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Dissertation
“How to implement Asset Management Control in a non-profit maintenance organization,
on a cost effective manner”
Master of Science in
Asset Management Control International Masters School
Student: H.W.G. Lobregt BSc
Supervisor: Dr J. Stavenuiter
Date: January 31, 2008
ii
Acknowledgements
This report is written in order to fulfill the requirements to obtain the Degree of
Master of Science in Asset Management Control on the Hogeschool Zeeland.
First of all I would like to thank my wife Emmie and my kids Mitchel and Daley
for being patient during this dissertation phase and supporting me with my
struggle.
Furthermore I would like to thank Dr John Stavenuiter for giving me the
opportunity to follow this master course and supporting me with his advice and
for the cooperation during this dissertation phase. His criticism and experience
force me to keep on track.
I also have to thank my colleagues Dave Sinay, for being a sounding board
and for giving support in theoretical assessment during this
course/dissertation and Rob Oudelaar, Wim Nijenhuis, Ron Bromlewe, Albert
Stam, Hidde Hylarides, Henk Broekhuizen, Martin Wouters, Wim Polle, Ruud
Wilner, Reinoud van Kralingen, Ben Kersting for filling in the questionnaire.
I hope this dissertation will contribute to the Asset Management Control
process within the Royal Netherlands Naval Maintenance and Service
Establishment
iii
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Executive summary
The goal of the research is to find out how to implement Asset Management
Control in a non-profit maintenance organization, in a cost effective manner.
Sub-questions were:
Is there a way available yet to implement performance driven maintenance
and system management approach (Asset Management Control) within a
Defense Maintenance Organization?
The capital technical system forms the core feature of Asset Management
Control (AMC). To achieve an effective capital asset, the activities in relation
to design, production and maintenance have to be considered. Asset
Management Control aims to specify, organize, plan, direct and control these
activities to achieve the most cost-effective solution. AMC is practically
supported by AMICO which is a software-tool that was specially developed to
support the AMC theory. AMICO transparently combines performances and
costs of actors and installations in view of the system‟s life cycle to provide
management information on installation and system level.
For one class of Navy ships (M-Frigate class) a case is conducted to discover
any improvements in management and organization to elucidate the working
of AMC to the defense organization. This case consisted of setting up and
testing a Life Cycle Management model for a period of two years. This case
resulted in locating performance killers, cost drivers and figures of system and
cost-effectiveness.
To find out whether AMC could contribute to the profit of Royal Netherlands
Naval Maintenance and Service Establishment, the level up to which the
Royal Netherlands Naval Maintenance and Service Establishment was
already managing their maintenance had to be investigated.
This case is based on the ten improvement factors on which AMC was
developed. It appeared that AMC had room for improvement. It was estimated
that Royal Netherlands Naval Maintenance and Service Establishment could
save on specific parts of the operational costs by management according to
AMC in the Design & Acquisition phase.
An analysis with the PRIMA program lists all strengths, weaknesses,
opportunities and threats for the implementation of AMC. The most important
factor that resulted from this analysis is: motivation and education of
v
participants. This is considered a success factor that should be monitored very
closely by the organization. AMC can only become a success when all
involved actors are motivated and educated.
The implementation of AMC is considered to be beneficial to the Royal
Netherlands Naval Maintenance and Service Establishment when the success
factors are closely monitored. AMC will provide insight in costs and
performance over the life cycle of a ship and is therefore considered to be a
significant and beneficial tool for management.
The main conclusion and recommendation of this dissertation are that a
maintenance approach should be implemented utilizing the following phases:
prepare an appropriate business strategy with directives;
prepare and plan the implementation;
improve of the data systems and analyses
implement and continuously improve the maintenance organization by:
o education and motivation of the employees.
A very interesting outcome of this dissertation is that in order to achieve the
best results, Royal Netherlands Naval Maintenance and Service
Establishment organization need to put some effort into basic needs such as
better definition of responsibilities within the Royal Netherlands Naval
Maintenance and Service Establishment, getting consensus about
maintenance responsibility throughout the whole Defense Materiel
Organization, and reinvestigate the structure and role of the changed
management organization, which are the corner stone‟s of motivation
according to General Berlijn [Berlijn, Leiderschap in de Krijgsmacht, 2008].
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Table of Contents
Acknowledgements
Executive Summary
Introduction……… ...................................................................................... 14
1. The Netherlands Defence Materiel Organisation ................................. 18
1.1. The Weapon Systems and Establisment .................................. 19
1.2 The Air Systems Branch ................................................................
1.3 Land Systems Branch ................................................................ 20
1.4 Sea Systems Branch .....................................................................
1.4.1 Core Tasks .........................................................................
1.4.2 RNLN Maintenance and Service Establishment .............. 21
2. Theoretical Assessment ........................................................................ 24
2.1 Through Life Management .............................................................
2.1.1 Results / Findings ................................................................... 32
2.2 Total Life Cycle System Management ....................................... 34
2.3 Results /Findings ...................................................................... 40
2.4 Summarized ............................................................................ 44
3. AMC Feasibility study ............................................................................ 46
3.1 General ..........................................................................................
3.2 Tools ........................................................................................ 48
3.3 Lay-out of the study .......................................................................
3.4 Value of the study ...................................................................... 50
4. AMC review on the Integrated Maintenance Case ............................... 52
4.1 Introduction ....................................................................................
4.2 The Basis: Contracts per System/Ship ...................................... 56
4.2.1 Contents Performance contract (SLA) .............................. 57
4.2.2 The PBSC as 1-on-1 input for the LCM model and SLA ... 58
4.3 The Multi-purpose - Frigate Case .............................................. 60
vii
4.3.1 The Multi-purpose - Frigate ..................................................
4.3.2 Materiel-oriented Operational Management ..................... 62
4.3.3 The SLA baseline ............................................................. 63
4.3.4 Maintenance Management ...................................................
4.3.5 Organization .........................................................................
4.3.6 Maintenance Operation .................................................... 64
4.3.7 Status Report........................................................................
4.3.8 System Portal ......................................................................
4.4 Product description of SLA ........................................................ 65
4.4.1 General .................................................................................
4.4.2 Communication Model ...................................................... 66
4.4.3 Description of Maintenance Activities ...................................
4.5 The analysis and control tool .........................................................
4.5.1 Function Diagram ............................................................. 67
4.5.2 Installation Diagram .......................................................... 68
4.5.3 Activity Diagram ................................................................ 69
4.5.4 Information on the Web Portal .......................................... 70
4.5.5 Point of interest ................................................................. 71
4.6 Findings and conclusions .......................................................... 72
4.6.1 M-Frigate Case conclusions as results of evaluation ............
4.6.2 Contract (SLA) conclusions .............................................. 73
4.6.3 Points of improvement ..........................................................
4.6.4 The Change of Maintenance ................................................
4.6.5 Compatibility with DMO business model .......................... 75
5. PRIMA Analysis of the Maintenance Organization .............................. 78
5.1 General ..........................................................................................
5.2 PRocess IMprovement application............................................. 79
5.3 Results evaluation of the organization related to the asset ...........
M-Frigate, with PRIMA .............................................................. 81
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5.3.1 Analysis ........................................................................... 83
5.3.1.1System Plan ............................................................
5.3.1.2 Life Cycle Management model ............................ 84
5.3.1.3 Contract management............................................
5.3.1.4 Service Level agreemen ..................................... 85
5.3.1.5 Organizational Plan ................................................
5.3.1.6 Actor Definition Model .............................................
5.3.1.7 Resource management ....................................... 86
5.3.1.8 Material Logistics Organization ...............................
5.3.1.9 Activity Plan ............................................................
5.3.1.10Team Building .................................................... 87
5.3.1.11Team Management ................................................
5.3.1.12Team Work ............................................................
5.3.1.13 Control Plan ...................................................... 88
5.3.1.14 System Information Portal .....................................
5.3.1.15 Management Control......................................... 89
5.3.1.16 System Cost Effectiveness ...................................
5.4 Summary of PRIMA Matrix ............................................................
5.4.1 Points of Improvement ..................................................... 90
5.4.2 Procedures and directives ............................................... 91
5.5 Summary ......................................................................................
6. Conclusions and Recommendations .................................................... 92
6.1 General ..........................................................................................
6.2 Organization Structure ...................................................................
6.3 Management Control .....................................................................
6.4 Case and contract .........................................................................
6.4.1 Case .....................................................................................
6.4.2 Service Level Agreement ................................................. 94
6.5 Point of Improvement .....................................................................
ix
6.6 Follow up activities .........................................................................
6.7 Recommendations ..................................................................... 94
x
Appendix 1. Resources
Appendix 2. References
Appendix 3. Description of the Process Definition Matrix application
Appendix 4. Relation to previous work
Appendix 5. Relation to the Program of the course
Appendix 6. List of abbreviations and concepts
Appendix 7. Questionnaire for PRIMA
Appendix 8. Questionnaire results for PRIMA
Appendix 9. LCM model M-Frigate
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Table of Figures
Figure 1 The cost effectiveness diagram of Juran [1999] ............................ 14
Figure 2 The Logistic Process Cycle ........................................................... 15
Figure 1.1 The Netherlands Defence Materiel Organisation ......................... 18
Figure 1.2 Weapon Systems & Establishments ............................................ 19
Figure 1.3 Sea System Branch ..................................................................... 20
Figure 1.4The Royal Netherlands Naval Maintenance Establishment .......... 21
Figure 2.1 Through Life Management .......................................................... 25
Figure 2.2 Actor relations during the CADMID stages .................................. 29
Figure 2.3 Support Options Matrix ................................................................ 30
Figure 2.5 Total Life Cycle Systems Management ....................................... 34
Figure 2.6 The PBL Maturity Framework ...................................................... 38
Figure 2.7 PBL Implementation model ......................................................... 39
Figure.3.3.1 Layout of the study ................................................................... 49
Figure 4.1.1 Reduce cost ............................................................................. 54
Figure 4.1.2 Improve Performance ............................................................... 55
Figure 4.1.3 Consider the combined cost ..................................................... 56
Figure 4.2.2.1 Performance Based Service Contract input .......................... 58
Figure 4.3.1 Integrated Maintenance case ................................................... 60
Figure 4.3.8.1. System Portal M-Frigat ......................................................... 65
Figure 4.4.1 Analyze and control tool .......................................................... 67
Figure 4.5.1.1 Function Diagram from AMICO model M-Frigate .................. 68
Figure 4.5.2.1 Installation Diagram from AMICO model M-Frigate ............... 69
Figure 4.5.3.1 Activity Diagram from AMICO model M-Frigate ..................... 70
Figure 4.5.4.1 Cost drivers and Performance Killers .................................... 71
Figure 4.6.4.1 Development in the daily work of the Installation Manager .... 74
Figure 5.1.1 Production Model ..................................................................... 78
Figure 5.3.1 Result of the analysis with PRIMA ............................................ 83
xii
Table list
Table 2.1 Through Life Management Successes ......................................... 32
Table 2.2.1.1 Performance-Based Logistics Programs review .................... .41
Table 5.4.1.1 Summarized results of improvements..................................... 90
Table 5.4.2.1 Summarized results of procedures / directives ....................... 91
13
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Introduction
Asset Management Control:
a new concept for capital assets;
a management approach to manage and control, over the life cycle, all
processes (specify, design, produce, maintain and dispose) needed to
achieve a capital asset capable to meet the operational need in the most
effective way for the customer/user.
But can it also give answers on the following questions:
How to get the best value for money?
How to control the total cost of Ownership?
Which system cost effectiveness is really needed?
How to improve performances and/or reduce cost?
Is there a way yet to implement performance driven maintenance and a
system management approach within a Defense Maintenance
Organization yet?
These questions [Kirkels, 2004] have been in every one‟s mind, but finding the
answers for large technical systems is not simple. The purchase price of an M-
Frigate is known, but what is the price of a capital asset, e.g. during its Life
Cycle.
The new concept of Asset Management Control provides an answer to these
questions.
Organizations like the NL Defense Materiel Organisation feel the need to show
the financial pros and cons of different investments. A number of models are
available to establish the effectiveness of expenditure; the most popular is the
model of Joseph M. Juran. His model divides system effectiveness in
availability, capability and dependability and costs has been specified by type.
Figure 1: The cost effectiveness diagram of Juran [1999]
15
The AMC system approach aims to stimulate all logistic actors to fulfill their
part in the most cost-effective way by showing the intended result and the
impact of their contribution to the whole system. The Logistic Process Cycle is
used to establish a relationship between costs and system effectiveness. The
material logistic process has subdivided into eight process steps. Each step
has to be in balance with the preceding and subsequent steps in the cycle, all
related to the Integrated logistic Support/Life Cycle Management (ILS/LCM)
analysis.
Figure 2: The Logistic Process Cycle [Stavenuiter, 2004]
A case was initiated to tackle the „problem‟ of implementing the ILS/LCM to
primarily intend to realize a Competence Center for Integrated Maintenance.
A Competence Center for Integrated Maintenance necessitates the Naval
Maintenance and Service Establishment to be capable of entering into
„business‟ performance contracts, made up of the following basic elements:
system definition (functions, capability);
yearly service plan;
performance standards;
a cost allocation report.
Why Integrated Maintenance?
Where the maintenance of the materiel is concerned, the Royal Netherlands
Navy centers its focus on minimizing life cycle costs during assigned
16
operational readiness. Methods and techniques have been developed for this
purpose, allowing for the integrated management of the materiel life cycle.
The Royal Netherlands Naval Maintenance and Service Establishment
(RNLNMSE) tend to the maintenance of a large portion of the Royal
Netherlands Navy (RNLN) materiel. The realization of Royal Netherlands
Naval Maintenance and Service Establishment products and services was
often segmented and differentiated. As a result, the Royal Netherlands
Naval Maintenance and Service Establishment‟s product-focused management
failed to fully fit in with the Royal Netherlands Navy ambition to approach
maintenance in an integral form. With the development and implementation of
IM, the Royal Netherlands Naval Maintenance and Service Establishment is
capable of offering products and services which fit in with the ambitions of the
Royal Netherlands Navy and its own aim; „realize the required system
effectiveness at minimum cost‟.
IM enables the Royal Netherlands Navy to make „cost-effective‟ considerations
with regard to maintenance. To that end, performance per ship (as system) is,
at installation level versus maintenance costs, expressed in terms of active
time, availability, reliability and capability. Expressing system effectiveness in
this way it will be possible to enter into Service Level Agreements (SLA) per
ship, per period, and the „customer‟ can base his choices on system
performance and operational needs.
17
18
1. The Netherlands Defence Materiel Organisation
The Defence Materiel Organisation (DMO) is the element of the Defence
organization where a large number of civilian employees work alongside
military personnel from the Navy, Army and Air Force to ensure the availability
of virtually all of the defense materiel. The majority of the materiel logistic
activities within the defense organization are carried out by DMO. The
operational commands can concentrate fully on their core business, in the
knowledge that DMO provides high-value materiel support. DMO is responsible
for materiel logistics policy, new materiel, maintaining materiel and the
divestment of surplus materiel.
DMO makes no distinction among the Services: the parts of the organization
are clustered around areas of expertise and types of materiel. The air force, for
example, has a great deal of expertise in the area of helicopters; but the navy
uses that type of materiel as well. Through concentration of expertise and
project management from the Services around a single type of materiel, DMO
is able to provide high-value expertise and quality to the operational
commands.
Director -General
Defence Materiel
Organisation
Directorate of Materiel policyt Directorate of Planning and
Control
Directorate of Personnel &
organisationTransition Manager
Directorate of Projects &
Procurement
.Project Branch
Directorate of Weapon
Systems & Establishment
Sea Branch
Facility Management Division
Safety Section
Department facilitaire
mattersLand System BranchProcurement Branch
Air System BranchDefence Materiel
Codification
Defence suppliers
monitoring Division
C2 Centre of
Excellence
.
.
.
Figure 1.1. The Netherlands Defence Materiel Organisation.
19
1.1 Weapon Systems & Establishment
The Directorate of Weapon Systems & Establishments is a combination of
DMO tasks related to logistic upkeep of materiel. This relates to activities
concerned both setting up and carrying out tasks. The directorate also
provides standards and expertise to the Directorate of Projects & Procurement
to support the materiel projects. The directorate also carries out many projects
on its own behalf. Those are all category 1 projects that were not mentioned
above, and the regular divestment of materiel. The directorate‟s focus is the
improvement and optimization of the readiness levels of materiel and weapon
systems.
Maintenance, repairs and modifications to mainly surface ships, submarines
and related military maritime systems.
Director -General
Defence Materiel
Organisation
Directorate of Materiel policyt Directorate of Planning and
Control
Directorate of Personnel &
organisationTransition Manager
Directorate of Projects &
Procurement
.Project Branch
Directorate of Weapon
Systems & Establishment
Sea Branch
Facility Management Division
Safety Section
Department facilitaire
mattersLand System BranchProcurement Branch
Air System BranchDefence Materiel
Codification
Defence suppliers
monitoring Division
C2 Centre of
Excellence
.
.
.
Figure 1.2. Weapon Systems & Establishments.
1.2 The Air Systems Branch
The Air Systems Branch ensures that weapon systems are suitable for the
mission, function properly and are airworthy and takes care of safe use of
weapon systems and the upkeep of weapon systems. Product management,
20
configuration management, Integrated Logistic Support management (ILS) and
Contract Management are among this branch‟s main tasks.
1.3 Land Systems Branch
The Land Systems Branch cost-effectively provides safe and high-quality
materiel for all operational users of the armed forces, throughout the product
life cycle. The branch has a philosophy of transparency and continuously
shares information with clients, to harmonize mutual expectations. The wishes
of the operational commands and their priorities are the key factor.
1.4 Sea Systems Branch
The Sea Systems Branch is active in technology areas that are unique for
military maritime systems. The branch also serves as the all-Services expertise
cluster for inter alia sensors, such as: radar, health & safety, environmental and
chemical technology.
Maintenance, repairs and modifications to mainly surface ships, submarines
and related military maritime systems.
Sea Systems Branch
Branch Staff
Platform
technollogy
division
Weapon
system
management
division
Centre for
automation of
mission critical
systems
Sensor and
Weapons
technology
division
Requirement
s support
&integration
division
Royal
Netherlands
Naval
Maintenance &
Services
Establishment
Figure 1.3. Sea System Branch.
1.4.1 Core Tasks
The Sea Systems Branch carries out feasibility studies in respect of the
procurement of materiel, carries out research to system integration, and makes
life-cycle cost analyses. Specifications and plans for the manufacture and
delivery of sea systems also originate in this branch. The branch also provides
support and advice with respect to procurement, construction and
21
implementation of systems. The Sea Systems Branch develops modification
programs and provides technical advice during divestment.
The high-value technological expertise within the branch enables the
composition of specifications for, for example, requirements, integration with
existing or new sea systems, and analysis for modification programs. In this
context, sea weapon systems means Multi-purpose and Air Defense and
Command Frigates, Landing Platform Docks, supply ships, Walrus-class
submarines and other sailing units.
1.4.2 Royal Netherlands Naval Maintenance and Service Establishment
Maintenance, repairs and modifications are the responsibility of the Royal
Netherlands Naval Maintenance and Service Establishment. The establishment
activities relate to all logistic and maintenance duties in respect of the
electronics and weapon systems on board. That is how the establishment
ensures that the materiel readiness of the ships and submarines is kept at the
desired level. It also provides technical advice and logistic support for the
ships, anywhere in the world, and supports large materiel projects. The Royal
Netherlands Naval Maintenance and Service Establishment comprise the
Platform (ships), Sensors, Weapon and Command Systems (SEWACO),
Special Products, and Logistic Services divisions.
A
DIP
Naval
Maintenance
Establishment
Logistic
Division
Platform
Branch
Sensor Weapon
& commando
systems
Special product
division
Sales
Division
Platform
Division
Electrical
Systems
Command
Control &
computers
Onder water
systems
Above water
systems
Casco
Systems
Figure 1.4 The Royal Netherlands Naval Maintenance Establishment.
22
The main tasks of the Royal Netherlands Naval Maintenance and Service
Establishment are:
Consulting services to the internal customers;
Maintenance, Repair and Overhaul (MRO) services;
Product Data Maintenance (PDM) services
The internal customers (operational users) are highly trained operators of
military equipment within combat or combat simulated environments. In the
recent years the complexity, costs and operational demands upon the capital
assets have increased. Due to an increase of complexity, maintenance-related
costs and operational demands upon the capital assets maintenance
management have become more important.
The DMO organization has adopted the Integrated Logistics Support (ILS)
methodology in order to increase the efficiency of the capital asset life cycle.
23
24
2. Theoretical assessment
Aim
In order to identify related developments with respect to Asset Management
Control, a theoretical assessment was conducted. However, the assessment
was, due to relevance, limited to the defense industry.
Approach
Research by literature, internet and seminars shows that there are different
philosophies and concepts, although, not all developments are fully mature, we
can acknowledge on basis of seminars and available publicized information [
Ref. 13, 25 and 27] that the US DoD and UK DoD developments gained most
maturity and are originated on defense standards.
Results
In order to establish a shared vision, these concepts and philosophies are used
and they have been summarized in the following paragraphs.
2.1 Through Life Management
"Historically, the functions of requirement definition, procurement management
and through-life support have been organizationally separated, which makes it
difficult to get the right balance between risk, cost, performance and through-
life support." The Ministry of Defense’s Strategic Defense Review 1998.
The Strategic Defense Review launched what have become known as the
SMART (Specific, Measurable, Achievable, Relevant, Time bound) Acquisition
reforms, aimed at faster, cheaper and better acquisition and support of
equipment. At the heart of SMART Acquisition is a change to integrated
management of the delivery of all aspects of capability, from identification of
the need for the capability to its disposal. This approach is known as Through-
Life Management [PBM handbook, 2001].
