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  2. Diminishing Manufacturing Sources and Material Shortages (DMSMS)

Diminishing Manufacturing Sources and Material Shortages (DMSMS)

ALCL 030

DAU GLOSSARY DEFINITION

The loss or impending loss of manufacturers of items or suppliers of items or the loss or impending loss of raw materials used to manufacture items of supply. Such losses may cause material shortages that endanger a weapon system's or equipment's development, production, or post-production support capability.

General Information

As discussed in the comprehensive DMSMS Knowledge Sharing Portal, DMSMS is traditionally thought of as applying to electronic items, but it is important to be aware that a DMSMS issue can arise regarding any item within a system, including software and non-electronic components—materials and structural, mechanical, and electrical (MaSME) items. 

DMSMS issues can be caused by many factors—such as low-volume market demand, new or evolving science or technology, changes to detection limits, toxicity values, and regulations related to chemicals and materials—that significantly affect the DoD supply chain and industrial base. Another aspect of DMSMS is when an item, although still available commercially, no longer functions as intended because of hardware, electronic and MaSME items, software, and/or requirements changes to the system. This is often referred to as functional obsolescence. Any of these situations may endanger an ongoing production capability and/or the life-cycle support of a weapon system or any training, support, or test equipment already in the field.  Ultimately, DMSMS issues affect materiel readiness and operational availability, which, in turn, affect both combat operations and safety.

No system or program is immune from DMSMS issues; they are inevitable. They affect short- and long-lived systems; repairables and consumables; space-based, air-based, ground-based, and sea-based equipment (including support and test equipment); and so on. DMSMS issues are not confined to piece parts or devices; obsolescence may occur at the part, module, component, equipment, or system level. DMSMS issues are also not limited to defense-unique items; commercial off-the-shelf (COTS) items represent a significant obsolescence problem, because such items are most susceptible to market forces.

Consequently, robust DMSMS management is needed. DMSMS management is a multidisciplinary process to identify issues resulting from obsolescence, loss of manufacturing sources, or material shortages; to assess the potential for negative impacts on schedule and/or readiness; to analyze potential mitigation strategies; and then to implement the most cost-effective strategy. 

DoD maintains a range of policies and guidance to support DMSMS and obsolescence planning and execution, including:

DODI 4245.15, DODM 4245.15, the SD-22 DMSMS Guidebook and the SD-26 DMSMS and Parts Management Contracting Guidebook are all intended to seamlessly align, integrate, support, and reinforce one another.

According to para 4.11.f. of DODI 5000.91, “the Program Manager, through the Product Support Manager, will develop, ensure funding, and execute a DMSMS management plan and conduct proactive risk-based DMSMS management per that plan to identify current DMSMS issues, forecast future DMSMS issues, program and budget for resolving DMSMS issues, and implement those resolutions IAW DODI 4245.15. Implementing DMSMS issue resolutions will take into account a parts management process that considers SCRM, supportability, loss of technological advantage, and obsolescence when selecting parts used in DMSMS resolutions. In addition, the PSM will use both current and forecasted DMSMS issues in developing product roadmaps for supportability.”

Additionally, according to Section 3 of DODI 4245.15 policy, “the acquisition and item management program offices and other DMSMS management performing organizations:

a. Develop (as soon as feasible after acquisition pathway authorization) and maintain a DMSMS management plan to document proactive, risk-based DMSMS management processes and team structures necessary to:

  1. Identify DMSMS risks (e.g., monitor bills of materials, review DMSMS notifications, and examine technology trends) in all life cycle phases.
  2. Assess the potential for negative impacts on schedule or readiness.
  3. Analyze potential mitigations.
  4. Implement the optimal resolution.

 

b.  Collect and maintain DMSMS case and management operations data and use the data to:

  1. Estimate and justify requests for resources in the programming and budgeting process to resolve DMSMS issues and conduct DMSMS management (e.g., resolution type, resolution cost, and number of items monitored).
  2. Assess the effectiveness of DMSMS management processes.
  3. Continuously improve DMSMS management processes.

 

c. Direct consideration of DMSMS when designing new items and redesigning existing items and in the production and reproduction of those items. Evaluate, document, and manage all DMSMS risks (e.g., technology selection, item selection, use of commercial-off-the-shelf items, proprietary or closed architectures) associated with these designs.

 

d. Identify, document, and mitigate DMSMS risks and issues throughout the life cycle of DoD items to minimize or eliminate their negative impacts.

 

e. Program and budget for both DMSMS management operations and DMSMS resolutions.

 

f. Include provisions in contracts and requests for proposals requiring the execution of the DMSMS management plan to:

  1. Perform proactive, risk-based DMSMS management and resolve DMSMS issues.
  2. Specify requirements for contractors and their suppliers to report information needed for government oversight (e.g., identification of DMSMS issues, system health, and research and analysis of resolutions).
  3. Provide access, delivery, and technical data rights (e.g., indentured bills of material, drawings, models, and supportability information) necessary to perform proactive, risk-based DMSMS management; implement resolutions to DMSMS issues; and continue DMSMS management in support of a DMSMS exit strategy to enable the transfer of DMSMS management activities at the end of the contracting period
  4. Establish a DMSMS exit strategy for life cycle phase changes, contract transitions, or similar situations.

 

g. Resolve DMSMS issues in a timely manner to minimize their impact on schedule, readiness, and cost.

 

h. Communicate with supply organizations internal and external to the DoD Component on mitigation of issues and risks identified in Paragraph 2.7.g of this issuance.

 

i. Train the DMSMS workforce and other stakeholders on DMSMS management.

 

j. Evaluate DMSMS management activities in logistics and engineering processes and practices. These evaluations will be performed during logistics assessments and systems engineering technical reviews as described in DODI 5000.02, starting at preliminary design review or its equivalent.

 

k. Establish a scheduled frequency for updating the DMSMS management plan.”

The SD-22 DMSMS Guidebook is another key resource and reference. It includes common practices developed by various DoD organizations to achieve these goals, and includes examples of results for review and consideration as well. The primary objectives of SD-22, however, are to define a proactive DMSMS management process that can be used by the PM/PSM to build an effective DMSMS Program, to define DMSMS support metrics to measure the effectiveness of a DMSMS Program, and to promote cost-effective supply chain management integrity through DMSMS problem resolution at the lowest (cost, time, functional) level. The guide outlines an effective DMSMS process as one which:

  • Ensures that all parts and material to produce or repair the platform are available
  • Reduces, or controls, TOC
  • Minimizes Total Life Cycle Systems Management (TLCSM) cost
  • Eliminates, or at least minimizes, reactive DMSMS actions
  • Evaluates design alternatives
  • Provides for risk mitigation as it applies to DMSMS
  • Evaluates more than one approach to resolve DMSMS issues
  • Collects metrics to monitor process effectiveness

For additional insights into the supply chain risk implications of DMSMS, see also GAO Audit GAO-17-768 Defense Supply Chain: DOD Needs Complete Information on Single Sources of Supply to Proactively Manage the Risks (Sep 28, 2017)

In addition, DMSMS is addressed extensively in the DoD Life Cycle Sustainment Plan (LCSP) Outline version 3.0, which highlights obsolescence and DMSMS management.  Among others, paragraph 4.12.1 Obsolescence Risk Management, Table 6-1 Design & Sustainment Requirements, and Section 11 Life Cycle Sustainment Plan (LCSP) Annexes all address DMSMS as a key issue to be addressed in life cycle product support and sustainment planning and execution.