Meteorology and Oceanography Command takes CNO's Sea Enterprise to heart.
The modeling effort described in the following is part of a much larger effort underway Navy-wide. Sea Enterprise calls for recapitalization of the Navy, using new technology and platforms. It seeks to improve organizational alignment, refine requirements, and reinvest savings to buy the platforms and systems needed to transform the Navy. Sea Enterprise will reduce overhead, streamline processes, substitute technology for manpower, and create incentives for positive change.
The CNO has set a long-term Navy transformation goal of developing approved and validated performance models for all level of effort (LOE) pro gram/budget estimates. Performance models establish a predictable and an accountable relationship between budget and performance.
NAVOCEANO Ship Performance Model
The performance model is a business tool for operational managers and financial managers. The ship performance model is an extensive and exhaustive database that accounts for the total cost of ship operations--not just the cost of fuel and crew. The model includes cost categories such as direct and indirect ship costs, personnel costs, equipment costs, and ship/survey-related shares of command infrastructure. It is designed to give oceanography community and Navy financial managers a true picture of the total cost of conducting oceanographic surveys and to be an extensive resource to use in cost analysis and control.
Following an exhaustive seven-month development in accordance with the CNO's mandate, the Meteorology and Oceanography Command has converted the management of its seven-ship survey fleet operation to a business-type performance model. This model allows the command to understand the relationship between cost and level of the survey fleet's performance. Performance is measured in terms of the number of survey operations completed in a fiscal year. While the model does not represent a new way of managing the fleet, it does produce greater insight into performance factors, cost structure, and the relationship between those two factors.
The model was designed by a private consulting firm under the direction of the Naval Oceanographic Office (NAVOCEANO) and progressed from concept to the accreditation process in seven months (from October 2003 to April 2004). It must be fully accredited by the CNO (Code N81) before formal implementation.
Historically, the Meteorology and Oceanography Command has been funded as an LOE organization, that is, one whose funding is usually based on the previous year's funding, not by force structure or readiness decisions or optimized by cost/benefit analysis. LOEs account for 13 percent of Navy Total Obligational Authority, according to a Navy memo on LOE organizations. As a point of reference, the ship survey operation amounts to about $110 million annually, or 44 percent of the command's total budget.
Understanding the total cost allows reporting of relevant cost categories to various organizational levels from NAVOCEANO, to command headquarters, to the resource sponsor, and to the Navy's Office of Budget (FMB). According to NAVOCEANO project manager Rich Kren, using the model enables NAVOCEANO to achieve unprecedented detail of the survey operation's costs. As an added feature, NAVOCEANO can compare the survey operation to a private benchmark.
In addition to cost information, the model provides performance information. The performance side of the equation shows where the operational costs are concentrated, which helps find inefficiencies. It also provides greater insight into the complexity of military surveys. The model indicates the community's ability to perform at the level dictated by fleet requirements for bathymetric, hydrographic, and oceanographic requirements. These requirements are time-sensitive and are validated by the Fleet Forces Command (FFC), which is the "demand signal" to the survey fleet. The performance model indicates the level of performance that is necessary to meet the demand. It enables NAVOCEANO to go back up the chain to demonstrate whether the fleet is properly sized to complete the necessary work.
The model shows better than any previous measure exactly what a survey costs, thereby enabling NAVOCEANO personnel to tell superiors at the FFC exactly how much survey work can be accomplished within a specific period of time. So, thanks to the model, the community and FFC are able to prioritize survey requirements and make survey decisions based on the costs and benefits ala particular requirement.
The model is divided into a planning/ budgeting component and an actual cost component. The requirements entry and planning/budgeting component were developed from October to December 2003. The actual cost component was built and reports were enhanced and expanded--while the model was in a local verification and validation process--from January to April 2004. The model and documentation were forwarded to Code 814 for accreditation, review by Johns Hopkins University, Applied Physics Laboratory. The accreditation team includes members from both of those organizations as well as from the FMB.
George Lammons works in the Public Affairs Office at the Naval Meteorology and Oceanography Command. He is a graduate of the University of Tennessee and Millsaps College. His articles have appeared in a variety of technical, professional, and general-interest publications.
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|Title Annotation:||Chief of Naval Operation|
|Publication:||Armed Forces Comptroller|
|Date:||Jan 1, 2005|
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