Calhoun: The NPS Institutional Archive DSpace Repository

Theses and Dissertations

1. Thesis and Dissertation Collection, all items

2008-09

A systems engineering approach to address human capital management issues in the shipbuilding industry

Parten, Douglas S.

Monterey, California. Naval Postgraduate School

http://hdl.handle.net/10945/3978

Downloaded from NPS Archive: Calhoun

DUDLEY

KNOX

LIBRARY

http ://w w w. nps.edu/lEbrary

Calhoun is the Naval Postgraduate Schools public access digital repository for research materials and institutional publications created by tire NPS community, Calhoun is named for Professor of Mathematics Guy K. Calhoun, NPS's first appointed and published scholar^ author.

Dudley Knox Library / Naval Postgraduate School 411 Dyer Road / 1 University Cirde Monterey, California USA 93943

NAVAL

POSTGRADUATE

SCHOOL

MONTEREY, CALIFORNIA

THESIS

A SYSTEMS ENGINEERING APPROACH TO ADDRESS HUMAN CAPITAL MANAGEMENT ISSUES IN THE SHIPBUILDING INDUSTRY

by

Hal M. Todd Douglas S. Parten

September 2008

Thesis Advisor: Gary O. Langford

Second Reader: James A. Turso

Approved for public release, distribution is unlimited

THIS PAGE INTENTIONALLY LEFT BLANK

REPORT DOCUMENTATION PAGE

Form Approved OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington DC 20503.

1. AGENCY USE ONLY (Leave blank) I 2. REPORT DATE I 3. REPORT TYPE AND DATES COVERED

September 2008 | _ Master’s Thesis

4. TITLE AND SUBTITLE A Systems Engineering Approach to Address Human Capital Management Issues in the Shipbuilding Industry

5. FUNDING NUMBERS

6. AUTHOR(S) Todd, Hal M.; Parten, Douglas S.

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

Naval Postgraduate School

Monterey, CA 93943-5000

8. PERFORMING ORGANIZATION REPORT NUMBER

9. SPONSORING /MONITORING AGENCY NAME(S) AND ADDRESS(ES)

N/A

10. SPONSORING/MONITORING AGENCY REPORT NUMBER

11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S. Government.

12a. DISTRIBUTION / AVAILABILITY STATEMENT

Approved for public release, distribution unlimited.

12b. DISTRIBUTION CODE

A

13. ABSTRACT (maximum 200 words)

Recent human capital trends within the Department of Defense (DoD) and its contractors have shown a dramatic decrease in science and engineering skill levels due to retirement and attrition. This has caused major concern for leaders, especially regarding engineering talent necessary for shipbuilding. This study investigated current DoD Human Capital Management (HCM) strategies for attracting, developing, retaining and managing competencies and intellectual resources for science and engineering talent within the shipbuilding industry. The investigation consisted of a survey of current DoD and industry HCM frameworks, an analysis of the needs of key stakeholders, and an examination of the gaps in the HCM strategies employed by these stakeholders. The result of the analysis was the development, via a functional analysis, of a notional HCM architecture for the shipbuilding industry that addresses stakeholder needs and closes the perceived gaps in current strategies. The notional HCM architecture was developed to provide a first iteration of a HCM architecture tailorable to a particular stakeholder’s HCM needs. This study also developed a notional overall measure of effectiveness (OMOE) model to suggest the means by which stakeholders can judge the effectiveness of their tailored version of the HCM architecture. This first-iterate OMOE was derived using weights and metrics based on the author’s insights gained from the research performed during this study, and suggests that further refinement of the HCM architecture is required.

14. SUBJECT TERMS Systems Engineering, Human Capital, Human Capital Management, 15. NUMBER OF Shipbuilding, Stakeholder Analysis, Functional Analysis, Gap Analysis, Overall Measure of PAGES

Effectiveness Model

247

16. PRICE CODE

17. SECURITY

18. SECURITY

19. SECURITY

20. LIMITATION OF

CLASSIFICATION OF

CLASSIFICATION OF THIS

CLASSIFICATION OF

ABSTRACT

REPORT

PAGE

ABSTRACT

Unclassified

Unclassified

Unclassified

UU

NSN 7540-01-280-5500

Standard Form 298 (Rev. 2-89)

Prescribed by ANSI Std. 239-18

I

THIS PAGE INTENTIONALLY LEFT BLANK

Approved for public release, distribution is unlimited

A SYSTEMS ENGINEERING APPROACH TO ADDRESS HUMAN CAPITAL MANAGEMENT ISSUES IN THE SHIPBUILDING INDUSTRY

Hal M. Todd

Northrop Grumman Shipbuilding, Pascagoula, Mississippi B.S. University of South Alabama, 1997

Douglas S. Parten

Northrop Grumman Shipbuilding, Pascagoula, Mississippi B.S. Oregon State University, 1990

