Foundation Forum

General Henry Viccellio Jr.
Commander, Air Force Materiel Command
AFA Air Warfare Symposium - Orlando
January 30, 1997

"Agile Combat Support for the 21st Century"

It is super to be here with you and to have a chance to share a few thoughts on a big subject about what is going on in our command and what is going on in the materiel part of the Air Force.

I am honored to be a part of this distinguished group of speakers that you've got this year and I am especially proud to be here and celebrating our Air Force's 50th anniversary, and, by the way, the Air Force Association's 51st anniversary -- especially since you are a big part of the Air Force's backbone, from my point of view. I applaud this association for your unfailing support, as the Vice Chief just pointed out, over the past 51 years, and let me say that I thank you in advance for the next 51, because I know you will be there.

Let me try to attack a pretty substantial subject head on for you. I'm sure you have read in the industry press in the past year or more that Air Force Materiel Command has been grappling with some pretty touchy issues: downsizing, acquisition reform, depot privatization and lean logistics, just to name a few. This morning I want to share with you how we are tackling those challenges, and hopefully, in a way that will help us review our policies, procedures and processes to provide agile and flexible support and effective logistics support to the Air Force in the 21st Century.

We've come a long way, since the dawn of this decade just a few years ago. Today, our Air Force people around the world are working harder than ever before to meet the challenges of this very different time. Most Americans don't realize this, but since the U.S. victory in the Gulf War, our U.S. Armed Forces have successfully engaged in over 40 different contingency operations around the world. In the last 10 years, we've brought home about two-thirds of our Air Force troops who were stationed overseas, replacing them when required with TDY troops. Today, we deploy about four times the number of people that we had deployed in 1989 to meet commitments. In fact, while we are here at this conference, there are about 50,000 U.S. service members deployed throughout the world, 14,000 of those are Air Force and about 600 of those are from Air Force Materiel Command.

In a recent speech, our Chairman, General Shalikashvili, discussed our Armed Forces deployment recently to Liberia, a perfect example of the kinds of missions our folks are engaged in today. Last April, our Armed Forces were called to evacuate American citizens living in Liberia with almost no notice. Within just a few hours, we had a joint task force formed and on the way, made up of soldiers, sailors, airmen and Marines. They evacuated nearly 2,400 American citizens from the war-torn country and returned all 2,400 to safety. The Liberian operation was certainly a far cry from the type of thing I spent most of my years in uniform preparing to fight, but it was typical of what is going on around the world today.

Like many of you during your days on active duty, I have been trained to be a Cold Warrior. In some ways, things were simpler during Cold War years. We knew a great deal about our enemy. We knew his order of battle, weapons, skills and tactics, and even his logistics structure. Then, on November 9, 1989, the Berlin Wall fell and the world watched in awe -- including me -- as a million people filled the streets and within a week tore down that wall without a loss of life. A year later, on this very day, January 31, 1989, McDonalds opened its first restaurant in downtown Moscow, foreshadowing the next year's events. In August of 1991, the Union that we had once referred to as the Evil Empire, imploded, giving both democracy and capitalism a chance to take hold. And the world order that we had known for decades changed virtually overnight.

In this post Cold War world, as it is often called, we find ourselves in a geopolitical -- not to mention fiscal -- environment of unprecedented uncertainty. The CEO of General Electric, Jack Welch, said a few years ago that pace of change in the 1990s would make the 1980s look like a picnic, a walk in the park. The bar of excellence in everything we do will be raised. That statement has been proven absolutely true. It is true in your professions as I am sure you've heard here from a variety of speakers in the last day and a half. It is certainly true for your Air Force. All of us are having to do better with less, whether our goal is to compete in the global market place or to provide focused logistics to a global battle space.

