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Systems Dynamics Modeling: Reducing Lifecycle Costs through Reliability Investments

An approach to investigating sustainment costs that incorporates both readiness and time of payback is to view the support process as an on-going enterprise supply chain that provides new parts, repair, support, maintenance, etc. over the operating life cycle. Improvements in reliability clearly affect the operational aspects of the supply chain through reductions in removals, overhaul requirements, new spare acquisitions, shipment of replacements and all of the associated and related costs.

Simulations of such enterprises using a dynamic modeling approach have established a relationship between improvements in reliability and reduced operating costs as well as indicating changes in readiness levels and time of payback.

lifecyclecosts purchasing    lifecyclecosts repair

Dynamic modeling of supply chain lifecycle costs provide benefits:

  • Demonstrating the affect of reliability investments and reliability improvements on lifecycle costs
  • Demonstrating the additional impact of demand and unit cost on payback periods of reliability investments
  • Providing guidance for analysis of investment strategies in regards to reducing overall lifecycle costs

lifecyclecosts annual_spend

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