Dayton, Ohio - July 18, 1997

General George T. Babbitt
AFMC's New Focus

On behalf of Air Force Materiel Command and Wright-Patterson, I'd like to welcome all of you back for this second day of the symposium. Thanks for choosing Dayton for your AFA national symposium site. I hope we can work this kind of an arrangement in the future, too.

I am sure when you see the B-2 later this morning and see the air show tomorrow, you'll be glad you came to celebrate the 50th here at the birthplace of aviation. And, I hope all of you come back for the Air Force Marathon in September!

Well, I've been here in Dayton almost two months now and although that is a much shorter time than I had waited to become confirmed, in retrospect, that time was a blessing. It gave me an opportunity to really think and plan and chart my vision for the Air Force Materiel Command. Since I assumed command on May 29, we've been running full speed ahead. I have visited all but six of our bases and see those in the next two weeks. I've met with my senior commanders twice to begin forming our business and execution plans for the next several years.

I want to spend the next few minutes describing to you what I see as the first order of business for AFMC.

As you've no doubt read in the press, there is great debate within the DoD and among the various "think tanks" over what future conflicts may look like. Will they be Desert Storm-type scenarios with plenty of warning and build-up time? Or will they be Rwandan humanitarian missions? Will we fight in Third World urban areas or in space? Most agree that the United States needs to be prepared for any and all of this contingencies. We in the Air Force believe the best way to assure victory in this potential spectrum of conflicts is to stop aggression early -- deny the enemy the initiative. Stopping him at the outset reduces the potential for casualties and promises to shorten the length of the conflict.

To prepare our forces to deploy on a moment's notice and to get the job done anywhere in the world, we have to change the way we do business. As the Air Force's combat support command, we at AFMC bear a great responsibility for developing and sustaining the weapon systems we need to defend our nation. I believe that in order to ensure our forces are flexible and agile enough to meet the challenges of today and tomorrow, we must reduce cycle time -- while controlling costs. We must reduce response time -- while controlling costs. We must reduce the need for combat service support -- while controlling costs. We must exploit reach-back capability and pull logistics -- while controlling costs.

Since 1990, the automobile industry has shortened the time it takes to bring a new model from concept to production from six years to two. But it still takes us over a decade to take most of our weapon systems from research to reality. We must do better. As former Congresswoman Barbara Jordan once said, "What the people want is very simple. They want an America as good as its promise." I believe what the people deserve is just as simple: An Air Force and an AFMC as good as its promise.

As I've stressed to my staff over and over, our mission must come first. We have promised the world's best combat support to America's Air Force, and we must deliver that support. If we are going to accomplish that mission, we must increase our performance while controlling our costs.

Certainly there is no excuse for saving money at the expense of the mission. However, there is always more than one way to get the job done. We need to exploit every opportunity to accomplish the mission well at lower costs.

At AFMC, we are working to drive out waste and non-value added costs from every activity we are involved in, from managing big ticket programs to providing base support services on our installations. General George Washington once said, "Our object ought to be to have a good Army, rather than a large one." Our object today ought to be the same. Our military is two-thirds the size of our Cold War force, but supporting an increased number of contingencies with less money. If we are going to continue to be the best in the world, we are going to have to change the way we manage the business side of what we do.

It is my goal as commander to shift from a focus on budget or input management to one of cost or output management. I want the leaders in this command, from the generals to the squadron commanders, to view themselves as cost managers, not budget managers. There is a big difference between the two.

If 10 budget managers sat around the table, they would all claim they needed more money. And each one would claim that if he had more money, he could save the Air Force money. Now I ask you, how can that be? How can we reduce costs if everyone spends more money?

The trouble is budget managers worry about their inputs. Cost managers, on the other hand, focus on outputs and specifically on the cost per unit of out. Their goal is not to deliver less; it is to continue to perform the mission well, but at a reduced cost.

Cost managers are also accountable. They commit to future cost reductions and they work hard to live up to their commitments.

My goal is to create a culture of cost management at AFMC, a culture in which increased performance decreases cost at the same time. At the same time, I don't believe it is an either/or proposition. Our near-term challenge is to define the businesses we are responsible for within AFMC and define our missions, customers, standards of performance and cost of outputs in order to increase our performance. Additionally, each commander and business leader will commit to a level of operational performance and output costs for next year and will sign a contract with me.

Of course, cost reduction doesn't happen simply by talking about it. In the end, we must change the way we do things. We have a lot of initiatives already underway.

We are working with OSD and the services to streamline our management of research laboratories and test and evaluation facilities. Under the banner of Joint Vision XXI, we have already taken action to consolidate our labs under a single commander and to restructure our research directorates to better address tomorrow's technology needs. We are also taking a hard look at test ranges and facilities in order to determine how we will invest in future capabilities.

Another initiative is acquisition reform. We believe we've made great strides in our pre-RFP release planning. Requirements development has improved and greater emphasis has been placed on specifying performance, rather than dictating process. We have significantly reduced our reliance on military specifications and standards where commercial specifications can provide as good or even better results. The single process initiative has allowed many companies with multiple DoD contracts to take advantage of these changes on existing programs.

Streamlining our acquisition processes not only allows contractors to reduce costs, it also allows reduction in government program management costs. We will place increasing emphasis on production and support costs during the EMD phase where careful engineering can best control these costs. Cost as an independent variable is the banner for this initiative.

In the near future, we will also expand our use of innovative contractor support arrangements. We will push for the co-use of production facilities for support. We can do little else when the cycle time of obsolescence is shorter than the time required to field an organic support facility. We believe existing organic support operations can be significantly improved. We already have demonstrated greatly reduced aircraft and component repair flow days under the banner of lean logistics. The challenge is to expand this quickly from demonstration to reality across the command.

On the installation front, we can and will reduce the cost of base support. Although another round of BRAC [Base Realignment and Closure Commission] may ultimately be necessary, we have other tools at our disposal. By better understanding our base support costs, we can take many actions to reduce those costs short of total base closure.

In summary, AFMC is moving out on all fronts to provide the world's best combat support in a cost-conscious manner. We are working hard to transform ourselves into people who understand and can control costs. I'm look forward to getting to know each of you better over the next several days and I invite you all to work with us to help us accomplish our goals for AFMC and for the Air Force.

Return to Dayton '97 Foundation Forum