Slides 13 3 apply role based cost control principles to a re

• 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 co

Apply Role-Based Cost Control Principles

to a Real World Scenario:

M1A2 Main Gun Qualification Cases

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

Call to Action: Ft Hood Campaign Plan for Improving Training Cost Effectiveness

• Fort Hood 2011 Campaign Plan

• Item P 1-2: “effectively and efficiently 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

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

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

Design Issues to be Considers:

How Full Should Cost be?

• Remember fullness issues:

• Cost considerations must be bounded to exclude elements that don’t support goal

• Example: every cost in the Army could include an allocation from the Commander in Chief if truly

“full”

• Choices:

• Allocations from Brigade, Division, Corps, etc.

• Allocations from personnel, resource management, chaplain, etc.

Potentially Key Support and Consumable

Cost Elements for Training

• The following is a list of major training costs

• Soldiers military pay

• Range: personnel, targets, power, etc

• Class I: food, food preparation, delivery

• Class III: petroleum, oil, lubricants

• Class V: ammunition acquisition and issue

• Class IX: maintenance: operator level,

organization level, depot level

Who Should Speak for the Cost Elements?

Defining the Cost Chain of Command

• The focus of Commander’s Intent is on the

Battalion Commander

• Think of the Battalion CO as the customer of the

process

• Who should the Battalion Commander assign

the role to speak for each cost element?

• These will be the presenters at the cost AAR

• This is the subordinate Cost Chain of Command

Learning Check

• How does the use of the cost information

affect the flavor of cost measurement?

• How should reporting roles be assigned?

Case A

• Let’s start with a relatively simple case:

• Frequency After each training event

• Scope Class III, V, and IX only

• Flavor Direct cost

• Fullness No allocation of higher HQ

No allocation of support

• Simple measurement process assumptions:

• Class III and IX cost calculated as actual tank miles at

FORCES estimate of $/mile

• Class V cost calculated as actual main gun rounds

expended at cost published in FORCES (use CTG 120MM TANK TP-T M831A1)

Using FORCES Model

www.osmisweb.army.mil

• Tank cost per mile:

• Go tab CFH Operating Tempo/Flying Costs

• Select Replenishment Parts & Fuel Cost by LIN

• Select T13305-TANK COMBAT 120MM M1A2

• Ammo cost per round

• Go to tab CFH Unit Support Costs

• Select Ammo and Missile Unit Cost from menu

• Select 1315C784-CTG 120MM TANK TP-T M831A1

Tank cost per mile = $288.37

CFH tab

CFH tab

Case A Data: This Training Event

• This training event

• 44 tanks drove 20 miles to the range, 5 miles on the range and 20 miles returning

• Each tank expended its allotment of 10 rounds

• Performance: qualification requires 7 bulls eyes

• 30 tanks qualified with first 7 rounds

• 10 tanks qualified on the 8 th round

• 2 tanks qualified on the 9 th round

• 2 tanks qualified on the 10 th round

Case A Data: Last Training Event

• The last training event

• 42 tanks drove 20 miles to the range, 10 miles on the range and 20 miles returning

• Each tank expended its allotment of 10 rounds

• Performance: qualification requires 7 bulls eyes

• 25 tanks qualified with first 7 rounds

• 10 tanks qualified on the 8 th round

• 5 tanks qualified on the 9 th round

• 1 tank qualified on the 10 th round

Individual Exercise Requirement

• The AAR presentation has been assigned to

you as the Brigade S-4

• Prepare your presentation:

• Showing and explaining costs and performance

compared to expectation (prior training event)

• Several suggestions for continuous improvement

• (One hint: look up cost per mile for heavy equipment transporter T59048-TRUCK TRACTR HET M1070)

Student Presentations

Teacher’s Notes: Both Training Events

last training event per tank tanks cost per $K miles to/from range 40 42 1680 288.37 484 miles on range 10 42 420 288.37 121 rounds per tank 10 42 420 708.00 297

903 qualifying rounds 7 25 175

882 qualifying rounds 7 30 210

Teacher’s Notes: Reconciliation

$K

reconciliation

20

Teacher’s Notes: Performance

performance: cum min rounds to qualify

Teacher’s Notes: Performance

This Event

Last Event Cumulative Minimum Rounds to Qualify

Teacher’s Notes: Potential Savings

• Use heavy equipment transporters (HETs) to move tanks to and from the range

potential savings

Teacher’s Notes: Potential Savings

• Return rounds not needed for qualification

potential savings

Case B: A More Complex Scenario

• It is possible to make the training AAR scenario much more realistic and complex

