Obsolescence Management
Written by Peter Buxbaum
MLF 2010 Volume: 4 Issue: 8 (September)
The United States armed services, especially in this day and age of tight budgets, try to squeeze as much usable life out of their systems as they can. In fact, although the military often uses commercially available systems and products, it utilizes them over a much longer life cycle than does the private sector.
This raises the issue of obsolescence. Suppliers can go out of business; technologies can become antiquated. If these contingencies are not planned for in advance, future program managers and logisticians may have to scramble to find alternatives, or worse yet, they may have to embark on a costly redesign of an obsolete part, component or system.
Military platforms that have been developed and deployed in recent years tend to take a proactive approach to obsolescence. Program managers and contractors alike anticipate obsolescence and pursue plans and strategies to avert the negative implications of this phenomenon. Effective obsolescence management means that obsolescence issues can be resolved at a lower level of cost and time than the redesign of a component by focusing on the mitigation of risk.
The hull of the Littoral Combat Ship [LCS], for example, has a planned usable life of 30 years. “With more COTS systems, as opposed to mil spec, mil qualified systems being incorporated into Navy designs, obsolescence planning comes along with it,” said Joe North, the LCS program manager at Lockheed Martin. “COTS parts do go out of production.”
The LCS is a small, fast vessel designed to provide close-in support adjacent to coast lines. Lockheed Martin is competing with General Dynamics on the design, with a Navy decision on the production contract due later this year. The Navy has plans to acquire 55 of the vessels.
The V-22 Osprey tilt-rotor aircraft will be part of the Marine Corps’ fleet for at least 20, and perhaps has many as 40, years. “We have an obsolescence road map that covers the whole aircraft, and especially avionics, where most obsolescence issues occur,” said Major Jeff Clemons, the V-22 program’s logistics and obsolescence lead. “If we anticipate that an original system will meet the requirements of the fleet, we might do a life of type buy for the program. If we believe a new system will be required, we tend to make a bridge buy which will get us to the new system.” Life of type (LOT) buys involve purchasing supplies to support equipment or systems for the rest of its projected life.
The V-22 is manufactured by a strategic alliance between Bell Helicopter Inc. and the Boeing Company. Designed to operate as a helicopter when taking off and landing vertically, the Osprey’s two engine propellers rotate 90 degrees forward once airborne, converting the Osprey into a turboprop aircraft.
Platforms like the MRAP (mine resistant ambush protected) all-terrain vehicle, or M-ATV, present a different type of scenario because it has been fielded to Afghanistan through a hurry-up acquisition and has not been budgeted through ordinary channels. Still, the Marine Corps’ MRAP program has endeavored to deal with obsolescence issues by designing the vehicle with components that are readily available.
“We buy things like engines, transmissions and axles from large manufacturers,” said Dave Hansen, the Marine Corps’ deputy program manager for MRAP. “The point is that the M-ATV has much in common with trucks found in the commercial market.” The Department of Defense sank $25 billion to acquire 15,000 MRAPs to protect warfighters from improvised explosive devices.
The responsibility for obsolescence management rests not only with program managers, but with the designers and manufacturers of the platforms. “It is certainly our view as the industry partner with our customer that we are responsible for the design of this aircraft in the sense of making sure there are parts available,” said John Rader, executive director of the Bell Boeing V-22 program. “We see obsolescence management as a primary role for us. It is woven into everything we do as part of production and our development ethos.”
The first thing obsolescence managers examine is what the military’s plans are for the platform. “If the Marine Corps says it wants to use the aircraft for the next 40 years, that is the scope we use for obsolescence planning,” said Rader. “It started with the basic design and the development contracts and in the productions contracts we have today. We are constantly looking to see what the obsolescence picture might look like over 40 years.”
Obsolescence planning is written into Lockheed Martin’s LCS contract as a deliverable, noted North. “We are under a contractual requirement to bring the program a plan to show how we will maintain the technology and refresh it throughout the life of the ship,” he said. “The obsolescence management plan shows the details of the cycles we need to be on and what we need to do post delivery of the lead ship to manage that plan and implement it.”
The M-ATV program is operating under a different format than the V-22 and LCS, but obsolescence management has not been neglected, according to Hansen. “In our contracts, we state that if companies go out of business or discontinue lines for these types of vehicles, the government is to be notified that we are to be allowed to obtain technical data packages for each of the vehicles,” he said. “That way, the government, or a company the government hires, can reengineer the parts.”
Hansen expects parts and components for the M-ATV to be readily available from commercial suppliers for decades to come. The M-ATV’s Caterpillar C7 engine, for example, is common to a number of MRAP models, the Army’s Stryker vehicle and the Marine Corps’ light armored vehicle. “We expect the commercial market to support these engines for 20 to 30 years and beyond,” said Hansen.
