12 Jun 2009
Enhancing Capability through Innovation within the Maritime Sector - RUSI Future Maritime Operations Conference, June 3rd 2009
Good afternoon Ladies and Gentlemen
For the next few minutes I am going to give an industrial perspective on some of the challenges that we all face in delivering naval capability, and give some thoughts on how innovation in a variety of forms can address some if not all of those challenges.
I am under no illusion that the climate in which we face these challenges is tougher than at any time in living memory. It does not need me to expound upon the economic crisis and budget shortfalls, an imminent Strategic Defence Review, military UORs or – heaven help us – political distractions and reputations, for us all to appreciate that.
Certainly, to be upbeat in the current climate may seem brave if not foolhardy, particular in and around Westminster. I do not come offering any great ‘vision on the road to Damascus’; but I do hope to offer a glimmer of optimism. I believe that we have an opportunity today in the Maritime Sector to grasp a new way of jointly delivering naval capability; if we fail to take the opportunity, it will be at a far greater cost to us all.
Before I get to all of that, let me briefly set the scene.
BVT was formed 11 months ago as a direct response to the Government’s Defence Industrial Strategy –
‘Worth Remembering’
It is our goal to not only transform our own company, but lead the transformation of the maritime sector to ensure that, through the long term sustainability of the industrial base, we retain the capability to deliver affordable, sovereign, naval capability long into the future.
In those 11 months we have achieved a huge amount – and in this context of achievements, I mean collectively - BVT, the Royal Navy, the MOD and many of the other key industrial partners.
The contract for the two Queen Elizabeth Class aircraft carriers was not a bad start for any business, and since then the programme has successfully been re-baselined, with a deliverable build strategy and excellent progress on design. In a little over a month, we will have the ceremonial first steel cut on the Clyde for HMS Queen Elizabeth.
We have also delivered the first of the Type 45s to the Royal Navy, and later this month we expect to sign the support contract that will ensure that we are able to provide these hugely capable ships with the support that they require through-life. Progress on the rest of the class continues well.
Good progress is also being made on the Future Surface Combatant as we move towards a targeted Initial Gate for the programme later this year.
And critically, I very much hope that in the coming weeks we will sign the Terms of Business Agreement (ToBA) between BVT and the MoD that will formalise our relationship into a 15 year partnership in which we commit to joint transformation of our respective organisations to drive out cost and enhance performance.
Investments required to achieve this will be underpinned by commitments to a minimum level of workload that will benefit the whole of the maritime supply chain.
With the expectation of challenging times ahead, cementing a closer working relationship between BVT, MoD and the wider industrial base, is critical if we are to ensure that key capabilities, that we all agree are essential for the long-term, remain on-shore in the UK.
We have made good progress, we are close, a little more of which later.
Capability & Innovation
Let me first take a look at what I think we mean by ‘capability’, how we turn this into real world Military Effectiveness and what we mean by Innovation.
It’s fashionable to talk about delivering capability to the fleet, but what do we really mean by capability? Do we all mean the same thing?
I have learnt over the years that simply giving the Navy new equipment doesn’t deliver capability unless it is provided as part of a fully integrated programme covering such things as Training, Personnel, Infrastructure, Doctrine and Logistics. Delivering capability is therefore much more than delivering equipment.
Since the cold war we have seen the military environment change rapidly and our systems now need to work in a wide range of operational settings that they were not designed for – from piracy and littoral operations to a possibly resurgent ASW threat - whilst collaborating with many different navies and land forces.
It is clear to me that the underlying capability of our navy, and navies around the world, must be their ability to adapt rapidly to new challenges – using the equipment they haves to give maximum effectiveness whilst rapidly pulling through new technologies and equipment to augment it further. In turn, industry’s underlying capability must be to be able to support our customers to do this.
I fear that in the past our respective procurement and commercial practices have almost tried to stop this happening, often at great cost.
Military need is not the only driver for change.
Safety of Military Personnel, for example, is paramount. Yes, servicemen go into harms’ way as part of their job but they should not do so unnecessarily. How can we use Naval technologies to minimise exposure to risk and maximise survivability when it’s unavoidable? For example, the MHPV programme is looking to separate the men from the minefield – a radical change to equipment, systems and doctrine that will demand innovation and flexibility from both industry and the RN.
We know that the equipment market is volatile. The DIS recognised that the UK MOD market is not large enough to sustain an industry that can meet all UK requirements with bespoke solutions. Our capabilities are increasingly constructed from tailored or off the shelf equipment integrated into a package to meet UK needs. This places huge demands upon the Integrator and creates a substantial through life management challenge.
If we are to achieve both affordability and sustainability – and in practise the two cannot be separated – then we must also deliver capability with broader marketability. The need for ships with broad application in a competitive export market has been a theme at this and many other conferences and discussions for years, but not one that has been well addressed.
The young people in the Navy today are emerging completely comfortable with complex information systems and ‘virtual worlds’ that are upgraded monthly but they may require more training in hands-on engineering – their capabilities and training needs are somewhat different from the 1980s. Therein lies another opportunity for innovative solutions in technology and training that exploit evolving personnel profiles and capabilities.
And we are seeing similar step changes in the infrastructure needed to support ships worldwide.
All this change is occurring in an economic and political environment that scrutinises every penny spent. Is it needed? Is it Value for Money?