Submitted in partial fulfillment of the requirements for the degree of

MASTER OF SCIENCE IN SYSTEMS ENGINEERING MANAGEMENT

from the

NAVAL POSTGRADUATE SCHOOL September 2008

Author: Hal M. Todd

Douglas S. Parten

Approved by: Gary O. Langford

Thesis Advisor

James A. Turso Second Reader

David H. Olwell

Chair, Department of Systems Engineering

THIS PAGE INTENTIONALLY LEFT BLANK

IV

ABSTRACT

Recent human capital trends within the Department of Defense (DoD) and its contractors have shown a dramatic decrease in science and engineering skill levels due to retirement and attrition. This has caused major concern for leaders, especially regarding engineering talent necessary for shipbuilding. This study investigated current DoD Human Capital Management (HCM) strategies for attracting, developing, retaining and managing competencies and intellectual resources for science and engineering talent within the shipbuilding industry. The investigation consisted of a survey of current DoD and industry HCM frameworks, an analysis of the needs of key stakeholders, and an examination of the gaps in the HCM strategies employed by these stakeholders. The result of the analysis was the development, via a functional analysis, of a notional HCM architecture for the shipbuilding industry that addresses stakeholder needs and closes the perceived gaps in current strategies. The notional HCM architecture was developed to provide a first iteration of a HCM architecture tailorable to a particular stakeholder’s HCM needs. This study also developed a notional overall measure of effectiveness (OMOE) model to suggest the means by which stakeholders can judge the effectiveness of their tailored version of the HCM architecture. This first-iterate OMOE was derived using weights and metrics based on the author’s insights gained from the research performed during this study, and suggests that further refinement of the HCM architecture is required.

