Effectively Addressing Obsolescence:

Transcription

1 Effectively Addressing Obsolescence: Decreasing Negative Implications November 15, 2012 Brian N. Slack GPDIS_2012.ppt 1

2 Overview What is Diminishing Manufacturing Sources and Material Shortages (DMSMS/DMS)? What items are impacted by DMS? Where can DMS occur over a product s life cycle? Why should DoD suppliers be concerned about DMS? DMS cost/risk impact and root cause analysis Commercial demand requirements impact DMS DMS management philosophies DMS mitigation tactics How to overcome the challenge of using a single source supplier Boeing s leadership in the DMS community GPDIS_2012.ppt 2

3 What is Diminishing Manufacturing Sources and Material Shortages? Diminishing Manufacturing Sources and Material Shortages: The loss, or impending loss, of manufacturers or suppliers of items or the shortages of raw materials. Obsolete part: A part of a larger system that is no longer manufactured by the original manufacturer. GPDIS_2012.ppt 3

4 What Items Are Impacted By DMS? During the design through sustainment phases the majority of DMS cases impact electronic items During all phases the entire system is vulnerable Electronics Software Mechanical Parts Raw Materials Tooling Support Equipment Problems occur at all levels Part Module COTS increases number of module and assembly level issues Sub-system System GPDIS_2012.ppt 4

5 Where Can DMS Occur Over a Given Products Life Cycle? Material shortage drives product change Manufacturer stops making product Insufficient market share or sales Sole source supplier goes out of business Insufficient demand to support manufacturing of part = Possible DMS Events DMS occurs at any life cycle phase GPDIS_2012.ppt 5

6 Why Should DoD Suppliers Be Concerned About DMS? Customer expectations Proactive DMSMS Management by system integrator and equipment providers is a contract requirement Key risk driver in Performance Based Logistics (PBL) contracts DMSMS management capability is criteria for contract award and supplier selection Supply Chain Management Regulation R requires proactive DMSMS management process SD-22 DMSMS Guidebook used by programs offices as standard for measuring DMSMS programs Supplier management Ensure all suppliers have proactive DMSMS processes/tools Need visibility & cooperation across supplier base Strategic benefit Minimize DMS costs to integrators Competitive discriminator to capture new business Consistent enterprise process/tools/metrics/solutions Customers expect integrators to shield them from DMS risks GPDIS_2012.ppt 6

7 DMS Cost/Risk Impact Programs in Production & Sustainment phases face significant DMS cost challenges Forced redesigns of equipment due to DMSMS Procurement and storage of lifetime buy components Manufacturing delays due to unavailability of components Inability to support equipment in the field due to lack of spares DoD estimates $1B per year to manage and resolve DMSMS problems New programs must proactively address DMS up front in Production Stage to avoid future life cycle cost problems Engineering cost for obsolescent resistant design exponentially less than reactive mitigation strategy Premium part prices Inefficient use of resources Can severely impact system availability, supportability, & life cycle costs GPDIS_2012.ppt 7

8 Root Cause Analysis DoD is not driving the semi-conductor market Minimal leverage with suppliers Forces integrators to react to changes in commercial sector needs Global Semiconductor Market in 2010 = $304B Industrial Electronics 7.3% Military / Aerospace 1.9% Automotive Electronics 7.5% Data Processing 38.0% Computers Computer 53%54% Consumer Electronics 19.1% Wired Communications 6.3% Wireless Communications 19.8% GPDIS_2012.ppt 8

9 Commercial Demand Requirements Impact DMSMS *40 million commercial parts are on DLA contract Most are non - NSN items * = According to Rupert Hopkins, XSB Inc. from the April 2008 Aging Aircraft Conference - Pin Point tool briefing GPDIS_2012.ppt 9

10 DMS Management Philosophies Resolve issues as they impact the program Do nothing approach cost is high Budget driven approach carries long-term consequences and risk Implementing concepts and approaches to minimize future impact and identify potential risk areas Program centric approach GIDEP Alerts Data-centric approach Independent weapon system management philosophy Minimize DMSMS costs across multiple programs Subscription Based Tools Life cycle based approach Managing from Engineering Manufacturing Development (EMD) to Disposal Risk Management approach improves availability and increases profit margins DMS management philosophy often associated with life cycle stage Copyright Copyright 2012 Northrop Corporation. 2009Grumman The Boeing Company. All All rights rights reserved. GPDIS_2012.ppt 10 reserved.