Today's national security environment clearly demands a different kind of Air Force. Terrorists -- rogue powers -- possessing chemical, biological and possibly even nuclear weapons, and computer hackers with evil intentions, have all but replaced our traditional enemies. As recent events have proven today, even our own homeland is vulnerable. From Atlanta, the home of the Braves, to our own Air Force home page, it seems there is truly no place that is immune from attack.

Today's budget environment demands a different kind of Air Force, as well. In the last 10 years, our U.S. defense budget has been cut by 40 percent and our Armed Forces modernization budget by over two-thirds. This year we spent only 3.2 percent of our national product on defense, and that is less than any time since before World War II. Yet today's and tomorrow's unpredictable and changing security environment requires a mobile, flexible and a technologically superior force. A force, as I hope you've all read by now in our strategic pamphlet, that can find and fix and target anything that moves on the face of the earth. And one that can support operations thousands of miles away from home base.

In this, our Air Force's 50th anniversary year, we've issued a new Air Force vision, which we call Global Engagement. Global Engagement goes beyond the Air Force as we know it, calling for an Air and Space Force on its way to becoming a Space and Air Force and, who knows, maybe even someday a Space Force. This force must be capable of not just fighting and winning our nation's wars when called upon to do so, but deterring them as well. All within today's and tomorrow's resource constraints. Global Engagement, introduces six core competencies, six areas we deem vital to the contributions of our air and space service. They are air and space superiority; global attack; rapid global mobility; precision engagement; information superiority and agile combat support. From doctrine to acquisition to programming to testing to fielding and to supporting, these competencies define who we are and what we do.

I assume that many of your other speakers, like Tom Moorman, have dwelt on these six specialties. But what I want to point out is that for the very first time in our Air Force's 50 year history, combat support and logistics, each a primary mission of Air Force Materiel Command, have attained core competency status, and not just in our Air Force vision. Joint Vision 2010, the Armed Forces joint vision, names no less than General Shalikashvili's byline, focused logistics among its four operational concepts. In fact, it states that the other three -- dominant maneuver, precision engagement and full dimensional protection -- are totally reliant on flexible, responsive and precise logistics.

Tomorrow's contingency operations will require that tailored logistics packages be delivered directly to troops in the theater. The days when we could prepare for war through forward basing or by pushing massive inventories of supplies and equipment out to our deployed forces are long gone. Tomorrow's forces will require supplies and sustainment to be delivered in a matter of hours, not days or weeks or months.

Despite the widely publicized stories of piles of unopened containers on the docks of Middle East ports, Desert Storm was as well the crucible for some great logistics lessons. Every day our Air Force cargo aircraft, augmented by our civil reserve fleet, too, delivered spares and supplies, uniforms, chem gear and fuel, and other equipment where and when it was needed. However, during Desert Storm, we had the luxury of time. We were able to preposition aircraft and troops and equipment. When Desert Shield began, we already had nearly 3,500 vehicles, hard wall shelters, aircraft hangars, power generation equipment, water purification equipment and munitions all prepositioned in theater. We also benefitted greatly from a host nation willing to supply us air bases, fuel and food and other services at a moment's notice.

Today's and tomorrow's conflicts may well not give us that time to prepare and may not include such robust host nation support. Last September's Desert Strike operation was a good example. In just three days, we planned an operation in which our B-52s took off from Guam, flew over 30 hours enroute and struck Iraq with conventional, air-launched cruise missiles. We had to take, and did take, decisive action without either basing support or overfly rights. Clearly our procurement and logistics structure has to reinvent itself to be flexible enough to support operations along this kind of a continuum. From Desert Storm to Desert Strike, Mogadishu and Tuzla.

As we prepare for future actions, including so-called operations -- other than war -- we have got to realize that the massive push for logistics -- the structure we built for, the structure we planned for, the structure we nurtured and lived with during Cold War years -- is not only inappropriate, it is incapable of meeting today's constantly changing requirements.

