Memorandum from BAE Systems
SUMMARY
BAE Systems Submarines is the UK's centre of
excellence for the design and build of nuclear powered submarines.
The BAE Systems' evidence presented in this memorandum is specifically
concerned with the sustainability of the UK's ability to design
and build nuclear powered submarines, rather than with the wider
issues about renewal of the nation's strategic nuclear weapons
capability. The UK's present strategic nuclear deterrent capability
(Trident) is carried in a fleet of nuclear powered submarines
(the Vanguard class), and a new class of nuclear powered submarines
could offer the preferred platform from which to deploy any successor
system to Trident.
The Submarine enterprise has faced significant
challenges in sustaining this capability—both within the
Submarines business itself and within the supply chain. The capability
is very fragile. BAE Systems is working with MoD and the supply
chain to understand the challenges and to establish measures to
ensure that capability can be sustained.
The capability to design and build nuclear powered
Submarines is dependent on sustaining a complex range of key and
unique skills. Suitably qualified and experienced design, engineering
and production staffs are required for the safe and efficient
execution of nuclear powered submarine programmes. These skills
can only be sustained by work on real submarine projects. Surface
warship work, for example, can provide some very important assistance
to the effective utilisation of facilities and overall skills,
but cannot by itself sustain those skills that are specifically
needed for nuclear powered submarine work.
It is the BAE Systems view that sustaining the
required capability and skills is critically dependent on establishing
and maintaining a regular drumbeat of nuclear powered submarine
production work—a boat every 22 months is considered the
minimum necessary drumbeat.
In addition, to sustain the core specialist
nuclear powered submarine design and engineering capability, BAE
Systems believes that there should be no significant delay to
the start of design work on a future submarine with assumed delivery
of around 2024.
INTRODUCTION
1. BAE Systems Submarines, based at Barrow-in-Furness,
is the UK's centre of excellence for the design and build of nuclear
powered submarines. BAE Systems Submarines is currently engaged
in the design and build of the first batch of Astute class SSNs
(nuclear powered attack submarines). The business employs c
3,500 people directly. Approximately 50% of the prime contract
value for a nuclear powered submarine is subcontracted to the
supply chain; the top 10 companies together with BAE Systems account
for c 80% by value of a nuclear powered submarine.
2. BAE Systems Submarines has also had a
history of designing and building conventionally powered submarines,
but the last such boat was completed in 1989, and the business
has no current conventionally powered submarine design available.
The business has also been engaged in design and build of surface
ships for the Royal Navy (eg HMS Albion, Bulwark, Ocean), and
anticipates having an important role on the UK's Carrier programme.
3. The Astute Class of nuclear powered submarines
is currently under construction by BAE Systems Submarines acting
as Prime Contractor. The target for the launch of the First of
Class boat is June 2007, followed by Contract Acceptance in November
2008. BAE Systems Submarines is responsible, as the Prime Contractor,
as the submarine builder and as the system-of-systems integrator,
for ensuring achievement of the performance and programme requirements
stated by the MoD Customer.
4. The modern submarine is required to deliver
multiple capabilities: stealth and covertness; endurance and sustainment;
reach and poise; the ability to insert Special Forces and to deliver
weapons. All of these capabilities are inherent in the design
of the current first batch of the Astute Class. However, further
developments will be required, to keep pace with technological
advances and the increased sophistication of potential opponents,
for any future submarine design, particularly in the SSBN role
(nuclear powered ballistic missile firing submarine).
5. This will demand the imaginative insertion
of new technology (for example the use of Open Systems Architectures
to both reduce procurement costs and provide protection against
obsolescence) and the better utilisation and management of both
design margins and space within the high density arrangement of
a nuclear powered submarine. Opportunities for achieving this
are already being studied and it is clear from the ideas being
generated to date that there are good prospects for delivering
the capability advances that are likely to be sought by the MoD.
6. However, it is not capability alone that
is needed. The second key characteristic is affordability. This
has rapidly become, and will continue to be for the foreseeable
future, a dominant theme. It is not only Unit Production Cost,
but the total Cost of Ownership that must be made affordable.
