Managing Logistics
Written by Peter Buxbaum
CGF 2010 Volume: 2 Issue: 5 (October)
When the U.S. Coast Guard established the Surface Fleet Logistics Center (SFLC) in Baltimore in December 2009, the move was emblematic of the consolidation of Coast Guard logistics on a number of fronts. The SFLC now represents the single touch point for the maintenance and repair of the Coast Guard’s 2,044 surface assets, which include 244 cutters and 1,800 smaller vessels.
Before SFLC was stood up, the Atlantic and Pacific coasts each had separate maintenance logistics commands. “There were also engineering logistics centers that reported to area commanders and not to a single support entity,” noted USCG Captain Mark Butt, the SFLC commander.
The Coast Guard’s aviation operations have long enjoyed consolidated logistics at the Aviation Logistics Center (ALC) in Elizabeth City, N.C. The SFLC will be migrating to the logistics information system run by the ALC. Coast Guard surface vessels will also be benefiting from more multi-year, multi-ship maintenance and repair contracts under the auspices of the SFLC.
Before the SFLC was organized, surface vessel logistics was “fairly fragmented,” said Captain Timothy Heitsch, a team leader within the logistics directorate at Coast Guard headquarters in Washington. “The more expensive parts may have been handled at the main logistics centers on the east and west coasts, but many parts were managed within individual programs. “The SFLC joins the ALC as the Coast Guard’s two main logistics centers,” Heitsch added. “They also comprise the main inventory control points and the majority of our supply chain work.”
MOVING PARTS
The ALC performs maintenance and repair on the Coast Guard’s 193 aircraft, located at 26 Coast Guard aviation units throughout the continental United States, Alaska, Hawaii and Puerto Rico. These include short and medium range recovery aircraft to medium and long range surveillance aircraft. Forty-four of these aircraft are completely overhauled on an annual basis.
The SFLC, like the ALC, is organized through a combination of product line managers, who are responsible for a particular asset class and functional lines of business, which include depot level maintenance, structural engineering, spare parts warehousing and information service needs. One of the cornerstones involved in organizing the SFLC, according to Heitsch, was to achieve total asset visibility “across all parts and major assets tied directly into requirements.”
Depot level maintenance is perhaps the core activity performed at the ALC and now, the SFLC. Depot level maintenance involves the total overhaul of an airframe or vessel. This overhaul is completed every four years in the case of the Coast Guard’s aircraft and includes a complete teardown and inspection of all planes and helicopters and the completion of any required modifications or upgrades.
The logistics centers are also the central points for all aircraft and vessel repairs. Major structural repairs are completed through airframe or vessel product lines. ALC and SFLC manage the shipment, component repair and warehousing of all spare parts.
Commander Dan Baravik, who heads the business operations division of the ALC, said that on an average day the ALC ships and receives over 900 standard parts; responds to over 100 technical and engineering questions; performs depot maintenance on 23 aircraft; works on four aircraft for “drop-in” maintenance; repairs 500 component parts and manufactures 100 piece parts; and processes 600 material requisitions through the Coast Guard’s Asset Logistics Management Information System (ALMIS).
The ALC serves as the central warehouse for a $1.2 billion spare parts inventory, and the SLFC now manages the Coast Guard surface fleet’s $298 million inventory, including 2.4 million parts and 65,000 line items. The center makes 50,000 material requisitions an annual basis.
SYSTEMS TRACKING
Developments with the Coast Guard’s logistics information systems are another example of the consolidation trend within the service’s logistics. In an effort to coordinate the maintenance and supply efforts between ALC and at the 26 operational units, ALC created ALMIS as an integrated computer-based system. ALMIS provides tracking of maintenance, flight time, training and allows for real-time, informed, data-based decision-making.
The SFLC is now in the process of transitioning to ALMIS. In addition, the Coast Guard is planning its next-generation logistics enterprise information system, known CG LIMS, or Coast Guard Logistics Information Management System.
“IT is key in today’s world,” said Heitsch. “The movement of information is what we utilize to be more efficient and effective. ALMIS is being used as a template for the next-generation system. We are envisioning CG LIMS as a single integrated system that will manage all of Coast Guard logistics.”
The surface assets were, and to some extent still are, managed by the Naval Engineering System (NES). “We are transitioning a lot of stuff to the same system used down at the ALC,” Butt observed. The NES is still being used to manage the logistics of the larger cutters, however. Eventually, these too will be switched to the consolidated Coast Guard logistics system.
“The system tracks configuration and maintenance parts,” said Butt. “It gives us a good knowledge of our usage of parts.” ALMIS has been integrated with a business intelligence tool from IBM Cognos for the last 10 years. Now that the SFLC is migrating to ALMIS, it too can take advantage of these capabilities. The Cognos tool allows Coast Guard analysts to view parts demand and to forecast when parts are needed, determine how many are essential to keep in stock, and perform various other analyses important to the management of Coast Guard resources. The Coast Guard’s solution is built on the Cognos 8 platform, but customized as a solution to meet the Coast Guard’s specific requirements.
While Cognos does not provide the Coast Guard with inventory visibility, it has the ability to analyze inventory data, explained Rob Dolan, a public sector solutions executive on the IBM Business Analytics Team. “Parts inventory would normally be managed within a data warehouse,” he said. “We would extract that data and report against it.”