Logistics today must respond to a pull, by receiving accurate, real-time information about the needs of our units that are deployed and operating out in the field, and by ensuring that daily, time-definite airlift and supply systems meet those requirements. Today's logistics can no longer afford to send the troops lots of everything in the hopes that they will have some of what they need. We can no longer stockpile massive inventories, just in case. We've got to respond to our warfighters' needs just in time. We simply cannot afford the slow response, huge inventories and the long lead times of yesteryear. In a word, today's logistics have got to become 'lean.'

Lean logistics is an established program that seeks to establish four endstates.

First, we need improved command and control capability in the logistics world. We envision, and we are working, to field a logistics C² system that will provide real-time visibility and facilitate the effective control of all logistics resources. Such a capability will enable us to plan, prepare, sustain and reconstitute forces in any time of a military operation, anywhere -- from a Desert Storm type of conflict to a humanitarian mission.

Our ultimate goal is a seamless logistics process that gives warfighters total visibility over their projected and their actual logistics status. This kind of visibility will help them make prudent decisions in the field based on actual capabilities, not the capabilities they either wish they had or hoped might be on the way. In our vision, there is no wholesale and retail. There is no field and no depot. There is just one logistics team and it is focused and responds to the needs of whoever is engaged wherever they might be.

Our second desired endstate is assured time-definite battlefield delivery and distribution. Air transportation in this country has evolved to the point today where we can order a Cashmere sweater for mom on the 23rd of December and have it by Christmas. We built upon industry's best practices, including the overnight concept that was pioneered by FedEx to develop Air Mobility Express. This will enable us to assure a focused flow of airlift to deliver high-priority supplies to our troops deployed in the field. Yes, when it absolutely, positively, does have to be there over night.

We've also developed worldwide express, which gives us the same agility in supporting normal peacetime operations or smaller contingency operations. There is an important point here. We are operating dedicated and time-definite focused resupply in peacetime so we can keep our procedures and policies, and our people, proficient and ready should we have to turn up the wick overnight.

Our third desired endstate is reach back capability for our forces. Air Mobility Express, logistics command and control, and the application of lean logistics principles will allow our warfighters to reach back to AFMC and other DoD suppliers, like DLA [Defense Logistics Agency] for log and sustainment support. This means we can send a leaner and much lighter fighting force forward, and support them from right here at home, rather than building maintenance depots and supply centers out in the theater. We can leave much of the more traditional combat support infrastructure, such as heavy intermediate maintenance support, right here at home, saving big dollars; and just as important, reducing dramatically the logistics footprint, in an era where lift is and will remain at a premium.

The final endstate is designing highly reliable weapon systems with low lifecycle costs, perhaps the most fundamental philosophical change we are trying to make. Our long-term vision must be to demand, develop and field systems that either seldom fail or are built to let us know they are degrading before actual failure occurs. Forcing ourselves to consider the entire lifecycle cost of a weapon system when making a procurement decision requires a huge mindset change at every level in my command. Cost schedule and performance as we know it today, doesn't always lend itself to considering the cost of logistics over the 40 or 50 or 60, or perhaps 94 years of an airplane's life. That must change. We simply must begin to consider R&M as equally important to performance. Ask yourself. What good is an airplane with the most effective avionics imaginable if those electronics have to be repaired or worked on after every flight?

With the procurement budget only a third of the size it was 10 years ago, none of us foresees many new systems on the horizon. Therefore, we simply must increase the reliability of the ones we have. We are currently planning to keep the B-52, for example, in service for the better part of the century. We need to start now, working the aging aircraft, aging avionics and corrosion problems that such lifecycle stretchouts are bound to bring. This emphasis on R&M is nothing new. Amidst a lot of hoopla in the mid-80s, we established the R&M 2000 program and put a general officer in charge to make it happen. And, some good things, like the VSIC technology currently used on the F-22 came out of this program. Yet the pressures of 12 consecutive years now of budget cuts have taken their toll. In a declining budget, the toughest dollar to find is an investment dollar. Yet sometimes that is what you need the most. It is time for a revitalization of this important thrust, and I think you'll see R&M get renewed visibility in the strategic plans and the refocused budgets coming out of Global Engagement.

