SOLE – The International Society of Logistics

1. Introduction to Logistics and Integrated Logistics Support (ILS) SOLE – The International Society of Logistics Presented to University of St. Thomas by Chapter 6 District 6 Minneapolis – St. Paul April 30, 2003

2. Logistics in History • Historically, Army quartermasters have • been charged with: • Examples: • Feeding soldiers (consumables, preparation service) • Providing fodder for horses (foraging, transportation) • Procuring uniforms, equipment, weapons, and ammunition (supply and repair management) • Supporting aircraft, ships, tanks, guns, vehicles (fuel, spare parts, repair, transportation, storage, interoperability)

3. Scope: Manufacturing vs. After-Sale 75 % of U. S. employment is services: 21 % of employment is goods producing: • Construction • Manufacturing 4 % of employment is extraction: • Agriculture • Mining Source: Statistical Abstract of the United States, 1997 for 1990

4. Emphasis: Products vs. Systems 17.8 % of Gross Domestic Product is manufacturing (1990): • Consumables • Non-repairable products • Repairable (consumer) products • Repairable (industrial, complex) products • Mobile (self-propelled) vs. Installed • Custom Engineered vs. standard product

5. Product Life Cycle • Product life cycle showing net profit highest in mature phases.

6. Systems Structure • System (prime contractor) • Subsystem - product (subcontractor level) • Sub-Subsystem • Component • Replaceable Assembly / Part • Application-Operating System / Software

7. Support Concepts - • Product Life Cycle Management • Life Cycle Cost (LCC) • Service Engineering (products) • Integrated Logistics Support (ILS) • Logistics Engineering (complex systems)

8. Product System • Development • Introduction • Growth • Maturity • Decline • Pre-Concept • Concept • Demonstration and • Evaluation • Full Scale Development • Production and Operation • Phase Out Product & System Life Cycle Management

9. Concept - Life Cycle Cost (LCC) • (1) All costs associated with the system life cycle, • (2) The total cost of acquisition and ownership over the life cycle, • (3) Approach to costing that considers all costs, and an • (4) Approach whereby the value of different concepts can be made by comparison of different LCC estimates and the concept with the minimum LCC is preferred.

10. Concept - Support Elements

11. Support Concepts – Elements (cont’d)

12. Integrated Logistics Support (ILS) “A disciplined, unified and iterative approach to the management and technical activities necessary to (1) integrate support considerations into system and equipment design; (2) develop support requirements that are related consistently to readiness objectives, to design, and to each other; (3) acquire the required support; and (4) provide the required support during the operational phase at minimum cost”.

13. Logistics Engineering “Those basic design related functions implemented as necessary to meet the objectives of ILS.” • Initial definition of system support requirements • Development of design input criteria • Evaluation of alternative design configurations • Determination of resource requirements • Ongoing assessment of support infrastructure

14. Logistics Definition #1 “The process of planning, implementing, and controlling the efficient,effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements”.

15. Logistics Definition #2 “The art and science of management, engineering, and technical activities concerned with requirements, design, and supplying and maintaining resources to support objectives, plans, and operations.”

16. Logistics Definition #3 “Logistics is the science of planning and carrying out the movement and maintenance of forces. In its most comprehensive sense, those aspects of military operations which deal with: (a) design and development, acquisition, storage, movement, distribution, maintenance, evacuation, and disposition of materials; (b) movement, evacuation, and hospitalization of personnel; (c) acquisition or construction, maintenance, operation, and disposition of facilities; (d) acquisition or furnishing of services.” North Atlantic Treaty Organization (NATO)

17. Affordability • Affordability is made up of: • Schedule • Affects Cost when compressed • Performance • Affects cost by quality required • Cost • The driver in affordability

18. Affordability • Where are the major costs a product Life Cycle • Design/Development • Procurement/Manufacture • Support • Disposal

19. Affordability • Costs of Life Cycle

20. Affordability • Methods of estimating costs • Life Cycle Cost (LCC) • Costs to design, manufacture, use and dispose of a product • Total Ownership Cost • LCC plus costs to recruit, train and support the product operating personnel • Design to Cost • Working to the amount of funds available

21. Affordability

22. Affordability • Support Factors Creating Costs • How many products • Where and how many sites • How many products at each site • How is repair accomplished • How many people are needed to repair • What training is needed by the maintenance people • What repair parts are needed and how many • How fast can failed units be repaired • Repair/support equipment is needed

23. Affordability • How is support designed into the product • Analysis of the design for: • Maintainability – How fast can it be repaired • Reliability – How long will it work without failing • Availability – Is it available when needed

24. Affordability • How is the lowest LCC cost achieved • Tradeoff studies • Design tradeoff • For ease of repair and cost of repair parts • Manufacturing tradeoff • For less environmental cost at disposal • Support tradeoff • Where to repair and at what level (O,I,Depot)

25. Affordability • Imbalance between “cost” and “System Effectiveness” Life Cycle Cost System Effectiveness COSTS Research & Development Performance & Effectiveness Production & Construction Reliability, Maintainability & Supportability System Operation Production & Disposability Maintenance & Support System Quality Retirement & Disposal Other Technical Factors

