2016 Defence Renewal Annual Report: Positive Momentum for Enduring Success

Alternate Formats

3. Performance Initiatives

A summary of the activities of the six performance-initiative portfolios follows.

Operations and Training. The four initiatives of the Operations and Training portfolio are quite different and as such, present challenges with regard to progress and results achieved. A great deal of work is underway, and the initiatives have benefited greatly from the leadership of Director of Staff, Strategic Joint Staff (DOS SJS) and regular meetings of the Operational Readiness and Training Committee. The portfolio realised $0.6 million in reinvestment opportunities though effectiveness and cost avoidance:

  • 1.1 The CAF Operational Force Posture and Readiness (CAF FP&R) initiative to develop a more effective means of managing force posture and is well underway and strong progress was achieved this year. The third annual FP&R Directive was released in June 2015 and provided a CAF-wide framework for readiness that is aligned to the mandated missions of the Canadian defence policy and the current Programme Alignment Architecture (PAA). The Strategic Managed Readiness Tool (SMaRT) that provides a uniform mechanism for Level One users to report their readiness status against key defence policy tasks was completed and rolled out on 1 April 2015, with the first full data collection occurring in October 2015. These two areas of focus have matured and have gained CAF community acceptance that they represent on-going practices that require no further developmental efforts. A third critical element of the initiative -- a means of cost-capturing FP& R output -- is almost complete and aims to finalize the cost-capturing implementation process with a first trial in June 2017.  However, due to the policy reset and the transition of the PAA to a Departmental Results Framework, the FP&R cost-capturing effort will be delayed by one year to June 2018. In the interim, FP&R implementation will be refined once the Defence Policy Review is completed to ensure that direction remains aligned with assigned tasks;
  • 1.2 With an initiative timeline beyond DR’s mandate, efforts are underway to remove DR 1.2 RCAF Simulation and Synthetic Environment from the DR 1.0 portfolio. The RCAF will continue simulation strategy objectives funded as an annual baselined capability while still providing the foundational policy and guidance to achieve effectiveness and efficiency through synthetic training. The RCAF plans to progress institutionalisation of simulation through several near-term initiatives such as networking key RCAF simulation assets, amending RCAF orders to strengthen simulation usage, and implementing senior advisory boards for simulation and training. The WST programme will be pursued through a capital acquisition with careful liaison to corresponding fleet life extension or replacement projects;
  • 1.3 The Maintenance Execution initiative – seeking to ensure that maintenance personnel are as productive as possible during their direct maintenance time -- continues to mature in the Royal Canadian Navy, the Canadian Army and the Royal Canadian Air Force. FY 2015/16 was characterized by a contractor led analysis. A Maintenance Execution Report is to be completed early in FY 2016/17. The three environments have received the extensive analysis and are examining how they can enhance both the availability and productivity of maintenance personnel; increase availability of spare parts; ensure adequacy of maintenance facilities; maximize usage of technology; and adopt a posture of continuous improvement. While some 40-60% of the recommendations fall within the authorities of the three Environmental Commanders, the remainder require enabling support from the Materiel, Infrastructure and Environment, and Information Management Groups. An initial review of the Maintenance Execution Report by the environments at the end of FY 2015/16 indicated that the anticipated effectiveness opportunities were consistent with originally planned reinvestment opportunities. With the analytical phase complete, the three environments will plan for implementation; and,
  • 1.4 The Ammunition Management initiative -- to institute a revised process for the governance and management of CAF ammunition requirements to support training and operations -- has progressed throughout the year and was aided by the stand-up of a Strategic J4. Director General  Support (DGS)/Strat J4 initiated a review of the CAF ammunition requirements process with the aim of transitioning from L1s submitting their requirements based on financial envelopes to a true requirements-based analysis. This approach – that will increasingly be linked to the FP&R process -- will be phased in and will begin for L1 returns for FY 2017/18.  DGS/J4 Ammo is in the process of amending Accountabilities, Responsibilities and Accountabilities and ensuring that CAF/DND policies reflect the changes. As the initiative matures, additional coordination will be required to ensure synchronisation with activities in DR initiatives related to Inventory Management, Warehousing and Distribution, and the Rationalisation of Real Property.