We've got a good vision of where lean logistics needs to go, but reaching these endstates will cost money. We've got to simultaneously consolidate and eliminate some of our infrastructure to pay for the new systems and the modifications we need. As most of you know, the base realignment and closure commission of 1995 slated two of our five depots, McClellan AFB [California] and Kelly AFB (Texas), for closure. We are working to consolidate that workload in a way that ensures continued force readiness, while providing some savings to the taxpayer and mitigating the impacts on our depot employees and their communities.

With this in mind, we've developed a closure and a realignment plan for each depot, which we believe will give us the best chance for those desired outcomes. In San Antonio, we are about to issue a final request for proposal for our C-5 depot maintenance work. The law requires both private industry and public depots be allowed to compete for this contract. However, this contract is different than any depot maintenance we've issue before. As the old saying goes, 'if you always do what you've always done, you'll always get what you've always got.'

This time we are not doing what we've always done. We are not requiring that interested offers, public or private, strictly adhere to the standards and unending list of military specifications -- the process standards that define, sometimes in nauseating detail, our depot maintenance procedures.

Instead, we are considering saying, in essence, if you think you can do big airplane maintenance cheaper, better and smarter, give us a proposal. Industry's response to this possibility has been far more than encouraging. We are indeed excited about our chance to truly get the best value for the dollar by exploiting and building on industry experience.

In Sacramento, we are proceeding a bit differently. The workload there is not as straight- forward and homogeneous as the C-5. Our McClellan depot repairs and maintains over 1,600 types of hydraulic parts, as well as electrical systems and generators and other instruments. So, to ensure that interested offerers know and understand the nature of this composite workload, and how best to approach it, we've issued a request for proposal that will enable interested contractors to come in and study what we do in Sacramento. Two private companies and at least one public depot will then be selected to bid on the maintenance contract itself.

At both bases there will be some common characteristics to these offerings. First, they will be performance-based. We will tell offerers what we need done, but not how to do it. We will also provide incentives for performance and commercial add-on because that has monetary value to us as well as the offerer. We will make provisions for lean logistics tenets, such as responsiveness to variations in daily demand.

Since I have been the AFMC commander, we have hosted a series of very successful industry days in which we've solicited and suggested feedback from industry reps on how to best manage this process. Our plan has generated the interest and enthusiasm of a number of qualified potential offerers. The bottom line is we are moving toward commercial practices in order to reap the best value for our limited resources.

I'll grant you that these changes are overdo. But we are off and running. In all of our depots, we are revolutionizing the way we do business as an important part of what we call lean logistics. It is transforming our corporate culture by putting the warfighting customer in control of the system, and this is a first. A lean system is demand-based. It takes advantage of commercial practices and it capitalizes on focused transportation to preclude the need for large inventories.

Implementing lean logistics requires a change in the way we do depot repair. This change is being implemented through what we call DREP, Depot Repair Enhancement Program. It identifies and authorizes a fixer to manage our repairs. Now, the fixer is supported by a shop service center collocated with the production line. It is comprised of people from every discipline who do planning, scheduling and parts chasing, as well as stocking, accounting and buying -- and even engineering for the fixer. Fixer is then freed up to concentrate solely on getting the fix done.

In the traditional depot structure, these critical support activities -- the one that the fixer needs most when parts run short -- or when you get an engineering or technical surprise -- are located somewhere over the horizon, and responsiveness is measured in months. Today they are steps away. And this is a key point -- they have their performance evaluations written by their team leader, the fixer. That has certainly raised some eyebrows.

