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Apply Role-Based Cost Control Principles to a Real World Scenario: M1A2 Main Gun Qualification Cases © Dale R Geiger 2011 Training has its Costs Terminal Learning Objective • Task: Apply Role-Based Cost Control Principles to a Real World Scenario • Condition: You are training to become an ACE with access to ICAM course handouts, readings, and spreadsheet tools and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors • Standard: with at least 80% accuracy • Determine appropriate characteristics of cost measurement and control process for case study scenario • Prepare cost measurement and reconciliation for AAR • Discuss requirements of cost management and control in context of case study scenario © Dale R Geiger 2011 Call to Action: Ft Hood Campaign Plan for Improving Training Cost Effectiveness • Fort Hood 2011 Campaign Plan • Item P 1-2: “effectively and efficiently manage, manage synchronize and resource training” • This case exercise provides a hypothetical response to the III Corps’ strategic intent • It outlines a Battalion level role based process • Your tasks are to build and deliver the AARs for the various roles represented in training M1A2 Abrams Main Battle Tank http://youtu.be/5vWLxr6LsY0 © Dale R Geiger 2011 M1A2 Abrams Main Battle Tank • The main armament is the 120mm M256 smoothbore gun The 120mm gun fires the following ammunition: the M865 TPCSDS-T and M831 TP-T training rounds, the M8300 HEAT-MP-T and the M829 APFSDS-T which includes a depleted uranium penetrator © Dale R Geiger 2011 Starting Point: Commander’s Intent • Develop an intent statement for your Battalion M1A2 main gun qualification training that meets the Corps’ intent • Make sure you address the two key goals of AAR processes: • Understanding the costs of their mission • Driving continuous improvement in cost effectiveness Design Issues to Consider: How Often Should this Review Occur? • Remember the frequency issues: • The cost of the control process is the sum of the measurement cost and the process cost • More frequent meetings increase both • Should the training costs be review be: • Event driven (after every training event?) • Daily? Weekly? Monthly? Quarterly? Design Issues to Consider: What Costs Should be Measured? • Remember scope issues • There is a point where the cost of greater detail exceeds the value of greater detail • The goal is to reasonably approximate the cost of things that matter • Choices: • Soldier, Squad, Platoon, Company, Battalion • The “significant few” cost elements • The “trivial many” cost elements Design Issues to be Considered: What Types of Costs Should be Included? • Remember cost flavor issues: • Different cost views exist to fill different intelligence need • What cost view provides best intelligence in support of Commander’s Intent? • Choices: • Controllable vs Non-controllable • Total vs Incremental • Fixed/Variable vs Direct/Indirect Team Exercise • Teams Assign Members as Follows: • • • • • • Battalion CO – most senior Brigade ACE – elected by group Range MGR DFAC MGR ASP MGR Brigade S4 • Prepare AAR briefings for Range MGR, DFAC MGR, ASP MGR, and Brigade S4 Team Presentations © Dale R Geiger 2011 43 AAR Briefings – Teacher’s Note • Last team’s Battalion CO (acting as Deputy Brigade Commander) and Brigade ACE (acting as Battalion CO) receive the AAR from the first team • First team’s Battalion CO and Brigade ACE receive the AAR from the second team, etc., etc • (All team members including Battalion CO and ACE can help their team’s presenters answer questions) © Dale R Geiger 2011 44 Teacher’s Note: Range MGR cost $K reserved days cost per $K battalion reserved days range cost $K last qtr this qtr 320 310 90 90 3.6 3.4 10 35.6 27.6 var potential savings used days reserved days 10 unneeded days unneeded cost $K 21.3 10.3 8.0 © Dale R Geiger 2011 45 Teacher’s Note: DFAC MGR cost $K 10% range meals cost per meal battalion soldiers days meals at per day cost of meals last qtr this qtr 420 440 42 44 5000 4000 8.40 11.00 300 4800 40.3 var 320 6400 70.4 (30.1) © Dale R Geiger 2011 potential savings bas per soldier day 8.48 8.48 soldiers 300 320 days recoverable cost $K 10.2 13.6 46 Teacher’s Note: ASP MGR last qtr this qtr cost $K 120.0 140.0 95% issuance $K 114.0 133.0 rounds issued 5000 6000 cost per issue 22.80 22.17 