Case Study
Flexible Staffing of New U.S. Coast Guard Cutters
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Key Idea Description
Performance Optimization in U.S. Coast Guard mission support through strategic flexibility in crew staffing of new cutters. This study leverages real options analysis and Monte Carlo simulation to refine crewing strategies, focusing on minimizing operational and support costs while enhancing readiness. By implementing flexible staffing aligned with actual ship delivery timelines, the study aims to reduce inefficiencies and improve operational capability in response to uncertainty inherent to modern shipbuilding.
- Broad Area: Military Operations, Coast Guard Ship Commissioning, Operational Efficiency, Strategic Flexibility, Workforce Management.
- Main issues of case: The analysis confronts key challenges in aligning crew availability with fluctuating ship delivery schedules impacted by construction delays and unforeseen events (e.g., hurricanes, pandemics). It explores the economic impact of staffing decisions and seeks to balance crew readiness with cost-effectiveness, addressing the risk of operational gaps due to personnel shortages.
- Main analytic topics: Employs real options analysis to explore the cost benefits of various staffing scenarios and Monte Carlo simulation to account for variability in ship delivery times. The study examines the net present value (NPV) of different staffing approaches, measuring their potential to reduce total lifecycle costs and enhance mission readiness through adaptive crew deployment.
Insights
- Flexibility in the staffing of newly constructed Coast Guard cutters, evaluated through the real options process, proves instrumental in minimizing service risks and maximizing net benefits, particularly crucial in uncertain modern shipbuilding landscapes.
- Investing in flexibility by resourcing shore based personnel up front to deal with recurring pre-commissioning tasks significantly enhances estimated net benefits over the life of a major ship acquisition program, highlighting the strategic advantage of adapting to dynamic construction schedules and optimizing resource allocation in military operations.
Training
Relevant lectures:
- Paradigm change in engineering systems and planning
- How to optimise design and decision-making under uncertainty
- How to manage the design process
Gallery
Abstract
The United States Coast Guard operates a surface fleet of approximately 250 cutters, ranging in size and complexity from 420-foot Heavy Icebreakers to 65-foot Inland Waterways Buoy Tenders. Today more than half of this fleet is operating well beyond its design service life. At the same time, the Coast Guard’s services are in great demand, with a steadily growing mission set. To address growing mission demand and an aging fleet, the Coast Guard is currently engaged in its largest shipbuilding effort since World War II. Seven Acquisition programs of record are scheduled to deliver 134 new cutters over the next 15 years. After the shipbuilder’s contract delivery and before they begin operations, cutters undergo a multi-year pre-commissioning period which includes significant industrial activities related to mission readiness, configuration management, obsolescence, and systems interfaces. In addition to complex industrial work, major training and certification events are also completed. This project employs flexible design principles to analyze the uncertainties associated with building complex ships, to inform staffing strategies for fielding new-construction vessels and transitioning them into operational CG cutters.
This analysis evaluates the timing of staffing pre-commissioning crews using the associated costs as a performance metric. The primary uncertainties modeled are associated with delivery schedule. Uncertainties impacting production costs, and significant events (hurricane, fire, pandemic) are also considered. This analysis indicates a flexible staffing strategy could save the Coast Guard more than $400 million in O&S costs across the life of the Offshore Patrol Cutter (OPC) acquisition program. Further, the super crew flex strategy described herein could increase savings to more than $600 million while offering significant benefits to our workforce. These strategies are scalable, and similar savings are projected if either flexible staffing approach is applied to any of the other 6 surface acquisition programs.
Summary
Introduction to Flexible Staffing in the U.S. Coast Guard Cutter Program
This technical study by Jay Kime assesses the implementation of flexible staffing strategies for newly constructed U.S. Coast Guard cutters as part of the Coast Guard’s largest shipbuilding effort since World War II. The analysis, prepared for the EM.422 Engineering Systems Analysis for Design course, focuses on optimizing crew assignment timing in response to uncertainties in ship delivery schedules.
Understanding the Project’s Scope
The project examines the staffing requirements during the pre-commissioning phase of new Offshore Patrol Cutters (OPC), which are central to modernizing the Coast Guard’s aging fleet. The analysis incorporates various staffing strategies to handle uncertainties such as delays in ship delivery, which impact operational readiness and cost efficiency.
Financial and Technical Analysis (Net Present Value)
- Base Case NPV: Traditional fixed crew assignment strategies are examined under deterministic conditions.
- Flexible Staffing Strategies: The study evaluates the potential savings from implementing flexible crewing strategies, which adjust crew assignments based on real-time ship readiness, potentially saving over $400 million in operation and support (O&S) costs across the OPC program.
Flexibility in Staffing Design
The research proposes three flexible staffing scenarios:
- Base Case Flexible Staffing: Aligns crew reporting with projected delivery dates but remains relatively rigid.
- Super Crew Flex: Introduces a highly flexible strategy where a ‘super crew’ handles most pre-delivery requirements, potentially saving more than $600 million compared to traditional strategies.
- Ship Buffer Flex: Delays crew assignments until ships are nearly operational, minimizing the time crews spend waiting for ships to be ready.
The flexible design’s higher initial investment is justified by significantly higher expected net benefits compared to the more rigid designs, especially when factoring in the potential for future adaptations which are highly likely given the sector’s rapid technological advancements.
Economic Performance Numbers
- Savings through Flexibility: Over $400 million with basic flexible staffing and up to $600 million or more with the super crew flex model.
- NPV Comparisons: Demonstrates substantial cost differences between fixed staffing and flexible strategies, highlighting the economic benefits of adaptive crew management.
Implications for Military Shipbuilding Operations
This case underscores the importance of flexibility in military logistics and personnel management, particularly in large-scale acquisition programs like those of the U.S. Coast Guard. By adopting flexible staffing strategies, military organizations can not only respond more adeptly to the inherent uncertainties of shipbuilding but also significantly enhance fiscal efficiency and operational readiness.
Conclusion
The study concludes that flexible staffing models can significantly reduce costs and improve efficiency in military shipbuilding and operations. By aligning crew assignments more closely with actual ship readiness, the Coast Guard can enhance operational readiness while reducing wasteful spending and personnel idle time.