DREP has revolutionized the way we do logistics. We automate the daily "what to repair" decisions. Our express computer system prioritizes the next part brought into repair, based on its contribution to the availability of the worldwide fleet of that particular aircraft. Our distribution model automates the daily "where to send that part" as well, based on the contribution of that repaired asset to worldwide fleet readiness. Big changes: When our part and repair budget is typically underfunded by 15 percent to 20 percent, as it is these years, these automated systems enable us to get maximum benefit out of everything we can afford to do.

Our contract repair and supply enhancement programs mirror the good work we've done inside the depot. Flexible partnerships with commercial contractors, combined with priority of repair based on maximum fleet readiness, have really made a difference. The Defense Logistics Agency's prime vendor, and virtual prime vendor efforts, are good examples of what we've done. We've teamed with DLA and commercial sources to set up commercial part stores right inside our depot work areas, alongside the fixer, where items are paid for only when they are used, and the risk of carrying excess inventory is greatly reduced. Wal-Mart, thanks for a great idea, but move over because we are coming on strong.

One way we are testing these initiatives is through our Pacer-Lean shops. Pacer-Lean's purpose is to run an end-to-end test of the entire depot repair enhancement activity for about a year, and we are about half-way through that year now. Pacer-Lean's success will determine how and when we institute these initiatives command-wide. We selected 10 sites, two at each of our five depots. We activated the first one, the E-3 avionics repair, at Warner Robbins in June, and the last one, Sacramento's TACAN repair facility, in September. All 10 sites are up now and we are beginning to see some results.

When we started down this road, some of our maintainers were skeptical. They wanted do stick to the ways they'd be repairing equipment for the last 20 years, where comfortable and stable quarterly production goals were often determined by factors that were far removed from field needs, unfortunately. What we found over the last six months, is the closer a given shop is to fully implementing the DREP process, the better they are at repairing the assets that are really needed today by our warfighters.

At Warner Robins AFB [Georgia], AWACS aircraft, down for those parts repaired in the E-3 avionics shops, or MICAP, as we'll call it, have significantly reduced from 22 aircraft at one time or another, in July, to only one in December. The total MICAP hours that these aircraft were grounded have fallen even further, from 2,600 plus, in July, to just 50 hours, total, in December. Oak City's common avionics shop, which services selected black boxes for a number of aircraft, has experienced similar success with their total grounding incidents down from 213 in August to only 160 in December.

Visualizing the initial success of DREP, we initiated a parallel program for our aircraft program depot maintenance effort. We call it AREP. This effort's goal is to push for a 50 percent reduction in the aircraft depot maintenance flow time. Manloading the aircraft more along the standards of the way the airlines do their depot work and ensuring the availability of parts are two keys to success. To date, we've met or exceeded this goal. Several C-141s and F-15s at Warner Robbins have come in and gone out in half the time of the average standard, and we are expanding what we are doing to the C-130 line.

We are excited about good results that we are seeing and the potential for what lean logistics can mean for our Air Force. For those skeptics, who, like Tom Cruise, keep saying 'show me the money,' Air Force Materiel Command is beginning to get results. We are convinced that our lean logistics initiatives, paired with our depot privatization efforts, will free up the resources to help us pay for what we need for our modernization programs.

More important than just saving money, these initiatives are molding us into a lean, more agile and efficient combat and support command -- one capable of supporting any air or space contingency worldwide at a moment's notice. It is like they say, agile combat support for the 21st Century, and it is exciting.

Thanks a lot and I'll be glad to answer some questions.

General Shaud: The questions seem to fall into three areas, combat support, privatization and then some procurement policies, and so forth. First, a combat support question. We talk about coalition warfare. What do you know about coalition logistics?