Through Life Management (TLM) is an integrated approach to all SMART
Acquisition processes, planning and costing activities across the Whole
System and Whole Life of the project and is illustrated in figure 2.1.
25
Figure 2.1 Through Life Management [PBM handbook, 2001].
The MOD UK life cycle stages of a defence capability are;
concept (C);
assessment (A);
demonstration (D);
manufacture (M);
in-service (I);
disposal / Termination (D/T).
The Through Life Management philosophy is adopted by the United Kingdom
Ministry of Defense (MOD) and started with the development and
implementation of SMART acquisition.
SMART Acquisition, that is governed through the Acquisition Policy Board
(APB), chaired by Minister (Defense Procurement), is a long-term MOD
initiative to improve the way to acquire defense capability and to adopt a
through-life approach to acquisition, rather than concentrating resources on the
initial procurement.
The aim of SMART Acquisition is;
"To acquire Defense capability faster, cheaper, better and more effectively
integrated."
The objectives of SMART Acquisition are:
Through Life Management Plan (TLMP)
Whole Life Costing (WLC)
Cost of Ownership (COO)
Costed Project Plan
C A D M I D/T
26
to deliver and sustain defense capabilities within the performance, time
and cost parameters approved at the time the major investment
decisions are taken;
to integrate defense capabilities into their environment within Defense,
with the flexibility to be adapted as the environment changes;
to acquire defense capabilities progressively, at lower risk. Optimization
of trade-offs between military effectiveness, time and whole life cost are
maximized;
to cut the time for (key) new technologies to be introduced into the
frontline, where needed to secure military advantage and industrial
competitiveness.
To achieve the objectives of SMART Acquisition, that is “To acquire defence
capability faster, cheaper, better and more effectively integrated”, it is vital that
there is an integrated through life approach to managing projects. The
characteristics of a Through Life Management approach are:
- a whole life outlook; starting from the point that the Equipment Capability
Customer (ECC) identifies the capability gap, and continuing up to the point
of final disposal;
- a whole system outlook; taking a integrated approach to delivering all of the
components of Military Capability, not just the Equipment;
- managing the Whole Life Costs of capability. Ensuring that investment
decisions take full account of all the longer term implications of acquisition,
in terms of operating, supporting, maintaining and finally disposing of
equipment;
- proactive involvement of stakeholders throughout the process. Being
realistic about what can be affordably achieved and agreeing this with the
customers and other stakeholders;
- having a realistic, cost- defined, whole life plan - the Through Life
Management Plan - and maintaining this throughout the lifecycle;
- better informed decision making, through the use of the TLMP;
- building all of these characteristics into IPT processes and working
practices.
27
Hence, Through Life Management is the philosophy that brings together the
behaviors, systems, processes and tools that will deliver these objectives.
By projecting the Through Life Management philosophies / concepts to the
dissertation subject „Organizing performance based management for in-service
support cooperation‟s‟ there should be ascertained that the application of
performance based management within the MOD UK is supported by
Customer Supplier Agreements (CSA) between the Integrated Project Team
(IPT) and (depending on life cycle stage) the Defence Procurement Agency
(DPA) or Defence Logistic Organization (DLO). The CSA is an agreement
between the Customer and Supplier setting out the working relationship
between them and recording other key project information such as deliverables
required, and performance measures and targets.
There are two distinct types of CSA currently in use:
CSA (Acquisition) - an agreement between the Equipment Capability
Customer (ECC) and an IPT for the procurement stages of a project
(Concept through Manufacture); and
CSA (Support) - the comparable agreement prepared at the In-Service
stage which manages output relationships between the Second
Customer and an IPT/ Business Unit.
The development of clear customer and supplier roles, and a defined
relationship between them, is fundamental to SMART Acquisition. What this
means in practice is creating a more logical separation of customer and
supplier roles, and clearly defining the tasks and responsibilities which go with
these. This will enable both customer and supplier to fulfill their roles more
effectively. It will give the customer more real control throughout the acquisition
life-cycle, and will provide the supplier with a clear and unambiguous
framework in which to operate, while maintaining the flexibility the supplier
requires, meeting the agreed project deliverables.
The purpose of a Customer Supplier Agreement CSA is to make short and long
term priorities, commitments and outputs between the parties explicit, to
describe clear and unambiguous Performance-Cost-Time (PCT) Targets,
permissible tradeoffs, roles and responsibilities for the signatories and to
produce realistic expectations through discussion and review. It should also
28
clearly outline the behaviors that each party will demonstrate in the course of
discharging their responsibilities under the agreement. Such a CSA will
facilitate a better Customer Supplier working relationship.
The principles of all Customer Supplier Agreements should be:
collaborative - A partnership agreement;
comprehensive but short - No more than 5 pages. If further detail is
essential it should be placed in an appendix, including appropriate
references to source documents;
broad In scope - High level with sufficient scope to identify and act on
trade-offs;
output focused - Focus on outputs rather than inputs. During the
Assessment Phase these will be expressed in terms appropriate to the
exploratory nature of the work. As the project progresses the outputs will
become more specific;
measurable - Identify objectives and timescales with mutually agreed
indicators to track performance;
dependencies - Identify any high level dependencies and other
interactions which might impinge upon the project output;
a Working Document – With performance reviewed jointly as demanded
by the short and long term objectives;
a Relevant Document – With a content review each year in the light of
the annual planning round, or between rounds if there is a significant
change in the situation, or a new project cycle phase calls for a
redefinition of the outputs;
referred to in the TLMP and updated when changes occur during a
planning round;
cost on a through-life basis, across all Lines of Developments using
Cost Of Ownership data.
However, the research scope is limited to the in-service phase. As illustrated in
figure 2.2 we can conclude that in-service support cooperation are managed
by the Defence Logistic Organization (DLO)
29
Figure 2.2 Actor relations during the CADMID stages.
The DLO Strategy is to transform logistic support to the Front Line by delivering
improved reliability and availability. Underpinning the strategy is the need for
an end to end and through-life view that optimizes logistic support solutions
and provides opportunities and incentives for industry to align with DLO
capabilities and responsibilities.
This transformation represents a shift from traditional support arrangements
with separate contracts for maintenance, repair and overhaul, spares and post-
design services, to an integrated approach that may include long-term
partnering arrangements with major Defense contractors. Furthermore, it is
underpinned by the SMART Acquisition approach which encourages Integrated
Project Teams (IPT‟s) to seek increasingly innovative support solutions in order
to optimize levels of service and value for money to drive down the cost of
ownership. Such solutions are collectively known as Contractor Logistic
Support (CLS). They cover a wide spectrum of support solutions ranging from
minimum contractor involvement („Traditional‟ model), where MOD-owned
equipment and spares are supported through various contractual
arrangements, to maximum contractor involvement („Contracting for Capability‟
model), where the prime contractor provides a total support package. The full
spectrum of options along this support continuum is illustrated in the Support
Options Matrix (SOM) (see figure 2.3)
Concept Assessment Demonstration Manufacture In-Service Disposal
In-Service Date
Defence Procurement Agency Defence Logistic Organization (DLO)
Integrated Project Team (IPT)
Equipement Capability Customer
(Customer 1)
Integrated Project Team (IPT)
Front Line Command
(Customer 2)
30
Figure 2.3 Support Options Matrix (SOM) [Jones. 1994.].
In practice most solutions fall somewhere between the two extremes of this
continuum and will include elements of both traditional and non-traditional
support arrangements [Jones. 1994].
CLS is recognized as a cost-effective support strategy that has developed an
increased drive under the SMART Acquisition initiative. Given the reality that
operational risk cannot be transferred but only managed, the application of
the principles and adherence to Integrated Logistic Support (ILS) methodology
will significantly aid in-project risk management. While it is accepted that CLS
solutions may be time constrained to limit risk, they must form a credible part of
a complete Through-life Management Plan (TLMP) and support strategy.
Solutions must identify sustainable and competent organizations to cover
ownership and Design Authority functions, ensuring that a project can be taken
31
through its full service life to its eventual cost-effective disposal. Throughout
this time, contractual arrangements will be required to provide incentives to
industry to invest and deliver against constantly improving performance and
cost targets, while still maintaining the flexibility of the MOD to respond to
changes in both operational and budgetary priorities.
With respect to CLS solution - Contracting for Availability (CfA), the TES
department published a draft TES-RMG Guidance note in 2006 with respect to
Contracting for Availability (CfA). The aim of this guide is to alert Project Staff
to a series of significant issues relating to Reliability & Maintenance which
should be considered during the Contacting for Availability process and
addressed by Availability Contracts.
Contracting for Availability (CfA) is a commercial process which seeks to
sustain a system or capability at an agreed level of readiness, over an
extended period of time, by building a partnering arrangement between the
MoD and Industry. The result of this process will be an Availability Contract,
which should include incentives for both parties to improve efficiency and
effectiveness over the life of the agreement. This is similar to a comprehensive
Contractor Logistics Support (CLS) arrangement, which uses Availability as its
principal metric. CfA can be applied to new capabilities and legacy systems in
any environment, at various levels. Fundamentally it must address the
Availability of what, when and where.
CfA is a deceptively simple concept which can be extremely difficult to deliver,
given the complexities and uncertainties which surround the Service
environments. The success of individual arrangements will stand or fall on the
effectiveness of the resulting contract and the degree of cooperation between
the MoD and Prime Contractor. CfA should be exploited as an opportunity to
improve support to the User community and not be viewed as a flag of
convenience for financial savings, manpower reductions or the abrogation of
responsibilities. Finally, the successful implementation of CfA requires a
wholesale change of attitude by all stakeholders, since it requires traditional
support activities to be replaced by innovative processes based on need
32
2.1.1 Results / findings
Some examples of Through Life Management successes are illustrated in
table 2.1.
Table 2.1 Through Life Management Successes [PBM, 2001].
In the year 2002 the United Kingdom„s National Audit Office performed an audit
with respect to the application of Through life Management at the Ministry of
Defence [PBM, 2001] This audit was mainly focused on Through Life
Management within the Ministry of Defence excluding contractors from Industry
and resulted in the following findings:
Through-Life Management is a key element of SMART Acquisition but
not all aspects of the change it entails have been fully developed and
managed coherently;
33
There has been continuing support for Through-Life Management from
senior management, but this has not always been consolidated into a
clearly visible strategy across the Department and the definition and
benefits of the change are not yet clear to some members of the
acquisition community;
The enablers of Through-Life Management are not yet fully in place.
Progress in setting in place tools and information sources to support
Through-Life Management has not always been as quick as the
Department would have liked and more remains to be done. Some
mechanisms for engaging the defence acquisition community and
promoting Through-Life Management behavior are not yet fully effective,
and measurement of progress and success has been patchy and is still
developing.
Although the audit depicts all findings and recommendations, as well the
„transformation to‟ as the „application of‟ Through Life Management, several
findings and recommendations should be taken into account when
Performance Based Management cooperation is established. These are;
Clearly communicate the aims and benefits of Through-Life
Management to all stakeholders related to the cooperation;
align responsibility with authority;
make every effort to speed up the implementation of the Whole-Life
Cost program and establish robust cost data for all projects to inform
decision-making;
ensure that all members of the PBM cooperation acquisition community
involved in the development and ongoing review of Through-Life
Management Plans have appropriate visibility of these plans;
clearly define the responsibilities of all members of the PBM cooperation
in Through-Life Management, either by revising Customer Supplier
Agreements or by developing alternatives such as the Responsibility
Matrices in Through-Life Management Plans;
ensure suitably mature costs.
34
Through-Life Management Plans are a prominent and integral part of
Business Cases. Unfortunately, no accessible information was found with
respect to successes with Performance Based Contractor Logistic Support
(or CfA) related to Through-life Management.
2.2 Total Life Cycle System Management
Total Life Cycle Systems Management is the implementation, management,
and oversight, by a designated Program Manager, of all activities associated
with the acquisition, development, production, fielding, sustainment, and
disposal of a DoD weapon system across its life cycle.
The Total Life Cycle Systems Management approach to system development
is optimized if it targets, as a major end state goal, operations and
maintenance phase effectiveness and affordability. TLCSM is distinguished by
the translation of force provider-specified levels of performance into deliverable
capabilities that represent system readiness, availability, and logistics
supportability. An
overview with respect to the scope of Total Life Cycle Systems Management is
illustrated in Figure 2.5 Total Life Cycle Systems Management
Figure 2.5 Total Life Cycle Systems Management [TLCSM-US DoD, 2003].
35
With respect to Life Cycle Logistic it is fundamental to systems engineering to
take a total life cycle, total systems approach to system planning, development,
and implementation. Total life cycle systems management (TLCSM) is the
planning for and management of the entire acquisition life cycle of a DoD
system.
Because of TLCSM, the program manager should consider nearly all systems
development decisions in context of the effect that the decision will have on the
long term operational effectiveness and logistics affordability of the system.
TLCSM considerations should permeate the decision making of all acquisition
functions and communities, during all acquisition phases. In fact, TLCSM
factors should be considered by the participants.
TLCSM encompasses the following concepts:
single point of accountability;
evolutionary acquisition;
supportability and sustainment as key elements of performance;
performance-based strategies, including logistics;
increased reliability and reduced logistics footprint;
continuing reviews of sustainment strategies.
In executing TLCSM responsibilities, program managers should apply systems
engineering processes and practices known to reduce cost, schedule, and
performance risks. This includes best public sector and commercial practices
and technology solutions
The program manager should apply a robust systems engineering
methodology to achieve the optimal balance of performance and total
ownership costs. Effective sustainment of weapons systems begins with the
development of a balanced system solution. The key is to apply the systems
engineering processes
Consequently, systems engineering should be applied at the initial stages of
program formulation to provide the integrated technical basis for program
strategies; acquisition plans; acquisition decisions; management of
requirements, risk, and design trades; and integration of engineering, logistics,
36
test, and cost estimation efforts among all stakeholders. Likewise, the Systems
Engineering Plan (SEP) should be established early in the program definition
stages and updated periodically as the program matures. The overall systems
engineering strategy should be addressed in and integrated with all other
program strategies. Systems engineering enables TLCSM, and provides the
framework to aid decision making about trade-offs between system
performance, cost, and schedule.
By projecting the Total Life Cycle Systems Management philosophies /
concepts to the dissertation subject Organizing performance based
management for in-service support cooperations it can be concluded that the
scope is limited to Performance Based Logistics during the sustainment phase.
Therefore, Life Cycle Logistic in systems engineering is not further discussed.
PBL is the purchase of support as an integrated, affordable, performance
package designed to optimize system readiness and meet performance goals
for a weapon system through long-term support arrangements with clear lines
of authority and responsibility. Application of PBL may be at the system,
subsystem, or major assembly level depending on program unique
circumstances and appropriate product support strategy analysis.
The essence of PBL is buying performance outcomes. It is procurement of a
capability to support the war fighter versus the individual parts or repair actions.
This is accomplished through a business relationship that is structured to meet
the war fighter‟s requirements. PBL support strategies integrate responsibility
for system support in the Product Support Integrator (PSI), who manages all
sources of support. Source of support decisions for PBL do not favor either
organic or commercial providers. Like traditional support strategies, PBL
optimizes the best public and private sector competences based upon a best-
value determination, evidenced through an appropriate analysis of the
provider's product support capability to meet set performance objectives. The
major shift from the traditional approach to product support emphasizes how
program manager teams buy support, not who they buy from. Instead of buying
set levels or varying quantities of spares, repairs, tools, and data, the focus is
on buying a predetermined level of availability to meet the war fighter‟s
objectives.
37
One of the most significant aspects of PBL is the concept of a negotiated
agreement between the major stakeholders (e.g., the program manager, the
force provider(s), and the support provider(s)) that formally documents the
performance and supports expectations and commensurate resources to
achieve the desired PBL outcomes. However, notice should be made that each
PBL arrangement is unique and will vary from other PBL arrangements. A PBL
arrangement may take many forms. There is no one-size-fits-all approach to
PBL.
Performance Based Logistics starts with the PBL strategy. A PBL strategy
focuses weapon system support on identified war fighter required performance
outcomes, rather than on discrete transactional logistics functions. It should
balance three major objectives throughout the life cycle of the weapon system:
delivering sustained materiel readiness;
minimizing the requirement for logistics support through the
incorporation of reliability-enhancing technology insertion and
refreshment;
continually improving the cost-effectiveness of logistics products and
services. Careful balancing of investments in logistics and technology to
leverage technological advances through the insertion of mature
technology is critical. The program manager should insure that the PBL
strategy addresses war fighter requirements during peacetime,
contingency operations, and war.
The development of a PBL strategy is a lengthy, complex process, led by the
program manager, involving a multitude of stakeholders. No two weapons
system PBL strategies are exactly the same. Fundamental to the development
and execution of a PBL strategy is the ability to understand and communicate
the ability of the provider(s) to support across the spectrum of PBL solutions, to
quantify the required elements of system performance included, and to
understand the practices and technology enablers that will be critical to
meeting the required performance levels. The PBL Maturity Framework (see
Fout! Verwijzingsbron niet gevonden.) was developed to meet this need.
38
Figure 2.6 The Performance-Based Logistics Maturity Framework [PBL, 2006].
The PBL Maturity Framework captures the range of solutions that may be
employed in a PBL strategy. Every PBL is not the same. The framework
encourages program managers to strive for the “right” level of PBL maturity
and not the minimum level. Associated with each level is a metric associated
with the outcome the program manager is buying. The framework is
incremental, in that each level builds on the previous levels. A description of
each level follows:
Level 1: These agreements make the supplier accountable for the delivery
speed required to meet customer requirements. This level focuses on logistics
planning and transportation and is applicable to many commodities and parts.
Logistics Response Time (LRT) is the preferred metric for Level 1 agreements.
The time it takes the supplier to deliver the part or commodity to the
government should determine their payment. The government‟s requirement
and terms of the contract will drive the supplier‟s behavior.
Level 2: These agreements focus on maintaining the required availability of
key components or assemblies, such as a wing flap or auxiliary power unit.
Level 2 includes logistics planning and execution, configuration management
and transportation. Under Level 2, a PBL provider may also make repair vs.
replace decisions. The preferred metric for Level 2 agreements is Materiel
Availability, measured at the point where the material is consumed. Availability
39
of the component or assembly is also linked to delivery speed because it helps
determine the reorder point, as does demand.
Level 3: These agreements transfer life cycle support responsibilities to the
PBL provider, assuring the operational availability (Ao) of the system. This level
is typically applicable for systems and weapon system platforms. There is an
additional focus on life cycle support, training, maintenance, repair and
overhaul. The appropriate metric is operational availability. The reliability of the
equipment and supply chain processes will influence the availability of the
system or platform. In Level 3 agreements, the PBL provider is assigned
specific life cycle responsibility, solely or in partnership, for the breadth of
processes that influence operational availability of the system.
Level 4: The PBL provider is assigned overall responsibility for the mission
effectiveness of the entire system. While each of the partnerships stages
contributes incrementally more to downstream mission effectiveness, Mission
Assured Logistics strives for Level 4 elements to assure that all critical
elements for success can be managed in an aligned and integrated manner.
The appropriate metric is Mission Reliability, measuring success in achieving
mission outcomes. Level 4 is applicable for complete weapon system
platforms.
The development and management of PBL arrangements consist of 12
discrete steps that can be applied to new, modified, or legacy systems, as
shown in Figure 2.7 Performance-Based Logistics Implementation model.
Figure 2.7 Performance-Based Logistics Implementation model [PBL, 2006]
40
The Performance Based Logistics methodology can be applied to new,
modified, or legacy systems and encompasses 12 steps. The intended outputs
of these steps are:
integrate requirements and support;
form the Performance Based Logistics Team;
baseline the system;
develop performance outcomes;
select the Product Support Integrator(s);
develop a Workload Allocation Strategy;
develop a Supply Chain Management Strategy;
establish Performance Based Agreements;
perform a Performance Based Logistics Business Case Analysis;
award contracts;
employ financial enablers;
implement and assess.
2.3 Results / Findings
Literature research with respect to PBL results / findings shows different
interpretations and/or conclusions.
On request of the DoD, the US Government Accountability Office (GAO)
performed a review with respect to DoD‟s implementation of performance-
based logistics arrangements. The objective was to determine whether DoD
could demonstrate cost savings or improved responsiveness through the use
of performance-based logistics arrangements. The results are published in the
Report to the Subcommittee on Readiness and Management Support,
Committee on Armed Services, U.S. Senate [Defense Management DoD,
2005]
GAO analyzed the implementation of performance based logistics
arrangements for 16 weapon system programs.
41
Military service Weapon system or
component Program office
Air Force C-17 Air Force Materiel Command Air Force F-117 Air Force Materiel Command Air Force JSTARS Warner Robins Air Logistics Center Air Force C-130J Air Force Materiel Command Navy ALR-67 (V3) Naval Supply Systems Command Navy Auxiliary Power Units Naval Supply Systems Command and
Naval Air Systems Command Navy F-18 E/F FIRST Naval Supply Systems Command and
Naval Air Systems Command Navy F-404 Naval Supply Systems Command and
Naval Air Systems Command Navy T-45 engines Naval Supply Systems Command and
Naval Air Systems Command Navy V-22 engines Naval Air Systems Command Navy/Marine Corps
KC-130J Naval Supply Systems Command and Naval Air Systems Command
Army HIMARS Aviation and Missile Command Army Javelin CLU Aviation and Missile Command Army TOW-ITAS Aviation and Missile Command Army TUAV Shadow Aviation and Missile Command
Table 2.2.1.1 Performance-Based Logistics Programs reviewed
[Defense Management DoD, 2005]
The following was concluded;
DoD program offices cannot demonstrate that they have achieved cost savings
or performance improvements through the use of performance based logistics
arrangements. Although DOD guidance on implementing these arrangements
states that program offices should update their business case analysis based
on actual cost and performance data, only 1 of the 15 program offices included
in the review have performed such an update consistent with DoD guidance. In
the single case where the program office has updated its business case
analysis, it determines that the performance based logistics contract does not
result in expected cost savings and the weapon system does not meet
established performance requirements. In general, program offices have not
updated their business case analysis after entering into a performance-based
logistics contract because they assume that the costs for weapon system
maintenance incur under a fixed price, performance-based logistics contract
will always be lower than costs under a more traditional contracting approach
and because they lack reliable cost and performance data needed to validate
assumptions used. Furthermore, the Office of the Secretary of Defense has not
established procedures to monitor program offices to ensure they follow
guidance and update the business case analysis. Additionally, program officials
say that, because of limitations in their own information systems, they typically
rely on cost and performance data generated by the contractors‟ information
systems to monitor performance-based logistics contracts. The program
42
offices, however, have not determined whether the contractor provided data
are sufficiently reliable to update their business case analysis. Although the
Defense Contract Management Agency (DCMA) and the Defense Contract
Audit Agency (DCAA) are most commonly used to monitor higher risk
contracts, such as cost plus contracts, they are potential resources available to
assist program offices in monitoring fixed price performance-based contracts.