7. BAE Systems Submarines is determined
to continue to nurture and develop the existing submarine engineering
and construction capability (facilities and expertise, both within
BAE Systems and in the supply chain) and to build on recent successes
on the Astute programme. The overriding intent is to deliver affordable
submarines to the Royal Navy within a sustainable business environment.
8. The need for this was fully recognised
in the Defence Industrial Strategy paper published by the MoD
in December 2005, from which the following relevant points are
extracted:
(a) "The DIS will promote a sustainable
industrial base, that retains in the UK those industrial capabilities
needed to ensure national security";
(b) "It is a high priority for the UK
to retain the suite of capabilities required to design complex
ships and submarines, from concept to point of build; and the
complementary skills to manage the build, integration, assurance,
test, acceptance, support and upgrade of maritime platforms through-life";
(c) "For the foreseeable future the
UK will retain all of those capabilities unique to submarines
and their Nuclear Steam Raising Plant, to enable their design,
development, build, support, operation and decommissioning";
(d) "MoD and industry must demonstrate
an ability to drive down and control the costs of nuclear submarine
programmes";
(e) "There are a number of specific
key maritime system capabilities and technologies which we should
retain onshore, and the ability to develop and integrate into
platforms complex maritime combat systems is also a high priority".
9. The "suite of capabilities"
that is crucial to the successful delivery of nuclear powered
submarines to the RN includes the development and maintenance
of:
(a) Systems Engineering (requirements, acceptance,
configuration management, embodiment planning etc) and Systems
Integration capabilities ie the ability to ensure that a complex
product such as a submarine can be designed as a coherent entity,
and that the individual elements can be integrated to deliver
the required capability.
(b) Submarine specific expertise. This includes:
naval architecture, hydrodynamics, structures, reactor plant,
combat systems, weapon handling and launch, platform systems (propulsion,
energy provision and distribution, heat management, life support,
habitability etc), signature management (acoustic and non-acoustic),
safety engineering (nuclear, ship, munitions, environment), marine
engineering, design for production, design for through-life support,
procurement, manufacture, construction, test and commissioning,
programme management.
(c) Computer Aided Design skills. The detailed
design of a nuclear powered submarine is very dense; space is
a highly valuable and important parameter and considerable precision
is required for equipment and system placement, particularly where
there is extensive use of modular build (see below). Some hard
lessons have been learned during the Astute Project that will
form valuable experience for future First of Class design work.
Computer tool selection needs to be right (supportable for the
long term; customised for the specific industry ie shipbuilding;
operator friendly with the required functionality—ease of
initial training and upskilling; speed of use).
AFFORDABILITY
10. Nuclear powered submarines are very
complex products. There is a "Golden (Equilateral) Triangle"
of activity: design; procurement from the supply chain; manufacture
and build. These are all mutually supportive and entirely interdependent
activities; synchronicity of the maturity of information is hugely
important for taut cost and programme management, particularly
where a degree of concurrency is necessary for ensuring that the
Customer's demanding operational timescales are met. Another relevant
factor is the fact that the First of Class boat is effectively
the prototype. Safety engineering is a fundamental part of the
design process; a cost effective and "adequate and sufficient"
safety case (consisting of claim, argument, and evidence) has
engineered features demonstrably meeting well structured and carefully
determined "safety functional requirements" early in
the overall process. Accepting that, for any future platform,
a degree of Design & Development (Engineering effort) will
be required, Unit Production Cost is predominantly driven by equipment
procurement and construction costs as shown below.
EQUIPMENT
PROCUREMENT COSTS
11. The majority of the acquisition and
through-life support costs are determined by the supply chain,
which has become highly bespoke over the last decades. Almost
all of the acquisition costs have now been expended for Astute
Boats 1-3. There are some opportunities for improvements for Boat
4 (although some long lead orders have been placed) but the proposals
which affect procurement costs that follow are mostly for the
later Astute Boats. These should lead into (and thus de-risk)
any potential SSBN Successor.
