Avi­a­tion main­te­nance op­er­a­tions re­quire plan­ning solutions that sup­port “con­di­tional” re­pair or “as re­quired” plan­ning ca­pa­bil­i­ties as well as mul­ti­ple de­mand and sup­ply streams to op­ti­mise in­ven­tory as­sets


Linking Rev­enue with De­sired Ser­vice­abil­ity of IAF Fight­ers

The is­sue of air­craft avail­abil­ity has been a problem for the In­dian Air Force (IAF) for many years. How­ever, it has come to promi­nence in re­cent years largely be­cause of the in­tense pres­sures on the de­fence bud­get. The de­creas­ing al­lo­ca­tion in real terms for rev­enue ex­pen­di­ture, re­quires the ut­most ef­fi­ciency from the IAF to off­set the dwin­dling num­bers of oper- ational squadrons and de­lays in the new air­craft in­duc­tions. From the per­spec­tive of the Min­istry of De­fence (MoD), while the de­mand for higher al­lo­ca­tions is gen­uine, the IAF must be fully geared up to utilise the avail­able re­sources in a time-bound man­ner. There is hardly any merit in ask­ing for more re­sources while the present ca­pac­ity to utilise the avail­able re­sources,

par­tic­u­larly those un­der the cap­i­tal head, is con­strained. The de­fence es­tab­lish­ment must, there­fore, look in­ward and find last­ing solutions to pro­cure­ment im­ped­i­ments.

In the regime of avi­a­tion, the com­plex­ity and high value of the equip­ment that is to be main­tained, re­quires pro­vi­sion­ing of spare parts. As air­craft avail­abil­ity is fun­da­men­tal to air op­er­a­tions, low avail­abil­ity of spare parts will re­sult in com­pro­mised op­er­a­tional ca­pa­bil­ity and im­pose ad­di­tional costs of ex­pe­dit­ing and fail­ure re­cov­ery. Fre­quently, the re­quired “time to re­pair” will be mea­sured in hours rather than days – which will mean that spare parts in­ven­to­ries will have to be kept in sev­eral lo­ca­tions to min­imise trans­porta­tion time to the point of use, cre­at­ing com­plex multi-ech­e­lon net­works.

How­ever, lev­els of spare parts avail­abil­ity has to be bal­anced by the need to keep in­ven­tory lev­els to a min­i­mum. So­phis­ti­cated meth­ods for de­ter­min­ing Tar­get Stock­ing Lev­els at each lo­ca­tion, driven by de­sired lev­els of avail­abil­ity, cost con­straints and by lo­ca­tion is of course, a com­plex task. It is im­por­tant to eval­u­ate what the re­sults will be in ad­vance of putting the con­trol­ling in­ven­tory man­age­ment con­fig­u­ra­tion pa­ram­e­ters into place. In some cases, the man­u­fac­tur­ing life cycle may have fin­ished be­fore the service life cycle has even be­gun and plan­ners may be faced with the need to cal­cu­late an “all time buy” quan­tity or to rely on re­pair or af­ter­mar­ket parts dis­trib­u­tors.

Avi­a­tion main­te­nance op­er­a­tions re­quire plan­ning solutions that sup­port “con­di­tional” re­pair or “as re­quired” plan­ning ca­pa­bil­i­ties as well as mul­ti­ple de­mand and sup­ply streams to op­ti­mise in­ven­tory as­sets and through­put. In­ter­nal de­mand for Line Re­place­able Units (LRUs), Shop Re­place­able Units (SRUs), Sub-Shop Re­place­able Units (SSRUs), com­po­nents and con­sum­ables are de­pen­dent on ‘as re­quired’ rates for a given sys­tem, which may vary by de­mand or cus­tomer en­vi­ron­ment.

The spares pro­cure­ment in the IAF is based on the model of con­sump­tion pat­tern cor­rected by the fore­cast fac­tor which de­pends on the pro­jected util­i­sa­tion of the war plat­form. The max­i­mum po­ten­tial of stor­age is de­fined by the stocks in hand plus those un­der con­tract and those in­dented. This po­ten­tial can­not ex­ceed five or three years hold­ing depend­ing on for­eign or In­dian ven­dors. This re­view of pro­cure­ment is done an­nu­ally and pro­cessed for con­tract through the del­e­gated fi­nan­cial pow­ers of the Air Of­fi­cer-in­Charge Main­te­nance (AOM) at Air Head­quar­ters or the MoD. If these re­views are not con­verted to con­tracts ev­ery year, it will ad­versely af­fect the sus­tain­abil­ity of the fleet.

