Understanding Department of Defense clients. The document discusses:
1) Industry trends in the Department of Defense (DOD) including a push for single general contractors, vendor consolidation, and cost pressures.
2) Major requirements and pain points of the DOD including complex structures, compliance, auditability, and traceability.
3) How Microsoft Dynamics AX can help address DOD needs like production capabilities, quality controls, and project capabilities while also acknowledging some gaps in areas like commitment accounting and contract-driven MRP.
3. Industry Trends
DOD is looking
for 1 General
Contractor vs.
specialized one
Vendor
Consolidation
Spare, Repairs and Retrofit
Vendors have to
diversify
products and
services
Cost Pressures
6. Requirement - WBS
Support for
Complex WBS
Multi-Level
structures
Multiple Funding
sources
Accounting at all
WBS structure
Contractors and
Labor
associations
Earned Value –
Revenue
Recognition
7. Requirements - Contract Types
Cost Plus
Percent
Complete
Time & Material
Fixed Price
Units Delivered
Milestones
Achieved
8. Requirements - Contract Inventory
Specific Cost
structures by
Contracts /
Customers
Inventory
Traceability
Free for next Job
With or En-Route to
Client
Where is the
inventory:
@ Warehouse
Inventory
consumption
tracking
9. Requirements - Quality
Sampling and
batch testing
Documentations
First Article
Testing
Selective and
Criteria based
QA
Digital
Signatures and
workflow
Multi Level QA
and Inspection
Checks
11. Requirements - Production Splits
Multi-Level
BOMs & routes
Order Splits
Outsourcing and
sub-contracting
Fixed fee
production
Billing and
Invoicing based
on Unit
delivered
Order
Prioritizations
12. Requirements - Revenue Recognition
Invoicing and
billing rules
Cost Realization
= Billing
Management
open
commitments
Retainage
Earned Value
Management
14. Why Microsoft
Industry Trends
Competitors
Cost Pressures
Vendor
Consolidations
Microsoft Dynamics AX capabilities
Production
Capabilities
Quality Controls
Procurement
Capabilities
Project
Capabilities
Technologies
Support of Hub
and Spoke
15. Known Gaps, what’s missing
Awareness
Aggressive
message
Compelling
offers
Vertical
Solutions
Microsoft Dynamics - Gaps
Commitment
Accounting
Contract driven
MRP
ITAR Compliance
DOD e-services
integrations
EVM
Reporting
Key industry trendsUnderstanding of DOD key requirementsPosition with Dynamics AX and Microsoft
Vendor ConsolidationDOD is looking for 1 contractor to support all aspect of the business Cost pressuresSpare, Repair and retrofit (refurbish)53% of discretional funding is going to government contractors. Around 1.3 Trillions
Department of Defense Companies and their SubsITAR ComplianceInternational Traffic in Arms RegulationsATAAuditability, Traceability, Accountability
Work Breakdown StructureUnlimited LevelsBasic Building BlocksExampleContract (terms, conditions, billing)Project Sub ProjectsActivitiesCost CodesTransactionsAll Transactions need to be tracked by JTD, YTD, PTDProject #124121First ArticleSub Projects/ActivitiesCost CodesTransactionsFirst Year ProductionSub Projects/ActivitiesCost CodesTransactionsSecond Year ProductionSub Projects/ActivitiesCost CodesTransactions
Cost PlusT&MFixed PricePercent Complete% of budget consumedUnits Delivered (milestone)
Keep inventory and traceability of transactions by the projectUnique costs by contract inventory What is done with ‘extra’ inventoryFree for next job by customerShip to customerMove to Stock WH and give a costWith or enroute to customerIn Stock
An absolute must with DOD workSample testingSOP’sDocumentationsFirst Article TestingCustomer acceptance testing
UGLYWant to rob Peter to Pay PaulTracking of material only (costs shouldn’t move)Need a separate Sub Contract
Need to deliver a quantity quicker than the full production orderProduction has already started and needs to be splitOnly important for T&M type contractsFixed bid has minimal impact
DOD companies want to recognize revenue and bill ASAP. Open Commitments is the quickest path for revenue recognition.Companies vary on methods but the rub is how to realize cost quickly so billing can be processed.How to flag open commitments for billing purposes.Usually done outside systems
Industry TrendsRevenue RecognitionContract InventoryWBSQuotingQualityHub and Spoke MethodsGAPs:Open commitment / as revenueSimplified contract MRPITAR ComplianceIntegration to DOD e-services
Industry TrendsRevenue RecognitionContract InventoryWBSQuotingQualityHub and Spoke MethodsGAPs:Open commitment / as revenueSimplified contract MRPITAR ComplianceIntegration to DOD e-services