Fred Swisher, Program Manager Phone: (407)

I. Program Overview

Organization Name/Program Name:

Lockheed Martin Missiles and Fire Control (LM MFC) Modernized Day Sensor Assembly (M-DSA)

Program Leader Name/ Position/Contact information – E-mail, Phone

Fred Swisher, Program Manager Email: [email protected] Phone: (407) 356-9346

Program Category Sub-System R&D/SDD program or project

Program Background: What is this program all about? (No more than one page).

Describe:

 The overarching need for this program

 History of the program

 The product that is created by this program

 Scope of work – original & updated

 Expected deliverables

 Current status of the program

The U.S. Army and LM MFC faced a daunting challenge in 2007. Apache attack helicopters were conducting combat operations in Iraq and Afghanistan at an

operational tempo of more than 18,000 hours per month and Army leadership determined that Apaches would be required to remain relevant until 2035. These attack helicopters relied on LM’s Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor

(M-TADS/PNVS) as their eyes to fly and fight. At the time, this sensor system was recently upgraded to modernize the targeting and pilotage FLIRs, but the Day Sensor

Assembly was 40 year old technology and Operation and Support (O&S) costs were spiraling upward. Lessons learned and post-deployment reports from theater identified capability shortfalls for the evolving threats. These factors combined to make the M-DSA a top priority for Army Aviation and Missile Command (AMCOM), but budget constraints would not support a traditional RDT&E program. MFC viewed this as an opportunity and

originated an innovative approach with a building block program structure to design, integrate and qualify a Modernized Day Sensor in two phases using a non-traditional funding source that was readily available: Army Working Capital Funds (AWCF), or

“modernization through spares.” This strategy uses AWCF to improve reliability, reduce O&S costs and mitigate obsolescence of the legacy Day Sensor Assembly for the M-TADS/PNVS using 21st century technology to enhance system performance. It requires a product design that is evolutionary, rather than revolutionary, so it can easily be retrofitted into the current fielded

M-TADS/PNVS systems. The first U.S. Government (USG) M-DSA Phase 1 Laser kit was delivered in May 2013. Phase 2 Qualification test is planned for 3Q13, Flight Test 1Q14, and ECP approval 3Q14.

Value:

What is the value, competitive positioning, advantage, and return created by this program to your:

• Customers – National interests, war fighter • Company – Strength,

bottom line, and shareholders • Scientific/technical

value (particularly for R&D programs)

Excellence and Uniqueness:

What makes this program unique? Why should this program be awarded the Program Excellence Award?

The M-DSA program is completely unique since it was planned as a two-phase firm fixed price development approach and executed within the annual AWCF budget constraints. This approach required an evolutionary product design such that it could be easily retrofitted into the current fielded M-TADS/PNVS systems. LM began this obsolescence replacement program by investing Internal Research and Development (IRAD) funds to architect a product that would solve critical warfighter needs and reduce the development risks and costs to the USG. M-DSA Phase 1 developed the modernized Laser Range Finder Designator (M-LRFD) laser kit to be backward compatible to the existing Legacy Day Sensor as well as forward compatible with the overall M-DSA. The new laser kit mitigates obsolescence issues, reduces O&S costs, significantly improves tactical performance and adds an eye-safe wavelength, which allows the aircrews to train as they fight at home station. The first laser kit was delivered to the U.S. Army in May 2013. M-DSA Phase 2 development provides our customer with a high-definition color display in the cockpit, high

resolution digital color TV camera, a Laser Pointer

Marker and a 21st century electro-optical structure with an additional field of view. These new capabilities hold technical value since it will be the first product to bring color to the cockpit, which will significantly improve communication with ground forces and enable “game changing” mission success on the battlefield. From a company standpoint, by mitigating obsolescence and decreasing supportability and maintainability risks, we ensure the Attack Helicopter remains relevant and ready. Performance is our objective; business is the follow on result.

III. ORGANIZATIONAL PROCESSES/BEST PRACTICES: (HOW DO YOU DO THINGS) = 30 POINTS

Strategic:

Opportunity Management - Describe how your program has identified its operational and business opportunity, and manages this opportunity throughout the program’s life cycle.

