cpl exam prep seminar - iems연구센터 홈페이지 exam preparation seminar.pdf · provide...

CPL EXAM PREP SEMINAR

LLOYD H. MULLER

PART I REVIEW INTRODUCTION - PURPOSE

SUPPLEMENT OWN STUDY!!!Provide a broad study frameworkProvide sample exam questionsProvide reading list – current to

November exam

SEMINAR FORMAT

Two 2 hour segments Summary lecture of important materialPractice 45 minute test designed to

challenge knowledge

PART I - OVERVIEW

Numerous definitions of logisticsSOLE’s definition: the art of science and

management and engineering, and technical activities concerned with requirements, design, and supply and maintaining resources to support objectives, plans and operations.Simply stated: care and feeding of system

PART I - OVERVIEW

Logistics is an integrated system - ILSSystem elements - DOD

MaintenanceSupport EquipmentSupply SupportPHS&TManpower & PersonnelTraining & Training SupportFacilitiesTechnical InformationComputer support (I include communication here)Design Interface – Supportability

OVERVIEW – SYSTEMS ENGINEERING

Systems EngineeringDefinition: Application of scientific and engineering efforts to transform an operation need into a system through top-down iterative process analysis, allocation, synthesis, design, test and evaluationKey point: logistics engineering is one element of this process

OVERVIEW – CONCURRENT ENGINEERING

Systematic & integrated design approachIncludes manufacture and supportConsiders all elements of product life cycleGoals: improve quality and reduce development time

OVERVIEW - LIFE CYCLE

All development stages from inception through retirementKey Point: Engineering done to

enhance life cycle: Operational effectivenessReduce costs


Stages

NeedIdentification

DesignAnd

Development

ProductionPhase

Operation & MaintenanceSupport Phase Retirement

Feedback Loop

Blanchard: Log Eng. Page 18


Relative Costs by Stage

R & D Production O & M

10% 30% 60%


Improvement Opportunity Curve

Need Dev Prod O & M Retire

Cumulative Cost Curve

Cost Improvement Opportunity

Blanchard: Log Eng, Page 18

OVERVIEW - SYSTEM EVALUATION FACTORS

Figures of Merit – Typical FactorsSystem PerformanceOperational and SupportTotal Life Cycle Cost – Common denominator

OVERVIEW - SYSTEM EVALUATION FACTORS

Typical Figures of Merit

Effectiveness FOM = AvailabilityLife Cycle Cost

Effectiveness FOM = ReliabilityLife Cycle Cost

LOGISTICS MANAGEMENT - GENERAL

Must meet overall strategic goals and missionsObjectives must be clear: quantifiable

if possible in terms of service or productsResources must support tacticsPerformance must be evaluated

through feedback system

LOGISTICS MANAGEMENT

Follows above principlesSOLE logistics environment is generally project oriented

Task oriented vs. continual productionParticipation is limited durationParticipants are hired experts loyal to their professionManagement is participative, consensualLeadership tends toward coaching vs. demanding

LOGISTICS PLANNING & MANAGEMENT

Logistics Support Analysis (LSA)Management modelDOD: MIL-STD 1388-1/2 – classic modelCommercial model – based on DOD modelDOD demands LSA but not MIL-STD

Definition: A systematic, comprehensive, tailored analysis on an iterative basis through all life cycle phases to support equipment so as to meet mission requirements

LOGISTICS SUPPORT ANALYSIS

LSA consists of5 Task Sections15 Tasks83 Subtasks

Task selection is tailored to project requirementsKey Point: Main task of LSA is influence system design for better supportability

LSA CANDIDATES

Show LSA Candidate slide

LOGISTICS SUPPORT ANALYSIS RECORDS

Designed to support LSA data requirements

Stores recordsProduces outputs such as maintenance plans

LSA - FMECA

Failure, Mode, Effect, Criticality First step of maintenance planning

Achieved by testingDesigned to learn what can go wrong

Analysis done by measuring functional output

LSA - RCM

Reliability Centered MaintenanceFollows FMECA findingsProvides definition of tasks to be

accomplishedSafetyCost effectivenessDoes not say how task is to be done

LSA Maintenance Planning

Follows from FMECA/RCM planningOutlines

What is to be accomplishedWhat resources are required

LSAR product

LSA SUPPORTABILITY

Maintenance is central LSA issueAll other elements have supporting role

LOGISTICS MANAGEMENT

Project management orientationFlat line and staff structure

Management Grid OverlayDOD: IPPD (Integrated Product and Process Development)Designed to speed development times

