Product Support Financial Value Drivers. 9/10 – Life Cycle Stage of a Product

Mar 19
2013

This blog is the ninth of ten discussing the product support financial value drivers of the solutions supplied by a commercial or military focused capital good Product Support Enterprise [PSE]. The blog will provide an overview on how the analysis of the life cycle stages of a product and its components can deliver a better understanding of the life cycle cost of a PSE.

The life cycle stage of a product inducted into a variety of Product Support processes can be broken-down into two primary stages: in-production and out-of-production, and then segmented into early, mid and late life stages. A further break-down can also be employed in which the product’s parts are either in-production or out-of-production. And finally the segmentation of a Product’s parts can be identified as being Made-To-Order [MTO], also referred to as developmental or proprietary, and Commercial Off The Shelf [COTS]. For each stage analyzed, the following 5 financial elements must also be reviewed:

  1. Direct resources: Tech labor (i.e. maintainers, tech reps)
  2. Direct resources: Parts (i.e. reparable, non-reparable)
  3. Indirect resources: Process flow (i.e. shop building, test equipment, schedulers)
  4. Indirect resources: Direct resource management (i.e. warehouse, transport, packaging, training)
  5. Indirect resources: PSE oversight management (i.e. offices, data infrastructure, leadership)

The blog will be a series of the following 3 charts providing a template for a variety of discussions in establishing PSE solutions throughout the life cycle of a product:

  1. Product life cycle graph and corresponding PSE activity
  2. Table of life cycle stages and potential scenarios; there can be many more scenarios that can be reviewed
  3. Example of inputs for each life cycle scenario selected

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The purpose of this BLOG was only to skim the surface as to the multiple questions that must be addressed when reviewing a Product’s life cycle and its financial impact upon the PSE.

Hypatia©, a Giuntini & Company financial software tool, provides a highly automated means of calculating the above and other product support financial value drivers, as well as an effortless way of being able to change any utilization assumption and immediately understand its impact upon total ownership costs. Hypatia is also a proven, trusted and highly effective tool for assisting in the development of product support business case analysis.

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