Examination of witnesses (Questions 100
WEDNESDAY 14 FEBRUARY 2001
100. Let's focus on that. What are the elements
outside your control which you would encourage us to encourage
others to improve?
(Mr Hill) The most important issue is the availability
of spares and obviously we are in competition frequently with
front-line units and they will always get priority over third-line
in terms of provision of spares. What we have to do together with
industry and the IPTs is manage the spares process better and
that is what Project Whirlwind is all about, managing the supply
chain. The other area is getting proactive technical advice from
design authorities like BAE Systems, Boeing and Agusta-Westland
and getting access to repair schemes in a proactive way to enable
us to recover aircraft quickly. Frequently we have aircraft grounded
awaiting repair schemes and that is an area we are actively working
with industry to try to improve.
(Mr Oughton) I should just explain a couple of figures
to reassure you that the issue of spares that Mr Hill refers to
for DARA is one that we are absolutely focused on in the Logistics
Organisation as a whole and one of the key step changes that we
are addressing across the whole of the organisation is to tackle
both the holdings we have of spares (to ensure that we are neither
over or under-providing in appropriate areas) and to develop a
much better inventory and tracking system so that we have a much
better understanding of the timeliness of delivery from suppliers
and the lead times we need to set for the acquisition of spares
and the management of those spares when we have them in our inventory.
So it is an issue we are tackling for the whole of the organisation.
101. Whilst the holding of the spares must be
quite expensive, it is a comparatively modest cost compared with
the availability or unavailability of aircraft when they are needed.
If this issue of spares and the other issues beyond your control
were to be cracked completely, can you give us a measure as to
the extent this would free up the availability of front-line aircraft?
(Mr Hill) One of our aims is to move as quickly as
possibleand this is under guidance from the Treasuryto
spares inclusive trading and we are putting the systems in place
that enable us to forecast very accurately exactly what spares
we need and when we want them. We build that into our offset lead
times and manufacturing resource planning system, and that is
up and running on two out of four sites. Defining clearly exactly
what you want is absolutely fundamental and then getting into
the direct relationship with industry for the procurement of those
spares, rather than having third parties which sometimes add cost
and time to the process. That is one of the fundamental targetsthat
we have got to get to spares inclusive trading as quickly as we
possibly can in the Agency.
102. Just a lateral look at your organisation.
How do you compare in terms of turn round times with your commercial
(Mr Hill) In some instances our turn round times are
significantly better than anything that industry can deliver.
If you take the Lynx main rotor gearboxes, we have reduced the
turn round time from 52 weeks to two weeks and there is not anybody
in the market-place that can compare with that timescale right
at the moment. If you look at our engine repair and overhaul we
have taken that down from 185 days to 57 on the Gnome (engine).
If you benchmark against best practice people are doing that in
45 days not far from your constituency at Hands in Portsmouth
so we have got to get a bit better, but we are getting closer.
In some other areas we are nowhere near as efficient as we would
want to be. We know where we have got to improve and we have plans
in place. In manufacturing, in particular, we are not as sharp
as best practice in industry but we have the skills and the equipment;
it is a question of getting the processes right for the future.
103. You are, of course, currently in a very
good position to lean on MoD and Government in all its aspect
in order to get priority for your own particular requirements
for spares and other issues. Is there a risk that you might lose
this special relationship if you move on to a more commercial
(Mr Hill) No, I think once we get the commercial processes
in place particularly through partnership arrangements where there
is a win/win for both parties, there is a vested interest in a
partnering arrangement in industry giving us the spares because
they do not get paid if they do not deliver through the prime
104. In the ideal world what percentage of aircraft
should be planned to be out of service?
(Mr Hill) That is a very difficult question. If you
benchmark against commercial aviation practice in some of the
airlines they are achieving 18 hours a day out of their jumbo
jets. We target at front-line 70% availability on our weapons
system and with the complexity of military aviation that is probably
as good as you are going to get. In some instances we are collectively
achieving that, in other areas we are nowhere near it, but that
is the kind of target we have got to shoot towards.
(Mr Oughton) The reason why it is difficult to give
a precise answer to that question is because as we develop post-Cold
War approaches to doing our business, we have to look at graduated
readiness times for the proportion of our forces immediately able
for use on operation overseas. But other elements of our Armed
Forces are on much longer periods of notice, not required for
immediate action, and that is a much more selective graduated
approach to the use of Armed Forces than constructing a single
figure that says we need 70% available, for everything at any
time. It is a much more complicated question to answer. What we
have to do with our project teams in the Logistics Organisation
is give Mr Hill the best possible guidance and clarity we can
on what our demands are, what outputs we require from him and
when, so that he is in the best position to meet those. Again
the trading fund we are setting up will add that clarity and discipline
to the relationship that currently does not exist.
Mr Hood: Mr Hill, thank you very much
to you and your colleagues. Just to repeat thank you for the hospitality
we were afforded last weekwe really appreciated thatand
for coming along today. Your evidence has been very useful in
our inquiry and I look forward to seeing you in the future. I
am sure you will look forward to reading our report.