Maintenance and Materiel. The four initiatives of this portfolio constitute close to 40% of Defence Renewal’s overall reinvestment opportunities. They identified $64.3 million in reinvestment opportunities in FY 2015/16 through cost avoidance and efficiencies. The four initiatives under this portfolio continue to mature over time producing both results and challenges. Other achievements in FY 2015/16 include the development of performance measures for the four initiatives, the completion of a Review Services Group review of two of the initiatives, and the commencement of the production of monetisation rule-sets to ensure consistency in reinvestment opportunity reporting:

  • 2.1 Inventory Management initiative continues to seek ways to avoid the cost of acquiring unnecessary items by optimizing the amount of inventory procured and held. Through its National Stocktaking Project, the initiative has already conducted stocktaking of $3.4B of materiel and verified items totaling $2.9B since 2012. The Distribution Resource Planning Application -- a forecasting and planning tool that utilizes historical demand to predict future requirements -- is being used by equipment teams to enable the reduction of overbuy expenditures. The Inventory Management Modernisation & Rationalisation Project (IMMRP) is examining items held against NATO Stock Numbers for archiving and disposal. And, the initiative is assisting the progress of an Automatic Identification Technology project that will, over time, enhance total asset visibility.  Going forward, achieving cost avoidance targets remains dependent upon ongoing improvements to data accuracy and integrity, as well as the effective use of enterprise Business Intelligence and forecasting tools to enable smart procurement planning. Given the initiative’s maturity and links to Defence Renewal initiatives on Maintenance Execution, Warehousing and Distribution and the Rationalisation of Real Property, the initiative was selected as a pilot for Defence Renewal’s nascent Performance Management Framework proof of concept project in the Spring of 2016;
  • 2.2 The Warehousing and Distribution initiative is led by the Canadian Materiel Support Group (CMSG) and seeks to ensure warehouse facilities are right-sized and efficient, and that the materiel distribution process is lean. Achievements included the establishment of a Campaign Plan comprised of five lines of effort:  Alignment, Optimisation, Rationalisation, Capability Development and Governance. In support of this Campaign Plan, several key studies were conducted that focused on depot warehousing operations, Group organisational structure, work processes, management of the Third Line Freight Budget, and operations of the National Freight Run. Several table-top Exercises were conducted on supply and ammunition materiel management processes, and a “Troops to Task Analysis” was initiated to review, optimize and standardize processes and organisational structures within the Formation. Recommendations from these activities will be incorporated into an implementation plan in FY 2016/17. The initiative also benefitted from other activities including the initiation of the removal of “dormant” stock under the IMMRP and an impact assessment of the Operational Clothing and Footwear Project on second and third line support. The study on depot operations identified significant challenges associated with the utilization of -- and training on -- the Defence Resource Management Information System (DRMIS) utilisation and training. To address this, CMSG has commenced an initiative to improve system training that will address programme functionality while also increasing stock visibility and confidence in the system;
  • 2.3 The Maintenance Programme Design initiative is aligned with the federal Defence Procurement Strategy and is progressing with Whole of Government support at the management level. A Director-General level Steering Committee includes representatives from three departments and industry representatives nominated by the Canadian Association of Defence and Security Industries and the Aerospace Industries Association of Canada. Based on three distinct lines of activity that are detailed below, the initiative seeks to optimize a balance between equipment performance, value for money, flexibility and economic benefit through the implementation of sustainment best practices that leverage the capabilities of the CAF, DND and industry:
    • Maintenance Programme Rationalisation: continues to optimize maintenance programmes through in-depth analysis of the maintenance actions that are performed on selected fleets. To date, the team has highlighted over 50 potential reinvestment opportunities for analysis - of which six have been reported. Progress continued on developing reinvestment opportunity monetisation rule-sets; with future approval of these rule-sets critical to future declarations. While data collection continues, an analysis of how Defence performs maintenance suggests that overheads related to inspections and engineering can be reduced and result, inter alia, in more CF-18s and Griffon helicopters available to the RCAF;
    • Sustainment Initiative: aims to institutionalize ways to optimize four principles (equipment performance, flexibility, value for money and economic benefits) through the identification and implementation of sustainment best practices that leverage the capabilities of the Government of Canada and Industry. This initiative has established strong joint governance with Public Services & Procurement Canada (PSPC), Innovation Science and Economic Development Canada, and Canadian industry. FY 2015/16 saw the successful completion of the final planning stages of a business transformation that will institutionalize processes and toolsets refined through sustainment business case analysis pilot projects, including the sustainment of T56 and F404 engines for CC-130 and CF-18 aircraft respectively, to help refine and validate the methodology. To remain successful, the Sustainment Initiative requires close collaboration amongst several Departments, Industry support, and significant professional development and communications efforts; and,
    • Engineering Flight Test Rationalisation: aims to reduce the cost of engineering flight test delivery, and will analyze options from three primary focus areas: rationalisation; outsourcing; and alternate location. As there is potential to outsource some current functions, Industry has been engaged through a consultative process. The related information has been compiled, and potential courses of action are being refined in a business case document that will be prepared in FY 2016/17.
  • 2.4 The Departmental Procurement initiative seeks to reduce costs of goods and services through improved and more effective procurement strategies, processes and best practices to ultimately optimize expenditures to deliver greater capability. In order to get a complete picture of the nature of commitments, the initiative “reverse-engineered” the procurement spend and engaged extensively with the Level 1s across DND, resulting in the identification of numerous examples of where savings could be realised. Three such examples include:
    • an International Standing Offer Agreement for Fuel (replacing hundreds of the RCAF’s Local Purchase Orders);
    • applying  “smart procurement” principles and methodologies (such as  early industry engagement, two-step bidding process, etc.) on the bidding process on several major military equipment acquisitions, resulting in lower bids than were anticipated; and
    • by increased use of Acquisition Cards across the Department (as demonstrated in a PSPC study) that concluded that DND could save millions of dollars each year.

