PBL

Performance-Based Logistics
A Strategy to Improve Performance While Reducing Risks

THE PROBLEM

Today’s performance-based logistics contracts present special challenges, especially when they are combined with requirements for through-life contractor logistics support. Typically contractors are compensated based on their success in achieving operational availability goals.

How can your program achieve the performance goals of the contract while keeping tight control on your data management and supportability analysis costs? How do you determine what supportability tasks are absolutely necessary? Where do you begin?

How can you improve your Reward/Risk Ratio?

IMPROVE YOUR REWARDS

Your first step is to maximize the potential benefit to your company. By incorporating supportability concerns as a fundamental part of the design concept, you build in the framework for performance management from the beginning. This allows you to identify key cost drivers, newer/cheaper technologies, alternative maintenance strategies, spares over- and under-runs, and other areas which drive up costs and/or reduce availability.

Your goal is to work smarter, not harder, with better processes and tools. Rather than over-sparing to ensure that you keep downtime to a minimum (which puts you at risk for a lot of unneeded and obsolete parts), you need to be able to really understand your spares requirements. You need to determine what preventive maintenance is required on what parts, and when. You need good reliability, availability and failure prediction models, and you need to update the data feeding those models frequently based the actual performance of your equipment in the field.

As with any other endeavor, you increase your bottom line with good management practices.

REDUCE YOUR RISK and COST

It is also critical to reduce the risks and minimize costs to the organization for our supportability plan. You may have to pay significant penalties for missed availability parameters. Reliability and maintainability “bad actors”; spares, insufficiencies; obsolescence issues; skilled workforce shortfalls; and inventory, maintenance, and transportation delays and inefficiencies are just some of the problems that can increase equipment downtime.

On the other hand, you have a limited budget to achieve your operational availability objectives. It is critical to understand and manage the support plan for your equipment. As part of this strategy, you must identify and consider replacing anything in your equipment design or support plan which is expensive, creates supportability difficulties, or otherwise decreases reliability and overall availability.

What’s the Solution?