R&M Improvements
Readiness Improvements. TOC is not simply a program to reduce O&S costs. Besides reducing TOC, most conceivable R&M improvements will also improve system performance, reliability, or readiness.
Designing in TOC Reductions. The majority of a weapon system's future life cycle costs (LCC) are tied to design. Consequently, to maximize LCC savings, reliability, maintainability, and availability must be built into the system from its inception. As upgrades and enhancements are made, the implication of of any proposed changes for life cycle cost should be a key parameter in evaluating these modifications.
Sustaining Engineering. Once the system is out of production, PMs can have a difficult time identifying funds for sustaining engineering projects that would improve RM&S. While systems still are in production, funds for these activities are subject to the PM_s control. Once the system is out of production, O&S funds typically are controlled by the Users, who are likely to have different priorities for sustaining engineering projects.
Legacy Systems. Major modifications may provide the best opportunity to implement O&S cost reductions and readiness improvements in legacy systems.
O&S Cost Drivers. Identifying O&S cost drivers and prime readiness degraders (low MTBF components or practices which contribute to frequent repairs or replacements) can provide significant readiness improvements while also reducing TOC.
One-of-a-Kind. One-of-a-kind or few-of-a-kind systems pose unique challenges for R-TOC because the improvements are spread across only a small number of systems and many have unique configurations.
Low Density/High Demand Systems. One of the most challenging aspects of implementing R-TOC within a Low Density/High Demand (LDHD) environment is targeting initiatives that demonstrate a large enough savings for a small fleet to justify the initial investment. High demand for these systems to support contingency requirements can also make it difficult to obtain access in order to install TOC improvements.
O&S Cost Drivers. Focusing on O&S cost drivers and principal readiness inhibitors can yield the best results for R-TOC investments. Often, a single subsystem, component, or practice is found to be a major driver of O&S costs or readiness inhibitor. Several Pilot Programs have achieved significant cost savings and readiness improvements by identifying these critical issues early-on in the R-TOC process.
O&S Cost Increases. It is important to recognize that aging systems will continually face "unknowns" that will drive up O&S costs. Additionally, installation of new subsystems can increase capability but also increase manning and maintenance requirements (and TOC).
Another constraint to reducing the net TOC of a ship is that some new shipboard systems will increase TOC, but congressional mandates or other legislation require that they be installed. For example, because of congressional mandates issued to reduce pollution of the seas, pollution control systems have been installed (Plastic Waste Processors, Oily Waste Separators, etc.). While these systems are necessary and important, they necessitate additional maintenance and manpower, thereby increasing TOC.
Retirement of Older Aircraft. It is logical to expect a drop in O&S costs due to the retirement of older aircraft. However, if the current pace of operations continues, the actual decrease in O&S costs may be less than expected due to increased usage of the remaining aircraft. Additionally, increases in the hourly rate for depot maintenance are increasing the cost of doing programmed depot maintenance (PDM) even though the program office and the depot negotiated a reduced number of hours in the depot package.
Pricing of Depot Services. The volatility of depot level reparable (DLR) pricing can have a significant effect on whether an initiative saves, avoids, or costs more money. For example, an initiative's projected cost savings/avoidance based on reliability (i.e. longer mean time between failure (MTBF)) could easily be lost if a change in DLR costs drive the return on investment (ROI) below an acceptable level. A change from organic to contract repair or a renegotiation of rates could dramatically increase DLR costs, having a negative effect on the projected ROI. On the other hand, those same changes could possibly decrease costs, having a positive effect on the ROI.
Transition of Technologies. In the case of relatively proven technologies, hurdling from R&D into acquisition/ implementation is a major obstacle. Simply doing a demo of technology is not enough to clear that barrier. We must actively work to overcome all obstacles up front (i.e., testing, documentation, drawings, procedural/policy/guidance changes) and couple the technology with the actual Fleet need in order to achieve a sound acquisition package and approval for installation. Formation of the Service-Industry IPT for the sole purpose of identifying and conquering those obstacles to acquisition through teaming and risk mitigation has assisted the process.