LM began the program by investing IRAD funds to create a concept to meet the users’ needs and define the top-level system capability requirements. Our IRAD investment, the involvement of the USG users and Army Program Office spawned a program and a funding source in the absence of customer defined requirements or a program of record. AMCOM recognized the increasing cost of

supporting the legacy DSA (driven by increasing

obsolescence) and authorized AWCF to mitigate that cost. The team worked closely with the U.S. Army to architect an innovative program approach to design, integrate and qualify a Modernized Day Sensor Assembly using the non-traditional AWCF budget and a phased technology approach. This allowed our team to achieve

“modernization through spares” and improve reliability, enhance performance, reduce O&S costs and mitigate obsolescence of the legacy DSA.

Strategic:

Strategic Supply Chain Integration and Cost

Effectiveness Management: - Describe how your program is integrating its supply chain to assure visibility and adapting long-term cost effectiveness up and down the supply chain.

LM made this original investment and leveraged

partnerships with suppliers who also made prototypes for consideration prior to contract award. Our critical

suppliers became part of our Integrated Product Team (IPT) working together to provide a highly producible and affordable product design even before contract award. Once on contract, our IPT performed a series of structured improvement events focused on providing a highly

reliable, “lean” production design that is easily maintained in order to ensure that the product was not just cost

effective to produce, but also cost effective to operate, maintain and sustain by the U.S. Army.

Strategic:

Operational Integration and Systems Engineering – Describe the challenges faced by your program in terms of integrating the system into its operational environment and its impact on systems engineering planning and management.

This program required a product design that is easily retrofitted into the current fielded M-TADS/PNVS systems. The M-DSA team pioneered an innovative design process that optimizes concurrent engineering via an Integrated Cross Functional Design Process. The design IPT included not just engineering but suppliers, manufacturing, quality control and supportability personnel. This team collated inputs from Cross Functional Design reviews and technical advice from Subject Matter Experts (SME) across all of these disciplines to develop a highly producible design that mitigates obsolescence, improves reliability and

maintainability while enhancing performance to meet the warfighters needs within the current budget constraints.

Operational:

Planning, Monitoring, and Controlling -

Describe your planning and resource allocation processes. How do you monitor and review your program’s

progress and make corrections to keep the program on track? How have you worked with your customer to assure Quality and communication

LM Missiles and Fire Control (MFC) leadership has maintained an in-depth oversight of the M-DSA program across the Vice President Senior Staff. This extra scrutiny was driven by our commitment to execute a system development program with significant technical, schedule and cost risk on a Firm Fixed Price contract. MFC

accomplishes this by applying a very detailed Earned Value Management System (EVMS) with weekly,

monthly and quarterly review cycles to leadership. EVMS is a requirement for traditional cost plus Research,

reviews and audits that do not “fit” your program effort?

Development, Test and Evaluation programs, but is not a USG requirement for firm fixed price contracts. LM has chosen to apply this management tool on all contract types that include a significant development effort as M-DSA does. Additionally, the MFC Technical Operations leadership conducts monthly reviews of a series of technical performance metrics that include System Development Maturity, Risk Mitigation execution, Risk exposure remaining, design margins vs. KPPs, and verification and validation of system requirements. Our strong integrated relationship with the Army program office has enabled us to minimize formal contractually required reviews in exchange for increased participation in our weekly IPT reviews, System Engineering Integration and Test reviews and quarterly Supplier Management Reviews. More working level communication equals less program cost.

Operational:

Supply Chain and Logistics Management -- What processes, tools and relationship-building methods have you used to develop, refine and improve supply chain and

stakeholder integration? Please indicate also methods used to analyze/fact-find regarding supplier

proposals. This is one of the most imperative needs of our industry – please provide specific details and data that assisted you in gauging the effectiveness.

Our team leverages Supplier Management teams to help our suppliers improve their processes and become top performers providing quality products on time to us. Our suppliers are viewed as business partners, not merely vendors to provide commodities. Additionally, the M-DSA team applied a supplier proposal evaluation and source selection process based on “Best Value” not necessarily the low cost bidder. This process scored each supplier and their proposal on a series of weighted categories that includes past performance history, technical solution, risk assessment, technical expertise depth and breadth, company commitment/investment as well as the traditional business measures such as cost and schedule. This scoring approach weighs the technical and risk elements more heavily than cost and schedule as our experience shows that partnering with these suppliers yields the best performing, most affordable product while minimizing total program costs. This approach has also shown that suppliers selected in this manner result in the best long-lasting business relationships.

