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Cost Effective Readiness at Tinker AFB

TINKER AIR FORCE BASE, Okla. -- Tinker organizations have contributed much to the "Road to a Billion and Beyond" savings program by implementing several cost effective readiness programs

OC-ALC Commander Brig. Gen. Gene Kirkland said the depot is a target-rich environment in its requirements planning to programmed depot maintenance and cost-effective readiness is a constant overreaching goal.

"Cost-effective readiness is really about shifting mindsets from a wartime environment to a steady state using a deliberate scientific approach to reduce costs," the general said.
Most recently, complex officials have focused their attention on lowering direct-material costs for PDM. OC-ALC Vice Director Kevin O'Connor said upwards of 60 percent of an aircraft's cost is related to direct materials and more than 85 percent of an engine's cost is for direct materials.

"We're really focusing hard on questioning repair versus condemn as well as how we manage that repair and the sources - contract and organic - of repair for the price challenges," Mr. O'Connor said. "We've taken a real hard look at our budgets and reduced our budgets for business operations, direct material, different overhead expenses and streamlined those budgets for true tangible savings for fiscal 2015."

General Kirkland said his leadership team is also exploring processes in which multiple disciplines can work concurrently on aircraft. The goal is to further reduce the direct materials cost to aircraft and engines, while maintaining transparency.

"Being as cost-effective as we can is only going to better posture us for success," Mr. O'Connor said.

72nd Air Base Wing
72nd ABW Commander Col. Christopher Azzano shared Mr. Alsup sentiments.

"Mission failure is not an option. The number of people around the world who would like to do America harm is, unfortunately, not decreasing. So, we have to support our mission partners, and we have to do it with fewer resources and fewer people. That means we have to get better at what we do... and we are absolutely relying on the whole team," he said. "Come forward with your good ideas, we're happy to hear them."

The air base wings are executing their own programs and initiatives to be cost-effective ready. Among them is the "Council of Colonels," an effort to standardize the practices within the AFSC's air base wings.

"It's a collaborative forum that allows us to share good ideas and standardize the way we do business in ways that are helpful and economical for our customers," Colonel Azzano said.

Continuous process improvements, assisting Tinker mission partners, and collaborating with community are other measures the 72nd ABW is using to reduce costs.

In one instance, the air base wing leveraged excess concrete barriers that the Department of Transportation didn't need. By allowing the air base wing to have them, the wing improved its force protection presence at a minimal cost.

Additionally, the air base wing and Oklahoma City Air Logistics Complex have partnered and reduced energy consumption 5.2 percent from fiscal 2012 to fiscal 2013, which is $2.65 million in cost avoidance. Colonel Azzano said follow-on projects, once capital investment is obtained, will result in further savings to the tune of $6 million to $7 million per year.

"We have embraced the continuous process-improvement culture," said 72nd ABW Vice Commander Col. Stephen Wood. "Each of these efforts contribute incrementally to our efficiency, ensuring we provide overall base support in a more cost effective manner."
The air base wing has contributed approximately $22-million cost-avoidance savings to the "Road to $1 Billion" initiative, said Colonel Wood, with near-term potential savings of an additional $15 million

448th Supply Chain Management Wing
The 448th SCMW operates on a large multi-billion dollar budget and the unit has brainstormed and implemented numerous cost-savings and cost-avoidance initiatives including Demand Forecast Accuracy, Commodities Strategic Sourcing and Strategic Alternate Sourcing.

Demand Forecast Accuracy is looking out into the future and determining a realistic quantity of repairable commodities without overshooting or undershooting the amount. Earlier this calendar year, the wing reached 58-percent accuracy, an all-time high. But, its goal by fiscal 2015 is 70-percent accuracy.

"If we undershoot, we're not supporting the warfighter and in the year of execution, we'd have to go out and use tactical buys very quickly and it's inefficient. We can do it, but it costs us more," said Steven Alsup, 448th SCMW director. "But, we don't want to overshoot either. We have billions of dollars of pipeline inventory and adding more to that inventory isn't always necessary. So, we don't want too much and we don't want too little. We want to hit it just right."

Combined with Commodities Strategic Sourcing and Strategic Alternate Sourcing, the wing has found there is a better way to do business. Commodities Strategic Sourcing allows personnel to find the best way to package and order Depot Level Reparables (DLRs). Strategic Alternate Sourcing allows the wing to use nonconventional and new avenues to repair and replace commodities (DLRs).

Mr. Alsup said recently the wing came across an issue with fan blades. In previous years, the fan blades were replaced instead of repaired. But, upon discovery that some military engines have commercial variants, which can be fixed instead of discarded; the wing looked into fixing broken fan blades. By using certified reconditioned assets that meet the engineer's specifications, the wing has saved $80 million on this initiative.

"Going out and buying onesies and twosies all the time is an expensive way of doing business," Mr. Alsup said. "We look at those needs and bundle them together ...We've found using strategic sourcing, over going out and doing tactical buys, can mean hundreds of millions in savings."

The wing also looked into replacing contracted employees with organic staff at Tinker, Robins Air Force Base, Ga., and Hill Air Force Base, Utah. By having federal service employees performing work, the 448th SCMW cut $46 million in expenses.
Mr. Alsup said he credits the workforce for their ingenious ideas.

"It's really the subject matter experts and artisans out there - whether they're equipment or management specialists, inventory-management specialists or mechanics - who brainstorm these great ideas. Their ideas spin off into more ideas and everybody needs to participate," Mr. Alsup said. "Their contributions to cost-effective readiness are really important and critical to the Air Force's success."