v

THIS PAGE INTENTIONALLY LEFT BLANK

VI

TABLE OF CONTENTS

I. INTRODUCTION . 1

A. DEPARTMENT OF DEFENSE AND SHIPBUILDING INDUSTRY

HUMAN CAPITAL TRENDS . 1

1. Navy Human Capital Management Perspective . 1

2. Shipbuilding Industry Concerns . 2

B. RECRUITING AND ATTRITION CONCERNS . 4

C. PURPOSE, GOALS, AND OBJECTIVES . 6

D. RESEARCH QUESTIONS . 7

E. BENEFITS OF STUDY . 8

F. SCOPE AND METHODOLOGY . 8

II. HUMAN CAPITAL MANAGEMENT STRUCTURES . 1 1

A. BACKGROUND . 11

1. What is Human Capital? . 11

2. What is Human Capital Management? . 12

B. STRATEGIC IMPLICATIONS OF HUMAN CAPITAL . 14

1 . Human Capital and Organizational Strategy . 14

2. Core Competencies and Competitive Advantage . 1 5

C. HUMAN CAPITAL MANAGEMENT STRUCTURES AND

PROCESSES . 18

1. Best Practices versus Best Fit Structures . 18

2. Four-Quadrant Human Capital Architectures . 20

D. HUMAN CAPITAL MANAGEMENT FRAMEWORKS . 28

1. The People Capability Maturity Model (People CMM) . 28

2. Tailored Adaptations of People CMM . 34

E. CHAPTER SUMMARY . 47

III. STAKEHOLDER ANALYSIS . 49

A. INTRODUCTION . 49

1 . Definition of Stakeholder . 49

2. Definition of Stakeholder Analysis . 50

B. STAKEHOLDER ANALYSIS PROCESS . 52

1. Identification of Potential Stakeholders . 52

2. Classification of Potential Stakeholders . 53

3. Determination of Potential Stakeholder and System

Relationships . 54

4. Determination of System Stakeholders . 55

5. Definition of Stakeholder Requirements . 56

C. STAKEHOLDER ANALYSIS DATA . 57

1. Identification of Potential Stakeholders . 57

2. Classification of Potential Stakeholders . 63

VII

3. Determination of Potential Stakeholder and System

Relationships . 64

4. Determination of System Stakeholders . 69

5. Defining Stakeholder Requirements . 70

D. CHAPTER SUMMARY . 72

IV. GAP ANALYSIS: ASSESSING HUMAN CAPITAL GAPS IN THE

SHIPBUILDING INDUSTRY . 75

A. GAP ANALYSIS THEORY . 75

1 . Gaps and Gap Analysis Defined . 75

2. Enterprise Framework Model Metrics . 76

3. Enterprise Framework Model Dynamics . 79

4. Application of a Gap Matrix . 83

B. SHIPBUILDING INDUSTRY THREAT AND VULNERABILITY

FACTORS . 85

1 . Shipbuilding Industry Threat Factors . 86

2. Shipbuilding Industry Vulnerability Factors . 92

C. SHIPBUILDING INDUSTRY HUMAN CAPITAL GAP ANALYSIS .... 97

D. CHAPTER SUMMARY . 1 00

V. FUNCTIONAL ANALYSIS AND OVERALL MEASURE OF

EFFECTIVENESS MODEL . 103

A. HCM CONCEPTUAL DESIGN . 103

1. Conceptual Design . 103

2. Requirements Analysis . 1 04

3. Functional Analysis . 107

4. Customized System Architectures . 122

B. OVERALL MEASURE OF EFFECTIVENESS MODEL . 1 23

1. HCM Value Hierarchy . 123

2. Prioritization of Stakeholder Requirements . 126

3. Quality Function Deployment . 128

4. OMOE Model . 135

C. CHAPTER SUMMARY . 1 42

VI. CONCLUSIONS AND SUGGESTIONS FOR FURTHER RESEARCH . 1 45

A. CONCLUSIONS . 145

1 . Research Question 1 . 145

2. Research Question II . 149

3. Research Question III . 150

B. AREAS FOR FUTURE RESEARCH . 1 52

1. Other Systems Engineering Design Phases . 152

2. Development of Blue Collar HCM Architecture . 153

3. Replace Notional Scoring with Industry-Expert Scoring.. 153

APPENDIX A . 155

APPENDIX B . 167

APPENDIX C . 173

APPENDIX D . 181

APPENDIX E . 201

APPENDIX F . 205

LIST OF REFERENCES . 215

INITIAL DISTRIBUTION LIST . 221

IX

THIS PAGE INTENTIONALLY LEFT BLANK

x

LIST OF FIGURES

Figure 1. DoD Top Ten Occupations, Losses vs. New Employees, 1990-1998

(From DiTrapani, Adedeji, & Lawler, 2000) . 4

Figure 2. U.S. Engineering University Graduates (From Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics

[OUSD AT&L], 2006) . 5

Figure 3. U.S. University Trends in Defense-Related Science and

Engineering (From OUSD AT&L, 2006) . 5

Figure 4. Summary of the HR Architecture Model (After Lepak & Snell, 1999;

2002) . 22

Figure 5. Stewart's Four-Quadrant Human Capital Model (After Stewart,

1997) . 26

Figure 6. Dynamic of the Lepak & Snell HR Architecture Model (After Lepak

& Snell, 1999) . 28

Figure 7. The five maturity levels of the People CMM (From Curtis, Hefley, &

Miller, 2001) . 30

Figure 8. Process Area Threads in the People CMM (From Curtis, et al.,

2001) . 33

Figure 9. CIPS Human Capital Management Components (From Center for

Innovation In Public Service [CIPS], 2006) . 37

Figure 10. CIPS Human Capital Management Framework Steps (From CIPS,

2006) . 38

Figure 11. CIPS Human Capital Management Framework Maturity Levels

(From CIPS, 2006) . 39

Figure 12. CIPS Human Capital Management Framework Skeleton (From

CIPS, 2006) . 40

Figure 13. Example of CIPS Human Capital Management Framework for the

Recruitment and Hiring HCM Component (From CIPS, 2006) . 41

Figure 14. CIPS Human Capital Framework Sample Assessment for the

Recruitment and Hiring HCM Component (From CIPS, 2006) . 42

Figure 15. Comparison of the focus areas in the CIPS HCM Framework and

the People CMM . 43

Figure 16. GAO Strategic Human Capital Management Framework

Cornerstones and Critical Success Factors Structure (From GAO,

2002) . 45

Figure 17. GAO Strategic Human Capital Management Maturity Levels (From

GAO, 2002) . 46

Figure 18. Generic Depiction of How Stakeholder Analysis Feeds

Development of the System Architecture . 73

Figure 19. Gap Analysis Enterprise Framework Dynamics (After Langford,

2007a) . 80

XI

Figure 20.

Figure 21. Figure 22. Figure 23. Figure 24.

Figure 25.

Figure 26.

Figure 27.

Figure 28. Figure 29.

Figure 30. Figure 31.

Figure 32. Figure 33.

Figure 34.

Figure 35. Figure 36.

Figure 37.

Figure 38.

Figure 39.

Figure 40.

Figure 41.

Figure 42.