LOGISTICS MANAGEMENT – IPPD STRUCTURE

Developed by civil industry as outgrowth of systems/concurrent engineeringCombines

Systems engineeringConcurrent engineeringProject team management


Key principles of successful IPT’sCustomer drivenCAIVFlat integrated management organizationConsensus guided but not drivenNo secrets – problems identified earlyMembers empowered to decide


Three level organizationWorking IPT: Team specialistsReview IPT: Provides high level guidanceOverarching IPT: Provides final decisions

DOD: Defense Acquisition ExecutiveCivil: CEO or senior VP levelThese people are committing the farm

LSA - SUPERVISION

Old authoritarian style outParticipative style emphasized

Theory X/YManagement by Objective

Communication and motivation skills more important than technicalRecognize that team members are

experts – not the supervisor

FINANCIAL METHODS - DEFINITIONS

Cost Analysis: Analysis of costs associated with completed workCost Estimation: Estimates of costs

associated with future workCost analysis can be used as basis of

cost estimation

FINANCIAL METHODS - WBS

Work Breakdown Structure: key starting pointOrganizes work from top to bottom in

discrete cost-able unitsMIL-STD 881B – DOD Standard

FINANCIAL METHODS –WBS Example

Level I Level II

Level III

Level IV – Etc.

01-00-00F-16 - System

01-01-00Aircraft

01-02-00Sup Equip

01-03-00Tech Data

01-03-00Facilities

01-03-01CADS

01-03-02LSAR

01-03-03CALS


Answers typical questionsWhat is to be done?What are inter-relationships?What are effects of failure – FMECA?How can maintenance be supported –RCM?What costs can be assigned to each work unit and in total?


Three basic levels of DOD analysisLevel I – Entire system including logisticsLevel II – Major elements such as logisticsLevel III – Subordinate elements: maintenanceLevel IV – Further shred-outs of Level III

FINANCIAL METHODS - CBS

Follows the WBS analysis structureAdds costs to the WBS


CBS sources of analysis dataHistorical analysisExpert estimatesCost estimating relationships: Cost/poundIndividual factors: QC efforts = 16% of manufacturers historical costsPast cost data


CBS estimation purposesRough order of magnitudeFeasibility/Validation estimateBudget Quality EstimateBid EvaluationsContract “should cost” estimates


CBS required actionsProgram planningMilestone reviewsBudget preparationsProcurement planningProposal evaluationsContract negotiationsContractor performance measurements

FINANCIAL METHODS – PRESENT VALUE

Brings future costs to present dollarsImportant CAIV consideration

Money gets cheaper in the futureResult of inflation

Maintenance should not be delayed as delayed action causes increased deterioration

FINANCIAL METHODS – PRESENT VALUE

Present Value of MoneyFormula: P=F(1/(1+i)n) Example:

Interest rate: 10%Pay now: $1000Pay in one year: $909.00

FINANCIAL METHODS – FUTURE VALUE

Future ValueFlip side of Present ValueShows future appreciated value of

investmentExample: $100 invested @ 6% for one

year = $106.00

FINANCIAL METHODS

Return on Investment (ROI)What’s it worth to me?Definitions

F = Future ValueI = Interest Raten = Number of yearsP = Projected total Profit

FINANCIAL METHODS - ROI

Two formulasFirst formula: F = P(1 + I)n

Derives basic profit from investment

Second formula: i = antilog log F – log P -1n

Derives return on investment


Example – 1st stepF= $6.216 mi = 7% annual returnn = 10 years (product life cycle)F = 6.126 (1.07)10 = $12.228 mP = 12.228 – 6.216 = $6.012


Example: 2nd stepF = risk capital + profit

i = antilog log 18.019 – log 6.016 -1010

i = .1159 or 11.59% ROI

FINANCIAL METHODS – PAYBACK ANALYSIS

Essential question – How long is the payback period?Example:

Investment = $15,000Annual return = $5,000Payback = 3 years

Example doesn’t account for tax benefits, time discounts, etc.

