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DARA on Fast Track toward Adaptive Enterprise for UK Defence Aviation Repairs Business

DARA (Defence Aviation Repair Agency) is a business in the middle of unprecedented change, within an industry that has itself seen extraordinary volatility in recent years.

DARA had to move from being a Government agency to a fully competitive commercial organisation, and sought partnership with Capgemini via a €33 million engagement.

Major performance gains are already a reality. These include reduction in the time taken to undertake full maintenance of a VC10 tanker aircraft from 180 days to 95 days, and servicing Sea King helicopter engines from 185 to 57 days.

Client Profile

Once part of the MoD (Ministry of Defence) in the UK, DARA is on a direct route to becoming a totally independent business, already trading commercially on the open market. DARA was the result of an amalgamation of two separate agencies - Royal Air Force and Royal Navy.

Between them, the agencies shared responsibility for servicing and maintenance of all aircraft owned by the British defence establishment. This included several hundred fast jets, a substantial fleet of helicopters and large jets used for passenger transport and in-flight refuelling.

Given the strategic nature of the business, the two agencies had always focused on exceptional levels of quality performance but had not always matched technical excellence with equivalent commercial thinking.

Business Issues

As part of a new approach to some aspects of defence management in the UK, the aim was for DARA to become an independent company. Although it was to continue working on MoD contracts, it also needed to take on work in the commercial sector for other clients at home and abroad. The first step was for DARA to become a “trading fund” within the MoD, with operations and commercial results separated from the Ministry.

The importance of a move towards full spares-inclusive trading, an ambitious goal for such a major development, cannot be overstated. It involved new thinking, attitudes and strategies and demanded a clear-sighted evaluation of DARA’s own systems and operations.

These were fundamental requisites in order to achieve the levels of efficiency needed to compete in the open market. That market had seen extraordinary pressures in recent years - demand fluctuation and competition balanced by an incessant drive for cost reduction. For DARA, the required transformation brought major challenges.

DARA had to move from having a single, albeit, important customer to seeking business all over Europe, and from being purely a defence business to servicing commercial companies. This had to be against a backdrop of an industry with intense competition - contractual relationships were rapidly evolving into new forms.

Scalability was essential to cope with rapid variation in demand - clients were moving towards service contracts with payment linked to results. Flexibility, speed and high efficiency were critical success factors. The DARA vision was to deliver:

• a world class aircraft maintenance facility providing outstanding ‘Turn Time’ performance and quality at a competitive price
• specialised service/product approaches
• customer focus
• high levels of skills and innovation to meet customer expectations.

Managing such change required a revolution in culture, attitudes and skills. There was another major challenge to overcome: a concurrent transformation of current processes and systems. DARA had inherited an infrastructure that reflected the past, not the future. It had four widely scattered sites, chosen for their proximity to major defence establishments rather than on commercial logic.

At the same time, haphazard investment over several years had left DARA with a legacy of 52 separate systems. Clear, decisive action was necessary so that DARA was ready to compete in the commercial world.

DARA had already made the decision to make processes the first priority. No radical change in performance was possible until the tangle of different systems were replaced by a single, integrated set of enterprise processes, optimised for speed, efficiency and scaleable working. DARA invested in Baan’s aerospace ERP system, and asked Capgemini to lead the implementation across the business.

Capgemini was selected for proven capabilities to deliver complex change projects involving multiple dimensions of people, processes and technology. It also demonstrated deep expertise of the MRO (Maintenance Repair and Overhaul) toolset deployed in the supply chain industry.

Solution

Capgemini proposed to re-engineer DARA business processes to incorporate a full redesign of commercial, planning, production, materials management, finance, new service provision and data management. The redesign would facilitate a full programme of change management, supported by the Baan system.

