Assessing Logistics Cost Using the FMS Decision Support and Budgeting Model - foreign military sales

DISAM Journal, Summer, 2000 by Steven House

ARROWS can also compute spares using the conventional demand based sparing approach (where each item is spared to a constant protection level) and forecast weapon system readiness for that mix of spares. This capability is valuable when FMS customers are unfamiliar with the RBS technique and want the APML to provide results based on the traditional methodology so as to better understand and appreciate the advantages of RBS optimization. Figures 9, shows the benefits of implementing RBS procedures in lieu of using demand based sparing approach. This figure clearly shows that to achieve 60 percent FMC rate using more depth. The RBS optimization is achieved by making cost trade-offs (i.e. buy fewer of the more expensive WRAs) without compromising the desired goal of 60 percent readiness.

As discussed earlier, reducing turn-around time by increasing FMS customer self sufficiency or relying on expedited transportation can achieve a significant reduction in pipeline spares cost. This savings can be used to offset the one time cost of buying increased support equipment and training or the added transportation cost. Figure 10 provides sample data with varying turn-around times. This chart provides the user and the FMS customer with a better appreciation of reducing the repair pipeline associated with in-country repair and the time it takes to repair the item overseas or in the U.S.

In summary, the NAVAIR decision and support budgeting model can provide the benefits described below:

* Quick-look capability to forecast spares requirements using optimization techniques,

* Easy to use tool for logisticians to assess alternative maintenance strategy,

* Trade off readiness versus cost at the system/sub-system level,

* Scenario driven- e.g. flying hours, sites, turnaround time,

* Embedded computational model is same model used by U.S. Navy for domestic requirements,

* Ongoing Navy upgrades to provide a more Windows-like environment.

About the Author

Steve House is currently the Director International Programs, Planning and Logistics for Information Spectrum, Inc. which is the prime support contractor for the Naval Air Systems Command FMS Logistics Directorate. He is a retired Navy Supply Corps Captain with extensive acquisition logistics and FMS experience while in the Navy. He also has lived and worked overseas a total of thirteen years, including business and financial manager of the Navy's commercial component repair program in the Western Pacific and Commanding Officer of the Navy's largest overseas supply depot in Subic Bay, Philippines.

Model Overview

Easy to use budgetary life cycle cost (LCC) Tool

* Trades off costs and readiness

* Focuses on major logistics cost drivers

* Uses 3M historical data tailored to each FMS case

* Documents:

- Cost of alternative operational and support strategies

- Critical WRAs/SRAs and high cost drivers

- Spares and repair of reimbursables cost to meet readiness and cost targets

- CLSSA budgetary forecast

* Portable, user friendly and provides quick response to customer's inquires with minimum training