Gaps Visualized Using the Enterprise Framework (After Langford,

2007a; Langford, Franck, Huynh, & Lewis, 2007) . 81

Example of a Gap Analysis Matrix (After the Open Group, 2000) . 84

Shipbuilding HCM Gap Matrix . 98

HCM System Functional Decomposition . 108

Top-tier Functional Decomposition of HCM Architecture for DoD

Shipbuilding Technical Industry . 109

Decomposition of Top-Tier Function “Facilitate Knowledge

Management.” . 110

Decomposition of Top-Tier Function “Manage Industry-

Government-Academic Partnerships.” . 1 1 1

Decomposition of Top-Tier Function “Administer Appropriate

Training.” . 112

Decomposition of Top-Tier Function “Develop Career Paths.” . 113

Decomposition of Top-Tier Function “Institute Competitive

Compensation.” . 114

Decomposition of Top-Tier Function “Identify Potential Talent.” . 115

Decomposition of Top-Tier Function “Utilize Interactive

Recruitment.” . 117

Decomposition of Top-Tier Function “Implement HCM Strategy.”.... 118 Decomposition of Top-Tier Function “Apply Proactive SME

Development.” . 119

Decomposition of Top-Tier Function “Conduct Shipbuilding

Opportunity Awareness Campaign.” . 121

HCM Architecture Value Hierarchy . 125

Pair-Wise Comparison Matrix for HCM Architecture Requirements

Using Notional Requirements Scoring (After Whitcomb, 2008a) . 127

Traceability of Requirements to Form Via Linked HOQs (After;

Whitcomb, 2008b) . 130

First Level QFD Matrix for Comparison of Top-Level Stakeholder Requirements to HCM Architecture Design Attributes (After

Whitcomb, 2008b) . 132

Second Level QFD Matrix for Comparison of HCM Architecture Design Attributes to Top Level HCM Architecture Functions (After

Whitcomb, 2008b) . 133

Third Level QFD Matrix for Comparison of HCM Architecture Design Attributes to Top Level HCM Architecture Functions, Part 1

(After Whitcomb, 2008b) . 134

Third Level QFD Matrix for Comparison of HCM Architecture Design Attributes to Top Level HCM Architecture Functions, Part 2

(After Whitcomb, 2008b) . 134

Fragment of the HCM Architecture OMOE Model (After Whitcomb, 2008b) . 138

XII

Figure 43. Figure 44. Figure 45. Figure 46. Figure 47. Figure 48. Figure 49. Figure 50. Figure 51. Figure 52. Figure 53.

Figure 54.

Figure 55.

Figure 56.

Figure 57.

Figure 58. Figure 59.

Figure 60.

CIPS HCM Framework Steps: Recruitment and Hiring Component

(From CIPS, 2006) . 156

CIPS HCM Framework Steps: Retention Component (1 of 2) (From

CIPS, 2006) . 157

CIPS HCM Framework Steps: Retention Component (2 of 2) (From

CIPS, 2006) . 158

CIPS HCM Framework Steps: Staff Development Component

(From CIPS, 2006) . 159

CIPS HCM Framework Steps: Workforce Planning Component

(From CIPS, 2006) . 160

CIPS HCM Framework Steps: Performance Management

Component (1 of 2) (From CIPS, 2006) . 161

CIPS HCM Framework Steps: Performance Management

Component (2 of 2) (From CIPS, 2006) . 162

CIPS HCM Framework Steps: Information Sharing Component

(From CIPS, 2006) . 163

CIPS HCM Framework Steps: Personnel Transaction Support

Component (1 of 2) (From CIPS, 2006) . 164

CIPS HCM Framework Steps: Personnel Transaction Support

Component (2 of 2) (From CIPS, 2006) . 165

GAO Strategic Human Capital Management Framework

Cornerstones and Critical Success Factors Structure (From GAO,

2002) . 168

GAO Strategic Human Capital Management Framework Critical Success Factors Table, Leadership Cornerstone (From GAO,

2002) . 169

GAO Strategic Human Capital Management Framework Critical Success Factors Table, Strategic Human Capital Planning

Cornerstone (From GAO, 2002) . 170

GAO Strategic Human Capital Management Framework Critical Success Factors Table, Acquiring, Developing, and Retaining

Talent Cornerstone (From GAO, 2002) . 171

GAO Strategic Human Capital Management Framework Critical Success Factors Table, Results-Oriented Organizational Cultures

Cornerstone (From GAO, 2002) . 172

Pair-Wise Comparison Matrix for HCM Architecture Requirements

Using Notional Requirements Scoring (After Whitcomb, 2008a) . 206

First Level QFD Matrix for Comparison of Top-Level Stakeholder Requirements to HCM Architecture Design Attributes (After

Whitcomb, 2008b) . 207

Second Level QFD Matrix for Comparison of HCM Architecture Design Attributes to Top Level HCM Architecture Functions (After Whitcomb, 2008b) . 208

XIII

Figure 61.

Figure 62.

Figure 63. Figure 64. Figure 65.

Third Level QFD Matrix for Comparison of HCM Architecture Design Attributes to Top Level HCM Architecture Functions, Part 1

(After Whitcomb, 2008b) . 209

Third Level QFD Matrix for Comparison of HCM Architecture Design Attributes to Top Level HCM Architecture Functions, Part 2

(After Whitcomb, 2008b) . 210

HCM Architecture OMOE Model, 1 of 3 (After Whitcomb, 2008b). ... 212 HCM Architecture OMOE Model, 2 of 3 (After Whitcomb, 2008b). ... 213 HCM Architecture OMOE Model, 3 of 3 (After Whitcomb, 2008b). ... 214

XIV

LIST OF TABLES

Table 1. Table 2.