12. Prior to construction of the Vanguard
Class, there was significant investment by the MoD in ship systems,
propulsion, etc. However, in the recent past, strategic R&T
investment has been targeted mainly at increasing combat capability
(primarily in improving Combat System effectiveness). Investment
now needs to be targeted at both capability and affordability
across the whole submarine design, including propulsion and platform
systems.
13. The necessary approach to cost reduction
is:
(a) Simplification (the "Lean Design"
concept) at all levels ie capability > requirements > standards
> design solution > support arrangements. The overall theme
is to continue to meet the essential capability requirements whilst
reducing complexity and the bill of materials (parts count, etc)
and thus also reducing the maintenance requirement (leading to
increased through-life affordability and availability).
(b) Appropriate use of equipment and technologies
in use in other related industries or environments—demonstrable
performance, better resilience to obsolescence, larger customer
base to share costs etc.
(c) The greater utilisation of automation,
with the purpose of matching the human input to the skills of
a reducing number of operators and addressing human reliability
issues whilst recognising that this is a warship that operates
in a demanding environment and is purposely put in harm's way.
(d) Ensuring that the standards (design,
manufacture, construction) chosen reflect what is actually needed
for the duty to be performed, neither too high nor too low (both
are significant cost drivers) either initially or subsequently.
Constructively challenge traditional thinking.
(e) Pro-active and strategic partnerships
need to be developed with key suppliers and the MoD Customer to
enable the supply chain to be managed better for the long term.
For much of the supply chain, some current elements of which are
exhibiting marked fragility, the submarine enterprise represents
a very small percentage of their customer base, with the result
that, increasingly, we have wanted to buy specialist components
and equipment that no-one else in the general market place wants.
We need to recognise that, where the submarine design inevitably
requires specialist components, then the strategic partnership
must include the lower levels of the supply chain that supply
such components. Where specialist components are not essential,
efforts should be made to engineer them out, in such a way that
the necessary capability, safety and operability are retained.
Developing strategic relationships across the supply chain can
also contribute to this aim.
(f) Design to enable through-life support
and upgrades to be introduced at minimum cost.
(g) Establishment of appropriate commercial
frameworks that incentivise the above.
CONSTRUCTION COSTS
14. In the past two years productivity improvements
have to date resulted in a 22% reduction in man hours in the construction
plans for Boats 1-3 with the prospect of more to come as a result
of ongoing improvement initiatives. This is being achieved through
items such as the following:
(a) Adopting "Lean Manufacture"
techniques such as "Value Stream Mapping" in the Pipe
Shop, fabrication areas etc. to improve process work flows, and
thus reduce level of effort and to shorten lead times.
(b) Progressively making much greater use
of modular build. The Main Propulsion Machinery Package, used
in the build of the Trafalgar and Vanguard Classes, has been supplemented
by three other large modules on Astute—the largest of these,
the Command Deck Module, weighing in at approximately 250 tonnes.
Nine major modules (and many smaller ones) will be used on Boat
2, and yet more on Boat 3.
(c) Use of "Vertical Outfitting"
to improve accessibility. Initial outfitting is now done with
the pressure hull units placed in the vertical position. Specially
designed platforms, themselves modular in construction, enable
features, pipe systems, equipments, etc to be installed more easily
and safely, whilst work can continue on the other side of the
hull without interference.
OVERALL COSTS
15. A performance management culture has
been created, and continues to be developed, throughout the workforce
under the auspices of an extensive programme of Organisation Development
that includes Leadership Development, Trade Union partnership
activities and work on a Submarines Competency Framework. The
need for appropriate incentivisation through Reward and Recognition
is also important and in 2005 an Incentive Bonus Scheme against
specific business performance objectives was put in place for
all non-executive personnel. Because of its success, this is being
repeated, with refinements, in 2006. Engagement of the whole work
force in continuous improvement and innovation is being encouraged
through a scheme called PRIDE (Performance through Recognition
of the Innovation and Dedication of Everyone).
16. During the period 2003-05, a range of
"Zero Based Budget" initiatives reduced overheads by
31% and further activity is ongoing in 2006 to reduce this by
a further 10%. For example, use of "Value Stream Mapping"
is being extended to other functions including finance (payments
of accounts)—the "Lean Office".
