Navy supply system refocuses on real-world readiness

Over the past several years, the Navy has been using an ongoing process improvement effort to improve its supply chains, and leaders say they’ve managed to find almost $1 billion in cost savings along the way. Now, the service is trying to make the supply chain fixes more tangible to its warfighting communities.

Under a new 2.0 version of Naval Sustainment System-Supply, the Navy is moving to a more explicit focus on improving the readiness of its aviation, surface and submarine fleets — trying to ensure supply problems aren’t contributing to downtime, as they currently are.

The first waves of NSS-Supply were focused mainly on putting dollar valuations around the cost of readiness — so the Navy could figure out ways to deliver more within a limited budget. The change in emphasis is meant to make more of the value of process improvements clearer to the Navy’s operational communities.

“We’re not having to make that leap to explain to them, ‘Commercial industry does it this way, they’re more lean, they’re more efficient, and then translate that into what it means for their readiness North Star,” Melissa Olson, the deputy director of NSS-Supply at Naval Supply Systems Command said in an interview for Federal News Network’s On DoD. “We’re just going right to the root causes — the diagnostics of what’s holding up their [goals of] 75 mission capable ships or their 80% ready submarines. From a materials or supply chain perspective, we are the ‘get better’ side of that data analysis. We can just say, ‘This is your gap analysis, this is where our root causes are, and we’re leaning into those for supply.”

Symptoms vs. root causes in Navy supply chain

So far, the overall effort has tacked 30 distinct supply problems in seven “waves” of initiatives. Under the first wave of the 2.0 version — Wave 8 — the Navy is building on some of what it’s learned so far.

For example, in some of the earlier waves, NAVSUP was able to identify how often ships waiting for maintenance were delayed mainly on account of unfilled parts orders. But that iteration of NSS-S also pointed to those unfilled orders as merely symptoms of more systemic “upstream” problems, like failing to forecast or “allowance” the parts a ship is likely to need in its next maintenance period, said Cmdr. Kirk Engler, the director of NSS-S.

“As a Navy, we have not been very disciplined in those modeling efforts. For instance, until recently, the Aegis SPY radar system had not been remodeled in over 12 years,” he said. “When you rerun the model, you take into account updated failure rates, updated demand rates, updated repair rates, all of the things that are taken into account when you look at a systems operational availability. That’s mean time, between failure, mean time, between repair, mean logistics downtime, all those factors really go into how confident we can be that the system is online. So when we started saying there’s a problem with modeling, we can start to see in the future how that remodeling effort is going to improve downstream allowances onboard the ships. For an older model, we’ll have exactly the parts that they need on board, versus when maybe the system was brand new, and we didn’t know how often the parts would fail or how long it would take to get a new part on board.”

Raising sustainment issues to senior leaders

Officials said the radar system parts availability problems are just one instance in which what might, on its face, look like a pure supply chain problem, is actually much more multifaceted. So another big focus of NSS-Supply, from the beginning, has been to raise issues to the flag officer level across the Navy’s systems commands and in the Pentagon.

Another similar example: the effort helped reveal that the Navy’s Virginia Class submarine program could see big readiness gains if there were a bill of materials for each ship — rather than a BOM for the class as a whole — letting officials forecast supply needs for each vessel’s maintenance periods before they reach drydock.

“That has really allowed us to stop blaming other organizations and get at the problem,” Rear Adm. Jason Lloyd, the deputy commander for ship design, integration and engineering at Naval Sea Systems Command said at the Navy League’s Sea Air Space conference earlier this month. “It also lets us put that bill up before Congress to get the authorization to buy the material that we need to shore up the supply system. Without this teaming that lets us question each other — instead of pointing fingers of blame — I don’t think we would have gotten to where we are.”

Editor’s note: For much more on NSS-Supply 2.0, click the play button at the top of this article to listen to Jared Serbu’s detailed interview with Cmdr. Kirk Engler and Melissa Olson. You can also listen by subscribing to On DoD in your favorite podcast platform.

This episode also features highlights from a digital transformation panel Jared moderated at Sea Air Space with senior leaders from the Navy, Coast Guard and Marine Corps. For the full video of the session, click here. 

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