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CHIPS Articles: Innovative performance-based logistics program drives Corps efficiency, costs

Innovative performance-based logistics program drives Corps efficiency, costs
By Manny Pacheco, PEO Land Systems Public Affairs - July 14, 2017
MARINE CORPS BASE QUANTICO, Virginia— The Program Manager for Towed Artillery Systems, a joint Army/Marine Corps program led by the Corps, has been awarded the 2016 Secretary of Defense Performance Based Logistics System Level Award for its success implementing cost and time-saving strategies in support of Marine and Army artillery.

The Program Manager for Towed Artillery Systems (PM TAS) developed a unique, hybrid supportability strategy that synergistically employs the competencies of organic and contractor support teams to ensure expeditious and cost effective support is provided for the M777A2 lightweight 155mm howitzer. Key supporting agencies are Marine Corps Logistics Command (MCLC), Marine Corps Production Plant Barstow, Defense Logistics Agency, Army Tank-Automotive and Armament Command (TACOM), Army Armament Research, Development and Engineering Center (ARDEC), Anniston Army Depot, Army Contracting Command-New Jersey, and BAE Systems.

As part of the strategy the PM TAS PBL Team awarded a 10-year firm-fixed price contract incentivized with the ability of the contractor to earn each of the last five years of the contract through good performance in support of the joint Marine Corps and Army M777A2 Towed Howitzer system. Since implementing the strategy in 2013, the PBL team has realized savings exceeding $1.6 million.

“Our primary goal is always readiness,” said Keith Gooding, program manager for Towed Artillery Systems at PEO LS. “Less than halfway through this contract period of performance, we have seen how successful it is to incentivize contract performance in a meaningful way and the results this kind of approach provides for our Marines and Soldiers.”

PBL is a Defense Department product support strategy to deliver weapon system readiness. It is an outcome-based strategy that incentivizes contract performance with industry by focusing on outputs, rather than inputs to balance warfighter readiness and contract affordability. Output measures may include things like weapon system availability, and operations and support costs; whereas input measures are things like technical services.

“A large part of our success was the time we invested in collaborating with industry to learn what is [considered] a real incentive for them,” said Mark Smith, product support manager for Towed Artillery Systems. “We learned that providing an option for our product integrators to invest early in a program and earn longer-term, sustainment work was even more important than the dollar amount. So, we developed this contract accordingly.”

As a result, this unique partnership has also played a role in changing how the Corps orders maintenance parts for the M777A2. While some of the components of the weapon system are owned and stocked by the service, others are not. Through the PBL team’s work, Marines at the unit level are able to order parts from the product integrator as they need them. This means less overstock and more flexibility for units at all levels to sustain the systems in their possession.

The numbers prove the effectiveness of this approach. In 2015 alone, the team’s efforts resulted in $479,000 in cost avoidance. Additionally, through outstanding supply chain service the team provides 89.2 percent of critical M777A2 parts to warfighters within four days, and 97.8 percent of parts within 30 days. The result is an average operational system readiness rate of 94 percent, compared to a requirement of 90 percent.

A specific example of the PBLCS hybrid team response to critical issues occurred in February 2016, when an Army artillery unit informed PM TAS that wheel hubs on twelve of their M777A2s were found cracked during a field training exercise.

PM TAS worked closely with MCLC and TACOM to alert the fleet to this issue. All USMC and Army units were directed to inspect their wheel hubs and report status. Coordination with BAE was made, spare wheel hub assemblies were provided, field support representatives were deployed, and within a few days the Army artillery unit was fully operational.

A failure investigation was initiated by PM TAS, BAE and ARDEC, and the end result was a recommendation for change to a more corrosion resistant alloy for manufacture. Excellent teamwork between organic and contractor PBLCS members resulted in maintaining the operational availability of the fleet, recognizing the cause of the failure and required change, and implementing the change within the same year.

Gooding and Smith credit much of the program’s success to the team’s innovative approach to providing system support. They said the recognition the program has received from the Defense Department is almost as good a reward as the satisfaction the team derives from knowing they are meeting the needs of the warfighter.

“Every member of our team, both Marine Corps and Army, come to work every day focused on the Marine and the Soldier,” said Gooding. “We work for them. To have the Office of the Secretary of Defense recognize the program and its support for our warfighters is an incredible honor.”

Program Executive Office Land Systems partners with Marine Corps Systems Command, in order to develop, deliver, and provide life-cycle planning for assigned programs.

The Program Manager for Towed Artillery Systems (a joint Army/Marine Corps program led by the Corps) has been awarded the 2016 Secretary of Defense Performance Based Logistics System Level Award for its success implementing cost and time-saving strategies in support of Marine and Army artillery.  U.S. Marine Corps photo by James Andrews
The Program Manager for Towed Artillery Systems (a joint Army/Marine Corps program led by the Corps) has been awarded the 2016 Secretary of Defense Performance Based Logistics System Level Award for its success implementing cost and time-saving strategies in support of Marine and Army artillery. U.S. Marine Corps photo by James Andrews
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