Operational:

System Integration, Testing & Reviews -

Describe the activities and processes used to succeed in your system integration, and testing. How did you conduct system design and technical reviews? What innovations in processes or tools were used to further evolve this

The M-DSA development team partitioned the DSA modernization into a two-phase approach, and divided each phase into sub-contract line item numbers to stay within fiscal year funding. This required the transitions from one phase to another to be effectively mapped out in advance. Program execution throughout the development process (design, integration, qualification and flight tests) was critical. To do this, LM applied its Product Design Process (PDP) which specifies detailed work products to

capability? _{be output throughout the process flow as well as the exit}

criteria to progress to the next step in the flow. The PDP also defines the types of reviews to be conducted at each point in the design process as well as unique review formats/outlines based on product categories. This meant that electrical hardware design reviews were different than those for software or the integrated subsystem. The PDP also defines that all designs must be done following our internal Design Assurance process, which establishes review cycles at the requirements definition/concept stage as well as an implementation review before committing the detailed design to the formal engineering release cycle.

Operational: Risk / Opportunity Management

Describe the processes used to identify both risks and opportunity and to assure potential for both is

addressed effectively Please indicate any forward-leaning processes to support.

The M-DSA program applies MFC’s Risk and

Opportunity Management tool to identify items, and then assigns an associated cost if the risk or opportunity is realized. This tool requires the team to lay out a mitigation plan, which becomes a sub-element within the program’s Integrated Master Schedule (IMS), and then track the burn down to retirement of this item. The M-DSA team

conducts twice monthly risk review boards with

representation from all disciplines in the organization. All team members are encouraged to identify risks and opportunities, and this process is initiated with a risk assessment in the Independent Technical Review (ITR) by a team of technical SME’s not assigned to the program. An ITR is required prior to proposal submittal and repeated at program start up. All risks and opportunity values are tracked in biweekly, monthly and quarterly internal business management reviews and an allocation of the program management reserve budget is made to cover the cost or benefit of realization. This assures that the full cost impact is addressed and taken into account when tracking financial performance on the program.

Team Leadership:

Team Culture and Motivation Describe how you created your team spirit and culture, and accomplished entire team integration and individual team member motivation.

Given the economic

environment and changes in the global marketplace, how did you assure your team changed swiftly and with agility?

Team culture emanated from the formation of highly effective relationships established with the customer that fostered an integrated working team, built on trust and confidence from previous program success. The program has been fortunate to have customers brief their real life experiences with our products and how important they are to the warfighter. This has allowed each team member to develop a personal ownership and pride knowing that what they do every day is important to supporting our troops. Given the marketplace, the reality of proceeding without the normal Program of Record support required total cooperation and agility between the LM and USG teams to quickly adjust proposed elements to align with

the acquisition mandates. The M-DSA team established an IPT with the customer to develop a road map of

executable and sequential performance milestones that enable viable scope accomplishment with acceptable completion criteria. Maintaining a robust business rhythm with the customer is critical to ensuring program success.

Team Leadership: Lessons Learned and Knowledge Management Describe how you collect lessons learned and best practices, and how they are shared with your team and company to improve

performance. Also how are you capturing expertise and

knowledge to assure

availability over the life of the program?

The Lockheed Martin team solicited constant input and participation from the U.S. Army customer and users operating in an IPT during the design phase. This feedback highlighted the critical requirements, and the team began working to solve issues while leveraging lessons learned from designing, building and fielding more than 600 Arrowhead® kits (M-TADS/PNVS), attaining more than 500,000 operating hours and having more than six years of field maintenance in combat theaters. The product’s field experience combined with customer feedback allowed our team to develop a highly producible design that mitigates obsolescence, improves reliability and maintainability and enhances performance in an affordable product that meets the warfighters’ needs. The lessons learned from program execution are

communicated within MFC and corporation through monthly metrics reviews, quarterly Contract Status Reports (CSR), and annual Performance Assessment Reviews.

Team Leadership:

Leadership Development How do you develop team’s skills and build future leaders

Junior members of the team were encouraged and accepted key leadership roles in LM cross-functional integration teams as well as lead discussions and negotiations with the customer. This proved to be instrumental in the development of win-win solutions, while fulfilling their individual professional growth. Talent management and succession planning continues to be essential to the long term success of the program and corporation. Employees are provided a series of courses and workshops on Full Spectrum Leadership to develop skills and provide feedback on strengths and weaknesses for further development. Employees are also encouraged to have mentoring relationships to gain insight and experiences from today’s leaders.

Best (& Next) Practices: Identify your program’s specific Best Practices that you believe are unique, and could be shared with others and become industry’s Next Practices.

