The Navy has embraced network-centric warfare as a means to greatly improve its combat effectiveness by enabling more rapid and precise decisions based on the ready availability of current and accurate information.

Although still in its early stages of implementation, network-centric's potential was demonstrated by naval aviation's powerful performance in Afghanistan.

Now, the Naval Air Systems Command (NAVAIR) is embarked on a major drive to use network-centric principles to make similar dramatic improvements in the Navy's business practices in order to make more resources available to the warfighter. The main tool in that drive is a business-management concept called Enterprise Resource Planning, or ERP.

Enterprise resource planning will provide a tool that "is going to give us the logistics equivalent of network-centric warfare. ... We will be more agile, and we will be much more affordable," said NAVAIR commander Vice Adm. Joseph W. Dyer Jr.

Removing the Redundancies

Among the problems ERP is intended to fix is the vast redundancy in information systems, processes, and databases that have proliferated throughout NAVAIR, and the resulting inability to get required information quickly and with a reasonable assurance of its accuracy, officials said.

As a result, when the fleet has an urgent need to replace key components, "We buy more, rather than fix," Dyer said. The reason, he said, is that the systems commands cannot quickly bring together the parts, the consumables, and the labor needed to make repairs.

Citing another example, NAVAIR's Ronald J. Rosenthal recalls that, when Vice Adm. John A. Lockhard, the former NAVAIR commander, would ask him to determine the total "ownership cost" of a weapon system, he had to admit that it would take more than a year to collect the data. The situation was much the same with personnel or financial questions, "It would take forever to get an answer," said Rosenthal, director of the NAVAIR Enterprise Solutions program office.

Rosenthal also related how, as a department head, he would ask the heads of each of his program sites how many employees they had at various government service levels. The total of those numbers usually would not match what was in NAVAIR's central database, though, because the information was months out of date.

The result was the same when Rosenthal tried to collect the financial data needed to determine how the department was doing on its expenses. Here, the answers also "would take forever, and none of the numbers were correct," he said.

Failures and Complications

Another critical problem complicates what NAVAIR calls configuration management, which means knowing what components or parts are actually installed on any individual aircraft. Currently, it can take weeks to find out if, and where, a particular production series of parts are installed and/or how long they have been there. Which means, of course, that if a "red stripe" alert is issued about a part that can fail after a certain time, the command must order an inspection of all units of that type of aircraft, and may have to ground the entire fleet until that is completed, Rosenthal said.

NAVAIR also is still grappling with the effects of a substantial downsizing in the 1990s, when the command went from 16 sites to eight, from six aviation repair depots to three, and from a work force of 50,000 employees to fewer than 30,000 today. Because the number of programs and the overall workload did not get much smaller, NAVAIR's personnel have had to "pedal faster," Rosenthal said.

The command also is facing the fact that an estimated 41 percent of the Defense Department's acquisition and technical employees will be eligible for retirement in the next five years, Dyer said. That could cause the NAVAIR work force to shrink by another 15 to 20 percent, he said.

"That is why Pete Nanos [Vice Adm. George P. Nanos Jr.] at NAVSEA and I want to talk about things like ERP and other new capabilities to allow us to manage more effectively and to replace that talent," Dyer said.

Management of the work force also is complicated by the multiplicity of business processes that must be learned, Rosenthal said. "When I moved someone in the business financial area from one program office to another ... [where] the processes and the tools that they used were entirely different, there was a learning curve that every person had to go through," he said.

RMA and RBA Initiatives

The search for solutions to these growing management inefficiencies began in the mid-1990s, Rosenthal said. At the same time that the services were embracing the "revolution in military affairs," or RMA--which in the Navy is perhaps represented best by network-centric warfare--the Navy's leadership was launching a parallel "revolution in business affairs" (RBA) to improve and modernize the service's management capabilities, he noted. "RMA was worrying about time-critical strike, sensor-to-shooter. ... We want to do the same thing in our business affairs."

