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DAUPROGRAMMANAGERSTOOL KITTwelfth Edition (Ver 1.0)December 2002
For sale by theU.S. Superintendent of Documents,Government Printing Office
Internet: bookstore.gpo.gov Phone: (202) 512-1800 Fax: (202) 512-2250 Mail Stop: SSOP, Washington, DC 20402-0001
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PREFACE
This 12th Edition of the “Tool Kit” contains a graphic summary of acqui-sition policies and managerial skills frequently required by DoD pro-gram managers. It is a current version of a “Tool Box” that was firstdeveloped by Mr. Charles F. Schied of PMC 92-1. For convenience, it issized for insertion into a 3-hole, 5-1/2” x 8-1/2” “Day Runner.” The infor-mation was extracted from Defense Acquisition University (DAU) coursematerial and is based on the DEPSECDEF memo, subj: Defense Ac-quisition, dated 30 Oct 2002. This memo cancelled DoDD 5000.1, DoDI5000.2, and DoD 5000.2-R, and issued interim guidance. The “Tool Kit”will be revised again when DoDD 5000.1 and DoDI 5000.2 are reissuedin early CY 2003. Material from the DAU Acker Library & Learning Re-source Center was also used.
Users of the “Tool Kit” are reminded that this summary is a guide onlyand should not be used as a substitute for official policy guidance.Periodic review of official policy guidance is recommended.
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ACKNOWLEDGMENTS
As Sponsor of the “Tool Kit” I wish to recognize the following membersof the Defense Acquisition University (DAU) faculty and staff for theirinput to this 12th Edition: Maj Norman Patnode, USAF, of the ProgramManagement and Leadership Department (PML) on the Capital/North-east Regional Campus, who, along with Mr. Bill Bahnmaier, formerly ofDAU, coordinated the input and editing of material from various DAUdepartments; Mr. Eduard Boyd of the Visual Arts Department for hissupport in preparing and editing drafts for printing, and Mr. Greg Caruth,Ms. Debbie Gonzalez, and Ms. Frances Battle of the same Departmentfor their detailed proofing of the final drafts and coordination of printingdetails. Other significant contributors were Mr. John Kelley, PML De-partment; Ms. Leslie Deneault, CM Department; Ms. Miriam Cohe,BCEFM Department; Mr. Richard Kwatnoski, Executive and Interna-tional Department; Mr. John Claxton, Dr. John Snoderly and Mr. GeorgeProsnik of the Curricula Development Support Center; Maj Mark McNabb,USAF, and Dr. Bob Lightsey of the Technology and Engineering Depart-ment, and Mr. Larry Heller of the Logistics Management Department. Ialso want to thank Mr. Tim Shannon, Dean of the Capital/NortheastRegional Campus for both his encouragement and support for this effort.
C.B. CochraneDirector, Center forProgram Management
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TABLE OF CONTENTS
I. Acquisition Management...........................................................1Program Manager’s Bill of Rights....................................................2Acquisition Decision Reviews & Phases.............................................3Acquisition Categories (ACAT).........................................................4Acquisition Strategy Elements.........................................................5Acquisition Excellence Initiatives........................................................6Planning to Support Acquisition Process .........................................7Acquisition Knowledge Sharing System (AKSS)............................7DAB Review Timeline.....................................................................8Information for Decision Reviews.......................................................9C4ISR Interoperability...................................................................10Science & Technology Linkage......................................................11ACTD Initiation Process..................................................................12Acquisition Program vs. ATD & ACTD............................................13Program Structure/Schedule (Example).........................................14International Armaments Cooperation.........................................15-16Resource Allocation Process....................................................17-20Appropriations........................................................................ 21-25Reprogramming............................................................................25Life Cycle Cost Composition........................................................ 26Cost Estimating ........................................................................... 27Performance Measurement........................................................... 28Contracting...............................................................................29-33Defense Industry Business Mgmt.............................................34-39Acquisition Logistics.................................................................40-43Organizational Structure...........................................................44-46Manufacturing Management.....................................................47-50Test & Evaluation (T&E)................................................................51Modeling and Simulation (M&S)................................................52-54Planning and Control................................................................55-61Risk & Trade-Off Analysis.........................................................62-64Technical Performance Measurement...........................................64Systems Engineering Process..................................................65-70Specs, Tech Reviews/Audits,....................................................71-73Configuration Management........................................................74-76Software Management..................................................................77Working Groups.......................................................................78-80
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II. Leadership & Managerial Skills..................................................81Delegation...............................................................................82-83Effective Meetings........................................................................84Personal Communications........................................................85-86Time Management...................................................................86-87Decision Briefing...........................................................................88Management Tools & Techniques...............................................89-90
III. Problem Solving Tools.........................................................91Brainstorming..........................................................................91-92Cause and Effect Diagram...............................................................93Force Field Analysis......................................................................93Histogram.....................................................................................94Scatter Diagram...........................................................................94Surveys.......................................................................................95Affinity Diagram......................................................................96-97Pairwise Ranking......................................................................98-99Pareto Chart.................................................................................99Benchmarking..............................................................................100Flowcharting...........................................................................101-103Nominal Group Technique (NGT).............................................104-105Problem Solving.....................................................................106-108Gantt Charts...............................................................................109
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IACQUISITION MANAGEMENT
• Things that make you go “Hmmm?...”
“The only thing most auditors fix is the blame.”
“Experience is something you got just after you needed it.”
“People are smarter than they look; listen to them.”
“The last 10 percent of the performance sought generates one-third of the cost and two-thirds of the problems.”
“Never open a can of worms unless you want to go fishing.”
“Those who believe it cannot be done will you please get out of the way of those who are busy doing it.”
• Things we should always remember.
“Be honest in everything you say, write and do.”
“Be good to your people, and they will be good to you.”
“Forgiveness is easier to obtain than permission.”
“Keep everyone informed; when in doubt, coordinate.”
“Be the first to deliver bad news.”
“Bad news does not get any better with time.”
“If you are sitting at your desk, you are not managing your program.”
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THE PROGRAM MANAGER’S BILL OF RIGHTSAND RESPONSIBILITIES
RIGHTS:
Program Managers have the RIGHT to:• A single, clear line of authority from the Defense Acquisition Executive.• Authority commensurate with their responsibilities.• Timely decisions by senior leadership.• Be candid and forthcoming without fear of personal consequences.• Speak for their program and have their judgments respected.• The best available training and experience for the job.• Adequate financial and personnel resources.
RESPONSIBILITIES:
Program Managers have the RESPONSIBILITY to:• Accept program direction from acquisition executives and implement it expeditiously and conscientiously.• Manage their programs to the best of their abilities within approved resources.• Be customer-focused and provide the user with the best, most cost-effective systems or capabilities.• Innovate, strive for optimal solutions, seek better ways to manage, and provide lessons-learned to those who follow.• Be candid about program status, including risks and problems as well as potential solutions and likely outcomes.• Prepare thorough estimates of financial and personnel resources that will be required to manage the program.• Identify weaknesses in the acquisition process and propose solutions.
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Pre-SystemsAcquisition
Technology Opportunities &User Needs
PRODUCTION & DEPLOYMENTOPERATIONS& SUPPORT
FULL-RATEPRODUCTION &DEPLOYMENT
LRIPCONCEPTEXPLORATION
CONCEPT & TECH DEVELOPMENT
TECHNOLOGY DEVELOPMENT
SYSTEM DEVELOPMENT & DEMONSTRATION
SYSTEM DEMONSTRATION
SYSTEM INTEGRATION
FRPDECISIONREVIEW
CRITICALDESIGNREVIEW
C IOCB
Systems Acquisition(Demonstration, Engineering
Development, LRIP & Production)
DEFENSE ACQUISITION DECISION REVIEWS & PHASES
FOC
Increment III
Increment II
Sustainment
Single Step orEvolution to Full
Capability
Sustainment DisposalA
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• DAB Review• Designated by DAE• Decision by DAE
• Component Review• Designated by DAE• Decision by Svc Sec/CAE
• ITOIPT Review• Designated by ASD(C3I)• Decision by ASD(C3I)
• Component Review• Designated by ASD(C3I)• Decision made by Comp. Chief Information Officer
• Does Not Meet ACAT I Criteria• Designated by Svc Sec/CAE• Decision by Svc Sec/CAE
• Does Not Meet ACAT I, IA or II Criteria• Designated IAW Component policy• Decision at lowest appropriate Level
• Not otherwise designated ACAT I, IA, II or III• Designated IAW Component Policy• Navy/USMC ACAT IVT/IVM• Decision at lowest appropriate level
ACAT 1D:
ACAT IC:
ACAT IAM:
ACAT IAC:
ACAT II:*
ACAT III:
ACAT IV:
Major DefenseAcq Pgms
Major AISAcq Pgms
MajorSystems
All Others(except for Army Navy, USMC)
ArmyNavyUSMC
ACQUISITION CATEGORIES (ACAT)
See AR 70-1 (Army)& SECNAVINST 5000.2B(Navy and Marine Corps)
No FiscalCriteria
$140M RDT&E or$660M Procurement(FY00 Constant $)
$378M Life Cycle Cost or$126M Total Prog. Costor $32M Prog. Cost inany single year(FY00 Constant $)
$365M RDT&E or$2.190B Procurement(FY00 Constant $)
*Army has an ACAT IIA for AIS reviewed at Army CIO level
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ACQUISITION STRATEGY ELEMENTSInterim Defense Acquisition Guidebook, 30 Oct 2002
• Requirements– Approved Source Docs– Status of In-process Source Docs
• Program Structure• Acquisition Approach• Risk• Program Management
– Resources• Advance Procurement• PMO Staffing & Support
– Info Sharing & DoD Oversight– IDE– Tech Reps at Contractor Facilities– Government Property In Possession of Contractors
– Tailoring & Streamlining• Requests for Relief or Exemption• Applying Best Practices
– Planning for Simulation-Based Acquisition and Modeling & Simulation
– Independent Expert Review of Software Intensive Programs
• Design Considerations– Open Systems– Interoperability
• Information Interoperability• Other-than Info Interoperability
– IT Supportability– Protection of Critical Program Info & Anti-Tamper Provisions
– Information Assurance• Support Strategy
– Product Support• Management Planning• Integration
– Source of Support• Contractor Log Support• Acq Cross-Servicing Agreements
– Human Sys Integration– Environ Safety & Occupational Health– Demil & Disposal– Life Cycle Support Oversight– Post Deployment Evaluation
• Business Strategy– Competition
• Fostering a Competitive Environment
– Competition Advocates– Ensuring Future Competition
• Building Competition Into Strategies
– Acquisition Phases– Evolutionary Acquisition– Industry Involvement
• Potential Obstacles– Exclusive Teaming– Sub-Tier Competition
• Potential Sources– Market Research– Commercial & NDI– Dual-Use Tech & Comm Plants– Industrial Capability
• SBIR Technologies– International Cooperation
• Cooperative Strategy• Interoperability• Compliance• Testing Required for Foreign
Military Sales– Contract Approach
• Major Contracts Planned• Contract Type• Contract Incentives• Performance Mgmt• Integrated Baseline Reviews• Special Terms & Conditions• Warranties• Component Breakout
– Leasing
• Core Logistics Analysis/Source of Supply Analysis
• Competition analysis (depot-level maint)• C4ISP issues summarized
From DEPSECDEF 30 Oct 02 memo, Defense Acquisition, Attach-ment 2, Operation of the Defense Acquisition System, Tab C.
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ACQUISITION EXCELLENCE INITIATIVES(Examples)
• Update/streamline the DoD 5000 Acquisition Process• Integrated Product and Process Development and Integrated Product Teams• Movement from Detailed Design Specifications and Process Standards to Performance and/or Commercial Specifications• Single Process Initiative• DoD Cost/Schedule Control System Criteria Replaced by Industry Standard Guidelines for Earned Value Management System (EVMS)• Commercial and Non-Developmental Item Acquisition and Practices• Cost As an Independent Variable (CAIV)• Open Systems Design and Interoperability• Acquisition Knowledge Sharing System (AKSS)• Defense Acquisition Pilot Programs• Implementation of Federal Acquisition Streamlining Act (FASA), Federal Acquisition Reform Act (FARA) and Information Technol- ogy Management Reform Act (ITMRA); (latter two are now known as Clinger-Cohen Act)• Electronic Commerce/Electronic Data Interchange• Collection and Use of Past Performance Information• Advanced Concept Technology Demonstrations (ACTD)• Acquisition Reform Benchmarking Initiative• Acquisition Workforce Personnel Demonstration Program• Contract Administration Reform• Procurement Process Reform• Performance Based Service Contracting• Logistics Transformation/Performance-Based Logistics• Alternative Disputes Resolution• Price Based Acquisition• Total Ownership Costs (TOC)
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PLANNING TO SUPPORT ACQUISITION PROCESS• Planning to support the acquisition process is accomplished within the Integrated Product and Process Development (IPPD) environment.• Program plans are for use by the PM and the integrated product
teams (IPTs) that support the PM and are discretionary.• There are four exceptions where specific plans are required:
Acquisition Plan required by the FAR/DFARS; Program ProtectionPlan; Command, Control, Communications, Computers and Intelli-gence, (C4I) Support Plan and TEMP -- the latter three are requiredby interim DoD 5000 guidance.
• Typically, the following areas will require some level of programoffice planning:
- Acquisition Strategy (page 5) - Risk Management- Systems Engineering - Computer/Software Devel/PDSS- Logistics Support/Post Prod Spt - Human Systems Integration- Program Protection - Deployment/Fielding- Training Development - Manufacturing- Technology Assessment & Control - Integrated Testing
ACQUISITION KNOWLEDGE SHARING SYSTEM(AKSS)
Legacy Deskbook
Frequently Accessed Links: DoDD 5000.1 (Interim), DoDI 5000.2(Interim), DCMA One Book, Interim GuideBook, FAR & DFARS,DCAA Manual Vol. 1, DCAA Manual Vol. 2 and FMS Manual.Collaborate & Share: Communities of Practice including CommunityCentral, Systems Engineering, Program Management, Contract Man-agement, Risk Management and Total Ownership Cost.
Order CDAsk a ProfessorDoD Forms Program
Manage Your Documents
Link to Other AT&L Sites Policy Documents: DoD, Army,Navy, Air Force, Marines, etc.Process/Topics:ESOH,Intn’l FMS, Other Transactions
Career Field: PM,Procurement, QA,Logistics, T&E, Other
Education & Training
The Following Quick Links and Information Browsers can be found onthe AKSS Web Site: http://deskbook.dau.mil/jsp/default.jsp
AKSS
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DAB TIMELINE MILESTONES B, C & FRPDR
Overarching Integrated Product Team (OIPT) Meetings
• ADM - Acquisition Decision Memorandum• CAIG - Cost Analysis Improvement Group• CARD - Cost Analysis Requirements Description• DAB - Defense Acquisition Board• FRPDR - Full-Rate Production Decision Review• JRB - Joint Requirements Board• JROC - Joint Requirements Oversight Council• LCCE - Life Cycle Cost Estimate(s)
3-4 WEEKS
JRBReview
2 WEEKS
2 WEEKS
CAIG briefsPreliminary
LCCE
DraftCARDto CAIG
30 DAYS
45 DAYS
180 DAYS
21 DAYS
DAB
OIPTReview
JROCReview
CAIGBriefs final
LCCE
TEMP toUSD(AT&L)/
DOT&E
MILESTONE DECISION INFORMATION —A POSSIBLE CONSTRUCT
WHY ? WHAT ? HOW ?
RISKS ? COST ? MANAGEMENT ?
AGREEMENT ?
1 2 3
4 5 6
7ü Have I Presented All Necessary Information ?
ü Does the Info Flow Logically ?
ü Is the Info Clear and Accurate ?
ü Is it Concise, Executive-Level ?
