Naval aviation and undersea ‘communities’ pave the way in Navy cost-cutting

By RICHARD R. BURGESS, Managing Editor

The engine repair shop at the Naval Air Station Lemoore, Calif., once required 78 days to overhaul an F404 jet engine, the power plant of the F/A-18 Hornet strike fighter based at the station. Beginning in 2005, however, turnaround time was cut to 27 days. The engine shop at the Naval Air Station Ocean in Virginia Beach, Va., slashed its overhaul time from 83 days to 12.

Navy officials attribute their successes to detailed process improvements such as reducing a mechanic’s total walking distance within a facility and prepositioning kits of replacement parts. The improvements at Lemoore and Virginia Beach enabled the Navy to shut down two of its seven engine repair facilities in 2005, and the service plans to close two more in 2006.

That will lead to reductions in the number of Hornet engine repair personnel from 480 to 167, said Vice Adm. Walter B. Massenburg, commander of the Naval Air Systems Command. Despite the reductions, the service will have “the same or greater productivity, with an additional 20-percent surge [capability] to handle the engines,” he said. Overall, the changes will generate savings of $90 million over six years.

Massenburg is in the vanguard of a revolution sweeping through parts of the Navy hierarchy. Service officials at several naval “communities” are adopting corporate models that they say will engender the development of disciplined cost-control processes, improve communications across each community, and help officials identify redundancies and drive costs out of support and operational processes ranging from engine overhauls to ship construction and ship manning.

Called enterprise efforts, the corporate models employ a board of directors comprising all the stakeholders in a particular community, such as naval aviation or surface warfare, committed to improving efficiency across the board. Naval aviation laid the foundation for its enterprise effort beginning in 1999 with an integrated improvement program that achieved some initial successes such as reallocating costs and bolstering aviation training.

In 2003, that effort was broadened and recast as the Naval Aviation Enterprise (NAE) aimed at improvements across the fleet, such as cutting costs and boosting operational cycle times.

The undersea warfare community also runs one of the more mature enterprise efforts, which is aimed at continuous improvements to the operational availability of its forces. In 2005, the surface warfare and command, control and communications communities launched their enterprise efforts. [See Seapower Forum, Page 40.]

In March, Delores M. Etter, assistant Navy secretary for research, development and acquisition, took some initial steps to establish an acquisition enterprise. Finally, Adm. Mike Mullen, chief of naval operations, is assessing a proposal called Single Provider, under which all Navy departments would adopt the business model created by naval aviation.

The NAE board of directors is run by Vice Adm. James M. Zortman, commander, Naval Air Forces. Other members include Massenburg, who functions as chief operating officer, and the commanders of the Naval Air Force of the Atlantic Fleet, the Naval Air Training Command, the Naval Air Force Reserve and other commands and agencies that affect naval aviation.

An advantage of some boards is that they bring together huge organizations that, in the past, created tension and conflict as they tapped naval support systems for resources. In this case, the Naval Air Systems Command and the fleet air forces are represented on the NAE board.

Massenburg said, “The air boss (Zortman) becomes the person who makes the decisions in the enterprise in order to get the most effective, efficient use of resources. … That’s where the metric comes in.”

Massenburg said the managerial processes introduced through various initiatives are yielding the dividends to support the NAE’s prime metric, aircraft ready for tasking at reduced cost.

“What a metric does for a single process owner is that it focuses people out of their stovepipes [toward] the greater good,” he said.

The Navy’s Undersea Enterprise (USE) has been functioning for “about 10 years,” said Vice Adm. Charles L. Munns, commander, Submarine Forces, who is chairman of the USE board of directors. “We have not called it an enterprise until recently, and we have a lot of effort to continue to mature our procedures to manage it as a full-fledged enterprise.”

The USE board of directors includes 15 members, comprising a who’s who of Navy submarine officers and other stakeholders supporting undersea forces. Members include the commanders of the Naval Sea Systems Command, the Naval Supply Systems Command, the Pacific Fleet’s Submarine Force, the program executive officer for submarines, the director of Strategic Systems Programs, the director of submarine warfare and other staff officers.

Operational availability — “around the world, around the clock” — is the prime measure of performance for the USE: “getting submarines deployed to the forward parts of the world where they do their business,” Munns said.

One of the most formidable challenges to the USE is reducing the cost of building a Virginia-class submarine to at least $2 billion, compared to the present $2.4 billion. That reduction is necessary if the Navy is to eventually increase production of the class to two per year, a step necessary to keep submarine force levels adequate to meet the requirements of the nation’s nine combatant commanders. Munns formed a cross-functional team to study how to drive out productions costs.

Many of the USE initiatives involve operational availability of ships, aircraft and weapons. But some USE objectives focus on personnel and intangibles such as leadership and culture. One is improved commanding officer decision-making. Another involves assimilating new crew members into the submarine culture, inculcating characteristics such as “tenacity, thinking from a logical base, relying on the facts, and imagination and innovation,” Munns said.

One USE cross-functional team worked on fine-tuning officer manning on submarines, enabling the force to reduce new officer intake by 9 percent in 2004 and 13 percent in 2005, for a total cost savings Munns estimates at $103.6 million.

Vice Adm. James D. McArthur, commander, Naval Network Warfare Command, has formed a board of directors from its electronics and space stakeholders for its enterprise, which he called the “C4 Triad.”

One of his board members, Rear Adm. Victor See, program executive officer for naval space systems, told Seapower that McArthur hopes to manage FORCEnet, a future seamless network of ships, sensors, troops and weapons, “as a single enterprise.”

The surface warfare community is building on its 3-year-old ShipMain project known for its cost-cutting and process changes related to the maintenance of ships. Vice Adm. Terrance T. Etnyre, commander, Naval Surface Forces, said his metric is “warships ready for any tasking.”

Etter established the Acquisition Enterprise Model Team in March, with Massenburg as its leader, said Capt. Tom VanLeunen, her spokesman.

“The success of the Naval Aviation Enterprise has led people to believe that it can have a positive effect on areas outside naval aviation,” he said.

Assistant Editor David W. Munns contributed to this article.