BUSINESS PROCESS MANAGEMENT GOES BALISTIC
The Royal Navy streamlines complex procurement process

By Howard Mathers, Team Leader, Submarine Integrated Project Team, Warship Support Agency, part of the Ministry of Defence, Mike Owens, Director of Submarines, Devonport Management Limited, Andy Cooper, SDE Project Manager, Devonport Management Limited, and John Stewart, Senior Consultant, Staffware Plc.

1. Introduction
The peace dividend in the 90s resulted in a reduction in the Royal Navy’s submarine fleet, with the complete phasing out of conventional submarines by 1994. Today, the Navy’s entire submarine fleet is nuclear powered, and the role these vessels play has been enlarged. Following the 1998 Strategic Defence Review, the nuclear-capable Trident submarines have a far more flexible role with tasks that include trials, surveys and exercises. The Royal Navy has four Trident submarines in the Vanguard class, with a further seven hunter/killer submarines in each of the Swiftsure and Trafalgar classes.

The first of the Trident submarines, HMS Vanguard, is currently undergoing its first refit, called a Long Overhaul Period (Refuelling) (LOP). Undertaken periodically and costing many hundreds of millions of pounds, the overhaul of a modern nuclear submarine is a very complex process involving a large number of geographically diverse parties, at a number of levels from the vessel’s staff, the dockyard, to various consultants and contractors, right up through to the Warships Support Agency, a part of the Ministry of Defence.

2. Overview
The refurbishment of a nuclear submarine is a major exercise involving refuelling the nuclear reactors, extensive safety checks and surveys, refurbishing systems, replacing equipment and implementing capability upgrades.

The Ministry of Defence (MoD) issues a specification for an overhaul one to two years in advance so that by the time the submarine enters dry-dock, the extent and detail of the works has been understood, as well as the complex procurement processes actioned – many replacement components are not stock items.

Apart from the MoD Submarine Support Integrated Project Team (SubIPT), which is part of the Warship Support Agency, there are a number of other organisations involved in the overhaul: Devonport Royal Dockyard, where the vessel is to be dry-docked for the overhaul (which is owned and operated by Devonport Management Limited), Rolls Royce (the design authority and main supplier of the nuclear plant on all Royal Navy nuclear submarines), and various consultants and contractors, as well as the crew of the vessel itself.

Due to the enormous complexity, when an overhaul specification is issued, it results in a myriad of enquiries. These include requests for surveys of various elements of the vessel for more information, or to determine what work is needed, or whether a particular item needs replacement, refurbishment or upgrading. There are thousands of such enquiries and each one needs to be resolved. It is not unusual for the resolution to one query to impact on numerous other elements within the vessel as many of the systems and components are inter-related and inter-dependent.

This advance planning phase of the overhaul is also important as many of the components used on a nuclear submarine are bespoke and as such have very long procurement lead times – it is not as though a new nuclear reactor safety system can be picked off the shelf and installed! Most parts are tailor made and need to go through stringent procurement and testing procedures.

Devonport Management Limited (DML), in partnership with WSA, decided that the ‘first-of-class’ overhaul of HMS Vanguard would be an ideal opportunity to review and upgrade the entire overhaul process.

3. Key motivations
A key theme in the WSA’s current policy is to reduce the overall cost of ownership of large capital assets. An area of concern was the total length of time and the cost to refurbish each nuclear submarine. An area identified as being particularly relevant was the enquiry system, both pre-overhaul and during the process. Enquiries were taking on average 15 days each to resolve, which was considered to be far too long.

The existing system used to control and monitor the overhaul was largely paper-based, although there was an element of electronic communication. The legacy system was green-screen based and was very clumsy and had to be augmented by paper records. There were some other computer systems used but they were self-contained and not web-based. The whole system needed to be streamlined and updated, as such the project team has augmented and improved the process and where possible reduced the total number of systems in use.

Other motivations running from the above were:

• A need for better interaction between all the parties, which are geographically spread.
• A need for better monitoring and management control of the entire system.
• A requirement for more timely, accurate, and comprehensive information to be available for all parties.
• A desire for continuity in the process.
• Pan-Enterprise visibility of processes and progress

4. Business innovation and management impact
Project leaders
The two principal organisations involved in the whole overhaul project were the Naval base, DML, and SubIPT, which is the team within the Warship Support Agency responsible for the project.

Howard Mathers is the SubIPT team leader, based at MoD Abbey Wood, Bristol.