The initiative is engaged in a number of other activities in support of procurement process improvements including creating a working group to identify and address common horizontal business process issues across the three environments, and participating in the Treasury Board-led initiative to reduce “red tape” in procurement.

Information Management/Information Technology. The role of IM/IT in Defence – and to Defence Renewal in particular – is increasingly complex and critical. The introduction and evolution of the Defence Chief Information Officer should help mitigate the challenges posed by a decentralised Defence IM/IT programme, and will aid in the overall effort to implement the IM/IT support necessary to realise the modern business reporting and intelligence tools required for long term success.  Oversight from the Information Management Board continues and in total, the three initiatives of the portfolio realised $9 million in reinvestment opportunities through cost avoidance:

  • 3.1 The IT Service Management (ITSM) initiative continues to realise progress. The Electronic Information Technology Service Management System has been rolled out across Defence and is performing well. Efforts to consolidate more than 160 points of service into approximately 20 Service Management Centres are well underway in cooperation with Level 1 staff across Defence. The National Service Management Centre achieved Initial Operational Capability (IOC) over two stages in December 2015 and March 2016. The stand-up of the remaining 20 Service Management Centres -- of which 10 achieved IOC on 31 March 2016 -- continues with all targeting Full Operational Capability in FY 2017/18. Key ITSM documents -- related to concept of operations and governance -- were endorsed by the Information Management Board.  Efforts to modernise and streamline the Inter-Capability Component Transfer (ICCT) process -- critical to realising the movement of positions from one Level 1 to another -- continue and are critical to realising the full opportunity envisioned under this initiative;
  • 3.2 The Application Portfolio Management initiative seeks to improve IT programme efficiency by addressing the overall stewardship and maturity of application management practices across DND/CAF. The initiative has completed the initial inventory of applications across the DND/CAF: to date, 1816 applications have been decommissioned (either retired or identified as duplicates) representing approximately $9.5 million in cost avoidance since the beginning of April 2014. Having completed their initial survey and rationalisation of applications, the initiative is now moving to a steady-state where continuous improvement is the norm: efforts to review and examine smaller networks within Defence continue; and
  • 3.3 Rationalising the Defence IM/IT Programme is progressing well: the Defence Chief Information Officer construct has continued to mature, and was formally designated as of February 2016. Though implementation is focussing on internal IM Group roles and processes, several broader Departmental changes have been made to the handling of IM/IT requirements including business relationship management and prioritisation. Moving forward, the recommendations and critical investments identified in the Lean Headquarters exercise as it pertains to the IM Value Case will be carefully reviewed, and the roles and increasing responsibilities of Shared Services Canada will require continued attention to ensure a sound and rational long-term Defence IM/IT programme.

