Like many combat enablers, the effect that maintenance brings to capability is often poorly appreciated. Maintenance is, however, an essential input to capability that comes with a price: too little means no capability; too much can consume a capability. Last year Defence was in the public spotlight for both problems. The new Landing Helicopter Dock (LHD) fleet spent a considerable amount of time alongside undergoing unforeseen repairs, and the ballooning costs of sustaining the Multi-Role Helicopter (MRH-90) fleet drew the attention of the Australian National Audit Office (ANAO). As Army introduces ever-more complex fleets of equipment, such as the recently announced Combat Reconnaissance Vehicle, the threat of unplanned growth in maintenance costs is a real possibility that must be considered now.
According to a recent ANAO report, Defence spends almost as much on sustainment of its materiel as it does on acquiring it. In 2015-16, this equated to around $6.5 billion on acquisition and $6.3 billion on sustainment, each about 20% of the Defence budget. Of concern, the ANAO also found that Defence is not reliable in forecasting Whole of Life sustainment costs, nor willing to present these costs as prominently as acquisition costs. The introduction into service of Army’s Multi Role Helicopter (MRH-90) fleet is instructive. In 2004, the forecast annual sustainment cost per aircraft was $2.13M, by 2009-10 it was $5.66M and by 2012 it was up to $7.70M per aircraft. In this time the fleet grew from 15 aircraft to 47 and the sustainment costs grew a whopping 350% per aircraft. In a rather significant understatement, the ANAO identified that the “sustainment cost has been identified as a ‘key risk’ for the MRH90 …” Notwithstanding that many improvements have been made to this platform, such cost blowouts will have consequences for Army’s sustainment budget and other capabilities. Directly addressing these cost implications in a 2016 speech to Defence Industry, Head Land Capability, Major General Kath Toohey, asked:
“How [can we] reduce our cost of ownership?… How do we better position logistics to support the modernised Land Combat System? Is there a way we can challenge / change / or drive our Force Generation model to optimise maintenance, sustainment and resource usage?”
As this article will highlight, solutions to these answers are already being generated, but in the face of an antiquated maintenance philosophy. Like our United States allies at the end of the Cold War, many maintenance functions were outsourced by Defence in the 1990s on the unproven premise that cost-savings could be made. Much later it was recognised that this efficiency drive occurred to the detriment of organic capability. For both the Australian and United States armies, it is probably too late to reverse these structural changes, so what can we do?
For a start, we need to appreciate the inherent value of our remaining maintenance system in terms of its cost and contribution to capability. As the ANAO noted from the 2015 First Principles Review, “…Defence treats staff as a ‘free good’ across the Department” yet the labour bill for Capability Acquisition and Sustainment Group (CASG) employees in 2015-16 was $490.4M. This also rings true at the Brigade level; a senior Combat Brigade logistics planner recently advised that if he could get the Brigade Royal Australian Electrical and Mechanical Engineers (RAEME) workforce to work an hour longer each week, he would not require the contracted maintenance support provided to achieve his Brigade’s equipment readiness requirements.
That the value of CASG project staff should always be costed against capability is clear, but less clear is whether the same argument applies to uniformed tradespeople. On the one hand, Army’s investment into technical trades is significant. The new technical trade training contract adopted for the Army School of Electrical and Mechanical Engineering (ASEME) is one of Army’s most expensive training contracts and RAEME tradespeople are amongst the better paid soldiers in the conventional Army. Therefore, Army could expect a similar return on investment in the form of productivity in workshops. However, the 2008 Pappas Review assumes no productivity savings from combat and combat-related military staff advising that ”… the number of combat and combat-related military staff has a direct relationship with capability” implying that the deployability, not the productivity, of these staff is paramount.
To be clear, the aim of ASEME has always been to generate soldiers first and qualified tradespeople second. Equally, the RAEME Corps’ Latin motto, Arte et Marte (with skill and fighting), reminds us that the Corps’ real purpose is to serve on the battlefield where the economic concept of productivity takes a backseat to maintaining equipment for the warfighter. Most warfighters will appreciate the truth of this dichotomy. On exercise or deployment they will know their supporting tradespeople work through the night to ensure broken kit is fixed if its availability is imperative to the mission. In barracks, these same warfighters as commanders may struggle to achieve unit equipment readiness requirements as their personnel are frequently absent from the unit workshop for leave, courses, physical or military training, medical appointments or corporate governance. Somewhere a balance exists.