Mike Owen, is director of submarines for DML, Plymouth. Devonport Royal Dockyard was a GoCo – Government-owned, contractor-operated organisation until being privatised in 1997. The main shareholders are now Kellogg Brown & Root, Balfour Beatty and the Weir Group.

Approach
Although a number of approaches were considered, it was decided that a radical one would be tried. It was felt that tinkering with some elements of the system would not produce the desired results, a fundamental change was needed. The existing system had developed over some time, growing as new needs and requirements emerged. Although critical paths were identified and monitored, the idea of workflow was not a recognised concept when this system evolved.

The overhaul of HMS Vanguard was scheduled to take place at Devonport, starting in 2002. It was decided that this would be the first project to introduce a new system, a sort of pilot to see just what could be achieved.

The process to be undertaken was far reaching: the whole project was to be reviewed from the point of issuing the notice of overhaul, through the pre-overhaul enquiry stage, through the overhaul itself to completion and re-commissioning. This would ultimately be implemented at every level, including the vessel itself, the dockyard and the other contractors. It would change the way the parties worked together, the way they communicated, the way the process was managed, and the way the parties were monitored, and produce performance data which could be evaluated.

Mike Owen and Howard Mathers are the key decision-makers for the overhaul of any Royal Navy submarine at Devonport. Other members of the team working on HMS Vanguard included the Logistics Support Company (LSC Group - a specialist logistics company and now a subsidiary of DML) and Rolls Royce (nuclear propulsion plant).

The first phase of the implementation of the new approach was to fully review all the stages and processes involved, prior to an actual overhaul project. The whole overhaul system from the notice, through the enquiries, to the overhaul specification and overhaul itself was analysed and scrutinised. The entire process was mapped so that the various workflows could be identified and quantified. This enabled the areas of the process to be identified which could be re-engineered to be more efficient, augmented or replaced by technology, or simply cut out as too bureaucratic.

LSC retained the services of Staffware, a UK-based specialist in business process management, to assist in this process. John Stewart, a former military man himself and a senior consultant, led the Staffware team.

The specification of the new system was a complicated process, involving the creation of a series of new workflow procedures. This included the re-engineering of certain elements of the business process, and allowed a proportion of the process to be automated.

Although seeking fundamental overall change, the management team adopted a cautious approach. Before each stage was authorised, the benefits in terms of performance and efficiency had to be quantified. Even then, before consolidating that stage and moving on to the next, it had to be working properly, clearly demonstrating the required change in terms of pre-defined key performance indicators (KPIs).

5. Technological innovation and process/procurement changes/improvements
There were a number of factors which usefully came together to allow the SubIPT to consider a change of approach: the introduction of the Restricted LAN Interconnect (RLI) providing an extensive Intranet system across the entire service using standard desktop tools, the need to replace the existing overhaul enquiry IT system and, most notably, the first-of-class overhaul of a Trident submarine.

The Long Overhaul Programme (Refuelling)
The whole process starts with the issue of a notice by the SubIPT that HMS Vanguard is to be overhauled. A Long overhaul period (Refuelling)(LOP) draft specification document is produced which outlines the work to be undertaken including upgrades, maintenance and repairs.

The overhaul specification identifies a significant number of surveys to be undertaken which may lead to further work. During the planning phases of the LOP specification the contractor will raise significant enquires to clarify what is required, to suggest new innovative ways of working or to identify conflicts with different aspects of the specification. The volume of these enquires can be significant and is important to try to clear these prior to the specification freeze as changes after this are dealt with by the change/amendment processes (DAR) which can add significant change management effort to all parties involved.

The final specification is issued to the contractor with an electronic and paper copies of the specification are sent to the vessel and key overhaul stakeholders. The contractor will produce a fully resourced LOP schedule and submit a tender for the work identified in the specification. In many cases this tender will have caveats/assumptions, which are to cover any outstanding enquires.

Specification Change Instruction (SCI): the problem
The existing system was largely paper-based, augmented by an antiquated RSCI (overhaul specification change instruction) system and a number of stand-alone IT systems. The enquiries were written on the prescribed form and then despatched through the hierarchy and a myriad of people who had to see, make comment, approve and even answer the enquiry. There was no way of monitoring the progress of the enquiry, knowing where it was, or easily appreciating implications of any decisions made on other aspects of the overhaul.

The other problem was that on many occasions the form did not have the necessary information and had to be returned to the initiator for completion, further delaying its resolution.

SCI’s: the solution
The enquiry system was identified as the cause of most of the delays in the process, and the obvious priority area for change. It was decided to digitise the whole system, making it workflow and web-based, through a secure intranet. Staffware business process orchestration software was used to ensure that the business process was achieved whilst ensuring full audibility and delivering significant business benefits.