Infrastructure. The four initiatives in this portfolio continue to progress well, highlighted by the centralisation of real property management under a single Infrastructure and Environment Group custodian. The Infrastructure and Environment Group developed a phased implementation plan to successfully transform the Group into a single strategic and accountable organisation that focuses on delivery and people. Effective oversight is provided by the Infrastructure and Environment Board and in total, the four initiatives of the portfolio realised $8.4 million in reinvestment opportunities through effectiveness and cost avoidance:

  • 4.1 The Centralisation of Real Property Management initiative has progressed well. As of 1 April 2016 the management of all infrastructure assets was centralised under the Infrastructure and Environment Group and the attendant ICCT process is well underway. FY 2017/18 will be the first year where efficiencies will likely be seen. As this initiative transitions to a steady state of continuous improvement, it has launched a detailed survey of assets and their status through a deliberate facility condition assessment. The contract for this assessment has been shortened from three to two years, and will gather the data required to determine the relative health of the portfolio, faster than originally planned;
  • 4.2 The initiative to Rationalize the Real Property Portfolio continues to progress as infrastructure -- and its associated real property replacement cost -- is divested from the portfolio. This initiative realized reinvestment opportunities through cost avoidance of Operations, Maintenance and Repair, and a reduction in the amount Paid in Lieu of Taxes. The portfolio realised the demolition of 115 structures with a total real property replacement cost of $107 million including: 56 buildings in Goose Bay, a former food services building in Gagetown, 10 Storage buildings in Shilo, and a hangar in Montreal. The divestments of Building 66 in Moncton (former I ESU Building before the unit moved to Kingston) and payments for previously disposed properties also contributed reinvestment opportunities. Additionally, the Defence Portfolio 2030 (formerly the National Real Property Development Plan) has been approved and released. Going forward, the document will provide the guidance -- and momentum -- to strategically rationalize the portfolio;
  • 4.3 The initiative to Optimize Facilities Management Service Delivery continues. This initiative requires working with Defence Construction Canada (DCC) and PSPC, and looks at negotiating new and re-negotiating existing contracts to include bundling of contracts, reducing contract administration costs and levering volume of work. The DCC Roadmap -- a collection of over ten strategic procurement initiatives directly in line with the original DR 4.3 plan and its Key Performance Indicators -- has been implemented. Opportunities are being pursued with PSPC to pilot their eProcurement solution with the Infrastructure and Environment Group. Combining the eProcurement solution with the implementation of the material module of DRMIS will deliver more efficient procurement processes for Infrastructure and Environment Group employees and directly aligns with the strategic objectives of the  Infrastructure and Environment Business Modernisation project; and
  • 4.4 The initiative to improve Real Property Project Delivery is using the integrated project delivery (IPD) process that has never been used in the Federal Government. IPD represents a fundamental change in project delivery approach and is characterized by: early involvement of key participants; collaborative innovation and decision making; early goal definition, target value design; intensified design and planning; and, shared financial risk and reward. In FY 2015/16, the IPD team has learned a great deal about the process by visiting a construction project built using IPD and attending a variety of training courses and conferences focussed on Lean Construction -- a fundamental element of IPD. Moving forward, in the next FY, the initiative will seek project approval for the IPD Pilot Project that has been confirmed as the Royal Canadian Dragoons Facilities Project at Garrison Petawawa. The initiative is also shaping the proposed internal approval process for an IPD project.

