Targeted Interactions Between Parts and DMSMS Managements

Jay Mandelbaum, Christina Patterson, Robin Brown

First, relax. Now imagine a perfect world where every program can minimize unanticipated negative cost and schedule impacts. How? Through the selection and proactive monitoring of the parts embedded in a system’s design. Not possible? Well, stop imagining and see that there are, in fact, two communities that exist and should be leveraged to help Department of Defense (DoD) programs do just that. The communities are parts management and diminishing manufacturing sources and material shortages (DMSMS) management.

What’s that? You are not familiar with these two communities and their management processes? Definitions for both can be found in the box on the next page. But more important than the definitions are what these communities can do for a program office and the development, production, and sustainment of its system.

Parts management benefits a system by ensuring that parts are selected for a system design that seek to reduce life-cycle cost and reduce logistics footprint.

DMSMS management benefits a system by identifying and resolving obsolescence issues before there is an opportunity for those issues to impact cost, schedule and readiness.

However, an even bigger payoff in terms of weapon system affordability, supportability and logistics readiness can be attained when both of these communities perform effectively and in conjunction with one another. This article will explore the responsibilities of each of these communities throughout the life cycle, as well as enabling activities that support these roles. With this information, program management should be able to gain an understanding of how these two communities should be used synergistically to help meet its program’s cost, schedule and readiness goals.

Parts/DMSMS Management Roles and Responsibilities

To avoid confusion, in some (but not all) companies the DMSMS and parts management organizations are one and the same. When that is the case, the differentiation between the two communities is somewhat artificial. On the other hand, within DoD, the authors are unaware of any situation where the two communities are the same. Consequently, there is an acute DoD distinction between the relative roles and responsibilities.

Parts DMSMS management roles operate in parallel over entire program life cycles. Acquisition programs benefit most when both parts management and DMSMS management begin early in the system life cycle. However, their respective roles and responsibilities, which at times are similar, do evolve over time (see Table 1).

Carrying out these Individual roles and responsibilities improves program affordability. For example, in parts management, avoiding new parts avoids costs. For each part alone, there is an average cost avoidance of $27,500 for not adding a new part into inventory (according to Standardization Document 19, Parts Management Guide).

According to a Defense Standardization Program Case Study, effective parts management by the Virginia Class submarine program was able to significantly reduce the number of new parts introduced into the supply system (relative to prior submarine programs).

Prior class design and construction suffered from parts proliferation—28,000 procured parts required for the Trident class, 29,000 procured parts for the Los Angeles class, and 45,000 procured parts for the Seawolf class lead ship construction. In contrast, the initial issue of drawings for the Virginia class called for 17,963 procured parts. Over the life of the Virginia class program, $27 million invested in parts standardization is projected to lead to $789 million in cost avoidance.

From a DMSMS management perspective, the Virginia class submarine program initiated a robust, proactive program early in the design build process. While some DMSMS is inevitable, carrying out its proactive roles and responsibilities leads to cost avoidance because the earlier a DMSMS issue is identified, the longer is the window of opportunity to resolve it. Since a long window of opportunity generally allows for more low-cost resolution options as compared to a short window of opportunity, more costs are avoided.

According to the SD-22, Diminishing Manufacturing Sources and Material Sources and Material Shortages: A Guidebook of Best Practices for Implementing a Robust DMSMS Management Program, the Virginia class program office established a technology refreshment integrated product team (IPT), formalized a standard operating procedure, developed a memorandum of agreement with the Naval Supply Systems Command for the advanced procurement of spares, and established a budget. As a result, the program has resolved more than 1,260 obsolescence issues and reaped more than $159 million of documented cost avoidance by being proactive since inception.

Closer working relationships between these two communities could increase their effectiveness. When the parts management community establishes part selection criteria, DMSMS considerations play a prominent role. After the engineering community tentatively selects parts (either for an initial design, a redesign to resolve an obsolescence issue, or another type of system modification), the DMSMS community should be given the new parts lists or bills of materiels (BOMs) or changes to existing parts lists or BOMs. DMSMS practitioners review the new parts for both current obsolescence and future obsolescence risk. If there is an issue serious enough that another part should be selected, the DMSMS community should work with the parts management community and ultimately with design engineering to identify an alternative.