This was a significantly different way of working so stakeholder involvement was critical. This was achieved through a series of regular end-user meetings to enable participation at every stage from concept, through design to implementation. This forum was also useful in coordinating training on the new system.

This element went very smoothly as each stakeholder took ownership of the new system and communicated the positive aspects of the new system (change agents) to their representative area.

Familiarity with the existing system was seen as a huge benefit so the new system was designed to replicate the old electronically, thus reducing the need for too much change management. The electronic forms were designed to be similar to those used previously, and largely followed the same routes.

Digitisation and application of workflow parameters resulted in a number of problem areas being resolved almost instantly. The accuracy of information improved significantly as all the data had to be entered completely otherwise an enquiry could not be logged on to the system. The speed of answers to enquiries improved, as distribution was instantaneous, and simultaneous to all those parties that needed to be contacted. It introduced tracking which enabled the management to see where bottlenecks were. It also enabled any party to track an enquiry that had specific implications or was urgent.

Surveys: the problem
Surveys are required to ensure that the submarine is safe to remain in service and to identify areas of the vessel that may require repair. The potential impact result of surveys work can have on the LOP schedule and the return of the submarine to active duty cannot be understated.

The LOP specification identifies what surveys are to be undertaken by the contractor or sub-contractors. The old system was paper based and required review by the contractor’s internal technical and commercial specialists before progressing. This system suffered significant delays in processing, excessive administrative controls (photocopying and tracking), and a lack of real time visibility of the whole process.

Delays meant that in some cases recommended decisions were not authorised until after a compartment or system was replaced resulting in rework and additional cost.

Surveys: the solution
It was decided to digitise the whole system, making it workflow and web-based, through the same secure Intranet as SCI’s. Stakeholder involvement and regular workshops at key stages of the process were again successfully employed.

Familiarity with the existing system was seen as a huge benefit so the new system was designed to replicate the old electronically, thus reducing the need for too much change management. The electronic forms were designed to be similar to those used previously, and largely followed the same routes. The system also allowed for uploading of electronic attachments enabling all instant access to digital photographs and other information required for the decision making process.

Workflow has also linked to the DML production, estimating and planning system, which triggers procurement, programming, working practices, testing, safety, costing and certification procedures.

This system has enabled HMS Vanguard to process 16616 survey items over a two year period whilst reducing administrative effort, Improving turnaround timescales, ensuring audibility.

Concessions: the Problem
When surveying equipment’s during LOP there are times when equipment’s are outside of design specification but fit for continued service. Traditionally this has required applying for a concession/CNC/production permit (PP) through an existing paper system. The paper application will be reviewed internally by the contractor’s technical and commercial specialists before being progressed.

Similar to the survey process the paper based system suffered significant delays in processing, excessive administrative controls (photocopying and tracking), lack of real time visibility of the whole process. Concessions/CNC’s/PP raised on paper also had to be typed back into the Platform Configuration Management system (SDD) without attachments. This meant that SDD users could see the application but not the supplementary attachments.

Several concessions/CNC’s/PP were lost each refit and the average time a concession was taking was 3 months leaving LOP’s at significant risk until the application was granted.

Concessions: the Solution
It was decided to digitise the whole system, making it workflow and web-based, through the same secure Intranet as SCI’s and Surveys. Stakeholder involvement and regular workshops at key stages of the process were again successfully employed.

Familiarity with the existing system was seen as a huge benefit so the new system was designed to replicate the old electronically, thus reducing the need for too much change management. The electronic forms were designed to be similar to those used previously, and largely followed the same routes. The system also allowed for uploading of electronic attachments enabling all instant access to digital photographs and other information required for the decision making process.

The system is also linked to SDD which enabled the concession/CNC/PP to be linked in SDD, removing the need for applications to be typed in by a data processor.

This system has enabled HMS Vanguard to process 547 concessions for the last year averaging since June 2003 29.9 days (319 applications raised) to raise, process, sentence and close. The system has allowed KPI’s to be produced straight from the system, reduced administrative effort and ensured visibility/audibility.

Additional functionality
The system also provides a discussion forum. Where lessons learnt or important informal messages can be posted in the forum, and linked to specific enquiries, surveys or concessions/CNC’s/PP. Others can then enter the discussion, which uses a simple ‘chatroom’ format, with such postings being automatically notified to the initiator.