So – could we - industry - combine our deep understanding of our ships and systems with the Navy’s deep understanding of operations and sailors to make them even more effective in a changing world? Would a constructive relationship such as this enable us to develop the innovative solutions that will deliver the most bangs per buck?
The relationship I envisage will need to break a lot of well established practices and ‘rules’ if it is to deliver the performance the RN and the UK needs. We (by which I mean all of us – not just BVT) will need to rise to a host of challenges:
- We need to develop ways of working that can pull through and prove technology without decades of expensive delays and interminable studies
- And we must recognise that the development of a new capability often starts with the In-Service-Date – it doesn’t end with it.
- We must not just reduce waste but be able to use some of the cash that’s saved to re-invest in capability
In other words we must really make TLCM work for us.
It is easy to say we need innovation and often we turn to our engineers for it, but there is a lot more to this than just engineering. To me innovation is nothing without implementation. It is not just equipment – it could be a radical change to the way that equipment is used to meet a new threat. Or a different way of making or buying it that drives out cost and means that we can afford more (or just keep what we have).
Where does a Maritime Systems Integrator like BVT fit in? In addition to developing innovative solutions of our own we can support the Navy by –
Helping the RN to plan and deliver implementation effectively
We can help to make capability affordable by building upon the lessons learnt to develop new economic and commercial models for warships build and support.
We can extend the work we are doing to reconcile the UK specific demands of the FSC with the need to spread development costs across exports.
The exploitation of the rich seam of ideas and innovation that emanates from our people, the largest single pool of maritime engineering expertise in the UK.
As they represent a world class differentiator not just for BVT, but for UK plc.
Much of this is evident in every ship we produce and every ship that leaves the UK on deployment.
But we have not always created the environment in the past to fully capitalise on this resource.
Great ideas and technologies have not been exploited and matured and we need to ensure that we look to better engender a culture of innovation to address this.
We have Intelligent Systems that help the Ship’s command adapt his tactics to fight the ship more effectively; novel materials that are being proven on small boats that could improve survivability of capital ships; models of ship system performance that could be used to reduce fuel consumption – the list is seemingly endless.
Many of these ideas have faltered because the way that we specify, design, build and support ships has seemed to conspire against the very innovation and hunger for experimentation that we need from our people.
In short - the UK has always and will continue to be at the forefront of invention – the real innovation we need now is to be at the forefront of implementation, integration and exploitation.
Transformation
By now you will have noticed a recurrent theme in this talk.
I see that we have a shared problem – how we deliver military capability at the sharp end for an affordable price with a sustainable industry.
We can only deliver this as a team effort with the MOD, the RN and Industry working openly and closely together.
Collectively, we have a real challenge to break down old barriers that stop us working together effectively and efficiently. Projects such as Type 45, CLS ships, the Queen Elizabeth Class Aircraft Carriers, SSSP and the NDP are all on the right tracks.
I believe that the ToBA will create the right environment in which we, jointly as true partners, can speed up and transform this progress. It will enable us to better understand requirements at a far earlier stage, assessing and responding to them five, eight, ten years ahead of time and sharing abilities to better help to define and meet those capability requirements.
We will all be able to take the long view, seeking to move on from the short-termism so evident for so long.
Our joint ToBA team has worked exceptionally well together these last 12 months, to make the case for change - and it is radical change for the whole sector - and to write it all down so it is binding on us and on the MoD.
When the ToBA is signed in the coming weeks, we will also sign a Strategic Partnering Agreement with the MoD, and with that comes concrete commitment to all do business together very differently.
This will not be some fluffy arrangement, it is a contract to transform, it is wrapped with governance “with teeth” and it will be delivered by a Joint Project Office accountable to me and to the Director Ships.
This is new and we are all determined to make it work for the benefit of the front line.
Let us be clear, the ToBA really will help the Royal Navy to secure its next generation of frigates, other future programmes and the support that they will require to deliver the Royal Navy’s commitments.
This is not going to be an easy journey for any of us. During the last year, BVT has undergone a root and branch review of our cost base and processes with the sole aim of a step change in efficiency which will be part of our contribution to the sustainability of the UK’s Naval Capability.
We wholeheartedly embrace joint MOD/Industry collaborations such as the Naval Design Partnership, Pan-Portsmouth (Naval Base) and the Mine warfare working group.
Our supply chain and engineering teams are engaging with key suppliers and partners throughout the UK to establish long term framework agreements that will improve the efficiency of both our operations and drive out cost.
And we have quadrupled and re-vitalised the company’s commitment to Research and Development so that we are fully equipped with technological innovation for the longer term future.
We will continue to invest in our people to keep our industry one that all of our people can be proud to be a part of, and we look forward to more sharing of people between us. Sharing responsibilities, not duplicating roles.
Conclusion
Chairman, Ladies and Gentlemen, ‘the role of future technologies’ is about as broad a topic as anyone could wish for, and ‘innovation’ is an easy and fashionable word to bandy about.
Perhaps one conclusion might be to suggest that we must be more innovative with our innovation. Certainly we need to look at broader ways of both defining and delivering future capability together than we have achieved in the past.
I have suggested some of the ways in which I believe that we can do that, but I return to the spark of confidence that I mentioned at the beginning, despite the enormous challenges that we undoubtedly face.
I believe that the TOBA between BVT and the MOD will deliver a step-change in ways of working across the maritime sector that will engender greater efficiency, encourage and harness innovation in its widest sense and ultimately deliver enhanced capability to both the Royal Navy and our overseas customers.
Thank you.
