Performance based contract
Students received extensive information about the case this week during the presentation of smart maintenance at the Ministry of Defence by Major Roy Weijers of the Royal Netherlands Army. Lieutenant Colonel Niels van Gilst gave an extensive introduction about the performance-based contract of Defence and Scania. The presentation by Peter Tavernier, senior account manager Defence & Airport Applications Scania Benelux, could be followed online via Microsoft Teams. Professors from the participating universities provided the students with the necessary theory with workshops on asset life cycle management, performance based contracts, life cycle costing, model based risk analysis, service supply chains, data driven decision support and predictive maintenance.
Luuk Jeurissen, student at the Technical University of Eindhoven, is enthusiastic about the workshops and about the approach to the practical case: “The diversity in the team gives many different angles, absolutely much more than we got in the 3 minute pitch”.
For Sjoerd Buters of Croonwolter&dros Performance Based Contracting is daily practice. “The case is certainly recognizable, including the decision-making process. It’s nice to be able to take this practical experience with you”.
The visit to the maintenance department at the barracks in Stroe was well received by the candidates, it gave clear insight into the comprehensive nature of maintenance at the Ministry of Defence.
The contract with Scania and the delivery of the Scania trucks are a fact. Colonel Mark Bours is committed to working with Scania. He asks the students for advice on the implementation of the performance-based contract and on the relationship with Scania. “We have presented the candidates of the WCM Summer School with the original plan as well as our areas for improvement. This is how we test the plan of approach and adjust it with new, fresh insights. I expect synergy from the different points of view”. The extensive contract guarantees maintenance and, more importantly, the availability of 95% of the equipment required by the Ministry of Defence.
According to the colonel, a big difference is that the Ministry of Defence used to do the maintenance itself and outsourced only a small part. In this new situation they outsource the entire maintenance to Scania. How do you do that with long-term data sharing and with training, so that knowledge is also available in the future?
Niels van Gilst manages the contract from within the Ministry of Defence’s management organisation; this sets out what data they want on, for example, wear and tear and driving behaviour. This sensor data will lead to predictive maintenance in the future. Mark Bours says that the contract is clear in peacetime, but in war situations, the vehicles have to be taken out of the contract for security and confidentiality reasons. The maintenance has to be done on a mission by the Ministry of Defence itself. After the mission, the vehicles come back for a kind of MOT with requirements, so that they are back in the good condition of the contract with Scania.
University lecturer Dutch Defence Academy Chris Rijsdijk: “Sensordata and logging are a valuable addition to the maintenance information system. Many alarms in a weapons system appear to be debatable, but they can still help in making diagnoses. A better understanding of their use is important for cyber security, design improvements and the prevention of operating errors. However, predictive autonomous maintenance based on sensor data is still the future”.
The 6 teams studied the plan of approach for the implementation of performance-based contracting within the Ministry of Defence in detail by means of SWOT analyses. During the information market, team 5 talks about the subsequent FMEA model (Failure Mode and Effects Analysis) of Prof. Dr. Mariëlle Stoelinga, University of Nijmegen. They observe in the FMEA, that in this case a lot of stakeholders are involved and there is still a lot of uncertainty. The team advises the Ministry of Defence to work on trust and cooperation between the various stakeholders.
On the closing Friday of the WCM Summer School, all teams will present their improvement proposals for the implementation of performance-based contracting within Defence. Jan Braaksma introduces the case for the live visitors and for the online attendees with the Scania Gryphus-video.
Jan Braaksma calls the implementation a complicated project: “The contract contains many responsibilities for Scania and for the Royal Netherlands Army. It means a huge organisation for Defence”.
The teams were each given 3 minutes to pitch their points for improvement, followed by 5 minutes of discussion with the questions of the online audience. In the break after the pitches the online voting for the winning team follows. Jan Braaksma reveals the result: the winner is team 6 with Marijke Witteveen from ABB, Sjoerd Buters from Croonwolter&dros, Wouter Jorna from Ministry of Defense, Muhammad Faizan Rabbani and Tim Douma, both from the University of Twente. They scored with a very strong SWOT analysis and with the ‘lighthouse’ idea to create an overview and to implement the contract smoothly on a strategic, tactical and operational level. Marijke Witteveen told us on behalf of the group that a control tower based on KPIs works together and controls training, data sharing and implementation.
During the panel discussion, the best ideas and suggestions from the teams are discussed. Colonel Mark Bours: “The teams discussed many details and different methods. Defence will certainly take these suggestions on board. Especially with team 6 the relationship of trust was acknowledged, but what I only missed was who owns the data. In any case, the groups have done very well in this short timeframe.”
Lieutenant Colonel Niels van Gilst: “An interesting take away is setting up a dashboard for the implementation of the performance based contract by team 1. The winning team 6 came up with a ‘lighthouse’ to highlight the entire operation: a control tower with collaborating teams from all levels of Defence and Scania. This certainly confirms our approach to the current management organisation with specialists from contract management, maintenance, operations, supply chain, finance and technical control”.
Peter Tavernier of Scania calls the fresh insights from the outside good, which makes Defence think out-of-the-box again. Mutual trust is necessary, but the saying is “trust comes on foot and leaves on horseback”.
Peter Tavernier: “It is good news that no one doubts the basis of the contract. We can work together on the undescribed parts of the contract, but those are the details. The big picture is correct.”
Niels van Gilst: “Defence has embarked on a new path with this form of contract. Scania and the Ministry of Defence see it as a cooperation agreement, which they manage together.
Certificates Summer School
Jan Braaksma and Henk Akkermans are proud of the strong analyses and beautiful recommendations of all candidates. All 30 participants receive the coveted WCM Summer School certificate for a festive closing.
WCM Summer School 2021
The next WCM Summer School will be in a year’s time. Participants who want to work together in the field of maintenance management & engineering can join Young WCM.
Pictures: Jenne Hoekstra