17. We continually benchmark with relevant
companies that operate similar processes. We use First Marine
International to compare us with other shipbuilders on a global
stage.
SUSTAINABLE BUSINESS
ENVIRONMENT
18. The Submarine Enterprise requires a
complex range of unique skills to be maintained. Suitably qualified
and experienced engineers and production workers are necessary
for the safe and efficient build of a nuclear powered submarine.
These skills can only be retained by performing "real"
work on "real" submarine projects. Retention would be
seriously threatened by any disruption to the production drum
beat (22 months) or by a significant delay to the start of the
design for a future submarine.
19. Whilst surface warshipbuilding can provide
some assistance towards the effective utilisation of facilities
and retention of overall skills in Barrow, it does not fulfil
the requirement of the key core submarine workforce. Sufficient
and continuous submarine specific work is necessary.
20. The positive steps taken by BAE Systems
Submarines to utilise skills and technology in the supply chain
and to increase productivity have reduced the number of people
required to build a nuclear powered submarine in an acceptable
timescale to less than 4,000. This compares with between 8,000
and 12,000 in the early 1990s when the Vanguard class was completed.
21. However, the gap between the design
of Vanguard and Astute caused significant difficulties within
industry. If this happens again it is the judgement of BAE Systems
that the loss of capability and expertise is likely to be irreversible.
In order to sustain the submarine-specific design skills, BAE
Systems believes that design work needs to be focused on a future
submarine to be delivered around 2024.
22. In addition to the design skills, unique
and vital production and commissioning and support facilities
(including Nuclear Site licence to the required NII/DSNR standards)
are needed by the UK submarine programme.
23. The optimum approach is to sustain strategically
an agreed level of capabilities (both skills and facilities) through
a long-term well-balanced acquisition drumbeat. It will be significantly
more cost-effective to take this approach than to risk losing
these capabilities, with the consequent need to regenerate them,
at significantly greater cost and risk, at a later date. Any subsequent
drumbeat variation will inevitably drive costs the wrong way,
either through the need to acquire additional expertise at short
notice or through having to attempt to retain labour during a
period of reduced utilisation. In practice, it is the BAE Systems
view that this production drum beat needs to be based on build
of a new nuclear powered submarine every 22 months in order to
sustain capability at Barrow and within the supply chain.
24. To realise the undoubted opportunities
for improving the "Value" of the product (necessary
functionality divided by the least total cost), appropriate and
timely investment is needed, both for facilities and for non-recurring
expenditure on design. Safety methodologies are emerging (although
they need further development) that will provide a much needed
mechanism for advising on the Balance of Investment between the
reactor plant and the supporting dockyard site services. This
should help significantly in minimising overall costs.
25. The submarine enterprise as a whole,
which includes all those who undertake activities throughout the
lifecycle of the current submarine flotilla, from concept studies
to support and eventual disposal, all need to play a part in this,
and methods need to be sought to ensure that creative, productive
and well-managed co-operative arrangements for working together
are established. In order to assess the relative merits of emerging
options, rigorous joint assessment processes need to be put in
place that determine the way forward based on achievability, cost,
timescale and overall benefit.
26. The design and delivery of a nuclear
powered submarine is a very complex undertaking that inherently
attracts significant risk. The contracting strategy for this enterprise
needs to take account of who really owns these risks and who is
best placed to manage them. A "decider—provider"
model has been conceived to express this concept, with industry
being the provider of design options, recommended solutions, assessed
benefits, cost data, programme proposals, etc, whilst the expert
customer takes the role of "decider".
27. In addition, in the nuclear powered
submarine business, there are clearly also opportunities for close
working with our US colleagues. This primarily is a government-to-government
activity, with the appropriate participation by industry, and
the information exchange agreements that have been put in place
have the potential to be hugely helpful. This should cover not
only design ideas, but should also investigate supply chain fragility
issues. There is undoubtedly a broad agenda of common problems
that could benefit from joint endeavour. Our recent and ongoing
experience with General Dynamics/Electric Boat, where a strong
and productive liaison has been put in place, has clearly demonstrated
the considerable utility of this approach. But this alone will
not deliver a sustainable industrial capability within the UK,
and is unlikely to deliver increased affordability.
