DDX FCS BRADLEY Stryker • Transaction-based • Fractured Supply Chains • Random Failures • Batch Process orders • Limited Accountability • Performance-Based • Integrated Chains • Fleet Management • Integrated Systems • PM Accountability • Capability-Based • Industrial Integration • Autonomic Logistics • End-to-End Solutions • Single-Line Accounting Response Time: 2000 2010 5-8 days 16 days 1-5 days . . . therefore, we will!!