Delivering Performance

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17th December 2014

Delivering Performance

The Hercules Integrated Operational Support (HIOS) programme, on which Marshall Aerospace and Defence Group is the contract prime, focusses on aircraft availability and the operational capabilities of the United Kingdom’s Royal Air Force.

HIOS is a highly effective, risk-reducing and incentivised partnership between the UK Ministry of Defence (MoD), Marshall Aerospace and Defence Group, Lockheed Martin and Rolls-Royce. Essentially, it is a form of Performance-Based Logistics(PBL) programme and is focussed on supporting the RAF’s operational capabilities.

Delivered under a long-term contract, HIOS covers aircraft maintenance and technical support (for which Marshall has the lead), supply chain management (for which Lockheed Martin has the lead) and propulsion management (for which Rolls-Royce has the lead).

Delivering Performance
Pre-HIOS, the MoD employed a team of people to manage the multiple and varied inputs (such as tooling, equipment, transportation and other supply chain logistics) needed to support the RAF’s C-130s. This team interacted with numerous specialists to manage all aspects of maintaining and modifying the fleet.

Recognising the inefficiency of this approach, the UK MoD created multi-disciplinary groups – or Integrated Project Teams (IPTs) – to bring all those with responsibility for supporting the C-130 together under one leader. However, as requirements and complexities grew so too did the size of the IPTs, and it soon became apparent that much of the work being done could be performed more cost effectively by contractors; and especially the OEMs. This, along with other factors, led to the adoption of a number of PBL-type contracts (for the Hercules and other platforms), where each contract typically related to how a provider would be responsible for ensuring the high availability of a single sub-system, LRU or major component. Accordingly, as the numerous providers assumed the risk of delivery, the MoD became a ‘contract monitor’, responsible for defining requirements, measuring the deliverables against KPIs and paying the bills.

Delivering Performance
However, such PBL arrangements can have limitations. For example, failure, by any single provider, even a minor one, can often be attributed to the non-performance of one or more of the other providers in the supply chain; and the failure can affect the entire fleet.

An Integrated Operational Support (IOS) arrangement gives the buyer a single interface to control, and it becomes the prime contractor’s responsibility to manage the numerous contractors and ensure that all required inputs are present to produce the desired output. All parties must adopt a unified approach to achieve the end goals and an IOS programme is all about constructive attitudes, collaboration and cooperation. HIOS debuted in 2006, is working extremely well and is the only IOS programme for the UK MoD to include propulsion management. In 2012, the UK MoD commented:

“The Hercules Integrated Operational Support contract saves the MoD £170m by replacing several short-term contracts with an agreement to provide the maintenance of the whole Hercules fleet.”

Delivering Performance

Reasons for the success of HIOS include: the focus is on the needs of the RAF; by being long-term, the contact encourages investment and continuous improvement by and within the HIOS team; it has light governance (with no more than two layers), thus enabling decisions to be made quickly; the HIOS team’s proximity to the RAF (e.g. at Brize Norton) gives operational focus and immediacy; an agile commercial structure is in place to react quickly to change; in addition to managing all aspects of maintaining and modifying the fleet to the standards required by different authorities (both inside and outside of the military environment) it also supports operations and exercises; incentives exist that reinforce positive behaviour; there is an unwavering focus on ‘Outputs’ (particularly availability) rather than ‘Inputs’ (such as spares, GFX, people and hangars); and there is a common drive within Team HIOS to succeed.

Moreover, although our IOS model is described here in the context of its application to the RAF’s Hercules fleet, it can be applied to any platform, for any operator.