Accession Number:

ADA312021

Title:

Using Technology to Reduce Cost of Ownership. Volume 1. Annotated Briefing.

Descriptive Note:

Final rept.,

Corporate Author:

LOGISTICS MANAGEMENT INST MCLEAN VA

Report Date:

1996-04-01

Pagination or Media Count:

70.0

Abstract:

The Deputy Under Secretary of Defense Logistics Logistics Management Institute LMI to assess the leverage available to reduce operations and support OS costs through insertion of technology in fielded weapon systems. LMI evaluated the tools DoD is currently using to identify cost drivers and characterized the ongoing programs targeted at reducing OS costs. This provided a basis for identifying the best practices in DoD and for developing recommendations for a new program. The initial phase documented in the Volume 1 annotated briefing, concluded that cost-tracking systems and sustaining engineering are not the limiting factors in reducing OS costs. Rather, production funding for technology insertion is the most serious obstacle. A cost of ownership reduction investment program funded by the Defense Business Operations Fund capitalization is proposed. Volume 2 contains a business case to test whether currently available investment candidates could provide an adequate return on investments ROI to justify such a program. LMI developed a Microsoft EXCEL spreadsheet model and used it to evaluate nine potential Service projects. The business case confirmed that an ROI of 91 in 20 years for currently available Service candidates was feasible.

Subject Categories:

  • Economics and Cost Analysis
  • Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE