Cinderella : A view of Armscor Acquisition
Mr Toastmaster, Honoured Guests and Toastcor Friends,
It is unnecessary for me to tell you about the reduction in funds available for military spending in the RSA. The result was inevitably a scaling down of all military activities and structures. Only recently Armscor also scaled down, but even after that, the question was asked : What service does Armscor demonstrably deliver to the DOD and the SANDF for the odd Rm160 that it receives per year? Taking into account that the main function of Armscor is to be the Acquisition Authority of the SANDF, it could easily be asked : What does that entail, and why does it cost so much money?
On request from management a study was conducted, and a short report compiled to characterise and summarise the work being done by the Armscor Acquisition teams. This report is available on the Armscor network for perusal at your leisure.
This study shows the broad scope of the work, the diversity of the work and the excellent performance by these teams in the management of the work on a daily basis.
The study was conducted by compiling a questionnaire on electronic media , and forwarding that to all the acquisition teams. After consultation with their teams, the questionnaires were filled out and re-routed to the compiler who did the collation and interpretation of the results.
Ten teams responded to the request, and these represent 141 people of whom 87 are technical people. The teams that responded were : Artillery, MechanisedInfantry; Log Staff Support; Guided Missiles; Aircraft; Infantry Weapons & Ammunition; Armour; Combat Support; MotorisedInfantry & Engineers and Maritime.They reported about 79 different projects or programs that represented a business value of 1,536 billion Rand per year. From these figures it can be seen that although not all teams responded, the study is wide enough to draw valid conclusions.
The following figure shows the distribution of the different projects. The distribution is highly skewed as could be expected - it follows the Pareto principle where the top 20% of the projects represents 80% of the business. The value of the programs varied between 0 and 250 million Rand with an average of nearly 20 million Rand per project. An average of 2,1 man-years technical labour is spent on each project, with a maximum of about 11 man-years on some of the labour intensive projects. These figures imply that each technical person on the average, conducts business to the value of 18 million Rand per year.
For the execution of his work, every technical person needs on the average 0.6 admin. support personnel to process his on average 17 orders per year. The number of orders per technical person may however be as high as 84. A further 0.7 support personnel are on average needed per technical person. If that is totalled for all the business reported, a massive 62 man-years of external support is needed. (Being Finances, Manpower, Internal System Services, IT etc.). When the total cost of the team is compared to the value of the business the factor is 51,6 on average, with a maximum of a staggering 130! This implies that the acquisition team costs on average less than 2% of the business value, and in some instances as low as 0,6%!
Concerning the type of work necessitated by the specialised acquisition function, the following results were seen from the study:
Time spent on Technical Contract Management : 24%
Time spent on Program Financial Control : 20%
Time spent on Quality & Configuration Management : 7%
Time spent on Baseline Management : 4%
Time spent on Technical Management: 14%
Time spent on Logistical Management : 9%
Time spent on client support & marketing : 9%
Time spent on Training & team-improvement : 4%
Time spent on consultancy & Team management activities: 6%
Time spent on Technology Management : 2%.