The material form in which the M-ATV cabs are fashioned is standard steel with no unusual metals or processes, noted Hansen, and the vehicles are equipped with standard armor packages. “We feel like we’re covered there, too,” he said.
The avionics of an aircraft are the place where obsolescence is most likely to occur and occur rapidly. Rader expects parts and components for the V-22 to be on the market for 10 to 15 years, making obsolescence decisions important to consider up front. “The program has to decide whether it wants to budget for a redesign now or to wait 10 years and look at the market again,” said Rader.
Integrated circuitry can go obsolete rather quickly. “The electronic industry may move to a new architecture or to a more advanced chip,” said Rader. “We combine a strategy life of type buys with redesign efforts. If we see an opportunity to do a design upgrade and this is part of the customer’s requirements, we will design in the new technology. If the customer is happy with what they have, we are likely to buy out an extended supply to prevent a redesign.”
For Rader, monitoring the potential for obsolescence must be constant. “We have monthly, sometimes weekly, meetings that include both industry and government representatives,” he said. We are constantly monitoring the availability of systems and parts, and that has been the case since the inception of the airplane.”
Ultimately, obsolescence management comes to ensure the effective operation of platforms over their life expectancies and to reduce overall life cycle costs. “We use a number of tools to make sure we are getting the best value,” said Clemons. “We investigate enhancing platform synergy by going to other programs and asking whether they maintain inventories of certain parts and components. If appropriate, we can do a joint buy with those other programs.”
Clemons also uses automated tools to help manage obsolete components. Two government-owned systems—the Government Industry Data Exchange Program and the Obsolescence Management Information System—allow him to keep track of upcoming parts obsolescence issues and to identify sources of needed parts and components.
A privately maintained service, AVCOM, owned by BAE Systems, concentrates on avionics. “Bell Boeing has a contract with AVCOM,” said Clemons. “You can load your bill of materials into the system and the system monitors industry sources for the availability of parts and components. Any time something gets flagged as going out of production, we get notified and are able to investigate the possibilities of making at LOT or bridge buy.”
Performance based logistics contracts are considered to be a key obsolescence management strategy. Performance based logistics, or PBL, relies on the private sector to support military weapons systems by entering into long-term logistics support contracts that are based on incentives to achieve specific performance goals. The military uses performance based logistics contracts to manage obsolescence by pushing the requirement to sustain the system to the manufacturer, while the manufacturer pushes its requirements to its suppliers. Both the LCS and the V-22 have PBL contracts in place or are under consideration.
“PBLs are always being considered,” said North. “We have a brand new ship class and new equipment being brought into the Navy as part of that. It takes looking at some data and what the logistics train looks like. We are targeting several systems for potential PBLs. We will be presenting a business case to the Navy and they will make the decision going forward.”
North views major components and systems as being the likely targets for PBLs on the Littoral Combat Ship. “Major components like engines, gears and propulsion trains, which are in constant use, is where you’re going to improve the costs to the Navy with a PBL,” he said.
The Bell Boeing Program Office was awarded two phases of a joint performance based logistics contract from Naval Air Systems Command in 2009, to support the Marine Corps and the U.S. Air Force Special Operations Command V-22 Osprey. The five-year contract is valued at $592 million. The V-22 joint PBL contract marks the first contract between Bell Boeing and the U.S. Department of Defense with both the U.S. Marine Corps and U.S. Air Force customers served by one contract.
The first phase of the PBL contract, awarded in January 2009, includes program management, site activation, maintenance planning and supportability analysis, technical data, in-service engineering and logistics, training and trainer support, support equipment, and dedicated and deployable squadron support. Phase 1.5 of the contract, valued at $11 million and awarded in June 2009, modified the existing contract and is designed to implement reliability improvements on a number of aircraft components that were determined to have a significant impact on mission readiness.
Phase 2 of the V-22 joint PBL contract award, expected to be awarded later this year, will include supply chain management for the V-22, which encompasses the purchase, repair, stocking and delivery of spare and repair parts. “Phase 1 covers the overseeing the management of sustainment for the platform in partnership with the program office,” said Clemons. “Phase 2 will get more into parts management and is currently being negotiated.”
For Rader, the point of a PBL is to incentivize the industry partner “to just keep things working. It makes it incumbent upon us as the industry partner to keep things running, and obsolescence management is part of that,” he explained. “If something breaks or goes obsolete we would need to invest in our own strategies to handle it. In a sense, if it is all done right, the customer never sees the problem.” ♦