Project Management Institute

Defence Materiel Organisation, Canberra, Australia

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The HMAS Sirius (foreground) and the HMAS Toowoomba conducting a replenishment at sea

One small team navigates the choppy waters it encounters on a major oil tanker retrofit project—and even salvages some extra cash.

SOMETIMES, LESS IS MORE—even at a massive organization with plenty of project management talent on deck.

“When you want to be innovative, sometimes a large team isn't the way to get there,” says Kim Gillis, general manager systems at the Defence Materiel Organisation (DMO). Part of the Australian Department of Defence, the Canberra-based group is responsible for acquiring and maintaining equipment for the country's military.

The group put the “less is more” theory to the test on its project to replace the HMAS Westralia. In service for more than 30 years, the single-hull oil tanker was part of the Afloat Support Force, which provides operational backup for the Royal Australian Navy fleet by supplying fuel, provisions and ammunition to ships at sea. In 2001, the DMO began planning for the ship's retirement. The goal was to build a new vessel for AUD$350 million to AUD$450 million by 2009.

But changing priorities and environmental concerns put the project on the fast track. In 2003, the DMO learned it had only 18 months and a reduced budget to purchase and retrofit a previously owned commercial vessel. And there would be five to seven people working on a project that Mr. Gillis estimates would normally have about 20 team members.

The project shifted in part due to the International Convention for the Prevention of Pollution from Ships (commonly known as MARPOL 73/78), which mandated a move from single- to double-hull tankers by 2006 to prevent dumping oil and other pollutants. Although the military isn't required to follow the rule, Australia wanted its ships to conform. “You can claim an exemption for something, but morally you have to examine your international responsibility,” Mr. Gillis says.

The compressed time schedule gave the DMO no time to contract a shipyard to build a new vessel. And besides, he adds, a ship of this size hadn't been constructed in Australia in more than 30 years.

5 to 7

Number of team members on the HMAS Sirius project

20

Estimated number of team members typically working on a project of this type

This meant the organization would need to purchase a pre-built ship and then modify it to meet navy specifications. The project wound up costing AUD$143 million. That freed up AUD$300 million, which was shifted to help pay for amphibious helicopter carriers, he says.

THE RIGHT SHIPMATES

The DMO's project team worked with an outside shipping operator and an agent to identify a suitable vessel. Together, they narrowed it down to four possibilities. Team members, along with several outside experts, then traveled to North America, Europe and Asia within two-and-a-half weeks to check out the options.

The market for double-hulled oil tankers was particularly strong at that time, with prices for ships climbing 10 percent every three months. So in June 2004, the DMO arranged to purchase the Delos, built by the South Korean Hyundai Mipo Dockyard. That was about nine to 10 months earlier than needed, but the move helped keep prices low.

Then the DMO turned around and leased the vessel, renamed the HMAS Sirius, to a commercial company for the year between purchase and refurbishment—turning a profit for the Australian government. During a routine government audit, “the auditor was quite stumped by the whole concept,” Mr. Gillis says.

When the refurbishment was ready to proceed the following year, the DMO contracted with the Australian shipbuilder Tenix to do much of the rehab. Dutch firm Rexroth Hydraudyne was assigned to work on the rig used to transfer supplies and fuel from one ship to another while at sea.

DMO DOSSIER

The Defence Materiel Organisation stakes its claim as “Australia's largest project management organization,” working on “the largest and most demanding projects in Australia.”

THE DMO VISION: To become “the leading program management and engineering services organization in Australia.” Stephen J. Gumley, Ph.D., the group's CEO, outlined the six ways the DMO is striving to achieve that vision:

1. Professionalize the DMO workforce and encourage life-long learning

2. Reprioritize work

3. Standardize practices

4. Benchmark against best practice

5. Improve industry relationships by encouraging open and honest dialogue and rewarding good performance

6. Lead reform by embracing change.

AUD$9.6 billion

2007-2008 budget for acquiring and sustaining military equipment and services

7,000

Number of DMO employees in more than 50 locations around Australia and overseas

More than 210

Number of current major projects

More than 200

Number of minor DMO projects

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A view from the Sirius as she conducts a replenishment with the Toowoomba for the first time.

ALL PHOTOS COURTESY OF DEPARTMENT OF DEFENCE

AUD$300 million Amount saved by the Defence Materiel Organisation when it decided to modify an existing ship, rather than build a new one

As part of the refurbishment, everything from military communications equipment to weapons to a helicopter landing pad had to be installed, Mr. Gillis says. In addition, the vessel had to be adapted to house a much larger crew. Originally, the Delos could accommodate 20 crewmembers, while the Sirius needed room for 75.

Along with arranging the purchasing, issuing the contracts and overseeing the contractors, the DMO project team had to take into account “all aspects of an operating warship when it is actually going to sea,” he says. For example, team members had to contend with significantly higher standards for fire safety and control, the installation of secure communication equipment and fitting of weapons systems.

As with any smaller team tackling a major project, keeping the right attitude would prove vital. The project management team was handpicked to only include “people motivated to actually achieve success,” Mr. Gillis says.

The DMO team also forged a close relationship with the Tenix team. “The project teams were truly integrated,” he says.

And that was a refreshing change. “Traditionally, there is a very adversarial relationship between the government and shipbuilders,” Mr. Gillis says.

In this case, the project teams from the DMO and Tenix worked hand in glove. “Everybody knew everybody's business. Generally, it was an open-book philosophy,” says Leigh Newbery, PMP, a Henderson, Australia-based Tenix project engineer who became the company's project manager for the Sirius when his predecessor retired.

In one case, the DMO project team saw that Tenix was falling behind on its work schedule. The Tenix manager promised to put 10 more people on the tasks. But when things still didn't seem to speed up, the DMO project team did a check. For safety reasons, anyone who goes on the ship must leave an identification tag behind in case of an accident. The DMO team simply counted up the ID tags, and found there had only been one extra person working on the project, not 10—unbeknownst to the Tenix manager. Tenix then responded to ensure additional staff was allocated to the job.

“A lot of it is just good common sense,” Mr. Gillis says. The key was having “a small, versatile, agile team.”

Like the DMO, the Tenix team consisted of only a handful of people, each with expertise in certain areas, such as aviation. “We had a small amount of people and a larger-than-normal authority to make decisions,” Mr. Newbery says.

Having a small number of people meant streamlining project processes. “We could solve the lion's share of the work in one meeting,” Mr. Newbery recalls, rather than having multiple meetings spread out across the country.

To keep things moving forward, the DMO team also didn't get hung up on items that weren't critical and would look for a new approach if the original plan wasn't working. It used commercial contracts to purchase the vessel, for example, which improved the level of understanding by the commercial shipping company and the Korean shipyard, Mr. Gillis says.

David Miller, executive general manager, at Melbourne, Australia-based Tenix, says he would invariably pick a small team over a large one. And even with the largest of projects, he breaks the work into small team projects.

“You get better interaction and camaraderie develops,” he says. “All understand what the other people are doing and how their part of it fits in with the big picture.”

The Sirius underwent sea trials in late 2006 and has now been operating for more than a year on deployment. That's a pretty big result for only five people. “A very small team of people can achieve fantastic outcomes,” Mr. Gillis says. –Susan Ladika

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When you want to be innovative, sometimes a large team isn't the way to get there.

–Kim Gillis, Defence Materiel Organisation

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK MARCH 2008 WWW.PMI.ORG
MARCH 2008 PM NETWORK

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