General Viccellio: I think the biggest secret to effective coalition logistics lies in the fact that we have over 81 countries today who, to some degree or another, rely on us for assistance in the procurement and/or the support of the weapon systems they use. At Wright Patterson AFB [Ohio] alone, I have 68 foreign officers and NCOs who are stationed there for the express purpose of helping us facilitate that kind of support. For some countries, it is very limited; for other countries it is almost exclusive. When you talk about the kind of equipment they use and the level of interdependence they have -- mutual support we like to say -- between the two logistics systems, I see that growing. When you take the dollar value of the support to all those countries and you add it up, that puts our foreign partners, our foreign customers, from our point of view -- as a group -- the third largest customer we have in AFMC -- right behind Air Combat Command and Air Mobility Command. That gives you a sense of how much interdependence we have. This will help us to work effectively together.

A question came up to General Moorman that leads me to a second factor. As we build a logistics command and control systems, that I've talked about, and as we work on C⁴ISR, we need to make sure that we build them in a way that will help our coalition partners take advantage of the focused and agile logistics concepts that we are fielding today. We are doing that effectively.

General Shaud: On privatization, if the privatization of McClellan and Kelly results in outsourcing to industry, what is the prognosis for the remaining ALCs [Air Logistics Commands]? Will the privatized depots be allowed to compete for core workloads?

General Viccellio: Let me say as we deal with the closure of Kelly and McClellan, one of the very important factors -- most important factor -- is that we have to take into the equation as we build the plan, is the fact that we have a lot of legislative guidance about the role the commercial sector can play in our depot business. Most of you have heard of the infamous 60-40 rule, which basically is sort of an expression of relationships that emerged during Cold War years. It says that we are not allowed to have more than 40 percent expressed in the dollars spent of our depot business in the hands of the commercial sector. Today, we sit at about 29 percent to 30 percent. So we have some head room without having to worry about legislative relief. We are using that head room for these first two sizable offerings out of Kelly and McClellan. That would leave us with limited residual head room.

We've got some other things we'd like to do. There is the engine work at Kelly. We don't have enough head room under current constraints to consider privatization of all of it, but we'd like to look at least some of it. We've got opportunities. We've got the B-2 depot coming along, which is going to be highly privatized, although the majority of it will be done at Tinker Air Force Base [Oklahoma]. We've got to leave head room for that. I anticipate, as we consider depot options for the JSTARS [Joint Surveillance and Target Attack Radar Systems], I would like to see the depot, whether it is a government operation or a commercial operation, at Warner Robbins [Georgia], to take advantage of the fact that we have our only operational unit there at Robbins and we've seen the value of synergy between depot and the operator with the AWACS at Tinker. We've got to leave a little head room for that.

Last year we went to Congress, as most of you know, and I had a chance to testify about what we had in mind. We tried to convince them that we weren't off on some wild goose chase. But we felt there was more opportunity for best value to the Air Force and the taxpayer at acceptable risk, rather than what 40 percent would allow us, as we are faced with what to do with the Kelly and McClellan workload.

We were unsuccessful in getting relief. So what we need to do, is make the public/private competition strategy work at Kelly and McClellan. And, as I've told lots of my depot and industry folks, it's up to them to make it a success. If the private offerors are successful--if we have qualified, proven performers that offer us this work at substantial savings--then we may go back to Congress with a very powerful track record and perhaps get the relief we are looking for. That is a synopsis of where we see ourselves today.

General Shaud: Another question that kind of follows on to what you were getting at there, what progress is the Air Force making in determining what functions can and ought to be privatized? At what organizational level will the decisions be taken to privatize a particular activity?

General Viccellio: Without question, when you look at the spectrum -- and this is a spectrum that I've used for philosophical discussions with industry reps -- at one end of the spectrum you've got let's call it the Acme Repair Shop. You've got some outfit, maybe a small business overhauling small pieces of equipment for you. On the other end, you've got a truly nationally integrated defense industrial base. Maybe you would point to Japan, maybe France, as being closer to that end of the spectrum than we've ever been, or perhaps feel comfortable in being.

