17 May 2007
Speech by Nigel Whitehead, Group Managing Director, Military Air Solutions
RUSI Air Power Conference
RUSI, London
17 May 2007
I am delighted to be here today to contribute to this important conference. The themes of agility, adaptability and capability that we are addressing are as vital and relevant to those of us in industry as they are to the armed forces themselves.
I am here representing BAE Systems. In various guises, BAE Systems has been delivering air power to the Royal Air Force from its very earliest days, and today, nearly 100 years after the first Vickers biplane took to the skies, we are proud to be the suppliers of platforms such as Typhoon, Tornado and Hawk - and supporting them in service. But the changes which this industry has gone through, and will continue to go through, are similar in magnitude to those that have occurred during the evolution of flight itself: the fundamental needs of our customer are changing, and over the next few minutes I will be giving you an insight into where it might lead.
I think that one of the best summaries of the needs and requirements of the modern armed forces was given by the UK's deputy chief of defence staff, Lieutenant General Andrew Figgures, in a recent speech. He emphasised the importance of being better than the opposition, wherever they may be in the world, the importance of having a winning, total package, and the importance of meeting the challenges and seizing the opportunities that arise from a changing environment.
The key message from General Figgures is a simple one. The world has changed, and our armed forces and defence industries need to change with it. The Cold War is long over, and industry must be as conversant with the changing threat as our customers are. We must meet the challenges and seize the opportunities of this changing environment by evolving the equipment and services we provide to match the military requirements.
As General Figgures said, what we need now for successful and effective military capability is the ability to bring maritime, ground and air components into one coherent joint force under a unified command, which means appropriately motivated, manned, trained and equipped force packages at the required level of readiness and with the necessary support, sustainability and deployability to achieve the full range of agreed military tasks. In other words, we need a winning, total war fighting package - 2nd place is not an option.
So does a model already exist in another domain that really illustrates the kind of winning, total package that we all in the defence sector can learn from? A model that brings together all the components needed for success, and is flexible enough to adapt rapidly to changing circumstances?
Success is not just having...
I believe that there is. The McLaren Formula One team, with which BAE Systems has enjoyed a technology partnership for 11 years, leads this year's manufacturers' standings, and its outstanding young driver Lewis Hamilton has this season made the most successful Formula One debut in history, leading the drivers' championship after podium finishes in his first four Grands Prix. It is a success story we would all wish to emulate, and from which we can all learn important lessons.
Most importantly, McLaren's success is not just about having the best car, or the best engine, or the best drivers or the best pit crew. It is about the way they all work together. With a common goal and unity of purpose.
Success demands a Total Package
Success demands a total package. For instance, as the McLaren car is racing around the circuit, information about its performance is being fed back to the control room in real time. That information is analysed and used not just to improve the car's performance later in the season, but to actually improve its capabilities in the current race. To achieve that remarkable degree of flexibility and real-time improvement, everyone at every level of the team must be involved, and they must be constantly giving each other feedback. They do that in Formula One - can we honestly say the same thing is the way we do business in the defence sector?
All too often we have all been focused on our separate tasks and goals, without seeing the whole picture and without making the necessary connections between suppliers, manufacturers and customer. Building the aircraft and using the system can be treated as separate events, and the result is that we don't always incorporate improved capability into our new products and services based on recent operational experience. Integrated working between industry and user must be encouraged so that we can match the continuous improvement that Formula One achieves.
There are other key factors to a Formula 1 team's success. The packages that are developed have to be complete and dependable. They have all the elements needed for success, whether it be logistics, training, facilities management, manpower - everything is there, at the right time and in the right place. Flexibility to respond to the competition and to adapt to external rule changes is an essential part of the package. And you can see objectively how successful this model is: Formula 1 cars get better and better from year to year, and even within each season. They are faster, safer, more economical, and more reliable.
As one car is going around the track the McLaren team is developing concepts and technologies for the next generation of cars, but they don't wait for the new model to arrive to start applying what they have developed. They start inserting the new capabilities that they have developed into their current cars later in the season or even the next race, so they are constantly upgrading and enhancing the performance of the car with minimal interruption. That truly is rapid, end to end engineering, and we can all learn from it.
Success demands Unity of Purpose - winning the Championship
But how have McLaren and other Formula One teams managed to develop this strikingly successful model, while we in the defence sector have lagged behind somewhat? I think it is largely because a Formula One team has an unrivalled unity of purpose. Success is all about winning races; it's as simple as that. Every member of the team works with one end goal in mind. Ideas and technologies are appraised solely in terms of how well and how quickly they will meet the goal; and capability, agility and adaptability are seen as essential tools for success.
