NEWS | June 8, 2021

Our Strategic Framework Pillars: Dependable Mission Delivery Pillar Focus Area One: Direct Work Vs. Overhead: Re-Baselining Overhead to Achieve An Overall Direct Labor Indicator (DLI) Increase

By Troy Miller, Public Affairs Specialist Norfolk Naval Shipyard

Norfolk Naval Shipyard’s Strategic Framework is a tool to communicate the shipyard’s mission and vision statements, and shows how initiatives executed across the command tie together with why NNSY exists—to deliver warships.  In order to bridge the gap between mission and vision, NNSY has identified four critical focus areas—our pillars.  These pillars are the highest priority strategic focus areas we must urgently work to improve.  They are Infrastructure; Dependable Mission Delivery; People Development; and Process Improvement and Innovation.  

When the Mission Pillar Team (MPT) formed, four focus areas were identified to help improve Norfolk Naval Shipyard's (NNSY) dependable mission delivery. They are: Reduce Overhead, Optimize Direct Support Services, Increase Production Efficiency and Inventory Other Direct Work (ODW). The process for reducing overhead has already started.

Naval Sea Systems Command (NAVSEA) tasked NNSY to conduct a review of all overhead charges that the shipyard is incurring. “Overhead is work that needs to get accomplished, mostly administrative in nature,” said NNSY’s Business and Strategic Planning Manager (Code 1201) Maria Williams. “It is work that doesn’t support the project directly like that of a wrench turner.”

A cross functional team of NNSY employees with diverse career backgrounds was formed to investigate each overhead position. The panel was not representing any particular department, code or shop, but the shipyard as a whole. Information was gathered and hard questions were asked to all departments. “We looked at the positions, not the people in those positions, to see if they could decrease job billets,” said NNSY Deputy Comptroller (Code 600) Jamie Finlay. “If a department has multiple billets of the same kind, the question was asked if they could still get the job done with fewer people. For instance, if a code has five analysts, can they do the same job if they reduce it to four or even three analysts?”

  Shipyard employees are not being displaced or removed from their current billet in order to reduce overhead. Instead, when an employee moves on either by promotion, retirement, finding a job outside the shipyard, or other means, their position is closely looked at to see if that billet can be removed and given to the waterfront to increase the number of people that directly support a project.

“I can’t stress enough that no one’s job is in jeopardy due to the reduction in overhead positions,” said Williams. “We are permitted a limited number of personnel and reducing overhead reshapes the workforce which allows us to focus on delivering ships.” By Fiscal Year 2025, the goal is to reduce approximately 400 overhead resources per day (RPD) and return them to the waterfront as Wage Grade positions.

According to Finlay, like any other process, there are always challenges to overcome. “We need to stick to the plan that we submit to NAVSEA,” said Finlay. “Another challenge will be ensuring we don’t just switch charging the same jobs from a historically overhead charge to direct just for the sake of reducing. This would violate the Uniform Costing Guidance that sets the way the shipyards charge and doesn’t really add any productive capability back to the workforce.”

It will be approximately a year until any noticeable results in reducing overhead will be achieved. Until then, the MPT and all the departments will do their part to make NNSY stronger, better and more dependable on all deliveries.