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Systems Engineering and Weapon Systems Acquisition Strategy of the U.S. Department of Defense and National Security
Published in Anna M. Doro-on, Handbook of Systems Engineering and Risk Management in Control Systems, Communication, Space Technology, Missile, Security and Defense Operations, 2023
The USD—AT&L (2008d) memorandum established that implementing life cycle management is a top priority for the DoD, and to achieve that objective, the DoD must seamlessly integrate its acquisition and life cycle sustainment policies. CJCSI 310.01F implemented a mandatory sustainment KPP—materiel availability, along with two mandatory sustainment KSAs: material reliability and ownership cost (USD—AT&L 2008d). Materiel availability is a measure of the percentage of the total inventory of a system operationally capable of performing an assigned mission at a given time, based on material condition (USD—AT&L 2008d). Material reliability is a measure of the probability that the system will perform without failure over a specific interval and generally expressed in terms of a mean time between failures MTBF and, once, operational, can be measured by dividing actual operating hours by the number of failures experienced during a specific interval (USD—AT&L 2008d). Ownership cost provides balance to the sustainment solution by ensuring that the operations and support (O&S) costs associated with materiel readiness are considered in making decisions (USD—AT&L 2008d). In addition to establishing life cycle metrics early in the acquisition process, it is necessary to track and monitor progress in achieving these metrics through the operations and support phase and DoDD 5000.1 currently recognizes performance-based logistics (PBL) as a key policy principle (USD—AT&L 2008d). PBL is not a contracting strategy—it is indeed a strategy applicable to both private-sector and DoD organic providers (USD—AT&L 2008d).
Improvements in pre-revolution French military logistics: lessons for modern day supply chains
Published in Supply Chain Forum: An International Journal, 2019
Loup Valax, David B. Grant, James R. Stock
The United Kingdom (UK) has achieved an unparalleled level of efficiency and responsiveness in its logistics and sustainment activities (Goure 2016). The British Ministry of Defense (MOD) has embraced outsourcing many of these functions to the private sector, e.g. satellite communications, management of its networks and pilot training. It also has entered into long-term arrangements with private companies for the maintenance and sustainment of major weapons systems. In so doing, it has made extensive use of performance-based logistics (PBL) contracts. PBL contracting, widely used by the world’s largest companies, is based on defined outcomes or levels of service (such as aircraft availability or time-on-wing for their engines), rather than parts and labour. For example, the MOD has a 25-year contract with Boeing to maintain the country’s fleet of Apache attack helicopters.
After-sales services and aftermarket support: a systematic review, theory and future research directions
Published in International Journal of Production Research, 2020
Measures of performance for aftermarket support, as shown in Table 6, are the next area of contributions. Literature demonstrate these contributions in industry and market sector case studies that position vendors as market qualifiers or order winners and can be divided into: (i) frameworks for performance management systems; and (ii) learning cycles of benchmarking. Measures of performance stem largely from advances in the C1 and C3 clusters and detail elements of the performance-based contractual relationships within the aftermarket of capital goods covering areas such as procuring repair and maintenance services (Kim, Cohen, and Netessine 2007, 2010) and returns (Autry 2005). Researchers are aware of the increasing transitions from resource-based contracting (RBC) or time and material contracting (T&MC) to performance-based contracting (PBC) – also known as ‘performance based logistics’ (PBL) in the defence industry and as ‘power by the hour’ (PBH) in the aviation industry (Jin and Tian 2012; Jin and Wang 2012; Bakshi, Kim, and Savva 2015; Öner, Kiesmüller, and van Houtum 2015; Jin et al. 2017). The premise of RBC/ T&MC is that OEMs (or vendors) are compensated as services are provided while PBC/ PBL/ PBH compensates OEMs with respect to the availability (performance) of product systems. This insight motivates research contributions that evaluate PBC in terms of signal reliability and inventory/stocking policies (Kim, Cohen, and Netessine 2007, 2010; Mirzahosseinian and Piplani 2011; Guajardo et al. 2012; Jin and Tian 2012; Jin and Wang 2012; Randall, Brady, and Nowicki 2012; Bakshi, Kim, and Savva 2015; Öner, Kiesmüller, and van Houtum 2015; Jin et al. 2017).
Optimal service parts contract with multiple response times and on-site spare parts
Published in International Journal of Production Research, 2020
Daniel Y. Mo, Yue Wang, Lawrence C. Leung, Mitchell M. Tseng
Performance-based contracts, also known as ‘power by the hour’ or ‘performance-based logistics’, have been studied from a vendor’s perspective in the commercial airline and defence industries. Kim, Cohen, and Netessine (2007) introduced a multi-task, principal-agent model to support resource allocation and use it to compare with other contracts. Along this line, Mirzahosseinian and Piplani (2011) formulated the closed-loop inventory system into a queuing model to serve the customer’s key performance measures better. Those performance-based contracts are more applicable to capital-intensive equipment which requires the service provider to develop a more tailored performance metric. In terms of optimal supply contract selection, Talluri and Lee (2010) formulated the manufacturer selection problem as a mixed-integer programming model to minimise the purchasing cost, fixed cost, and investment cost for the entire planning period. Spare parts management problems have been also approached using a game theory framework (Jin, Tian, and Xie 2015). Within such a game-theoretic framework, our study can be considered as mechanism design (Mo, Tseng, and Wang 2016). Mechanism design is where the service provider offers different response times with different prices and when users select their response times, they also indicate their needs of maintenance service to the service provider. Dan, Zhang, and Zhou (2018) studied a dual-channel supply chain composed of a manufacturer and a retailer who sells homogeneous durable goods bundled with warranty service. An optimal value-added service level is identified through finding the Nash equilibrium. Nowadays, service contracts have been extended from capital-intensive equipment to different types of products and systems.