BAE Systems: Supply Chain Management

Together with Accenture, BAE Systems is helping the United Kingdom Ministry of Defense (MoD) introduce availability contracting to the Royal Air Force's fleet of Tornado aircraft. Under the ATTAC (Availability Transformation: Tornado Aircraft Contract) program, BAE Systems has contracted with the MoD to improve the availability of the Tornado fleet for frontline operations, while considerably reducing the cost of fleet maintenance. By bringing to bear Accenture's experience in IT integration, performance management and supply chain management along with our Program Profitability and Capabilities Based Lifecycle Management assets, BAE Systems is in a position to help realize key aspects of the UK Defense Industrial Strategy and to secure work on future availability contracts for other complex MoD programs.

BAE Systems is a global defense and aerospace company, delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. BAE Systems, with 88,000 employees worldwide, had 2006 sales that exceeded $25 billion.

Contracting for Availability is also known as Performance Based Logistics (PBL) and although BAE Systems continues to support this as the preferred approach to product support implementation in the US Department of Defense (DoD), it represents a fundamental shift for the UK defence industry. BAE Systems has piloted availability agreements with the UK MoD (e.g. Tornado Line Replacement Units) since the early 1990's, but like other prime contractors BAE Systems has traditionally worked with the UK MoD under contracts for discrete maintenance and repair services and the provision of spares and parts. In these arrangements, the ministry's Defence Logistics Organisation was responsible for integrating the various service contracts, and ultimately for meeting the aircraft availability requirements of the end customer, the Royal Air Force.Performance Based Logistics, on the other hand, is an innovative operating model for the UK MoD in which the prime contractor is charged with meeting key output measures, such as aircraft available flying hours. The contractor acts as a Prime Systems Integrator (PSI) for the key operations needed to deliver the desired outcomes, such as supply chain management, fleet maintenance activity, airworthiness, training and technical support. In general, the contractor then becomes responsible for streamlining processes and reducing overall costs. Under ATTAC, BAE Systems takes responsibility for "depth" support at RAF Marham (the RAF will continue to carry out day-to-day flightline maintenance) and will combine this with a structured and cost-effective approach to upgrade work under the Capability Development and Sustainment Service (CDSS) to maintain the aircraft's warfighting effectiveness throughout its service life.

BAE Systems L&IS began working with Accenture early in 2006 to provide a pivotal role in the development and deployment of the ATTAC IS Solution as required to support its new IS business capabilities. Together, joint teams began by focusing on three vital areas:

• Designing and implementing complex integration capabilities to manage the technical interfaces to connect the company, Ministry of Defence and third-party systems.
• Providing an enterprise performance management capability that enables BAE Systems to monitor business performance against contractual and performance indicators.
• Managing the gathering and validation of requirements and the introduction of service, for the IS capability releases and delivering those capabilities on time and within budget.

Accenture is integrating proven IS delivery methodologies with BAE Systems' existing quality and governance processes to create a new quality gate process based on phased containment principles.

The ATTAC IS Solution realised the first release of its Enterprise Performance Management solution in 2006 in advance of the award of the main ATTAC contract, anticipating the customer benefits from having this capability in place at contract award. There have been subsequently two further releases in 2007 and 2008. This system enables service managers to closely monitor a number key performance indicators to assess business performance against contractual and performance requirements. This includes a "business dashboard" that will bring together a wealth of data streams to provide timely, accurate and meaningful service information drilling down to access a hierarchy of key performance indicators in more detail. This ability enables timely and effective corrective and preventative action and helps BAE Systems quickly identify value enhancing opportunities in its operations.