This is not the main issue though because this RAEME workforce makes a definite contribution to both maintaining the capability and deploying it. I think the real issue is how we match this incredibly valuable but finite workforce to the right areas. The Singapore Armed Forces (SAF) offers an interesting solution. The SAF has a similar sized professional army to the Australian Army yet their operating and geographic context is certainly different to Australia. To this end they have recognised that their own finite uniformed maintenance workforce is critical to their ability to deploy. One outcome of this is that scant maintenance is conducted by SAF tradesmen on general purpose vehicles and equipment whose repairs are readily outsourced. Instead, the efforts of SAF tradesmen are focussed on mission critical equipment such that they conduct the majority of maintenance on their Terrex armoured fighting vehicle (AFV) fleet. Whilst further investigation will be warranted should the Australian Army consider this approach for its incoming fleet of AFVs, there are three related factors that could influence this to ensure our maintenance personnel are treated as a valuable resource:
- Mission critical equipment fleets are increasingly the most expensive and technically demanding on the battlefield, demanding readily available, experienced and highly qualified maintainers.
- Army’s recruitment offer for Science, Technology, Engineering and Mathematics (STEM) qualified potential maintainers must be competitive.
- The advanced technology that Army introduces over the next decade will appeal to this competitive market since it is not freely available elsewhere.
A closer look at the maintenance system could also drive down costs by considering how we plan and forecast our maintenance requirements, and how much maintenance we need to do. On the former, Army has recognised the deficiencies of the existing maintenance system. Since 2016 a team working under the banner of Plan CENTAUR have identified numerous deficiencies using the LEAN methodology to improve workshop practices and update Army’s maintenance strategy. On the latter, direction was released in late 2017 for Army’s AFV fleet maintenance recognising the new paradigm that Army’s Plan BEERSHEBA ushered in. Using legacy AFVs (ASLAVs and M113A4s), its successor, Plan KEOGH, laid the groundwork within Army for the incoming Land 400 fleet of AFVs in terms of structures and training. Using similar structures across Forces Command, Plan KEOGH demands that commanders and exercise planners align to the force generation cycle of ‘readying, ready and reset’. Enforcement of this cycle is intended to set limits on equipment usage during training, particularly when a combat brigade is in the reset phase of the cycle. Supporting documents also define revised regionally-based contractual maintenance arrangements. These are good steps towards realising Head Land Capability’s goal to reduce the cost of ownership.
Caution is necessary though. The introduction of a next generation fleet of AFVs through Land 400 should encourage those in charge of this program to pause; not just in consideration of the previously dismounted infantry units now operating AFVs but also for Army’s armoured regiments. Why? Just ask the US Army what happened following the introduction of the M1 Abrams in the 1980s. Chris Demchak’s case study of how the US Army introduced a complex machine into service concludes that even with careful planning, unexpected problems frequently arose that challenged the organisation’s ability to develop enterprise solutions when bespoke and localised fixes were more readily achieved. So called ‘buffering’, introduced to manage this complexity quickly escalated fleet cost of ownership through growth in specialist maintainers, contractors and test and evaluation. Further, she advised that whilst this may be workable in a garrison environment it is hardly recommended for the complexity of conflict.
Regardless, this is one of the premises justifying the modernisation of Army’s AFVs through Land 400. Besides improving a capability, it supposedly drives down the cost of ownership. As Dave Beaumont observes (with reference to Demchak) this is often not the case for militaries as the ANAO’s critique of the MRH’s sustainment costs demonstrates, and a 2016 Army discussion paper advocating the use of tanks acknowledges.
So what can be done to reduce cost and the buffering Demchak identifies? The authors of the Army tank discussion paper identify a range of potential solutions for sustainment costs, but it is hard to go past their main point; to simply reduce the tank fleets’ rate of effort through greater investment in simulation systems that replicate crew procedures, vehicle operation, and gunnery. The Land 400 program will deliver on this in later phases but such an outcome should also be considered now as part of Army’s maintenance strategy.
Solutions to partially address Demchak’s buffering concern may also be available through further investment in Army’s highly-qualified RAEME workforce and the forecasting tools it relies upon. One of Demchak’s key concerns is that on introduction to service, complex systems impose a huge burden of unknown and often unforeseen faults. Significant investments during design and testing can go some way to resolving these issues, but would likely render such a system unaffordable. An alternative to investing during design is to invest in the human capital responsible for maintaining the fleets. Much like the Ryan Review’s goal to improve decision-making superiority in the Army through investment in professional military education and professional discussion portals like The Cove, Army should consider a similar investment in the technical and intellectual superiority of its tradespeople. Much is already done through ASEME trade courses and Plan CENTAUR activities but more could occur through virtual reality based training, conferences, distributed learning and existing networks. Not all problems can be solved this way but undoubtedly having a trusted and highly skilled workforce on hand to develop solutions is more desirable than not.
