LCCA, life cycle cost analysis aims to determine the Real Cost of a Materiel System. Costs can be attributed to three major factors: Technology Lead, Time In-service, Technology Lag.

Sep 012016

Systems Engineering

Systems Engineering is a design approach to achieve an integrated system that is designed from the start to accommodate the logistic support requirements.

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A System is a collection of elements or equipment that when combined produce an outcome not obtainable by the elements alone.
A Systems Integrator or Systems Engineer is tasked with integrating the elements, which may themselves be completely self-contained items or sub systems, so that they can be connected together or communicate with each other and work as a single functioning entity.
The elements (or sub systems) can include hardware, software, facilities, personnel, procedures, and documentation; ie. all things required to produce system-level outcome.
The outcomes typically include system-level functions and performance but may also extend to system qualities, system properties, system characteristics and system behaviours.
The total value of the system, beyond the sum of the independent parts, is usually created by the interconnections between the parts; eg automating the data transfer from a data reader, directly into the collating software that is able to make use of the data and provide a real time (graphical) display of the data just read, such as a bar scanner on a supermarket checkout.
System Engineering is a way of looking at the “big picture” when making design or operating decisions.
It is a way of achieving the operational functional and performance requirements in the intended environment over the planned life of the system.
Another way to put it would be; Systems Engineering is a way of thinking logically.
Often the system will have opposing constraints, which generally means something is compromised. Systems engineering attempts to look at the system holistically to determine the priorities of the functions and operabilities and thus minimise critical compromises while at the same time maximising functionality or performance.
The art of optimising the overall design without favouring one system/subsystem at the expense of another is an iterative process and may have inputs from many disciplines: electrical and electronics engineers, mechanical engineers, human factors engineers etc.
The ultimate result sought is a safe and balanced design that optimises the opposing interests and multiple, sometimes conflicting constraints.

Aug 312016

Life Cycle Cost Analysis
The Real Cost of a Materiel System
Costs can be attributed to three major factors:

  •  Technology Lead
  •  Time In-service
  •  Technology Lag

Technology Lead
To achieve a technological edge, significant funds are invested in research and development (R&D).
This can lead to increased risks and hence costs and cost blow-outs.
There is a significant difference between ‘Leading edge’ and ‘Bleeding edge’ and development costs will generally be reflected in ‘Leading edge’.

Time In-service
The heavy investment in seeking leading edge technologies demands an effective return on investment.
This can lead to Materiel Systems being kept in service longer than equivalent commercial equipment.

Technology Lag

Towards the end of the capabilities life, support costs can significantly increase.
This can create problems in the identification of replacement Mission Systems.

Life Cycle Costing

Life Cycle Costing (LCC) Analysis comprises estimation and analysis techniques applied to the financial management of a capability.

It provides for the structured collection, analysis and presentation of Life Cycle Cost LCC data, to assist in decision making for mission system capabilities

When done well, LCC provides the evidence to support the expenditure on the capability.

Aug 312016

Materiel Life Cycle

The life cycle phases are:

  •  Needs
  •  Requirements
  • Acquisition
  • In-Service
  • Disposal

The Needs Phase
The Materiel Life Cycle (MLC) starts when the capability gap is identified and a materiel solution is required.

The Requirements Phase
Proposals are developed for Government consideration.
This is generally a Two pass approval system:

  •  1st Pass Approval to investigate possible solutions
  •  2nd Pass Approval given to acquire (money is usually assigned at this point)

The Acquisition Phase
Acquisition is the process of procuring an appropriate materiel system:

  •  to meet the identified requirements
  •  value for money over the life of system
  • includes the Mission and Support Systems

Transition Into Service
Transition Plan – addresses transfer of:

  •  ILS procedures & resources
  •  management responsibility

Acquisition ILS Manager to In-Service Support providers and the Project Office

In-Service Phase
The In-Service phase generally starts when the supplier delivers a materiel system.

In-Service support aims to:

  • Optimise cost of ownership
  • Ensure the capability remains fit for purpose

The Disposal Phase
Disposal is to be carefully considered, taking into account:

  • financial, environmental, security, archival, safety, and
    third-party transfer issues, e.g.
  • Foreign Military Sales (FMS)
  • International Traffic in Arms Regulations (ITARS)