military costs and challenge of total force management 13 october 2004 jo a. decker
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Military Costs and Challenge of Total Force Management 13 October 2004 Jo A. Decker DCNO for Manpower & Personnel (N10) Chief of Naval Personnel. American Society of Military Comptrollers – Washington Luncheon. Agenda. Rising Military Personnel Costs Historical Perspective & Trends - PowerPoint PPT PresentationTRANSCRIPT
Military Costs and
Challenge of Total Force Management
13 October 2004
Jo A. DeckerDCNO for Manpower & Personnel
(N10)Chief of Naval Personnel
American Society of Military Comptrollers –
Washington Luncheon
2
Agenda
• Rising Military Personnel Costs– Historical Perspective & Trends
• Total Force Management– Human Capital Strategy
– Synchronization Challenge
• MPN POM/Budget– Resourcing Process Deficiencies
– Way Ahead
3
Historical Perspective
• Before FY01– Deployments were well defined – 6 months every 18 months
• Sea/Shore tours were 4 years at sea/ 3 years at shore• Enlisted ranks were flat at Top 6 of 69%• Retention was low and attrition high
• Since FY01 - USS Cole incident, 9/11 attack, Afghan War, Operation Iraqi Freedom– Deployments as long as 10 months. Under Fleet Response Plan
(FRP), deployments will vary in the future. • Sea/Shore tours are being lengthen – 5 years at sea/ 2 years at shore for junior
enlisted• The need to increase retention and lower attrition, increased the need to
increase Top 6, targeted pay raises, & incentive pays
4
320,000
330,000
340,000
350,000
360,000
370,000
380,000
End FY03 End FY04 End FY05 End FY06 End FY07 End FY08 End FY09 End FY10 End FY11
Navy Active End Strength Profile
Glide Slope370K Active members in PRESBUD 04
Glide Slope357K Active members in PRESBUD 05
Current Glide Slope 348K Active members
Military Manpower Requirements Decreasing …
Reduction targeted against Overhead and Shore Installations
5
Average Costs Increasing . . .
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000F
Y90
FY
92
FY
94
FY
96
FY
98
FY
00
FY
02
FY
04
FY
06
Per
Cap
ita
Cos
t of
Man
pow
er
DHP Health Care
Accrual begins
AVF “Marketplace “ Fact of Life per capita Costs
Increasing
Officer
Enlisted
TY$ FY00 FY01 FY02
Officer 97352 99152 103119Officer w / DHP
Enlisted 43426 44046 46899Enlisted w / DHP
TY$ FY03 FY04 FY05 FY06
Officer 105,493 109,430 114,775 116,459Officer w / DHP 109,729 114,002 120,139 122,158
Enlisted 48,888 50,064 51,262 53,983Enlisted w / DHP 53,124 54,636 56,626 59,682
TY$
6
Result . . . MILPERS share of Navy TOA largely unchanged
0
20
40
60
80
100
120
140
$ B
illio
ns
MILPERS TOA Total Navy TOA
22.9
%
22.7
%
21.9
%
21.4
%
21.7
%
22.4
%
23.3
%
23.4
%
22.6
%
23.1
%
The Opportunity Cost . . . Navy Unable to invest in
Recapitalization Requirements
Navy TOA
MPN % of Navy TOA
7
373,800 Active
190,000 Civilian
180,000 Contractors
85,900 Reserve
Navy Manpower DeterminationApproximately 830,000 Salaries
568,000 Shore (68%)(198,000 Military + 190,000 Civilian + 180,000 Contractor)
48,000 Individuals Account (6%) (Students, transients)
214,000 Battle Forces (26%)(Manpower Documents)
• Focusing Military on War Fighting
• Concentrating on Shore Support Infrastructure
• “Sea Enterprise” Efficiencies, Strategic Sourcing
8
Total ForcePast & Future
0
200
400
600
800
1000
1200
1400
FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Pers
onne
l Str
eng
th (K
)
32.5% Decrease(- 87K)
Contractor
DoN Civilian
Active and Reserve Military
39.5% Decrease(- 127K)
42.8% Decrease(- 317K)
39.9% Decrease(- 531K)
Navy Post-Cold War Drawdown
9
Strategic Vision
• Total Force Human Capital Strategy will deliver the right number of Navy team members.
• Active duty uniformed strength represents just one component of the larger Navy human capital resource universe.
• The Navy will leverage the human capital assets embedded in our active military, reservists, civilians, and contractors.
• Must be accomplished in a fiscally responsible manner and within a Total Force context.
10
Our Human Capital Strategy• Moving toward a Sea-Centric, Forward-Deployed Force
– Recruiting and Retention at All-Time Highs
– Quality of Life and Service Critical
– Revolution in Training for Highly Tuned Skill Sets
• Significant cost-savings are in hand…more to come Tools and processes for success
Free up military manpower
• Sea Warrior Initiative The Right Sailor with the Right Skills at the Right Time for the Right Job
Putting the Sailor First in the way we design, engineer, and operate our ships and aircraft
Re-shaping the Force…Reducing Costs…Winning the Battle for People
11
Synchronization Challenge
• Policy changes are not instantaneous – time is required to properly reduce strength and synchronize targeted billets to targeted Strength
– Funding cannot be removed until Work is eliminated, Strength reduced
– Personnel reductions must be managed by community and Claimants
• Bottom Line: Billet reductions must be synchronized with executable Strength and Funding profiles to achieve savings
12
MPN $ Challenge
Current Business Processes are not Precise• Programming
– Military manpower priced based upon averages of averages– Limited data to support decision making
• Budgeting– MPN budget built on 12 to 24 month old data– Current methodology presumes Behavior and External Factors
remain the same from year to year.
• Execution– Each year on average requires significant reprogramming
Today’s legacy systems and methods are based on processes that have existed for 30 years
13
• Transformation critical to:
– Capture and use updated Fleet requirements as the basis for future Strength and Budget projections
– Shift to more accurate HR and Pay data sources
– Obtain more granular data with increased detail
– Provide visibility into programming & budgeting assumptions
MPN $ Challenge
Way Ahead
The Future
Step 1 Step 2 Step 3
FY 2004CFO Compliant
Execution Reports
Enterprise Data Warehouse
• Live Personnel Data
• DFAS detailed pay reports
Replace ManpowerProgramming
& Budget Process
FMMP Focus
• Shift to accurate data sources
• Granular data for decision making
Replace DFAS LegacyPay and Reporting
Forward Looking Focus
• Use Navy NSIPS as source data for pilot to test & evaluate new financial accounting functionality
• Build-Test COTS Financial Reporting System – CFO Compliant, Automated Data Entry
• Phased approach - manageable• Embraces FMMP/BMMP• Joint • Pilot enables choices/options• Builds functionality for the Future
15
Additional Back-ups
16
The best Sailor to the key assignment at the right time
SeaTrial
SeaEnterprise
SeaWarrior
Manpower
ImprovingNavy’s
Workforce
PersonnelOptimal
Distribution
TrainingRevolution in
Training
Sea Shield
Sea Basing
Sea Strike
Sea Warrior Delivers Readiness with a market based approach in a competitive environment
Sea Warrior – Key Manpower Enabler