Will the DoD Ever Manage Parts More Efficiently?

Jun 27
2010

The estimated current inventory investment by DoD for the organizational level parts employed during the Product Support processes of correct/prevent unplanned weapon system failure is $40 billion. An estimated 35%-50% of this investment is materially excess or obsolete (will never be used). Another issue is that the financial accounting accuracy of these parts would never meet the “smell test” by any private sector auditing firm; people would go to jail for this type of accounting…but that is another story.

GAO has had many studies dealing with the efficiency and effectiveness of the management of parts by the Services; none have been very flattering: Study 1, Study 2, Study 3

DoD accountants are not “bad people;” they do the best with the procedures provided to them. The real issue is that DoD, nor the Federal Government, develops a balance sheet that has any merit; politicians like it that way because accountability for “mistakes” can often be hidden from view…nothing better for a politician than to be opaque!

As more and more parts are COTS, and CLS, coupled with PBL/Outcome-Based Product Support constructs become more common, some of these inventory investment issues will become less glaring.

US Second-To-None For Product Support Prowess

Jun 14
2010

Americans have been bombarded by the Main Stream Media (MSM) touting the demise of US manufacturing base, and in turn the demise of the demand for the resources (parts, maintainers, tech support, and others) employed during the processes of the Product Support stage of the lifecycle of a capital good….but the MSM is a foolish bunch that is clueless regarding our true manufacturing might, and in turn our true Product Support prowess which is second-to-none in the world and will remain so for the foreseeable future.

Here are some facts about the US manufacturing sector from a recent article from Barrons:

“The U.S. economy is the largest and most productive on the planet. With just 4.6% of the global population, the U.S. accounts for roughly one-quarter of global output, generating more output in a year than the next three largest economies (Japan, China and Germany) combined. America’s economy is three times the size of China’s; the per capita income of China is only about 10% of that of the U.S.

The United States is a manufacturing superpower; we’re still in the business of making stuff, despite incessant reports to the contrary. We shouldn’t equate the demise of Detroit with the death of U.S. manufacturing. The U.S. makes more goods in a year than any other country, although America’s share of global manufacturing output was roughly 17.5% in 2008, down from 22.4% in 1990 and about 20.5% in 1980.

Many U.S. manufacturers have held their own the past few decades, even in the face of stiff competition from Japan, Germany and China. China’s share of global manufacturing has increased sharply over the past decades, hitting 17.2% in 2008, close to the U.S. number. However, the Chinese figure includes mining and quarrying, and electricity, gas, and water supply, in addition to manufacturing, and most of China’s gains came at the expense of Japan, South Korea, Mexico and others — not the U.S.

The largest exporter in the world is neither Germany nor China. It’s the U.S., despite annual trade deficits and all the chatter about U.S. companies not making anything the world wants to buy.”

Giuntini & Co. Featured Content on IDGA

Jun 09
2010

Ron Giuntini’s latest industry-shaping white paper, ‘The 20 Elements of an Outcome-Based Product Support Business Model for the Military Sector’ is the current ‘featured content’ on IDGA.org. Check it out to learn about the 20 mandatory points that the DoD requires every model to include. Visit the IDGA at www.idga.org.

Follow Giuntini & Co. on Twitter!

Jun 09
2010

http://twitter.com/giuntinicompany

Counterfeit COTS Parts

Jun 07
2010

With the advent of the increased employment of COTS parts in weapon systems, counterfeit commercial parts infiltrating its supply chain has become a concern for the US military community of Defense contractors, LCMCs, DLA and others. OEMs have historically struggled with the counterfeit issue due to IP concerns and its impact upon losing market share to the suppliers of counterfeit parts. For the military, the primary concern is its impact upon warfighter safety during a mission due to quality issues of the counterfeit part, as well as reliability issues resulting in decreased system availability due to higher failure rates of the counterfeit part. 

DoD is attempting to address the above issues through its Industrial Base Office. Thoughts?

http://www.bis.doc.gov/defenseindustrialbaseprograms/osies/defmarketresearchrpts/final_counterfeit_electronics_report.pdf

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