Performance Based Logistics(PBL)

Logistics support for the modern weapons systems is changing wherein the decades old approach of investing in large inventories, controlling the issue of assets and contracting for procurement of components is giving way to a modern method of support  ie Performance Based Logistics (PBL). As opposed to having to manage and direct every aspect of weapon system support, the PBL concept buys Performance rather than goods and services. PBL moves the focus from the management of parts and suppliers to management of the suppliers responsible for delivering required performance.  It delineates performance goals such as weapons system availability and logistics response time, instead of focusing on measures such as parts, training, maintenance and technical services. PBL empowers the provider to decide how best to meet military objectives by focusing on operational readiness rather than just delivering a product.

PBL is a support strategy that places primary emphasis on optimising weapon system support to meet the needs of the military. Its primary tenets are documentation of equipment performance requirements as measurable parameters in Performance Based Agreements (PBAs), designation of single point accountability for performance with a Product Support Integrator (PSI)/ Product Manager (PM), and development of support metrics and accompanying incentives to ensure that the performance objectives are met. In short, PBL emphasises on obtaining performance, and not transactional goods and services. PBL delineates outcome performance goals of weapon systems, ensures that responsibilities are assigned, provides incentives for attaining these goals, and facilitates the overall life-cycle management of system reliability, supportability, and total ownership costs. It is an integrated acquisition and logistics process for buying weapon system capability.

Under a PBL environment, the provider has the freedom to create a network of capabilities and initiatives to achieve the prescribed performance, cost and customer satisfaction targets. Additional results are a streamlined logistics pipeline, lower costs and best value. In short, weapons system support is optimised at an affordable cost. The PBL provider’s compensation is based on achievement of these goals.

A designated PM (Program Manager) works with the user to document performance and sustainment requirements in performance agreements specifying objective outcomes, measures, resource commitments, and stakeholder responsibilities. The PM employs effective Performance-Based Life-Cycle Product Support. PBL changes the metric by which the effectiveness of the logistics system is gauged in order to drive an alternative approach to managing the system .The traditional approach has been to measure outcomes in the logistics system by raw industrial output, including such things as the number of weapons and platforms repaired, the tons of material moved, the hours of services provided, and the number of replacement parts acquired. PBL measures the outcomes in terms of how the system meets desired performance parameters. Specifically, these performance parameters include the efficient identification of warfighter needs, the delivery of the needed material to the warfighters, and the timely delivery of goods and services to the warfighters.

PBL is managed through a system of contracts called PBA’s (performance-based agreements). The need for such agreements is determined by the PM’s (program managers) who conduct a business case analysis that reveals that a new support arrangement either can deliver the same level of performance  at less cost than the existing arrangement or can increase the level of performance at the same cost as the existing arrangement. The requirement that performance goals be met is imposed on the supplier but is of sufficient duration and flexibility to permit the supplier to adapt his enterprise to meeting the goals. Organizationally, the performance-based logistics system works best under partnerships between the government-controlled depots and logistical centers and the private suppliers (usually the suppliers that produced the weapons or equipment to be sustained and supported). These public–private arrangements are called outcome-based partnerships.

In short, PBL delineates outcome performance goals of weapon systems, ensures that responsibilities are assigned, provides incentives for attaining these goals, and facilitates the overall life-cycle management of system reliability, supportability, and total ownership costs. It is an integrated acquisition and logistics process for buying weapon system capability and leads to the following benefits:

• Increased material availability
• Decreased response times
• Decreased repair turn-around-times
• Near elimination of awaiting-parts problems
• Major reduction in backorders
• Reduced logistics footprint

Under a PBL solution, we don’t buy parts, we buy performance; we don’t manage supplies, we manage the suppliers.

*The author is a Senior Fellow at CLAWS

Views expresses are personal