11 Reducing DMS Impacts Using a Life Cycle Based Approach Design Parts screening DMS resistant designs Technology and equipment roadmap development COTS equipment strategy EMD/Production Sustainment BOM monitoring/risk assessment DMS solutions based on roadmaps, SCM, reliability based logistics, funding, and product life cycle data Equipment reclamation strategy Spiral development activities BOM monitoring/risk assessment Technology Roadmap Alignment DMS funding alignment In a total life cycle approach, different program stages will emphasize different strategies / processes to minimize risk GPDIS_2012.ppt 11

12 DMS Mitigation Tactics Throughout the Life Cycle Phases Block / Spiral Obsolescence Prediction/Monitoring Upgrade Part Screening Planning Solution Development Tech Insertion Roadmaps / Funding DMS Resistant Design Concepts Technology EMD Production Development Operations & Support Disposal Minor Redesign Cycles Critical System/LRU Block Upgrades Reclamation GPDIS_2012.ppt 12

13 DMS Common Mitigation Tactics Using existing stock to meet future requirements for the part Use approved alternate source substitute Purchase parts from trusted and qualified sources Parts must be Form, Fit, and Function approved Aftermarket manufacturer GPDIS_2012.ppt 13

14 DMS Common Mitigation Tactics Reclamation of serviceable and tested components Generalized Emulation of Microcircuits GEM or reverse engineering Life-of-Type Buy or Bridge buy Buy of product going obsolete to last through redesign of the product Most exercised alternative Excess inventory typically results Technology Refresh - Redesign (Minor/Major) Most costly alternative Improved capability Greater reliability GPDIS_2012.ppt 14

15 How to Overcome the Challenge of Using a Single Source Supplier Single source strategic partnering decision to use one of many suppliers Any stage Lead time away in months or years to qualify new supplier Risk and cost to program increases Other Risk Mitigation Strategies Work with supplier to discuss aftermarket possibilities for part Discuss possibility of obtaining design rights for the part Understand supplier roadmap for part to ensure next generation device is compatible with existing design Overcome using single source suppliers Mature stage or earlier Consider split procurement between two suppliers to maintain manufacturing production capability Maintain healthy supplier management relationship with open and honest communication GPDIS_2012.ppt 15

16 Boeing s Leadership in the DMS Community Boeing s strength 160,000 plus employees Providing technical knowledge and engineering skills Boeing is a thought leader in obsolescence and technical solutions Boeing led a joint DoD/Industry team to develop an industry standard for DMS Management Plans Internal collaboration and deployment of predictive DMS tools Teamed with government and industry in establishing minimum semi-conductor and integrated circuits requirements and industry standards for the DoD called Aerospace Qualified Electronic Component (AQEC) Government Electronics and Information Technology Association (GEIA) and Defense Standardization Program Office (DSPO) Patent pending solutions Established enterprise wide Community of Practice for sharing DMS information Common processes and procedures Coordinate joint activities impacting multiple programs Many Boeing programs have won DoD DMS Management Awards GPDIS_2012.ppt 16

17 Summary DoD suppliers must be concerned about DMS DMS can happen at any life cycle phase Commercial demand requirements impact DMSMS Life cycle based approach & DMS common mitigation tactics most effective approach to address DMS The challenge of single-source suppliers can be overcome and managed GPDIS_2012.ppt 17

18 Questions? Questions? EOT_PW_Sub_icon.ppt GPDIS_2012.ppt 18 18

19 Sample Title First Slide Here This is an example of how text would look within the slide layout design. GPDIS_2012.ppt 19

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