WHY DOES THIS HAVE TO BE SO COMPLICATED?


number of parts that would be needed, due to contractual requirements and expected number of missiles.


Changing demands heavily affect the long-term viability of those lifetime buys, however. As the MSE demand increased per year, the lifetime buy run-out point came earlier than originally estimated. Tese changes accelerate the need to rede- sign sooner than originally planned.


In most instances, contractors will not buy components ahead of need for production until the development and qualification programs are complete. Business strate- gies motivate contractors to look at the tradeoff between ordering parts too early, the expense of building adequate facil- ities for storage, and the risk of excess inventory, versus not ordering parts soon enough, which impacts production sched- ules. By law, the government cannot buy parts ahead of need, and must procure parts for requirements each year within the president’s budget. So, even in face of obsolescence, a possible redesign, and knowing that buying more parts now will mitigate risk to the production line by “buying in bulk” with a lifetime buy, you do not have the authority by law, nor the money to do it. Interesting, right?


In MSE, design specifications are planned to maintain the same interface from the preliminary design review through seven years, until the design becomes obsolete. (See Figure 1.) Tis seven-year figure is based on the term YTEOL, or "years to end of life." Te preliminary design review usually happens six to 18 months into development, and is followed by a criti- cal design review, and then a request for change. Once the design reaches produc- tion, there is only a small window of time remaining before the design becomes obsolete. Another surprise to this young assistant product manager!


138 Army AL&T Magazine Fall 2021


HOW CAN WE FIX THIS? Te PAC-3 MSE product office imple- mented a long-range, strategic planning cell that built a product road map to show where the missile technology needs to be inserted to support the requirements. Te product road map helps strategize and control timing of redesigns, while taking the opportunity to add perfor- mance improvements. The planning cell facilitates crucial conversations with contractors, causing them to think differ- ently about which part manufacturers they use for designs.


Obsolescence is both a challenge and an opportunity.


Te contractor builds a design and chooses parts based on a list of weighted crite- ria, including required speeds, weight, distance, targets to engage, and somewhere down on the list, risk of obsolescence.


For example, remember that commercial processor that allows me to watch faint- ing goats on my cellphone? It could also be chosen for the contractor’s design because it gives the missile seeker required perfor- mance. However, that processor may have a high risk of obsolescence, which would push it further down on our weighted selection scale. We also evaluate provid- ers in other industries, such as the auto industry. Analysis must be conducted to see if these parts could be used and have more longevity, providing greater produc- tion stability. As DOD continues its modernization efforts, and pivots toward using artificial intelligence in operations,


understanding how these single-source unique parts affect the longevity of a weapon’s design and production will be crucial. Terefore, the government and the contractor need to have that crucial conversation prior to and at preliminary design review about which part is in the final design. If not, it could have a water- fall effect when that advanced processor needs to be replaced sooner than planned and forces the system to be modified.


As described earlier, business strate- gies drive contractors’ decisions to invest in parts ahead of need. However, those factors do not drive the government. Laws governing acquisitions limit the govern- ment’s ability to commit funds ahead of need, but there are tools that can help and acquisition strategies it can employ to reduce risk.


Multi-year contracts could help fund requirements in future production years to keep enough parts on hand to mitigate production obsolescence risks. Accord- ing to the Navy Multi-Year Procurement Guidebook,


the U.S. Navy has used


these types of contracts to lower costs, provide substantial continuity of produc- tion or performance of its procurements, and provide incentives to contractors to improve productivity through investment in capital facilities. Another innovative idea is to rethink how the U.S. and its FMS partners quantify the amount of parts purchased during the development contract and transition to production. Additional parts purchased at that time could be a risk mitigation tool to protect against more parts being used than origi- nally projected.


THE WAY AHEAD Obsolescence is complex, and using lessons learned from other programs is a good place to start when going into any new development program.


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