A single, seamlessly integrated team, with Capgemini, Baan and DARA personnel came together in a highly efficient way. The team removed all artificial boundaries between them to scope the project, develop strategies and deploy solutions, and adopted a composite methodology to drive results. The methodology comprised best practice from industry-specific approaches, Baan’s own method and Capgemini’s quality system, DELIVER. Several elements of the collaboration included:

skills transfer

It was recognised quite early on that skills and experience were critical aspects, and there was strong emphasis on skills transfer, with DARA people being given unqualified support to develop their own expertise to new levels as the project continued.

customer focus

The work remained highly customer focused, with emphasis on the kind of results most valued by commercial clients. That included giving the team visibility across the full supply chain, backed by a capability to develop holistic solutions for customers.

transformational outsourcing

The long-term management of specialised systems was turned into a flexible outsourcing contract, again managed by Capgemini. The nature of the outsourcing service addresses DARA’s requirement for maximum scalability and efficiency in an evolving manner.

Project implementation is on going, stage by stage. Experience and skills from Capgemini’s broad portfolio of services is leveraged to drive results at each step of the way. These range from Strategy Consulting, Supply Chain, Technology Consulting and Outsourcing.

The new system is already live at the smallest of DARA’s four major sites, and plans to deploy to remaining sites over the next few months are well advanced. Legacy systems will be decommissioned as soon as the new system has been deployed in all sites.

Following completion of the core ERP deployment, the transformational element of the outsourcing service will come into play when the programme encompasses DARA’s ‘outer circle’. This includes connecting the ERP system to core external industry systems as well as to DECS. The latter is one of the most sophisticated online marketplaces in the world, jointly developed by the MoD and Capgemini.

Management at DARA clearly demonstrate satisfaction with Capgemini’s input to date and have awarded a 3-year outsourcing contract valued at over €30 million. This covers IM (Infrastructure Management) for the entire IT infrastructure at DARA, together with AM (Applications Management) services, including the Baan system.

Services for IM are delivered from Capgemini’s secure data centre at Toltec, near Bristol. This includes a help-desk for some 5,000 staff at all DARA sites in England, Wales and Scotland. AM services are delivered remotely from Capgemini’s Applications Management Service Centre in Sale, Cheshire.

Benefits

Not only will implementation of the Baan ERP approach at DARA provide greater responsiveness and flexibility in action; it will enable better management of all processes in one comprehensive system. That includes assessing the value of contracts, improving financial controls and ensuring close integration of production, scheduling and supply chain.

Driving the process of rapid implementation and development are facts of life that DARA now deals with. The need for responsiveness, being able to cope at high speed with the need to expand or contract to fit fluctuating market demands. The need to deliver a set of customised solutions that precisely fit the non-standard requirements of very different customers.

The need to have a transparent, highly efficient but very secure supply chain based on flexible relationships and, potentially, facilitated by digital exchanges. Above all, the need to manage costs in a business where lack of accurate information at the right moment can wipe out the profit on a major piece of business. The work carried out at DARA is ultimately about assuring the very future of the company.

Most important of all, the entire DARA organisation is now more flexible and ready for change. The success of the changes undertaken so far has helped to breed more adaptive attitudes throughout the company. This, together with the inherently greater fluidity of the new processes now in place, makes DARA able to face the future in this highly unpredictable market with confidence.

In the words of the Chief Executive for DARA:

“As a commercial enterprise operating in highly competitive international defence markets, we must ensure that customers and customer service are our prime focus, and that our information systems support every part of our business in meeting that objective.”

“Capgemini has clearly demonstrated the commitment and capability to deliver the world-class IT service that we, as a customer-facing organisation, know to be vital.”

One key benefit of the outsourcing service from Capgemini to DARA is to provide economies of scale. Service delivery adopts an ‘industrialised’ concept of shared resources and manpower to many clients, meaning that DARA pays for a service, not a fixed number of resources. These elements facilitate transformational outsourcing for DARA’s benefit. Commenting on the outsourcing elements of the partnership, the CEO adds:

“Outsourcing our IT to world-class professionals will also boost our ability to respond rapidly to whatever new needs may emerge in the fast-changing worlds of aviation and defence.”

Written in co-operation with DARA