In doing so, these DoD agencies have the capability to verify the reliability of
contractors‟ information systems and collect cost and performance data
needed to update the business case analysis. Until program offices follow
DoD‟s guidance and update their business case analysis based on reliable cost
and performance data, DoD cannot evaluate the extent to which performance-
based logistics arrangements are achieving expected benefits and being
effectively implemented within DoD.
With respect to these findings the GAO recommends to take the following two
actions:
Reaffirm DoD guidance that program offices update their business case
analyses following implementation of a performance-based logistics
arrangement and develop procedures, in conjunction with the military services,
to track whether program offices that enter into these arrangements validate
their business case decisions consistent with DoD guidance.
Direct program offices to improve their monitoring of performance based
logistics arrangements by verifying the reliability of contractor cost and
performance data. The program offices may wish to increase the role of DCMA
and DCAA in overseeing performance-based logistics contracts.
However, a White Paper called Performance-Based Logistics - The Changing
Landscape in Support Contracting [PBL, 2006] shows that in spite of
unprecedented success in improving operational readiness and stemming
rampant weapon system support costs, PBL continues to face resistance. In a
recent General Accountability Office (GAO) report on PBL, 16 programs
utilizing PBL support strategies were examined. GAO findings showed that 10
of the 16 exceeded the performance requirements specified in their PBL
agreements, and the remaining 5 programs met all performance requirements
A 100% success rate in terms of meeting the objective of „buying performance
43
outcomes‟. No previous DoD support strategy has approached that level of
success, yet GAO still found room to question whether the success “could be
attributed directly to their use of performance-based logistics arrangements.”
Clearly, there are still challenges ahead. DoD financial processes, particularly
those that dictate the use of various „colors‟ (appropriations) of money are
problematic. While most weapon system support costs are funded with
„Operations and Support (O&S)‟ funds, full scope sustainment also requires
Procurement and Research, Development, Test, and Evaluation (RDT&E)
funding for modifications to counteract obsolescence and improve support
processes. PBL transfers many of the „make or buy‟ decisions to the prime
support contractor, yet DoD financial rules still require government managers
to include separate appropriation funding requirements in contracts .
In other words forcing them to „estimate‟ what kind of support decisions the
support contractor will make, and in doing so setting arbitrary boundaries that
constrain contractor flexibility to make best value decisions.
Industry has done a great job in joining with DoD in utilizing PBL to deliver real
results on today‟s battlefields. Systems such as the Stryker, F/A-18 Super
Hornet, C-17, and Joint STARS have all historically demonstrated high mission
availability rates in both Operations Iraqi Freedom and Enduring Freedom. Still,
PBL has yet to be implemented on very complex „system of systems‟ platforms,
such as Navy Carriers, or the developmental Army Future Combat System and
Joint Strike Fighter programs.
PBL‟s concept of buying customer (war fighter) performance outcomes will be
challenged with these multi-user, multi-variant, and in some cases multi-
national systems. In spite of the doubters, there are PBL champions as well.
On September 21, 2005, Ken Krieg, the new USD/AT&L spoke to the National
Defense Industry Association (NDIA), and said, “Obviously, there are a number
of tools, but one answer is Performance-Based Logistics. When Performance-
Based Logistics, or PBL, is done right, it focuses energy on the necessary
outputs and can provide both effectiveness and efficiency.” PBL has produced
too many „wins‟ to warrant slowing its progress. DoD desperately needs
consistent operational readiness and more reliable, easily deployable systems
in today‟s global engagement threat environment, and PBL has shown
consistently that it can achieve those results. DoD should press ahead with
44
vigor, and work towards alleviating any remaining financial, statutory, or policy
barriers that limit the full potential of PBL. DoD has made a commitment,
through continued downsizing of the base and Depot infrastructure, to rely on
public-private partnerships for weapon system support. There is indeed best
value in utilizing the immense capabilities, flexibility, and entrepreneurial
approach of the private sector. PBL is the best available strategy that takes full
advantage of those benefits, and should receive commensurate continued
support and implementation emphasis
2.4 Summarized
The cooperation between the defense organizations and the industries has
been motivated by shortening lead times, better control and increased
performances. Operational availability is the most important aim. PBL-contracts
mostly concern the supply of spare parts and optimizing the maintenance
process. The industry has their own stores on site and the spare parts are no
property of the defense organizations, but they have been earmarked for the
basis concerned. In the maintenance process the industry has been involved in
the repair of specific components, which cannot be carried out in an efficient
manner by the defense organizations. The defense organizations also show
that they have specialists, carrying out highly technological work and that there
were clear commitments between the defense departments, concerning
distribution of work.
PBL-contracts contain measurable objectives for performance improvement in
the maintenance process in the field of lead times and costs. Experience from
these organizations proves that it is wise to step by step develop PBL contracts
with the industry and not in a short time. PBL contracts will improve
increasingly in the future. The contract has a maximum term of five years.
Longer terms are cheaper, but not allowed by American law. The defense
organizations have a positive attitude towards the cooperation with the
industry. Problems in the implementation exist; however, they have mostly to
do with overdue delivery of spare parts by subcontractors. A system of
penalties and rewards has been included in the contract, depending on
45
supplied performance. Most important condition for good cooperation is mutual
trust and the willingness to share information.
46
3. AMC Feasibility study
3.1 General
For this purpose a case Integrated Maintenance (“Integrale Instandhouding”)
has been started. The aim of the case is to obtain experience in the
implementation of maintenance control by system-effectiveness and
operational use of maintained systems. The Royal Netherlands Naval
Maintenance and Service Establishment responsibility and boundary conditions
to the internal customers are described in a contract called a Service Level
Agreement (SLA). The SLA describes the planned system performance in
terms of active time, system-effectiveness, reliability and availability versus
costs of installation during a fixed period. By describing the system
performance and costs in an SLA the customer has the means to optimize the
balance of the system performance, costs and his operational needs. The pilot
project has not answered all questions in order to be able to fully implement the
ILS concept. The purpose of this dissertation is to research a structured
method of implementing a performance driven maintenance approach and
system-effectiveness into a defense organization and to determine if this is a
profitable approach.
Maintenance within the Royal Netherlands Navy (RNLN) was customer driven.
The Royal Netherlands Naval Maintenance and Service Establishment have
maintained the military equipment in accordance with an obligation of best
intends described in a covenant, between the commander in chief RNLN and
the maintainer. The maintenance is scheduled in accordance with the
operational schedule of the maintained equipment. The covenant describes the
maintenance tasks, available budget, and resources. The maintenance
activities are mainly driven by input of the user/customer. This approach has no
or minor reference to system or installation performances for control over the
budget and resources assigned to the maintainer. The assumption is that this
approach will not fulfill future demands due to an increase of complexity,
maintenance related costs, and operational demands upon the naval ships.
Approach
47
The applied research method for this dissertation is based on a feasibility study
of used material (M- Frigate) and an organization analysis with a new
application PRIMA.
To be able to reach the goals set out in the aim of the dissertation, the
following steps have been taken:
the research is based on a description of the standing organization of
the Royal Netherlands Naval Maintenance and Service Establishment;
desk research on organization theory:
o the desk research is focused on examining the literature
regarding the available implementation methods;
o the data gathered during the desk research has been
analyzed.
desk research on performance driven maintenance and system
management (AMC approach) approach in a cost-effective way:
o the desk research is focused on examining the literature
regarding the preferred organization to practice this AMC
approach [TQM manual, 2006]
o based on the data of the desk research on AMC, this and the
wishes of the organization, an organization for performance
driven maintenance is defined.
based on the analysis recommendations for the implementation of
performance driven organizing have been drafted;
the aim of the feasibility study is to validate the theoretical method as
found during the desk research and to test the theoretical method in
practice;
the data gathered during the feasibility study will be analyzed;
a questionnaire has been drafted based on the implementation theory
of TQM manual and the comparison of the organization.
Target group: middle management, upper management, and potential
partners in SLA.;
an analysis of the organization will be done with PRIMA (PRocess
Improvement Application);
The results of this analysis shall be translated into a conclusion and
recommendations.
48
3.2 Tools
The applied research method for this dissertation is based on feasibility study
and an analysis with the new software application PRIMA (Process
Improvement Application). This is very useful when a limited amount of time is
available to address a complex strategic situation.
Feasibility studies examine the economic, marketing, technical, managerial,
and financial aspects of your proposed business idea. While independent, the
study is based on information provided by you. Whether one is applying for a
government-backed business loan, seeking funds for expansion or plant
modernization, or deciding what steps come next in growing the business, a
detailed feasibility study will provide the required ammunition to make one‟s
case, or help adjust the proposal to meet the requirements of lenders and other
funding sources.
What are the benefits of feasibility studies?
Implementing feasibility studies can:
map out for lenders your proposal‟s strengths and potential;
realistically analyze the impact of expansion;
show you the pros and cons of your idea;
analyze the business idea.
[www.ciras.iastate.edu/management/feasibilitystudies.ap]
After getting familiar with the topic, the feasibility study will be conducted. This
will be done in the second part of the data collection period to get acquainted
with the subject and to be able to do a more “in-depth” questioning.
The aim of this feasibility study will be:
1. gain knowledge about the subject;
2. collect new ideas about alternative solutions concerning the
problems;
3. get feedback on ideas resulting from the literature study.
The feasibility study will be prepared in advance to make it as efficient as
49
possible. This will improve the quality of the feasibility study. Furthermore on-
site observations will be carried out. These will consist of visits to the research
“site”.
PRIMA
PRocess Improvement Application Analysis, (PRIMA). In view of this project,
PRIMA analysis compares the situation in which AMC is implemented in the
organization with the cons and pros.
A PRIMA analysis is mostly performed to identify success factors based on the
environmental scan. In this case the PRIMA analysis is used to investigate the
probability of success that AMC approach can have for Defense Materiel
Organization. This may imply that some of the Defense Materiel Organization
weaknesses can be opportunities for AMC approach.
3.3 Lay-out of the Study
A general plan of the research can be found in figure 3.2.1.
Figure.3.3.1 Lay-out of the study.
F
i
n
d
i
n
g
s
Which system cost-
effectiveness is really
needed?
AMC
Review
IM
case
Conclusions
&
Recom-
mendations
PRIMA
Analyses
&
Results
How to control the Total
Cost of Ownership?
How to get the best
value for money?
How to improve
performances and/or
reduce cost?
Is there a way yet to
implement performance
driven maintenance and
system management
approach within a
Defense Maintenance
Organization?
T
h
e
o
r
e
t
i
c
a
l
A
s
s
s
e
s
m
e
n
t
R
e s e a r c
h D e f i n
i t i o n
50
3.4 Value of the study
The Value of the study in the Defence Materiel Organisation will be, to improve:
the approach of Asset Management Control.
the management control of process-, organization-, personal- and
information management aspects;
which AMC processes should be executed by each actor (based on
acceptable risks) within this organization?
how to organize an organization where each actor can contribute his
own specialty and autonomy of each actor is ensured;
information support environment.
Furthermore the research might be used for future research.
51
52
4. AMC review on the Integrated Maintenance Case
4.1 Introduction
The Integrated Maintenance project was initiated to tackle the „problem‟ of
implementing the ILS/LCM. One of the final results of this project for that
matter was primarily intended to realize a „Competence Center for
Integrated Maintenance‟ for the management of the Royal Netherlands
Naval Maintenance and Service Establishment.
A Competence Center for Integrated Maintenance requires that the Naval
Maintenance and Service Establishment are capable of entering into
„business‟ performance contracts, made up of the following basic
elements; system definition (functions, capability), yearly service plan,
performance standards and a cost allocation report .
As far as the maintenance of the materiel is concerned, the Royal
Netherlands Navy centers its focus on minimizing life cycle costs during
assigned operational readiness. Methods and techniques have been
developed for this purpose, allowing for the integrated management of the
materiel life cycle.
The Royal Netherlands Naval Maintenance and Service Establishment tend
to the maintenance of a large portion of the RNLN (Royal Netherlands
Navy) materiel. The realization of Royal Netherlands Naval Maintenance
and Service Establishment products and services was often segmented
and differentiated. As a result, the Royal Netherlands Naval Maintenance
and Service Establishment‟s product-focused management failed to fully fit
in with the RNLN ambition to approach maintenance in an integral form.
With the development and implementation of IM, the Royal Netherlands
Naval Maintenance and Service Establishment is capable of offering
products and services which fit in with the ambitions of the RNLN and its
own objectives; „realize the required system effectiveness at minimum
costs‟.
IM enables the RNLN to make „cost-effective‟ considerations in regard to
maintenance. To that end, performance per ship (as system) is, at
installation level versus maintenance costs, expressed in terms of active
53
time, availability, reliability and capability. By expressing system
effectiveness in this way it will be possible to enter into Service Level
Agreements (SLA) per ship, per period, and the „customer‟ can base his
choices on system performance and operational needs.
IM is based on Asset Management Control (AMC). This is a new approach
that has been developed for managing the material logistic process
across the entire life cycle of capital goods. Based on the Logistic Process
Cycle a system model is set up, with which all processes of the entire life
cycle can be planned, directed and controlled.
In line with this, being 'in control' of the cost-effectiveness of assets (e.g.
the marine fleet) applies in equal measures to profit and non-profit
organizations. With the AMC approach, not only can every euro be
accounted for, but it can also be justified, given that the relation between
operational needs, imposed by the customer/user, and costs (people,
resources and materials) can be clearly indicated and controlled. For
organizations working with much capital-intensive material, the objective in
the next few years will be to:
reduce Cost;
improve Performance.
An integrated approach is necessary for: “guaranteeing the required
system effectiveness at minimum costs” through:
ILS implementation;
grip on system effectiveness;
preparing for enterprise resource planning (ERP)
54
YE
AR
LY
CO
ST
S (
Mil
.Eu
ro)
ACQUIRE MAINTAIN OVERHAUL DISPOSE
120
100
80
60
40
20
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
LIFETIME (years)
Figure 4.1.1 Reduce cost [Stavenuiter, 2006].
Costs are attached to realizing specific system effectiveness. During the
entire life cycle of the materiel, efforts should be centered on realizing the
required material availability at minimum life-cycle costs. The life-cycle
costs of a system/installation can be divided into investment costs,
operation costs (maintenance costs and costs of use) and disposal costs.
The level and development of maintenance costs are indicative to the
effectiveness which the system and installation management are put in
practice. For charting the costs in the framework of IM, an LCM model will
be drawn up to gain „short & simple‟ transparency into:
costs of maintenance in man-hours (so-called „costs‟);
costs of spare parts (so-called „outlays‟).
These variable costs constitute a significant part of the maintenance costs
and serve as a good indicator for the efforts required for readying and
maintaining the system or installation for use (the so-called „conditioning‟
and „sustainability‟). Better transparency will be achieved when the
investment costs are also incorporated, something that has not (yet)
occurred within the RNLN.
55
maintainability
PERFORMANCE
CAPABILITY RELIABILITY AVAILABILITY
active time down time
transportability
serviceability
mission time failure rate
INSTALLATION PERFORMANCE
AVAILABILITY
active time down time
RELIABILITY
mission time failure rate
quality
load
CAPABILITY
quality
suitability
transportability maintainability
testability serviceability
traceability
adaptability
compatibility
flexibility
Figure 4.1.2 Improve Performance [Stavenuiter, 2004].
The „performance‟ or system effectiveness of the material is generally
affected by three main factors, i.e. availability, reliability and capability.
Each of these factors is in turn affected by one or more underlying factors.
These factors, too, can be further analyzed.
For IM it is expected that the forecast and the realized system effectiveness
will be analyzed at least up to the level of the factors specified in the
diagram. Zoom in, only if there is cause for such an examination, in case
of large anomalies, for example.
Important properties of technical systems are reliability or operational
reliability and maintainability. Failure of systems/installations will be
unavoidable during operational phase. The average time between two
failures is an important parameter in this connection. A high level of
material maintainability is for the user a precondition for the shortest
possible down time of the equipment. For this purpose one can consider a
modular construction of the material or the use of quick-release couplings.
The average repair time is indicative of the maintainability. If, in practice,
the material appears to be less reliable or maintainable than agreed, one
56
III222
may want to consider expanding reliability or maintainability, and thus also
(inherent) system effectiveness modifications, for example.
To enable analyses, it is important to know the different factors that have
been considered during the construction of the main components. Usually
breaking these down into pure source data such as key times (corrective
and preventive) and the various waiting times (for spare parts, key capacity
and other), will suffice.
and performances!
Figure 4.1.3 Consider the combined cost [Stavenuiter, 2004].
4.2 The Basis: Contracts per System / Ship
These contracts are entered into the form of a Service Level
Agreements (SLAs). The IM SLA is made up of the following
fundamental elements;
system definition (functions, capability);
yearly service plan, performance standards;
a costs allocation report.
A system is a complex interconnection of installations, on which many an
actor within the Royal Netherlands Naval Maintenance and Service
Establishment work to guarantee the required availability. That is why a
system contract is made up of several service contracts (per installation).
57
Premised on the SLA quote, the best possible capital assets/desired
service level combination will be sought in consultation with the
customer/user. As illustrated in an Activity Diagram (see figure 4.5.3.1).
4.2.1 Contents of Performance contract (SLA)
• System definition (functions, capabilities)
• Yearly service plan:
– type of maintenance;
– why is that maintenance specified;
– when will that maintenance be implemented.
• Performance standards per installation:
– active time (days per year that an installation should be available);
– availability (% of AT without logistic interruptions);
– reliability (% of risk on a mission without logistic interruptions);
– capability (% of proper functioning based on FST standards).
• Costs per installation & per activity (product/actor)
• Contract terms and conditions
• Appendices
For the „customer‟, the provision of information starts with a (concept) SLA.
An SLA is a contract with which maintenance can be specified as follows:
the parties involved;
the agreed level of service;
, the conditions under which service is provided;
costs and warranties.
For this, a yearly service plan is agreed at system level (class/ship). The
yearly service plan is a plan that is geared to the mission profile in which
concrete arrangements are made with respect to the performance of the
58
functional chains. e.g.; Anti Air Warfare(AAW);Anti Submarine warfare
(ASW) Command, Control & Communication (C3), etc., specifically for that
period. The entire range of Royal Netherlands Naval Maintenance and
Service Establishment products and services, the related costs and terms
and conditions, are incorporated in the yearly service plan. (E.g. an AMICO
Installation Diagram, see page 63)
4.2.2 The PBSC as 1-on-1 input for the LCM model and SLA
Performance Based Service Contract [format conform input AMICO/LCM model]
Installatiegegevens Performance Requirements
Life Cycle Period (status): IO(Operationeel) of MJO of TTO Active Time 0-365 dagen
UKC: Availability 0-100 %
BSMI: Reliability 0-100 %
Aanschafprijs (EURO): Capability 0-100 %
Jaar: 2003 (-1) of (-2) Opmerkingen:
Installatiemanager:
Organisatie: BWS of OWS of C3
Kostenverdeelstaat
Uitvoering (Actor) BBS code Product ME blok Uren Uurloon Kosten Uitgaven Totaal
CZM GES Opdrachtst./voortgangsbew. 0 0
Portfoliomanagement Klantcontact, pln.en coord. 0 0
Productie ondersteuning Orderplanning & uitgifte 0 0
Schip OLM (1-ste lijns onderhoud) 0 0
Productgroep ILM (2-de lijns onderhoud) 0 0
Materiaalplanning Materiaalvoorziening 0 0
Maintenance Engineering Installatie management 0 0
System Engineering Systeem management 0 0
Tekenkamer Technische documentatie 0 0
Diagnostiek / Analyse Bedrijfszekerheid informatie 0 0
Meet- & Kalibratiecentrum Kalibratie en metingen 0 0
Instandhoudingskosten (totaal): 0 0 0 0
Figure 4.2.2.1 Performance Based Service Contract input.
For the SLA, baseline data are drafted per installation in the form of
Performance Based Service Contract (PBSC) see figure 4.2.2.1. This
compilation of data is presented at ship-system level in a Service Level
Agreement. The maintenance process is managed on the premise of the
SLA and the PBSC‟s per installation. In fact, a form of Contract
Management is created, which is be set up as follows.
Organization/Communication:
agreement to implement maintenance to the material on the basis of
SLA‟s;
agreement per SLA (intrinsic agreement on product, time and
59
money);
coordinate per SLA;
agreement per PBSC (intrinsic agreement on product, time and
money);
coordinate per PBSC.
Management Control:
controlling anomalies at system level (system effectiveness, costs,
expenditures);
controlling anomalies at installation level (Availability Killers
(AK)/Cost Drivers(CD), modifications);
SLA adjustments to (new) customer requirements;
PBSC adjustments to (new) customer requirements;
controlling fluctuation in work at system level;
controlling fluctuation in work at installation level.