Table 3.

Table 4. Table 5.

Table 6.

Table 7.

Table 8.

Table 9. Table 10.

Table 11. Table 12. Table 13. Table 14. Table 15. Table 16. Table 17.

Table 18. Table 19.

Table 20. Table 21.

Table 22.

Table 23. Table 24. Table 25. Table 26.

Table 27.

Pfeffer's Sixteen Human Capital Best Practices (After Pfeffer, 1994). 19 Example of GAO Strategic HCM Critical Success Factors (After

GAO, 2002) . 47

Purposes of Stakeholder Analysis (After Langford, 2007a;

Schmeer, 1999) . 51

Representative Stakeholders Determined During Brainstorming . 58

Representative Stakeholders Determined Examination of Scenario

1 . 59

Representative Stakeholders Determined Examination of Scenario

2 . 60

Representative Stakeholders Determined Examination of Scenario

3 . 61

Representative Stakeholders Determined Examination of Scenario

4 . 62

Stakeholder Analysis: Classification of Stakeholders . 64

Stakeholder Analysis: Stakeholder Impacts to System Lifecycle

Stages . 65

Stakeholder Analysis: Determination of Stakeholder Worth . 67

Stakeholder Analysis: Determination of Stakeholder Importance . 67

Stakeholder Analysis: Determination of Stakeholder Influence . 68

Stakeholder Analysis: Classification of Stakeholders . 69

List of Primary Stakeholders . 69

List of Secondary Stakeholders . 69

Gaps In Current DoD HCM Architectures for the DoD Shipbuilding

Technical Industry . 105

Gap-to-Function Traceability Matrix . 105

Stakeholder Requirements of DoD HCM Architecture for DoD

Shipbuilding Technical Industry . 106

Requirement/Function Traceability Matrix . 107

Initial Pair-Wise Comparison of Stakeholder HCM Architecture Requirements Using Notional Requirements Scoring (After

Whitcomb, 2008a) . 126

Attribute Scoring Table for HCM Architecture Design Form

Elements (After Whitcomb, 2008b) . 137

Results of OMOE Assessment of the Proposed HCM Architecture.. 141 Initial List of Stakeholders Determined During Brainstorming (1 of 2)1 74

Initial List of Stakeholders Determined During Brainstorming (2 of 2)175

List of Stakeholders Determined During Consideration of Scenario 1 . 176

List of Stakeholders Determined During Consideration of Scenario 2 . 177

xv

Table 28.

Table 29.

Table 30.

Table 31.

Table 32.

Table 33.

Table 34.

Table 35.

Table 36.

Table 37. Table 38. Table 39.

Table 40. Table 41.

Table 42.

Table 43. Table 44.

Table 45.

Table 46.

Table 47.

Table 48.

Table 49.

Table 50.

List of Stakeholders Determined During Consideration of Scenario 3 . 178

List of Stakeholders Determined During Consideration of Scenario 4 . 179

Initial Classification of Stakeholders and Their Impact on System

Lifecycle Stages, (1 of 4): Academia . 182

Initial Classification of Stakeholders and Their Impact on System

Lifecycle Stages, (2 of 4): Industry . 183

Initial Classification of Stakeholders and Their Impact on System

Lifecycle Stages, (3 of 4): Government . 184

Initial Classification of Stakeholders and Their Impact on System

Lifecycle Stages, (4 of 4): Other . 185

Determination of Stakeholder Worth, (1 of 10): Academia to

Academia . 186

Determination of Stakeholder Worth, (2 of 10): Academia to

Industry . 187

Determination of Stakeholder Worth, (3 of 10): Academia to

Government . 188

Determination of Stakeholder Worth, (4 of 10): Academia to Other . 189 Determination of Stakeholder Worth, (5 of 10): Industry to Industry. 190 Determination of Stakeholder Worth, (6 of 10): Industry to

Government . 191

Determination of Stakeholder Worth, (7 of 10): Industry to Other . 192

Determination of Stakeholder Worth, (8 of 10): Government to

Government . 193

Determination of Stakeholder Worth, (9 of 10): Government to

Other . 194

Determination of Stakeholder Worth, (1 0 of 1 0): Other to Other . 195

Determination of Stakeholder Importance, Influence, and Final

Classification (1 of 4): Academia . 196

Determination of Stakeholder Importance, Influence, and Final

Classification (2 of 4): Industry . 197

Determination of Stakeholder Importance, Influence, and Final

Classification (3 of 4): Government . 198

Determination of Stakeholder Importance, Influence, and Final

Classification (4 of 4): Other . 199

Compiled List of Human Capital Shipbuilding Industry Specific

Stakeholder Needs . 203

Initial Pair-Wise Comparison of Stakeholder HCM Architecture Requirements Using Notional Requirements Scoring (After

