Much has been made of the issues that the Collins class faces as the Future Submarine program seems stalled at the moment. ADM Editor Katherine Ziesing spoke to ASC CEO Steve Ludlam about how the nation’s only indigenous experienced submarine builder is dealing with Collins issues as the business prepares for future opportunities.
ADM: What role is Deep Blue Tech (DBT) playing in building up ASC's submarine design capabilities?
Ludlam: We set up DBT in 2007 and self-funded it to make an investment in submarine design as a whole, and at different specific elements, and we’ve got a staff of 30 people at the moment. We’re aiming to double that by the end of the financial year. What DBT is really doing is looking at the design space of the submarine, like the internal equipment possibilities and the technologies where these elements combined can give you more capability. It’s an opportunity to exercise the team around what a future submarine might look like.
We’ve also set up about 30 non-disclosure agreements with equipment providers around the world, so we’re beginning to study the equipment in more detail, the associated demands, and the way we integrate it into the submarines. We’re also understanding what the in service support aspects of that equipment might be.
So basically, it’s complimented the rest of the design work that we do here at ASC. It’s not there to design a submarine from first principles but rather to be part of a future submarine team to fulfil what the Commonwealth is looking for in a future design.
ADM: How far is DBT working with DSTO on those elements you just talked about?
Ludlam: There’s nothing formal with either the Royal Australian Navy or DSTO. We have had conversations with both DSTO and Navy but we get no privileges beyond anyone else interested in Future Submarine in that relationship.
It’s just an exchange where a few people’s minds are thinking about what the possibilities might be rather than any deliberate path or deliberate work. It’s very informal at this stage, and we are working with a notional set of requirements we have devised from the 2009 Defence White Paper.
ADM: Does the relatively slow cycle of submarine construction, especially the design of new classes and with technology moving so quickly, does that allow industry and naval customers to learn the lessons from previous projects? Do you think we’re in danger of breaking very new and risky technical ground with each new submarine project?
Ludlam: There’s always a risk and there’s really no question of that. The fact that we built six Collins class submarines on what was essentially a brown field site and the fact that we have been in existence for 25 years means that we’ve actually still got a lot of the people here that were part of that original program. So that’s very helpful in that we’ve taken knowledge from that build and the issues that they faced in terms of the equipment. We’ve got a solid base of designers and production teams that really understand these issues.
The big challenge with any new submarine build is restoring the manufacturing capability. The plan to address that risk is by building test pieces, and these might be quite large pieces. This will be part of a much larger technology demonstration program as part of the research and development effort.
These things don’t have to cost a lot of money but they restore the skills that we may well have lost just because we’ve not practiced them. We’ve got the knowledge we just have to get the practical experience back.
If the Commonwealth of Australia does ask for 12 submarines, there might be, say, three flights of four submarines. The evolved Collins is probably one option and then the first four might be an evolution of that. The second flight might have more capability inside those boats.
The fact that it is the second flight allows us to confront some of the obsolescence issues from the first flight. From flight to flight there would be continuous improvement and practice in design, technology and the manufacturing capability as you are constantly learning and building those lessons into the next flight.
There is a risk but I think we have a great indigenous capability. We’ve got some of the best engineers that I’ve ever worked with. The challenge of managing that risk is never going to be easy but I believe it is manageable.
ADM: How much overseas involvement, and in what areas, would ASC require from companies like Kockums and Electric Boat to construct an evolved Collins?
Ludlam: It’s always useful to work with other people. We have a capability agreement with Electric Boat and I think that is a very important relationship and it’s very strong. We regularly have their staff helping out here with the way we do things. Our heritage is clearly Kockums but that would have to be something that we would have to consider carefully given a choice of submarine has not yet been made.
The 30 non-disclosure agreements with companies here and overseas that I mentioned earlier are also part of the equipment approach where we need to be very inquisitive about what we’re designing in these early stages.
We want to be ahead of any problems that may arise during the operation of these submarines. Working with others, regardless of the design, will be an important issue for ASC.
ADM: What do you need to put in place to ensure the availability and supportability of the Collins fleet over the next 15-20 years?
Ludlam: Availability comes down to reliability. The measures that we put in place for cost, safety, availability, reliability and maintainability are all important. How many sea days that Collins can put to sea is what we need to improve and there are a lot of elements that come together to make that happen. Everything we do, we do as well as we can to get that excellence in performance that I’m constantly striving for and have done since day one with ASC.
ADM: At the recent Submarine Institute of Australia conference, AVM Chris Deeble has referred to the animosity that exists between Collins’ enterprise partners. Why does this exist? What’s being done to dispel it?
Ludlam: We are working hard here to become more customer focussed in what we do. Part of that is deepening the relationship in what I call the enterprise and the Submarine Program Office are a large part of that enterprise. In the next 18 months, and even the next six months, we need to demonstrate as an enterprise that things are fundamentally changing in our business. Effectiveness and efficiency are very simple words but what is it that we need to do to make sure that everything that needs to happen, happens on time and that we keep to our program.
Whether there has been animosity or not, we have to get beyond that and work with one enterprise-wide mind to deliver the sea days that Collins needs. Each of us has cost reduction and continuous improvement firmly in our minds and we do tend to solve issues quickly as a group when they arise.
ADM: AVM Deeble has said he wants to get the time taken for a Collins full cycle docking at ASC down from 900,000 to 800,000 hours. Is this achievable and if so, how and when?
Ludlam: That comes back to some of the points I made earlier. 100,000 hours out of the program is roughly 10 per cent and I think that this is achievable. We have to have everything we need in place, in time. We have to make no mistakes so there is no re-work and that is where the excellence in performance attitude in ASC comes to bear. Everyone in the enterprise has their part to play in that but I do think it is achievable.
