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Describe the case and the main considerations of the distribution chain or situation presented in the case Mention at least five strategic, operational or remedial measures used in th

1.Describe the case and the main considerations of the distribution chain or situation presented in the case (5pts)
 2.Mention at least five strategic, operational or remedial measures used in the case (5pts)
 3.Describe at least five main considerations of the time function and any other relevant parameters in the design of the distribution network (5pts)
 4.Describe at least five main considerations of the cost function of the case, any other relevant parameter in the design of the distribution network (5pts)
 5.Present at least five recommendations to the management of the company to deal with the situations presented in this case (5pts)
 6.References no later than the past five years. (2.5pts)

11800577.pdf

UV1090 Jan. 21, 2009

This case was prepared by Tom Cross, Senior Director of Executive Education, Darden School Foundation. Copyright  2008 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. The U.S. Navy and its educational partners are licensed to make copies of this document and to distribute those copies to Navy personnel for educational purposes. To order copies, send an e-mail to [email protected] No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation.

MINE RESISTANT AMBUSH PROTECTED (MRAP) VEHICLE

U.S. soldiers were dying in Iraq and Afghanistan from improvised explosive devices (IEDs), roadside bombs, and suicide car bombs. Up-armored high mobility multipurpose wheeled vehicles (HMMWVs), also called Humvees, offered inadequate protection. Mine- resistant ambush protected vehicles (MRAPs) provided much improved protection to soldiers. Getting MRAPs into the field to replace Humvees was a top-priority project.

The MRAP Vehicle Joint Program Office was created on November 1, 2006, to respond to a validated CENTCOM Joint Urgent Operational Need Statement (JUONS). MRAP became a Major Defense Acquisition Program in February 2007; the Navy was designated the Executive Agent.

The MRAP team had achieved remarkable results. As of May 31, 2008, 9,121 MRAP vehicles had been produced, and 5,493 were in the field, primarily in Iraq. This was the fastest vehicle procurement since the Jeep in World War II.

This case examines the MRAP program at its beginning in late 2006 from a strategic- sourcing perspective. The strategic-sourcing model is used to examine the challenges faced. The strategic-sourcing discussion is followed by an MRAP team members’ briefing to discuss the program results, the actions taken, and why. The Burning Platform

Operation Iraqi Freedom in 2003 had been a success with the toppling of Saddam Hussein’s regime and occupation of Baghdad in less than 90 days. The United States and coalition forces had used their fast-paced, mechanized, combined arms operations to overwhelm the Iraqi army. Since then, counterinsurgency operations in the complex Iraq urban terrain had been problematic.

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This document is authorized for educator review use only by Ramon Torres, Universidad Interamericana de Puerto Rico until December 2012. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860

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Iraqi soldiers, now part of the insurgency, had gained extensive knowledge and experience with IEDs during the 1983–88 Iran/Iraq war. Iraq was one of the most mine-infested nations in the world with 10 million mines in the ground—8 million antipersonnel and 2 million antitank. IED explosions were a widespread problem: 600 per month in Iraq and 64 per month in Afghanistan. There had been a total of 1,795 U.S. IED fatalities in Iraq from July 2003 to June 2008, peaking at 90 in the month of May 2007. IEDs accounted for 60% of all U.S. combat casualties in Iraq and for 50% in Afghanistan.

IEDs were the greatest threat to convoys. Traffic circles, bridges, and overpasses in the extensive and modern Iraqi highway system caused chokepoints where vehicles were vulnerable to attack. Built-up medians with vegetation and trash along highways added to the danger. Predictable traffic routes by coalition convoys made them easy prey for the insurgents. Humvees, the primary transportation vehicles, were not designed to protect U.S. forces against IEDs, nor were they upgradeable to be able to do so. The enemy knew this and attacked the weak spot of the U.S. forces.

There were many reasons that IEDs had become the insurgency’s weapon of choice. IEDs were low in cost, were simple to make, and made a forceful impact. There was an almost inexhaustible supply of materials for making IEDs and a low risk of exposure for the enemy. It was psychological warfare at its most vicious level.