5% return $K 6.0 7.0 rounds returned 200 300 cost per return 30.00 23.33 battalion last qtr this qtr var tanks 150 180 rounds issued 10 10 total rounds issued 1500 1800 cost of issues $K 34.2 39.9 (5.7) tanks returning rounds returned tanks returning rounds returned tanks returning rounds returned total rounds returned cost of returns $K © Dale R Geiger 2011 0 0 0 0 90 270 54 108 18 18 396 9.2 (9.2) 47 Teacher’s Note: Brigade S4 Class I Food last qtr this qtr var soldiers 300 320 days meals @ per 4800 6400 cost per meal 7.23 7.23 meal cost $K 34.7 46.3 (11.6) Class V ammo rounds issued 1500 1800 rounds returned 396 rounds used 1500 1404 cost per round 708.00 708.00 ammo cost $K 1062.0 994.0 68.0 Class III POL IX Maint last qtrthis qtr var tanks 150 180 miles to/from range 40 total miles to/from range 6000 cost per mile 288.37 288.37 tanks cost $K 1730.2 1730.2 miles on range cost per mile tanks cost $K HETs miles to/from range total miles cost per mile HETs cost $K © Dale R Geiger 2011 450 1080 288.37 288.37 129.8 311.4 (181.7) 40 6.17 0.0 180 40 7200 6.17 44.4 (44.4) 48 Teacher’s Note: Summary $K last qtr this qtr var Class III IX to range 1730.2 44.4 1685.8 Class V Ammo 1062.0 994.0 68.0 Class III IX on range 129.8 311.4 (181.7) DFAC cost 40.3 70.4 (30.1) Range cost 35.6 27.6 8.0 Class I Food 34.7 46.3 (11.6) ASP issues 34.2 39.9 (5.7) ASP returns 0.0 9.2 (9.2) 3066.8 1543.3 1523.5 reconciliation HET use Return rounds plan More miles on range More soldier days All other © Dale R Geiger 2011 1685.8 58.7 (181.7) (41.6) 2.3 1523.5 49 Teacher’s Note: Performance Cumulative Minimum Rounds to Qualify This Event Last Event © Dale R Geiger 2011 50 Case C – Individual Exercise • Add Military Pay for the Soldier days involved at an average cost of $65K per year and 250 work days per year • Discussion on materiality How significant is Military Pay? â Dale R Geiger 2011 51 Teacher’s Note: Case C Summary Mil Pay soldiers days soldier days cost per day soldier cost $K last qtr this qtr 300 320 1200 1600 260 260 var 312.0 416.0 (104.0) $K last qtr this qtr var Class III IX to range 1730.2 44.4 1685.8 Class V Ammo 1062.0 994.0 68.0 Mil pay 312.0 416.0 (104.0) Class III IX on range 129.8 311.4 (181.7) DFAC cost 40.3 70.4 (30.1) Range cost 35.6 27.6 8.0 Class I Food 34.7 46.3 (11.6) ASP issues 34.2 39.9 (5.7) ASP returns 0.0 9.2 (9.2) 3378.8 1959.3 1419.5 reconciliation HET use Return rounds plan More miles on range More soldier days All other © Dale R Geiger 2011 1685.8 58.7 (181.7) (145.6) 2.3 1419.5 52 Cost Elements - Budget • Soldier Cost: military manpower appropriation managed at Department of the Army level • Range Cost: Garrison Ranges (IMCOM) • Class I: Garrison DFACs (IMCOM) • Class III: Brigade budget • Class V: appropriation managed at Army level ammunition issuance is Garrison ASPs (IMCOM) • Class IX: split between brigade, Garrison DOLs (IMCOM) and OMA appropriation (DA) Conclusion: Budget vs Cost Views Mil Pay $ Ammo $ Food $ Army Battalion AAR FORSCOM Corps Division POL $ Repair $ Brigade Battalion IMCOM Brigade S1 Range Manager DFAC Manager Brigade S4 Ammo SP Manager Brigade S4 Region Garrison Range $ Ammo Issue $ DFAC $ Maint $ Conclusion: Budget vs Cost Crosswalk Mil Pay $ Ammo $ Food $ Army Battalion AAR FORSCOM Corps Division POL $ Repair $ Brigade Battalion IMCOM Region Garrison Range $ Ammo Issue $ DFAC $ Maint $ Brigade S1 Range Manager DFAC Manager Mil Pay $ Range $ DFAC $ Brigade S4 Ammo SP Manager Brigade S4 Ammo Issue $ Food $ Ammo $ Maint $ Repair $ POL $ Conclusions • Role based cost management and control offers numerous opportunities to engage • In improving the cost effectiveness of complex processes • With many different types of cost • With many different supporting organizations and accountable personnel © Dale R Geiger 2011 56 ...Training has its Costs Terminal Learning Objective • Task: Apply Role- Based Cost Control Principles to a Real World Scenario • Condition: You are training to become an ACE with access to ICAM... Determine appropriate characteristics of cost measurement and control process for case study scenario • Prepare cost measurement and reconciliation for AAR • Discuss requirements of cost management and... course handouts, readings, and spreadsheet tools and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors • Standard: with at least 80% accuracy