The debate over military defence often focuses on the large investment in new equipment, but also – perhaps as a result of the investment – on closed units and reduced capabilities. Compared with 10 years ago, we invest considerably less in military defence, and there simply isn’t enough money to accomplish everything that the parliament requests. For this reason, defence procurement must constantly be made more efficient, and new methods are needed to better leverage investments.
Defence equipment of today is often highly sophisticated, whether it involves aircraft, ships, weaponry or IT systems. Procurement is associated with major investments and a high degree of complexity, not to mention the products are subjected to a long operational life including deployments in tough conditions. In addition to the initial investment, significant costs are incurred for operations, maintenance and decommissioning. The products are part of a larger system, so it’s important to understand what the cost drivers are. However, the high degree of complexity can make it difficult to make timely, critical decisions, and to understand all the consequences, especially the financial impact.
So what can be done to maximise the utility of the equipment and equipment maintenance over time, while controlling costs?
We are certain that one of the keys to more efficient equipment processes are to work more systematically with Life Cycle Management (LCM). In other words, the buyer considers the product on a life cycle basis, as part of a larger system, starting already during the procurement and development phase. The ability to control the total cost is the greatest in the early phases, long before the product is deployed. There should be an understanding in place early on regarding the expected cost of manufacturing, using, maintaining and decommissioning the product.
Using an effective LCM analysis, it is possible to control both the short-term and long-term consequences of various choices, both in terms of product cost and product functionality. This will make it easier to build a maintenance structure with the right capacity in terms of repair shops, engineers and spare parts.
By systematically following up on the product’s use, it is possible to adapt one’s resources according to operational changes. It is possible to control both system performance and costs. And most importantly, the defence department will accomplish its desired goals – at a lower cost.