The Humvee was an all-purpose, large, modern-day Jeep. With its four-wheel drive, automatic transmission, and diesel power, it was among the most capable all-terrain vehicles in the world. There were 132,000 Humvees in the fleet and more than 21,000 in Iraq. Many had been retrofitted with bolt-on armor, which provided some protection from roadside IEDs, but not from buried IEDs, the insurgents’ weapon of choice at the time. Strategic-Sourcing Process

On May 20, 2005, the U.S. Office of Management and Budget (OMB) directed that all federal agencies use the strategic-sourcing process in their acquisition of commodities. OMB defined the process as follows:

Strategic sourcing is the collaborative and structured process of critically analyzing an organization’s spending and using this information to make business decisions about acquiring commodities and services more effectively and efficiently. This process helps agencies optimize performance, minimize price, increase achievement of socio-economic acquisition goals, evaluate total life cycle management costs, improve vendor access to business opportunities, and otherwise increase the value of each dollar spent.1

1 “Implementing Strategic Sourcing,” Clay Johnson III, OMB Deputy Director for Management, to Chief

Acquisition Officers, Chief Financial Officers, and Chief Information Officers, May 20, 2005. Do Not

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In January 2005, at the Public Sector Strategic Sourcing Roundtable, Censeo Consulting Group and the Darden School of Business defined strategic sourcing as a disciplined end-to-end process to systematically analyze and develop optimal strategies for buying goods and services based on data-driven, fact-based analysis to drive decision-making. It was a holistic process that addressed customer needs, market conditions, organizational goals and objectives, and other environmental factors. The approach was crossfunctional to support an organization’s mission and develop organization-wide strategies. The five-step process is shown in Figure 1:2

Figure 1. Commodity strategic-sourcing process.

Sourcing strategies typically involved one or more of the five generic strategies shown in Figure 2:3

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Figure 2. Five generic sourcing strategies.

While he was with Booz-Allen, Darden Assistant Professor Tim Laseter first articulated

the term “balanced sourcing,” based on his field research to identify industry best practices in acquisition. That research identified four key practices—leveraging supplier innovation, building and sustaining relationships, modeling total cost, and creating sourcing strategies. This insight resulted in the basic framework (Figure 3), originally termed balanced sourcing, for committing to competitive pricing and cooperative relationships:4

Figure 3. Framework for committing to competitive pricing and cooperative relationships.

4 Dr. Tim Laseter, University of Virginia Darden Graduate School of Business Assistant Professor of Business Administration, former Senior Partner at Booz Allen Consulting and author of “Balanced Sourcing.” Do

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MRAP: Opportunity Assessment

As can be seen in Figure 4, soldiers were dying at an increasing rate from IEDs in Iraq. A solution was needed immediately.

Figure 4. Monthly fatalities from IEDs in Iraq.5

There was an all-out effort on multiple fronts to neutralize the IED threat. The Joint IED Defeat Organization (JIEDDO) was formed to coordinate and focus the efforts. JIEDDO had the following three priorities:

1. Prevent IEDs from being planted—attack the insurgency.

2. Prevent planted IEDs from exploding.

3. When “all else fails, survive the blast.”

In 2004–05, JIEDDO worked on electronic jammers, unmanned surveillance aircraft, better intelligence, force education, and improved armor protection. Up-armoring Humvees to improve their survivability against roadside IEDs was a priority. JIEDDO purchased 122 commercially available MRAPs and used them primarily for IED clearing. By 2007, JIEDDO had had some success, as insurgents had to plant six times as many IEDs as they did in 2004 to inflict the same number of casualties.

In 2006, the insurgents stepped up the IED threat by burying more of the explosives in the roads and developing a more sophisticated version packed with as much as 100 pounds of explosives. Still, up-armored Humvees offered little protection because the explosives blasted through the vehicles’ vulnerable underbellies. And in 2007, insurgents began to use explosively formed projectiles (EFPs), molten-metal projectiles able to penetrate the armored steel of a M1A1 Abrams tank, further increasing the threat to U.S. forces.