The program utilizes a variety of metrics to track performance and ensure excellence, and while some methods are not unique to our program, the combination and frequency of these checks are. At each development phase, the team performs a variety of monthly quality checks, including: Continuous Technical Operations Improvement Board, Enterprise Leadership Council,

Performance Management Review, Baseline Review, Performance Assessment Review and an Independent Non-advocacy Review. These checks measure, review and improve performance in key processes of product

development. The team also implements best practices of IPTs, Green Belt training, Lean Six Sigma, Supplier Management Teams, trade studies, Value Chain Optimization and design Kaizens. In addition to the metrics already in place, the M-DSA team pioneered an innovative design process to optimize concurrent engineering via an Integrated Cross Functional Design Process. A design IPT that includes not just engineering, but manufacturing, quality control, supportability and supplier personnel is also part of this process. The team collated inputs from reviews and technical advice to develop a highly producible design that mitigates

obsolescence, improves reliability and maintainability and enhances performance in an affordable product that meets the warfighters’ needs. This design approach is now a model for MFC and is being implemented into MFC Best Practices. The combination of these Best Practices

contributed to MFC winning the Malcolm Baldrige National Quality Award in 2012.

IV. ADAPTING TO COMPLEXITY: (HOW DO YOU DEAL WITH YOUR PROGRAM’S UNIQUE COMPLEXITIES) = 20 POINTS

Identify the Program’s

Market Uncertainty level

– How new is your product to your market and users, based on the definitions below. Then describe how you deal and address this specific uncertainty: - Derivative – an

improvement of an existing product/system.

The Modernized Day Sensor Assembly is a derivative of the existing product, the Day Sensor Assembly. The

modernization has required commonality with the previous system to allow for retrofitting into the current fielded M-TADS/PNVS systems through an engineering change proposal. This derivative applies a number of sub-elements which are both a new generation in an existing product line (Laser Range Finder Designator, Laser Spot Tracker, and the gimbal mounted Laser Pointer Marker) and new to rotary wing aviation market items, such as the High Resolution Color TV Camera.

Identify the Program’s Technological

Uncertainty using the

definitions below. Then describe how you deal and address this uncertainty:

- Medium Technology

- High-Technology:

The Modernized Day Sensor Assembly leverages a combination of applying Medium-Technology with the development of the high-definition color display, high

resolution digital Color TV Camera, Laser Pointer Marker and

High-Technology with the modernized Laser Range Finder Designator kit and 21st Century electro-optical structure with an additional field of view.

Identify the level of your

System Complexity using

The M-DSA is partitioned into multiple Line Replaceable Modules (LRMs) for improved maintainability and reduces

explain how you are dealing with this level of complexity:

- A Sub-system fitting within a larger system. - A System – a collection

of subsystems performing multiple functions.

O&S cost. M-DSA a Sub-system of the M-TADS/PNVS

System. The M-TADS/PNVS is a sub-system of the Apache AH-64 heavy attack helicopter. The M-DSA requirements are flowed down from the M-TADS/PNVS performance

specification to each LRM. The M-TADS/PNVS

requirements with the Apache aircraft is controlled through Interface Control Documents and changes are coordinated by the Interface Control Working Group, which is managed by the USG with all stakeholders. Interface changes are verified and validated on the Apache Aircraft Integration Lab prior to aircraft flight test.

Identify the Paceand Urgency of your team’s effort using the definitions below. Then describe how you deal with the

program’s pace requirements:

- Time Critical – there is an absolute and critical-to-success deadline.

This is a time-critical product to support capability shortfalls to counter evolving threats and new tactics. Since M-DSA is not a program of record, the program must demonstrate performance to maintain a priority for AMCOM and receive sequential annual AWCF funding to support a platform configuration upgrade. The program established and

maintains a rigorous business rhythm internally and externally with the customer to show progress and work issues real time.

Other Complexities & Uncertainties - Describe other

complexities and unknown factors faced by this program and how you addressed them.

The customer underwent a functional reorganization of their program office, which introduced alignment complexity across inter-team functions. Timely role and responsibility briefings were conducted at the senior and working levels to ensure no gaps were created and to transfer and retain focus in critical priority areas. Coordinated IPT’s were essential to effective communication. Sequestration continues to threaten at-risk programs and encourages good performance.

