The Navy competitively awarded a firm-fixed-price contract in April 2001 to Michelin Aircraft Tires Corporation (MATC), Greenville, S.C. to manage the Navy’s aircraft tire program. This contract had a five-year base, and two five-year options totaling $261.5 million, to support all 23 tire types the Navy used (PBL Award Summary 2011). MATC subcontracted with Lockheed Martin to provide the supply chain services, including demand forecasting, order fulfillment, and inventory management. The responsibility for on-time tire delivery fell on Lockheed Martin.
The PBL tires team improved material availability and reliability. Response times dropped from 60 days to 2 days within the continental U.S. (CONUS) and 4 days outside the continental U.S. (OCONUS), even during surge periods. Fill rates have been 100 percent completed and 98.5 percent on-time, exceeding goals of 95 percent. This high level of material availability enabled the Navy to completely draw down its former stockpile of wholesale tires from 60,000 tires to zero, consistently reduced delivery timeframes, and significantly reduced the need for local retail customer inventory levels. The inventory drawdown saved the Navy money by reducing the costs related to the ownership and maintenance of the tires and warehouses.
The program also achieved a high level of material reliability and reduced the total ownership cost. This is evident by the dramatic reduction in engineering investigations and continued improvements to the aviation tire reliability, safety, and maintainability. This demonstrates the benefit that the Navy receives from a long-term contract based on performance - the private investment in product improvement that results in cost-savings and a better end product. In 2011, the PBL tires program was awarded the Component Level Award, one of the three 2011 Secretary of Defense PBL awards for these significant sustainment improvements.
The research project was partially funded by the Lockheed Martin Corporation.