LOG LEADERSHIP LESSONS
Compiled by KMI Media Group staff
Kevin Trammel is the general manager of military aftermarket services at Pratt & Whitney. He is a member of the American Institute of Aeronautics and Astronautics and the Institute for Operations Research and Management Science. He has served as Pratt & Whitney’s executive for Defense Logistics Agency’s Strategic Supplier program. He is a frequent speaker on the benefits of a performance based logistics, is on the AIA Product Support Executive Board, and works on the advisory board for Aviation Week’s MRO Military.
Kevin G. Trammel General Manager Programs Military Aftermarket Services Pratt & Whitney
Logistics in an Era of Peace and Austerity As the defense industry enters an age of “peace and austerity,” current budgetary realities make logistics more important than ever. The winding down wars in Iraq and Afghanistan coupled with the new emerging operations, such as Operation Odyssey Dawn in Libya, are changing the missions of our warfighters. Simultaneously, congressional budget pressures have put the Department of Defense under greater scrutiny. The defense spending sequestration threat forces us to ask, “How can we maintain readiness while saving money?” With a fiscal environment that poses the greatest challenge to our armed forces in a generation, senior leaders rightly worry about the danger of a hollow force. The Pentagon’s need to adapt to this new reality is underscored in a recent memo from Frank Kendall, acting undersecretary of defense for Acquisition, Technology and Logistics, endorsing the implementation of Next-Generation Performance-Based Logistics Strategies. The memo, written to service acquisition executives, noted that operations and support costs comprise 60 to 70 percent of total ownership costs and that “We must find ways to lower our O&S expenditures while maintaining the right readiness for our warfighters.” Having spent 29 years in the aftermarket sector, I know that across our industry, we are determined to save money for our DoD customer so they can safeguard the resources of the American taxpayer. Our goal at Pratt & Whitney is to provide and deliver affordable readiness to customers. We know we must provide more than dependable engines to stay in business. We must also provide flexible maintenance, repair and overhaul services that ensure customer readiness, from delivery through retirement, all over the world. Engines are among some of the most technologically sophisticated machines ever built. Out of 10,000 parts in an engine, up to 4,000 parts will be evaluated in a typical overhaul. Furthermore, engine parts are often made of super alloys composed of expensive materials, meaning these parts 6 | MLF 6.7
do not sit on the shelf waiting to be installed; they have long lead times in manufacturing. Improperly forecasting overhauls can result in part shortages, which lead to work stoppages, which lead to decreased readiness. And when you consider that an engine only comes into the shop for overhaul every seven to eight years—and then only for a few months—the overhaul “window” is the only opportunity to inject new technology into the engine. This illustrates the importance of proper planning and forecasting. Pratt & Whitney and others in the industry use forecasting to streamline the aftermarket supply chain. Working with the DLA, we provision military engine customers with spare parts for in-service products and develop data analysis tools and forecasting models for engines, spares and the administration of business warranty claims. Additionally, there are longterm contracts (LTCs) in place for part support. Multi-year pricing included in these LTCs enable the DLA to get parts on order quickly. We can reduce administrative lead times from 120 days or longer to 45 days or less. This speeds up the supply chain process, but while these processes have evolved and improved, the next generation of performance based logistics is where the real potential for cost savings lies. Integration of supply, maintenance, planning and forecasting with a life cycle approach can greatly minimize the logistics footprint of an engine system, increasing the tooth-to-tail ratio. At its root, logistics is about preparedness. It requires precision accounting of consumption and replenishment; it maximizes efficiency; and it minimizes burdens on the supply system. Advances in information technology are powering a new era in logistics that is arriving just in time. The future demands better supply chain planning. Fortunately, many companies across our industry are preparing for these contingencies. We are paying attention to the long-term consequences of our decisions to make sure we have the right products, services and logistics in place to support our men and women in uniform and keep the warfighter mission ready. O www.MLF-kmi.com