• Threat• Capability
• Requirement• Analysis of Alternatives • Acquisition Strategy
• Risk Mgmt Plan• T&E Plan
• T&E Results
• CAIV Objectives• LCCE
• ICE
• PMO Structure• IPT Structure
• WIPT - OIPT Structure
• APB• ADM
• Exit Criter ia
Milestone
FinalCARDto CAIG
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Milestone/ReviewRequired Information A B C FRP X X X X
X X XX X XX X
XX
XX
XX X
XX X XXX XX X X
X X XX XX XX XX
X X XX XX X XX X
XX
X X XX
XX
X XX X X
XX XX X XX XXX XX X XX XX X X
INFORMATION FOR DECISION REVIEWS
Note 1. Also summarized in acquisition strategyNote 2. OSD T&E Oversight programs onlyNote 3. ICD, CDD & CPD replace MNS & ORDNote 4. If no Milestone B, submit at Milestone CNote 5. Program Initiation for Ships
Acquisition Decision Memorandum (ADM) (Note 5)Acquisition Program Baseline (APB) (Note 5)Acquisition Strategy (See page 5)Affordability AssessmentAnalysis of Multiple ConceptsAnalysis of Alternatives (AOA) (Note 4)Beyond LRIP Report (note 2)Capabilities Development Document (CDD) (Note 3)Capabilities Production Document (CPD) (Note 3)C4I Support Plan (Notes 1 & 5)C4I Supportability CertificationClinger-Cohen Act Compliance (MAIS) (Note 5)Competition Analysis (depot-level maintenance rule) (Notes 1 & 5)Compliance with Strategic PlanComponent Cost Analysis (MAIS; optional MDAP) (Note 5)Consideration of Technology IssuesCooperative Opportunities (Note 1)Core Logistics/Source of Repair Analysis (Note 1)Cost Analysis Requirements Description (MDAP & MAIS) (Note 5)Economic Analysis (MAIS)Exit Criteria (Note 5)Industrial Capabilities (n/a AIS) (Note 1)Independent Cost & Manpower Estimate (MDAPs; n/a MAIS)Independent Technology Assessment (ACAT ID only)Initial Capabilities Document (ICD) (Note 5)Interoperability CertificationIT Certification (MAIS)Live Fire T&E Waiver (covered systems)(note 2)Live Fire T&E Report (covered systems)(note 2)LRIP Quantities (n/a AIS)Market ResearchOperational Test & Evaluation ResultsPost Deployment Performance ReviewProgram Protection Plan (Note 1)Pgm Environ, Safety & Ocup Health (w/NEPA schedule) (Note 5)Registration of Msn Critical & Msn Essential Info Sys (Note 5)Spectrum Certification Compliance (Note 4)System Threat Assessment (n/a AIS)Selected Acquisition Report (MDAPs)Technology Readiness Assessment (Note 5)Test & Evaluation Master Plan (eval strategy due MS A)
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C4ISR INTEROPERABILITYDoD Policy: (CJCSI 6212.01B)
DISA: Defense Information Systems AgencyJITC: Joint Interoperability Test Command
Recommends:• Certify• Certify with Comments• Not Certify
Requirements CertificationCINC/
Service/Agency
JointStaff
JointStaffDISA
Interoperability Certification
• Supports clarification of Interoperability test issues• Witnesses/conducts Interoperability tests
Interoperability Certification
CINC/Service/Agency
TEMP/Test Results DISA/JITC
RequirementsCertification
MNS*ORD*
Certification
* MNS and ORD will be replaced with ICD, CDD and CPD when CJCSI 3170.01B is revised in CY 2003.
• All C4I systems developed for use by U.S. forces are considered to be for Joint use.• All C4I requirements shall be reviewed/updated at every milestone.• Joint Staff will certify all requirements documents for conformance with Joint C4I Policy & Doctrine, architectural integrity, and Interoperability standards.
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11 MDADECISION
oversightpanel
Adv Tech Dev (6.3)
ACTDATDLab/field demoWarfighting Experiments
Warfighting Needs&
R&D Objectives
Tech Base (6.1/6.2)
Basic Research Applied Research
oversightpanel
STOP
STOP
Systems
S&T
Options
(1)Concepts for new systems/upgradesystems out of production.
(2)Insert into ongoing systems development,or complete ACTD development.
(3)Upgrade system in production/fieldedsystems, or produce mature ACTD.
(4)Use of new technology for demilitarization/disposal.
S&T LINKAGE TO DEFENSE ACQUISITION PROCESS
(1) (2) (2) (3) (4)(3)PRODUCTION & DEPLOYMENT
OPERATIONS &
SUPPORT
FULL-RATEPRODUCTION & DEPLOYMENT
LRIPCONCEPTEXPLORATION
CONCEPT & TECH DEVELOPMENT
TECHNOLOGY DEVELOPMENT
SYSTEM DEV & DEMONSTRATION
SYSTEM DEMONSTRATION
SYSTEM INTEGRATION
FRPDECISIONREVIEW
CRITICALDESIGNREVIEW
C IOCBA
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ACTD INITIATION PROCESS
Breakfast Clubbriefing/
assessment
DUSD(ASC)Review
JROCbriefing/
assessment
Overallprioritization/approval
(USD(AT&L)-VCJCS)
JWCA
ACTDConceptTechnology Inputs
ServicesAgenciesIndustry
Allies
JROCJWCACINCsServices
Needs
DeveloperSponsor
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ACAT: Acquisition CategoryDT/OT: Developmental/Operational TestingDUSD(AS&C): Deputy Under Sec Def (Advanced Systems & Concepts)FAR: Federal Acquisition Regulation
Motivation
Requirement
Oversight
FundingACATConfiguration& TestingRulesRole of User
Acquisition Program• Develop, produce and field system• Cost, schedule, performance
MNS/ORD*Milestone Decision
Authorityfully FYDP funded
all ACATssystem/subsystemprototypes DT/OT
DoD 5000 Series/FARmax involvement
Advanced Technology Demonstration (ATD)• Demonstrate feasibility and maturity• Reduce technical risks and uncertainties at relatively low cost
not required
RDT&Enot ACAT effort
technologydemonstrations
informal/FAR/OTAsome involvement
FYDP: Future Years Defense ProgramMNS: Mission Need StatementORD: Operational Requirements DocumentOTA: Other Transition Authority
ACQUISITION PROGRAM VS. ATD & ACTD
DUSD(ASC) Oversight Panel(Breakfast Club)
RDT&E (2 yrs in field)not ACAT effort
tech demonstrations in fieldenvironment with users
implementation directive/FAR/OTAmax involvement
Advanced Concept Tech Demonstration (ACTD)• Gain understanding of and evaluate utility prior to acquisition decision• Develop concepts of operation and doctrine
labs/R&D centers
user sponsor & JROC prioritization
* MNS and ORD will be replaced with ICD, CDD and CPD when CJCSI 3170.01B is revised in CY 2003.
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PROGRAM STRUCTURE/SCHEDULE (EXAMPLE)
ContractAward
RDT&EProcurementO&MMILCON
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
CE TDSys Integ Sys
Demo
System Devel & Demo
C&TD
AB
PrototypeCompetition
CDRFRPC IOC
Incr 2SD
B FRP IOC
FRP IOCCB
SI SD LRIP PROD Incr 2PROD
Incr 3SD
Incr 3PROD
C
DecisionReviews& Phases
TechnicalReviews
(as needed)
Developmental& Operational
Testing
DeliveriesOT
FOT&E
EDMEOA
LRIP Production
LRIP Full-Rate Prod & Depl Sustainment/Disposal
Incr 2
Incr 3
(eng dev models)
DT&E
LFT&E
IOT&E
C&TD
ASR CDR PCAPCAPDRSRR SFR FCA/SVR
Prod & Deployment Operations & Support
CDR PCA
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DoD INTERNATIONAL ARMAMENTSCOOPERATION POLICY
SECDEF Memorandum 23 March 1997“It is DoD policy that we utilize International Armaments Coop-eration to the maximum extent feasible, consistent with soundbusiness practice and with overall political, economic, techno-logical, and national security goals of the United States.”
THE SCOPE OF DEFENSE COOPERATIONProduction &
RDT&E Procurement Follow-on SupportInformation Foreign Military Sales Cooperative LogisticsExchanges Supply Support
Engineer & Direct Commercial Sales Mutual SupportScientist Exchanges Exchanges
Cooperative R&D Cooperative Production Logistics Support(Joint Funds)
Comparative or Coproduction/Licensing Host Nation SupportJoint Testing (ForeignFunds) Defense Industrial
BaseStandardization Reciprocal Procurement
The Program Manager’s Focus
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INTERNATIONAL ACTIVITIES ASSOCIATED WITHDEFENSE ACQUISITION PHASES
Cooperative Production Coproduction Licensed Production Production Sharing Foreign Military Sales
Technology Opportunities& User Needs
NATO ForumsDEAs/IEPsStaff TalksS&E Exchanges
CooperativeDevelopmentIntl. Testing
Concept &Technology Development
System Demonstrationof SDD Phase
Production &Deployment,Sustainment
DEFENSE SALES VS. COOPERATIVE ACQUISITIONThey are Different
• Defense Sales• Any Nation• U.S. Contracts (FMS)• U.S. Manages (FMS)• Production & Support• DoS or DoC + DoD - USD (Policy)• Foreign Initiated• Foreign Funds (or U.S. Credit/Grants)
• Cooperative Acquisition• Allied or Friendly• U.S., Ally or NATO• Jointly Managed• All Acquisition• DoD - USD (A&T) + DoS and DoC• U.S. and/or Foreign• Foreign + U.S. Funds
Note: DEA = Date Exchange Agreement IEP = Information Exchange Project
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RESOURCE ALLOCATION PROCESS - OVERLAPCOMPRESSED POM/BUDGET CYCLES
CY02 CY03 CY02J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
FY04
FY05
FY06
Planning Enactment Execution
Planning Enactment Execution
FY02
FY03
Programming &Budgeting
*Previously a sequential programming/budgeting process
POM FY06-11Budget FY06-07
FY02 & prior
Execution
Enactment Execution
FY03 FY03 & priorProgramming &
Budgeting
*Programming &Budgeting
POM FY04-09Budget FY04-05
DPGFY04-09
POM FY05-09Budget FY05
FY04 &prior
Planning
FY04 FY04 & prior
DPG FY 05-09 FY005
DPG FY06-11
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JPD: Joint Planning DocumentNMS: National Military StrategyCPR: Chairman’s Program RecommendationDPG: Defense Planning GuidanceNSS: National Security Strategy
PPBS - PLANNING PHASE
FEB MAR SEP FEB MAR APR/MAY
NMS
SECDEF
JPD DRAFTDPG
DPG
CPR
CJCSJoint Staff/OSDCmbt CmdsDepts/Agencies
PresidentNational Security CouncilCIA/DIA/CJCS/OSD
NSS
1st Year 2nd Year
Joint Staff/OSDCmbt CmdsDepts/Agencies
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PPBS - PROGRAMING/BUDGETING PHASE
AUG SEP OCT NOV DEC JAN
DoD Components(Military Depts,
Defense Agencies &Others)
OSD
JointStaff
POM
BES OSD
FYDP
DPGcompliance
Issues
CPA
Questions/Hearings
PDM
DoD Components - PEO - PMAnswer/Reclama
FYDP
PRG/DRB
meetings
PBMBIPBD’s
1st PBD FInal PBD
POM: Program Objectives MemorandumBES: Budget Estimate SubmissionDPG: Defense Planning GuidanceCPA: Chairman’s Program AssessmentPBD: Program Budget DecisionMBI: Major Budget IssuesPB: President’s BudgetPDM: Program Decision MemorandumDRB: Defense Resources BoardPRG: Program Review Group
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RESOURCE ALLOCATION PROCESSEnactment
DoD
President& OMB
Congress AuthorizationCommittees
AppropriationCommittees
Testimony Appeals
Authorization/AppropriationConference(Acts Passed)
Phase I:
PPBS
President’sBudget
Apportionment
Allocation/Execution
Phase IV:
BudgetCommittees
Phase III:
CONGRESSIONAL ENACTMENT TIMETABLE
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT15 15
BudgetResolution
House
Senate
House
Senate
House
Senate
Authorization
Appropriation
PressBudget Committee Inputs
FloorHRINGS MARKS FLOOR
HRINGS MARKS FLOOR Floor
BILL / RPT HASC HRINGS MARK-UP FLOOR FLOOR
CONF ACT /RPT ^
SASC HRINGS MARK-UP FLOOR FLOOR BILL / RPT
BILL / RPT HAC HRINGS MARK-UP FLOOR FLOOR
CONF ACT /RPT ^
SAC HRINGS MARK-UP FLOOR FLOOR BILL / RPT
CONF RESOLUTION ̂
“TARGET”FISCALYEAR
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- 2031
- 2032
- 2033
- 2034
- 2035
- 1506
- 1507
- 1508
- 1611
- 1810
- 1109
PROCUREMENT APPROPRIATIONS(ACCOUNT NUMBERS AND BUDGET ACTIVITIES)
Appropriation Budget Activity
1. Aircraft 2. Modification of Aircraft 3. Spares &Repair Parts 4. Support Equipment & Facilities
1. Other Missiles 2. Modification of Missiles 3. Spares& Repair Parts 4. Support Equipment & Facilities
1. Track Combat Vehicle 2. Weapons & Other CombatVehicles 3. Spares & Repair Parts
1. Ammo 2. Ammo Production Base Support
1. Tactical & Support Vehicle 2. Commo & ElectronicsEquipment 3. Other Support Equipment 4. Spares& Repair Parts
1. Combat Aircraft 2. Airlift Aircraft 3. Trainer Aircraft4. Other Aircraft 5. Modification of Aircraft 6. AircraftSpares & Repair Parts 7. Aircraft Support Equipment& Facilities
1. Ballistic Missiles 2. Other Missiles 3. Torpedoes &Related Equipment 4. Other Weapons 5. Not Used6. Spare & Repair Parts
1. Ammo, Navy 2. Ammo, Marine Corps
1. Fleet Ballistic Missile Ships 2. Other Warships3. Amphibious Ships 4. Mine Warfare & Patrol Ships5. Auxiliary, Craft & Prior Year Costs
1. Ship Support Equipment 2. Commo & ElectronicsEquipment 3. Aviation Support Equipment4. Ordnance Support Equipment 5. Civil EngineerSupport Equipment 6. Supply Support Equipment7. Personal & Command Support Equipment8. Spares & Repair Parts
1. Not Used 2. Weapons & Combat Vehicles 3. GuidedMissiles & Equipment 4. Commo & ElectronicsEquipment 5. Support Vehicles 6. Engineering& Other Equipment 7. Spares & Repair Parts
Army (21 -)Aircraft
Missile
Weapons
Ammo
Other
Navy (17 -)Aircraft
Weapons
Ammo
Shipbuilding& Conversion
Other
Marine Corps (17 -)
Procurement
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- 3010
- 3020
- 3011
- 3080
- 0300
- 0350
- 0360
- 0390
Appropriation Budget Activity
PROCUREMENT APPROPRIATIONS(ACCOUNT NUMBERS AND BUDGET ACTIVITIES)
(Continued)
Air Force (57 -)Aircraft
Missile
Ammo
Other
Defense (97 -)Defense-Wide
National Guard & Reserve Equipment
Defense Production Activity Purchase
Chemical Agents & Munitions Destruction
1. Combat Aircraft 2. Airlift Aircraft 3. TrainerAircraft 4. Other Aircraft 5. Modification of In-Service Aircraft 6. Aircraft Spares & Repair Parts7. Aircraft Support Equipment & Facilities
1. Ballistic Missiles 2. Other Missiles 3. Modificationof In-Service Missile 4. Spares & Repair Parts5. Other Support
1. Ammo 2. Weapons
1. Not Used 2. Vehicular Equipment 3. Electronics &Telecommunications Equipment 4. Other BaseMaintenance & Support Equipment 5. Spares &Repair Parts
1. Major Equipment 2. Special Operations Command3. Chemical/Biological Defense
1. Reserve Equipment 2. National Guard Equipment
1. Defense Production Activity Purchases
1. Chemical Agents & Munitions Destruction-RDT&E2. Chemical Agents & Munitions Destruction-Procurement 3. Chemical Agents & MunitionsDestruction-O&M
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MFP 6 RDT&E R&D Budget Category Activity
RDT&E APPROPRIATIONSRelationship Between MFP 6 (Research and Development)Categories and RDT&E Appropriations Budget Activities
RDT&E APPROPRIATIONS(ACCOUNT NUMBERS)
ProgramElement #s
RDT&EBudget Activity Title
6.1 BA 1 Basic Research 0601xxx6.2 BA 2 Applied Research 0602xxx6.3 BA 3 Advanced Technology Development 0603xxx6.4 BA 4 Demonstration & Validation 0604xxx6.5 BA 5 Engineering & Manufacturing 0605xxx6.6 BA 6 RDT&E Management Support 0606xxx --- BA 7 Operational System Development 010xxxx;
020xxxx;030xxxx; etc.