The improvement of maintenance forecasting tools and their predictive ability would complement this investment. Already at our disposal is a large and mostly unmined set of data within our maintenance systems that could inform and improve our equipment maintenance forecasting. Chris Jackson proved this in 2009 when as an Army Captain he mined Land Rover servicing data. His analysis of this data showed that a recently serviced vehicle was “1000 times less reliable than one that had been serviced 10 000 km ago” and led to mandatory servicing intervals being doubled. Close to the end of its life, planned maintenance costs for this fleet were sharply reduced. Such is the power of data analysis. As an organisation, Army should exploit this lesson for our new equipment fleets wherever possible.
To close, Army is embarking on a transformative modernisation journey that will outfit its field forces with an unprecedented level and scale of complex technology. No one is assuming this will be easy, and amongst the many challenges associated with this journey is keeping sustainment costs under control. Examples of the stalled LHD fleet and expanding MRH90 and tank sustainment budgets offer a sobering guide on what to expect.
Yet there are signs that the Australian Army is aware of these challenges and is looking for solutions on either side of the maintenance balance sheet. On the productivity side we could use our workforce more effectively and in so doing change the way we recruit, utilise and invest in our technical workforce to overcome constant staffing shortages, competition for skills and the ever-present complexity inherent in introducing new systems. On the other side of the balance sheet, organisational changes to reduce actual equipment usage, and efforts to better forecast our maintenance liability offer other means to drive down the cost of ownership. Army’s intended investment into simulation, coupled with efforts to exploit our maintenance data would complement these outcomes.
Finally, Army’s yet-to-be-endorsed maintenance strategy may offer the roadmap to aid its modernisation journey. It is vital that is does – Army’s $20 billion investment into new AFVs should provide the Government with the capability it needs and the protection that the Australian public expects for its troops. It should not therefore be undermined by rising and unforecasted maintenance and sustainment costs that bring into question the affordability and value of that capability.
About the author: Brendan Robinson is a graduate of the UK Command and Staff College and the Royal Military College Duntroon. Trained as a mechanical engineer at the Australian Defence Force Academy, he now coordinates infrastructure projects from the plans branch at Headquarters Forces Command. He maintains a healthy interest in world affairs and Army modernisation.
. R. Callinan, ‘Call navy trial off, we’ve got that sinking feeling’, The Australian, 9 August 2017, page 6. Callinan drew attention to the unforeseen maintenance costs associated with the Navy’s LHD and Army’s Tiger Armed Reconnaissance Helicopter fleet.
. Australian National Audit Office (ANAO), Defence’s Management of Materiel Sustainment, 39, para 3.37.
. ANAO, 37, para 3.24.
. D. Warren, Defense Maintenance: Sustaining Readiness Support Capabilities Requires a Comprehensive Plan, Testimony Before the Subcommittee on Military Readiness, Committee on Armed Services, House of Representatives, (Washington DC: United States General Accounting Office, 2001). Warren testified that cheaper sustainment costs were never realised following the downsizing of the US Department of Defense’s maintenance system at the end of the Cold War.
. J. McCarthy, Logistics in War, ‘Tyranny of the Easy Button: Finding a Balance between Contract & Organic Logistics’, (blog), 17 July 2017, accessed 29 November 2017, https://logisticsinwar.com/2017/07/17/tyranny-of-the-easy-button-finding-balance-between-contract-organic-logistics/.
. ANAO, 42, para 3.45.
. Department of Defence, 2008 Audit of the Defence Budget, (Canberra: Department of Defence). In discussing labour productivity gains in the Defence workforce, the Pappas Review assumes no productivity savings are realised from combat and combat-related military staff observing that ”…the number of combat and combat-related military staff has a direct relationship with capability.” Defence, 2008 Audit of the Defence Budget (Pappas Review), page 25 [Accessed 7 Oct 2017]
. Chris Demchak, 1991, Military Organizations, Complex Machines – Modernization in the U.S. Armed Services, Cornell University Press, New York
. Demchak, 32.
. Demchak, 38.
. Army cites this very point in describing Project Land 400 and the rationale for replacing its “ASLAV fleet with a CRV due to obsolescence factors that constrain tactical employment and increase the cost of ownership.” Australian Army, Project Land 400, https://www.army.gov.au/our-future/modernisation-projects/project-land-400 [Accessed 5 Dec 2017]
. Chris Jackson, ‘Do we service materiel too often?’, Maintenance News Issue No 120, Land Systems Division Defence Materiel Organisation, (Melbourne: Jun 2009), 1,2.
. Land Systems Division, ‘Extended servicing interval for Land Rover 110’, Maintenance News Issue No 121, Defence Materiel Organisation, (Melbourne: Sep 2009), 12.