FINANCIAL METHODS – PAYBACK ANALYSIS

Example with tax considerationsPayback for $10,080 investment with 7 year life, $4,000 annual savings, and 40% tax rate

Year Dep. Tax Benefit Save after taxes Total Cumulative1 4*10,080 * 1/7 = $576 $2400 $2976 $29762 4*10,080 * 1/7 = $576 $2400 $2976 $59523 4*10,080 * 1/7 = $576 $2400 $2976 $89284 4*10,080 * 1/7 = $576 $2400 $2976 $11,904

Payback = 3.5 years

FINANCIAL METHODS – BREAK EVEN ANALYSIS

Logic is the same as payback analysis except that it can deal with more variablesTypical applications

Given certain information, how many years until payback?Given certain information, what discount rate will give a payback?Given certain information, how many miles must be driven to break even

ANALYSIS METHODS – OPERATIONS RESEARCH

Purposes:improve methods Use of resources

MethodStudies operational relationshipsMathematically orientedCPM typical example

ANALYSIS METHODS – SYSTEMS ANALYSIS

Process for organizing systems engineeringRelationships of functionalitiesFMECA/RCM are examples

ANALYSIS METHODS – FEASIBILITY STUDIES

Generally, this is a cost driven exerciseCAIV has been big player

Essentially, a budget buster might offer the absolute best mission supporter, but not be possible due to costA lower cost version that still meets

requirements will be selected

ANALYSIS METHODS – RISK AND UNCERTAINTY

Basic premise: all projects involve risk Poker game is typical exampleProgram: political influence or economic strength of nation or natural disasterDecisions must be made with imperfect knowledge

Cost of failure and value of success must be weighed


Types of RiskExternal unpredictable: regulatory, natural hazardsExternal predictable: market risks, operational, environmentInternal non-technical: management, schedule, costTechnical: technology change, performance, complexityLegal: licenses, patent rights, contractual


Concept Development Implementation TerminationPhase Phase Phase Phase

Opportunity/Risk

Amount at Stake RiskImpact Area

RISKLE VEL

TIME

$

V

A

L

U

E


Risk ManagementRisk assessment: baseline and structuring, screening, quantification, modelingRisk Response

System Standards: definitions, policies, procedures, monitoring, risk updateInsurance: buying financial protectionPlanning alternatives

Risk Documentation: information databases and assessments


Quantitative MethodsProbability Analysis – Poker estimationMaxi-Mini Regret – Financial gains/lossesDelphi Method – Consensus of expertsMonte Carlo – Probabilistic recreation of eventsPERT/CPM – Estimation of time flow

Monte Carlo

Risk Analysis TechniqueUses Random NumbersDevelops discrete set of events Assign each event 0% – 100% probability

Run each scenario many timesDevelops a stable estimate of expected outcomeExample shown now

QUEUING THEORY

Reduces waiting time costsExamples:Drayage costs for trucks Mechanics waiting for parts Customers waiting in check-out lines

QUEUING THEORY

CHECK-OUT STATION

WATING TIME 30 MINUTES @ $100/HOUR = $1050

2ND CHECK-OUT STATION

WAITING TIME REDUCED TO $300

ANALYSIS METHODS – CONTINGENCY PLANNING

If this: What then?First Aviano AB AMC flightAll plans set upCommander asked: what about fog?Thank God he asked

MANAGEMENT INFORMATION SYSTEMS

Classically two different elements Computers Information

Prefer combined computers, communication and informationEffect has been to speed and improve

accuracy of information

Management Information Systems

ApplicationsCharacterized by dynamic change Systems engineering

CALSCAD

Commercial applicationsJITMRPDRP

PROCUREMENT& PURCHASING

Procurement is policy levelCoordinates requirements with operations and logisticsChanging from MIL-STD’s to COTS was major DOD procurement change

Purchasing is enacting of purchasing policies

PROCUREMENT - PROPOSALS

IPPD involves procurement as team memberEstablishes project’s procurement strategy Involves concurrence with other team members

InvolvesDefine need for projectDevelop Statement of Work (SOW), specifications, and WBSMake or buy analysisLaying out milestonesCost estimating/analysisObtaining approval to proceed

