BUSINESS PROCESS MANAGEMENT GOES BALLISTIC
The Royal Navy streamlines complex procurement process
By John Stewart, senior consultant, TIBCO BPM Group, and published in MoD Defence Contracts Bulletin ( www.contracts.mod.uk ) 11 August 2004

Introduction
The peace dividend in the 1990s resulted in the phasing out of the conventional submarine fleet. Today, the Royal Navy's entire submarine fleet is nuclear powered, and following the 1998 Strategic Defence Review, the nuclear-capable Trident submarines have a far more flexible role. 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 complex process involving geographically diverse parties, at a number of levels, from the vessel's staff, right up through to the Warship Support Agency (WSA).

Overview
The UK Ministry of Defence (MoD) issues a specification for an overhaul one to two years in advance so that the extent of the works has been understood and the procurement processes has been actioned.

A number of organisations are involved: the MoD Submarine Support Integrated Project Team (SubIPT), 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.

An advance planning phase of the overhaul is crucial as many of the components used on a nuclear submarine are bespoke and require stringent procurement and testing procedures.

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

Key motivations
The WSA's current policy includes the reduction of the overall cost of ownership of large capital assets. An area of concern was the length of time and cost to refurbish each nuclear submarine, specifically the enquiry system, as enquiries were taking on average 15 days each to resolve.

The existing system used to control and monitor the overhaul was largely paper-based, with an element of electronic communication. The legacy system had to be augmented by paper records and other self-contained computer systems were used. The whole system needed to be streamlined and updated.

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.

Business innovation and management impact

Project leaders
The two principal organisations involved in the overhaul project were the naval base, that is DML, and SubIPT, which is the team within the WSA responsible for the project.

Approach
It was felt that a fundamental change was needed, including the recognition and creation of a series of new workflow procedures.

The overhaul of HMS Vanguard was scheduled to take place at Devonport, starting in 2002. This was to be a pilot scheme.

The whole project was to be reviewed. This would be implemented at every level, including the vessel, the dockyard and the other contractors. It would change the way the parties worked together and communicated, the way the process was managed and the way the parties were monitored, as well as produce performance data which could be evaluated.

Mike Owen, Director of Submarines for DML, Plymouth, and Howard Mathers, SubIPT team leader, were the key decision makers for the overhaul of any Royal Navy submarine at Devonport. Other team members 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 was to fully review all the processes involved prior to an actual overhaul project. The whole overhaul system was analysed and the whole process mapped.

LSC retained the services of Staffware, a UK-based specialist in business process management, to assist.

The management team adopted a careful approach, quantifying benefits of each stage prior to application, clearly demonstrating the required change in terms of predefined key performance indicators (KPIs).

Technological innovation and process/procurement changes/improvements
A number of factors allowed 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, 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 Period (Refuelling)
The SubIPT starts the process by issuing a notice 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.

The overhaul specification identifies surveys to be undertaken, possibly leading to further work. During the planning phases of the LOP specification the contractor will raise enquiries to clarify what is required, to suggest innovative ways of working or to identify conflicts within the specification. The volume of these enquiries needs to be cleared prior to the specification freeze, as changes after this are dealt with by the change/amendment processes, (removed reference to DAR) which can add significant change-management effort.

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

Specification Change Instruction (SCI): the pr oblem
The existing system was largely paper-based, augmented by an antiquated RSCI (overhaul specification change instruction) system and several stand-alone IT systems. Monitoring progress of enquiries was not possible.

The other problem was that on many occasions the form did not contain the necessary information.

SCIs: the solution
The enquiry system was digitised, making it workflow- and web-based, through a secure intranet

Stakeholder involvement was critical and achieved.

Staff were familiar with the existing system so the new system was designed to replicate the old electronically.

Digitisation and application of workflow parameters resulted in many problem areas being resolved almost instantly. Accuracy of information improved significantly. Tracking was introduced enabling management to track enquiries and see where bottlenecks were.

Surveys: the problem
Surveys are required to ensure that the submarine is safe to remain in service and to identify areas that may require repair. The potential impact of surveys on the LOP schedule and the return of the submarine to active duty cannot be understated. The old paper-based system suffered significant delays in processing.

Surveys: the solution
It was decided to digitise the whole system, making it workflow- and web-based, through the same secure intranet as SCIs, again replicating the old system electronically.

Workflow was 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 16,616 survey items over a two-year period whilst reducing administrative effort, improving turnaround timescales and ensuring auditability.

Concessions: the problem
When surveying equipment during LOP sometimes equipment is outside its design specification but is fit for continued service. Traditionally this required applying for a concession/CNC/production permit (PP) through an existing paper system.

Several concessions/CNCs/PPs were lost during each refit and the average time a concession was taking was three months.

Concessions: the solution
As before, it was decided to digitise the whole system, with the new system designed to replicate the old system electronically.

The system is also linked to the Platform Configuration Management s ystem which enabled the concession/CNC/PP process to be linked, 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 KPIs to be produced from the system, reduced administrative effort and ensured visibility/ auditability .

Additional functionality
The system also provides a discussion forum so that parties can post problems and seek answers.

Hurdles

There were a number of critical issues to overcome:

•  Resistance to change. Importance of involving stakeholder community from the outset.

•  Levels of computer literacy had to be changed.

•  Integration of various systems and databases to make the new process work.

•  Trust. Much of the business process is invisible to the user.

•  Recognition of the need to 'keep it simple', ensuring ease of use for all.

•  Recognition of the need for through-life continuous improvement support for these new business critical processes.

System configuration
The introduction of NavyNet providing an intranet system helped facilitate the new workflow system.

The workflow process is controlled by business process-management and orchestration software, delivered through ASP on Microsoft IIS. Staffware's Process Suite employs an independent process layer, enabling development of complex business processes. The workflow tools supplied enable process modelling, application integration, process monitoring and rapid application development. The software manages the life-cycle of the process.

Reporting services are provided by Crystal Reports. An online 'knowledge repository' has been provided through ASP fast-forum.

Cost savings and productivity improvements
The overall objective was to reduce the ownership cost of capital assets such as HMS Vanguard. The key area of concern was overhaul times, specifically enquiry processing, surveys & concessions and other system transactions.

The new process has succeeded in reducing the average transaction time of SCIs from 15 days to just 7, a 53% reduction, and reducing the average time for concessions from 3 months to almost 1 month (29.9 days) a 66.6% reduction (June 2003-January 2004, Vanguard). It is recognised that the new system has helped to deliver and manage 16,616 surveys, an improvement from the paper system.

The changes have realised the ambition to reduce the pre-overhaul enquiry stage, and helped the Vanguard Partnership to work more closely.

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

Conservative estimates 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 system information.

•  The ability to include more remote parties, such as the vessel's team and key contractors, such as Rolls-Royce.

•  The level of tracking information has dramatically improved.

•  Management information is available for the first time. Turnaround times can be evaluated, identifying bottlenecks.

•  Problem solving has been improved.

•  The new workflow system has built in flexibility.

•  A knowledge repository is now available to all to address future improvements.

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

DML and SubIPT are both 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.

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