STOCKING LEVELS
Cognos is helping the Coast Guard manage its budget and parts costs. “They didn’t really have a good handle on their parts inventory and could not guarantee they could find a part,” said Dolan. “If they could not find it easily, they reordered it. They found they had an extensive inventory of duplicate parts but that other parts were out of stock. That had a negative impact on the surface vessel mission.”
Before the advent of the SFLC, the ALC used Cognos to pull parts data from 26 air stations. Now the system is being expanded to provide inventory data visibility from over 250 surface stations. “They are pulling reports from all of those different stations in an effort to understand what the inventory picture looks like and to make sure they have the right number of the right parts on hand,” said Dolan.
In many cases, this involves determining an appropriate minimum stocking level for each part based on historical usage patterns. “This way they always maintain a certain level of parts in stock and they are proactively reordering parts—rather than when a craft goes down,” Dolan added. “They are also not overbuying parts.”
Besides providing an operational benefit, maintaining proper inventory levels also reduces Coast Guard logistics costs. “By maintaining inventory at minimum levels, the Coast Guard is not paying premiums on rush orders,” said Dolan. “In many cases the Coast Guard has data on parts availability from different suppliers so they can make sure they are getting the part at the lowest price.”
ALC analysts recently used ALMIS data to analyze aircraft repair cycles. “We are trying to create a pull system so we can order the right parts without expediting it,” explained Baravik. Analysts at the ALC also used Cognos to reevaluate and increase the allowance for logistics on Coast Guard aircraft deployed after the recent massive oil spill in the Gulf of Mexico. “The system is able to automatically spit out orders for parts; we shipped them on the next flight out to the gulf,” said Baravik. “The analysis of this data greatly helped keep aircraft maintained down there in the gulf.”
In another case, SFLC analysts used Cognos to determine that the Coast Guard was over-maintaining its 25-foot response boats. “Honda specified its engines are supposed to be maintained after every hundred hours of use and we run them 500 hours a year,” Butt noted. “We sat down with Honda engineers and realized they were referring to annual maintenance for recreational boaters. We were able to change our maintenance schedule and save one million man-hours per year while keeping the manufacturer’s warranty in place.”
ASSET VISIBILITY
The development of CG LIMS will modernize Coast Guard logistics systems, consolidate surface vessels completely into the singular system, and fill in gaps in asset visibility that exist today. “ALMIS is an older system,” said Baravik. “You can do a lot with it, but CG LIMS will be more intuitive.”
ALMIS currently provides a 95 percent solution to total asset visibility on the aviation side. “The system tracks items throughout their entire life cycle, from the point when we buy it to installation on an aircraft and removal for repair, all the way through to the point when it is disposed,” Heitsch said. “There are a few oddball situations where we lose visibility. We are implementing total asset visibility for small boats, and the plans are to fully integrate this across the entire Coast Guard fleet, surface and air.”
Visibility on the surface side presents more of a challenge because there is more interfacing with the Navy for parts repair. Visibility is often lost when that happens. “On the aviation side, we tend to keep the parts in house so we don’t lose visibility,” said Heitsch. “We are working with the Navy on several projects to improve logistics performance and visibility.”
CG LIMS is envisioned as a modular, integrated system. “CG LIMS is viewed as a single logistics application for the management of assets and the supply chain,” said Heitsch. He projects the first segment will be deployed in three years and full implementation could stretch another five years beyond that.
STREAMLINING INTEGRATION
Patrol boats will be integrated into the system from the beginning. “Larger vessels will be staying under NES because we can’t move everything at once,” Heitsch acknowledged. “They will be moved somewhere down the line.”
The SFLC startup will also likely lead to more consolidated and efficient maintenance and repair operations. “Up until now, almost all of our ship repair contracts were put out on the street as ‘onesies’ and ‘twosies’ that involved a specific vessel and a specific time,” said Butt. “We are working on getting multi-ship, multi-year contracts in place with shipyards.”
One such contract is already in place with the Todd Pacific shipyard in Seattle. In 2009, Todd Pacific won a second five-year contract for the maintenance and repair of the Polar Sea and the Polar Star, icebreakers that operate in Antarctica.
“The multi-year contracts include contract line items that we use for our planning efforts,” said Elizabeth Ugorcak, director of ship repair at Todd Pacific. “We are able to order long lead time material in the early phases of the contract.”
These include spare parts and components that are anticipated to be repaired. “This also allows us to plan our prefabrication work,” said Ugorcak. Todd Pacific prefabricated shafts, piping, foundations and tanks in connection with recent work performed on the Polar Sea.
The shipyard is currently preparing the Polar Star for a return to service after several years on inactive status. The work will include much of the same work performed on the Polar Sea and will also involve cleaning the vessel’s underbody, repainting the hull, outfitting her with three new cranes and updating her engine, hydraulics and ventilation systems.
“The biggest advantage of getting the multi-ship, multi-year contracts in place will be that we will only have to issue a delivery order,” said Butt. “We will have the contractual relationship already set up and the shipyard will be able to avoid the learning curves associated with working on a new vessel.” ♦