* NOTE: Although similar, titles of the Major Force Program (MFP) 6 Categories(which are not shown above) are not exactly the same as titles of the RDT&EAppropriation Budget Activities. In addition, as indicated by the potential PEnumbers that can be assigned to the “Operational System Development” BudgetActivity for RDT&E BA 7, those activities are not considered MFP 6 efforts. Whilecorrectly funded with RDT&E dollars, these efforts do not fall under a MFP 6Category; rather, for MFP purposes, the efforts are considered part of the MajorForce Program within which the fielded operational system falls.
Appropriation Account NumberRDT&E, Army 21 - 2040RDT&E, Navy 17 - 1319RDT&E, Air Force 57 - 3600RDT&E, Defense Wide 97 - 0400Development T&E, Defense 97 - 0450Operational T&E, Defense 97 - 0460
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SAMPLENAVY APPROPRIATIONS AND BUDGET ACTIVITIES
* Note: Below Threshold Reprogramming (BTR) amount limits are cumulative over entire period of time the specific fiscal year appropriation is available for obligation purposes (i.e., 1, 2, 3 or 5 years).
PROCUREMENT
SCN-1 Ship Conv - FBM Ships $10M Greater of 5 FullSCN-2 Ship Conv - Other Warships $10M orSCN-3 Ship Conv - Aphib Ships 20% ofSCN-4 Ship Conv - Mine & Pat Ships amountSCN-5 Ship Conv - Aux, Craft & PY Costs appropriated
WPN-1 Weapons Proc. - Bal. Msl 3WPN-2 Weapons Proc. - Other MslWPN-3 Weapons Proc. - Torp & Eq.WPN-4 Weapons Proc. - Other WpnWPN-5 Weapons Proc. - Other Ord.WPN-6 Weapons Proc. - Spares & Repair Parts
OPN-1 Other Proc. - Ship SEOPN-2 Other Proc. - Comm/Elec EqOPN-3 Other Proc. - Aviation SEOPN-4 Other Proc. - Ordnance SEOPN-5 Other Proc. - Civil Engr SEOPN-6 Other Proc. - Supply SEOPN-7 Other Proc. - Pers & Com SEOPN-8 Other Proc. - Spares & Repair Parts
APN-1 Aircraft Proc. - CombatAPN-2 Aircraft Proc. - AirliftAPN-3 Aircraft Proc. - TrainerAPN-4 Aircraft Proc. - OtherAPN-5 Aircraft Proc. - ModsAPN-6 Aircraft Proc. - SparesAPR-7 Aircraft Proc. - SE & Fac.
Below Threshold Years Available Reprogramming Rules for Obligation Funding
Other Appropriations / Titles Max In Max Out Purposes Policy
O&M, N Operations & Maintenance $15M No Congressional 1 AnnualRestriction
MILPER, N Military Personnel $10M No Congressional 1 AnnualRestriction
MILCON, N Military Construction Lesser of No Congressional 5 Full +$1.5M or 25% Restriction Appropriated
6.1 BA 1 Basic Research $4M Greater of 2 Incremental6.2 BA 2 Applied Research $4M or6.3 BA 3 Advanced Tech. Devel. 20% of6.4 BA 4 Demonstration & Val amount6.5 BA 5 EMD appropriated6.6 BA 6 RDT&E Mgmt Supp
(T&E Ranges) (Civilian Salaries)
BA 7 Operational Systems Devel. (Post-Production)
Procurement Below Threshold Years AvailableBudget Buget Activity Reprogramming Rules for Obligation FundingActivity Description Max In Max Out Purposes Policy
[At Line Item Level]
MFP 6 Below Threshold Years Available R&D RDT&E Budget Activity Reprogramming Rules For Obligation FundingCategory Number and Title Max In * Max Out * Purposes Policy
[At Program Element Level]
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LINE ITEM
BELOW THRESHOLD REPROGRAMMING ACTIONS
APPN MAX INTO MAX OUT LEVEL OF CONTROL OBL AVAIL
Reference Sources: DoD Financial Management Regulation (DoD 7000.14-R); Volume 3, Ch 6 (Aug 2000).
BUDGET ACTIVITYSOME BA 1 SUB- ACTIVITY
LIMITATIONS ON DECREASES(OPERATING FORCES)
LESSOR OF+ $ 2M
+ 25%
3 YEARS(SCN: 5 YEARS)
PROJECT
RDT&E
PROC
O&M
MILPERS
MILCON
NONE, UNLESSOTHERWISESPECIFIED
NO SPECIFICCONGRESSIONAL
RESTRICTION
NO SPECIFICCONGRESSIONAL
RESTRICTION
GREATER OF- $ 4M
- 20 %+ $ 4M PROGRAM ELEMENT 2 YEARS
+ $ 10M
+ $ 15M
+ $ 10M BUDGET ACTIVITY 1 YEAR
1 YEAR
5 YEARS
GREATER OF- $ 10 M
- 20 %
Amounts are Cumulative Over Entire Period of Obligation Availability
APPROPRIATION LIFE
Current Period: Available for new obligations, obligation adjustments, expenditures, and outlays
O&M
RDT&E
Procurement
Ships
MILCON
MILPERS
YEARS1 2 3 4 5 6 7 8 9 10 11
Expired Period: Available for obligation adjustments, expenditures, and outlays
Cancelled: Unavailable for obligations, obligation adjustments, expenditures, and outlays
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LIFE CYCLE COST COMPOSITION
Source: DoDD 5000.4
FLYAWAYCOST
DEVELOPMENT COST LIFE
CYCLECOST
PROCUREMENTPRIMEEQUIPMENT
PROGRAMACQUISITION
COST
WEAPONSYSTEM
COST
PROCUREMENTCOST
RDT&E, PROC &MILCON• FACILITIES
RDT&E, PROC, MILCON, O&M, & MILPERS• OPERATIONS SUPPORT• DISPOSAL
PROCUREMENTSUPPORT EQUIPMENT,TECH DATA, PUBS, ETC.
PROCUREMENT• INITIAL SPARES
RDT&EPRIME EQUIPMENT;
SUPPORT EQUIPMENT ITEMS;TECH DATA; PUBS; ETC.
PRODUCT IMPROVEMENTSFunding Decision Tree
Does ProposedModification (Mod)Increase System
Performance?Is System
Currently InProduction?
NOO&M $Procurement $
NO
YES YES
IF . . . . .
THEN . . . . .
AND . . . .Fund Purchase of the Mod Kitsand Installation of those Mod Kitson the Fielded System with . . . . .
Fund Developmentand Testing with. . . . .(To Include the ModKits used for Testing)
Is DT or IOT&ERequired?
Procurement $
YES
RDT&E $
NO
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Estimate Methods CommentsAnalogy - Comparison to one similar existing system;
based on judgments. Little or no data available;Relatively quick, easy, flexible. Used in earlyphases (e.g., Concept & Tech Dev / CE).
Parametric - Comparison to many similar existing systems;based on statistical analysis. Determine primarycost drivers and Establish Cost EstimatingRelationships (CERs) Used in early to mid-phases(e.g., Concept & Tech Dev / CE and System Dev& Dem / SI).
Engineering or Summation of “all” individual items in the system.“Bottoms-Up” Uses WBS structure for estimating purposes.
Used in mid-phases (e.g., System Dev & Dem /SD).
Extrapolation - Comparison to historical cost of same system.Based on extrapolation from actuals.Uses Learning Curve Theory Used in late phases(e.g., production and replenishment spares).
COST ESTIMATING
1. Make sure cost data is relevant and homogeneous. Caution: Watch out for historical data in times of change. Prior actuals may include uncompensated overtime or were priced as a “buy-in.” 2. Focus on cost drivers. 3. Test sensitivities and data relationships.
Guidelines
COST ESTIMATING RELATIONSHIPS(CER) - (Parametric) Est.
Cost
+ Sigma
Most LikelyCost
- Sigma
New Parameter Parameter (Size, Wt.)
MEAN+ Sigma
- Sigma
= Similar Systems
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BCWPACWP
BCWPBCWS
BCWP (cum)BAC
ACWP (cum)BAC
PERFORMANCE INDICES
Cost Performance Index CPI =
Schedule Performance Index SPI =
Percent Complete =
Percent Spent =
=
ESTIMATE AT COMPLETION
EAC BAC__(Lowest Est.) CPI(cum)
EAC = ACWP(cum) +(Highest Est.)
BAC - BCWP(cum)EAC - ACWP(cum)v
BAC - BCWP(cum)_{CPI(cum) *SPI(cum)}
TCPI(EAC) =
TO COMP PERFORMANCE INDICES
Defining, Planning and Budgeting
Work Packages Planning Packages(6 month coverage) (remainder of effort)
PERFORMANCE MEASUREMENTCOST & SCHEDULE PERFORMANCE MEASUREMENT
$45
1. Define the work (WBS)2. Schedule the work3. Allocate budgets } Cost Account
WBS
Task A
Task B
Task C
Tasks D-X
$10
$ 3
Element/Cost Account - 300
$ 4
4. Prepare and monitor performance profiles
TERMINOLOGY VARIANCESBCWS - Budgeted Cost of Work Scheduled Cost Variance CV = BCWP - ACWPBCWP - Budgeted Cost of Work Performed Schedule Variance SV = BCWP - BCWSACWP - Actual Cost of Work PerformedMR - Management Reserve Cost Variance % CV% =EAC - Estimate at Completion (Govt)LRE - Latest Revised Estimate (Contractor)BAC - Budget at Completion Schedule Variance % SV% =CBB - Contract Budget Base (CTC+AUW)CTC - Contract Target CostPMB - Performance Measurement Baseline Variance at Completion VAC = BAC - EACAUW - Auth Unpriced Work
BCWP - ACWP BCWP
BCWP - BCWS BCWS
}}
CBB
SCH VAR
ACWP
BCWP
MR
- COST VAR
NOW
BCWS
BAC
EAC/LRECTC
PMB}
TIME
COST
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TYPES OF CONTRACTS
Cost Family: Appropriate when product not well defined; high risk; contractor pro-vides best efforts; Government pays all allowable costs. Fee varies by type.
Cost Plus Fixed Fee (CPFF) - Fee same regardless of actual cost outcome.
Cost Plus Incentive Fee (CPIF) - Actual fee earned computed by applying shareratio to over/under run, subject to min/max fee limits.
Fixed Price Family: Product well defined, low risk; contractor must deliver product.
Firm Fixed Price (FFP) - Price fixed regardless of actual cost incurred.
Fixed Price Incentive Firm Target [FPI(F)] - Final price computed by applyingshare ratio to over/under run,subject to ceiling price limitation.
Award Fee (AF) - Either stand alone Cost Plus Award Fee (CPAF) or combinedwith cost or fixed price types. AF unilaterally determined by government based onsubjective evaluation of contractor’s performance.
Fee Limits: CPFF - Fee limited to 15% for R&D; 10% for Production and services.No statutory or FAR/DFARS regulatory limitation on other contract types.
CONTRACTINGCOMPONENTS OF CONTRACT PRICE
Contract Price = Cost + Profit/Fee
Direct Cost Indirect Cost
Direct Labor Direct Material Overhead G&A FCCM OtherDirect Cost (ODC)
Engrg Mfg Raw PurchasedLabor Labor Material Parts Engrg Mfg Mat’l
Std Comm Spt Spt Handling Items
Subcontracts Inter-divisional Transfers
TYPICAL CONTRACT TYPE BY PHASE CTP SDD/SI SDD/SD PROD CPFF,FFP CPFF, CPIF CPIF, CPAF FPI(F), FFP
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CONTRACT TYPE FEATURES
PromiseContractor Risk
Cash FlowProgress Payments %
AdministrationFee Limit %
FIXEDPRICEDeliveryHighDelivery75/90/95LowNone
COSTREIMBURSEMENTBest EffortsLowAs IncurredN/AHigh15/10/6 on CPFF
FEE
FIXEDFEE
(SHARE 100/0)
COST ESTIMATED COST
PRICE = COST + FIXED FEERisk Highest to the GovernmentObtains Fee Regardless of Cost
CPFF
FEE
COST TARGET COST
(Target) PRICE = (Target) COST + (Target) FEEAll Reasonable Cost PaidShared Risk Between Min/Max Fee
MAX
TARGET
MIN
CPIF
Share Ratio
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COST
CONTRACT TYPE FEATURES(Continued)
COST TARGET COST
(Target) PRICE = (Target) COST + (Target) Profit
=Point of TotalAssumption
(PTA)CEILING PRICE - TARGET PRICE
GOVERNMENT SHARE + Target Cost
0/100 SHARE
FPI(F)
FFP
PRICE = COST + PROFIT
PTA
Share Ratio
CEILINGPRICE
PROFIT
PROFIT
TargetProfit
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PRE-SOLICITATION PROCESS
POST-SOLICITATION PROCESS
MarketResearch
AcquisitionStrategyRequirement
AcquisitionPlan
Post Draft RFPon ElectronicBulletin Board
CBD NoticeAdvisory Multi-Step
FinalizeRFP
CBD Notice ofRFP
Release
RFP Releaseto Industry
BriefSSAC
SSADecision
Receipt of Oral& WrittenProposals
Initial Eval ClarificationsLimited Communications
CompetitiveRange
Determination
Face-to-FaceDiscussions/Negotiations
Receive & AnalyzeField Surveys(if requested)
Prepare for Discussionswith
Remaining Offerors
Request FinalProposalRevision
Receive &Analyze
Final Revision
DebriefUnsuccessful
Offerors
BriefSSA
Contract Award(Distribution)
SourceSelection Plan/
Strategy
RFP ReleaseBriefing to
SSA
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• GSA Multiple Award Schedules (MAS)– General Services Administration contracts for both products and
services–available to all agencies.
• Government–Wide Agency Contract (GWACs)– similar to MAS but more restricted in products and services available.
• Indefinite Delivery/Indefinite Quantity Contracts– Task orders (services) & Delivery Orders (products) issued under
omnibus umbrella contract.
• Other Transactions (OT)– Defined: Vehicles used for basic, applied and advanced research projects and
prototype development. OTs are not Contracts, Grants, or CooperativeAgreements.
– Objective: Attract commercial companies and consortia that historically havenot done business with the Department of Defense because of statutoryand/or regulatory requirements. OTs are not subject to the FederalAcquisition Regulation. Designed to increase DoD access to dual useTechnologies.
– Research Projects:
• Where practical, government cost share should not exceed cost share of other parties.
• Use OT when standard Contract, Grant or Cooperative Agreement is not appropriate.
– Prototype Projects:
• Must be directly relevant to weapons or weapon systems proposed to be acquired or developed by DoD.
– Constraints:
• At least one non-traditional contractor participating.
• If no non-traditional contractor participates, 1/3 of cost paid by parties otherthan federal government, or, senior procurement executive justifies transaction
– OT Guide for Prototype Projects, January 2001.