Provision of up-to-date information:
SLA report (on product, time and money, per 4 months.);
PBSC report (on product, time and money, per 4 months);
cost/performance update on web portal (per 4 weeks).
Updated source data (at least every 4 weeks):
hourly wages on the premise of WO (Werk Opdracht, Work Order)/
BBS (Bedrijf Beheers Systeem, Company ERP System), ATW‟s
(Aanvraag Tot Werk, Work Order Management System), (OLM
Service/Ship);
expenditures on the strength of VAS (Voorraad Administratie
Systeem, inventory administration system)/BBS registrations;
OPDEFs on the strength of CZSK/Ship statements;
failures with downtime on the strength of MATRACS (Modificatie
Administratie Systeem, modification administration system)
registrations by Ship;
60
Figure 4.3.1 1
.
progress of modifications on the strength of MOD (Modification)
portal Project Leader MODifications (PL-MOD).
This work method can also serve as an important basis for implementing
the INK and the ISO certification processes
4.3 The Multi-purpose-Frigate Case
IInntteeggrraatteedd MMaaiinntteennaannccee
CCaassee
MMuullttii--PPuurrppoossee FFrriiggaatteess
RRooyyaall NNeetthheerrllaannddss NNaavvyy
22000033 -- 22000044
Figure 4.3.1 Integrated Maintenance Case.
4.3.1 The Multi-purpose Frigate
Background information.
In the beginning of the nineties the Multi-purpose Frigates of the Karel
Doorman–class replaced the Wolves- and Van Speijk class - Frigates.
M. - Frigates are usable on the Atlantic Ocean and the North Sea. The
chosen hull is able to maintain its high speed at sea. The rudder roll
stabilization design enables operation with helicopters during bad weather.
To reduce the risk of discovery, the M. - frigates have a lot of facilities,
varying from low-noise cavitations to a reduced radar reflection.
Specifications:
displacement 3.300 ton;
length 122,2 meters;
width 14,4 meters;
61
draught 6,2 meters;
propulsion:
o 2 gas turbines main engines (power 12,75 MW);
o 2 diesel cruise engines (power 3600 kW.
speed 29 knots (55 km /hour);
crew 152 (men and women).
Armaments:
NATO Sea Sparrow guided missile system against air targets (Anti Air
Warfare);
Harpoon Weapon system against surface targets (Anti SUrface
Warfare);
Lynx - helicopter for submarine combat / surface observation, search
and rescue and transport (ASW, S&R);
Counter Targeting Systems:
Electronic attack Systems (Electronical Warfare, EW);
Chaff launchers SRBOC (Super Rapid Bloom Off board
Chaff).
Torpedo Weapon System anti submarines; (Anti Submarine Warfare
,ASW);
Goalkeeper Close in Weapon System (AAW, ASuW, self defense)
Oto Melara 76 mm gun (long distance gun for (ASuW);
2 x point-50 machine-gun‟s (crew served weapon).
Within the Royal Netherlands Naval Maintenance and Service
Establishment the control of these installations has categorized this class of
ships in, functions and installations.
System Functionalities of a Multipurpose Frigate are divided in two
technical varieties, Sensor Weapon COmmando (SEWACO) and Platform
systems:
1. SEWACO function:
62
Primary (AAW, ASuW, ASW, EW, helicopter operations and self
defense);
Support (Communication, Navigation and C2I Support).
2. Platform function:
Support (Auxiliary, Mobility, hotel facility, representation and ship and
crew survivability0.
Each of these system functionalities has technical functions (181) and their
installations (183). For nearly each installation an Installation Manager is
assigned. For these systems/installation there is a total of 2000 actors.
This is a very complex process/system which is not easy to manage.
For a Life Cycle Management model of an M-Frigate see Appendix 9.
Approach
The Royal Netherlands Naval Maintenance and Service Establishment
have, as Integrated Maintenance (IM) competence center, entered into
service contracts with the operational user (CZSK). The system contract
comprises several service contracts (per installation). The SLA is intended
to provide the customer with an accurate picture of system effectiveness,
and maintenance activities performed in that year.
To implement this system approach in a structured manner, IM has opted
for a short & simple method: Keep It Short & Simple (KISS) is the first phase
in this approach. The entire approach is incorporated throughout this project
in a simplified (KISS) way. An SLA report, on the basis of which
management can decide whether and if yes, how IM can be continued in the
future, is submitted at the conclusions and recommendations (see also
results in „IM AMC eindrapportage‟ [Lobregt, 2004].
4.3.2 Materiel-oriented Operational Management
The IM control structure is developed to provide a material-oriented
operational management. In principle, IM covers the material‟s entire „life
cycle‟. Good service planning is essential, because it is here that the
63
foundation is laid for the rest of the entire operation. By representing the
Technical System (read 'ship') in functions and installations and the
Logistics process (read 'the maintenance') as chains of maintenance
activities, the IM control structure can be categorized into 3 primary
management functions: Process Management, Installation Management
and System Management.
4.3.3 The SLA baseline
The results to date show that IM can be applied for all RNLN materiel. This,
on the premise of yearly service plans per unit. The yearly service plan is
geared to the mission profile in which concrete arrangements are made,
specifically for that period, in regard to the performance of functional chains.
In the yearly service plan is incorporated the entire range of Royal
Netherlands Naval Maintenance and Service Establishment products and
services, related costs and terms and conditions. These are the standards
for the actual maintenance.
4.3.4 Maintenance Management
Management of maintenance is based on the premise of performance
indicators. The most important material-oriented performance indicators are
system cost-effectiveness, active time, availability, reliability and capability.
Data are delivered as “Performance Based Service Contracts” to the
“System Manager”. The LCM model is additionally supplemented with failure
and downtime information from the ships and VAS & BBS data from the
Royal Netherlands Naval Maintenance and Service Establishment.
4.3.5 Organization
For this case, management decided to introduce a project-based IM for the
SEWACO system of the M-frigates. The project is done by the Royal
Netherlands Naval Maintenance and Service Establishment Management
and the ILS council is appointed as steering group. The actual execution
64
takes place within the SEWACO Division. Other divisions were involved as
much as possible. Following the formation of the project group, a look will be
taken at how the concepts can be fleshed out. To fulfill all IM roles within the
project, the following work groups, in addition to the Direction committee,
where put together:
System management group;
Installation management group;
Data management group.
A sounding board group representing all stakeholders was also formed.
4.3.6 Maintenance Operation
IM is tested in practice through the following products:
8 SLAs for maintenance of SEWACO subsystem of M-frigates;
for 28 installations, the underlying Performance Based Service
Contracts (PBSC);
an overview of actors, products and costs per installation;
contract terms and conditions.
4.3.7 Status Report
Where management of the contracts is concerned, much hard work has
been put into the four monthly status reports (Lobregt, 2004). Unearthing
the required data proved to be a daunting task and there appears to be a
great quantity of 'gray work'. These are installation-oriented activities on
BSMI which cannot be automatically associated with the PBSC in question.
4.3.8 System Portal (Information technology)
To keep the entire suite of information controllable and transparent, full
advantage has been taken of the web technology available in the PDM
group. A specific System Portal, to which all relevant material information
was linked, has been set up for the M-frigates (see figure 4.3.8.1).
65
Figure 4.3.8.1. System Portal M-Frigate
4.4 Product Description of SLA
4.4.1 General
The SLA covers a limited number of installations of the SEWACO
system. Where a SEWACO system is concerned, it is important to
bear in mind that the operational software falls under the responsibility
of CAMS. Terms and conditions concerning delivery reliability and
turnaround times. General terms and conditions concerning
fundamental principles, changes, defects and negligence.
Principal shall be accountable for the correct management, use and
maintenance of the SEWACO installations on board the ships.
Principal shall provide the Royal Netherlands Naval Maintenance and
Service Establishment with information concerning onboard
maintenance and performance measurements such as: MATRACS,
HAKOG, configuration management, stock replenishment, and
periodic maintenance tests etc. The quality and timely delivery of these
figures are crucial to the maintenance process.
Service provider shall be accountable for on-shore transport and
66
maintenance, including logistic tasks and onboard assembling and
disassembling.
Service provider shall be accountable for acceptance and final testing
after MJO, TTO and IO, including timely reports.
Service provider shall account for all costs and expenditures concerning
ILM and DLM in the BBS and VAS system in order to guarantee
correct hours/costs registration.
Principal shall account for all costs and expenditures for OLM in the
company registration system on board (to be specified in detail) and
shall report this periodically (every 4 weeks) to the MB to guarantee
correct hours/costs registration.
Service provider shall be accountable for reporting on the fulfillment of
the contract.
4.4.2 Communication Model:
o CZSK - Portfolio manager M - Frigates on planning and
execution;
o CZSK - System manager M - Frigates on contract terms and
conditions regarding system and functional performances,
analyses (SATs) and budgets concerning costs and
expenditures;
o CZSK – Installation management on installation performances,
costs, expenditures and modifications.
4.4.3 Description of Maintenance Activities
The maintenance activities will be based on the V&O schedule
(BENOPS). The maintenance activities are documented in the:
Yearly service plan with the agreed activities;
LCM model;
4.5 The Analysis and Control Tool
As supplement to the analysis and control tools, a computer program
has been used for modeling the system/capital assets – the ship – and
67
all the required activities throughout the life cycle. This program,
AMICO, is made from three modules:
System Effectiveness Module with which the technical system is
modeled;
Logistic Process Module with which all logistic activities
associated with each other are mapped out;
Cost Information Module with which all costs are collected and
specified in different cost units and cost types.
The design of the entire model is chosen such that it is generally
applicable, therefore not only for naval ships, but also for, offshore,
petrochemical, railway and aviation industries, and Public Works and
Water Management.
.
Figure 4.4.1 Analyze and control tool.
4.5.1 Function Diagram
The Function Diagram (FD) indicates the system status at the highest
level. Something is going on with the Functions and Installations in red.
If one scrolls down from system level by following a „red‟ function task,
one will arrive at the basic functions and installations (functional
packages) which cause the problem. If the mouse is put on a basic
function (the function to which installations are linked) and the screen
bar „Installation Diagram‟ (ID) (top left) is opened, the „Installation
Block Diagram‟ of the relevant basic function will be shown.
68
Figure 4.5.1.1 Function Diagram from AMICO model M-Frigate.
4.5.2 Installation Diagram
The actual system architecture is modeled with the Installation
Diagram (ID) and the FD.
By means of relations, impact factors and the like, the System
Engineer can model the actual system such that it can be further
calculated at different levels with the help of performance indicators.
To provide insight into the interrelated relationships and the ranking
order of the installations, an Installation Diagram is set up for each
basic function. In combination with the Function Diagram, the entire
system is placed in a model in this way, which can then be calculated
further. This can then make the consequences of inadequately
reliable installations visible at a higher level, in terms of both
performance and costs.
.
69
Figure 4.5.2.1 Installation Diagram from AMICO model M-Frigate.
4.5.3 Activity Diagram
Scroll down to a material logistic process, which to a large extent
determines the installation performances, and place the mouse on an
installation and click on the screen bar „Activity Diagram‟.
A process diagram has been incorporated for each installation and
each Y-P, which shows who is responsible for what. The relations:
primary responsibility, normative, supplying and supporting, are
shown in the model through the symbol arrangements.
By clicking on a red „Activity Block‟ a data window will appear with:
baseline, actual and what-if, information.
Underlying information, e.g. who is the manager, the WOs attributed
from the ERP system, more information, etc. can be retrieved via the
menu on the right. As supervisor, one can also incorporate
messages in the memo field.
New actors, products, installations, etc. can be entered via the menu
option „Model‟.
In reality, these AD are drawn up in relation to the actors involved,
among other things, based on: project plans, maintenance concepts,
service plans, etc.
For underlying information a web page of the System Portal can be
opened from different data windows.
70
Figure 4.5.3.1 Activity Diagram from AMICO model M-Frigate.
Since everything is set up digitally, and is easily accessible via
Internet and intranet, it is possible to run through the model from
system level (e.g. commander, the general manager) to activity level
(first-line management, production chief) and consult all vital
information via data windows.
It is also possible to present and print all AMC data in different report
formats and the application can perform LCC calculations in
different ways.
4.5.4 Information on the Web Portal
During the IM pilot, these types of installation overviews constituted
the core of the SLA trimester reports for the Integrated Maintenance
of the M-Frigates.
The purpose of this page (see figure 4.5.4.1) is to provide an
overview of the actual system-effectiveness in relation to the
baseline as provided in the SLA. Based on red-colored Availability
Killers (AKs) and Cost Drivers (CDs) anomalies are reported and
improvement actions indicated.
The basis for this information is the updated data within the LCM
model, which is set up in AMICO. The model is filled with
71
maintenance and user data that are supplied by the various
(Maintenance) Engineering departments.
The so-called „baseline‟ data are supplied to the System Manager in
the form of a Performance Based Service Contract (PBSC).
Afterward, the LCM model is periodically updated with current data
from the legacy systems (BBS, VAS, and MATRAC) that are
supplied by the RM&A department.
The actual System Cost-effectiveness, Function-effectiveness and
the Installation Performance of the underlying system functions are
calculated using the LCM model. Per ship/UKC, an overview is
provided of data in table format, supplemented with a clarification
from System management, if necessary.
A vital information source is the trimester reports in relation to the
installation-focused performance contracts (PBSCs). The underlying
process for this is „structured maintenance‟, which forms the basis of
IM and should be further integrated as IM work method in the
organization. It also serves as an important basis for the still ongoing
implementation of INK and the ISO certification.
Figure 4.5.4.1 Cost drivers and Performance Killers (Demo Data) [Lobregt, 2004].
4.5.5 Point of interest:
at first it may seem like performance is appearing opposite
costs;
the problem in nonprofit organizations such as the RNLNMSE
72
always results in the same thing, allocation of costs;
the traditional approach to maintenance management as
applied in the industry and profit organizations shows a strong
tendency toward the capitalization of loss;
this is not consistent with the (current) thought within nonprofit
organizations such as the RNLNMSE. How can we move
beyond this? It seems that whenever the effort is focused on
availability and reliability, this supposed contradiction is not as
big as it appears to be at first time;
improvement of system-effectiveness (product or availability,
reliability and capability) often appears to have optimization of
the costs as a side effect. In other words, Cost Drivers are
useful also Availability Killers.
4.6 Findings and conclusions [Lobregt, 2004]
The goal of the research to find out if it is possible and how to
implement Asset Management Control in a non-profit maintenance
organization, on a cost effective manner, has resulted in the following
conclusions.
4.6.1 M-Frigate Case conclusions
1. integrated Maintenance based on performance contracts is
feasible.
2. we have or can gain system information and knowledge rather
easily.
3. a performance contract has a cost-reducing effect.
4. the requirements for cost transparency are clear.
5. we have or can obtain fair access to the required management
information.
6. performance indicators can be defined.
7. Contract Management can be applied in each organization.
8. a Performance Contract can also be drafted for complex systems
9. adequate control is feasible with the right approach
.
73
4.6.2 Contract (SLA) conclusion
Conclusions of reports [Lobregt, 2004] are, that 80% of the costs
and waiting times are caused during the logistic process. On board,
many components are replaced and have to deal with long logistic
waiting times.
In other words, the highest savings are at Logistic Services, based
on:
periodic consumption;
maximum logistic waiting times.
4.6.3 Points of improvement:
registration of hours disciplines (IMG action);
registration of hours of PU‟s and ME‟s to a valid BSMIs
[existing installations] (IMG action);
registration of hours on the right maintenance category
(action all).
4.6.4 The Change of Maintenance
Maintenance has changed.
A modern outlook on maintenance takes account of risks and
functionality versus costs. Risks are not only fallout times due to
technical failure, but also include labor laws and the environment.
Moreover, it is a fact that a large portion of potential costs for
maintenance are already tied up in the design.
To minimize costs for management of the installation early
involvement is an absolute requirement.
74
Figure 4.6.4.1 Development in the daily work of the Installation Manager.
As a result of future perspective carried out by the Management of
the Royal Netherlands Naval Maintenance and Service
Establishment, it has been decided that the company will be set up
as a Competence Center for maintenance. One of the fundamental
principles in this is an integrated approach based on the Integrated
Logistics Support (ILS) thoughts.
An integrated approach of this kind is essential to guarantee the
system-effectiveness required by the customer at minimum costs.
The Product Unit therefore is set up to make a useful contribution in
all phases of a product‟s Life cycle. Thus the unit must have the
essential knowledge and experience to make a contribution to the
service planning of new building projects. A contribution of this kind
can help project managers make the right decision in the choices
they make for new material. The unit should also be capable of
making the right contribution to the construction and transfer of new
material. The largest activity is, however, the maintenance of
material during the use phase. In conclusion, the unit should be
capable of making a contribution to the sales or disposal of material.
Material-focused management makes it possible to get a grip on the
system-effectiveness of installations and chains of installations,
where ultimately the ship, as a system, can carry out the customer-
required tasks.
The foundation or norm for this is formed by the maintenance
concepts that need to be drafted for the different installations. A
maintenance concept is realized on the strength of expertise within
75
the unit, and on users and other information sources. Through this
system, the best possible service plan is formulated (who, what, why,
how) on the strength of defined focus points [Boer, Vermeer, 2003]
4.6.5 Compatibility with the DMO business model
The establishment of (Weapon) System Management is the
responsibility of the System Plan, deposited at the DMO. A
System Plan is a plan for a class of ships, in which material
logistic standards and guidelines for the maintenance phase are
documented. This is drafted for a class of systems. The System
Plan is the document in which all information associated with the
(sub) system for the system management is incorporated. The
system plan contains guidelines for the use of the (sub) system
and its maintenance. Via AMICO, the required performances at
system and function level are translated into required
performances at installation level. The installations constitute the
foundation for control. Hereof, maintenance concepts are drafted,
supported by the STORM (Support application for Technical
Overview, Reliability and Maintainability) application.
The method of structured maintenance (implementation of ILS/LCM)
developed and introduced by the Royal Netherlands Naval
Maintenance and Service Establishment is compatible with the
processes that are written for the new DMO organization.
System Management is recognized at top level. For the RNLN this is
in regard to the (classes of) ships.
A ship/system delivers a number of functions which are often realized
with collaborating installations, which are extremely complex.
Within the Royal Netherlands Naval Maintenance and Service
Establishment the control of these installations is categorized into
functions, systems and installations. Hence the reason that the
RNLNMSE will be playing a role in:
o meeting structures for system management;
o guidelines for handling material, containing a description of:
1. development of the plan of use into a use profile
76
(the material-logistic translation of the User Plan );
2. preconditions per ILS-aspect:
maintenance;
stock replenishment;
documentation;
trainings;
facilities;
personnel.
3. cross reference to ILS-Plan(s) for the system (and/or
subsystems)
4. cross reference to the Configuration Control Plan
o Material logistic management of the class of systems, with
a development of normative Process Indicators (PI‟s) per ILS
aspect:
RAMT;
Life cycle costs;
degree of service;
turnaround time;
supply / delivery reliability;
etc.
The maintenance concepts are highly compatible with the
maintenance method implemented at Defense and in particular at
the Royal Netherlands Navy.
This compatibility with the Royal Netherlands Navy organization is a
conscious choice to obtain the best possible fit between the
structured approach and the Royal Netherlands Navy environment,
which are Royal Netherlands Naval Maintenance and Service
Establishment biggest customer. Other coordination is possible, but
the choice for more potential end-products increases the control
burden and reduces the level of standardization. It is also a fit with
ISO 9001 standard. In terms of the INK model, this means a shift
77
from activities/process-oriented work to system-oriented work for the
Royal Netherlands Naval Maintenance and Service Establishment.
As suggested previously, structured maintenance constitutes a basic
work method of the maintenance organizations. The structured
approach fits in with the work method that can be deduced from the
control models of the DMO. The CO (via DMIP), too, has expressed
much appreciation as to how maintenance is controlled at Royal
Netherlands Naval Maintenance and Service Establishment, or as
they call it “is in control”. The further implementation of structured
maintenance would then constitute an obvious choice.
78
5. PRIMA analysis of the Maintenance Organization
5.1 General
The long term objective as stated in the URORKM document of the RNLN
Maintenance Establishment is “filling in the need for control of the activities
of the RNLN Maintenance Establishment which are beyond the level of
installations, i.e. on a system level (ship/ship‟s class), concerning cost
effectiveness of maintenance and logistics support.”
This „control‟ function is coordinating and supporting in its essence with the
asset view (i.e. ship/ship‟s class) as object of interest. The essence is
visualized in the production model see figure 5.1.1.
Fig. 5.2.1.1 Production Model Figure 5.1.1 Production Model [TQM, 2006].
Installation Management is the responsibility for the line divisions of
the RNLN Maintenance Establishment i.e. Platform and SEWACO
product units/material groups in which engineering, material
scheduling and production are organized around installations.
Direct (i.e. consult and decide )
for the life cycle management of assets PK/CD reports
LCM models
PBSC‟s
Change proposals for system cost effectiveness
Actions for PK/ CD‟s
Service Level Agreements
System Information Portals + LCM teamsites
System Plans
SLA reports
Concept SLA‟s
79
5.2 PRocess IMprovement Application (PRIMA)
Introduction
For the real implementation of integrated quality control a choice is
made for a dynamic treatment. This is realized by the web application
PRIMA (PRocess IMprovement Application). PRIMA is based on 4x4
Process Definition Matrix where each element has been defined as a
function area. In line with the Total Quality Manual [TQM, 2006] these
function areas have been defined and described with their mutual
relations. The dynamics, ongoing improvements , are reached by
using a self evaluation, by periodically reviewing how the current actor
chain actually performs with respect to required process (the baseline,
fixed as in the TQM Manual[TQM, 2006].
The organization must supply the company-specific data. By means of
a generic step-by-step plan the process is structured and coordinated
on the specific assets (dependent on their complexity, financial value,
value for the processes in which they act) and requires the materiel
availability against minimum costs.