Of course, there is a question of how well working relationships between these communities and designers actually work. The better the integration, the greater the benefit to program offices. The following section looks at some common enabling activities and raises questions about better interfaces between the two communities.

Enabling Activities

Contract Language

Both DMSMS and parts management guidance provide numerous best practices to help perform these roles and responsibilities. Both communities have established preferred contract language. In the case of parts management, contract requirements are covered in Military Standard (MIL-STD) 3018. Although there is a requirement for proactive DMSMS management in MIL-STD-3018, additional requirements may be needed to ensure that best DMSMS management practices are performed (e.g., materials and chemicals, transfer plans, health reports, metrics, …). While the SD-22 contains some more expansive contract language examples, an effort is now under way to establish preferred contract requirements, corresponding contract language, and associated data item descriptions (DIDs) and contract data requirements lists (CDRLs). These two approaches to contract language have been pursued independently. Would a joint approach to combine DMSMS and parts management contract requirements into fewer independent contract clauses be a good idea?

Plans

Plans that summarize key activities and are updated throughout the life cycle are an important aspect of both parts and DMSMS management. While the plans have a similar structure, there are important differences. The parts management plan described in the SD-19 is a tactical plan written by industry for industry. There is no parts management plan written by the government for the government because the government does not design the system. The DMSMS management plan described in the SD-22 is written by the government for the government. It is generally more strategic than tactical, but individual program offices may tailor it to their needs. Industry’s tactical DMSMS management plan is described in SAE Standard 0016 and should be aligned with the government’s plan. Should there be closer integration among the plans?

Teams

Both communities carry out activities with a multidisciplinary team composed of people with similar functional expertise. Again, there are differences. The parts management team described in the SD-19 is an industry team. While there will be a government point of contact (POC), there usually is no formal parts management government team. The Virginia Class program adopted a more aggressive parts management approach.

The user interface for more than 600 interactive electronic technical manuals is standardized, allowing sailors to easily work across multiple systems and ships within the class—a first for submarines.

A Defense Standardization Program Case Study highlights that the program established a Parts Standardization Board—more than 2 years before completion of the ship specifications—to identify, implement and maintain a parts standardization program. The board, the gatekeeper of allowable parts, functions under the direction of program management and has members from the engineering, design, materials, planning, quality and operations departments. A team leader reports directly to the program manager to ensure that standardization goals are maintained. In addition, the shipbuilder’s president signed and supports the standardization policy and procedures. Finally, the shipbuilding specification directs the use of standard parts. The use of standard parts is tracked as a technical performance measure throughout design and construction.

The DMSMS management team described in the SD-22 is a government-led team that meets regularly, including industry participation to the extent required by contract. Industry’s internal DMSMS management team is not described in the SD-22; its structure may be similar to industry’s parts management team. For the Virginia class submarine, the DMSMS management team was integrated into its technology refreshment IPT.

According to the Defense Standarization Program Case Study, the team identifies obsolescence issues affecting the Virginia-class submarines before they impact ship construction and develops timely solutions. The team’s ­approach has the following elements:

• Identify obsolescence issues early using the Obsolescence Management Information System (OMIS) or through vendor monitoring efforts.
• Notify stakeholders that an issue has been identified.
• Identify all systems affected.
• Select a solution.
• Execute the solution.
• Measure and report results to ensure consistency and repeatability.

There is, however, no direct interface between industry’s parts management team and the government DMSMS management team. How does the necessary communication take place?

Systems Engineering Design Considerations

DMSMS management and parts management are both system engineering design considerations. According to the Defense Acquisition Guidebook (DAG), parts management is a standardization design strategy available to program managers. The benefits of parts standardization include reducing the number of unique or specialized parts used in a system (or across systems), reducing the logistics footprint, and lowering life-cycle costs.

In addition, parts management can enhance the reliability of the system and mitigate part obsolescence due to DMSMS. For DMSMS, the DAG identifies practices that the program should consider to minimize DMSMS risk throughout the system’s life cycle:

• Avoid selecting technology and components that are near the end of their functional life.
• Proactively assess the risk of parts obsolescence while selecting parts, during the design process.
• Use, when feasible, an Open Systems Architecture to enable technology insertion/refreshment more easily than with design-specific approaches.
• Proactively monitor supplier bases to prevent designing in obsolescence.