5 Graph created by case writer with data from http://www.icasualties.org. Do

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In 2006–07, a phased transition began. Humvee up-armoring, which cost approximately $14,000 per vehicle, continued at as fast a pace as possible. Simultaneously and as expeditiously as feasible, MRAPs, which cost between $600,000 and $1 million per vehicle, were purchased and fielded. MRAP: Profile Commodity

Commercial off-the-shelf (COTS) capability existed for MRAP vehicles. MRAP technology had been developed in South Africa and Rhodesia (now Zimbabwe) in the 1970s. BAE Systems had been manufacturing mine-resistant vehicles in South Africa since 1977. The MRAP V-shaped hull and larger ground clearance deflected blasts and greatly increased soldier survivability. A vehicle such as the Humvee with its one foot of ground clearance received 16 times more blast impact through the floor than an MRAP with its 3- to 4-foot ground clearance (Figure 5).

Figure 5. MRAP comparison with Joint Light Tactical Vehicle and Humvee.

1Unclassified

MRAP Cat 1 / JLTV Cat B / HMMWV Characteristics

16,560 lbs 6,580 lbs**

23,140 lbs

Transport

Weight Curb Payload GVW

35,504 lbs 5,564 lbs

41,068 lbs*

10,900 lbs 5,500 lbs***

15,400 lbs

No C-130 due to height No helo transport

1 x C-130 at GVW 1 x CH-47 at ECC (ext)

2 x C-130 at GVW 1 x CH-47 at GVW (ext)

*ECP Variant Payload ~ 49,000 lbs with automotive performance degradation

***Payload includes frag kit armor

Mission Profile

JLTV – ICMRAP – IMG (IMG used as example)

M1114 (w/frag kit 5)

30/30/4045/40/15 30/30/40

Note: Mission Profile numbers represent primary/secondary/x-country terrain

**Payload includes B-Kit armor

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1Unclassified

JLTV – IC

120

153

254

MRAP – IMG (IMG used as example)

M1114 (w/frag kit 5)

Max Height for C130 Transport

(102)

90.5

130

196

MRAP Cat 1 / JLTV Cat B / HMMWV Dimensions (pictures are approximately to scale)

159

220

76 (92 – Combat Ht)

There were three categories of MRAP vehicles based on the major mission profiles:

 Category I—Used for small-unit combat operations in urban or confined areas, the Mine Resistant Utility Vehicle (MRUV) weighed 7 tons and had a 6-crew capacity.

 Category II—Used for convoy security, combat engineering, ambulance duty, and troop and cargo transportation, the Joint Explosive Ordnance Disposal (EOD) Rapid Response Vehicle (JERRV) weighed 19 tons and had a crew capacity of 6 to 10.

 Category III—Used for clearing routes of IEDs, mines, and other explosive devices, the vehicle weighed 22.5 tons and had a 12-crew capacity.

In addition, there were variants within the three categories by branch of military service, meaning 16 variants had to be tested, produced, and equipped (Figure 6). And an MRAP II vehicle was being considered to counter the EFP threat and evolution based on ongoing field experience with the MRAP vehicle.

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Figure 6. Variants that had to be tested, produced, and equipped.