The application PRIMA aims at the following advantages:
to make ongoing improvement operational;
to perform the process as a result of self evaluation (the
improvement points) to conduct improvements, uniformity,
and a clear communication;
transparency, to maintain pressure to improve;
transparency, to have directives for real improvements
in-depth analysis of the status of Life cycle Management
(Asset Management Control) in the own organization;
overview of asset and/or company specific bottlenecks;
recommendations concerning optimum improvement
approach;
links to references from the ISO-9001 standard and the INK
model.
80
improvement process of the organization and to make
ongoing improvement operational;
process and results of evaluations (action improvement plan)
make it uniform, transparent and communicable;
management of improving actions.
For a detailed description of PRIMA see Appendix 3.
How to proceed in the future in the new Royal Netherlands Naval
Maintenance and Service Establishment setting and its
environment?
A further implementation of Integrated Maintenance and embedding
it in the entire MATLOG organization (OCKM, DMO, and RNNMSE)
appears to have become an irreversible process. The concern is
now to determine the best way to run through the rest of the process.
The (new) actors or organizations playing a large part in this are:
the operational user (CZSK);
the Defense Material Organization (DMO);
the Royal Netherlands Naval Maintenance and Service
Establishment (RNNMSE);
the DICTU and DTO.
Objective
First of all, the objective of the IM is to ensure that the existing
knowledge is guaranteed and expanded, if necessary, so that it can
fulfill its role as member of a competence center for maintenance.
For the further implementation, IM will have to be supported as much
as possible by line management. Related, still running projects are:
Operational management on board (OCKM);
ISO-KAM implementation and certification (RNNMSE);
Set-up Structured Maintenance within the MB;
System-oriented stock replenishment (DLD/MB);
ILS implementation (MATLOG/DMO);
81
IWSM vs. DMIP (DMO), ERP implementation.
Approach
„Provide the required system effectiveness at minimum costs‟. In the
present situation this goes down by doing more with less, since
maintenance is (still) too expensive and system effectiveness too low.
In other words: „Reduce Cost, Improve Performance‟.
Cost-savings and performance improvement are and will remain the
ongoing driving force. It contributes to the defense objectives and the
Royal Netherlands Naval Maintenance and Service Establishmen t‟s
right to continuity.
In the game of problem recognition, prioritization, finding solution paths,
coordination and realization, the IM pilot manal [Stavenuiter, 2004]
serves as fundamental principle and guideline. The series of
processes, actors, of which primary field of activity and responsibility
fall within the line management, are at the core of the IM and the
operational management. For realizing its objectives or tasks, line
management can count on Management and supporting departments
for the most suitable organization, methods, techniques and
information technology.
The following management functions will be directly involved in this:
portfolio management, material planning, system management,
system engineering, installation management, and data management,
information management (ICT) and Human Resources Management.
5.3 Results evaluation of the organization related to the asset M-Frigate,
with PRIMA
For each type of the asset, the impressionable Value to Control and the
Measure or Perfection has to be determined, the concerning process can
be compared. This happens on the basis of objects and company
information, which must be imported by the person responsible for the
82
asset. This baseline (the reference area) is specifically specified for the
organization and the concerning materials/objects/assets
With the Quick scan it is possible to reflect this reference area and the
Life cycle Management approach.
Algorithms to indicate Measure of Perfection
MOP = Measure of Perfection
MOP = function of (VtC, RtC)
VtC = Value to Control (the financial value of the assets)
RtC = Risk to Control (the risk = chance x impact)
Formula for MOP = VtC + RtCf + RTCs + RtC e [0<%MOP<100]
(see also table A1 in Appendix 3 and note 3)
Calculation by using following data:
o VtC = 3 (Total Cost of Ownership is >100 M€)
o RtC financial = 2 (Cost of unforeseen failures are > then 10k€)
o RtC safety & Health = 1 (Small injuries 1 or more times/year)
o RtC environmental = 2 (Regularly returning environment
incidents).
MOP = 3 + 2 + 1 +2 = 8 = 80 %
Figure 5.3.1 showed the results of filling in the questionnaire, of 15 closely
involved actors (managers and engineers) in PRIMA, with a MOP of 80%.
See for results of the questionnaire in Appendix 8.
83
Figure 5.3.1 Result of the analysis with PRIMA.
5.3.1 Analysis
Business studies have taught that there is no sense in wanting to
arrange one aspect within an organization to perfection when the rest is
still lagging far behind.
It is, however, possible for an organization to grow to a higher level of
perfection if it develops while maintaining a certain degree of balance.
The method of structured maintenance developed provides the
opportunities to grow in the measure of perfection.
The interesting question is: Where is the optimum threshold between
costs and measure of perfection? In order to obtain the answer, the
past has to be observed. In the eighties this was at about 80%.
[Stavenuiter, NVDO presentation] Perhaps clever use of IT prospects
has induced this optimum threshold to rise?
No matter, for us, the first challenge is to reach an MOP of 80%
across the entire line.
5.3.1.1 System Plan
Absolute score (arithmetic average) 55%
Corrected score (calculation) 68%
84
Point of improvement:
use the System Plan as a reference (standard);
increasingly use and improve the use of the System Plan in the
organization;
keep the System Plan a living document and adapt modification on
the basis of modified insights;
make the specifications accessible for involved actors;
complete the specifications of the standards;
complete and correct the materiel specifications;
complete the User Plan / Exploitation Plan;
specify the responsibility to establish and maintain the System Plan;
acquire the correct competences to be used with the System Plan;
carry out a risk analysis with regard to performances (availability
and reliability of to function asset) and with regard to costs.
5.3.1.2. Life Cycle Management model
Absolute score (arithmetic average) 62%
Corrected score (calculation) 77%
Points of improvement:
define performance indicators with regarding to cost effectiveness;
establish standards to check and validation of system
performances;
carry out a Life Cycle Analysis.
5.3.1.3 Contract management
Absolute score (arithmetic average) 45%
Corrected score (calculation) 56%
Points of improvement:
accomplish the suppliers and trains these;
implement Contract Management in the organization;
85
improve the competencies within the organization in the field of
contract management.
5.3.1.4 Service Level agreement
Absolute score (arithmetic average) 42%
Corrected score (calculation) 52%
Points of improvement:
use a larger extent of Service Level Agreements in the organization
increase the availability and accessibility of the current
maintenance planning for relevant actors
make specifications clear (SMART) available/accessible for relevant
actors
make an integrated cost overview (Total Cost or Ownership)
make information about guarantees available and accessible for
relevant actors
specify quality/service requirements regarding maintenance
define more requirements regarding checking and validation of
made agreements
increase products/services insight in pricing and lead times in
relation to provided functionality and performances
5.3.1.5 Organizational Plan
Absolute score (arithmetic average) 58%
Corrected score (calculation) 72%
Points of improvement:
make quality and service requirements available and accessibly for
relevant actors;
further elucidate that AMC treatment results in a cost effective
treatment.
5.3.1.6 Actor Definition Model
Absolute score (arithmetic average) 58%
Corrected score (calculation) 72%
86
Points of improvement:
elucidate the expectations regarding to the functioning of the employees;
clarify that AMC treatment results in a cost effective treatment
5.3.1.7 Resource management:
Absolute score (arithmetic average)
68%
Corrected score (calculation) 85%
Point of improvement:
verify the implementation of action regarding the performance and
assessment interviews.
5.3.1.8 Material Logistics Organization:
Absolute score (arithmetic average) 67%
Corrected score (calculation) 83%
Points of improvement:
frequently evaluate the team objectives and the performance of the
team members
use the competences of the team members
organize missing competences
communicate to attain the team objective and everyone‟s
role/assignment of tasks
make sure the team members accept their role and assignment of
tasks
5.3.1.9 Activity Plan:
Absolute score (arithmetic average) 58%
Corrected score (calculation) 72%
87
Points of improvement:
keep the Activity Plan active and current in the organization;
implement continuous improvements in the organization (with
feedback).
5.3.1.10 Team building:
Absolute score (arithmetic average) 66%
Corrected score (calculation) 82%
No points to improve.
5.3.1.11 Team management:
Absolute score (arithmetic average) 52%
Corrected score (calculation) 65%
Points to be improved
use the process design as a standard and reference area for Team
Management;
use a team design as a standard and reference area for Team
Management;
explain that Team Management is effective;
make an improvement plan based on the results of the (their own)
evaluations;
apply workshop treatment;
carry out evaluations with respect to training and development of
the people in the organization;
carry out evaluations.
5.3.1.12 Team Work:
Absolute score (arithmetic average) 57%
Corrected score (calculation) 71%
Point of improvement:
Carry out evaluations.
88
5.3.1.13 Control plan:
Absolute score (arithmetic average) 52%
Corrected score (calculation) 65%
Points of improvement:
analyze the costs and profits report and define structural points to
be improved;
analyze the jamming report and define structural points to be
improved;
monitor the implementation of corrective and preventive
maintenance action;
monitor the implementation of performance-specific appointments;
monitor the implementation of the Action Plan to improve cost
effective commitment of the assets;
evaluate the implementation of performance-specific
appointments/agreements and justify if necessary;
verify and validate the requirements from the Control Plan;
carry out evaluations.
5.3.1.14 System Information Portal:
Absolute score (arithmetic average) 40%
Corrected score (calculation) 50%
Points of improvement:
use the web portal as a source of information for announcing
priorities and taking decisions;
make contractual information SLA‟s and PBSC's visible and
accessible for relevant actors;
make information of system tests visible and accessible for relevant
actors;
specify a report over a period longer than 5 years so that
development of costs and performances can be made visible;
specify responsible actors to realize the acquired characteristics;
89
show information on the web portal which proves the cost-effective
commitment of the assets;
make sure all relevant actors have access to the information of the
required asset.
5.3.1.15 Management Control:
Absolute score (arithmetic average) 40%
Corrected score (calculation) 50%
Point of improvement:
stipulate, define improvement actions on the basis of customer
satisfactions research.
5.3.1.16 System Cost Effectiveness:
Absolute score (arithmetic average) 45%
Corrected score (calculation) 56%
Points of improvement:
analyze the costs/turnover report and carry out trend analyses;
analyze the jamming report and define structural points to be improved;
analyze changes in the use/user intensity of the assets on established maintenance appointments;
give feedback on user/maintenance experiences and formulate lessons learned;
give feedback on user/maintenance information from the exploitation organization to maintenance organization;
clarify the relation between costs and the performances of the assets;
make the management information visible and accessible for relevant actors.
5.4 Summary of PRIMA Matrix
The goal of the research to find out if it is possible and how to
implement Asset Management Control in a non-profit maintenance
90
organization, on a cost effective manner, has resulted in the following
points of improvement and directives for management, see also table
below
This approach with PRIMA leads to get a better insight in the
organization of:
the process;
result orientation.
Process analysis gives:
status of the maintenance;
strong and weak points of the organization
5.4.1 Points of Improvement.
Process Function Elements
Points of Improvement
Process Realization
responsibility and competencies
evaluation of competencies and the role and task of the team members
Process Management
competencies van Contract management
evaluation for learning and development of people
Process Model arrangement
establish standards
use of web pages
Process plan
the use of the System Plan
analysis of data (cost, jamming and changes in user/ user intensity
Table 5.4.1.1 Summarized results of improvements
91
5.4.2 Procedures and directives
Process-Function-Elements
Improvement plan for Procedures / directives
Process Realization
make Service Level Agreements
Process Management
implementation of Contact Management
get the right competencies
stipulate/ define improvements actions
Process Model arrangement
to make information (data) visible
Process plan
use System plan as directive
make clear that AMC treatment is cost effective in Actor Definition Model and Organizational Plan
Table 5.4.2 Summarized results of procedures / directives
5.5 Summarized:
the hardware and data systems;
The education and thinking of people;
The organization structure
and management has to give directives.
92
6. Conclusions and Recommendations
6.1 General
The research goal is to find out how to implement Asset Management Control
in a non-profit maintenance organization, in a cost effective manner, The
implementation of this is no sinecure for an organization such as the RNLN
Maintenance Establishment. The systems(Assets) are complex, as are the
materiel logistics processes around them. This means that the choices
regarding the methods and techniques to be used should be considered
thoroughly and substantiated properly. A range of methods and techniques
seems necessary. An intensive education and training program is needed to
give all actors the opportunity to master this. Information and communication
are keywords.
6.2 Organization Structure
Typical are the many communication lines and the interrelated relations and
coherence of products from the various subgroups in the maintenance
organization. Much attention has been given to set up and maintain these
lines. Partly due to differences in fundamental principles at the start of the
project and the difference in the use of data.
This requires a more extensive investigation.
6.3 Management Control
The M-frigate case results in a well accepted work method with respect to
structured maintenance. Structured maintenance has been a working method
for the Maintenance Organizations. The structured treatment fits the working
method of the DMO business models. The implementation of structured
maintenance seems the right choice.
6.4 The M-frigate case [ Lobregt, 2004 and Stavenuiter, 2004]
6.4.1 M- Frigate Case
integrated maintenance based on performance contracts is feasible;
system information and knowledge is available or can be gained
93
rather easily;
a performance contract has a cost-reducing effect;
the requirements for cost transparency are clear;
fair access to the required management information is available or
can be obtained;
performance indicators has to be defined as good;
contract management has to be applied in each organization;
a Performance Contract can also be drafted for complex systems;
adequate control is feasible with the right approach.
6.4.2 The contract (SLA)
Conclusions about SLA reports are that 80% of costs and waiting times are
caused during the logistic process. On board, many components are replaced
and have to deal with long logistic waiting times.
In other words, the highest savings are at Logistic Services, based on:
periodic consumption;
maximum logistic waiting times.
6.5 Points of improvement [ Lobregt, 2004 and Stavenuiter, 2004]
registration (hours) disciplines;
adjustment of order structure BBS;
the hardware and data systems;
The education and thinking of people;
The organization structure;
and management has to give directives;
data management needs to be improved on many fronts.
6.6 Follow-up activities
the interpretation and perception of the various actors‟ roles needs to be
given further shape through training and coaching. The role models
need further development through a combination of training and
coaching:
much profit can be gained from early involvement of the
maintainer in the development phase.
94
the organization of data reception, processing, data defining and
information models is an important subject to further development;
knowledge is explicitly based on expertise.
This Follow-up activities requires further investigation.
6.7 Recommendation
o Keeping it short & simple (do not do everything at once);
o Use the knowledge that is present within the organization
(make expert teams);
o Do not overestimate the value of DATA;
o Do not underestimate the effort to acquire the right DATA;
o Support from “Management” is necessary (directives);
o Fill in knowledge management. Provide training if necessary;
o Implementation always demands time, patience and coaching;
o GOAL has to be focused on relationship with the customer;
o Give directives to work with contracts per system (SLA) /
installation(PBSC).
Appendix 1.
Resources
Literature will mainly be extracted from the following resources:
Various literature, including reports, books magazines, etc;
Internal papers of the Defense Materiel Organization;
Information resulting from interviews, discussions and other
conversations;
Appropriate IT facilities;
Internet databases/websites;
Royal Netherlands Naval Maintenance and Service
Establishment library;
Library of Hogeschool Zeeland and other universities;
Information, lectures, presentations collected during the course.
Congresses
Appendix 2. References
A 2.1 Bibliography
1. Blanchard, B.S., 1998. Logistic Engineering and Management, Prentice Hall Inc,
Upper Saddle River, USA, ISBN 0-13-919978-0.
2. Boer.J de, W. Vermeer, RNLN Handboek ILS (in Dutch), versie 1.4, RNLN
Directoraat, The Hague, 2003.
3. Brochure DMO (in Dutch), versie. 0.1.0.2007, Centrale Organisatie.
4. DEFENSE MANAGEMENT DOD Needs to Demonstrate That Performance-Based Logistics
Contracts Are Achieving Expected Benefits, GAO-05-966, United States Government
Accountability Office (GAO), September 2005
5. Grijpstra J, AMC in Shipping, May 2006.
6. HZ/IMS, Brochure Asset Management Control Master Course (in Dutch),, 2003.
7. International Master School. Handbook MSc Dissertations, NL.
8. ISO-9001 – standard.
9. Jones, J.V., 1994. Integrated Logistic Support Handbook, McGraw-Hill, Inc., New
York, USA, ISBN 0-07-033079-4.
10. JSP 336 (3rd Edition) Volume 3 Part 2 Pamphlet 2 Section 1, Version 1.00, 01 Mar 06
11. Kirkels H, Ploos van Amstel W, NL-ARMS Netherlands review of military studies
2004, ISSN 0166-9982.
12. Lobregt H., IM AMC eindrapportage (in Dutch), versie 1-1, Marinebedrijf, 2004.
13. Performance-Based Logistics congres 2007
14. Performance-Based Logistics - The Changing Landscape in Support Contracting, University of
Tennessee and Supply Chain Visions, 2006
15. PRIMA program description (in Dutch),
16. Rustenburg J.W.A system approach to budget-constrained spare parts management.
17. Schouwers, A (2003-4), Nice boat! But what‟s the upkeep like? Delft Outlook, Delft
University.
18. Stam A.J., Evaluatie Installatie Management Groep IM, Marinebedrijf (in Dutch),
19. Stavenuiter, J., 2002. Cost Effective Management Control of Capital Assets, Asset
Management Control Research Foundation, Medemblik, NL, ISBN 90-9015938-X;
20. Stavenuiter, J., 2004. IM_pilotboek_versie_1 (in Dutch).
21. Stavenuiter J., IM by KISS projectuitvoeringsplan, Marinebedrijf (in Dutch),
2002.
22. Stavenuiter J, NVDO Innovatiemodel presentatie (in Dutch),
23. TES - RMG guidance notes reliability & maintenance issues affecting contracting for availability issue 1,
TES, 24 April 2006
24. The performance based management handbook A Six-Volume Compilation of Techniques and
Tools for Implementing the Government Performance and Results Act of 1993,volume 1, PBM
SIG, September 2001(http://www.orau.gov/pbm)
25. The acquisition handbook Edition 6, UK DOD, 2005
26. Through Life Management (TLM – UK MoD) – DEFSTAN-00-60 and SMART
Acquisition Handbook.
27. Through Life Management, report by the comptroller and auditor general, HC 698
Session 2002-2003, Ministry of Defence, 21 May 2003
28. Total Life Cycle System Management (TLCSM – US DoD) - DoD Directive 5000.1
and 5000.2
29. TQM Manual – System Management Marinebedrijf/CPIM 18 september 2006 (in
Dutch).
A 2.2 Internet Source:
a. www.ato.nl
b. www.amc-rf.com
c. www.ciras.iastate.edu/management/feasibilitystudies.ap
d. www.hz.nl
e. www.businessballs.com/swotanalysisfreetemplate.html
f. www.mindtools.com
g. www.netMBA.com, 2006
h. www.quickMBA.com, 2006
i. www.navy.mindef.nl/publicaties/Handboek_ILS_geheel_tekst.htm)
j. www.ams.mod.uk/ams/content/docs/ils/ils_web/tailor/guide/default.
k. http://akss.dau.mil/dag/DoD5000.asp?view=docume &doc=2
l. http://akss.dau.mil/dag/DoD5000.asp?view=document&doc=2
m. http://cals-cf.calsnet.arizona.edu/icyf/docs/needs.pdf
n. http://www.ams.mod.uk/ams/content/docs/ils/ils_web/tailor/guide/default.htm
o. http://www.nao.org.uk/publications/nao_reports/02-03/0203698.pdf
p. http://nl.wikipedia.org/wiki/INK-mode
Appendix 3.
Description of Process Definition Matrix application
Process Definition Matrix
Introduction
For the real implementation of integrated quality control a dynamic
treatment is chosen. This is realized by the web application PRIMA
(PRocess IMprovement Application). PRIMA is been based on 4x4
Process Definition Matrix where each element has been defined as a
function area. In line with the Total Quality Manual [TQM, 2006])
these function areas have been defined and described with their
mutual relations. The dynamics, ongoing improvements, are obtained
by using self evaluation, by periodically reviewing how the current
actor chain really performs with respect to the required process (the
baseline, fixed as in the TQM Manual[TQM, 2006].
The organization must deliver the company-specific data. By means
of a generic step-by-step plan the process is structured and
coordinated and is required for the specific assets (depending on the
complexity, financial value, value for the processes in which these
act), the maximum availability of material at minimum cost.
The PRIMA application aims at the following advantages:
to make ongoing improvement operational;
to perform the process as a results of self evaluation (the
improvement points) to conduct improvements, uniformity,
and a clear communication;
Transparency to maintain pressure to improve;
in-depth analysis of the status of Life cycle Management
(Asset Management Control) in its own organization;
overview of asset and/or company specific bottlenecks;
recommendation concerning optimum improvement
approach;
links to references from the ISO-9001 standard and the INK
model.
Generic applicable step-by-step plan
On the basis of the i2-pilot book [Stavenuiter, 2004] and the ISO-9001
standard the Process Definition Matrix has been set up, which has
lead to the Process Standard (i.e. the description of the function
areas with the in and outputs). A quick scan can be carried out using
evaluation questions. Together with the required measure of
perfection this will give a better perception of the status of the specific
asset type and in the whole organization. The improvement points
can be determined as well as the working methods (i.e. the
procedures and directives from the TQM Manual [TQM, 2004] realize
these improvements.
Figure A2 Process improvement cycle [NVDO model]
The Process Definition Matrix
The Process Definition Matrix is divided in 16 function areas (primary
elements /areas for special attention/ process functions), which can
be analyzed separately, but have a mutual logical consistency. The
function areas (business function areas) have been classified to both
of the phases from a chain process (chain elements) and the aspects
of a single process (process elements), in accordance with character
mentioned below. The 4 x 4 matrix appears as a good compromise
between an overview on the one hand, and on the other hand a
measure to specify the domain‟s fields concerned.