Personnel. Though diverse in scope and ambition, the five initiatives in this portfolio have made steady progress though there are still opportunities to be realised. The Canadian Forces Personnel Management Committee has many pressing matters on its agenda including Defence Renewal though one initiative -- 5.5 The Renewal of the Cadet and Junior Canadian Rangers -- stands outside the CFPMC governance process and seeks VCDS guidance on the way ahead. Combined, the initiatives have identified $21.7 million in reinvestment opportunities through cost-avoidance, efficiencies and effectiveness:

  • 5.1 The initiative to modernise Individual Training and Education has made some progress beyond the major enhancements to the Defence Leaning Network and Learning Support Centres (e.g. virtual classrooms, assessment and collaboration capabilities, Advanced Distributed Learning Labs, and Wi-Fi capability in Borden) that were achieved last year. However, the initiative will benefit from a recent investment of funds and personnel to enable it to move forward with development and implementation as outlined in the CAF Campus Operational Framework.  A recovery programme – that consolidates efforts and offers a plan going forward – is under development;
  • 5.2 The Modernisation of the CAF Career Management Process has achieved most of its objectives and is effectively transitioning to a steady state of continuous improvement. Costs associated within existing activities have been reduced; low-value steps have been eliminated; business processes have been changed; and, stewardship of CAF career management services and programme delivery has been enhanced. A more efficient model for military moves, for example, has not only increased the accuracy of cost forecasts, it has resulted in the timely release of postings messages to personnel. Going forward, work on the Canadian Forces Personnel Appraisal System replacement – the Personnel Appraisal and Talent Management System (PATMS) -- is dependent upon the Military Personnel Management Capability Transformation (MPMCT) project. However, given delays to the MPMCT, alternate design and funding options are being explored to pursue advanced delivery of PATMS given the time sensitivity of this initiative; 
  • 5.3 Military Personnel Management Capability Transformation /MPMCT Project (GUARDIAN) continues to progress but under revised timelines with new baselines. The roll-out of GUARDIAN Release 1 -- replacing the in-service HR system with technology dating from the late 1990s -- is planned for early in FY 2016/17. The initiative is widely recognised as  an important effort to bring the military HR management and pay system up to modern pan-Government standards and is directly linked to the success of other Defence Renewal initiatives including  5.1 Individual Training and Education, 5.2 Modernisation of the CAF Career Management Process and 5.4 Recruiting;
  • 5.4 The initiative to Modernise the CAF Recruiting Process is also transitioning to a steady state of continuous improvement as it responds to the ongoing need to embrace modern technology and practices to bring in the military members of tomorrow. Significant internal process improvements have already been realized (e.g. the Recruiting Operations Centre has centralized recruiting, with decentralized execution, better geographic coverage through internet applications, quicker response times from recruiters to applicants, improved synchronisation with other L1s in managing personnel awaiting training and recruiting Reserve Force personnel). CF Recruiting Information System 2 (launched in January 2015) has greatly enabled better file management, thereby improving effectiveness and efficiency; and
  • 5.5 The Renewal of the Cadet and Junior Canadian Rangers initiative continues to make progress and has exceeded the original estimates outlined in the Defence Renewal Charter and attendant Plan. Like other initiatives, a commitment to continuous improvement has taken root. Over the first 18 to 24 months of Defence Renewal, reinvestments totalling $11.9M have been realized and a further $6.4M to $8.0M is projected over FY 15-16 to FY 17-18. The increase is attributable to such things as: reducing staff (e.g. Full-Time Equivalents) , suspending lesser-priority training activities, achieving efficiencies in summer programme transportation, introducing a field training uniform for army cadets, providing additional funding for fitness and sports activities at community-level, developing and delivering a training package for adult staff and volunteers, and funding growth in the JCR Programme.