OTHER WAYS TO BUY
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CONTRACTOR PROFITABILITY RATIOS
The basic concept of profitability ratios is to measure income againstrevenue or against the investment required to produce it. There arethree principal profitability ratios with which you should be familiar.They are:1. Return on Sales which shows what percentage of dollars are leftafter the company has paid for all costs, interest, and taxes. It isexpressed as:
2. Return on Total Assets which looks at the efficiency with whichmanagement has used its resources, the company’s assets, to gen-erate income. It is computed as:
As noted, ROA addresses how well management utilizes the assetsof the firm in generating income. The ROA formula reflects the com-bined result of Return on Sales and the total asset turnover ratio (sales/total assets), broken down as follows:
3. Return on Common Stockholder’s Equity measures the rate of re-turn on the owners’ investment—their equity in the company. This isalso known as Return on Equity (ROE).
ROE can also be broken into two components: these being return onassets adjusted for preferred dividends and financial leverage (a ratioreflecting the relationship of creditor to owner financing—expressedas total assets/ common stockholders equity). This is shown by:
These profitability ratios give three different viewpoints concerningthe “bottom line” on the income statement—how much net profit isbeing made on each sale, how much is being made for the assets thatare employed, and how much is being made for the company owners.From an owner’s perspective, another profitability ratio you may beaware of is Earnings Per Share (EPS):
Return on Sales = Net IncomeSales
ROA = Net IncomeSales
SalesTotal AssetsX
ROE = Net Inc. - Pref. Div.Total Assets
X Total AssetsCommon Stockholder’s Equity
Earnings Per Share = Net Income Minus Preferred DividendsNumber of Shares of Common Stock Outstanding
ROE = Net Income - Preferred DividendsCommon Stockholders’ Equity
ROA = Net IncomeTotal Assets
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FINA
NC
IAL A
NA
LYSIS SHEET
(EXAMPLE)
Y96 5.01 0.92 4.60 4.60 4.27 19.65Y97 4.63 0.99 4.58 4.58 5.48 25.12Y98 3.81 0.91 3.48 3.48 4.68 16.31Y99 1.50 0.85 1.27 1.27 4.72 6.01Y00 -2.05 0.83 -1.71 -1.71 4.24 -7.25
Q4Y00 -2.05 0.83 -1.71 -1.71 4.24 -7.2512 mo. trailing
Return on Sales (%)(Net Income/Sales)
-4.00-2.000.002.004.006.008.00
Y96 Y97 Y98 Y99 Y00 Q4Y00
Total Asset Turnover(Sales/Total Assets)
0.00
0.200.40
0.600.80
1.001.20
Y96 Y97 Y98 Y99 Y00 Q4Y00
Return on Assets (%)(Net Income/Total Assets)
-4.00
-2.00
0.00
2.00
4.00
6.00
Y96 Y97 Y98 Y99 Y00 Q4Y00
Return on Assets (%)(Net Income/Total Assets)
-4.00
-2.00
0.00
2.00
4.00
6.00
Y96 Y97 Y98 Y99 Y00 Q4Y00
Equity Multiplier(Total Assets / Shareholder Equity)
0.001.00
2.003.00
4.005.00
6.00
Y96 Y97 Y98 Y99 Y00 Q4Y00
LOCKHEED MARTIN CORPLMT
Return Tot. Asset Return Return Equity Returnon Sales % X Turnover = on Assets % on Assets % X Multiplier = on Equity%
DUPONT ANALYSISSIC: 3760 GUIDED MISSILES &SPACE VEHC
Fiscal Year End: 12
X =
X =
Return on Equity (%)(Net Income / Shareholder Equity)
-15.00-10.00-5.000.005.00
10.0015.0020.0025.0030.00
Y96 Y97 Y98 Y99 Y00 Q4Y00
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Cashreceived
CASH CYCLE
Accountsreceivable
Sale(DD 250)
Finished goodsinventory
Raw materialinventory
Contractaward
Cashdisbursed
Cashdisbursed
Wagespayable
Work in processinventory
Accountspayable
- Delivery
CONTRACTOR FINANCING AND PAYMENTS
Commercial Non-Commercial Commercial Non-Commercial
* Internal Contractor Financing — Retained Earnings
- Govt specified- Offer or proposed- Interim- Advance
- Private • Trade Credit • Bank Credit — Revolving Credit — Term Loan- Government • For Non-Commercial — Progress Payments
• Performance Based• Cost Incurred Based• % Complete
— Unusual ProgressPayments
— Assignment of Claims — Guaranteed Loans — Advance Payments
- Periodic- Partial
PAYMENTSFINANCING (External*)
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Indirect costs
• Costs that can’t be tracedto a single cost objectbecause they areassociated withmultiple cost objects.
• Example: electricity forthe company’s facilities
Direct costs
• Costs that can betraced to a singlecost object.
• Examples: materialand labor to assemblean aircraft
DIRECT AND INDIRECT COSTS
Indirect costs areassigned to cost
objects usingindirect rate(s).
Traced directly
Traced directlyDirect
material
Directlabor
CostObject
ASSIGNING INDIRECT COSTS
CALCULATION OF INDIRECT RATES
RATE = Indirect Cost PoolAllocation Base
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LIFE CYCLE OF INDIRECT COST RATES
BIDDING ONCONTRACTS
ADJUSTINGPAYMENT &
CLOSINGCONTRACTS
PAYINGCONTRACTS
FORWARDPRICINGRATES
BILLINGRATES
ACTUALRATES
Direct material $ 40,000Material handling 10% 4,000
Direct engineering labor 6,000Engineering overhead 100% 6,000
Direct manufacturing labor 12,000Manufacturing overhead 150% 18,000
Other direct costs 6,000Subtotal 92,000
General and administrative 25% 23,000Total cost 115,000
profit 15% 17,250Cost of money for facilities capital employed 1,500
Price $133,750
CONTRACTOR’S COST PROPOSALEXAMPLE
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CONTRACTOR BUSINESS PLANNING PROCESSOUTPUTS
MANPOWER PLAN
Ratesfor
Estimating
SALES
ANNUALOPERATING PLAN
CAPITALINVESTMENT PLAN
PRODUCTION &ENGINEERING PLAN
MASTER DELIVERYSCHEDULE
IR&D/B&P PLAN
TOP MANAGEMENTGOALS, OBJECTIVES,
STRATEGIES
OVERHEADFORCAST
BUSINESS BASESALES FORCAST
$ $
TREND
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PRINCIPAL ACQUISITION LOGISTICSGOALS/OBJECTIVES
• Influence product design for supportability
• Design the support system
• Concurrently deploy system (includes support infrastructure)
• Maintain readiness and Improve affordability
• Support Strategy is part of the acquisition strategy and an integralpart of the systems engineering process. The support strategyshall address life-cycle sustainment and continuous improvementof product affordability, reliability, and supportability, while sustaining readiness.
• Supportability Analyses is a set of analytical tools, conducted asan integral part of the systems engineering process, to determinehow to most cost effectively support the system throughout thesystem life-cycle and form the basis for related designrequirements included in the system performance specification andlogistics support plan.
• Product Support Management Plan is a life-cycle plan thatincludes actions to assure sustainment, and continually improveproduct affordability. This plan is used throughout initial procurement, reprocurement, and post-production support. The plandocuments an integrated acquisition and logistics strategy for thelife of the system.
• Performance-Based Logistics is the output performanceparameters to ensure a system ready capability, the assignment ofresponsibilities and implementation of incentives for the attainmentof the goals associated with these performance parameters, andthe overall life-cycle management of system reliability andsustainment, and total ownership cost.
LOGISTICS MANAGEMENT PROCESS NOTES
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Maintenance Planning – establishes maintenance concepts and require-ments.
Manpower & Personnel – identification of personnel skills, grades andquantity required to support operation and maintenance of system.
Supply Support – determine requirements to acquire and manage sparesand repair parts.
Support Equipment – identify all equipment required to support operationand maintenance of the system.
Technical Data – scientific and technical information used to supportsystems acquisition.
Training & Training Support – determine requirements to acquire trainingdevices and conduct training of operators and maintenance personnel.
Computer Resources Support – identification of facilities, hardware,software and support tools to operate and support embedded com-puter systems.
Facilities – identify real property required to support system.Packaging, Handling, Storage and Transportation – identify designs and
methods to ensure the system is preserved, packed, stored, handledand transported properly.
Design Interface – relationships of logistics related design parameters toreadiness and support resources requirements; influence design forsupportability.
SUPPORT ELEMENT DEFINITIONS
BEST PRACTICE:Support Elements
MaintenancePlanning
Manpower &Personnel
SupplySupport
SupportEquipment Training &
Training Support
TechnicalData
DesignInterface
ComputerResources
Support
SYSTEM
Facilities Packaging, Handling,Storage and
Transportation
Note: Under Performance-Based Logistics (PBL), Support Elements are still valid even thoughGovernment is buying results and solutions, not specific resources or processes.
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SYSTEMS ENGINEERING (SE) LINKAGE TO DEFENSE ACQUISITION PROCESS
PRODUCTION & DEPLOYMENT OPERATIONS & SUPPORTFULL-RATE
PRODUCTION &DEPLOYMENT
LOW-RATEINITIAL
PRODUCTION
CONCEPTEXPLORATION
CONCEPT & TECH DEVELOPMENT
TECHNOLOGY DEVELOPMENT
SYSTEM DEV & DEMONSTRATION
SYSTEM DEMONSTRATION
SYSTEM INTEGRATION
FRP DECISION REVIEWCRITICAL DESIGN REVIEW
Technology Opportunities & User Needs
C IOC FOC
Single Step orEvolution to Full
Capability
Pre-Systems Acquisition Sustainment
Sustainment Disposal
Analysi s
Al lo cation
Syn thes is
(Balan ce)
R e qu ir e men ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Analysis
Al lo cation
Syn thes is
(Balan ce)
R e qu ir e men ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Analysi s
Al lo cation
Syn thes is
(Balan ce)
R e qu ir e men ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Analysis
Al lo cation
Syn thes is
(Balan ce)
R e qu ir e men ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Produce Product
ProduceSupport System Product
SupportManagementPlan
ProductSupportManagementPlan
ProductSupportManagementPlan
DemonstrateSupportability& Life CycleAffordability
DemonstrateSupportability& Life CycleAffordability
Inputs to:• ORD• TEMP• APB• Contract
GO
AL 1
GO
AL 4
GO
AL 2
Design Productfor Supportability
Design DevelopSupport System
Acquire & DeploySupportable System
GO
AL 3
Maintain/ImproveReadiness &
Improve Affordability
Modifications & Technology Insertion
Post Deployment Evaluations
Post ProductionSupport
Readiness &Total OwnershipCost Objectives
PerformanceBased
Logistics
AcquisitionStrategy
SupportStrategy
Evaluate AlternativeLogistics Concepts
SupportConcepts
SYSTEMS
ENGINEERING
PROCESSSYSTEMS
ENGINEERING
PROCESSSYSTEMS
ENGINEERING
PROCESSSYSTEMS
ENGINEERING
PROCESS
IOCFACTORY
CLOSED
Systems Acquisition
Demil&
Disposal
ProductSupportManagementPlan
BA
INCREMENT IIINCREMENT III
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Sufficient SparesAnd Repair Parts for
System Life?
Yes
Yes
No
No
MonitorUsage Data
MultipleSources?
EvaluateAlternatives
MonitorVendors
Sole SourceReprocurement
CompetitiveReprocurement
SubstituteParts
ComponentRedesign
Life of TypeBuy
POST-PRODUCTION SUPPORT DECISION PROCESS
Logistic Down Time
(LDT)
CorrectiveMaintenance Time
(CMT)
AdministrativeDelay Time
(ADT)
PreventiveMaintenance Time
(PMT• Locating tools• Setting up test equipment• Finding personnel (trained)• Reviewing manuals• Complying with supply procedures
• Parts Availability “In the Bin”
• Needed items awaiting transportation
• Preparation time• Fault location time• Getting parts• Correcting fault• Test and checkout
• Servicing• Inspection
OPERATIONAL AVAILABILITYStandby
TimeOperating
Time
Uptime
DowntimeAO =
Uptime +
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PROGRAM OFFICE ORGANIZATION STRUCTURES
ENGRNG PRODUCTIONBUSINESS LOGISTICS
FUNCTIONALDIVISIONS
FUNCTIONALDIVISIONS
FUNCTIONALDIVISIONS
STAFF STAFF STAFF
PM
PM
STAFF
Functional Structure
“Pure” Product Structure
PMSYSTEM A
PMSYSTEM B
PMSYSTEM C
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ENGRNG
PROGRAM OFFICE ORGANIZATION STRUCTURE(Continued)
Matrix StructurePEO
PM PM PM
STAFF STAFF STAFF
ENGRNG PRODUCTION
BUSINESS LOGISTICS
FUNCTIONALDIVISIONS
FUNCTIONALDIVISIONS
SYSCOMHEAD
FUNCTIONALDIRECTORS
LOGISTICS
PRODUCTION
BUSINESS
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IPT = Integrated Product TeamPIT = Program Integration Team (Composed of Functional Directors)
Note 1: IPTs mirror Work Breakdown Structure
PROGRAM OFFICE ORGANIZATION STRUCTURE(Continued)
PIT
AIR VEHICLEIPT
ENGINEIPT
SUPPORT SYSIPT
TRAINING SYSIPT
Note 1
INTEGRATED PRODUCT TEAMS
SYSTEM PROGRAM DIRECTOR
DIR OFLOG
DIR OFTEST
DIR OFCONTRACTS
DIR OFPROJECTS
DIR OFENG
DIR OFFIN MGT
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THE ROLE OF MANUFACTURING IN THEACQUISITION PROCESS
SUSTAINMENTFULLRATELRIPCE T D DEMON-
STRATION INTE-
GRATION
CBA
Execute the Manufacturing Plan Reflect Design Intent Repeatable ProcessesContinuous Process Improvement
PRODUCTION Influence the Design Process Prepare for Production
RDT&E
Producible DesignFactory Floor Characterized
MILESTONE C EXITREQUIREMENTS
CURRENT DoD 5000 PROCESS
• Unstable requirements/engineering changes• Unstable production rates and quantities• Insufficient process proofing• Insufficient materials characterization• Changes in proven materials, processes, subcontractors, venders, components• Producibility• Configuration management• Subcontractor management• Special tooling• Special test equipment
COMMON PRODUCTION RISKS THAT GREATLYIMPACT COST, SCHEDULE & PERFORMANCE
Uniform, Defect-Free ProductConsistent PerformanceLower Cost
NET RESULT:
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• Producibile system design shall be a development priority*• Design/engineering shall focus on*;
- Producibile design- Capable manufacturing process- Necessary process controls- Minimizing manufacturing costs
• Full rate production shall require*;- Stable systems design- Proven manufacturing process- Available production facilities and equipment
• Quality management process shall*;- Establish capable process,- Continuously improve the process- Monitor and control critical processes and product variation- Establish mechanisms for feedback of field product performance;- Implement an effective root cause analysis and corrective action system
PRODUCIBILITY
DEFINITION: The measure of relative ease of manufacturing a product.The product should be easily and economicaly fabricated,assembled, inspected and tested.
* The PM is responsible for Producibility *
PRODUCIBILITYInterim Defense Acquisition Guidebook, 30 Oct 02
5.2.3.5.1 Producibility, 5.2.3.5.3 Quality
*Under Revision; NOT Mandatory
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.90
.85
.80
.75
.70
.65
.60
.55
_X
UCL
LCL
2 31 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 24 25
.40
.30
.20
.10R =.178
UCL
19
2 31 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 24 2519
_X (Control Chart)
_R (Control Chart)*
*Note: No lower control limit for R Chart for sample size below 7.