This Process Definition Matrix is intend to offer a better understanding
of the outlines from which we can guide improvement of the
processes.
AMC DOMAIN ASSET RELATED
CONTROLPERFORMORGANIZESPECIFY
PROCESS PHASES
SERVICE LEVEL
AGREEMENTS
CONTRACT
MANAGEMENT
RESOURCE
MANAGEMENT
LIFE CYCLE
MANAGEMENT
MODEL
LCM SYSTEM
PLAN
SYSTEM COST
EFFECTIVENESS
TEAM
WORK
TEAM
BUILDING
TEAM
MANAGEMENT
ORGANIZATIONAL
PLAN
ACTIVITY
PLAN
CONTROL
PLAN
MANAGEMENT
CONTROL
SYSTEM
INFORMATION
PORTAL
LIFE CYCLE
MANAGEMENT
TEAM
ACTOR
DEFINITION
MODEL
Figure A3 Process Definition Matrix [TQM Manual, 2006]
The description is a process standard for a function area and is
formulated such that it applies as a generic and absolute reference
area.
For each type of the asset, the impressionable Value to Control and
the Measure or Perfection to be determined, the concerning process
can be compared. This happens on the basis of objects and company
information, which must be imported by the person responsible for the
asset. This baseline (the reference area) is specifically specified for
the organization and the concerning materials/objects/assets. With
the Quick scan it can be possible to reflect this reference area and the
Life cycle Management approach. From that the coming
improvement points are then presented within the process
improvement cycle as action/improvement plan.
Algorithms for to stipulate Measure or Perfection
MOP = Measure or Perfection
MOP = f (VtC, RtC)
VtC = Value to Control (the financial value of the assets)
The higher the financial value of the assets, the more important it is
that a good system is used for managing the asset with respect to its
life cycle. That means that the Measure of Perfection must be higher.
RtC = Risk to Control (the risk = chance x impact) of occurrence of
unforeseen events with financial, safety/health and environmental
consequences seen from the asset itself and coupled with
management of the asset during its life cycle.
The higher the risks, the more important it is that there is a high
Measure Of Perfection in managing the asset during its life cycle.
Checklist of hazards:
incorrect, too late, incomplete information;
lack of tools;
lack of sufficient and correct training;
lack of supplies and components;
technical properties of the asset (for example innovative
material/concepts or correct, robust and proven design);
properties of the organization within which the Life Cycle
Management (LCM) is carried out during the life span of the
asset;
properties of the surroundings/the context within which LCM is
carried out (for example political aspects).
MOP criticality matrix gives insight in the impact of none and/or
insufficient system management for a specific type of asset (class of
simultaneous assets, system group). THE MOP is therefore specified
by type of asset.
NB 1: The parameters VtC and RtC each have one of the four
values 1, 2, 3 or 4. The criticality matrix has been built up such that
each (next) value includes the previous value (for example RtC
financial = 2 is RTC financial = 1 + addition, RtC environmental = 3 is
RTC environmental = 2 + addition, etc.).
NB 2: This criticality matrix must be regarded with respect to the life
span of the assets (i.e. the period of which the management can be
influenced). Therefore it does not only apply to failures of installations
or components in the asset, but also to interferences in processes
and their deliverables (for example risk of overdue delivery of the
design specification for asset, risk during construction and production
of the asset, etc.).
The different gradations of criticality have been described in the table
A1 below:
Value or parameter VtC and RtC
1 2 3 4
VtC
part or TCO (Total Cost or
ownership)
>1 M€ (M= million)
>10M€ >100M€ >1000M€
RtC
Financial/economical (see note. 1)
Impact on CE
Costs unforeseen
failures > 10k€/years Number of
unforeseen (reasonably) failures less
than 1/year. asset is functioning
(SE=90-100%).
1 + Several
unforeseen failures/year. Asset function
limits (SE=75-90%).
2 + Costs
unforeseen failures> 10k€/years
Regularly returning unforeseen
failures. Asset is no longer
functioning (SE=50-75%).
3 + Costs
unforeseen failures > 100k€/years.
Asset is no longer function (SE<50%)
Safety & Health
(see opt. 2)
Small injury.
Limits (1 or more times/year)
No health complaints. costs>10k€
1 +
Injury with staff absence (1 or more
times/year) No health complaints
Costs>100k€
2 +
Injury with long-term several
times/year. Health complaints.
To cost > 1m€
3 +
Injury with long-term staff absence,
regularly returning. health
complaints. Deadly victims Costs>10m€
Environmental (see note. 3)
Small local impact (for example
leakage of not toxic substances).
Number of environment incidents less
than 1 per year. Costs>10k€
1 + Environment incidents
several times/year. Local larger
impact (for example leakage of toxic
substances) Costs>100k€
2 + Regularly returning
environment incidents. Regional
impact (for example leakage of
toxic substances) To cost > 1m€
3 + Extensive impact of
environment incidents (environment
calamity) Costs>10m€
Table A1 Value or parameter VtC and RtC [TLM report, 2003]
Note. 1:
The financial/economic hazards say something about the impact of
unforeseen events on the cost effectiveness (CE = SE/LCC). What
are the performance killers and cost drivers (PK/CD's)?
This concerns loss of income and increasing costs (to remedy
failures). The consequence will be cost of damage.
Note. 2:
Costs concern taking (among other things securities and health)
actions to remedy failures. The consequence will be cost of damage.
Note. 3:
This more or less concerns the “eco points” of the asset during its life-
cycle. Therefore factors such as energy use, toxic substances,
dismantling, environmental taxes at calamities (fire, earthquake, flood
etc.) are concerned as well.
Costs concern taking (environmental) measures to prevent
recurrence of failures. The consequence will be cost of damage.
To keep it simple the number of values that the MOP can have is
restricted to four possible values. These are:
MOP = 100% if MOP as f (VtC, RtC) >= 12;
MOP= 80% if 9 =< MOP as f (VtC, RtC) <= 11;
MOP= 60% if 6 =< MOP as f (VtC, RtC) <= 8;
MOP = 0% if MOP as f (VtC, RtC) < 6 => does not apply.
Example for a M-frigate: MOP = VtC + RtCf + RtCs + RtCe
= 3 + 4 + 3 + 2
= 12 => MOP = 100%
Quick scan
On the basis of the Process Standard the Quick scan (with interview
technique) enables determination of how the processes can be
improved and to what extend this contributes to the cost-effectiveness
of the assets, concerning their life cycle.
At the highest level the result is visualized by indicating the status per
area of special attention, with color coding, (green = okay, yellow =
moderate, red = problem).
SERVICE LEVEL AGREEMENT
MATERIAL LOGISTICS
ORGANIZATION TEAM WORK
SYSTEM COST-EFFECTIVENESS
incomplete need
courses unclear
little
consistency
CONTRACT MANAGEMENT
RESOURCE MANAGEMENT
TEAM MANAGEMENT
MANAGEMENT CONTROL
not filled in
sufficient level
implicit present
in development
LCM-MODEL ACTOR DEFINITION
MODEL TEAM BUILDING INFORMATION PORTAL
sufficient
level not filled in incomplete
sufficient
level
SYSTEM PLAN ORGANIZATIONAL
PLAN ACTIVITY
PLAN CONTROL PLAN
overall present
sufficient level
overall present
not present
Figure A3 Result Quick scan (as an example)
The Quick scan has ten questions per function area in the innovation
matrix. The questions have been built up as follows:
Strategically: (questions concerning the organization):
is the elementary matter present in relation to the Process
Standard?
Tactically (questions concerning the planning):
how (well) is this controlled?
is enough knowledge and experience available in this area?
Operational (questions concerning the implementation):
to which (detail) level are process elements covered?
A table has been included in Appendix 7 for total overview of the
typification of all questions.
With these questions understanding is obtained of what the process
is concerning and of how to fulfill the Process Standard (diverted from
ISO-9001 standaard.
On the basis of the corrected score (i.e. the corrected standard for the
specific asset on the basis of the measures of perfection) the
action/improvement points (Points of Improvement – PoI) are initiated,
2. Maintenance Quick Scan
Op basis van de SMM kan met de MQS op een snelle en interactieve wijze (d.m.v. interviewtechniek) bepaald worden waar duurzaam onderhoud kan worden verbeterd en in welke mate dit bijdraagt aan het uiteindelijke bedrijfsresultaat. Op het hoogste niveau wordt het resultaat gevisualiseerd door de status per aandachtsgebied aan te geven. Op basis van dit overzicht en onderliggende informatie wordt een actie-/verbeterplan opgesteld. Afhankelijk van de situatie en type organisatie wordt bepaald volgens welke methoden c.q. technieken dit het beste kan worden uitgevoerd. Om hierbij weloverwogen keuzes te maken is de Work Method Checklist ontwikkeld.
from rough to fine (for example: 0<score<50% then PoI-a,
50<score<70% then POI-b, different then continue in the same way).
The possible action/improvement points have been introduced on the
basis of analyses, for instance of the procedures, directives and the
standards from the TQM Manual.
In the action/improvement point table and per function area, a list of
action/improvement points is now rendered (including a link with the
procedures, directive, etc. concerned from the TQM Manual). On the
basis of this overview management is now possible through
action/improvement points, which indicates the time span in which
this must be realized and what the ROI is. This is based on expert
opinion and/or information from other systems. This serves as a basis
for making decisions with respect to prioritizing or for carrying out
improvement actions.
To determine the methods and/or techniques for the best
action/improvement point and how this can be realized, the next step
is to judge the situation and possibilities concerned. To make well-
considered choices the Work Method checklist (WMC), the TQM
manual [TQM Manual, 2006] is the guideline and refers of
components from ISO-9001 standard [ISO-9001-standaard] and the
INK model [www.netMBA.com, 2006].
Appendix 4.
Relation to previous work
Relation to previous work
The main focus of the IM pilot project is to obtain and test the control
structure within the maintenance facility and to test the control
structure between the customer and maintenance facility. It did not
answer questions addressing the organizational models that are
needed to imbed the LCM concept into the organization.
Blanchard (1998) stated that Logistics Management involves;
planning, organizing, directing, and controlling of all activities
necessary to fulfill the system operational and effectiveness
requirements. In this content the dissertation will focus on organizing
for Logistics Management. Organizing is defined as the combining of
resources in such a manner as to fulfill a need. The ultimate objective,
of course, is to achieve the most cost-effective utilization of human,
material and monetary resources through the establishment of
decision making and communication processes designed to specific
objectives. For the Royal Netherlands defense organization the cost
effective utilization of resources becomes more relevant because of:
major cuts in defense budgets (defense white paper 2000) and;
new environmental danger for the higher echelon maintenance of
the armed forces that are to be subjected to what is known as
competitive service assessment (Defense and strategic agreement
2002).
Jones (1995) gives a brief description of an ILS organization.
According to Jones the manner in which the disciplines are organized
may depend on the acquisition phase of the specific product, the
company size, and the type of products supported. He shows the
relation between the different ILS tasks. The key to successful
program management is a clear definition of responsibilities. The ILS
program manager is the person who bears the total responsibility for
the ILS program. Jones describes extensively the ILS function, but he
does not describe the development and implementation of ILS within
an organization.
J.Stavenuiter‟s Cost Effective Management Control of Capital Assets
research (Stavenuiter, 2002) focuses on the development of a new
Asset Management Control (AMC) approach to improve cost-
effectiveness of capital assets. In chapter 9 Stavenuiter arranges the
findings of different studied methods and techniques from a technical,
economical, and organizational/social point of view. He states that
from an organizational/social point of view specific asset management
related „organizational /social‟ methods have not been found, except
the Total Productive Maintenance (TPM) method. Total Quality
Management (TQM) is defined as an „organizational‟ method that
seems to dovetail with methods such as ILS and Activity Base Costing
(ABC). It is recognized that TQM covers the entire field of asset
management and logistics. Although TQM has been described as a
complete business management method the more specific methods
such as Human Resource Management (HRM), Business Process Re-
engineering (BPR) and the Balance Score Card (BSC), also cover the
whole field of asset management and logistics. The overview of
studied methods and techniques shall be the point of departure of this
dissertation.
Appendix 5.
Relation to the Program of the course
The AMC approach [Stavenuiter, 2002]
Asset Management Control (AMC) is defined as a Life Cycle
Management (LCM) approach to manage all the processes (specify,
design, produce, maintain and dispose) needed to achieve a capital
asset (e.g. a ship, an offshore platform, an aircraft, etc.) capable to
meet the operational need in the most effective way.
The increasing complexity, cost and size of capital assets, in
combination with a shorter economic life time of high-tech system
components has stimulated the need for management tools able to
analyze the system effectiveness and life cycle costs.
The maritime environment has been chosen as the primary research
domain. The maritime environment, in particular the Royal Netherlands
Navy, is familiar with asset management and material logistics.
The maritime environment is an aggressive environment. Maritime
systems and their equipment often operate in adverse conditions,
suffer considerable wear and tear and have a high depreciation rate.
Especially under these conditions cost-effectiveness is hard to attain.
A reliable and well-organized AMC system is essential to ensure
reliable operations.
The design, referred to as LCM-systems, aims to support the
management control of the logistics processes throughout the life
cycle with respect to the functionality of the technical system. The
System Design is divided into six modules:
the Structuring Module to set up the system-, process-
and information structure;
the Analysis Module to indicate the system elements,
logistic products, processes, actors and budget needed;
the Training Module to provide a skilled Life Cycle
Management team;
the Program Module to set up Logistic Programs for all
different life cycle periods;
the Representation Module to achieve insight and
understanding of the interdependence between
functions, system installations, logistic products and
processes, actors and cost;
the Control Module to inform and communicate with all
involved actors.
During the first case study LCM-systems is experienced as a new
AMC approach for the RNLN. Based on the case study results it can
be concluded that the LCM-model supports AMC to meet the main
objectives by providing insight into the system performances for all
actors. The system modeler (AMICO) has proved to be applicable to
represent the real combat-system to support AMC. The availability of
unambiguous procedures and guidelines is essential to bring across
the various roles and their relationship of the actors. Reliable system
data are the basis for the logistic communication and activities,
information management is considered to be a key factor for AMC.
For these reasons, an AMC system based approach would appear
interesting for the whole maritime sector. It is expected that the
principles and results of this research will be also useable in many
other sectors where capital assets play an important role.
System Analyses Method
The Analysis Module is based on the (integrated) Logistics Process
Cycle (LPC) composed of eight discerned entities.
The elaboration of the system- and logistics process structure is based
on the following reasoning.
Starting point is the assumed fact that the logistics process structure is
directly related to the installation entities (functional packages). The
installations are considered to be the physical elements for which a
logistic actor (or group of actors) is responsible. For this reason a
logistic actor is recognized as a significant element in the logistics
process. In this context an actor could be: the design department, the
workshop, the specialized contractor and so on.
Meeting the required installation performances requires logistic
products and services such as: design, production, installation, testing
and maintenance. As systems become more complex, installations
become more complicated. This means that more logistic control
products and services are necessary such as: documentation,
instruction, training, configuration management, etc.
Providing the required products and services, on schedule, demands
well-tuned logistic activities for the whole life cycle of an asset. In this
context logistic activities could be: designing, production, maintenance,
etc.
Performing these activities requires well-equipped logistic actors.
To equip these actors various resources are essential, such as:
personnel, infrastructure, material, tools, etc.
It can therefore be concluded that the logistics process can be
structured with following entities:
Resources;
Actors;
Activities;
Products and services.
A more detailed overview is given in J. Stavenuiter, Effective
Management Control of, Capital Assets, The Netherlands, 2002
To determine if AMC will be implemented „in a cost-effective way‟, it
is necessary to have a realistic insight in the operational and
maintenance costs. As stated before, this research focuses on the
cost-effectiveness of maintenance. It is generally known that better
„control‟ can downsize the costs, but control itself is costly too. An
optimum should be determined to achieve the most cost-effective
way.
Appendix 6.
LIST OF ABBREVIATIONS AND CONCEPTS
A Availability
AAW Anti Air Warfare
ABC Activity Based Costing
ADG Activity Diagram
AIM Asset Information Management
AMC Asset Management Control
AK Availability Killer
AMCS Asset Management Control System
AMICO Asset Management Information & Communication
APB Acquisition Policy Board
ASP Active Server Page
ASUW Anti Surface Warfare
ASW Anti Submarine Warfare
AT Active Time
ATW Aanvraag Tot Werk(Application To Work)
BBS Bedrijf Beheers Systeem (Company management system)
BOS Bedrijf Ondersteunend Systeem ( Business support system)
BPR Business Process Re-engineering/Re-design
BSC Balanced Score Card
BSMI Basis Standaard Materieelindeling (Basic Standard Materiel Classification)
BW S Bovenwatersystemen (Above surface systems)
C Capability
C3 Command, Control en Communication communication)
C3I Command Control Communication & Information
CAD Computer Aided Design
CAE Computer Aided Engineering
CALS Continues Acquisition and Life-cycle Support
CAM Computer Aided Manufacturing
CBS Cost Breakdown Structure
CD Cost Driver
CDM Cost Data Module
CDS Chef Defensie Staf (Defense, Chef of Staff)
CE Cost Effectiveness
CELSA Cost Estimation for Logistics Support Analysis
CfA Contracting for Availability
CLS Contract Logistic Support
COEA Cost & Operational Effectiveness Analysis
COQ Cost Of Quality
CPIM Centrale Planning & Instandhoudingmanagement (central planning &
maintenance management)
CSA Customer Supplier Agreements
CVM Concept Variation Model
CZM Commandant Zeemacht (Commander of Naval Forces)
CZSK Commando Zee Strijd Krachten (Commando Naval Forces)
DARS Data Attribute Rating System
DBI Database Interface
DCAA Defence Contract Audit Agency
DCMA Defence Contract Management Agency
DDSEW Directeur Divisie SEWACO (Director Of SEWACO Division)
DEF-STAN Defence Standard
DFE Design For Environment
DLM Depot Level Maintenance
DLO Defense Logistic Organisation
DMG Data Management Groep
DMIP Defensie Materieel Instandhoudingproces (Defense materiel maintenance
process)
DMKM Directeur Materieel Koninklijke Marine (Director Materiel KNLNRNLN)
DMO Defensie Materieel Organisatie (Defense Materiel Organization)
DMS Document Management System
DoD Department of Defense
DPA Defense Procurement Agency
DQI Data Quality Indicator
DSMC Defense Systems Management College
DT Downtime
DTC Design To Cost
ECC Equipment Capability Customer
ECDM Environmentally Conscious Design & Manufacturing
ECP Engineering Change Proposal
EDI Electronic Document Interchange
EFQM European Foundation for Quality Management
ELFF Expected Life Failure Frequency
EM Environmental Management
EMS Environmental Management System
EMW Electromagnetic Warfare
EP Exploitatieplan (Operating plan)
ERP Enterprise Resource Planning
FDG Function Diagram
FE Function Effectiveness
FMCC Failure Mode/Cause Combinations
FMECA Failure Mode Effectiveness & Criticality Analysis
FOM Figure Of Merit
FST Functionele Systeem test (functional system test)
FTA Failure Tree Analysis
GAO Government Accountability Office
GES Groep Escorte Schepen (escort ship group)
GWA Geleide Wapen Analyse (guided weapon analysis)
H.R.H. Her Royal Highness
HNLMS Her Netherlands Majesty
HOQ House Of Quality
HRM Human Resource Management
HTML Hypertext Markup Language
IM Integrale Instandhouding (integrated maintenance)
ICE Integrated Cost Estimation
ICEA Integrated Cost & (operational) Effectiveness Analysis
ICT Information & Communication Technology
IDEF0 Integrated Definition for Function modeling (type 0)
IDG Installation Diagram
ID-nr. Identification number
IF Impact Factor
IHC Instandhoudingconcept (maintenance concept)
ILM Intermediate Level Maintenance
ILS Integrated Logistics Support
IMG Instalation Managementr
IMG Installatie Management Groep (installation management Group)
INCOSE International Council on Systems Engineering
INK Instituut Nederlandse Kwaliteit (Dutch Quality Institute)
IP Installation Performance
IDA Integrated Project Team
IPPD Integrated Product & Process Modeler
IR Infra Red
IS Information System
IWSM Integraal Wapen Systeem Management (integrated weapon system
management)
KAM Kwaliteit, Arbo & Milieu (quality, labor law & environment)
KBG Klankbordgroep (sounding board group)
KISS Keep It Short & Simple
KM Koninklijke Marine (Royal Netherlands Navy)
KPI Key Performance Indicators
LCA Life Cycle Analysis/Assessment
LCC Life Cycle Cost
LCCA Life Cycle Cost Analysis
LCCB Life Cycle Cost Budgeting
LCCM Life Cycle Cost Management
LCC-OPT Life Cycle Cost & Optimization
LCF Lucht Commando Fregat(Air command frigate)
LCI Life Cycle Indicator
LCM Life Cycle Management
LO Learning Organization
LORA Level Of Repair Analysis
LP Logistics Program
LPC Logistics Process Cycle
LPD Landing Platform Dock
LPM Logistics Process Module
LRT Logistic Response Time
LSA Logistics Support Analysis
LSAR Logistics Support Analysis Record
MADS Maintenance Analysis Data system
MAS Modificatie Administratie Systeem (modification administration system)
MATRACS Modificatie Administratie Systeem (modification administration system)
MATLOG-IV Materieellogistieke Informatievoorziening (materiel logistic information
services)
MB Marinebedrijf
MBO Management By Objectives
MBS Materieel Beheer Systeem (material management system)
MBV Mijnen Bestrijdingsvaartuig (mine countermeasure vessel)
MCS Materieel Configuratie Systeem (materiel configuration system (network
application)
MD Mijnendienst (minesweeping service)
MEA Maintenance Engineering Analysis
MEAR Maintenance Engineering Analysis Record
MF Multi Purpose Fregat (Multi-purpose frigate)
MIL-HDBK Military Handbook
MIL-STD Military Standard
MIS Management Information System
MLA Maintenance Level Analysis
MLM Mid Life Modernization
MMI Man Machine Interface
MoD Ministry of Defense
MOD Modification
MOP Measure Of Prefection
MRP Material Resource Planning
MT Mission Time
MTA Maintenance Task Analysis
MTBF Mean Time Between Failures
NATO North Atlantic Treaty Organization
NDIA National Defense Industry Association
NPDM Nato Product Data Model
NPV Net Present Value
OAM Operation Aggregation Model
OEE Overall Equipment Effectiveness
OLM Operational Level Maintenance
ORS Onderhoud Registratie Systeem (maintenance registration system)
OT Organizational Transformation
OWS Onderwatersystemen (subsurface systems)
OZB Onderzeeboten (submarines)
OZD Onderzeedienst (submarine service)
PBSC Performance Based Service Contract
PCB Printed Circuit Board
PCT Performance Cost Time
PDM Product Data Management
PIM Product Information Management
PLF Platform (system)
POS Periodiek Onderhoud Systeem (periodic )maintenance system)
PP Production Performance
PUP Project Uitvoeringsplan (project implementation plan)
QAT Quality Action Team
QF Quality Factor
QFD Quality Function Deployment
R Reliability
RCM Reliability Centered Maintenance
PRIMA PRocess IMprovement Application
RGG Regiegroep (direction committee)
RAMT(S) Reliability, Availability, Maintainability & Safety
RNLN Royal Netherlands Navy
ROC Regionaal Opleidings Centrum
RTC Risk To Control
SA Support Analysis
SATCOM Satellite Communication
SCM Supply Chain Management
SDM System Development Methodology
SE System Effectiveness
SEM System Effectiveness Module
SEMP System Engineering Management Plan
SEP System Enginering Plan
SEW SEWACO (system)
SEWACO Sensor, Weapons & Command (system)
SF Service Factor
SHOPSY Ship Operation System
SLA Service Level Agreement
SMART Specific, Measurable, Achievable, Relevant, Time bound
SMG Systeem Management Groep (system management Group)
SOM Support Options Matrix
SOW Statement Of Work
SPARC System for Production & Resources Consumption
SSE&M Systems Support Engineering & Management
ST&E System Test & Evaluation
STORM Support application for Technical Overview, Reliability and Maintainability
TBK Thema bij eenkomst (theme meeting)
TD Technische Dienst (technical department for platform/ship system)
TDC Technical Data Center
TDM Technical Document Management
TDP Technical Data Package
TOF Technische Onderhoud Functie (technical maintenance function)
TLM Through Life Management
TLMP Through Life Management Plan
TLMSM Through Life Management System Management
TOR Terms Of Reference
TPM Total Productive Maintenance
TQM Total Quality Management
UK United Kingdom
UKC Uniforme Kosten Code (uniform costs.)