Management Systems. The four initiatives that constitute this portfolio are progressing reasonably under a governance mechanism that, with the stand-down of the Civilian Workforce Management Board (CWMB), relies on extant boards and regular meetings between the VCDS and the Assistant Deputy Minister (HR Civ).

  • 6.1 The Lean Headquarters. Numerous initiatives have reduced the size of NDHQ's HR footprint since the first contractor conducted their analysis from 2012 and presented their assessment to the CWMB in May 2013 – before the launch of Defence Renewal. These include the Deficit Reduction Action Plan and the transfer of resources to Shared Services Canada, as well as workforce attrition. The department has infact exceeded its DRAP targets by 1825 FTE, and the DND/CAF Headquarters has been reduced by approximately 946 FTE, reducing the cost of headquarters by $89.5M annually. Through the CMS contract, KPMG has provided initial indications that the Headquarters structure is reasonable although further efficiencies can be found by: enhancing the Materiel Group; thoroughly appreciating the cross-cutting role the Information Management Group; and, assessing the Military Personnel Command. Furthermore, the analysis suggests that the Defence Team could focus on process refinement and optimisation -- pursuing improvements to business analytic tools and the establishment of an information management focus -- to drive efficiencies. The Final report is due early in the next Fiscal Year;
  • 6.2 The Project Approval Process Review (PAPR)  a detailed review by the initiative lead -- supported -- has indicated that though dated, the initial internal assessment of the initiative’s  scope and potential  (to achieve twice the project approval throughput in half the time) was sound and should be acted upon. Implementation is now underway:  the PAPR Governance and Change Management Team is 75% staffed; briefings on the way forward to effected Level  1's have been launched; and, the PAPR Performance Measurement Tracking Tool has been developed and will be activated in an upcoming DRMIS release in FY 2016/17;
  • 6.3 The Review of Civilian Human Resources Management continues to progress well and is in a steady state of continuous improvement. Over the course of the past year, the Civilian Human Resources Group implemented the e-staffing self-service tool (i.e. HR Actions), new service standards for both Classification and Staffing and has created several tools that will be able to measure service delivery performance in several HR areas in the next FY. To date, L0 governance has been established, communications have been augmented, and the Public Service Commission’s New Directions in Staffing approach has been activated. The Civilian Human Resources Group has taken the first steps towards implementing Next Generation HR, a series of initiatives that aim to clarify, create and communicate business processes and roles, more self-service capabilities, standardisation of work processes, and smarter use of qualified resources. Not only will the Civilian Human Resources Group be able to monitor classification and staffing, but it will be able to generate business intelligence and report on performance against service standards. Fundamentally, Next Generation HR takes over where Service Delivery Transformation had begun and opportunely uses the established successes of Staffing Reform (e-staffing, dedicated staffing teams), Classification Transformation (e-class, Job Library, centralisation of work) and the Review of HR Planning (Service Standards, HR Dashboards) to shape how the Civilian Human Resources Group provides services to the Defence Team; and
  • 6.4 the Consolidation of Emergency Dispatch seeks to provide multi-layered, trained, bilingual and robust communications and dispatch facilities to ensure that all calls for Emergency Services are answered and assistance is rendered to the caller. The initiative – which includes regionalising police and fire calls from more than 32 locations to three or less -- has matured since its launch in September 2014, and benefitted from a detailed examination supported by the CMS contract. The report has been accepted and the Canadian Forces Provost Marshal is currently preparing an implementation plan. Though the reinvestment opportunities stemming from this initiative are modest, the benefits of a consolidated approach to emergency dispatch to members of the Canadian Armed Forces are significant and justify a commensurate level of investment to ensure long-term success.

During FY 2015/16, the DRT introduced improvements to the Defence Renewal Reporting Templates (DRRTs) to provide more fidelity on the performance of all Renewal initiatives. The documents – updated three times a year – include tombstone information, forecasts, work plans, financial data, and risks and allow staff, leadership and governance bodies the opportunity to access fresh information on initiatives.