Thesis Presentation for the Degree of
Master of Science in Asset Management Control at the Hogeschool Zeeland
Prepared by ing. I.A. Khrystova
Scientific Supervisors: Ir.P.J.T. Bakker, MSc
Ir. Peter Van Gestel, MSc Expert Supervisor: ing. P.J. Kense, MSc
Contents
• Introduction
Research topic;
COTS background and COTS definition;
Field of research;
• Research approach
Statement of the problem;
Research question;
Research model and sub-research questions;
Research strategy and study cases;
• Results from the literature review, criteria X
• Current policy summary, criteria Y
• Assessment of the study cases and assessment findings
• Conclusions and recommendations
• Reflection on research
• Questions
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Research topic
Commercial off the Shelf (COTS) policy at
DMO: consequences of implementing COTS
products and components in naval military
assets
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Definition of COTS
“COTS items are commercial items that have been sold, leased, or licensed in substantial quantities in the commercial marketplace and that are offered to the Government without any modifications.”
COTS benefits:
Elimination of the need to invest in the development and support of unique items;
Lower risks since the product is already established;
Integration of new or latest technology (which is probably the most important benefit for Defence organisations);
Reduced cycle time;
Lower life cycle costs;
Improved reliability and availability;
Access to commercial support services.
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Field of research
Director
DMO
Directorate of Projects &
Procurement
Projects Branch Procurement
Branch
Government Quality Assurance
Division
Directorate of Weapon Systems
Sea Systems Branch
Land Systems Branch
Air Systems Branch
Directorate of Logistics Agencies
Naval Maintenance & Service Agency
National Supply Agency
Woensdrecht Logistics Centre
General Support Branch
Directorate of Materiel Policy
Directorate of Planning and
Control
Directorate of Personnel&
Organisation
Transition Manager
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Statement of the problem
Absence of an unified and streamlined COTS policy results in:
• Lack of clear definition what is understood under COTS and how to
deal with this group of products;
• Form-Fit –Function replacements are almost never available;
• Suppliers consider any electronic component as COTS for the
systems being purchased in accordance to MIL SPEC ;
• Overpricing of COTS components;
• Lack of transparency how to trace OEM to buy COTS directly;
• Lack of clear replacement strategy due to a shorter life cycle of
COTS and the rapid occurrence of obsolescence;
• Knowledge about COTS is fragmented and not centralized.
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Research question
What are the consequences of implementing COTS products
and components in naval military assets and what is the impact
on the effectiveness of the maintenance process?
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Subresearch questions 1 & 2
1. Which criteria for the
effectiveness of the
maintenance process with
respect to performance
preparation will be considered
in view of implementing COTS
products and components in
naval military assets?
2. To what extent does the
current policy comply with
those criteria?
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Subresearch question 3
3. To which extent does the
maintenance process in each
of the study cases comply with
the set of criteria derived from
the research question 1?
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Subresearch question 4
4. What have we learned from
the analysis results of study
cases (Z1, Z2, Z3, and Z4) in
view of the maintenance
process effectiveness in
relation to COTS?
What are suggestions and
recommendations for
improving of the maintenance
process effectiveness and of
the COTS policy?
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Research objectives
• Surveying the expectations of the stakeholders;
• Understanding the issues which occur during the exploitation and
maintenance phase of military assets in relation to COTS;
• Investigating backgrounds and causes of those issues;
• Examining if the current maintenance policy in relation to COTS
items is effective (IST);
• Determining principles and selection criteria to structure and
systematize the COTS process in order to mitigate risks related to
the obsolescence character of COTS products;
• Analyzing the current process and make recommendations for
Target (SOLL) situation.