Whitcomb, 2008a) . 206

Attribute Scoring Table for HCM Architecture Design Form Elements (After Whitcomb, 2008b) . 21 1

XVI

LIST OF ACRONYMS AND ABBREVIATIONS

ABS

AHP

ANSI

ASCE

ASME

ASNE

CAD

CIPS

CMM

CNO

CVN

DAU

DD

DDG

DoD

DoN

ESDRC

ESO

FA

FFBD

GAO

GWOT

HCM

HOQ

HR

IEC

IEEE

American Bureau of Shipping Analytic Hierarchy Process American National Standards Institute American Society of Civil Engineers American Society of Mechanical Engineers American Society of Naval Engineers Computer Aided Design, Computer Aided Drafting Center for Innovation in Public Service Capability-Maturity Model Chief of Naval Operations

Multi-Purpose Aircraft Carrier (Nuclear Propulsion)

Defense Acquisition University Destroyer

Guided Missile Destroyer Department of Defense Department of the Navy

Environment and Sustainable Development Research Center

Electric Ship Office

Functional Analysis

Functional Flow Block Diagram

Government Accountability Office (United States)

Global War on Terror

Human Capital Management

House of Quality

Human Resources

International Engineering Consortium

International Institute of Electrical and Electronics Engineers xvii

IPS

Integrated Power System

INCOSE

International Council on Systems Engineering

ISO

International Organization for Standardization

KSA

Knowledge, Skills, and Abilities

LPD

Amphibious Transport Ship Dock

MIT

Massachusetts Institute of Technology

MMO

Massively Multiplayer Online

MOE

Measure of Effectiveness

MOP

Measure of Performance

NASSCO

National Steel and Shipbuilding Company

NAVAIR

Naval Air Systems Command

NAVSEA

Naval Sea Systems Command

NAVSUP

Naval Supply Systems Command

NA&ME

Naval Architecture & Marine Engineering

NC-EQW

National Center on Educational Quality of the Workforce

NNR-NE

National Naval Responsibility for Naval Engineering

NPS

Naval Postgraduate School

NOW

Net-Centric Warfare

NSPS

National Security Personnel System

NSRP-ASE

National Shipbuilding Research Program Advanced

Shipbuilding Enterprise

OMOE

Overall Measure of Effectiveness

ONR

Office of Naval Research

OSD

Office of the Secretary of Defense

OUSD -AT&L

Office of the Under Secretary of Defense for Acquisition,

Technology & Logistics

PEO

Program Executive Office

PMS

Program Management, Ship

QFD

Quality Function Deployment

R&D

Research & Development

XVIII

SEI

Software Engineering Institute, Carnegie-Mellon University

SLBM

Submarine-Launched Ballistic Missile

SME

Subject-Matter Expert

SNAME

Society of Naval Architects and Marine Engineers

SSN

Attack Submarine, Nuclear Powered

SSP

Strategic Systems Programs

SW-CMM

Software Capability-Maturity Model

USMC

United States Marine Corps

WAF

Worth Activation Function

WTF

Worth Transfer Function

XIX

THIS PAGE INTENTIONALLY LEFT BLANK

xx

EXECUTIVE SUMMARY

This thesis investigates human capital management (HCM) within the DoD shipbuilding industry and addresses the issue of decreasing science and engineering skill levels due to retirement and other attrition, a concern to both DoD and industry. An overview is provided of the characteristics of human capital and HCM principles, highlighting the importance effective HCM has on an organization’s strategic position within the marketplace. Maturity-based frameworks are presented as examples of disciplined and continuous processes for developing and improving HCM practices in DoD and industry.

The authors perform a stakeholder analysis to determine the key stakeholders within government, industry, and academia that have an interest in HCM for the shipbuilding industry. In the analysis, 134 stakeholders are identified, classified, and prioritized, and their specific HCM needs are identified, leading to ten high-priority HCM requirements.

Next, the authors perform a gap analysis to identify and investigate the perceived gaps in the shipbuilding industry HCM strategies terms of the threats to the industry and its vulnerabilities. Gaps are highlighted indicating the difficulty the industry has in effectively attracting engineering talent, developing it, and transferring the critical skills learned to the next generation of engineers.

The stakeholder and gap analysis results are used to guide the development of a top-level notional HCM functional architecture to meet the industry’s HCM needs. The architecture is presented as a notional framework that can be tailored according to particular stakeholder HCM priorities. A notional overall measure of effectiveness (OMOE) model is presented to illustrate to stakeholders how the effectiveness of the tailored architecture may be assessed. This first-iterate OMOE was derived using weights and metrics based on the author’s insights gained from the research performed during this study, and suggests that further refinement of the HCM architecture is required.