VARIABILITY CONTROL• GOAL: Minimize and control manufacturing variation on key product characteristics• WHY: Direct correlation between deviation from nominal value on key characteristics and product quality and functionality• TOOLS: QFD, DOE, Process control chart (Statistical Process Control, see below)
QUALITY MANAGEMENT SYSTEMSInterim Defense Acquisition Guidebook, 30 Oct 02
“The PM shall allow contractors to define and use a preferred qualitymanagement process that meets required program support capabilities.The PM shall not require third party certification or registration of asupplier’s quality system.”
Note: ISO 9000 Series International Quality Standard is considered a Basic Quality System --focus is mainly on “Document what you do, and do what you document”
Advanced Quality Systems (AQS) such as Boeing’s D1-9000, Motorola’s Six Sigma, and others, focus on Customer Satisfaction, Key Processes Identification and Control, Metrics, Flow-down to Suppliers, and many other advanced process-oriented techniques.
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PRODUCTION READINESS REVIEWS (PRRs)
• Identify program risks, issues and opportunities Early• Assess capibility of contractor (and sub-contractor) to deliver
on-time, within cost• Assess actual contractor performance (metrics?)• Assess effectiiveness of contractor’s corrective actions• Measure improvement of contractor’s performance
“WHY WE DO THEM”
“HOW TO DO THEM”• Get a Charter that the PMO and contractor both understand• Coordinate with DCMA/CAS - use them• Establish areas of Assessment with Metrics
- Producibility- ECOs/design stability- Sub-contractor management- Cost of scrap, rework and repair- Manufacturing process control- Tooling status
• Ask questions, touch things, talk to shop floor workers- See what is actually happening on the factory floor
ADDITIONAL INFORMATION SOURCES
• DAU’s Advanced & Electronic Manufacturing Resources(A&EMR) website:
- Go to www.dsmc.dau.mil, then click on Information Dissemination, then click on the A&EMR- Contains references to DoD Manufacturing Requirements, and Best Business Practices such as Lean Production, e-Commerce, Six Sigma, Basic and Advanced Quality Systems, and Supply Chain Management
• Best Manufacturing Practices Center of Excellence- www.bmpcoe.org
• Lean Aerospace Initiative (LAI)- http://web.mit.edu/lean/index.html
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Use Combined DT/OT - single integrated Contractor/Gov’t DT and OT Team;shared test events & test data; independent data analysis & reporting.
ACAT I & II Programs - require an independent, dedicatedIOT&E to proceed Beyond Low Rate Initial Production.
T&E Required before going Beyond Low Rate Initial ProductionProduction Qualification T&E - Verify Design Article meets Spec/PM responsiblePerformed by Contractor &/or Government/DPRO assistance valuable. Readinessfor IOT&E.• Live Fire T&E (LFT&E) - Vulnerability and Lethality/Dev’l Agency fund and execute.DOTE oversight, approval and Congressional reporting for ACAT I, II and selectedprograms.• Initial Operational T&E (IOT&E)- Operational Effectiveness and Suitability/Independent Svc OTA plan and manage. DOTE oversight, approval, andCongressional reporting for ACAT I and selected systems.
Models and Simulations used throughout the Acq Process
REQUIREMENTS DEVELOPMENT
ENGINEERING DESIGN
FABRICATION & TEST (BENCH, LAB)
INTEGRATION & TEST (H/W IN THE LOOP)
OT&E:
TEST & EVALUATION (T&E)Developmental T&E (DT&E)/Operational T&E (OT&E) Comparisons:
OT&E• Operational effective/suitable• Operational Test Agency (OTA) resp.• “Typical” User Personnel• Many test articles/each test• “Combat” environment/Threats• “Production Rep” Test Articles• Contractor may not be allowed
DT&E• Tech. perf. measurment• Dev. agency rsp. (PM)• Technical Personnel• Ltd. test articles/each test• Controlled environment• All types of Test Articles• Contractor involved
T&E Tasks & Events
• Test Rqmts• Test Interfaces• Eval Strategy• Sys. Engineering• Design for Test• S/W Human T&E• TEMP• Subsystem T&E• Software Only T&ESystem DT&E• CSCI T&E• R. A. M.• Supportability• Interoperability• Production Qual• Live Fire T&E• Cert of Readiness for IOT&E
AGONIZE OVER THRESHOLDS!
To Support T&E during: RQMTs Definition T&E Planning Engr Design Fabrication Integration Sys DT&E OT&E Training Ops
System OT&E• Effectiveness• Suitability
• Acceptance Test• Manf. Test
• Data Collection• Reporting
DEVELOPMENT T&E:QUALIFICATION T&E,ACCEPTENCE T&E, LFT&E
PRODUCTION (PAT&E, FOT&E)
DEPLOY & OPERATIONAL SUPPORT
EOA, OA, IOT&E(OPEVAL)
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M & S PLANNING
IDE Planning
• Establish a business processimprovement team
• Identify High Payback ProcessAreas
• Identify potential legacy systemsand data repositories
• Identify user base includingremote sites
• Capacity of PC workstations• Bandwidth of communication lines• Where servers are/will be located• Identify legacy system host
platforms
SBA Planning
• Establish a simulation & VV&Aplanning process
• Identify High Payback ProcessAreas
• Identify potential legacy systems,Service/Joint-standard simulations,Architectures and data repositories
• Identify where user and simulatorsare / will be located
• Capabilities & Architectures ofExisting Simulations
• Network Bandwidth Requirements• IDE utilization opportunities• Interoperability / Interface / Immer-
sion Requirements• Required Capability Gap• Design SBA Architectures• Establish long term plan, budget,
DOCUMENT & implement• Manage it, update, evolve, reiterate
HOW DO WE PLAN? - A NOTIONAL APPROACH
Simulation Support Plan (A,MC),Single Acquisition Mgt Plan (AF),Acquisition Strategy, TEMP
• ACCESS YOUR SERVICE CENTERS OF M&S EXPERTISE• Establish a simulation coordinating group; the EARLIER the better• Design long term M&S applications and the Integrated Digital Environment
through the acquisition strategy, TEMP, STEP, SSPs• CONTINUOUS PLANNING PROGRAM PLANNING
TEMP
M& S inAcquisition
Feb 2000
SimulationBased
AcquisitionA New
Approach
DSMCDec 98
AFI 16-10021 June 2000
M&SSupport toAcquisition
USAFSimulation
BasedAcquisition
A NewApproach
DSMCDec 98
SMARTPlanning
GuidelinesJAN2000
ARMY
{SBA}
TheEffectiveness
of Modeling &Simulation in theWeapon System
Acquisition ProcessOct 1996
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HIERARCHY OF MODELS AND SIMULATIONS FUNCTIONS
RESOLUTION SUPPORTED MODELS & SIMULATIONS FORCE OR SYSTEM LEVEL
IncreasingResolution
ActualPerformance
IncreasingAggregationComparative
Results
The Hierarchical Aggregation of Models reduces Fidelitysignificantly & must be evaluated. - (PM, DIS & DMSO)
Test &Evaluation
Operational Req’ts DevelopmentEffectiveness AnalysisTactics DevelopmentMission Planning & Rehearsal
DesignManufacturing
CostSupport
DevelopmentTech Req’ts Dev.
Joint/CombinedForces
Air Wings Battle Groups
Air Wing
EWA/C
AircraftSystem
Fire Control
Radar
Corps
Air Vehicle
(System/Subsystem/Component)
(One-on-One)
(Many-on-Many)
Theater/Campaign
Mission/Battle
Engagement
Engineering
(Groups of Systems-Force Package)
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THE EVOLUTION OF MODELING & SIMULATION
VIRTUAL PROTOTYPE PHYSICAL MOCK-UP FINAL PRODUCT
DistributedInteractiveSimulation
(DIS)
FullSystem
Prototypes
CADCAMCAE
CADAM
Simulation BasedAcquisition
The Advancing Computer & Communications Technology Revolutions
SimulationBase Design
(VirtualPrototyping
with mfg design,risk/cost analyses,mat’l designation)
CONCEPTDEVELOPMENT
DEPLOYMENT& SPPORT
MANUFACTURING
TEST & EVALUATION
ENGINEERING DESIGN& ANALYSIS
INTEGRATED
SYSTEM DATA
Operational Training
Oper ational Simulation
P ar ametr ic DesignDetailed Design
Manufacturing
Acquisition Planning
Advanced Surface CombatantDARPA
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TYPICAL TIMES FOR PROGRAM ACTIVITIES
EventTime
(months)6 - 9
9 - 126 - 8
24 - 3030 - 362 - 3
9 - 122 - 3
6 - 12 3
18 - 30
(ADD’L TYPES OF PLANNING CHARTS ON NEXT 5 PAGES)
TYPES OF PLANING CHARTS
MILESTONE CHART (Gantt)
PLANNING AND CONTROL
Procurement Request Development TimeContract Lead-timeDAB Lead-timeSI Design, Fab and TestSD Design, Fab and QualTest Readiness Review Lead-timeDT&EOT Readiness Review Lead-timeOT&EOT Report PreparationProduction Lead-time
Time Period J F M A M J J A S O N D J F M A M
DesignFabIntegrateGnd. TestQualFlt. TestProduce
• Advantages: Simple
• Disadvantages: Difficult to show dependencies between activities unless computer-constructed chart.
Activity:
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NETWORK CHART
= CRITICAL PATH
TIME 5 4 7 4 52117 6 7
COST2,200
15,0002,5004,600
028,00023,00013,5009,000
PLANNING AND CONTROL(Continued)
3 5
1 2 6 7
TASKBriefTransportShip GFEShip systemInspectTrain maint.Train oper.Integ. sys.Dry Run
TASK #1-22-32-62-44-63-63-56-77-8
4
8
ACCELERATECOST TIME - 500 600 750 - 800 800 - 400
53425
1412
65
• Advantages: Shows dependencies; computes critical path• Disadvantages: Complex; computerized support required to maintain
Does not provide any chronology
17
21
5
4
6 7
4
7
5
• Advantages: Shows chronology and dependencies• Disadvantages: Complex; computerized support required to maintain
SWAN CHART
0 5 9 12 14 26 30 36 43 DAYS
• USE TASKS & TIMES FROM CHART ABOVE
6-7 7-8
2-33-6
1-2 2-6
2-4
3-5
4-6
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1 2 6 7 8 9
3
4
5
10
11
125
4
4
21
5
17
7 6 7 21 30
45 7
5
BRIEFSHIPSYS
INSPECT
INTEG-RATE
TRANSTROOPS
TRAINOPS
DRYRUN
TEST
TRAINMAINT
SHIP GFE
GOVTANALYZE
GOVTREPORT
KTRREPORT
KTRANALYZE
Normal PERT Display for manual method:
* PERT = Program Evaluation & Review Techniques
5BRIEF
SHIP 7GFE
INTEG- 6RATE
DRY 7RUN
21TEST
GOVT 30ANALYZE
GOVT 5REPORT
KTR 7REPORT
KTR 45ANALYZE
TRAIN 17OPS
TRANS 4TROOPS
SHIP 4SYS
TRAIN 21MAINT
5INSPECT
Most widely-used PERT Display using scheduling software:
PERT* NETWORK CHARTS
INTE-GRATE
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Project WorkBreakdown
Structure (WBS)
Task/ResponsibilityMatrix
“ When ”
Networks
“ How Much ”
“ How ”
NETWORK SCHEDULE DEVELOPMENT
T&E
a
b
M
a
b
S
a
b
c
C
10
11
12
20
21
22
30
31
32
33
40
41
42
43
50
51
5230
2010
Scheduleabcdabcdabcd
MNSAOA,ORD
TechnicalCriteria
“ What ”
“ Who ”
WorkPackages
Manpower& MaterialEstimates
ProjectPlans
Org.WBS
10
20
30
40
11122122313241
T&E M S Ba b a b a b a
p s1
s1 pp
s1
p s1
s2
p
C
RequirementsDocuments
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26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0
WORKING DAYS PRIOR TO COMPLETION (LEAD TIME)
(SUB-CONTRACTPART)
(PURCHASE PART)
(PURCHASE PART)(PURCHASE PART)
(SUB-ASSEMBLY “B”)
(SUB-ASSEMBLY “A”)
FINAL ASSEMBLY
(FABRICATED PARTIN-HOUSE)
TEST SHIP
6
874
1
2
3 5
121110
9
LEAD TIME CHART
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80706050403020100
80706050403020100
O N D J F M A M J J 1 2 3 4 5 6 7 8 9 10 11 12MONTHS CONTROL POINTS
80706050403020100
PlannedActual
LINE OF BALANCE TECHNIQUE
26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0
PRODUCTION LEAD TIME CHART 22 WORK DAYS/MONTH
61
4 7 8
2
3 5 9
10 11 12
Snapshot in time: 1 May
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ACQUISITION PROGRAM BASELINE(Performance) - An Example
Baseline Values
Objective
Threshold
X
.85
.80
.75
.70
.65(Prob)
ExitCriteria
(.77)
System Integration System Demonstration Low-Rate Initial Prod Full-Rate Prod
CurrentEstimate
Growth (Maturity) Curve
MS B CDR MS C FRP DR
SURVIVABILITY
ExitCriteria
(.73)
System Development &Demonstration Phase
Production &Deployment Phase
* in this example the current estimate falls below the threshold -this represents a baseline breach of performance.
*
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List ofTop Risks
RISK MANAGEMENT PROCESS MODELRisk
Assessment
Risk Monitoring/Reporting
Risk EventIdentification
List of HandlingOptionAlternatives
Process Plans & Controls
Organization & Training
Revised BestHandlingOptions
StatueReports
Best Options
Revised TopRisk List
Risk Mgt Plan(Implemented)
ProcessPreparations
RiskMonitoring& Reporting
Risk HandlingOption Analysis
ScheduleBudget & MIS
RiskIntegration
Risk ManagementPlanning/Prep
Risk Handling
RiskAnalysis
Risk HandlingOption
Identification
Risk andRisk Handling
OptionIntegration
List of RiskEvents
RiskDescriptions
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RISK MANAGEMENT
1. Develop program plans to the work package level.
2. Assess risk at the lowest work package/WBS level.
3. Manage the highest risk work packages; most others will work out.
TRADE-OFF ANALYSIS*
1. Identify alternative solutions
2. Select evaluation criteria/factors & MOEs; i.e. cost, schedule, performance criteria
3. Weight evaluation criteria
4. Develop utility functions for each factor
5. Conduct evaluation (weighted utility summary table where weight is multiplied by utility function value)6. Perform sensitivity check7. Select highest scored alternative
RISK & TRADE-OFF ANALYSIS
Risk PlanningRisk Mgmt Plan (The Process) Risk ID
TechnicalCostScheduleLessons learnedWBS
Risk AnalysisNetworksSimulationWatch listsTemplates
Risk HandlingAvoidanceControlAssumptionTransferResearch
Risk Management Risk Assessment
*With Cost As an Independent Variable (CAIV), aggressive cost objectives areestablished as a result of trading performance and schedule for cost.
SOW DELIVERABLES WBS
OBS
WORK PKGPLANNING PKG
GANTT/NETWORK
CHART
COSTEST.
COSTVS
TIME
PLAN RISK MGTPROCESS
ASSESS RISKHANDLE RISK
Specs Contract
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TECHNICAL PERFORMANCE MEASUREMENTTHE CONCEPT
TECHNICALPARAMETERVALUEe.g., MTBFWeightFuelConsumption
Tolerance Band
Threshold
Planned Value
CurrentEstimate
TIME
Variation
Planned Profile
Achievement to date
Milestones
}
1. ARE ALL VIABLE ALTERNATIVES BEING EXPLORED?
- Is each alternative clearly defined? - Have the alternatives been
prescreened? How? - Are affordability limits established? - Can all of the screened-out alternatives
be defended?
2. ARE SELECTION CRITERIA IDENTIFIED?
- Are all significant criteria identified? - Do the criteria discriminate between
alternatives? - Are the criteria measurable? - Have the criteria been pre-approved?
3. IS THE CRITERIA WEIGHTING SYSTEM ACCEPTABLE?
- Are rationales for criteria weightsexplained?
- Are criteria weights consistent withguidance?