V.METRICS (HOW DO YOU MEASURE PROGRAM’S PERFORMANCE) = 30 POINTS

(Note: We are not looking for $ results, but the relative percentage achieved. In particular indicate what specific metrics and data you are using that drive the program beyond standard measures of schedule, budget, and performance, and which have contributed to your program’s focus and its success.)

Customer - How do you measure the impact of your program on your customer and your customer’s satisfaction? Include a description of your metrics, as well as numerical evidence.

The M-DSA program is fully engaged with its USG customer to develop the best product to support the warfighter.

Customer satisfaction is a top priority and monitored by our weekly meetings and open dialog. The customer has rewarded the M-DSA program by awarding it with a Contractor

Performance Assessment Report (CPAR) rating of 5.0 out of 5.0, which is the highest possible score for a program. The CPAR stated the customer would definitely conduct

additional business with LM. Internally, the CPAR rating and strong customer relationship are reflected in the Enterprise Performance Reporting System report that lists the customer

metric as green, the highest rating, and is flowed up to corporate.

Performance - How do you measure your

program’s performance in traditional terms such as schedule, budget, requirements, and business results?

Regarding schedule, the M-DSA program is fully compliant to the DFAR EVMS mandated by LM internal policy for a firm fixed price development contract. The program is internally audited semiannually to ensure compliance to required policies and procedures. The (IMS) meets all internal policies and best practices and is used to manage and track the performance of the program. Budgeting and cost control is managed as required by EVMS and includes detailed weekly performance reviews to ensure that cost is kept within budget constraints. Variances are tracked against quarterly developed spending plans and briefed to management on a weekly basis and revised quarterly at a minimum to provide accurate assessments. Requirements are managed in accordance with the internal Product Development Process, Engineering Process Manual and tracked using the DOORS tool. DOORS database requirements are traceable from the customer-provided Performance Specifications through lower level Design Requirements Sheets, providing a direct path for product verification proven by qualification. Continuous Improvement Board metrics provide assessments of the requirement specification compliance, risks and engineering performance in cost and schedule tracked through such measurements as drawing release, system maturity, schedule performance index, cost performance index, critical task and task start/finish curves. Enterprise Leadership Council metrics are a subsection of the above measures that are provided to corporate leadership monthly and are combined with

thousands of other programs across LM to provide leadership with an assessment of program health, stability and

performance across the Lines of Business. Business results are evaluated and communicated as part of the comprehensive CSR process that is briefed quarterly to each management level through the corporate leadership of LM.

Preparing the Future - How do you measure and assess the long-term contribution of your program to the

corporation/organization?

The M-DSA program adheres to the LM Corporate process regarding long range planning. A Long Range Plan is developed based on input from the current M-DSA program regarding projections on future orders. This information is used to develop the backlog for upcoming orders that is critical in the current economy to maintain Lockheed Martin’s success.

Team - How do you measure and assess the impact of your program on your team development

LM Voice is our corporate employee survey we use to assess how we are doing in making Lockheed Martin the best place to work. This tool allows information to be analyzed at the program and functional levels with various sorts and filters to

satisfaction? allow understanding of subgroups while preserving _{anonymity. The M-DSA program, in particular, ran a special}

corporate initiated survey on program to focus more closely on the program level team. The results showed that the M-DSA Team job satisfaction (and a number of other elements) was rated higher than the Fire Control Line of Business or the Missiles and Fire Control Sector of the Corporation. Both of these higher organizations were also the highest rated in their groups. Employee training and development are formal processes and part of the Full Spectrum Leadership culture that we embrace at Lockheed Martin to ensure we have the most motivated, enthusiastic, effective employees possible.

Unique Metrics - Describe any unique metrics you are using to measure your program’s progress and how do you focus it for outstanding success.

The M-DSA program has developed variety of metrics to manage and measure the programs performance. The Control Account Manager (CAM) tool outlines activities from the IMS in a color coded, list (grouped by month) that allows the CAM to quickly review their schedule position and evaluate delinquent, current and upcoming activities to assess for opportunities. A detailed tracking sheet is being used to capture the current engineering changes, organize priorities, monitor turnaround times and drive the team to sign off on the changes. A Near Critical metric provides visibility of

activities that are close to the program’s critical path and tracks the trend over time to help assess the current risk position. The System Development Maturity metric tracks the program’s performance against its established technical baseline schedule and assists in separating engineering performance as a subsection of the overall program. All of these metrics are specifically designed to suit the M-DSA program’s unique needs and production schedule. By ensuring we monitor our progress and quality along the way, we

position the program for outstanding success.