XXI

THIS PAGE INTENTIONALLY LEFT BLANK

XXII

ACKNOWLEDGEMENTS

Hal Todd:

I would like to thank my beautiful wife Shirlean and daughter Halle for the love, support and patience they have given me during the development of this thesis. They are wonderful. I thank my mother Ruthy Todd, brother Stephen and sister Sylvia for never letting me doubt my ability to achieve great things. It has only been through the mercy and grace granted to me by my Lord and Savior Jesus Christ and the support of my pastors Rodney and Shetecia Chastang (and church family Agape Ministries) that I could hope to reach such achievements.

I would like to give my sincere gratitude to my director and mentor Robert Rifley and the Northrop Grumman Shipbuilding (NGSB) Advanced Capabilities Group (ACG) Systems Engineering management staff for providing me with the insight and expertise to finish the NPS SEM-PD21 program. I would be remiss if I did not acknowledge the support and mentoring provided by my sector vice president Eric Womble. The encouragement he provided is representative of the type of support extended from the NGSB Executive staff, ACG senior management and NGSB SEM PD-21 graduates.

I would like to express my genuine appreciation to our thesis advisors Professor Gary Langford and Professor James Turso. They gave of their time, experience and wisdom without hesitation or limit. Thanks to the entire NPS SEM PD-21 staff for their scholarship, professionalism and efficiency. The NPS SEM PD-21 program is excellent. It has provided the Systems Engineering background I need to perform effectively in my career. I am grateful for the support of my Cohort 7 classmates, especially Denise Turso--Thank you Denise for the encouragement and keeping Doug and I on schedule. I would like to give special thanks to my thesis partner Doug Parten. My favorite description of Systems Engineering is that it is an art and science. I like to think of myself as the artist, and Doug as the scientist. Together we created a Systems Engineering masterpiece.

xxiii

Doug Parten:

I would first like to thank our thesis advisors, Professor Gary Langford and Professor James Turso, for their dedicated efforts to help Hal and I create this work. Professor Langford was helpful in getting Hal and I to expand our thinking, both in our classes with him and in the thesis effort. Jim was invaluable in helping us more clearly focus our efforts to address the dire human capital needs within the shipbuilding industry.

I would also like to thank Charles Wilson, a NPS alumnus, and my mentor during my NPS SEM PD-21 experience, for encouraging me to apply for this wonderful educational opportunity. Charles provided guidance, was a willing sounding board when I had problems, and helped me keep perspective throughout my time at NPS.

A special thank you goes to my classmate Denise Turso, who kept me on my toes, provided encouragement, was always willing to give a constructive criticism when necessary, and was a great project teammate. In addition, I thank my thesis partner Hal for suggesting the challenging topic of human capital, providing the vision that guided this work, and having the patience to explain difficult concepts to me when I did not understand.

I thank my parents for instilling in me the curiosity critical to learning and for teaching me that anything worth doing is worth doing to the best of one’s abilities. Without that drive, I would not have made it through the rigors of the SEM PD-21 Program.

Finally, and most important, I would like to thank my lovely wife, Michelle, and my sons Nicholas and David. They each experienced the highs and lows (and stress) of the SEM PD-21 Program as much or more than I, and took up the slack when school pressures prevented me from being a proper “husband” and “daddy.” I could not have completed the program without their love, support, and encouragement.

XXIV

I. INTRODUCTION

A. DEPARTMENT OF DEFENSE AND SHIPBUILDING INDUSTRY HUMAN

CAPITAL TRENDS

Engineering and technical skill levels in the United States have been a major concern facing the Department of Defense (DoD) and its contractors for the past decade. The national defense needs of the Cold War utilized much of the available professional engineering talent in the United States. With the end of the Cold War, a decline in the number of engineers and scientists working DoD programs has occurred as opportunities in civilian industry have become more inviting. In addition, work on DoD programs, once desirable, has been overshadowed by the allure and excitement of careers working on new technologies, such as computer and internet systems, quantum computing, and nanotechnology. As a result, fewer numbers of engineers are entering the defense industry, causing the average age of the work force to increase. Thus, the core knowledge and experience base is nearing retirement in ever greater numbers, elevating the risk that the critical technical skills and systems knowledge required to develop future military systems will be lost (Office of the Undersecretary of Defense for Acquisition, Technology, and Logistics [OUSD AT&L], 2006).