- Are criteria weights consistentlydistributed in the tree?
4. ARE UTILITY (SCORING) CRITERIA DETERMINED?
- Is defensible rationale established foreach criterion?
- Are criteria developed from operationalmeasures of effectiveness wherepossible?
- Do all plans use the same numericalscale?
- Is the location of the “zero point”explained?
5. ARE EVALUATION METHODS DOCUMENTED?
- Are test data reliability estimates(confidence levels) incorporated?
- Are models validated? When? Who?
6. HAS SENSITIVITY BEEN ESTIMATED?
- Are error ranges carried through withworst-on-worst case analysis?
- Have the effects of changes in the utilitycurve shapes been examined?
- Have rationales for the limits beendeveloped?
PROGRAM MANAGER’S CHECKLIST FOR REVIEW OFTRADE-OFF PLANNING AND STUDIES
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PROCESS OUTPUT• Development Level Dependent
- Decision Data Base- System/Configuration Item Architecture- Specifications & Baselines
SYSTEMS ENGINEERING PROCESS
Functional Analysis/Allocation• Decompose to Lower-Level Functions• Allocate Performance & Other Limiting Requirements to All Functional Levels• Define/Refine Functional Interfaces (Internal/External)• Define/Refine/Integrate Functional Architecture
Synthesis• Transform Architectures (Functional to Physical)• Define Alternative System Concepts, Configuration Items &
System Elements• Select Preferred Product & Process Solutions• Define/Refine Physical Interfaces (Internal/External)
System Analysis& Control(Balance)
Requirements Loop
Requirements Analysis• Analyze Missions & Environments• Identify Functional Requirements• Define/Refine Performance & Design Constraint Requirements
• Trade-Off Studies• Effectiveness Analyses• Risk Management• Configuration Management• Interface Management• Data Management• Performance Measurement - SEMS - TPM - Technical ReviewsDesign Loop
Verification
PROCESS INPUT• Customer Needs/Objectives/Requirements
- Missions- Measures of Effectiveness- Environments- Constraints
• Technology Base • Output Requirements from
Prior Development Effort • Program Decision Requirements • Requirements Applied through
Specifications and Standards
• Customer = Organizations Responsible for Primary Functions• Primary Functions = Development, Manufacturing, Verification, Deployment, Operations, Support, Training, Disposal• System Elements = Hardware, Software, Personnel, Facilities, Data, Material, Services, Techniques
RELATED TERMS
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REQUIREMENTS ANALYSIS QUESTIONS• What are the reasons behind the system development?• What are the customer expectations? How will they measure
the performance of the system?• Who are the users and how do they intend to use the product?• What do the users expect of the product?• What are their level of expertise?• With what environmental characteristics does the system
have to comply?• What are existing and planned interfaces?• What functions will the system perform, expressed in cus-
tomer language?• What are the constraints – hardware, software, economic,
procedural – with which the system must comply?• What will be the final form of the product – model, prototype,
mass production?
• Specific, Clear and Unambiguous: Contains no vague terms• Understandable: Stated with sufficient detail in everyday language• Concise: Contains no unnecessary words• Consistent: Top-to-bottom consistency with identical usage of terms and conformance to standards• Stable: Baselined and under configuration control• Traceable: Derived from the mission profile or the contractor’s design policies• Verifiable: Determine whether the product is satisfying the requirement• Feasible: Can achieve, produce, and maintain the requirement
ATTRIBUTES OF A WELL – DEFINED REQUIREMENT
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FUNCTIONAL ANALYSIS/ALLOCATION(THE CONCEPT)
• Allocate Functions • Decompose Higher
Functions• Allocate Performance • From Higher to
Lower Functions• Functional Descriptions • Functional Flow
Block Diagrams • Time Line Analysis • Functional Architecture
(2 min) (60 min) (5 min)
LAUNCH CRUISE LAND
FLY
start end
(67 min)
CRUISE LAND LAUNCH
FLY
REQUIREMENTS LOOPPROCESSINPUT
FunctionalAnalysis/Allocation
Synthesis
Requirements Loop
RequirementsAnalysis
Design LoopVerification Loop
System Analysis& Control(Balance)
PROCESS OUTPUT
• Ensure all requirements are covered by at least one function.• Ensure all functions are justified by a valid requirement. (No unnecessary duplication)
Requirements Loop
Functions Transport Load Start Carry Stop Unload Communicate
Transport Troops X X X X X XSquad Level X X X X50 KM X X90 Minutes from Transporter X X X X XArrivalConstant XCommunication
Requirements
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DESIGN LOOP
PROCESS
INPUT
FunctionalAnalysis/Allocation
Synthesis
Requirements Loop
RequirementsAnalysis
Design LoopVerification Loop
System Analysis& Control(Balance)
PROCESS OUTPUT
• Ensure all functions are covered by at least one hardware (or software) element
• Ensure all elements of physical architecture are justified by a valid functional requirement. (No unnecessary duplication)
Aircraft Air Frame Engine Communications Nav System Fire Control
Preflight Check X X X X XFly
Load XTaxi X X XTake-Off X X XCruise X X X XRecon X X X X
Communicate XSurveillance ? ? ?
FunctionPerformed
P H Y S I C A L A R C H I T E C T U R EFUNCTIONALARCHITECTURE
AUDIT TRAIL, DECISION DATABASE,ITEM SPECIFICATIONS, ETC.
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SYNTHESIS• Defines the Physical Architecture
- Each Part Must Meet At Least One Functional Requirement- Any Part Can Meet More Than One Requirement
• Justify Architecture by Trade Studies & EffectivenessAnalyses
• Document All Process Information in Database• Generate Documents from Database
VERIFICATION LOOPPROCESS
INPUT
FunctionalAnalysis/Allocation
Synthesis
Requirements Loop
RequirementsAnalysis
Design LoopVerification Loop
System Analysis& Control(Balance)
PROCESS OUTPUTVerification Loop
• Each Requirement Must be VerifiableSection 4 of Specification
• Verification Evaluates whether SolutionMeets Requirements
• 4 Types of Verification• Examination• Demonstrations• Simulations / Analysis• Test
FLY TechDoc’s
EJECTDESTROYPROPEL
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HOW DO I MAKE DECISIONS ?
WILL IT DO JOB/WORTH THE $$ ?
ARE WE DOING THE RIGHT THING ?
HOW DO I KNOW IT WORKS?
WILL IT MEET THE PERFORMANCE CRITERIA?
WILL IT ALL WORK TOGETHER ?
DO WE KNOW WHAT WE HAVE ?
ARE WE READY TO GO ON ?
HOW DO I RUN THIS PROGRAM ?
SYSTEM ANALYSIS AND CONTROL(MGMT TOOLS)
H E L P !
TRADE STUDIES
EFFECTIVENESS ANALYSIS
RISK MGMT
TECHNICAL PERF MEASURES
MODELING & SIMULATION
TECH PERF MEAS
CONGFIG MGMT
TECHNICAL REVIEWS
INTEGRATED PLANNING
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SPECIFICATIONS AND STANDARDSA New Way of Doing Business (Acquisition Reform)
(Sec Def Memo of 29 June 1994)
1. Use Performance-Based Specifications
2. Cancel/Convert Manufacturing and Management Standards to Performance or Nongovernment Standards (NGSs)
3. Encourage Contractors to Submit Alternative Solutions to Military Standards/Specifications
4. Prohibit Use of Military Specifications/Standards Except when Authorized by SAE or Designee
Design/Fab Require desired Specify exact parts andoutcomes or functions, componentsSpecific design to KTR
Processes Few, if any Specify exact processes
Physical Give specifics only for Specify more physicalCharacteristics interfaces, environment, characteristics, than
or human factors needed for int, env,etc.
Interface Reqmts Detail interface data does Detailed interface dataNOT solely make a perf.spec a detail spec.
Materials Leave specifics to KTR Require specific materials
Test & Eval State performance Prescribed testingneed; KTR picks processtest procedure
PERFORMANCE DETAIL / DESIGN
PERFORMANCE VS. DETAIL SPECIFICATIONS
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• Program Unique Specifications advantages:• Help avoid duplication and inconsistencies.• Enables good estimates of necessary work and resources.• Provides consistent communication among players as people
rotate.• Can be used to prepare test plans.• Can be used a long time after the system has been put into
operation.• Serves as an interface between customers, developers and
designers.• Can act as negotiation and reference document for engineering
changes.
MIL-STD-961Standard Performance Specification
Standard Design SpecificationProgram-Unique SpecificationsNo waiver required to use.
STD PRACTICE
PROGRAM-UNIQUE SPECIFICATIONS
• Defines mission/technical performance requirements. Allocates Requirements to functional areas. Defines interfaces.
• Defines performance characteristics of CI’s (form, fit, function). Details Design Require ments only to meet interfaces. “DESIGN TO.”
• Includes “how to” and specific design requirements. Usually includes specific processes and procedures. “BUILD TO.”
• Defines process performed during fabrication.
• Defines production of raw materials or semi-fabricated material used in fabrication.
System
(HW or SW)Item
Performance
(HW or SW)Item
Detail
Process
Material
Functional(“System”)
Allocated(“Design to”)
Product(“Build to”)
Product
Product
Specification Content Baseline
Specs
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Anal ysi s
Alloca tion
Syn thes is
(Bal ance)
R equ ir e men tsL oop
De si gn
L oop
Ve rif ic at ion
Ana lysis
Al loca tion
Syn thes is
(Balance )
Re qu ir em en ts
Loo p
D esi gn
Loo pVe rif ic at io n
Ana lysi s
Allocati on
Syn thes is
(Bal ance )
R equ ir e men ts
L oop
De si gn
L oop
V e rif ic at ion
Ana l ysi s
Alloca tion
Syn thes is
(Bal ance)
R equ ir e men tsL oop
De si gn
L oop
Ve rif ic at ion
Ana lysis
Al loca tion
Syn thes is
(Balance )
Re qu ir em en ts
Loo p
D esi gn
Loo pVe rif ic at io n
Ana lysi s
Allocati on
Syn thes is
(Bal ance )
R equ ir e men ts
L oop
De si gn
L oop
V e rif ic at ion
Ana lysis
Al lo ca tion
Synth es is
(Balance )
Re qu ir e m en tsL oo p
D e si gn
L oo p
V e rif ic at io n
Ana l ysis
Allo cati on
Syn th es is
(Bal an ce )
Re qu ir e men ts
L oo p
De si gn
L oo pVe rif ic at io n
Ana lysi s
Al lo ca tion
Synth es is
(Balance )
R e qu ir e m en ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Ana lysis
Al lo ca tion
Synth es is
(Balance )
Re qu ir e m en tsL oo p
D e si gn
L oo p
V e rif ic at io n
Ana l ysis
Allo cati on
Syn th es is
(Bal an ce )
Re qu ir e men ts
L oo p
De si gn
L oo pVe rif ic at io n
Ana lysi s
Al lo ca tion
Synth es is
(Balance )
R e qu ir e m en ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Ana l ysi s
Alloca tion
Syn thes is
(Bal ance)
R equ ir e men tsL oop
De si gn
L oop
Ve rif ic at ion
Ana lysis
Al loca tion
Syn thes is
(Balance )
Re qu ir em en ts
Loo p
D esi gn
Loo pVe rif ic at io n
Ana lysi s
Allocati on
Syn thes is
(Bal ance )
R equ ir e men ts
L oop
De si gn
L oop
V e rif ic at ion
PDR - Preliminary Design Review
CDR - Critical Design Review
PRR - Production Readiness Review(s)
TRR - Test Readiness Reviews(s)
FCA - Functional Configuration Audits
SVR - System Verification Review
PCA - Physical Configuration Audit
- Approve allocated requirements- Establish allocated baselines
- Preliminary product requirements- Ready for fabrication
- Assess producibility/manuf readiness
- Assess test readiness- Approve test plans
- Verify CIs perform to spec
- Verify CIs perform to system spec
- Verify the product baseline
ASR - Alternative Systems ReviewSRR - Systems Requirements ReviewSFR - Systems Functional Review
SSR - Software Specification Review
- Preferred System Solution meets needs- Preliminary Functional Requirements- Approve functional requirements- Review preliminary allocated requirements- Approve S/W allocated requirements
SYSTEM REVIEW DEFINITIONS
ASR SRR PRRs/TRRSSFR CDRSSRPDR PCASVRFCA
Contractor
DocumentsSys Perf SpecItem Perf SpecsItem Detail/TDP
BaselinesFunctionalAllocatedProduct
Tech Reviews
MS A B C
Government
Draft
System Definition SYS
CI
SysTechRqmts
ItemDesignRqmts
DetailedDesignRqmts
SYSTEMS ENGINEERING MANAGEMENTin Acquisition
Block ILRIP
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CONFIGURATION MANAGEMENT PLANNING
• The decisions on• Which baselines the government should eventually control• The data needed• When that control should be established
...are strategic management decisions that involve• Acquisition strategies - sources, competition, etc.• Logistics support plans - repair levels, data needs, open systems, etc.• Technology insertion - stable vs rapidly moving technologies, etc.
• Government should control the Functional Baseline (documents systemlevel requirements)
• DoD PMO’s increasingly choose to leave Allocated Baselines under contractor control until late in development. (Documents the CI level design requirements.)
• Promotes contractor design flexibility• Relieves PMO from administrative burdens of managing design ECPs• Requires effective implementation of IPPD
• When and if to control baselines is dependent on support philosophy and acquisition management strategy.
“A management process for establishing and maintaining consistencyof a product’s performance, functional and physical attributes with itsrequirements, design and operational information throughout its life.”
• Identify and document the functional and physical characteristics ofconfiguration items.
• Control changes to configuration items and their relateddocumentation.
• Record (or Status Accounting in DoD terms) and report informationneeded to manage configuration items effectively, including thestatus of proposed changes and implementation status of approvedchanges.
• Audit configuration items to verify conformance to specifications,drawings, interface control documents, and other contract require-ments.
CONFIGURATION MANAGEMENTNon-Government Std: EIA Standard-649
Also see MIL HNBK 61
- Adopted by DoD, 22 Nov 96
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• The Government PMO:– Identifies External Interfaces– Establishes interface standards
(baselines)– Maintains interface stability
• The Contractor:– Manages Internal Interfaces– Establishes Interface
- Requirements to Include- Internal & External Interfaces
– Controls Interfaces to Ensure- Accountability & Timely- Dissemination of Changes
The government increasingly chooses to manage interfacesleaving design details to contractors
• Identifies, documents, & controls all functional and physicalcharacteristics.
• Interfaces, what?• Common boundary.• Types: Mechanical, Electrical, Operational, Software.• Functional & Physical characteristics.
• Where?• Within one contractor’s design.• Between contractor’s items and GFE.• Between multiple contractors’ items.• Between systems
• Controlled by Interface Control Working Group.• Documented in Interface Control Documents.
?
INTERFACE MANAGEMENTWill it all work together?
INTERFACE CONTROL CONCEPT
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BASIC PURPOSES OF WBS
HOW TO CREATE A WORK BREAKDOWN STRUCTURE
Sys Eng
System
Training Test Mfg
computer sensor
CrewSimulator
HW
XXXSystemSW
ApplicationSW
displays
Grouping forSpec.