PROCUREMENT - PROPOSALS

Types of contractsCost plus

Cost plus fixed feeCost plus incentive fee for improved methods/results

Fixed priceFixed plus incentive fee for productivity gainsFixed plus economic price adjustments

Risks Cost plus is buyer’s riskFixed price is contractor’s risk

PROCUREMENT – SOURCE SELECTION

Sealed bidsMost common – Open to all biddersRequests sent out for bids to be opened on specified date

Sole source – negotiatedDone when no other bidder is availableInvolves cost estimating/analysis for both sides to reach equitable agreement

PROCUREMENT – CONTRACT NEGOTIATIONS

Initial stage - done to refine understandings during solicitation stage

Follow-on negotiations - Contracts are living documents that must adapt to unforeseen conditions

To succeed, negotiations must be done in good faith

QUALITY

Crucial element todayLogistics quality can add value -

utilitiesInvolves total commitment

QUALITY

Two questionsWhat is core competency of producer?What does the customer want?

Both questions must be answered To substanceAccurately

QUALITY

Typical MeasurementsOn-time performanceOrder completenessLine item fill rateInvoice accuracyDamage/loss free receipt

COMMERCIAL LOGISTICS

Important during EMD and later phasesInvolves:

Support of manufacturing processesDistribution of basic productFollow-on support of fielded systemWill comprise 60% life-cycle costs

Will discuss more common elements

TYPICAL FACTORY FLOW

PRODUCTION

IN INVENTORY OUT

SALES - $$$PROCUREMENT TO SUPPLIER

I/B TRANS O/B TRANS

MANAGEMENT

Note relationship of all logistics elements

Order of Processes

Manufacturing drives inventoryInventory drives transportationProduction requires O/B movementProduction depletes inventoryReplenishment generates procurement actionReplenishment creates I/B movement requirement

PHYSICAL DISTRIBUTION - EVOLUTION

TO 1960’s 1970’s – 80’s 1980’s – 90’s 1990 - 2000+Stage 1 Stage 2 Stage 3 Stage 4

Mgmt Opns Cost & Cust Strategic EnterpriseFocus Exec Service IntegrationOrg Decen Centralized Integration Total Design Func Organization

WarehouseAnd

Transport

TotalCostMgmt

IntegratedLogistics

EnterpriseIntegrative

Management

SUPPLY CHAIN MANAGEMENT

Outgrowth of enterprise logistics Integrates separate firms

Replaces vertical integration of 1900’sEach firm concentrates on core activity

Goal: Raw material to customer integration of processesInvolves:

Long term commitment to mutual growthExcellent communication and transportation

CORPORATE GOALS

Broad corporate goals – five year plansMarketing

Strategy of achievementBased on anticipated sales: demanded and generated

Sales: Tactics of marketing planProduction and Logistics: Support

US ENVIRONMENT

Customer/Quality drivenDeregulated marketsPublic good to be met by competition

Lower pricesHigher quality

Continual consolidations

INTERNATIONAL ENVIRONMENT

World economyGrowth of regional partnerships: NAFTA and EUFast transfer of information and resourcesGrowth of world marketsReduction of regulations

PERCENTILE INVENTORIES

Costs generated byReorder costs

Purchasing administrationTransportation

Inventory costsCost of invested moneyWarehousing costsShelf-life costs

ECONOMIC ORDER QUANTITY

Resolves the two inventory costs

C

O

S

T

S

QUANTITIES

INVENTORY COSTS

ADMIN COSTS

BALANCE

DRP/MRP/JIT

Basic premisesProbabilities not usedDecisions made with near term dataInventory flows “just-in-time”

RequirementsPowerful computers to handle massive dataExcellent communications with suppliersReliable transportation

PURCHASING PRINCIPLES

Purchasing is enactment of procurement policiesResponds to inventory re-order

requirementsGenerally will try to buy in bulk up to

procurement policiesCheaper volume ratesFewer transactions to manage

TRANSPORTATION - PRINCIPLES

Decentralized network of contracted agentsIncreasingly deregulated

Traffic manager no longer rate clerkMust seek and negotiate best buys

Service considerations PriceReliability

TRANSPORTATION - PRINCIPLES

Cost of material drives selectionHigh cost material uses expensive airlift

Relative cost is insignificantCost of downtime usually important

Low cost material uses cheap rail/barge

Relative cost very highInventory cost of material low

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