26. Affordability • Extra costs created by lack of support analysis • Peculiar support equipment • Special Tools • Test equipment • Training • Support of support equipment

27. Affordability • Conclusion • Supportability is a main factor in the cost of owning a product • The most efficient way to get to the lowest LCC is analysis of the design

28. Design and Supportability The tale of four vehicles

29. Measures of Logistics • Reliability • Maintainability • Availability

30. Reliability • How often a thing breaks. Expressed in failures/unit of measure. • Examples • 385 failures/million hours of operation • 68 failures/100,000 miles • 7 failures/million cycles

31. Maintainability • The ease with which an item is repaired • Includes time to diagnose the problem, fix the problem and verify the fix • Usually expressed as mean time to repair

32. Availability • The amount of time a piece of equipment is available for use. • Availability affected by • Time equipment in for service • Time equipment in for repair

33. Availability & Support Cost • High Reliability + • High Maintainability = • High availability • Low support cost

34. Technology Changes • Emissions standards necessitated • Fuel injection • Electronic distributors • Hot spark plugs • Three and four valves/cylinder • Mass air flow sensors • Oxygen sensors • Exhaust gas regulators

35. 1978 Omni (1.7 Liter) Change Coolant 30 K miles Change Oil & Filter 3 K miles Change Air Filter 30 K miles Change Spark Plugs 15 K miles Ignition Timing 15K miles Replace PCV 30 K miles Service Trans 15 K miles Plug Wires As needed Replace Belts As needed Replace Timing Belt 60 K miles Change Fuel Filter 15 K miles 1998 Cirrus (2.0 Liter) Change Coolant 36 K miles Change Oil & Filter 3 K miles Change Ail Filter 30 k miles Change Spark Plugs 30 K miles Ignition Timing N/A Replace PCV 30 K miles Service Trans 15 K miles Plug Wires 60 K miles Replace Belts 60 K miles Replace Timing Belt 60 K miles Change Fuel Filter N/A Scheduled MaintenanceComparison

36. Cost of Repair (Fuel System) Vehicle Component Pt Cost Hours Lbr Rate Lbr Cost Tot Cost 1978 Omni, Carb Fuel Filter $ 3.00 0.3 $94.00 $ 28.20 $ 31.20 1.7 Liter, 4 Cylinder Fuel Pump $ 50.00 0.5 $94.00 $ 47.00 $ 97.00 1998 Cirrus, Inject Fuel Filter $ 27.00 0.7 $94.00 $ 65.80 $ 92.80 2.0 Liter, 4 Cylinder Fuel Pump $ 215.00 1.4 $94.00 $ 131.60 $ 346.60 1998 Escort, Inject Fuel Filter $ 16.00 0.6 $94.00 $ 56.40 $ 72.40 1.9 Liter, 4 Cylinder Fuel Pump $ 255.00 0.8 $94.00 $ 75.20 $ 330.20 1998 Cavalier, Inject Fuel Filter $ 19.00 0.7 $94.00 $ 65.80 $ 84.80 2.2 Liter, 4 Cylinder Fuel Pump $ 457.00 1.8 $94.00 $ 169.20 $ 626.20

37. Fuel System Maintenance Cost Over Life of Vehicle Vehicle Task Cost Freq Total Cost 1978 Omni Change Fuel Filter $ 31.20 1/15 K miles $ 310.20 Change Fuel Pump $ 97.00 1/75 K miles $ 194.00 $ 504.20 1998 Cirrus Change Fuel Filter $ 92.80 1/150 K miles $ 92.80 Change Fuel Pump $ 346.60 1/150 K miles $ 346.60 $ 439.40 1998 Escort Change Fuel Filter $ 72.40 1/30 K miles $ 362.00 Change Fuel Pump $ 330.20 1/150 K miles $ 330.20 $ 692.20 1998 Cavalier Change Fuel Filter $ 84.80 1/30 K miles $ 424.00 Change Fuel Pump $ 457.00 1/150 K miles $ 457.00 $ 881.00

38. When Things Go Wrong Fault Parts Cost Labor Cost Total Cost Lens separated from $75.00 $47.00 $122.00 fog lamp Heat/AC valve broke $150.00 $600.00 $750.00 Premature spark plug $48.00 $200.00 $248.00 wearout Headlight gasket $300.00 $94.00 $394.00 separation

39. Automotive Design Trends • Longer vehicle life (150 K miles) • High reliability for critical components • Low reliability for non critical components • Minimal preventive maintenance • Built in diagnostics • Fewer repair parts, more assemblies • Poor maintainability

40. Effect on Consumers • Few critical component failures • Several non critical component failures • High parts cost • High labor cost • Support costs escalate after 100k miles

41. What can we do? • Be aware of hidden vehicle support cost • Read consumer type evaluations • Look for accessibility of components • Talk to mechanics • Ask dealer for scheduled maintenance costs. • Complain about support costs

42. Logistics Engineering and Support Engineering Questions ???