Apply Role-Based Cost Control Principles to a Real World Scenario: M1A2 Main Gun Qualification Cases...

Apply Role-Based Cost Control Principles Apply Role-Based Cost Control Principles to a Real World Scenario:to a Real World Scenario:

M1A2 Main Gun Qualification CasesM1A2 Main Gun Qualification Cases

© Dale R. Geiger 2011 1

Training has its CostsTraining has its Costs

Terminal Learning ObjectiveTerminal 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


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

• Fort Hood 2011 Campaign Plan• Item P 1-2: “effectively and efficientlyefficiently managemanage,

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


http://youtu.be/5vWLxr6LsY0

M1A2 Abrams Main Battle TankM1A2 Abrams Main Battle Tank

http://youtu.be/5vWLxr6LsY0

M1A2 Abrams Main Battle TankM1A2 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.


http://www.army-technology.com/projects/abrams/

Starting Point: Starting Point: Commander’s IntentCommander’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:Design Issues to Consider:How Often Should this Review Occur?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:Design Issues to Consider:What Costs Should be Measured?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:Design Issues to be Considered:What Types of Costs Should be Included?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:Design Issues to be Considers:How Full Should Cost be?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 Potentially Key Support and Consumable Cost Elements for TrainingCost 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? Who Should Speak for the Cost Elements? Defining the Cost Chain of Command 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 CheckLearning Check

• How does the use of the cost information affect the flavor of cost measurement?

• How should reporting roles be assigned?


Case ACase 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 ModelUsing FORCES Modelwww.osmisweb.army.milwww.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


Ammo cost per round = $708.00

CFH tab

Case A Data: This Training EventCase 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 8th round• 2 tanks qualified on the 9th round• 2 tanks qualified on the 10th round


Case A Data: Last Training EventCase 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 8th round• 5 tanks qualified on the 9th round• 1 tank qualified on the 10th round


Individual Exercise RequirementIndividual 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 PresentationsStudent Presentations


Teacher’s Notes: Both Training EventsTeacher’s Notes: Both Training Events


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

903qualifying rounds 7 25 175

8 10 809 5 45

10 1 10did not qualify 10 1 10

42 320 708.00 227

this training event per tank tanks cost per $Kmiles to/from range 40 44 1760 288.37 508miles on range 5 44 220 288.37 63rounds per tank 10 44 440 708.00 312

882qualifying rounds 7 30 210

8 10 809 2 18

10 2 20did not qualify 10 0 0

44 328 708.00 232

Cost Data

Performance Data

Teacher’s Notes: ReconciliationTeacher’s Notes: Reconciliation


$Kthis training event 882last training event 903variance 20

reconciliation2 more tanks firing (14)2 more tanks to range (23)fewer miles on range 58

20

Teacher’s Notes: PerformanceTeacher’s Notes: Performance


performance: cum min rounds to qualify

last time cum this time cum

7 59.5% 59.5% 68.2% 68.2%

8 23.8% 83.3% 22.7% 90.9%

9 11.9% 95.2% 4.5% 95.5%

10 2.4% 97.6% 4.5% 100.0%

dnq 2.4% 100.0% 0.0% 100.0%

Teacher’s Notes: PerformanceTeacher’s Notes: Performance


This EventThis Event

Last EventLast Event

Cumulative Minimum Rounds to QualifyCumulative Minimum Rounds to Qualify

Teacher’s Notes: Potential SavingsTeacher’s Notes: Potential Savings

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


potential savings

HETs cost per mile 6.17

tank cost per mile 288.37

savings/mile from HETs 282.2

miles to/from range 1760

savings from HETs $K 497

Teacher’s Notes: Potential SavingsTeacher’s Notes: Potential Savings

• Return rounds not needed for qualification


potential savings

rounds fired 440

rounds needed 328

rounds over need 112

cost per round 708.00

savings from returns $K 79

Case B: A More Complex ScenarioCase 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 • Leadership• Staff• Process• Measurement

• How might each work in this scenario?


Requirement: LeadershipRequirement: 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 SupportRequirement: 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: ProcessRequirement: 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

continuous improvement results

Requirement: MeasurementRequirement: Measurement

• Providers (with the help of the ACE) develop suggested measures and methods

• Leaders approve measures and methods • Measurement goals• 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 CheckLearning Check

Case B: Expanded ComplexityCase 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 issuance and range management must be allocated


Case B: Expanding ComplexityCase 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 - FoodGarrison 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 – ASPGarrison 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 Garrison Support – Range ManagementManagement

• 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• 60 days were used by units


Case B: Additional Data Last QuarterCase 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• 30% qualified on the 8th round• 10% qualified on the 9th round• 2% qualified on the 10th round

• 10 range days were reserved and 4 used• 300 soldiers were fed four MREs each day


Case B: Additional Data this QuarterCase 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• 30% qualified on the 8th round• 10% qualified on the 9th round• 10% qualified on the 10th round

• 8 range days were reserved and 5 used• 320 soldiers were fed four MREs each day

41

Team ExerciseTeam 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 PresentationsTeam Presentations


AAR Briefings – Teacher’s NoteAAR 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)


Teacher’s Note: Range MGRTeacher’s Note: Range MGR

last qtr this qtr varcost $K 320 310reserved days 90 90cost per $K 3.6 3.4

battalionreserved days 10 8range cost $K 35.6 27.6 8.0


potential savingsused days 4 5reserved days 10 8unneeded days 6 3unneeded cost $K 21.3 10.3

Teacher’s Note: DFAC MGRTeacher’s Note: DFAC MGR

last qtr this qtr varcost $K 420 44010% range 42 44meals 5000 4000cost per meal 8.40 11.00

battalionsoldiers 300 320days 4 5meals at 4 per day 4800 6400cost of meals 40.3 70.4 (30.1)


potential savingsbas per soldier day 8.48 8.48soldiers 300 320days 4 5recoverable cost $K 10.2 13.6

Teacher’s Note: ASP MGRTeacher’s Note: ASP MGR

last qtr this qtrcost $K 120.0 140.095% issuance $K 114.0 133.0rounds issued 5000 6000cost per issue 22.80 22.175% return $K 6.0 7.0rounds returned 200 300cost per return 30.00 23.33


battalion last qtr this qtr vartanks 150 180rounds issued 10 10total rounds issued 1500 1800cost of issues $K 34.2 39.9 (5.7)

tanks returning 3 0 90rounds returned 0 270tanks returning 2 0 54rounds returned 0 108tanks returning 1 0 18rounds returned 0 18total rounds returned 0 396cost of returns $K 0 9.2 (9.2)

Teacher’s Note: Brigade S4Teacher’s Note: Brigade S4

Class I Food last qtr this qtr varsoldiers 300 320days 4 5meals @ 4 per 4800 6400cost per meal 7.23 7.23meal cost $K 34.7 46.3 (11.6)


Class III POL IX Maint last qtrthis qtr vartanks 150 180miles to/from range 40 0total miles to/from range 6000 0cost per mile 288.37 288.37tanks cost $K 1730.2 0 1730.2

miles on range 450 1080cost per mile 288.37 288.37tanks cost $K 129.8 311.4 (181.7)

HETs 0 180miles to/from range 40 40total miles 0 7200cost per mile 6.17 6.17HETs cost $K 0.0 44.4 (44.4)

Class V ammorounds issued 1500 1800rounds returned 0 396rounds used 1500 1404cost per round 708.00 708.00ammo cost $K 1062.0 994.0 68.0

Teacher’s Note: SummaryTeacher’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

reconciliationHET use 1685.8 Return rounds plan 58.7 More miles on range (181.7)More soldier days (41.6)All other 2.3

1523.5


Teacher’s Note: PerformanceTeacher’s Note: Performance


This EventThis Event

Last EventLast Event

Cumulative Minimum Rounds to QualifyCumulative Minimum Rounds to Qualify

Case C – Individual ExerciseCase 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 SummaryTeacher’s Note: Case C Summary

Mil Pay last qtr this qtr varsoldiers 300 320days 4 5soldier days 1200 1600cost per day 260 260soldier cost $K 312.0 416.0 (104.0)


$K last qtr this qtr varClass 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

reconciliationHET use 1685.8 Return rounds plan 58.7 More miles on range (181.7)More soldier days (145.6)All other 2.3

1419.5

Cost Elements - BudgetCost 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 ViewsConclusion: Budget vs. Cost Views

ArmyArmy

FORSCOMFORSCOM

CorpsCorps

DivisionDivision

BrigadeBrigade

BattalionBattalion

Mil Pay $Ammo $

Food $

IMCOMIMCOM

RegionRegion

GarrisonGarrison

Range $Ammo Issue $DFAC $Maint $

POL $Repair $

BattalionBattalion

BrigadeBrigadeS4S4

Ammo SP Ammo SP ManagerManagerBrigade S4Brigade S4

Brigade S1Brigade S1 Range Range ManagerManager

DFAC DFAC ManagerManager

AAR

Conclusion: Budget vs. Cost CrosswalkConclusion: Budget vs. Cost Crosswalk

ArmyArmy

FORSCOMFORSCOM

CorpsCorps

DivisionDivision

BrigadeBrigade

BattalionBattalion

Mil Pay $Ammo $

Food $

IMCOMIMCOM

RegionRegion

GarrisonGarrison

Range $Ammo Issue $DFAC $Maint $

POL $Repair $

BattalionBattalion

BrigadeBrigadeS4S4

Ammo SP Ammo SP ManagerManagerBrigade S4Brigade S4

Brigade S1Brigade S1 Range Range ManagerManager

DFAC DFAC ManagerManager

Maint $ Repair $

POL $

Ammo Issue $

Food $ Ammo $

Mil Pay $ Range $ DFAC $

AAR

ConclusionsConclusions

• 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 organizationsand accountable personnel


Apply Role-Based Cost Control Principles to a Real World Scenario: M1A2 Main Gun Qualification Cases...

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