5Unclassified

BAE CAT I RG-33L

259

GDLS-C CAT I RG31 Mk 5 (Pre-

MRAP) 50

MRAP Vehicle Fleet

Army

BAE CAT II RG-33L

1323

BAE CAT II HAGA

123

FPII CAT II Cougar

300

GDLS-C CAT I RG31 Mk 5e

600

BAE TVS CAT I Caiman

1822

IMG CAT I MaxxPro

4120

FPII CAT I Cougar

1545

FPII CAT II Cougar

605

FPII CAT III Buffalo

NavyUSMC SOCOMAir Force

FPII CAT I Cougar

397

FPII CAT II Cougar

147

FPII CAT I Cougar

397

FPII CAT II Cougar

147

IMG CAT I MaxxPro

329

CAT I AUV

The number of vehicles required in Iraq increased rapidly and changed every few weeks. The initial requirement was for 1,185 vehicles, but total requirements would exceed 20,000 if all the Humvees in Iraq were replaced with MRAPs. The long-term goal was to replace all Humvees by September 2009 with early fielding of as many MRAPs as possible, and it was an urgent one. The near-term goal was to have 1,525 MRAPs in theater by December 31, 2007. The acquisition goal was outcome-oriented—to deliver the maximum number of survivable vehicles, with performance proven by tests, in the shortest time. MRAP: Supply Market Analysis

A company called Force Protection fielded the first MRAP-style vehicle in 2003 and was the only U.S. manufacturer making them for the U.S. military. Two other manufacturers were known to be producing MRAP-style vehicles in South Africa and Australia. Recent U.S. MRAP production had been fewer than 10 units per month. The deadline for delivering 1,525 MRAPs by the end of December 2007 meant that production lines would have to be staffed, equipped, up and running, and producing more than 1,000 units per month. The incentives and support that suppliers needed to ramp up production this fast and the number of suppliers who would be willing to commit the resources necessary for rapid production ramp-up without knowing future production requirements beyond the initial 24 months were issues that needed to be resolved. Do

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Ten manufacturers said they were capable of delivering variations of the MRAP based on COTS designs. All the variations shared two main features—raised chassis and V-shaped, monocoque hulls to deflect the impact of IEDs. In November 2006, the nine manufacturers listed below responded to a request for a quote that included required delivery of four test vehicles within 60 days:

 Oshkosh Truck Corporation—Oshkosh, Wisconsin

 Protected Vehicles, Inc.—North Charleston, South Carolina

 General Dynamics Land Systems, Inc.—Ontario, Canada (York, Pennsylvania, manufacturing)

 Force Protection, Inc.—Ladson, South Carolina

 Armor Holdings, Inc.—Sealy, Texas

 Textron Marine & Land Systems—New Orleans, Louisiana

 General Purpose Vehicles LLC—New Haven, Michigan

 International Military and Government LLC—Warrenville, Illinois

 BAE Systems, Inc.—Santa Clara, California It was not known which of these vehicles would pass the testing process, nor was the production and quality-assurance capability of these suppliers. Several suppliers indicated they could initially gear up their production rates within 30 to 90 days after receiving production orders based on successful test results, production capacity, and operational requirements.

Challenges dictated by the production requirements were daunting. More than 36 prototypes would have to be evaluated and assessed for performance, protection, and payload by the U.S. Army Aberdeen Test Center (ATC)—both developmental and operational testing, typically done in sequence: DT-C1 threshold-level survivability, DT-C2 safety testing, DT-C3 overmatching threat testing, and IOT&E (Initial Operational Test and Evaluation). What would be the standards for vehicle reliability? How long and how many miles would be required for durability testing? The testing would need to ensure that the vehicles were survivable and usable, could support rapid procurement and fielding, and could meet statutory requirements for live-fire test and evaluation.

There were internal process challenges as well. Three of the nine manufacturers were small and not cash-rich. How would payments to suppliers be done on time? Who would provide the dedicated resources to oversee the supplier’s production and quality assurance? How would final inspection issues and damage in transit be handled? Would budget money be available in a timely manner so the suppliers could commit resources? How would the complex communication and coordination be handled among all the manufacturers and other stakeholders? Do

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After the vehicles were built, the Space and Naval Warfare Systems Center in Charleston, South Carolina, had to fit them with government-furnished equipment (GFE)—turrets, radios, sensors, and jammers—which typically took 30 days. How could that time be reduced to seven days to reach the goal of processing 50 vehicles per day or 1,000 vehicles per month? Could the Army and Marine Corps agree on installation-kit interchangeability to simplify the process? Could Six Sigma and Lean systems be used to speed up the process?