The Navy's RBA effort started "by taking a hard look" at what private industry had been doing to harness the power provided by improvements in information technology, Rosenthal said. That led to creation, in December 1998, of an ERP program office--which in January 2000 awarded a contract to KPMG Consulting, teamed with IBM and the Science Applications International Corporation, to serve as an integrator.

According to a NAVAIR briefing document, ERP is defined as the "implementation, automation, and integration of standard business processes ... using commercially available software solutions." Implementation of the ERP concept, the briefing document says, requires "the employment of commercial best practices." The end result, the brief continues, is the use of "standard business processes and tools" across the enterprise, regardless of the program or site, all supported by a "single common database."

The NAVAIR goal, the document also says, is "to improve our processes and deliver the best product to the warfighter; to improve our decision-making abilities, and [to] stop looking in the rear-view mirror."

The Ultimate Success: Warfighter Effectiveness

In a statement that has evolved into a wall poster at the ERP program office, Lockhard noted that when private firms reengineer their business processes the results show on the bottom line. "For us, though," he said, "the ultimate success will be improving warfighter effectiveness in an era of high demand and limited resources." The tool required to achieve that goal, Lockhard said, "is called Enterprise Resource Planning, and I firmly believe it is key to our Navy's future."

Dyer said that there are a number of "wonderful parallels" between network-centric warfare and the new management tools being used to improve acquisition process and procedures. He quoted an old Army friend as saying that network-centric basically translates into nothing more than the answer to a soldier's two oldest questions: Where are the bad guys, and where am I? "If you know the answers to those two questions, and you're quick, you can take tactical advantage," Dyer said. In the systems commands, he continued, "We see a corollary: Where is our stuff? And what is it doing? Also, what is our return on asset investment, and how can we speed cycle time?"

NAVAIR officials said the command selected Enterprise Resource Planning as the tool needed for its process reengineering because it has been used so successfully by other large organizations.

The briefing guide describes ERP as "commercially available business software solutions that enable organizations to automate and integrate business processes, share common data and processes across the entire organization, and produce and access information in a near real-time environment. ... It will provide consistent information for timely decision-making and performance measurements.

"Thus, NAVAIR will reduce cycle times, create a more efficient and effective team, and provide employees with consistent, accurate, and timely information."

The computer software at the heart of the process, Rosenthal said, is produced by SAP, a German firm that is the second largest software provider in the world, behind Microsoft.

Four Pilot Projects

NAVAIR is testing the ERP approach in a pilot project. Three other Navy offices are engaged in similar efforts, but related to different areas of management. NAVAIR's pilot project--which focuses on the acquisition of weapons systems, program management, financial management, and asset tracking-configuration management--is using the E-2C Hawkeye program as a test bed.

NAVAIR also is teaming with the Naval Supply Systems Command on a pilot project dealing with aviation supply-chain and maintenance management; the E-2C and the LM2500 engine are the test beds for that project.

In yet another project, the Space and Naval Warfare Systems Command (SPAWAR) is concentrating on the financial-management process used at SPAWAR Systems Center San Diego to manage the Navy Working Capital Fund.

Finally, the Naval Sea Systems Command and the staff of the U.S. Atlantic Fleet are teaming on a pilot program dealing with regional ship maintenance and work force management--starting at Ships Intermediate Maintenance Activity (SIMA) Norfolk, but with the possibility of later phasing in the Norfolk Naval Shipyard.

Rosenthal noted that the program managers of each of the four pilot projects, working independently, adopted similar approaches, and all selected the SAP software. To keep the results "compatible" and ensure they are applicable Navywide, he said, the four pilot efforts are being coordinated by an executive steering group, chaired by Dyer, and an integrated control board.

The NAVAIR briefing paper referred to earlier says that, based on the examples of other organizations that have used ERP, impressive improvements are expected from the pilot projects. Among those "other organizations" are the Canadian Armed Forces, which reported a 25 to 50 percent increase in production output, and a 50 percent reduction in inventory; Newport News Shipbuilding, which cut the number of its parts by 58 percent; and the Dallas branch of Lockheed Martin, which claimed a 20 to 30 percent cut in order-fulfillment time.