There is a se­ri­ous con­tention on the spares so pro­jected vis-a-vis the rev­enue bud­getary al­lo­ca­tions and one is forced to un­der­take some sort of pri­ori­ti­sa­tion re­sult­ing in sub-op­ti­mal ac­cep­tance of the spares pack­age which will af­fect the sus­tain­abil­ity fig­ures. Fleet­wise rev­enue spend­ing ver­sus ser­vice­abil­ity achieved on a year-on-year ba­sis, should have been the yard­stick to mea­sure the ef­fi­cacy of the pro­cure­ment process. This has not been the model fol­lowed re­sult­ing in in­sur­mount­able un­ser­vice­abil­ity and nearly all the fleet of the IAF have been stuck at ser­vice­abil­ity fig­ures of about 60 per cent. This is­sue needs to be viewed with the spend­ing ver­sus out­comes in a mod­ern IAF.

There are two models which need se­ri­ous con­sid­er­a­tion by the IAF. These are, firstly chang­ing the IAF pro­vi­sion­ing sys- tem in­ter­nally to make the spar­ing so­lu­tion linked to cost of this so­lu­tion with the achiev­able or de­sired ser­vice­abil­ity of the war plat­form. Se­condly, to look at the ex­ter­nal ven­dors who can as­sure a de­sired ser­vice­abil­ity of the plat­form by tak­ing re­spon­si­bil­ity ob­vi­ously at a cost on models based on Per­for­manceBased Lo­gis­tics (PBL). Both these are quan­tifi­able and trace­able models to as­sure sus­tain­abil­ity, but, need deeper anal­y­sis in­ter­nally to as­sess the needs for dif­fer­ent fleets.


Equip­ment and sup­ply chain managers are of­ten re­quired to es­ti­mate the parts they will need to sus­tain a sys­tem. Such sys­tems are typ­i­cally com­posed of ma­jor com­po­nents namely struc­tural el­e­ments, en­gines, elec­tron­ics, com­mu­ni­ca­tions, power, hy­draulics, etc., which, in turn, are com­posed of a mul­ti­tude of dif­fer­ent parts. When fail­ures oc­cur, those com­po­nents must be re­paired or re­placed with a spare part be­fore the sys­tem can re­sume op­er­a­tion. Managers must walk a fine line be­tween buy­ing too few spare parts and hav­ing their sys­tems sit idle or buy­ing too many parts and wast­ing valu­able re­sources.

Multi-Ech­e­lon Tech­nique for Re­cov­er­able Item Con­trol (MET­RIC) In­ven­tory Op­ti­mi­sa­tion is a set of al­go­rithms that cal­cu­lates sup­ply re­quire­ments to sup­port a de­sired avail­abil­ity tar­get or service level across a net­work of re­pair lo­ca­tions. These tar­gets are ei­ther called out by main­te­nance con­tracts or in­ter­nally de­ter­mined. MET­RIC can ap­ply service level tar­gets spec­i­fied as air­craft avail­abil­ity fill rates, al­low­able back­o­rders and their rates, etc. Fleet avail­abil­ity, the prob­a­bil­ity that an air­craft is air­wor­thy at any point in time, is a com­mon op­ti­mi­sa­tion cri­te­rion. MET­RIC cal­cu­lates the tar­get stock­ing lev­els and fill rates re­quired to achieve the de­sired fleet avail­abil­ity or part fill rate tar­get. With MET­RIC, over­all sup­ply and re­pair costs are min­imised.

This is a math­e­mat­i­cal approach to de­ter­min­ing the op­ti­mal spares mix for a sys­tem by di­rectly re­lat­ing in­vest­ment in spare parts to sys­tem readi­ness. It pro­vides the best way to re­tune in­ven­tory in­vest­ments, min­imis­ing costs with­out sac­ri­fic­ing the mis­sion or max­imis­ing sys­tem avail­abil­ity for a given bud­get con­straint. The sys­tem approach to sizing spares in­ven­to­ries has been adopted, in vary­ing de­grees, by each of the US mil­i­tary ser­vices and has been of of­fi­cial pol­icy of the De­part­ment ofr De­fence since 1985. The Air­craft Sus­tain­abil­ity Model fol­lowed in the US is an ex­am­ple of this approach.