DevelopmentInterface
ManagementEarned ValueEvaluation
RiskAssessment
TechReview
Structure
$$$Management
ProductTree
ECPImpact
IPTSetup
SupportCATT
AppendixA
BC
MIL HDBK881
System
Anal ysis
Allo cati on
Syn thesis
(Balan ce )
Re qu ir e m en tsL oo p
D e si gn
L oo p
V e rif ic at io n
Anal ysis
Al lo cati on
Synth esis
(Bal an ce )
Re qu ir e m en ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Anal ysi s
Al lo ca ti on
Synth esis
(Bal ance )
R e qu ir e m en ts
L oo p
D e si gn
L oo p
V e rif ic at io n
Definethe Product
Tailor(supporting processes)
Create and refineas design matures
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SOFTWARE MANAGEMENT
• Nine Principal Best Practices to Improve Software Development, Reduce Costs, and Increase User Satisfaction*
- Formal Risk Management- Agreement Interfaces- Peer Reviews/Inspections/Walk-throughs- Metric-Based Scheduling and Management- Binary Quality Gate, at Inch-Pebble Level- Program-wide Visibility of Project Progress vs. Plan- Defect Tracking Against Quality Targets- Configuration Management- People-Aware Management Accountability
• Nine Project “Breathalyzer ” Questions to provide “Quick Look” at Software Project Health**
- Do you have a current, credible activity network supported by a work breakdown structure (WBS)?- Do you have a current, credible schedule and budget?- Do you know what software you are responsible for delivering?- Can you list the current top 10 project risks?- Do you know your schedule compression percentage?- What is the estimated size of your software deliverable? How was it derived?- Do you know the percentage of external interfaces that are not under your control?- Does your staff have sufficient expertise in the project domains?- Have you identified adequate staff to allocate to the scheduled tasks at the right time?
*“Little Yellow Book of Software Management Questions” (Software Program Managers Network)**“Project Breathalizer Questionnaire Software Health”; Software Program Managers Council
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TYPICAL WORKING GROUPS
• Logistics Support Management Team (LSMT)• Test & Evaluation Working Group (TEWG)• Computer Resources Working Group (CRWG)• Requirement Interface Working Group• Interface Control Working Group (ICWG)• Technology Assessment Working Group• "Tiger" Team• Process Action Team• Integrated Product & Process Teams
RECOGNIZE WHICH PHASE OFTEAM DEVELOPMENT YOU AREIN AND TAKE POSITIVE ACTIONTO WORK THROUGH
WORKING GROUPS
TEAM DEVELOPMENT WHEEL
PerformingCreativeTrustingEffectiveConfident
FormingMillingConfusionPolitePurposeless
NormingCohesionPurposeFeedbackRelevancy
StormingConflictFrustrationResistanceCliques
Note: These can be an additional phase – “Adjourning” – when the teamdisbands, says good bye, and reflects on lessons learned.
This is a “celebration” phase.
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Disadvantages• Takes more time• Hard to terminate• Paralysis by analysis
WORKING GROUPS(Continued)
Group Consensus - a general agreement by all team members that theycan live with, and be commited to a particular course of action. Untilyou have this agreement, you don't have consensus. Guidelines forachieving:
1. Avoid arguing for your own opinion.
2. Go for "win-win" solutions.
3. Do not change your mind to avoid conflict.
4. Avoid majority vote, coin-flipping, horse-trading.
5. Expect differences of opinion.
MANAGEMENT TRADE-OFFSFOR WORKING GROUPS
Advantages• More ideas & solutions• Consensus positions• Strong commitments
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• Decision Making• Resolving Issues• Communicating• Planning• Executing• Controlling
• Customer Focus• Leadership• Values• Vision• Purpose• Goals & Objectives• Critical Success Factors
• Diversity• Conflict• Comfort Zones• Communications• Focus• Organizational Climate• Trends
• Awareness• Roles & Responsibilities• Operating Agreements• Team Accountability• Empowerment• Trust• Five Cs• Team Identity• Self assessment
CommunicationCommitmentCooperationContributionCaring
Team Processes
Team Principles
Team Dynamics
Team Foundation
ThinkingLearning
TEAM PERFORMANCE MODEL
Charter
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IILEADERSHIP & MANAGERIAL SKILLS
• More things that make you go “Hmmm?... ”
“An authority is a person who just happens to know the source.”
“A conservative is a person who believes nothing should bedone the first time.”
“Diplomacy is the art of hearing all parties arguing in a dispute andnodding to all of them without ever agreeing with any of them.”
“The meeting raised our confidence that the contractor can actu-ally accomplish the task and that it will occur in our lifetime.”
“This is the earliest I've been late.”
“The world would be a much better place if people weren't allowedto have children until they've proven they can successfully man-age a DoD program.”
“Everyone is bound to bear patiently the results of his/her own ex-ample.”
“The superior person is firm in the right way, and not merely firm.”
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DELEGATION
REASONS FOR DELEGATING 1. Improve manager's time management
a. Increase manager's span of controlb. Increase time allocated to long range planningc. Increased management efficiency
2. Assure tasks performed by most qualified3. Build organizational depth4. Improve employee motivation5. Increased teamwork (IPTs/TQM)6. Maximize resources7. Appropriate organizational responsibility
12 STEPS FOR DELEGATING1. Set clear objectives and task statements2. Select "Delegate"; check qualifications3. Provide training, if necessary4. Solicit input from Delegate5. Assign task and deadline6. Provide any relevant guidance
a. Critical information required to do tasks rightb. Potential approaches - only as suggestions!c. Describe results desired
7. Makes a delegation "contract" (see next page)8. Establish controls9. Maintain controls
10. Provide feedback11. Identify lessons learned12. Evaluate performance
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DELEGATION(Continued)
DELEGATION RECORDDescription of Action: Date:
Person Assigned:
Authority Level (specify):1 - Take action; do not report back2 - Take action; report back (see Frequency)3 - Prepare plan; proceed upon approval4 - Do only as directed below
Frequency of Contact (specify):1 - daily2 - weekly3 - monthly4 - other
Suspense Action:
Performance Assessment:
Suspense Date:
Delegation Guidance/Agreements:
(SAMPLE)
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EFFECTIVE MEETINGS
PRE-MEETINGA. Establish type of meeting
1. Information (quick, crisp)2. Planning/Strategizing (slow, deliberate)3. Problem solving (divergent/convergent)4. Decision (deliberate)5. Staff/Conference (repetitive, short)6. Feedback/Evaluation (slow, contemplative)7. Training (smooth, flowing)8. Social (rambling)
B. Select participants1. Based on purpose; relevant; decision auth.2. Size: 4-7 ideal; 10-12 tolerable; >13 unsat.
C. Circulate agenda (3-5 days in advance)1. Type, purpose, date, place, start/finish times2. Topics, time allocated (minutes), speakers3. Assign recorder
CONDUCTING MEETINGA. Opening
1. Start on time2. Repeat type and purpose of meeting
B. During1. Facilitate the meeting2. Encourage openness and communication3. Develop cohesion4. Use active listening5. Stick to agenda
C. Closing1. Set time and date of next meeting2. Summarize agreements, actions, decisions3. Close on time or before
AFTER MEETINGA. Review minutes with recorderB. Publish minutes
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DIRECTIVE• Give advice• Evaluate• Motivate• Explain• Reassure
NON-DIRECTIVE• Don't display authority• Listen carefully• Don't advise• Facts only; no opinions• Employee find solution
Advantages• Effective with inexperienced personnel• Quick• Take charge attitude
Advantages• Develops commitment• Good training• Employee responsible• Supports delegation
Disadvantages• Perceived insulting• Does not support delegation• Manager keeps responsibility
Disadvantages• Takes time• Skill/patience required• Ineffective with inexperienced personnel
COUNSELING PROCESS
1. Set up interview - private, confidential,unhurried
2. Encourage discussion - open questions,active listening
3. Help employee think it through - deal withfacts, no opinions or own views
4. Let them find the solution - their solution totheir problem
COUNSELING
PERSONAL COMMUNICATIONS
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PERSONAL COMMUNICATIONS(Continued)
WIN-WIN NEGOTIATIONS
FOCUS: Defeat the problem; not the person
APPROACH:Resolve conflictReach agreementNormalize relationshipsCombine efforts
GOAL:Acceptable gains by both parties
INTER-PERSONAL NEGOTIATIONS
1.Separate people and emotions from the problem2.Focus on interests, not positions3.Generate options for mutual gain4.Insist on objective criteria
- Screen for importance- Limit to 2 minutes- Do all at one time- Itemize topics before calling- Don't socialize- Screen for importance- Do not invite into office- Remain standing- Re-delegate- Stay focused on subject area and on schedule
1. Incoming telephone calls
2. Outgoing telephone calls
3. Unscheduled visitors
4. Improper delegation5. Poorly conducted meetings
TIME MANAGEMENTTIME ROBBERS AND AVOIDANCE TECHNIQUES
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TIME MANAGEMENT(Continued)
1. List all tasks.2. Categorize tasks using matrix.3. Review quadrant 3 items; re-assign as 1, 2, or 4 as appropriate.4. Do quadrant 1 tasks first; consider delegating!5. Strive to maximize time for quadrant 2 tasks (be proactive!).6. When all 1 and 2 tasks are complete, do quadrant 4 tasks.
KEEP A "TO DO" LIST
1. List all goals and tasks.2. Categorize as A - High value
B - Medium value C - Low value
3. Prioritize within each category (e.g. A-1, A-2, etc.).4. Accomplish all A tasks, then all B. Do C if time permits.5. Review list and priorities daily.
HIGH IMPORTANCE LOW
HIGH
URGENCY
LOW
DO ITNOW
VERIFY&
RE-ASSIGN
MID-TO-LONGRANGE
PLANNING
BUSYWORK
1
2
3
4
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DECISION BRIEFING
Elements of a Decision Briefing
• Purpose - Issues• Outline - Agenda• Background• Assumptions• Alternatives Identified• Evaluation Criteria• Analysis of Alternatives• Recommendation• Implementation Plan
Things to Expect (from Briefee)
• Challenges to assumptions, definitions, methodology• Does it comply with or change policy?• Is the situation sensitive to change?• Issues with analysis, tradeoffs, recommendations, implementation• Open/closed questions
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MANAGEMENT TOOLS & TECHNIQUES
1. Activity-based Management (ABM). Uses detailed economicanalyses of important business activities to improve strategic andoperational decisions. ABM increases the accuracy of cost informa-tion by more precisely linking overhead and other indirect costs toproducts or customer segments. Traditional accounting systemsdistribute indirect costs using bases such as direct labor hours,machine hours, or material dollars. ABM tracks overhead and otherindirect costs by activity, which can then be traced to products orcustomers.
2. Balanced Scorecard. Defines what management means by“performance” and measures whether management is achievingdesired results. The Balanced Scorecard translates mission andvision statements into a comprehensive set of objectives andperformance measures that can be quantified and appraised. Thesemeasures typically include: financial, customer value, internalbusiness process, learning and growth, and employee performance.
3. Cycle Time Reduction. Decreases the time it takes a company orprogram to perform key activities throughout its value chain. CycleTime Reduction uses analytic techniques to minimize waiting time,eliminate activities that do not add value, increase parallel pro-cesses, and speed up decision processes within an organization.Time-based strategies often emphasize flexible manufacturing, rapidresponse and innovation in order to attract the most profitablecustomers.
4. Groupware. Refers to a broad range of technologies that allowpeople in organizations to work together through computer networks.These products range from sophisticated electronic mail packagesto applications that link offices and employees. Organizations usesuch technology-aided communications to better inform strategicand financial decisions and to more effectively and economicallybring together working groups. (DAU has a Groupware capability inits Management Decision Center, which is used for managementdecision making by offices and agencies throughout DoD.)
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MANAGEMENT TOOLS & TECHNIQUES (Continued)
5. Outsourcing. Occurs when a company or Government agency usesthird-parties to perform non-core business activities. Contractingthird-parties enables a company or agency to focus its efforts on itscore competencies. Many companies find that outsourcing reducescost and improves performance of the activity. Third-parties thatspecialize in an activity are likely to be lower cost and more effective,given their scale. Through outsourcing, a company or agency canaccess the state of the art in all of its business activities withouthaving to master each one internally.
6. Business Process Reengineering. Involves the fundamentalredesign of core business processes to achieve significant improve-ments in productivity, cycle times, and quality. In Business ProcessReengineering, companies start with a blank sheet of paper andrethink existing processes to deliver more value to the customer.They typically adopt a new value system that places increasedemphasis on customer needs. Companies and/or Governmentagencies reduce organizational layers and eliminate unproductiveactivities in two key areas. First, they redesign functional organiza-tions into cross-functional teams. Second, they use technology toimprove data dissemination and decision making.
7. Strategic Planning. Is a comprehensive process for determiningwhat a commercial business or Government agency should becomeand how it can best achieve that goal. It appraises the full potentialof a business and explicitly links the business objectives to theactions and resources required to achieve them. Strategic Planningoffers a systematic process to ask and answer the most criticalquestions confronting a management team – especially large,irrevocable resource commitment questions.
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BRAINSTORMING
PURPOSE: To stimulate the free flow of ideas.
METHOD: Group members take turns generating ideas. One ideastimulates another and then another. Freewheeling of ideas is en-couraged. Brainstorming stops when all group members run out ofideas. See the back of this page for questions that may suggest newideas for you.
GROUND RULES:
Put judgment aside. Remember, all ideas can be thought of asstarters.
No criticism allowed. This is not the time to judge an idea. Don'tcriticize other ideas no matter how ridiculous they may seem. Theideas can be discussed in detail later; now, the objective is to gen-erate more ideas.
Welcome free-wheeling or blue-skying. Let those wild ideas comeout—otherwise you may conceal your creative process. The im-practical ideas may trigger other ideas that are possible to use.
Strive for quantity, not quality. The more ideas brought out, thebetter the chance of a great solution.
Combine and rearrange ideas. Single ideas aren't the only way tomake a suggestion. You can make additions or combinations ofpreviously suggested ideas to create still better ideas.
Record all ideas exactly as expressed. This keeps the mind free ofremembering what was said and allows you to build on previousideas.
IIIPROBLEM SOLVING TOOLS
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BRAINSTORMING(Continued)
Why does it work?
Some of the reasons why brainstorming enhances a group's creativity are that it:
- Increases involvement and participation.
- Produces the most ideas in the shortest time.
- Reduces the need to give the "right" answer.
- Frees up the group; allows the members to have fun and is interesting.
- Reduces the possibility of negative thinking.
QUESTIONS TO STIMULATE YOUR BRAIN CELLS:
1. Can we use this idea elsewhere? As is? With changes?2. If we change it,; Is there anything else like it? Any related issues?3. Modify? Change? Rearrange? Meaning, color, motion, sound, odor, taste, form, shape, layout, etc.?4. Magnify? Add what? More, stronger, larger, new?5. Minimize? Subtract what? Eliminate, smaller, lighter, slower, split?6. Substitute? Who, what, when, where?7. Reverse? Opposite, backwards, upside down, inside out?
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FORCE FIELD ANALYSISA Force Field Analysis illustrates the relationship and significance offactors that may influence the problem or goal. This analysis helps usbetter understand driving and restraining forces.
Used for making decisions, force field analysis can help:• Identify realistic improvement opportunities;• Develop systematic action plan for problem resolution; and• Create criteria for evaluating effectiveness of improvement actions.
CAUSE AND EFFECT DIAGRAMThe cause and effect diagram is a graphical illustration of the relationshipbetween a problem or goal (the effect) and its potential contributors (thecauses). Sometimes called the “fishbone” or Ishikawa diagram.Used for analyzing problems, a cause and effect diagram can help:• Determine root causes of a given effect;• Identify areas where there is a lack of data.
GOAL: Stop Smoking+ Driving Forces
Poor Health
Burned Clothing
Poor Example
Cost
Impact on Others
Restraining Forces –
Habit
Addiction
Taste
Advetisements
Stubborn
ENVIRONMENT MACHINEPEOPLE
POORPHOTOCOPY
QUALITY
METHODS MATERIALS
OriginalSettings
PencilHardness
DryingTime
Bad PaperHandling
PoorMaintenance
Bad SettingsContamination
PaperAlignment
HandsDirty
BadOriginalsHumidity
OperatingHours
Sharpness
Lamp DirtySpeed
Roll ConditionNotCleaning-up
Not Level
PoorQuality
PoorStorage
Copy Paper
WritingPressure
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SCATTER DIAGRAMA scatter diagram depicts the correlation between two variables (X and Y).
