The Myth of the Rheostat

Document Sample
The Myth of the Rheostat Powered By Docstoc

                           The Myth of the Rheostat
                                                                   By Steve Geary, University of Tennessee, and
                                                                     Dr. Wesley Randall, Auburn University

               e are in a recession, but we       and field a less reliable system, product                Now is a time to step carefully,
               still have to find the money       support costs more.                                avoid hip shot “buzz word” approaches
               to rescue the banks, get a jobs          The only decision points are wheth-          that make nice bumper stickers and lack
program going, and bail out Detroit. And,         er to use the system and whether to                substance. Too often, inside the Beltway
we still have a couple of pretty hot engage-      maintain it. In either case, reducing mis-         bumper stickers become a rallying cry
ments going on in Southwest Asia that are         sion capability does not reduce total cost.        for those enamored with seemingly easy
continuing to cost lives and money.               The cost is merely deferred, and in some           answers. The rheostat is no answer at all;
      The budget knives are out. Ever since       cases increased.                                   it is a dangerous mirage.
9/11, the Pentagon budgets have been                    Experience has taught us that broken               Now is when we should be discuss-
strong. Those days are coming to an end.          systems that aren’t fixed as a quickly as pos-     ing stable, long-term collaborative
      “The areas most likely to get cut are       sible are dangerous. Things happen to forms,       strategies that incentivize up-front
acquisition and procurement,” said Steven         paperwork, and the system itself. There’s          investment in reliability improvement
Kosiak of the Center for Strategic and            a reason we have regulations on hangar             and drive down total costs over the life
Budgetary Assessments.                            queens. Broken jets need to be fixed.              cycle. Now is when we should be talk-
      The day has come for thoughtful
reflection in the defense community. We
need to decide how we are going to pay                    “If you want to drive down product support
for new systems while still being able to af-
ford fielded systems. Instead we’re hearing
                                                         costs you either invest up front or reduce use.
people talking about the need to “preserve                         There are no free lunches.”
budget flexibility” and avoid “must pay
bills.” Some seem to believe in some sort of
panacea that will relieve us of the responsi-           Now there might be some nominal              ing about how intelligent supply chain
bility to make choices.                           reduction in inventory because you could           integration can harness network-wide
      More and more often there is talk of        trade time for inventory position and              knowledge in a manner that creates
controlling support costs with a “rheostat        aggregate inventory at a central location.         superior, more effective and affordable
strategy,” the ability to dial up or dial down    You might be able to reduce manpower               product support.
system performance or mission capability          and create backlog. But, these are marginal              Now is when we should be articulat-
rates based on funding availability. In the       impacts on costs in the near term, with            ing reasoned choices and viable strate-
abstract that sounds really interesting, but      potentially catastrophic financial implica-        gies to live within our means. Life cycle
let’s get real. System performance is a func-     tions across the life cycle.                       affordability can, and must, be modeled,
tion of design, design is a function of invest-         This rheostat is a fool’s bargain. Even if   measured, benchmarked, managed and
ment, and costs are a function of design and      you don’t maintain the system, you still have      continuously improved. Cost, schedule,
use. So if you want to drive down product         to pay for the infrastructure. You still have      performance and affordability across the
support costs you either invest up front or       the opportunity cost of the money tied up in       life cycle are key and co-equal perfor-
reduce use. There are no free lunches.            the system that the taxpayer already bought,       mance parameters. We should stop pre-
      Operations and maintenance fund-            sitting around collecting dust. You have the       tending they are not.
ing is consumed as a function of use. The         parts sitting on the shelf.                              We obsess about acquisition costs
levels of labor, inventory, repair parts and            A “rheostat” is the 21st century ver-        and pull everything we can out of the
depot resources used to keep a system             sion of Potemkin’s village. We’ll still have       unit cost during procurement to keep
operational are directly related to the level     all our systems, but they’ll just be hollow,       Congress happy, and figure we’ll deal
of use of the system. If you design (or           useless shells. The rheostat will dial us back     with the product support and affordability
redesign) and field a more reliable system,       to the empty pipelines and bare firewalls          constraints someday.
product support costs less. If you design         of the 1990s.                                            Well, someday is here. ◗

60 • February 2009