There is even scope for us to do better than that I think. It’s an ambition, but can we do better than that? Can we take a full cycle docking from three years down to two years? And I don’t mean by putting more people aboard the ships by hour but I think further reductions are very possible. We are already showing signs here at ASC at being able to take significant time out of full cycle dockings.
ADM: What lessons can we, or should we, learn in Australia from the experience of other counties such as the UK, US, France and Germany on sustaining a submarine fleet?
Ludlam: The first lesson is that they have the same problems that we do in many respects. They’ve learnt the same lesson that we have in that you need to get ahead of the problems before they happen. And that means that we should really invest in some research and development, continuous engineering and improvement.
Instead of it all being about more money it’s about using the money wisely. I’m convinced that we have the great engineering talent and we have the energy and leadership to get us where we need to go. We have the underpinnings all there.
Benchmarking performance information between us, making sure that we have a like for like comparison, can be difficult. The nations you mentioned prepare their data in different ways. We do improve one another by watching what everyone else is doing but we do try and benchmark as much as possible, even if it is hard work to do so.
ADM: Signature of the new support contract for Collins is well overdue. Why? What are the issues?
Ludlam: It depends on what you mean by overdue as there are people with certain expectations out there. I guess it’s a question of watch this space. We need to develop a contract that brings incentive based performance behaviour to the fore and Navy, DMO and ASC have been working out the details of how to achieve that. I think you will see a much more unified enterprise with a new agreement.
I’m not going to argue over timing but I think you will see a contract that makes for more days at sea for Collins. We think it will be signed quite soon but I’m not prepared to say much more than that.
ADM: As the MD and CEO of a government-owned business, how difficult is it to reconcile the normal commercial imperative for profitability with the Strategic Reform Program (SRP) and the far-reaching changes in process and efficiency now being demanded of ASC by the customer?
Ludlam: I don’t think it’s difficult to reconcile at all. It doesn’t matter whether you’re a government owned company or not, your obligation to the customer is to deliver value for money by reducing cost while not reducing your level of output.
SRP is about reducing cost and improving the level of output, which is every MD or CEO’s mission. A lot of what we’ve done in out WorkSmart program has helped I’m sure.
ADM: ASC's WorkSmart program appears to be something of a winner – can you outline what it is and perhaps how it can it be applied to other industries?
Ludlam: Its base is in Lean Manufacturing with a Six Sigma-like approach. We’re removing waste and duplication from processes. The Six Sigma approach is about consistently reproducing results reliably. We’ve employed that with our teams across the business.
We have an ideas scheme, not just a suggestions scheme. We have about 80 whiteboards around the various ASC sites where the teams regularly stand around the board, write the good ideas down and then progress them themselves and various levels of management support them in that.
Where these ideas have delivered really great benefits, we give out awards. It’s about engaging everybody in the business. In the first nine months of 2011, we invested about $500,000 in one program and saved just over $5 million and that’s just one program. There are roughly 50-60 ideas that we’re working with at the moment.
We’re also formally training many people in Six-Sigma and Lean with qualifications that are based not just on theory but on projects that they work on themselves. They have to deliver a measured benefit. The program has had massive take up across the whole organisation because people feel as though they own the ideas and they throw themselves at it.
ADM: On the shipbuilding front, BAE Systems Australia has blamed inadequate technical drawings from Navantia for its difficulties with AWD keel blocks. Are Navantia AWD technical drawings to the required standard?
Ludlam: The construction of the AWDs is overseen by an organisation known as the AWD Alliance. The Alliance has been in operation for six years now and will operate for the 15-year life of the ship build. ASC is part of this alliance, alongside Raytheon and the Defence Materiel Organisation.
Earlier this year, on learning of the build up of work and constraints at BAE Systems in Williamstown, the Alliance swung into action. The matter has been resolved and the project is accelerating. Costs have been contained and the schedule impact minimised.
The drawings we get from Navantia are of a good workman like quality. There are changes with them from time to time that we have had to cope with.
ADM: The 2011 ASC Annual Report indicates quite remarkable improvements in performance. How have these been achieved?
Ludlam: Leadership is all about effort, energy and drive. It’s about setting good targets about what we want to do. For example, we need to get HMAS Sheean out into the water in early December. Sheean is out on the hard stand currently. We have simple messages about how many work packages are needed to be closed before we get her into the water and every day you see what needs to be done when you walk onto the site. When we get her into the water she will be six to eight weeks ahead of schedule.
So simple targets, get people motivated, get the energy and effort into it and let the teams work on good ideas that are carried through. We need to make sure that benefits are delivered and essentially just get on with the job.
But we’re not where we want to be.
There’s always more to be done at ASC and the wider enterprise. We want to lead the enterprise, not dominate it, by taking a leading part and this is something we strive to do every day.
ADM: What are the goals you have set for ASC? How will you achieve them, and over what period?
Ludlam: The next 18 months should show a big difference and the next six months should show a very clear, deliberate and well communicated plan. This plan is already in place and we’re already making changes as a consequence. The simple goal is to deliver Collins availability with an increase in sea days and deliver AWD on cost and on schedule because that is what the Navy really wants.
We all know that with projects of this complexity there will likely be issues with cost and schedule but that doesn’t mean that we aren’t working all the time to address any likely issues.
You can expect to see a business that is very conscious of our performance and what we can do to improve it wherever possible. The whole process could be called a performance-based transformation. We set one goal, achieve it and then set the next goal level.
It’s also about managing risk. The work that we’ve undertaken to date to sustain Collins, and Collins will continue for the next 20 years, that is the intellectual scaffolding that will allow the RAN to make a decision on Sea 1000. We have so much knowledge here that we don’t want any privileges but we want to be able to use it and give certainty of outcome in a cost effective way.