Used for data analysis, a scatter diagram can help:• Confirm a hypothesis that two variables are related.• Provide both visual & statistical means to test the strength of a potential relationship.
HISTOGRAM
The histogram chart displays the distribution of a measurable character-istic (for example: weight, length, speed, etc.). A histogram shows whatthe variability of the data is in a graphical or pictorial manner.Used for data analysis, a histogram can help:• Present a picture of how the process is operating;• Compare actual process measurements with an expected distribution;• Observe patterns in the data; and• Investigate process stability.
Y
X
FREQUENCY
MEASURABLE CHARACTERISTICS
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SURVEYS
A Survey is used to collect data from a variable number of items or peoplefor a comparative study. They are used when a new project is planned,to prove the need and the demand of the customer.Surveys can be used anywhere in the organization to find out specificinformation which is necessary to make improvements in a process.
Surveys:- Are an inexpensive way to test a system or product.- Can be used with a large number of people or a small group.- Can give you an overall view, determined by the questions you ask.- Show if an organization is meeting its quality goals.- Help identify satisfied and dissatisfied customers or employees.
Survey Process1. Determine the group to be studied.2. Determine what questions will be asked.
Note: Train your data collectors thoroughly. Everyone must know how to askthe questions, who to approach, and how to approach them.
3. Compile your results in chart form using a Pareto chart, histogram,and other tools that will give you clarification.4. Use the compounded data to form a base for improvement.5. Continue to take data to monitor improvements, and make sure theimprovements you have made are working.
Caution!
Data must be collected honestly and consistently.An untrained collector can skew the data to reflect personal biases.A poor, inconsistent survey will give you invalid data.Make sure there is enough time allowed for the collecting process.
Brainstorming
SURVEY1.2.3.4.
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AFFINITY DIAGRAM
An affinity diagram is a technique for organizing verbal information intoa visual pattern. An affinity diagram starts with specific ideas and helpsyou work toward broad categories. This is the opposite of a cause andeffect diagram, which starts with the broad causes and works towardspecifics. You can use either technique to explore all aspects of anissue.
Affinity diagrams can help you:• Organize and give structure to a list of factors that contribute to aproblem.
• Identify key areas where improvement is most needed.
How to do it:1. Identify the problem. Write the problem or issue on a chalkboard
or flip chart.
2. Generate ideas. Use an idea-generation technique to identify allfacets of the problem. Use index cards or sticky-back notes torecord the ideas.
3. Cluster your ideas (on cards or paper) into related groups. Usequestions like “Which other ideas are similar?” and “Is this ideasomehow connected to any others?” to help group the ideastogether.
4. Create affinity cards. For each group, create an affinity card, a cardthat has a short statement describing the entire group of ideas.
5. Cluster related affinity cards. Put all of the individual ideas in agroup under their affinity card. Now try to group the affinity cardsunder even broader groups. You can continue to group the cards untilyour definition of “group” becomes too broad to have any meaning.
6. Create an affinity diagram. Lay out all of the ideas and affinitycards on a single piece of paper or a blackboard. Draw outlines ofthe groups with the affinity cards at the top of each group. Theresulting hierarchical structure will give you valuable insight into theproblem.
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Environment
EquipmentErgonomics
Training
Original Document
No Definitionof Quality
NoiseLightingDesk HeightChair HeightComfort
HandwritingGrammarPunctuationSpelling
Draft CopyFinal CopyDistributionFont
ComputersPrintersTypewriters
Typing SkillEditing SkillComputer SkillProofreading Skill
No MeasurementNo Feedback
Technical JargonSlang
Affinity Diagram
Interruptions
UnreasonableDeadlines
Time of Day
Typographical Errors
Author Skill Requirements
AFFINITY DIAGRAM EXAMPLEA publication team wanted to reduce the number of typographical errorsin their program’s documentation. As part of a first step, they conducteda brainstorming session that produced the following list of factors thatinfluenced errors.
Computers No FeedbackProofreading Skill PrintersUnreasonable Deadlines NoiseLighting TypewritersChair Height ComfortDesk Height Time of DayTechnical Jargon InterruptionsHandwriting GrammarSlang SpellingDraft Copy PunctuationDistribution FontFinal Copy Editing SkillComputer Skill Typing SkillNo Measurements
The following affinity diagram helped them to focus on areas for further analysis.
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PAIRWISE RANKING
Pairwise ranking is a structured method for ranking a small list of items inpriority order.Pairwise Ranking can help you:• Prioritize a small list.• Make decisions in a consensus-oriented manner.
How to do it:1. Construct a pairwise matrix
2. Rank each pair. For each pair, have the group (using a consensus-oriented discussion) determine which of the two ideas is preferred.Then, for each pair, write the number of the preferable idea in theappropriate box. Repeat this process until the matrix is filled.
3. Count the number of times each alternative appears in the matrix.
4. Rank all items. Rank the alternatives by the total number of times theyappear in the matrix. To break a tie (where two ideas appear the samenumber of times), look at the box in which those two ideas are compared.The idea appearing in that box receives the higher ranking.
Each box in the matrix represents the intersection(or pairing) of two items. If your list has five items,the pairwise matrix would look like this, with the topbox representing idea 1 paired with idea 2:
1 2
3 4
2345
12 21 3
4
2345
12 2
3 4
2345
12 21 2 31 2 3 45 5 5 5
2345
1 and 2 compared2 is better
1 and 3 compared1 is better
4 and 5 compared5 is better
...and so onuntill...
Alternative 1 2 3 4 5Count 2 3 1 0 4Rank 3rd 2nd 4th 5th 1st
Alternative 5ranks 1st overall
Alternative 5 appears4 times in the matrix
Alternative 1 2 3 4 5Count 2 3 1 0 4Rank
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PAIRWISE RANKING EXAMPLEA program team was asked to recommend a site for testing a uniqueportion of a system. A feasibility study produced a list of six possiblelocations. The team then used pairwise ranking to determine thatNellis AFB was best suited for this particular test.
1. Fort Huachuca 4. Nellis AFB2. Edwards AFB 5. Eglin AFB3. Kirkland AFB 6. Hanscom AFB
12 21 3 34 4 4 45 5 5 4 51 6 6 4 5
23456
Site 1 2 3 4 5 6Count 2 1 1 5 4 2Rank 3rd 6th 5th 1st 2nd 4th
PARETO CHARTA bar chart which arranges contributing factors/causes to a problem inorder with respect to their degree of contribution to the problem.Used for analyzing problems, a Pareto chart can help:• Select improvement opportunities;• Identify root causes with greatest impact from a cause and effect
diagram;• Check results of improvement efforts by comparing Pareto charts
before and after action is taken.
40
30
20
10
Customer Complaints (Food Service)
POORSERVICE COST QUANITY TASTE OTHER
Causes
%Contribution
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AF Product Division A 75 daysNavy Product Division B 79 days
AF Product Division B 95 days
Army Product Division A 110 days
Navy Product Division A 140 days
Government Agency C 200 days
BENCHMARKING
Benchmarking is the process of measuring products, services, andpractices against the toughest competitors or those known as leaders intheir field. Benchmarking can help you:• Understand how you compare with similar organizations.• Identify areas for process improvement.How to do it:Identify the process to be benchmarked. Select a process (asopposed to a product) that is important to both your organization and yourcustomers. Be sure the process in your organization is similar to, andmeasured in the same manner, as the one it’s being compared to.Study other organizations. Develop a list of organizations withcomparable products and services. Determine what specific processesthe organization performs. Based on this information, rank the organiza-tions from best to worst.Compare and evaluate. Compare your process to the best and worstcases, and list the important differences. These differences can suggestpotential improvements to your process.
Note: Benchmarking is not replicating a process from an organization thatexcells. (Unless your goal is to be 2nd best.) It is studying the process, clearlyunderstanding the theory behind the process and then restudying your ownprocess to determine improvements.
Benchmarking ExampleUsing inputs their customers pro-vided, the executive leaders atAF Product Division B decidedthat their source selection pro-cess needed improvement. Aspart of the initial analysis, theywanted to see how their processcompared with others. They de-termined that the average num-ber of days required for sourceselection was an important pro-cess measure.As a result of this analysis, rep-resentatives visited AF ProductDivision A and Navy Division Band studied their source selec-tion procedures.
Best
Worst
(Our Organization)
(Average number of days required)
Source Selection
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FLOWCHARTING
A flowchart is a graphic representation of the steps of a process.Flowcharts help us understand the process by mapping out the steps inas much or as little detail as needed.
Enlisted Accessions and Training
Used for analyzing a process, a flowchart can help:
• Understand the existing process;
• Locate improvement areas in a process;
• Document changes to a process;
• Show relationships between different steps in a process; and
• Identify critical stages of a process.
There are standard flowchart symbols. When you are developing aflowchart, especially in a group environment, the goal is to chart theprocess. Don't waste time debating which shape a symbol should be. Aflowchart that doesn't use the standard symbols can be just as useful asa chart that does use them.
RECRUITING
HASPRIOR
SERVICEENTERSBASIC
TRAINING
ASSIGNEDTO A
SPECIALTYFIRST DUTY
ASSIGNMENT
TECHTRAINING
REQUIRESTRAINING
DISCHARGED
PASSES
RETAIN
FAILS
NO
YES
NO
YES
NO
YES
NO
NO
YES
YES
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A
B
This Symbol... Represents...
Start/Stop
Decision Point
Activity
Document
Connector (toanother page orpart of thediagram)
Some Examples:
Recieve TroubleReportMachine operable
Approve/DisapproveAccept/RejectYes/NoPass/Fail
Drop off travelvoucher
Open access panel
Fill out troublereport
STANDARD FLOWCHART SYMBOLS
DEPLOYMENT FLOWCHARTS
A deployment flowchart shows the process flow and the work groupsinvolved in each step. It provides a graphic representation of a givenprocess or system work groups, or individuals responsible for each activity.
A deployment flowchart is used anytime individuals or groups need toanalyze a process in order to improve a system.
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Deployment flowcharts are used for various functions such as trainingagenda, daily schedule, meeting analysis, emergency procedures, pur-chasing process, communication procedures, maintenance process, etc.
Deployment Flowcharts:• Identify involvement in a process, as it relates to the whole process.• Define work processes, and identify existing loops through people or
departments.• Visualize a process or system.
Deployment Process1. Select a process or system to analyze.
2. Identify the cast of characters (people involved in the process).
3. Document the existing process using the flowchart symbols.
4. Discuss changes to be made in the process with all those involved withthe process.
5. Update the deployment flowchart with the proposed changes andimplement the new process
6. Study the effectiveness of the change and return to step #1 above.
Time correlation if applicable
Process Identification
Cast of Characters
Task Box
Circle denotes added support
Meeting
Decision Diamond
Decision Line
Shadow box means more informationon another flow chartReport
End Source: Dr. Myron TribusDeployment Flow ChartingQuality & Productivity, Inc.,Los Angeles, CA 90024
NO
YES
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NOMINAL GROUP TECHNIQUE (NGT)Ranking of consensus
Why?Allows a team to come to consensus on relative importance of issues,problems, or solutions by combining individual importance rankings intoa team’s final ranking.
What?• Builds commitment to the team’s choice through equal participa-
tion in the process• Allows every team member to rank issues without being pressured
by others• Puts quiet team members on an equal footing with more dominant
members• Makes a team’s consensus (or lack of it) visible; the major causes
of disagreement can be discussed.
How to do it:1.Generate the list of issues, problems, or solutions to be prioritized
In a new team with members who are not accustomed to team participation, it may feel safer to do written, silent brainstorming, especially when dealing with sensitive topics.
2.Write statements on a flipchart or whiteboard
3.Eliminate duplicate and/or clarify meanings of any of the statements As a leader, always ask for the team’s permission and guidance when changing statements.
4.Record the final list of statements on a flipchart or whiteboardExample: Why does faculty have inconsistent output?
A Lack of trainingB No documented processC Unclear quality standardsD Lack of cooperation with other departments in developing
standardsE High turnover
Use letters rather than numbers to identify each statement so that team members do not get confused by the ranking process that follows.
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5. Each team member records the corresponding letters on a piece ofpaper and rank orders the statements Example: Larry’s sheet of paper looks like this:
A 4B 5C 3D 1E 2
• This example uses “5” as the most important ranking and “1” asthe least important. Since individual rankings will be latercombined, this “reverse order” minimizes the effect of teammembers leaving some statements blank. Therefore, a blank(value = 0) would not, in effect, increase its importance.
6. Combine the rankings of all team members John Paul George Ringo Mary Total A 4 5 2 2 1 = 14 B 5 4 5 3 5 = 22 C 3 1 3 4 4 = 15 D 1 2 1 5 2 = 11 E 2 3 4 1 3 = 13
“No documented process,” B, would be the highest priority. The teamwould work on this first and then move through the rest of the list asneeded.
Variation:Weighted MultivotingEach team member rates, not ranks, the relative importance of choicesby distributing a value, e.g., 100 points, across the options. Each teammember can distribute this value among as many or as few choices asdesired.Example: John Paul George Ringo Mary Total A 20 10 = 30 B 40 80 50 100 45 = 315 C 30 5 10 25 = 70 D 5 10 20 = 35 E 10 10 20 10 = 50With large numbers of choices, or when the voting for the top choices isvery close, this process can be repeated for an agreed upon number ofitems. Stop when the choice is clear.
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CREATIVE PROBLEM SOLVING
PROCESS STEPS1. List perceived problems2. Gather relevant data3. Define actual problem4. Determine alternative solutions5. Analyze and evaluate alternatives6. Select solution7. Validate solution
DIVERGENT THINKING*1. Accept all ideas and alternatives2. Defer judgment or evaluation3. Discuss, combine, hitchhike, improve ideas4. When exhausted, move to converge
CONVERGENT THINKING*1. Establish categories of alternatives2. Develop evaluation criteria3. Avoid premature closure4. Keep eye on objective5. List strengths and weaknesses6. Select best alternative or idea
*Used sequentially during all problem-solving steps
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KNOT CHART
As you work your way thru the problem, everything should move intothe left column – Know.
The Knot Chart is useful for:
• Initially sorting the wheat from the chaff• Organizing/coordinating the next steps of the problem solving
process
Think we knowOpinionKnow Need to know
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QUALITATIVE PROBLEM SOLVING(Kepner - Tregoe)1/
Deviation Statement: (Describe the actual performance vs. should performance)
1. Define deviation.2. Describe what deviation IS and IS NOT.3. List distinctions between what deviation IS and IS NOT.4. Do distinctions indicate or suggest a change?5. Determine possible causes based on distinctions and changes.
1/ Copyright Kepner Tregoe, Inc. (1981). All rights reserved. Reprinted with permission. (Kepner-Tregoe, Inc.,Research Road, P.O. Box 704, Princeton, N.J. 08542)
SpecifyingQuestion
What?(Identify)
Where?(Location)
When?(Timing)
Extent?(Magnitude)
Does the distinctionsuggest a change?
What is distinctive about"Is" vs. "Is Not"?Is Is Not
Possible Causes:
Most Likely Cause:
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GANTT CHART
A Gantt Chart is used for planning schedules and managing projects. Itis a method for basic planning and work instruction.
How to do it:1. The Gantt Process begins by listing the activities of a project inorder of execution.
2. Place the number of each activity across the top of your chart. Timeduration such as days, weeks, years, etc., can replace activity num-bers if appropriate.
3. Draw vertical lines across the chart for each item.
4. Starting with number 1 begin comparing the activities. Can number 1be done at the same time as number 5 or 6?
5. Draw horizontal lines to indicate which activities can be done simul-taneously.
6. You now have an overview of your project giving you a starting point,and time saving measures to help you complete the project on time.
ACTIVITIES 1 2 3 4 5 61. Requirements are written2. Finances are arranged3. Bidding takes place4. Contractor is selected5. Prototype is built6. Testing begins
ACTIVITIES1. Requirements are written2. Finances are arranged3. Bidding takes place4. Contractor is selected5. Prototype is built6. Testing begins
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Notes
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