Approach to Developing a Life Cycle Cost for the RRRP - Research Paper Example

Approach to developing a Life Cycle cost for the RRRP The existing radar systems are not integrated, they are ageing and out d, so that the overall life cycle costs of operating and maintaining it are high. The problem arises specifically for the owner of the radar systems, because an increased life cycle cost means that in the long term, the project does not remain cost effective. The supporting costs associated with the operation and maintenance of the systems have been shown to be 2 to 20 times greater than the initial procurement costs. Each department would seek to minimize its own costs; for example engineering would seek to minimize capital costs while accounting would wish to maximize only the project’s net present value. By working towards maximizing value in terms of achieving economic competitiveness and value through lowering the lowest long term costs of ownership, a good objective will be achieved for all the departments. The assessment of life cycle costs includes the cradle to the grave costs and provides a method to accurately consider long term decisions. Six different radar test centres have come together in order to create a single unified program to replace their existing ageing radar systems, hence this new umbrella organization is the one that stands to benefit the most from the improvement of the radar life cycle. The first stage in the improvement of the radar life cycle is the acquisition stage, where old and defective parts of the system would need to be replaced by new components. One of the first aspects which must be taken into consideration is that the existing radar systems are fifty years old and therefore practically obsolescent, and will require periodic upgrades of both software and hardware, which would only involve further costs. How often such upgrades would need to occur would depend upon how often computer capacities would increase. For example, Moore’s law states that the number of transistors that can be placed inexpensively on an integrated circuit would double every two years, so this effectively means that existing technologies would become obsolescent very quickly. Hence hardware and software upgrades may be required at least once every four to five years. Moreover, in the case of older systems, manufacturers of some of the parts could stop making them and it would become difficult to replace the parts, thereby necessitating upgrades, because some components are no longer available. Where radar systems are concerned, the accuracy and complexity requirements are also quite high; therefore the capacity of all the existing radars might need to be improved. Since there are seven different test centers involved in this exercise, each with its own radar system, it would be necessary to identify and group the common elements of hardware and software in the different types of radars. The new common system developed must ensure that provision is made for replacement parts in order to promote continued efficacy of the system. Phase 1 of the development of the project would identify all the customers, stakeholders and users of the system, as well as capturing the system interfaces and the transactional information flows between them. During the initial design of the new system, a preliminary assessment needs to be made of the technology readiness of the system, such as examining the level of maturity of the existing systems, sub systems and components to ensure they are in an appropriate state of readiness, i.e, radar components can also be transported to different locations within the test range using trailers of varying sizes, so that radar preparation is complete and ease of transport is available. The benefits of completing this technology readiness assessment would be that any components that are too old or immature would be easily identified, so that costs for replacement can be determined and uncertainties associated with the use of such systems can also be identified. This phase would be very useful to arrive at an assessment of potential investments which would need to be made in technology as well as development needs, all of which would need to be factored into the overall cost. Since improvements in technology could sometimes entail huge investments and entail some degree of uncertainty, it may also be necessary to revise the time frames available for the completion of the project. Once the various TRL phases of the project have been completed and ease of transport established, the first milestone of the project would be complete. During the initial stages of the project, risk assessments would also have to be taken up, to identify any potential hazardous situations for which some provision needs to be made. One of the tools which could be used is the R13 process which is being beta tested by the Air Force, i.e, Risk identification, Integration and ‘itilities. The army uses other tools such as CASA and ACEIT, but the RI3 process is likely to be extra helpful because it is particularly useful in identifying risks inherent during the integration phase of a program. Additionally, a Manufacturing Readiness Assessment also identifies whether the manufacturing tools and processes are in a state of readiness for use. Other assessments which would need to be made to complete the assessment phase of the project, would include Design for Manufacturability and the Design for Assembly, both of which would help to evaluate whether the design of the system components are up to the mark for manufacturing and assembly. Completion of this stage represents the second major milestone of the project. Such assessments would also help to develop fall back positions, there are likely to be schedule slips and cost overruns. The next stage would be deriving the LLC estimates. The Government is aiming to replace the radars currently existing at the seven sites with RRP radars. This stage of the project would therefore necessarily involve a comparison with other similar systems which have been implemented elsewhere, drawing parallels between the design, development, integration, evaluation etc and assess which upgrades could be included based upon the relative costs. Deriving an accurate RRP estimate would be invaluable in determining whether those radars would cost less over their lifetime, or whether they would be more to less the same costs to run over the same time period. The LLC estimates described above are those produced at the acquisition stage of the project. Subsequent LLC estimates would need to also incorporate the results from other kinds of assessments such as TRAs, MRAs and other kinds of risk assessments, in order to add some substance to the estimates which are derived. LLC estimates prepared after the acquisition stages also need to take into consideration any proposed upgrades. Risk assessments which are carried out need to take into account not just the risks associated with the operation of various components of the system but also the maintenance, operation and sustainability of the systems. Incorporating the RI3 process at subsequent stages would also ensure that the design takes into consideration issues such as obsolescence, supply chain issues, maintainability, etc. In arriving at LLC estimates, the following steps would need to be implemented: (a) Identification of items to be analyzed and relevant time frames (b) Focus on technical features through economic consequences (c) Developing yearly cost details (d) Selecting the appropriate cost models and acquiring the cost details (e) Assembling yearly cost profiles using breakeven charts to simplify details into time and money (f) Developing big cost items into Pareto distributions for further study (g) Testing alternatives for high cost items (h) Studying uncertainties and/or risk of errors and selecting the preferred course of action Developing a step by step process in this manner helps to provide the necessary tools to create and engineer maintenance budgets and derive estimates of ownership costs, so that decision making can take into account the financial implications involved in achieving the lowest long term costs for the program. 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