UT Uptime
VAS Voorraad Administratie Systeem (inventory administration system)
VTC Value To Control
V&O Vaar & Onderhoud (navigation & maintenance)
V&O Vorming & Opleiding (training & education)
VMB Varende Materieelbeproeving (Sea Acceptance Trials)
WD Wapentechnische Dienst (WE with regard to SEWACO systeem)
Y-P Year-Period
Appendix 7. Questionnaire for PRIMA
Questions 100 80 0-60 Recommendations
1. System plan
1 Is a general specification available of the materiel concerned: presently, entirely, particularly and well accessible?
2 Are users specifications/plans for example; required production capacity, task, missions, security, etc.; well specified, and for all actors accessible?
3 Is a risk analysis available, which is based on reliability and availability requirements and cost estimates, per function/installation?
4 Are the main points clear and property defined regarding the complete maintenance process?
5 In this area, are sufficient competences present/available?
6 Has a proper Exploitation Plan been established or is a similar document present?
7 Has the responsibility to establish or maintain the System Plan, been covered/recognized in the organization?
8 Is the System Plan being properly used within the organization?
9 Is the System Plan properly managed, maintained and adjusted?
10 Is the System Plan frequently used as a reference?
2, Life cycle management
1 Has a Life Cycle Analysis been performed or is it available for any asset?
2 Have the cost effectiveness and the performance indicators been defined?
3 Is a structured overview or activities per Life Cycle phase available?
4 Is a specification of maintenance activities or product/actor combinations in terms of product, time (for example number of man-hours) and money (tariffs and costs) available?
5 Are the actors (employees carrying out the work) identified and specified (required qualifications)?
6 Are (technical) contract conditions (terms) available?
7 Is system engineering (for example function model and physical product model or the assets) convened/recognized in the organization?
8 Is an overview of the required competences (knowledge and skills) available?
9 In this area, are sufficient competences present/available?
10 Have requirements/standards been established regarding verification and validation (system tests & evaluation)?
3. Contract management
1 Has a Need Analysis for product and services been carried out?
2 For cost effectiveness and performance indicators, have suppliers (prime actors) been defined?
3 Is a structured overview of all contract types for services and products available?
4 Is a specification of the products and services available per supplier?
5 Has the supervisor of the supplier been identified and educated?
6 Have (technical) evaluation criteria and cycles been defined?
7 Is Contract Management covered/recognized in the organization?
8 Has a Performance Based Service Contract (PBSC) been concluded/employed with the suppliers?
9 In the field of Contract Management, are sufficient (own) competences present/available?
10 Have requirements/standards been established, with respect to checking and validation of the real situation, with the agreements made in the contract?
4. Service Level Agreements
1 Are specifications regarding the functionality to provide performance capacity available (costs, times, capability, availabil ity, reliability)?
2 Is it evident that this results in a cost effective approach?
3 Is an integrated cost overview (Total Cost of Ownership) available?
4 Is a user/maintenance planning available?
5 Are guarantees available?
6 Regarding maintenance, are qualities and service requirements available?
7 Have requirements and conditions, regarding the use of people, resources and material (for example components) tasks been drawn up?
8 Is the perception, regarding pricings and lead times (benchmarking) sufficient?
9 Is the responsibility for set up, managing and maintaining of requirements and agreements in the SLA well covered in the organization?
10 Are the requirements and appointments frequently being verified and validated?
5. Organizational plan
1 Are specifications regarding the settled competences available?
2 Is it evident that this results in a cost effective approach?
3 Has a clear customer supplier relation been settled (concerning make/buy decisions both external and internal customer supplier relations)?
4 Is a current user/maintenance planning available?
5 Are job descriptions available and accepted?
6 Are qualities and service requirements available regarding maintenance?
7 Is the perception regarding pricings and lead times (benchmarking) sufficient?
8 Are the aim and the function of the organization parts covered in the organization?
9 Are the principles/main points, concerning the structure and culture of the organization settled and working entirely as agreed upon?
10 Are the requirements frequently verified or validated?
6. Actor Definition model
1 Are the hierarchy and operational and functional structure communicated to customers and employees?
2 Is it evident that this results in a cost effective approach?
3 Have the responsibilities and competences been settled?
4 Is a current capacity planning available?
5 Has an evaluation/performance interview been planned with actors, are these carried out and does this lead to improvement?
6 Are the requirements concerning the expected functioning clear for every actor/employee?
7 Is sufficient capacity (qualitatively and quantitative) available for the actors to catch special situations (long term sick leave, jobs with a destiny or priorities, etc.)?
8 Are the relations between the competences (tasks and job descriptions) and the operational need of the assets (production capacity, missions, security, etc.) well-known?
9 Is the training plan leading?
10 Are the requirements, appointed to the organization, for the environment frequently verified and validated?
7. Resource management
1 Is the capacity (numbers and knowledge) of own staff or third parties staff and subcontractors known?
2 Have attainable specifications (qualities, quantities and delivery periods) been included in all contracts?
3 Are the internal and external contacts known?
4 Is a capacity planning (required versus available) available?
5 Are the general training requirements, work permission procedures etc., regularly checked (in advance)?
6 Is an introduction program for new actors (own employees, employees of third parties) available?
7 Is there sufficient capacity to catch special situations (long-term sock leave, jobs with a destiny or priorities)?
8 Is the training plan of the own organization and the contractors available?
9 Is there a perception of the sick leave, respectively retirement of senior employees (natural cause) and is an action plan available to reduce sick leave, or to solve the retirement of senior employees?
10 Are performance and assessment interviews with employees and subcontractors carried out and which actions resulting from thes e interviews are planned and verified?
8. Material Logistics Organization
1 Is the capacity need (knowledge) known for the coming year?
2 Are the team budgets known?
3 Is a regular discussion of progress and information-exchange between the teams being conducted?
4 Are the team objectives clear to the team members and do they believe in these objectives?
5 Is the role/task assignment within the teams clear to the team members in relation with the team objectives?
6 Do the team members call each other to account on reaching the team objective and their role in this?
7 Are the mutual competences of the team members clear for everyone and do they use these?
8 Do the teams have ineffective, missing competences?
9 Has a training plan for structurally missing competences been drawn up and is this carried out?
10 Are the team objectives and the requirements to the team members frequently being evaluated?
9. Activity Plan
1 Is a description of the processes (who, what, how, when) available?
2 Are the user plans like required production capacity, tasks, missions, security, etc, well specified and entirely accessible for all actors?
3 Have the actors been indicated and do they know the working method they have to use and the required techniques?
4 Is a package of measurements for security, environment, liability, etc. available?
5 Is the Activity Plan really used (established, managed, maintained) within the organization?
6 Are the necessary competences known, both qualitatively and quantitatively?
7 Has the manner of Configuration Control been described with regard to the processes (change in working methods)?
8 Has Asset Management Control been arranged, particularly the information flow regarding Cost Performance Indicates (CPI's)?
9 Is feedback being provided concerning ongoing improvement?
10 Is the Activity Plan anchored/embedded in the organization (training/workshops, etc.), so that it becomes something durable?
10. Team Building
1 Is a process design (Activity Plan) available (has it been developed)?
2 Has the process design (Activity Plan) been reviewed with respect to the practice; it is working in practice according to the process design?
3 Has a clear specification of the teams been made, their aims/tasks and their role in the processes?
4 Has a clear specification of the actors (actor definition model) and their roles in the teams/processes been made?
5 For the teams, have communications and decision-making structure been described; do they work according to this structure?
6 Has the process design been set up and certified according to (inter) national models (for example TQM, EFQM, INK) and/or (for example ISO-9001)?
7 Has the organization (both the team members themselves and other actors and possibly outside the organization) been informed about the teams (aim, composition, aimed at results, responsibilities and powers)?
8 Are the teams formed formally covered in the organization? Do the teams have formal responsibilities and powers?
9 Is the process of Team Building managed/maintained and regularly (annually) being adjusted?
10 Has it been shown that teams result in a cost effective treatment of the organization?
11. Team Management
1 Is it working according to the workshop treatment?
2 Are employee/actor evaluations (regularly) being carried out, have improvement actions been developed and have these been communicated?
3 Is this management resulting in a cost effective process?
4 Is it perceptible that evaluations (both of our own function and from the organization parts (teams, departments, etc.)) are carried out and that they are effective and always improved?
5 To carry out activities on a SMART manner, have these been specified?
6 Are evaluations frequently being carried out on the aspects of learning, management and professional? (Individual /team) improvement?
7 Is an improvement plan available on the basis of evaluations and are these improvements actually being carried out?
8 Does the process design (see Activity Plan and Actor Definition Model) apply as a standard and/or reference area or a feedback?
9 Is the team design (see Team Building) considered as a standard and/or reference or a feedback?
10 Does the management pay attention to improvements of the process design, asset design and organization/team design?
12. Team Work
1 Are the improvement plans, the team development plans for the teams actually being carried out effectively?
2 Are the actors acquainted with the process chain and is their role clear, both in the team (s) as in the team process?
3 Are the actors playing the role which is expected of them?
4 Is the team cooperating well (effectively and efficiently)?
5 Do (harmonization) problems get solved adequately?
6 Is management information (CPI's) available?
7 Is an overview of problems during the implementation of work available?
8 Are current improvement plans/team development plans available?
9 Are evaluations being carried out?
10 Are the results of the teamwork regularly verified and validated?
13. Control Plan
1 Have reports (formats, frequencies, distribution) been defined and is the cost effective commitment of the assets under control?
2 Is a periodical report available concerning the cost effective commitment of assets?
3 Is an Action Plan available which is monitoring the cost effective improvement commitment of assets?
4 Has an inspection plan been developed or a situation dependent maintenance plan?
5 Is the corrective and preventive maintenance implementation being monitored?
6 Has a jamming report with analyses been drawn up?
7 Have costs and turnover analyses per asset or parts of it (function, functional package) been drawn up?
8 Are the requirements of the expected functioning of the assets being shared and are these clear?
9 Are the requirements and main points and conditions which are put in the Control Plan for Life Cycle Management (regularly) being evaluated, verified and validated?
10 Have the performance specific appointments been made, has the implementation hereof been monitored and the appointments evaluated and if necessary adjusted?
14. System Information Portal
1 Is asset information structurally available on a web portal?
2 Do all relevant actors have access to this asset information?
3 Is the information concerning the cost drivers and the performance killers available?
4 Is this information giving insight in acquired characteristics, improvement actions and who is responsible for this?
5 Is the information giving insight in the developments of the maintenance costs and performances (capability, availability, reliability) of the assets over the past 5 years?
6 Is contractual information (SLA and/or PBSC's) transparent?
7 Is the information of system tests (functional tests) that results in the capability figures of assets transparent?
8 Does the organization (for example LCM-team) use the web portal as a communication platform which is based on priority and decision-making propositions, referring to the implementation of activities?
9 Is the web portal providing information elucidating that Life Cycle Management results in cost effective results?
10 Have requirements been developed which cause the Systems Information Portal to be (regularly) verified or validated?
15. Management Control
1 Has a clear choice been made for carrying out the work in-house or have it outsourced?
2 Is a system available for drawing up and evaluating budgets by life cycle?
3 Is a report concerning the usage of spare parts available?
4 Is a regular customer satisfaction research being performed, improvement actions defined and are these carried out?
5 Is benchmarking possible with maintenance costs with respect to operational costs both within a group of equal assets or unequal types?
6 Is a report concerning the performance or the infrastructure available?
7 Is a report concerning assets and the installation performance available?
8 Is a report concerning assets and the installation Life Cycle Costs available?
9 Is it perceptible that Life Cycle Management is cost effective?
10 Are the requirements for Management Control (regularly) evaluated, verified and validated?
16. System Cost Effectiveness
1
Are the performances of assets (running hours, operational environment, jamming, etc.) and implementation of maintenance tasks structured by the users/operators and is feedback given to the maintenance organization?
2 Are the requirements of products and services known?
3 Is a jamming report with analysis available?
4 Is a cost analysis by product type with respect to recent development analyses available?
5 Has a clear relation been established between costs and benefits (performances of the assets)?
6 Is management information (CPI's) available?
7 Is an evaluation regarding usefulness, quality and costs of the maintenance and supplying available?
8 Did bad experiences get a feedback and have actions been undertaken?
9 Is the impact of modifications in use intensity analyzed and if necessary processed in the appointments concerning cost effectiveness commitment of the assets?
10 Is improvement management (ongoing improvement of the system cost effectiveness) considered?
Appendix 8. Results of the questionnaire for PRIMA
Questionnaire
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100 %
Result
s
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100%
Result
s
0-59%
60-
79 %
80-100 %
Results
0-59%
60-
79 %
80-100 %
Results
Average
1. System Plan
1
Is a general specification available of the materiel concerned: presently, entirely, particularly and well accessible? 90 90 70 70 65 65
90
90 70 70 50 50 90 90
90
90 70 70 90 90 78
2
Are users specifications/plans for example; required production capacity, task, missions, security, etc.; well specified, and for all actors accessible? 90 90 50 50 50 50
60
60 70 70 70 70
100 100
60
60 70 70 50 50 67
3
Is a risk analysis available, which is based on reliability and availability requirements and cost estimates, by function/installation? 50 50 50 50 85 85
50
50 50 50 70 70 0 0
50
50 50 50 50 50 51
4
Are the main points clear and property defined regarding the complete maintenance process? 70 70 70 70 90 90
90
90 70 70 70 70 80 80
90
90 50 50 90 90 77
5
In this area, are sufficient competences present/available? 70 70 70 70 85 85
90
90 70 70 70 70 50 50
90
90 50 50 70 70 72
6
Has a proper Exploitation Plan been established or is a similar document present? 90 90 70 70 70 70
100
100 50 50 50 50
100 100
100
100 70 70 90 90 79
7
Has the responsibility to establish or maintain the System Plan, been covered/recognized in the organization? 50 50 0 0 30 30
66
66 50 50 90 90 70 70
66
66 50 50 70 70 54
8
Is the System Plan being properly used within the organization? 50 50 0 0 40 40
75
75 50 50 50 50 60 60
75
75 50 50 70 70 52
9
Is the System Plan properly managed, maintained and adjusted? 90 90 0 0 0 0
100
100 50 50 0 0
100 100
100
100 50 50 70 70 56
10
Is the System Plan frequently used as a reference? 70 70 0 0 10 10
100
100 50 50 50 50 60 60
100
100 50 50 70 70 56
2, Life Cycle Management
1
Has a Life Cycle Analysis been performed or is it available for any asset? 90 90 0 0 60 60
90
90 50 50 0 0 0 0
90
90 50 50 90 90 52
2
Have the cost effectiveness and the performance indicators been 50 50 0 0 75 75
90
90 70 70 0 0 50 50
90
90 50 50 70 70 55
defined?
3
Is a structured overview or activities per Life Cycle phase available? 70 70 0 0 80 80
100
100 50 50 90 90 50 50
100
100 50 50 70 70 66
4
Is a specification of maintenance activities or product/actor combinations in terms of product, time (for example number of man-hours) and money (tariffs and costs) available? 90 90 0 0 85 85
50
50 90 90 90 90 50 50
50
50 70 70 90 90 67
5
Are the actors (employees carrying out the work) identified and specified (required qualifications)? 70 70 0 0 85 85
66
66 90 90 90 90 30 30
66
66 70 70 70 70 64
6
Are (technical) contract conditions (terms) available? 50 50 70 70 65 65
40
40 0 90 90 0 0
40
40 70 70 50 50 48
7
Is system engineering (for example function model and physical product model or the assets) convened/recognized in the organization? 70 70 90 90
100 100
90
90 70 70 70 70
100 100
90
90 50 50 50 50 78
8
Is an overview of the required competences (knowledge and skills) available? 90 90 70 70 90 90
75
75 90 90 90 90
100 100
75
75 50 50 90 90 82
9
In this area, are sufficient competences present/available? 90 90 70 70 80 80
60
60 90 90 90 90 80 80
60
60 70 70 90 90 78
10
Have requirements/standards been established regarding verification and validation (system tests & evaluation)? 90 90 , 90 90 75 75
90
90 90 90 90 90 50 50
90
90 90 90 90 90 85
3. Contract
Management
1
Has a Need Analysis for product and services been carried out? 90 90 0 0
100 100
50
50 90 90 70 70 0 0
50
50 70 70 70 70 59
2
For cost effectiveness and performance indicators, have suppliers (prime actors) been defined? 70 70 0 0 25 25
40
40 90 90 0 0 0 0
40
40 70 70 50 50 39
3
Is a structured overview of all contract types for services and products available? 70 70 0 0 0 0
15
15 90 90 0 0 10 10
15
15 50 50 70 70 32
4
Is a specification of the products and services available per supplier? 90 90 0 0 80 80
90
90 90 90 90 90 50 50
90
90 70 70 70 70 72
5
Has the supervisor of the supplier been identified and educated? 90 90 0 0 0
75
75 70 70 90 90 10 10
75
75 70 70 70 70 55
6
Have (technical) evaluation criteria and cycles been defined? 50 50 0 0 90 90
90
90 70 70 90 90 0 0
90
90 90 90 50 50 62
7
Is Contract Management covered/recognized in the organization? 50 50 70 70 65 65
75
75 90 90 0 0 0 0
75
75 90 90 50 50 57
8
Has a Performance Based Service Contract (PBSC) been concluded/employed with the suppliers? 50 50 0 0 0 0
40
40 90 90 0 0 30 30
40
40 50 50 70 70 37
9
In the field of Contract Management, are sufficient (own) competences present/available? 50 50 70 70 40 40
40
40 70 70 70 70 0 0
40
40 70 70 50 50 50
10
Have requirements/standards been established, with respect to checking and validation of the real situation, with the agreements made in the contract? 50 50 0 0 0 0
40
40 70 70 90 90 20 20
40
40 0 0 50 50 36
4. Service Level Agreement
1
Are specifications regarding the functionality to provide performance capacity available (costs, times, capability, availability, reliability)? 90 90 0 0 25 25
75
75 50 50 70 70 10 10
75
75 50 50 50 50 50
2
Is it evident that this results in a cost effective approach? 50 50 0 0 25 25
50
50 90 90 70 70 10 10
50
50 50 50 50 50 45
3
Is an integrated cost overview (Total Cost of Ownership) available? 90 90 0 0 25 25
75
75 70 70 0 0 0 0
75
75 50 50 50 50 44
4
Is a user/maintenance planning available? 90 90 70 70 80 80
90
90 90 90 90 90 80 80
90
90 70 70 70 70 82
5 Are guarantees available? 50 50 0 0 10 10
66
66 90 90 0 0 0 0
66
66 50 50 50 50 38
6
Regarding maintenance, are qualities and services requirements available? 90 90 70 70 10 10
60
60 90 90 90 90 0 0
60
60 70 70 50 50 59
7
Have requirements and conditions, regarding the use of people, resources and material (for example components) tasks been drawn up? 70 70 0 0 10 10
50
50 90 90 90 90 30 30
50
50 50 50 50 50 49
8
Is the perception, regarding pricings and lead times (benchmarking) sufficient? 50 50 0 0 60 60
40
40 90 90 70 70 30 30
40
40 70 70 50 50 50
9
Is the responsibility for set up, managing and maintaining of requirements and agreements in the SLA well covered in the organization? 70 70 0 0 10 10
30
30 90 90 0 0 60 60
30
30 50 50 50 50 39
10
Are the requirements and appointments frequently being verified and validated? 50 50 0 0 0 0
50
50 90 90 70 70
100 100
50
50 50 50 50 50 51
5. Organizational Plan
1
Are specifications regarding the settled competences 70 70 0 0 80 80
80
80 90 90 70 70
100 100
80
80 50 50 70 70 69
available?