Where are we in the middle? And what kind of functions should we talk about? I am very comfortable, and in some of these offerings like the C-5, you will see new areas, such as engineering support, materiel management, the procurement of and management of and configuration and control of, the parts that go into these aircraft being handed over to the contractor as part of the offering. It is something we haven't traditionally done in the past. On the end of the spectrum, where we will be cautious, are some things that are required by law that we do. We cannot allow a contractor to disperse money to themselves, so to speak. In other words, we've got to maintain the contractual authority. We feel strongly about having a continued role in the determination of requirements, how much and what do we need done? The definition of the desired outcome.

Configuration control is something we will probably share, as we are in the F-22 business, during the developmental phase with a contractor more than we have in the past. With respect to the actual hands-on maintenance, there is no question there, that as long as it is not a core workload, and as long as we meet all the statutory requirements with respect to quantity and the process we use to make the decision, you will see that offered to the civilian sector.

General Shaud: Butch, great answer. next question. With today's shrinking O&M dollar, the push to cost-avoid is strong. Programs that save O&M dollars by outsourcing, reclaiming high cost throwaway aircraft parts, are having huge success. Does Materiel Command support these programs and how can the system be helped further by Materiel Command?

General Viccellio: When I was deputy chief of staff for logistics in the early 1990s, we were sitting there with this massive industry of excess equipment that followed the rapid drawdown we did in 1991 through 1993. Over on Capitol Hill, there was a point of view that emerged that basically said -- and they looked at it simply in dollar terms -- since you Air Force have all this inventory, much of which you say yourself is excess to your needs. We are not going to give you the money you say you need to buy new parts and repair parts.

That got us in a Catch-22 because often the very relationship between the nature of those parts had a dollar value that drove this decision, and what we really needed for newly emerging block 40, block 50 F-16s, F-15Es, etc. So we set a very aggressive program looking at what we had on hand and tried to define what we really needed for this post Cold War Air Force, and what can we dispose of; and that has produced income for us. It has offset the need for procurement, which was Congress' goal. That is not over yet, but we have reduced the value of our inventory by billions of dollars and we are beginning to get some credibility on Capitol Hill.

You probably have seen some of the horror stories -- about what some people think were mistakes in that process -- with the guys out there that buy Cobra parts and build themselves a helicopter to go chase Coyotes, and all of that. Those are few and far between exceptions. We've done a good job in inventory reduction. It has bought us credibility on the Hill and it has saved us some dollars.

General Shaud: Last question, Butch. Recognizing you as the combat-ready Air Force Materiel Command Commander, with the benefit of your experience at AFMC, would you critique the marriage between Log Command and Systems Command?

General Viccellio: I would for reasons for more than the economy of having consolidated headquarters and reduced overhead, in that regard. When we built AFMC, the bedrock of our philosophical approach to the materiel job was what we called integrated weapon system management, having a single manager, a single SPO [System Program Office] who is responsible for a prime weapon system in every sense. The SPO is responsible for the S&T, for the research and development needs for that aircraft, which are predominant early in its lifecycle. But if you look at the F-16 today, we are still doing major modifications and we need research to support that. The test activities, the procurement relationship with the contractor, and, for those older weapon systems that are out of procurement, the support, via an organic depot kind of support, or a support that is predominantly out in the civilian industry as our KC-10s are, or in most cases, it is a combination of the two.

Just like any kind of organization, Ron Yates and Charlie McDonald who got together and built this concept and this new command back in 1992, were on a fast track. We probably defined this IWSM [Integrated Weapon System Management]; it is conceptually sound, but we just threw SPOs out there into it and said, "Go do some of this."

In retrospect, we have a situation today where the relationships between the SPO and the depots product group managers, the PEOs, for those who have PEOs up in the Pentagon, is not quite as clear as it should be. We are doing some retrofit on clearly defining authorities and responsibilities. That will strengthen it. To answer the question, it was built on a sound premise, and, given time, we'll evolve that way into a very effective management approach.

General Shaud: It was great having you joint us today. Thank you very much.

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