There were two options offered by the U.S. Transportation Command to ship completed MRAPs to the theater. Airlift took two days, but only three Category I MRAPs could fit in each C-17 aircraft and one per C-131 aircraft. Sealift took between 22 to 30 days, and 360 vehicles per month could be shipped.

Tier-two vendor requirements were huge. Heavy-duty tire production was currently only 1,000 tires per month. Production of 1,300 MRAPs would require 6,000 tires, which would take six months to produce. A production rate of at least 20,000 tires per month was needed. Diesel engines, axles, and other components offered similar supply challenges. Requiring common components among the manufacturers could cause further delays. But the greatest challenge was obtaining the ballistic-grade steel required.

Category I MRAPs each required between four and five tons of steel, which usually had to be ordered six months in advance. Only two steel mills in the United States made the rolled homogenous armor required for up-armoring Humvees, and only one, International Steel Group (ISG), was currently in operation. ISG already had increased its armored-plate production to 35,000 tons in 2004 from 6,500 tons in 2003 for the Humvee. Although total Department of Defense (DoD) demand for armored steel was only 21,000 tons per month—a fraction of the 8 million tons per month of U.S. production—the limited supply of armored steel (U.S. production of 8,400 tons per month) was the result of its complexity, which required that it be heated and continuously rolled to produce the chemical and physical requirements of hard armored steel.

Finally, what would be the field sustainment program—spare parts, training, retrofitting future upgrades, etc.? Manufacturers could provide the recommended spare parts but was that acceptable?

In many respects, this was the largest mobilization of industry to support the military since World War II. In addition to the vehicle assemblers, steel mills, automotive-component manufacturers, and parts fabricators, others would be involved. Should the team request the Priority Allocation of Industrial Resources (PAIR) Task Force to put a DX rating on the MRAP project (Exhibit 1)?

According to section 2533b of title 10, United States Code and section 8024 of the DoD Appropriations Act, FY 2007 (PL 109–289) domestic sources were required to provide specialty metals including armored steel plates. Was it possible to get exceptions so non-U.S. sources could be tapped? Do

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The project team pursued a very aggressive schedule while working through many issues that could delay fielding vehicles or increasing costs. But there were still questions for the initial team of eight people to answer. What additional people resources would the team need, and where would the resources come from? How fast could the resources be added? How would the work of a larger team be coordinated? Could the Defense Contract Management Agency (DCMA) Industrial Analysis Center assist the team? Assignment Questions

1. What is strategic sourcing?

2. What sourcing strategies would you use and why do those strategies make sense?

3. How would you apply effects-based thinking to derive actions and outcomes?

4. What metrics would you use to measure outcomes?

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Exhibit 1

MINE RESISTANT AMBUSH PROTECTED (MRAP) VEHICLE What is the Priority Allocation of Industrial Resources (PAIR) Task Force?

The PAIR Task Force’s mission is to ensure industrial resources are allocated to DoD procurement programs in accordance with operational priorities in a comprehensive and integrated manner. The purpose of the Task Force is not to resolve Service unique needs. Rather, the Task Force determines industrial resources required to execute emergent plans, identifies any conflicting demands on these resources, and devises alternative approaches to resolving these conflicts based on warfighting requirements established by the Joint Staff.

The Office of the Deputy Under Secretary of Defense (Industrial Policy) convenes and chairs the Task Force. Task Force membership includes representatives from the following organizations: Departments of the Army, Navy, and Air Force Service Acquisition Executives (SAE); Office of the Undersecretary of Defense (Acquisition, Technology and Logistics); Director, Strategic and Tactical Systems, Office of Assistant Secretary of Defense (C31); Defense Logistics Agency; Office of the Undersecretary of Defense (Comptroller); Defense Contract Management Agency (DCMA), the Joint Staff, the Joint Materiel Priorities and Allocation Board, and the Department of Commerce. Senior DoD decision makers support the efforts of the Task Force to ensure the Department speaks with one voice to industry and balances limited resources to meet warfighting priorities.

The Task Force address

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Describe the case and the main considerations of the distribution chain or situation presented in the case Mention at least five strategic, operational or remedial measures used in th

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