2
Is it evident that this results in a cost effective approach? 50 50 0 0 60 60
80
80 90 90 70 70 0
80
80 50 50 50 50 53
3
Has a clear customer supplier relation been settled (concerning make/buy decisions both external and internal customer supplier relations)? 90 90 0 0 80 80
33
33 90 90 70 70 90 90
33
33 70 70 50 50 61
4
Is a current user/maintenance planning available? 90 90 0 0 85 85
100
100 90 90 90 90
100 100
100
100 90 90 70 70 82
5
Are job descriptions available and accepted? 70 70 0 0 90 90
100
100 90 90 90 90
100 100
100
100 70 70 70 70 78
6
Regarding maintenance, are qualities and service requirements available? 90 90 0 0 85 85
85
85 90 90 90 90 80 80
85
85 50 50 50 50 71
7
Is the perception regarding pricings and lead times (benchmarking) sufficient? 50 50 0 0 80 80
40
40 90 90 70 70 80 80
40
40 50 50 50 50 55
8
Are the aim and the function of the organization parts covered in the organization? 50 50 0 0 90 90
75
75 90 90 70 70 80 80
75
75 70 70 50 50 65
9
Are the principles/main points, concerning the structure and culture of the organization settled and working entirely as agreed upon? 50 50 0 0 70 70
60
60 90 90 70 70
100 100
60
60 50 50 70 70 62
10
Are the requirements frequently verified or validated? 70 70 0 0 75 75
50
50 90 90 70 70 80 80
50
50 0 0 50 50 54
6. Actor Definition Model
1
Are the hierarchy and operational and functional structure communicated to customers and employees? 50 50 0 0 80 80
50
50 90 90 90 90
100 100
50
50 90 90 50 50 65
2
Is it evident that this results in a cost effective approach? 50 50 0 0 25 25
80
80 90 90 70 70 0 0
80
80 0 0 50 50 45
3
Have the responsibilities and competences been settled? 50 50 90 90 80 80
75
75 90 90 90 90
100 100
75
75 70 70 50 50 77
4 Is a current capacity planning available? 50 50 90 90 95 95
90
90 90 90 90 90 80 80
90
90 70 70 50 50 80
5
Has an evaluation/performance interview been planned with actors, is this being carried out and does this lead to improvement? 50 50 0 0 75 75
90
90 90 90 90 90 80 80
90
90 70 70 50 50 69
6
Are the requirements concerning the expected functioning clear for every actor/employee? 50 50 0 0 80 80
80
80 90 90 70 70 80 80
80
80 70 70 50 50 65
7
Is sufficient capacity (qualitatively and quantitative) available for the actors to catch special situations (long term sick leave, jobs with a destiny or 50 50 70 70 40 40
75
75 90 90 50 50 80 80
75
75 0 0 50 50 58
priorities, etc.)?
8
Are the relations between the competences (tasks and job descriptions) and the operational need of the assets (production capacity, missions, security, etc.) well-known? 50 50 0 0 85 85
75
75 90 90 90 90
100 100
75
75 0 0 50 50 62
9 Is the training plan leading? 70 70 90 90 85 85
90
90 90 90 90 90
100 100
90
90 0 0 50 50 76
10
Are the requirements, appointed to the organization, for the environment frequently verified and validated? 50 50 0 0 80 80
80
80 90 90 90 90 0 0
80
80 0 0 50 50 52
7. Resource Management 0
1
Is the capacity (numbers and knowledge) of own staff or third parties staff and subcontractors known? 70 70 70 70 85 85
90
90 90 90 90 90 80 80
90
90 70 70 50 50 79
2
Have attainable specifications (qualities, quantities and delivery periods) been included in all contracts? 90 90 70 70 75 75
75
75 90 90 90 90 80 80
75
75 70 70 50 50 77
3
Are the internal and external contacts known? 50 50 0 0 70 70
100
100 90 90 90 90 70 70
100
100 70 70 50 50 69
4
Is a capacity planning (required versus available) available? 70 70 90 90 80 80
100
100 90 90 90 90 80 80
100
100 70 70 50 50 82
5
Are the general training requirements, work permission procedures etc., regularly checked (in advance)? 90 90 90 90 65 65
75
75 90 90 90 90 30 30
75
75 90 90 50 50 75
6
Is an introduction program for new actors (own employees, employees of third parties) available? 70 70 90 90 45 45
90
90 90 90 90 90 50 50
90
90 90 90 50 50 76
7
Is there sufficient capacity to catch special situations (long-term sock leave, jobs with a destiny or priorities)? 50 50 70 70 25 25
75
75 90 90 0 0 80 80
75
75 50 50 50 50 57
8
Is the training plan of the own organization and the contractors available? 70 70 70 70 50 50
75
75 90 90 90 90
100 100
75
75 50 50 50 50 72
9
Is there a perception of the sick leave, respectively retirement of senior employees (natural cause) and is an action plan available to reduce sick leave, or to solve the retirement of senior employees? 50 50 90 90 85 85
90
90 90 90 90 90
100 100
90
90 70 70 50 50 81
10
Are performance and assessment interviews with employees and subcontractors carried out and which actions resulting from these interviews are 70 70 90 90 50 50
80
80 90 90 90 90 80 80
80
80 70 70 50 50 75
planned and verified?
8. Material Logistics Organization
1
Is the capacity need (knowledge) known for the coming year? 70 70 90 90 75 75
90
90 90 90 90 90
100 100
90
90 70 70 50 50 82
2 Are the team budgets known? 90 90 90 90 0 0
75
75 90 90 90 90
100 100
75
75 70 70 50 50 73
3
Is a regular discussion of progress and information-exchange between the teams being conducted? 70 70 90 90 55 55
75
75 90 90 90 90 80 80
75
75 70 70 50 50 75
4
Are the team objectives clear to the team members and do they believe in these objectives? 50 50 90 90 75 75
90
90 90 90 70 70 80 80
90
90 50 50 50 50 74
5
Is the role/task assignment within the teams clear to the team members in relation with the team objectives? 50 50 90 90 80 80
80
80 90 90 90 90 80 80
80
80 70 70 50 50 76
6
Do the team members call each other to account on reaching the team objective and their role in this? 50 50 90 90 75 75
80
80 90 90 90 90 50 50
80
80 70 70 50 50 73
7
Are the mutual competences of the team members clear for everyone and do they use these? 50 50 90 90 75 75
90
90 90 90 90 90 80 80
90
90 50 50 50 50 76
8
Do the teams have ineffective, missing competences? 50 50 90 90 70 70
90
90 90 90 70 70 80 80
90
90 70 70 50 50 75
9
Has a training plan for structurally missing competences been drawn up and is this carried out? 70 70 90 90 10 10
80
80 90 90 90 90 80 80
80
80 90 90 50 50 73
10
Are the team objectives and the requirements to the team members frequently being evaluated? 50 50 90 90 30 30
50
50 90 90 70 70 50 50
50
50 70 70 50 50 60
9. Activity Plan 0
1
Is a description of the processes (who, what, how, when) available? 70 70 90 90 80 80
80
80 90 90 90 90
100 100
80
80 70 70 50 50 80
2
Are the user plans like required production capacity, tasks, missions, security, etc, well specified and entirely accessible for all actors? 90 90 0 0 50 50
75
75 90 90 90 90 80 80
75
75 50 50 50 50 65
3
Have the actors been indicated and do they know the working method they have to use and the required techniques? 70 70 0 0 70 70
80
80 90 90 90 90
100 100
80
80 50 50 50 50 68
4
Is a package of measurements for security, environment, liability, etc. available? 90 90 0 0 75 75
90
90 90 90 90 90
100 100
90
90 70 70 50 50 75
5
Is the Activity Plan really used (established, 70 70 0 0 70 70
80
80 90 90 70 70
100 100
80
80 50 50 50 50 66
managed, maintained) within the organization?
6
Are the necessary competences known, both qualitatively and quantitatively? 70 70 0 0 70 70
50
50 90 90 70 70
100 100
50
50 50 50 50 50 60
7
Has the manner of Configuration Control been described with regard to the processes (change in working methods)? 90 90 0 0 80 80
33
33 90 90 90 90
100 100
33
33 50 50 50 50 62
8
Has Asset Management Control been arranged, particularly the information flow regarding Cost Performance Indicates (CPI's)? 50 50 0 0 65 65
70
70 90 90 50 50 70 70
70
70 50 50 50 50 57
9
Is feedback being provided concerning ongoing improvement? 90 90 0 0 70 70
33
33 90 90 70 70
100 100
33
33 50 50 50 50 59
10
Is the Activity Plan anchored/embedded in the organization (training/workshops, etc.), so that it becomes something durable? 90 90 0 0 25 25
75
75 90 90 70 70 80 80
75
75 50 50 50 50 61
10. Team Building
1
Is a process design (Activity Plan) available (has it been developed)? 90 90 0 0 55 55
90
90 90 90 90 90 80 80
90
90 70 70 70 70 73
2
Has the process design (Activity Plan) been reviewed with respect to the practice; it is working in practice according to the process design? 90 90 0 0 60 60
75
75 90 90 90 90 80 80
75
75 70 70 70 70 70
3
Has a clear specification of the teams been made, their aims/tasks and their role in the processes? 70 70 70 70 70 70
75
75 90 90 90 90
100 100
75
75 50 50 90 90 78
4
Has a clear specification of the actors (actor definition model) and their roles in the teams/processes been made? 70 70 70 70 80 80
75
75 90 90 90 90
100 100
75
75 50 50 70 70 77
5
For the teams, have communications and decision-making structure been described; do they work according to this structure? 50 50 0 0 70 70
75
75 90 90 70 70 80 80
75
75 50 50 70 70 63
6
Has the process design been set up and certified according to (inter) national models (for example TQM, EFQM, INK) and/or (for example ISO-9001)? 90 90 90 90 5 5
75
75 90 90 90 90
100 100
75
75 70 70 90 90 78
7
Has the organization (both the team members themselves and other actors and possibly outside the organization) been informed about the teams (aim, 70 70 70 70 5 5
90
90 90 90 90 90
100 100
90
90 50 50 70 70 73
composition, aimed at results, responsibilities and powers)?
8
Are the teams formed formally covered in the organization? Do the teams have formal responsibilities and powers? 90 90 0 0 60 60
75
75 90 90 90 90
100 100
75
75 50 50 70 70 70
9
Is the process of Team Building managed/maintained and regularly (annually) being adjusted? 50 50 0 0 70 70
90
90 90 90 70 70 30 30
90
90 50 50 50 50 59
10
Has it been shown that teams result in a cost effective treatment of the organization? 50 50 0 0 25 25
75
75 90 90 70 70 30 30
75
75 x 0 70 70 49
11. Team Management
1
Is it working according to the workshop treatment? 50 50 0 0
100 100
30
30 70 70 70 70 80 80
30
30 70 70 70 70 57
2
Are employee/actor evaluations (regularly) being carried out, have improvement actions been developed and have these been communicated? 50 50 70 70 95 95
75
75 70 70 70 70 70 70
75
75 70 70 50 50 70
3
Is this management resulting in a cost effective process? 70 70 70 70 80 80
60
60 50 50 70 70 70 70
60
60 x 0 50 50 58
4
Is it perceptible that evaluations (both of our own function and from the organization parts (teams, departments, etc.)) are carried out and that they are effective and always improved? 70 70 0 0 25 25
75
75 70 70 70 70 60 60
75
75 50 50 70 70 57
5
To carry out activities on a SMART manner, have these been specified? 50 50 0 0 0 0
90
90 70 70 50 50 80 80
90
90 50 50 50 50 53
6
Are evaluations frequently being carried out on the aspects of learning, management and professional? (Individual /team) improvement? 50 50 0 0 0
75
75 90 90 50 50 30 30
75
75 70 70 50 50 49
7
Is an improvement plan available on the basis of evaluations and are these improvements actually being carried out? 70 70 0 0 65 65
75
75 70 70 70 70 70 70
75
75 x 0 50 50 55
8
Does the process design (see Activity Plan and Actor Definition Model) apply as a standard and/or reference area or a feedback? 70 70 0 0 35 35
90
90 70 70 70 70 70 70
90
90 50 50 50 50 60
9
Is the team design (see Team Building) considered as a standard and/or reference or a feedback? 70 70 0 0 70 70
75
75 70 70 0 0 70 70
75
75 50 50 50 50 53
10
Does the management pay attention to 90 90 90 90 85 85
75
75 70 70 70 70 80 80
75
75 50 50 50 50 74
improvements of the process design, asset design and organization/team design?
12. Team Work
1
Are the improvement plans, the team development plans for the teams actually being carried out effectively? 70 70 0 0 5 5
50
50 90 90 0 0 50 50
50
50 70 70 70 70 46
2
Are the actors acquainted with the process chain and is their role clear, both in the team (s) as in the team process? 50 50 0 0 65 65
66
66 90 90 90 90 80 80
66
66 70 70 70 70 65
3
Are the actors playing the role which is expected of them? 50 50 0 0 65 65
66
66 90 90 70 70 80 80
66
66 70 70 70 70 63
4
Is the team cooperating well (effectively and efficiently)? 50 50 90 90 70 70
66
66 90 90 70 70 80 80
66
66 70 70 90 90 74
5
Do (harmonization) problems get solved adequately? 50 50 90 90 75 75
66
66 90 90 70 70 80 80
66
66 50 50 70 70 71
6
Is management information (CPI's) available? 50 50 90 90 20 20
75
75 90 90 50 50 80 80
75
75 70 70 90 90 69
7
Is an overview of sticking points by the implementation of work available? 50 50 90 90 85 85
75
75 90 90 90 90 80 80
75
75 50 50 70 70 76
8
Are current improvement plans/team development plans available? 70 70 0 0 45 45
33
33 90 90 70 70 50 50
33
33 50 50 70 70 51
9 Are evaluations being carried out? 70 70 90 90 80 80
66
66 90 90 70 70 70 70
66
66 50 50 50 50 70
10
Are the results of the teamwork regularly verified and validated? 50 50 0 0 70 70
50
50 90 90 50 50 70 70
50
50 50 50 50 50 53
13. Control Plan
1
Have reports (formats, frequencies, distribution) been defined and is the cost effective commitment of the assets under control? 70 70 0 0 0 0
75
75 70 70 70 70
100 100
75
75 0 0 50 50 51
2
Is a periodical report available concerning the cost effective commitment of assets? 50 50 0 0 0 0
33
33 70 70 70 70
100 100
33
33 0 0 50 50 41
3
Is an Action Plan available which is monitoring the cost effective improvement commitment of assets? 90 90 0 0 0 0
66
66 90 90 70 70
100 100
66
66 0 0 50 50 53
4
Has an inspection plan been developed or a situation dependent maintenance plan? 70 70 90 90
100 100
80
80 50 50 70 70
100 100
80
80 0 70 70 50 50 76
5
Is the corrective and preventive maintenance implementation being monitored? 90 90 90 90
100 100
80
80 90 90 90 90
100 100
80
80 70 70 50 50 84
6
Is a jamming report with analysis available? 70 70 90 90 65 65
90
90 90 90 50 50 80 80
90
90 0 0 50 50 68
7
Have costs and turnover analyses per asset or parts of it (function, functional package) been drawn up? 50 50 0 0 0 0
50
50 90 90 50 50 80 80
50
50 0 0 50 50 42
8
Are the requirements of the expected functioning of the assets being shared and are these clear? 70 70 90 90 95 95
75
75 90 90 70 70
100 100
75
75 70 70 70 70 81
9
Are the requirements and main points and conditions which are put in the Control Plan for Life Cycle Management (regularly) evaluated, verified and validated? 70 70 0 0 10 10
33
33 70 70 50 50
100 100
33
33 0 0 50 50 42
10
Have the performance specific appointments been made, has the implementation hereof been monitored and the appointments evaluated and if necessary adjusted? 90 90 0 0 25 25
50
50 70 70 50 50 70 70
50
50 0 0 50 50 46
14. System Information Portal
1
Is asset information structurally available on a web portal? 90 90 0 0 30 30
90
90 0 0 70 70 50 50
90
90 50 50 90 90 56
2
Do all relevant actors have access to this asset information? 50 50 0 0 40 40
100
100 0 0 50 50 50 50
100
100 50 50 90 90 53
3
Is the information concerning the cost drivers and the performance killers available? 50 50 90 90 10 10
75
75 90 90 70 70
100 100
75
75 50 50 90 90 70
4
Is this information giving insight in acquired characteristics, improvement actions and who is responsible for this? 50 50 50 50 0 0
80
80 90 90 90 90
100 100
80
80 70 70 70 70 68
5
Is the information giving insight in the developments of the maintenance costs and performances (capability, availability, reliability) of the assets over the past 5 years? 70 70 50 50 0 0
50
50 70 70 70 70
100 100
50
50 50 50 50 50 56
6
Is contractual information (SLA and/or PBSC's) transparent? 50 50 50 50 0 0
50
50 90 90 70 70
100 100
50
50 50 50 50 50 56
7
Is the information of system tests (functional tests) that results in the capability figures of assets transparent? 70 70 50 50 0 0
- - 70 70 70 70
100 100
- - 50 50 50 50 46
8
Does the organization (for example LCM-team) use the web portal as a communication platform which is based on priority and decision-making propositions, referring 50 50 50 50 0 0
60
60 50 50 0 0 50 50
60
60 50 50 50 50 42
to the implementation of activities?
9
Is the web portal providing information elucidating that Life Cycle Management results in cost effective results? 50 50 50 50 0 0
75
75 50 50 0 0 50 50
75
75 50 50 70 70 47
10
Have requirements been developed which cause the Systems Information Portal to be (regularly) verified or validated? 50 50 0 0 0 0
75
75 50 50 50 50 50 50
75
75 50 50 50 50 45
15. Management
Control 0
1
Has a clear choice been made for carrying out the work in-house or have it outsourced? 50 50 90 90 85 85
90
90 90 90 50 50 70 70
90
90 70 70 50 50 74
2
Is a system available for drawing up and evaluating budgets by life cycle? 70 70 0 0 80 80
90
90 70 70 70 70 20 20
90
90 50 50 50 50 59
3
Is a report concerning the usage of spare parts available? 50 50 0 0 70 70
50
50 70 70 70 70
100 100
50
50 70 70 50 50 58
4
Is a regular customer satisfaction research being performed, improvement actions defined and are these carried out? 50 50 70 70 60 60
33
33 90 90 50 50
100 100
33
33 90 90 50 50 63
5
Is benchmarking possible with maintenance costs with respect to operational costs both within a group of equal assets or unequal types? 70 70 0 0 35 35
50
50 0 0 0 80 80
50
50 50 50 50 50 39
6
Is a report concerning the performance or the infrastructure available? 50 50 0 0 0 0
30
30 90 90 0 0 80 80
30
30 50 50 50 50 38
7
Is a report concerning asset- and the installation performance available? 70 70 0 0 60 60
50
50 50 50 50 50
100 100
50
50 50 50 50 50 53
8
Is a report concerning asset- and the installation Life Cycle Costs available? 70 70 0 0 40 40
50
50 50 50 0 0 30 30
50
50 50 50 50 50 39
9
Is it perceptible that Life Cycle Management is cost effective? 50 50 0 0 0 0
66
66 70 70 70 70 30 30
66
66 50 50 50 50 45
10
Are the requirements for Management Control (regularly) evaluated, verified and validated? 50 50 0 0 0 0
40
40 70 70 70 70 30 30
40
40 50 50 50 50 40
16. System Cost
Effectiveness 0
1
Are the performances of assets (running hours, operational environment, jamming, etc.) and implementation of maintenance tasks structured by the users/operators and 70 70 0 0 50 50
60
60 70 70 50 50
100 100
60
60 50 50 50 50 56
is feedback given to the maintenance organization?
2
Are the requirements of products and services known? 70 70 0 0 50 50
75
75 90 90 70 70 0 0
75
75 50 50 50 50 53
3
Is a jamming report with analysis available? 90 90 0 0 25 25
75
75 90 90 50 50
100 100
75
75 50 70 120 50 50 68
4
Is a cost analysis by product type with respect to recent development analyses available? 70 70 0 0 25 25 50 50 90 90 0 0
100 100 50 50 50 50 50 50 49
5
Has a clear relation been established between costs and benefits (performances of the assets)? 50 50 0 0 40 40 40 40 70 70 0 0 0 0 40 40 50 50 50 50 34
6
Is management information (CPI's) is available? 50 50 0 0 30 30
50
50 70 70 70 70 50 50
50
50 50 50 50 50 47
7
Is an evaluation regarding usefulness, quality and costs of the maintenance and supply available? 70 70 70 70 25 25
33
33 90 90 70 70
100 100
33
33 70 70 50 50 61
8
Did bad experiences get a feedback and have actions been undertaken? 50 50 90 90 80 80
66
66 90 90 70 70
100 100
66
66 70 70 50 50 73
9
Is the impact of modifications in use intensity analyzed and if necessary processed in the appointments concerning cost effectiveness commitment of the assets? 50 50 0 0
100 100
33
33 0 0 70 70
100 100
33
33 50 50 50 50 49
10
Is improvement management (ongoing improvement of the system cost effectiveness) considered? 70 70 0 0 60 60
66
66 70 70 70 70
100 100
66
66 50 50 50 50 60
Appendix 9.