1. Navy Human Capital Management Perspective

Each area of DoD faces Human Capital issues, but approaches these issues from different perspectives. According to the Office of the Undersecretary of Defense for Acquisition, Technology, and Logistics (OUSD AT&L) Report of the Defense Science Board Task Force on Future Strategic Strike Skills (2006), the U.S. Navy, as part of its Human Capital Management Plan, has emphasized the importance of retaining personnel having strategic technical skills. The plan is particularly effective at utilizing the talent made available from officer personnel

1

that remain in the strategic strike field by transferring to related civilian positions after leaving active duty. The study further states that this is unique among the strategic arms of the of the U.S. military establishment:

The Navy’s Strategic Systems Programs (SSP) is the only DoD strategic strike organization to specifically label [sic] their effort a “Human Capital Management Plan.” It recognizes the aging of its current workforce and acknowledges that the lack of new development and production programs is a disincentive for the recruitment and retention of a skilled workforce (p. 49)

The SSP does not limit this mandate to DoD activities, and urges the industry to support the Navy’s effort by developing their own plans for development and management of their human capital (OUSD AT&L, 2006).

2. Shipbuilding Industry Concerns

Within the shipbuilding industry, leaders are gaining awareness of how human capital issues will affect the future of the industry. In recent testimony before Congress, Michael Toner, Executive Vice President Marine Systems, General Dynamics stated (2005), “The strength of the industry lies in our people, and the engineering, production, and ship technology that they bring to bear in delivering these warships” (p. 1). In his testimony, he expressed his concerns regarding the experience level of the engineering and design work force at General Dynamics’ Electric Boat Division. Toner cited estimates that 2,200 experienced engineers and designers are required to design new submarines efficiently. For the last 40 years, this workforce has maintained at least 2,500 personnel. However, the Navy’s current plans for submarine research and development (R&D) and design development have significantly reduced the number of new submarine designs. According to Toner:

2

The current forecast for submarine R&D and new design development places the Electric boat engineering and design workforce at risk. For the first time since the start of the nuclear submarine program, over 50 years ago, there is no new submarine design planned” (p. 12).

This trend puts the shipbuilding engineering experience base at great risk as the opportunities for work diminish.

The Government Accountability Office (GAO) has noted recent increases in shipbuilding costs. In its 2005 report Improved Management Practices Could Help Minimize Cost Growth in Navy Shipbuilding Programs, the GAO examined eight shipbuilding programs (DDG 91 & 92, CVN 76 & 77, LPD 17 & 18 and SSN 774 & 775). According to the report, these programs have exhibited cost growth in aggregate of $2.1 billion. GAO noted that 77 percent of this growth was due to increases in material and labor costs, and estimates that these costs could increase further to $3.1 billion if the constructing shipyards do not maintain their efficiency and meet schedule commitments (United States Government Accountability Office [GAO], 2005).

The same GAO report states that the increased ship acquisition costs resulted from the high proportion of inexperienced or “green” labor. Labor hour increases associated with the cost growth ranged from 33 percent to 105 percent, totaling 34 million extra labor hours expended in the construction of the eight ships. The reason for this increase, according to the shipyards, was the loss of a large number of experienced and skilled shipyard workers, who took higher paying jobs in other industries. This movement of human capital out of the industry puts a burden on the less experienced workers that remain to finish the job, which takes longer, and results in a significant amount of rework to correct mistakes caused by lack of experience (GAO, 2005).

3

B. RECRUITING AND ATTRITION CONCERNS

As noted above, recent trends have shown a dramatic increase in the amount of science and engineering expertise leaving DoD due to retirement and attrition. As seen in Figure 1, taken from The Civil Service Workforce After Strategic Sourcing, the number of DoD science and engineering employees decreased greatly in the period 1990 to 1998 (DiTrapani, Adedeji, & Lawler, 2000). Accompanying this reduction was a decrease in new talent entering engineering and science occupations. Current studies have identified a decline in qualified applicants due to diminishing enrollment in technical curriculums at colleges and universities (Figure 2). Stiff competition for the existing technical job pool from industries outside of shipbuilding further reduces the availability of applicants.

Figure 1. DoD Top Ten Occupations, Losses vs. New Employees, 1990-1998

(From DiTrapani, Adedeji, & Lawler, 2000)

4

U.S. Engineering Personnel

University Graduates* *

(in thousands)

1980

1990

1995

2002

B.S.

68.8

81.3

78.1

73.6

M.S.

16.2

24.8

29.7

26.9

Doctorate

2.5

4.98

6.1

5.2

* Statistical Abstract 2005

Figure 2. U.S. Engineering University Graduates (From Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics [OUSD

AT&L], 2006)

Furthermore, security changes in marketplace dynamics due to 9/11 and the Global War on Terrorism (GWOT) have introduced increased eligibility restrictions within DoD and shipbuilding programs, thereby escalating limitations on candidate selection (OUSD AT&L, 2006). As shown in Figure 3, most graduate students in U.S. colleges and universities are foreign nationals.

20000

15000

10000

U.S. University Trends in Defense- Related S&E

Graduate Student Enrollment (1994-2001)

Engineering Disciplines