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Study cases
• Air Defence and Command
Frigate (LCF):The Active
Phased Array Radar(APAR)
• Patrol ship(PS)Integrated
Sensors and Communication
Suite (ISCS)
• Mine Hunters (PAM): SPVDS
• Hydrographic Survey Vessel
(HSV): Integrated Bridge
Management System
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Criteria X
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Business
Engineering
Contract
Program-wide
COTS price assessment, Risk identification approach and impact on maintenance, COTS technology insertion and
its planning during the life-cycle Knowledge management, information sharing
Main delivery contract with supplier, Type
of support contract with
supplier, Contract
surveillance and evaluation
approach
Supportability analysis, COTS ILS Support, Test equipment Support, COTS reliability, COTS maintenance and replacement strategy, COTS obsolescence strategy, COTS failure and fault
registration, Technical development on the market
COTS definition and COTS
categories, Relationships
with suppliers, COTS costs and
method of control
Current policy summary
Logistics guideline “Obsolescence management” issued in
September 2009
Has a temporary status until ILS plans are amended;
Is based on the stipulations from the STANAG 4597 “Obsolescence
management” and two TNO reports;
Covers strategic objectives.
Guidance MEDDMKM 23 version 1.0 issued in December 2003
Gives a broad overview of COTS issues;
Pays attention to market knowledge, ISS contracts;
Has seven appendixes and therefore is less conveniently arranged;
Is written for the old structure of the organization.
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Criteria Y
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Acquisition Sustainment
COTS Replacement
strategy, Supplier
responsibilities ILS support for
COST replacement strategy;
Obsolescence risk analysis
ISS contract with supplier;
Price indexation method for spare
parts; Performance
registration and analysis of
obsolescence; COTS obsolescence
problems and technical meetings;
Link of COTS replacements with
system modifications COTS components
obsolescence method
Assessment criteria
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18 CRITERIA (X) 10 CRITERIA (Y)
18 ASSESSMENT CRITERIA BUSINESS ENGINEERING
CONTRACT
PROGRAM-WIDE
Study cases assessment
18 Assessment
criteria
Check list questions
Gap analysis template
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Identify current
standings
Identify objectives
Create plan of actions
Data analysis
GAP analysis template example
N Activity area
Assessment criteria
Check list questions
Study case
Yes Partly No N/A Remarks and comments
1. Business 1.1. COTS definition and COTS categories
Is there any definition given regarding COTS products?
Z1 X Set up a process
Z2 X
Z3 X
Z4 X
1.2 Relationships with suppliers
Is only one contractor involved in the process?
Z1 X Set up a process
Z2 X
Z3 X
Z4 X
1.3 COTS costs and method of control
Is there any method applied on how to control costs of the COTS products?
Z1 X Set up a process
Z2 X
Z3 X
Z4 X
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Conclusions
For the short term:
• Establish an internal “COTS management” policy ASAP taking into consideration existing policy documents and practices in the organisation;
• Revise “Obsolescence management” and the Guideline MEDDMKM 23;
• Make it obligatory to specify COTS requirements in requests for quotation (RFQ).
For the long term:
- Set up a COTS management/obsolescence group, which will be specialized in: - new developments in this domain; - program-wide approach; - technology insertion and eventual risks. - Look for an international cooperation.
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Recommendations
Definition:
COTS in military systems are products and components which are :
developed in accordance to the latest technological achievements,
integrated in military assets without or with minor modifications;
having limited visibility into reliability and frequency of their new updates;
creating interdependencies.
Considerations:
COTS require a proactive approach during development, acquisition , and being very crucial during the exploitation phase of military assets;
COTS proactive approach imply strong policies from the side of suppliers and organizations for:
planning of COTS replacements;
mitigating of COTS obsolescence issues,
indicating financial consequences;
specifying COST support elements in contracts.
In order to achieve effective maintenance process for the naval military assets considering use of COTS products and components, minimum 75% of the criteria specified for the assignment of the study cases are to be met:
Effective maintenance process = f (Business, Engineering, Contract, Program-wide Activities and Criteria)
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Tactical recommendations
• 23 recommendations
• 25 recommendations
• 47 recommendations
• 19 recommendations
Business Engineering
Contract Program-
wide
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Reflection on research
This research is facing a challenge;
The whole process is a learning loop whereby the abstract theory
has been tested in practice;
The scope of the research was very ambitious;
It was an intention to investigate how the obsolescence
management has been set up by other NATO countries;
This research is a qualitative assessment aimed at process;
A major point to conduct a quantitative pilot study investigating
financial consequences of COTS usage
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