Within the defence business there are often many different partners with many different goals - profit versus cost savings; technical excellence versus programme schedule; specification compliance versus fit for purpose. That is no longer good enough, views have to change, and change fundamentally. We in defence need to find a real unity of purpose, and really, only one is appropriate: we must ensure that all of our endeavours are relevant to supporting the men and women of our armed forces when they are in a combat environment and give them the best support we can for them to win. For industry, that means changing our mindset, and developing the awareness at every level of our organisation that how well we do our job could ultimately affect the outcome a life or death issue for our end users.
There must also be changes in the way our customers view us in industry, with a greater emphasis on partnering. They must help us to help them, rather than viewing it purely as a transactional relationship.
What does this McLaren Formula One-style complete and dependable package mean to us in the defence sector?
It means all of us in the supply chain - from the end user, through prime contractors to the smallest suppliers - we must be focused on what is needed at the point of use.
Complete and Dependable - all components necessary for success
Achieving this will involve planning and delivery across all Defence Lines of Development: training; equipment; infrastructure; information; personnel; logistics; organization; and concepts and doctrine. In other words: it's not just about the equipment.
Right Place (worldwide), Right Time
Achieving this is going to mean thinking and behaving differently. It may also affect how we are contracted and rewarded. For instance, we need to develop solutions that will allow ease of deployment. Previously in the defence arena, production and maintenance generally took place in the same, industrial location, far removed from where the aircraft were actually in operation. Compare that with Formula One, where mechanics travel the world with the cars, providing overnight repairs and solutions wherever they may be. Dependability is key - vital spares or engine software arriving even a day late for a Grand Prix would be catastrophic. We in the defence industry must match Formula 1 performance, and develop the flexibility of the product, our services and ourselves - to provide support where our customer is and to improve ease of deployment and ensure dependable supply. In other words, adopting the 'one goal' ethos.
The supply chain is equally key. If our own relationship with our customer has been as a supplier rather than a partner, we must recognise that our own "suppliers" will view us in the same way. We too must change that attitude, and we must work with our supply chain to ensure that it is efficient, dependable and will allow all of us to deliver on our promises.
Flexibility to respond to the Changing Environment
This assured package for the defence sector must have the flexibility to respond to a changing environment. A central part of that must be the ability and willingness for all involved to change plans and make trade offs where necessary.
This requires a partnering approach that values and actively encourages flexibility but also ensures that key capabilities are nurtured to enable a rapid response to the unforeseen.
A successful approach will also include a wide range of acquisition routes, from urgent operational requirements through to major programmes. Our partnering arrangements must also be adaptable enough to respond to these very different needs and requirements.
Relevant - Smooth Insertion of Improved Capability
Rapid identification, pull through and deployment of new technology is critical to a successful package. As in Formula 1, technology that is being developed for the next generation of car can often be used in existing models. We must also make sure that we use our new relationship to seek out all suitable technologies from a diversity of sources.
We need to have smooth insertion of improved capability, across all lines of development. Using common technologies and their application across several platforms will ensure best value, higher levels of interoperability, and ease of deployment of improvements.
An example of the way forward comes from the Tornado programme, where BAE Systems and the RAF have adopted an incremental approach. Initially BAE Systems provided spares and repairs, but we have gradually been contracted on a more output based focus We have now signed a contract called ATTAC which makes BAE Systems responsible for the availability of the whole aircraft, except the engine, for the next ten years. We can't achieve this alone and our partnership with the MOD, RAF and the Supply Chain is critical.
The ATTAC programme also allows us to build a closer relationship between users, providers and deciders. As we provide greater support to Tornado, Typhoon and other platforms, more and more BAE Systems staff are working at RAF bases sharing the priorities of the customer - even providing some in theatre support Already my colleagues in BAE Systems Land Systems have demonstrated that level of close support, with the Bulldog armoured personnel carrier in Iraq. In response to a UOR from the UK Ministry of Defence, BAE Systems upgraded and up-armoured the vehicles, providing greater survivability to our soldiers, and supporting them with our own engineers based in Basra.
Unity of Purpose
Unity of purpose is the key to a winning team's success, and it will be key to our success too. We must adopt a one-team approach focused on the successful use of our capability. Teamwork is critical not only in support but in every part of the life cycle.
This approach must be underpinned by key performance indicators and incentives. We must agree what measures we are going to drive ourselves against to get that unity of purpose. Could the goal be flying hours, or successful missions rather than number of aircraft available? Could the joint enterprise be measured and rewarded on its ability to respond quickly to a new requirement?
Alignment with Customer needs
So if those are the kinds of transformations we must go through, what progress have we made so far? At BAE Systems we have reorganised our structure to make us better placed to fully meet the requirements of the UK Defence Industrial Strategy. We have done this by creating through life businesses, where we have merged our integrated support businesses with our platform businesses, to clearly match the goals and intentions of the DIS.