Historic and potential forward workload, depending on MoD decisions on programme like CVF, MARS and Future Submarine
NUCLEAR
SKILLS
28. This section covers design, justification,
build, commissioning, support and disposal of Naval Nuclear Propulsion
Plant.
29. The scope of the Naval Nuclear Propulsion
Plant within a submarine is significantly greater than the reactor
and the primary systems (ie the Nuclear Steam Raising Plant, NSRP).
It also includes all those supporting propulsion and ship systems,
equipments and structures that provide any form of functionality
for the continuing safe operation of the nuclear reactor plant
for the full range of normal, emergency and accident conditions.
These latter items are in the Platform scope of supply and nuclear
safety case skills are required for the production of the Safety
Reports for steam, feed, electrical power, containment etc and
the Manoeuvring Room Substantiation Report.
30. BAE Systems Submarines, by contract
from the MoD, is the Design Authority (DA) for the whole Astute
submarine and a particular individual is identified for this role.
This arrangement explicitly confers responsibilities on this individual,
and on others designated by that individual, for ensuring that
the product meets the required integrated performance requirements,
is safe to operate, complies with legislation and is overall fit
for purpose.
31. BAE Systems Submarines will, whatever
the DA arrangements for any future submarine, have significant
safety management obligations, and hence significant need for
nuclear suitably qualified and experienced personnel. This requires:
(a) Production of the Design Safety Justification
for the appropriate elements of their nuclear scope of supply.
(b) The production also of a Build Assurance
Justification for all elements of the NRP.
(c) All the safety management arrangements
to be in place that are necessary for a Licensed Site on which
the submarine is constructed, tested and commissioned, and authorised
to operate for the first time.
32. In all of the above, there is a need
for close working with the NSRP designer who provides the Reactor
Plant information that is fundamental to the Plant and Site Safety
Cases. BAE Systems Submarines, as both the DA and Site Licensee,
has an obligation to be an intelligent customer of this information
and subject it to an appropriate level of "fitness for purpose"
scrutiny, even though much of it may go through "Independent
Nuclear Safety Assessment" in accordance with the MoD's current
requirements. Currently effort is being put into attempting to
streamline these arrangements.
33. All of the above activities require
nuclear skills, which are in short supply and increasingly expensive.
Those required to design, justify, commission and operate the
Naval Nuclear Propulsion Plant (NNPP) would appear obviously submarine-specific
(and therefore need to be sustained in accordance with DIS)—but
since they currently represent the only active nuclear
power plant design and build capability within the UK, there is
a significant risk that an emergent Civil Nuclear Power Generation
programme could deplete the available skill base within the broad
submarine focussed industrial enterprise (BAE Systems, RR, DML
and key suppliers) to below the level needed to sustain the submarine
programme before a larger pool of expertise in UK can be regenerated.
34. The availability of enough suitable
qualified and experienced nuclear managers, safety case authors
and reviewers is already a challenge. Initiatives are being taken
to:
(a) Formally develop a Nuclear Engineering
and Safety Function within BAE Systems.
(b) Establish a training and development
plan for Nuclear Engineering and Safety skills.
(c) Reduce the reliance on subcontractors
where able to do so.
(d) Pursue proposals for the implementation
of improved Naval Nuclear Propulsion Plant Safety Case methodologies
for later Astute boats (Industry-wide Steering Group with solid
support from all Naval Nuclear sites established)—a key
objective is the appropriate integration of NSRP and Site safety
cases—see earlier reference to Balance of Investment technique.
(e) Seek appropriate nuclear engineering
and safety contracts from both NNPP and civil nuclear sectors
to level out the resource demand in a cooperative manner with
other NNPP contractors. With regard to civil work, this supports
the Defence Diversification programme.
(f) Support Cogent's proposals for the establishment
of a National Nuclear Skills Academy.
17 October 2006
|