How well do the design interfaces work? Could the communities be better integrated to increase their influence on the design?

Proactive DMSMS management and robust parts management decrease supply chain risk. Robust supply chain integration reduces DMSMS risk.

Supply Chain Integration

Supply chain integration encompasses new product development, technology, procurement, strategic sourcing, quality, technical data, inventory and demand management, and supply chain risk management. In nearly all of these elements, parts management concerns and DMSMS concerns are very closely related. DMSMS and parts management are key elements of supply chain integration; their contributions are quite similar in concept.

For example, for the technical data element of supply chain integration, parts management is concerned with using technical data to ensure that the part can perform in a way that meets all requirements. DMSMS management is concerned with having sufficient technical data to allow for monitoring for obsolescence and resolving issues if an item can no longer be procured. For the Virginia class submarine, the management of technical data was standardized. The user interface for more than 600 interactive electronic technical manuals is standardized, allowing sailors to easily work across multiple systems and ships within the class—a first for submarines. Also, standardized technical documentation, including all of the ship’s drawings, is integrated with the supply-ordering process and with onboard training products.

Proactive DMSMS management and robust parts management decrease supply chain risk. Robust supply chain integration reduces DMSMS risk. Again some questions on efficiency can be raised. Is there duplication of effort and sufficient communication at the tactical level? Are the interactions among headquarters offices sufficient? Are these subjects sufficiently addressed in policy and guidance?

Conclusions

DMSMS management and parts management are closely connected as shown by the fact that they complement each other throughout the life cycle; they both require plans, operate in teams and rely on contract language; they reinforce each other as design considerations; and both have strong connections to supply-chain integration.
There are, however, questions concerning the efficiency and effectiveness of those connections as well as connections to other activities, especially design. Are there ways to improve how each is managed by better taking advantage of their synergies to answer the following:

• To what extent do the desired interactions of the two communities in program offices reflect reality?
• How can the program office teams, plans and contract language be better integrated?
• Is there any duplication of effort or lack of communication that can be avoided in program offices?
• Can communication be improved at the headquarters level?
• Are changes needed to parts/DMSMS management policy, guidance, training or outreach?

An important step has been taken to pursue the answers to these questions with the appointment of a single individual to lead both functions within the Defense Standardization Program Office (DSPO), reporting to the systems engineering office in the Office of the Secretary of Defense (OSD). According to Greg Saunders, the DSPO Director, this change “recognizes and acknowledges the close cooperation and interrelationships of DMSMS and Parts Management. A systems engineering approach integrates these two closely related programs bringing to life the well-worn phrase, ‘the whole is greater than the sum of the parts.’ Each program has made significant contributions in the past—putting them under the same OSD program lead is a logical next step that should produce even greater efficiencies for our weapon systems programs.”

But by itself, this step is not sufficient. Program offices will only benefit if program leadership takes action to ensure that government and industry parts and DMSMS management practitioners not only do their job in a robust manner, but also have their recommendations given priority by other engineers and logisticians in the program office.

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MANDELBAUM and PATTERSON are researchers at the Institute for Defense Analyses (IDA) in Alexandria, Virginia. They have researched obsolescence policy, guidance and training during the last 7 years, and the best practices and other observations that they identified have been instrumental in working the agenda and outputs of both the Department of Defense (DoD) Defense Manufacturing Sources and Material Shortages (DMSMS) Working Group and Parts Standardization and Management Committee.

BROWN works in the Defense Standardization Program Office at Fort Belvoir, Virginia. She has been DoD’s lead for DMSMS since May 2016 and parts management since January 2018. Prior to joining the DoD, she was the DMSMS lead at Naval Air Systems Command (NAVAIR) and provided DMSMS support to NAVAIR programs for 15 years.

The authors can be contacted at [email protected]; [email protected]; and [email protected].

The views expressed in this article are those of the author alone and not the Department of Defense. Reproduction or reposting of articles from Defense Acquisition magazine should credit the authors and the magazine.