SSS PROCESS TEAM

1. SSS PROCESS TEAM IMPROVED PLANNING Gari Jenkins STANLEY FARM ROOM 4. 1415 - 1500 Thursday 28 Jun 07

2. Smoothing the Load HYPOTHESIS A move towards a smooth or level maintenance load within each Naval Base will enable the bases and industrial partners to increase efficiency by more sensibly matching resources. Smoothing theUpkeep Loadacross & within the yards Smoothing theFTE Load within the yards Single integratated planning team

3. 1 2 3 4 1. Allocation across the yards : Devonport Portsmouth Rosyth 2. Smoothing within the yards : Baseline Partial Optimal Smoothing the Load > UPKEEP SMOOTHING THE UPKEEP LOAD To quantify the projected annual benefits, a sensitivity analysis was undertaken to consider the impact of variations to the baseline load.

4. Smoothing the Load > UPKEEP • CAPTURING THE DATA • workshop held (all yards) to clarify the requirement • loading assumptions explored & outstanding issues clarified • proforma produced to capture the results

5. Smoothing the Load > UPKEEP RESULTS . Partial Optimal no identifiable savings when smoothing the load against the Partial criteria • Savings profile needs to be considered: • no load Sep 09 – Sep 10 (25% share) • no load Feb 10 – Sep 10 (33% share) • no initial savings (25% & 33% share) Notes: a. savings achieved via optimised utilisation & decreased overtime levels b. savings increase as allocation (load) increases

6. Smoothing the Load > UPKEEP RESULTS . Partial Optimal • Savings profile needs to be considered: • post 2015, T45 class will affect profile • above savings for 2009 - 2015 identifiable savings for Labour cost only – overtime / agency staff Notes: a. savings achieved via optimising productive time – manifest as decreased overtime / reduced Agency staff b. savings increase as allocation (load) increases c. figures assume load equi-proportioned across the skill-sets (need more analysis)

7. Smoothing the Load > UPKEEP RESULTS . Partial Optimal awaiting costings

8. 1 2 3 4 Note: the SSS Cost Model will be used as the framework for costing Smoothing the Load > UPKEEP Optimal ANALYSIS Devonport Portsmouth Rosyth [ y% (Upkeep/Labour) ] x 0.25 + [ 12% (Upkeep/Labour) ] x 0.5 + £2.7M [ 6% (Upkeep/Labour) + 4% (Upkeep/Subcon) ] x 0.25 = (7.5 + 0.25y)% (Upkeep/Labour) + 1% (Upkeep/Subcon)

9. 1 2 3 4 Note: the SSS Cost Model will be used as the framework for costing Smoothing the Load > UPKEEP Optimal ANALYSIS Devonport Portsmouth Rosyth Profile 3 Cost of Workpackage Partial Savings Optimal Savings £2.7M £2.7M Optimal Baseline Partial Smoothing Quotient

10. 1 2 3 4 Smoothing the Load > UPKEEP Optimal ANALYSIS Devonport Portsmouth Rosyth programme Available Force Elements for Scheduling (AFES)

11. 1 2 3 4 Note: the SSS Cost Model will be used as the framework for costing Smoothing the Load > UPKEEP Partial ANALYSIS Devonport Portsmouth Rosyth [ 3% (Upkeep/Labour) ] x 0.25 + £1.02M [ 7% (Upkeep/Labour) ] x 0.5 + [ 0% (Upkeep/Labour) + 0% (Upkeep/Subcon) ] x 0.25 = 2.66% (Upkeep/Labour) + 0% (Upkeep/Subcon)

12. Overview 1

13. Smoothing the Load > FTE SMOOTHING THE FTE LOAD A Defence Logistics Transformation Programme (DLTP) Study in 20061 estimated that £4M2 of savings (to RN Labour / sub con) could be realised with a fully level FTE maintenance programme. • Some points: • this was when the criteria (iaw CSAs) stated that the maximum concurrent loading was 4 streams – Fleet have now (via dialogue with SFMs) reduced this to 3. • a completely fully level load profile (taking into account seasonal variance) is highly unlikely - £4M would therefore appear to be the maximum saving (10% ci) 1 DGLF/DLOGMP/14/09 dated 10 Nov 06 refers. 2 estimated at £2M at each of the southern Naval bases

14. Smoothing the Load > FTE FTE LOAD PROFILE FOR 2007 > dated Mar 07

15. Smoothing the Load 1

16. Smoothingthe Load 1 Confidence: MED

17. Best vfm Fleet Date HYPOTHESIS Flexibility through free slippage of Fleet Dates can result in savings to the cost of an Upkeep period. To quantify the projected annual benefits, a sensitivity analysis was undertaken to consider the impact of variations to last 2/3 completed Upkeep projects to identify how much could have been saved from labour & O/T costs as a result of moving (free slippage) the (actual) Fleet Date by : 1 weeks right 2 weeks right 3 weeks right

18. Best vfm Fleet Date Devonport Portsmouth proforma produced to capture the results Rosyth Total Savings: £2.15M

19. Best vfm Fleet Date RESULTS . • SUBJECTIVE / OBJECTIVE ANALYSIS . . .

20. Best vfm Fleet Date RESULTS .

21. Best vfm Fleet Date RESULTS . • SUBJECTIVE ANALYSIS . . . because accurate forecasting of the effects/savings that could be attributed to ‘free slippage’ of FD is impossible. This is primarily because the requirement for O/T & sub-con support varies markedly from project to project depending on timing of the requirement / nature of the outstanding work / availability of in-house capacity and/or capability / potential effect on other projects / cost and availability of sub-con support at the time • Experience has shown that work expands to fill the time available. Therefore any extension of TIH becomes, albeit unintentionally, the catalyst for an increase in project cost rather than a reduction. • Resulting from FD slippage, time related costs would normally exceed savings. Examples are: • - sustainment of Project management team • - electricity supply • - cleaning and fire sentry requirement • - berthing • - further BOM capability insertion

22. Overall 1 2