My own business, for example, is now called Military Air Solutions, and it provides advanced military air capability by supporting the front-line and providing capability enhancements either as upgrades or as new product. It also helps MOD to understand the art of the possible and where leverage can gained by the application of new technology -realising these as new requirements and risk reducing the solutions. Central to our new way of doing business will be the forging of long-term partnering agreements, and in the air sector we have just signed a Foundation Contract with the UK MOD with the aim of signing such an agreement within 12 months.
Under programmes such as Tornado ATTAC, we are also undertaking long-term contracts, in the Tornado's case for the next ten years and potentially beyond this until the fleet transitions out of service. We can't do that unless we are working side by side with the customer, understanding the performance of the whole package in-theatre and ensuring that we enhance capability based on that feedback.
Performance & Delivery
Developing some good practice is one thing - deploying it successfully across the board is another. At BAE Systems we have worked hard to ensure that everything we have done on developing the ATTAC programme for Tornado has been mapped and captured in an Integrated Support Business Model (ISBM) that we are sharing across all our platforms. As a result, when Typhoon enters full service, we will have the benefits of all the lessons from ATTAC in supporting it.
We have introduced a much stronger focus on delivery. Project management is a major focus of our recruitment, and this year the number of people in our PM community will rise to nearly 1,400. Our PM staff are members of the Association for Project Management Professionals, and in their qualifications are achieving an 83% pass rate, compared to the national average of 60%. Up to 100 people across MAS are planning to sit the APMP exam this year.
MAS has already dedicated 675 days of non-executive training for its project management staff so far this year, on top of more than 2,100 days training spent in 2006.
In recognition of the importance of supply chain, in procurement, BAE Systems has created a training and development programme for our 1200 procurement specialists. The programme also provides our procurement professionals with cross-functional business competencies such as performance centred leadership behaviours. The programme is delivered by Warwick University in the UK and is accredited by the Chartered Institute of Purchasing and Supply.
We appreciate the budgetary constraints our customers face and are endeavouring to work with them to rise to the challenges. As a business we are determined to deliver within both cost and timescale parameters and we are placing great effort on this. We have created a Lean Learning Academy and 180 of our leaders and managers have completed a three-week intensive course in lean principles. That was a major investment by BAE Systems, and we plan to increase participation in 2007, including involvement by RAF personnel. Already, skills learned from our Lean Learning Academy have contributed to, in some areas, a 19 per cent improvement in productivity, a 25 per cent drop in non-labour costs and a 30 per cent improvement in scrap and concessions.
Responsiveness
We have developed the techniques to make the rapid responses needed from UORs. I have already mentioned our success with the Bulldog armoured personnel carrier. Another example is the Sniper Pod. Because of our close working relationship with the RAF and MOD on the Harrier aircraft we were aware of the potential requirement for specific capabilities to meet an operational need. In the past we may have waited for a contract but driven by our new 'one goal' relationship we started to work to integrate the Sniper pod onto the aircraft at our own cost, to enable our customer to deploy this equipment earlier into theatre. In this way we are acting as part of the team supporting the men and women of the armed forces.
We are working to sustain Britain's industrial capability by an intensive development programme on unmanned air vehicles. The DIS made clear that as a nation we should be looking at 'technology that can and should be inserted into future capabilities, directly improving the delivery of military effect'. Our work with UAVs is aimed at achieving exactly this.
Rapid engineering is as relevant to the defence sector as it is to Formula One, and our work on UAVs is also yielding good results in this area. Process capability that we have developed for UAVs is now being deployed on Typhoon, and we are continuing to work on identifying more cross-uses of technologies or engineering capabilities.
As our partnership with our customer strengthens it will be increasingly important for us to optimise our operating footprint based on our customer's demand, which will mean forward planning of the facilities, skills and size of workforce we are going to need. We must build on many of the key skills we already have to fully enable a through life approach. As an example many of our new recruits are supply chain or project managers - evidence of how much we are adapting to the new challenge.
The needs of our armed services are evolving quickly and our task is supporting them and we must get it right. Our commitment to this goal is reflected in the Military Air Solutions' mission statement:
Working as an integral part of the team delivering effective air power giving real advantage to the men and women of the armed forces. Can be trusted to deliver - always.
That is not a mission statement that we would have created under the old environment, nor would it have had strong resonance with our customer in the past. But it is precisely the path we have now committed ourselves to, because we believe it reflects the role demanded of industry in the DIS. Can we, as an overall enterprise step up to the mark?
To put things in perspective we should remember that Formula 1 is essentially an entertainment industry where the difference between first and second place is the loss of two points - yet they can and do achieve this unity of purpose.
In Defence the difference between first or second place can affect safety of the men and women in our Armed Forces and where they operate.
In the words of Kevin O'Donoghue - "We have no option. We have got to get this right."