6. Hurdles
There were a number of critical issues to overcome:

• There was resistance to any change. It was important to involve the entire stakeholder community in this change from the outset.
• Levels of computer literacy had to be changed, although the introduction of the NavyNet required that anyway.
• Integration of various systems and databases to make the new process work. These were not only SubIPT and DML but also subcontractors such as Rolls Royce. This was overcome using business process management (BPM) and business process orchestration (BPO) software.
• Trust. Much of the business process is invisible to the user. Early operation of the system would also involve users checking via the telephone that information was flowing to the correct place. This quickly stopped as the users became familiar with the operation of the system.
• Recognition of the need to ‘Keep it Simple’, ensuring applications were written to be easy and intuitive to use, even for those with extremely limited IT background.
• Recognition of the need for through life continuous improvement support for these new business critical processes. The old style of IT project management, whereby an application is delivered and the project ends is unacceptable with these integrated systems. Funding must enable key improvement activities, especially training, to be supported throughout the life of the service.

7. System configuration
The introduction of NavyNet providing an extensive Intranet system across the service using standard desktop tools, to some degree, facilitated the introduction of the new workflow system. Defining exactly what additional hardware has been introduced is difficult due to the integration with existing systems and databases, and also with different organisations.

In terms of operation, the whole workflow process is controlled by business process management and orchestration software supplied by Staffware, delivered thin-client through Microsoft IIS on ASP. Staffware’s Process Suite employs an Independent Process Layer, which enables development of complex business processes. The workflow tools supplied enable process modelling, application integration, process monitoring and rapid application development tools. The software manages the lifecycle of the process from definition, through deployment, execution, measurement, change and re-deployment.

Reporting services are provided by Crystal Reports. An on-line ‘knowledge repository’ has been provided alongside the workflow, through ASP fast-forum, to assist in the capture of informal discussions.

8. Cost savings and productivity improvements
The overall stated objective was to reduce the ownership cost of large capital assets such as HMS Vanguard, a Trident submarine. The key area of concern was overhaul times, and specifically the length of time it took to process enquiries, Surveys & Concessions and other transactions through the system.

The new process has succeeded in reducing the average transaction time of SCI’s from 15 days to just seven, a 53 per cent reduction & Concessions from 3 months to almost 1 month (29.9) 66.6% reduction (June 2003 – January 2004 -Vanguard). It is recognised that the new system has helped to deliver and manage 16616 surveys items which would have been extremely difficult using the paper system.

The overall changes have realised the ambition to reduce the pre-overhaul enquiry stage. It has also helped to reduce the Risk to LOP programmes by increasing visibility of bottlenecks, removed unnecessary administrative controls and helped the Vanguard Partnership to work more closely.

It is anticipated that it will be possible to reduce that period further, as the new workflow system is further refined.

In terms of actual cost savings, conservative estimates currently predict savings of some £3 million over five years, with the software investment being recovered within two.

Other benefits have been:

• A significant increase in the accuracy of information within the system.
• The ability to include more remote parties involved such as the vessel’s team and key contractors, such as Rolls Royce. This can help in supporting engineering and logistics decision making.
• The level of tracking information has improved dramatically. Every enquiry and transaction has an audit trail and the project managers can trace the location of every element of every enquiry, and who or what is delaying decisions.
• Management information is available for the first time. Turnaround times can be evaluated, identifying bottlenecks in the system.
• Problem solving has been improved. With the spontaneity of the system, complex problems can be reviewed and resolved in a relatively short period of time. This is further enhanced by the existence of a discussion forum on the system.
• The new workflow system has built in flexibility. It is scaleable up or down to cope with changes in workload and numbers of simultaneous overhaul’s at different stages.
• A knowledge repository is now available to all to address future improvements, enabling all parties to mine the information to understand where improvements in the associated processes can be made. This will enable preventative quality improvements to be made, reducing the cost of non-quality and directly improving the bottom line.

9. Rollout
The new system is already being used by HMS Talent, HMS Torbay RAMP, HMS Victorious LOP(R), Trident Class Spares & WSMI areas. This has significantly expanded the current user base to 731.

Both DML and SubIPT are still learning from the new system, and these lessons are being implemented. It is anticipated that the efficiency and cost savings experienced with HMS Vanguard will be exceeded with follow on platforms benefiting from the already sunk cost.

Published in Supply Chain Practice Vol 6 No,1, March 2004 - produced by the Supply Chain Knowledge Centre, Cranfield Centre for Logistics & Supply Chain Management, which is part of Cranfield University School of Management. www.sckc.info

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