The de­fence ser­vices face nu­mer­ous chal­lenges—data rights, ob­so­les­cence, fre­quent soft­ware up­grades, mul­ti­ple con­fig­u­ra­tions and many more. Air­lines and gov­ern­ments the world over are im­prov­ing their ef­fi­ciency through bet­ter man­age­ment of spare parts in­ven­tory, us­ing a col­lec­tion of prac­tices that re­duce the size and cost of spare parts in­ven­tory and shift more of the risk to out­side par­ties. Operators are turn­ing to out­side providers of af­ter­mar­ket ser­vices for ma­te­rial man­age­ment programmes that prom­ise to han­dle re­pair and main­te­nance of ma­jor com­po­nents, in­clud­ing pro­vi­sion of spares with guar­an­tees for parts avail­abil­ity. Tra­di­tion­ally and for the fore­see­able fu­ture, the MoD and the IAF do pre­fer sus­tain­ment to

To meet the ob­jec­tives of PBL, both govern­ment and In­dus­try must agree on busi­ness prac­tices that pro­vide the great­est value for all par­ties

be com­pleted in-house or by lo­cal, in­dige­nous in­dus­try. They look to the orig­i­nal equip­ment man­u­fac­tur­ers to work with lo­cal in­dus­try in or­der to es­tab­lish main­te­nance ca­pa­bil­i­ties to quickly sup­port the fleets in­coun­try rather than re­ly­ing on in­ter­na­tional sources that could de­lay avail­abil­ity for an air­craft due to com­plex and time-tak­ing import and ex­port pro­ce­dures.

The goal of both ac­qui­si­tion and sus­tain­ment is to gain the most ef­fi­cient and ef­fec­tive per­for­mance of the sys­tem for its en­tire life. In do­ing so, it is im­por­tant to re­alise that ac­qui­si­tion and sus­tain­ment are not sep­a­rate, but are si­mul­ta­ne­ous and in­te­gra­tive is­sues that re­quire anal­y­sis and syn­the­sis through­out the prod­uct life cycle.

PBL is the pur­chase of sup­port as an in­te­grated, af­ford­able, per­for­mance pack­age de­signed to op­ti­mise sys­tem readi­ness and meet per­for­mance goals for a weapon sys­tem through long-term sup­port ar­range­ments with clear lines of au­thor­ity and re­spon­si­bil­ity. Ap­pli­ca­tion of PBL may be at the sys­tem, sub- sys­tem or ma­jor as­sem­bly level depend­ing on the cir­cum­stances and ap­pro­pri­ate busi­ness case anal­y­sis.

The essence of PBL is buy­ing per­for­mance, in­stead of the tra­di­tional approach of buy­ing in­di­vid­ual parts or re­pair ac­tions. PBL sup­port strate­gies in­te­grate re­spon­si­bil­ity for sys­tem sup­port in one or more Prod­uct Sup­port In­te­gra­tors (PSI), that man­age sources of sup­port, pub­lic and pri­vate, in meet­ing the ne­go­ti­ated per­for­mance out­comes.

A ma­jor chal­lenge for conversion to a PBL en­vi­ron­ment is to adopt busi­ness prac­tices more com­mon in com­mer­cial or­gan­i­sa­tions. To meet the ob­jec­tives of PBL, both govern­ment and in­dus­try must agree on busi­ness prac­tices that pro­vide the great­est value for all par­ties.


It is very im­por­tant to have a metic­u­lous process to deal with the en­tire sup­ply chain in sup­port of the war plat­form. PBL can be at sub-as­sem­blies only or en­tire mis­sion sys­tems.It is there­fore im­por­tant that all mech­a­nisms are well placed so the PSI can man­age all the sup­pli­ers and parts as well as the lo­gis­tic pro­cesses.