• First, let’s consider the four requirements for cost control

Requirement: Leadership

• Battalion Commanders and Deputy Brigade Commander drive the AAR

• Interact with support providers who:

• Explain cost and performance compared to

expectations

• Develop continuous improvement initiatives that improve cost and performance

Requirement: Staff Support

• The Brigade Assistant to the Commander for the Enterprise (ACE)

• Supports Brigade and Battalion leadership as well

as subordinates with

• Credible cost measurements, analyses, insights

• Constructive questions, suggestions, and ideas

• Reports directly to Division ACE

• Works for Brigade Deputy Commander

Requirement: Process

• The Cost and Performance After Action Review (CPAAR)

• Occurs monthly, quarterly or as needed

• Brigade DCO establishes meeting schedule

• Brigade ACE defines meeting format

• Providers present cost and performance by Battalion

• Battalion COs critique presentations and

• Credibility: actionable, understandable

• Usefulness: continuous mission improvement

• Affordability: perfect is too expensive

• What is the role of the ACE in staff support?

• What is the role of the ACE in the AAR?

Learning Check

Case B: Expanded Complexity

• Let’s evolve to a more complex scenario:

• Frequency Quarterly training brief

• Scope Class I, III, V, and IX

(food, POL, ammo, maintenance)

• Flavor Direct cost and indirect cost

• Fullness No allocation of higher HQ

Garrison allocation of support

• Additional measurement process assumptions:

• Class I cost calculated from MRE cost per serving data:

FORCES CFH Unit Support Cost  Subsistence Data

• Garrison support costs for food handling, ammunition

Case B: Expanding Complexity

• Key Support Providers: i.e AAR Presenters

• Class I, III, V, IX Brigade S4

• Range: Garrison Range Manager

• Food Prep: Garrison Dining Facility Mgr

• Ammo Issue: Garrison Ammo Supply Mgr

Garrison Support - Food

• Food prep:

• Manager estimates that 90% of her cost supports dining facilities and 10% support range ops

• Total cost for last quarter was $420,000

• Served 90,000 meals in dining facilities

• Served 5,000 meals in field

• Total cost for this quarter is $440,000

• Served 95,000 meals in dining facilities

• Served 4,000 meals in field

Garrison Support – ASP

• Ammunition Supply Point:

• Manager estimates that 95% of cost supports

ammo issuance and 5% supports ammo return

• Total cost for last quarter were $120,000

• Issued 5,000 main gun rounds

• Returned 200 main gun rounds

• Total cost for this quarter is $140,000

• Issued 6,000 main gun rounds

• Returned 300 main gun rounds

Garrison Support – Range

Management

• Range Management:

• Manager suggests allocating range cost on the

basis of range days reserved by units

• Total cost for last quarter was $320,000

• 90 days were available for range usage

• 90 days were reserved for range usage by units

• 70 days were used by units

• Total cost for this quarter is $310,000

• 90 days were available for range usage

• 90 days were reserved for range usage by units

Case B: Additional Data Last Quarter

• Last quarter training:

• 150 trips to and from range, 450 miles on range

• Each tank expended its allotment of 10 rounds

• Performance: qualification requires 7 bulls eyes

• 54% qualified with first 7 rounds

• 10 range days were reserved and 4 used

Case B: Additional Data this Quarter

• This quarter training:

• 180 trips to and from range on HETs, 1080 miles on range

• Each tank was issued 10 rounds and unneeded rounds were returned to the ASP

• Performance: qualification requires 7 bulls eyes

• 50% qualified with first 7 rounds

• 8 range days were reserved and 5 used

• 320 soldiers were fed four MREs each day

Team Exercise

• Teams Assign Members as Follows:

• Battalion CO – most senior

• Brigade ACE – elected by group

Team Presentations

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

Teacher’s Note: Range MGR

Teacher’s Note: DFAC MGR

recoverable cost $K 10.2 13.6

Teacher’s Note: ASP MGR

Teacher’s Note: Brigade S4

Teacher’s Note: Summary

Teacher’s Note: Performance

This Event

Last Event Cumulative Minimum Rounds to Qualify

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?

Teacher’s Note: Case C Summary

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

Maint $ POL $

Battalion

Brigade S4

Ammo SP Manager Brigade S4

AAR

Conclusion: Budget vs Cost Crosswalk

Maint $ POL $

Repair $

Battalion

Brigade S4

Ammo SP Manager Brigade S4

Maint $ Repair $ POL $

Ammo Issue $ Ammo $Food $ Mil Pay $ Range $ DFAC $

AAR

• 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