Rosenthal predicted that, with a standardized information and management system, if a NAVAIR employee is transferred to a new program he or she "will come in with all the training, all the experience available, ready to go to work." The end result, he added, will be "a major improvement in productivity."

Tail-Number Database

Rosenthal and Dyer also predicted a major leap forward in configuration management. The new system should provide a baseline configuration for every aircraft, by tail number. Every time there is any maintenance on that aircraft at any level, the information will be entered into the database and will automatically update the entire system, Rosenthal said.

If a contractor later reports that a specific lot of one or another of the parts the company provides has a flaw that results in a higher failure rate after a certain number of operating hours, the tracking system will be able to show "exactly where the parts are, on what aircraft, and what the hours are." Instead of grounding all of that type of aircraft, or inspecting all of them, he said, "You can just zero in on those that absolutely have to be fixed."

The new system also offers major benefits for the individual worker, Rosenthal said. "You are going to be able to do everything on the web that you normally do by form. You want to take leave, want to check on anything about your record, change your health benefits? It will be right there," he said.

Rosenthal said that NAVAIR expects to activate the first major phase of the ERP system in October: (a) at the command's Patuxent River (Md.) headquarters; (b) at its overseas repair activities in Atsugi, Japan, and Naples, Italy; and (c) at Naval Air Training Systems in Orlando, Fla. These activations would affect a total of about 3,000 people. All NAVAIR employees would benefit from the self-service personnel function, he said.

Next January, ERP also will be in place at the command's major naval air warfare centers--at Point Mugu and China Lake, Calif., in Lakehurst, N.J., and at Patuxent River. These four activations would affect 12,000 to 15,000 more personnel. NAVAIR expects to complete the process by including its three air rework depots early in FY 2004, he said.

Applying ERP throughout NAVAIR is expected to cost a total of $440 million through FY 2007, Rosenthal said. He predicted, though, that there would be a major return on investment because of the "tremendous savings" expected to result.

Although ERP starts with better computer software, the main improvements, Rosenthal said, will come from "changing people's thought patterns." "A lot of people ask: 'Is this an IT project?' We tell them it's a major business re-engineering process," he said. "We spent so much time chasing after data before that people are going to realize that they now have a lot more time to do analysis and planning ... than they have ever had before," Rosenthal said. *

The Next Priorities

To NAVAIR commander Vice Adm. Joseph W. Dyer Jr., the best way to help the command's work force do a better job of supporting the fleet would be to conduct a good "spring cleaning" that would get rid of the old systems that waste the resources needed to buy new aircraft and systems for the operating forces. If he can free enough resources, he said, the next priorities would be to: (l) buy aircraft and weapons at more efficient rates; and (2) increase the use of multiyear contracting to further improve procurement efficiency. He is sure that the systems NAVAIR now sends to the fleet are fully compatible within a particular battle group, Dyer said, but he also wants to improve the command's ability to test and demonstrate interoperability at both the Navywide and joint levels.

In Operation Enduring Freedom, the former carrier pilot noted, the Navy demonstrated "three technologically significant improvements"--greater weapons accuracy, more bandwidth in the delivery of information, and "almost unlimited memory" in intelligence systems. Those improvements, he said, allowed the aircraft carriers launching strikes during Phase One of the war against terrorism to become "a decisive force" in land-attack operations.

The "bad news," Dyer said, is that naval aviation is increasingly burdened with a plethora of aging aircraft and weapons systems that require an enormous amount of resources to maintain and manage. "One of the things we are working real hard on this year," he said, "is ... how to free resources ... so we can [use them] to recapitalize [the Navy's aircraft and weapons inventories]. We have to recapitalize if we are going to have a strong and secure and affordable future," he said.

Because the Navy does not buy things "in economical quantities," Dyer said, he also wants the "spring cleaning" to "free the resources [needed] to get us up to buying at efficient rates." Multiyear contracting would be another way to achieve more efficient procurement, he said.

Dyer also said he is determined to improve NAVAIR's business processes through implementation of the Enterprise Resource Planning system so that the command not only becomes more efficient but also will be able to function effectively after the expected retirement, in the next several years, of several thousand more highly skilled personnel.