In this con­text, it is cru­cial to have an in­te­grated IT in­fra­struc­ture to sup­port the PSI. The more com­plex a PBL is, the more rel­e­vant the IT in­fra­struc­ture be­comes. Com­pa­nies such as SAP have de­vel­oped cut­tingedge solutions to suc­cess­fully sup­port the im­ple­men­ta­tion of PBL in the aerospace and de­fence mar­ket. When a PSI chooses its IT in­fra­struc­ture, it is im­por­tant to con­sider the level of ac­count­abil­ity that it will pro­vide when it comes to on-time de­liv­ery, mean­time be­tween fail­ure (MTBF), mean­time be­tween re­moval (MTBR), pro­duc­tion lead time (PLT) and In­ven­tory Turnover Rate (ITR). By hav­ing the right tools in place, the PSI will be able to share the re­sults with the service and also have full vis­i­bil­ity of what is nec­es­sary to achieve per­for­mance tar­gets. The ASM model based on MET­RIC and sim­i­lar models need to be tai­lored for the In­dian en­vi­ron­ment which will be re­quired for the PBL con­trac­tor.

In the past 15 years, sev­eral in­ter­na­tional de­fence com­pa­nies have been repo­si­tion­ing them­selves as service providers rather than pure equip­ment sup­pli­ers. Ad­di­tion­ally, they have been in­volved more in op­er­at­ing de­fence ca­pa­bil­i­ties, which has proved to be highly ef­fec­tive al­low­ing the mil­i­tary to bet­ter un­der­stand the func­tion­al­i­ties of weapon sys­tems.

A first con­sid­er­a­tion is whether or not PBL sup­port will have fi­nan­cial ben­e­fits for the con­trac­tor. Sup­port ser­vices, es­pe­cially per­for­mance based strate­gies, are in­creas­ingly be­com­ing part of the value propo­si­tion of de­fence com­pa­nies bid­ding for de­fence programmes. How­ever, PBL is a long-term com­mit­ment that re­quires con­trac­tors to bal­ance risks and re­ward through vig­or­ous fi­nan­cial anal­y­sis. Se­condly, as part of the bid to in­crease aware­ness of PBL in the MoD, con­trac­tors must clar­ify the re­sults and ex­pec­ta­tions as also build a case for pub­lic-pri­vate co­op­er­a­tion.

Fi­nally, it is im­por­tant for the pri­vate sec­tor to un­der­stand the dy­nam­ics of dif­fer­ent mar­kets in or­der to bet­ter lever­age the use of PBL. Mov­ing for­ward, the in­sti­tu­tion­al­i­sa­tion of Pub­lic Pri­vate Part­ner­ship should be en­cour­aged in or­der to fa­cil­i­tate the un­der­stand­ing be­tween the mil­i­tary and the man­u­fac­tur­ers when it comes to service sup­port to achieve per­for­mance. In or­der to be suc­cess­ful in im­ple­ment­ing PBL, such bench­mark­ing and im­prove­ment pro­cesses need to be­come rou­tine for an or­gan­i­sa­tion rather than ad-hoc ac­tions.

Un­der the C-17 Globe­mas­ter III Sus­tain­ment Part­ner­ship with the US Air Force, Boe­ing is re­spon­si­ble for all C-17 sus­tain­ment ac­tiv­i­ties. Boe­ing also part­ners with three US-based C-17 Air Lo­gis­tics Cen­tres. Boe­ing per­forms sup­ply sup­port man­age­ment for more than 95 per cent of the C-17’s re­pairable parts. Ex­ceed­ing con­tract re­quire­ments with a 92 per­cent is­sue ef­fec­tive­ness rate for as­signed re­pairable items, PBL has been help­ing the C-17 achieve the high­est readi­ness of any air­lifter and has gen­er­ated cost sav­ings.

It is im­por­tant to note that, although the fun­da­men­tal con­cept of buy­ing per­for­mance out­comes is com­mon to each PBL arrangement, the strat­egy for any spe­cific PBL pro­gramme must be tai­lored to the op­er­a­tional and sup­port re­quire­ments of the end item. While sim­i­lar in con­cept, the ap­pli­ca­tion of PBL for a tac­ti­cal fighter air­craft may be very dif­fer­ent from a PBL strat­egy for an Army ground com­bat sys­tem. There is no one-size-fits-all approach to PBL. Sim­i­larly, there is no tem­plate re­gard­ing sources of sup­port in PBL strate­gies.

It is im­por­tant for the pri­vate sec­tor to un­der­stand the dy­nam­ics of dif­fer­ent mar­kets in or­der to bet­ter lever­age the use of PBL



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