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Level of Repair Analysis

Level of Repair Analysis. Level of Repair Analysis for the Enhancement of Maintenance Resources in Vessel Life Cycle Sustainment Dr. Lucas Marino, CMRP Hank Kocevar, CMRP. Hierarchy of Assets in an Integrated Asset Management System. Management. Strategic Goals.

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Level of Repair Analysis

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  1. Level of Repair Analysis

  2. Level of Repair Analysisfor the Enhancement of Maintenance Resources in Vessel Life Cycle Sustainment Dr. Lucas Marino, CMRP Hank Kocevar, CMRP

  3. Hierarchy of Assets in an Integrated Asset Management System Management Strategic Goals Manage Asset Portfolio Capital Investment value, performance and sustainability Manage Asset Systems System performance, cost & Risk Optimization Manage Individual Assets Asset life cycle costs, risks & Performance

  4. Utilize Asset ManagementCycle Acquire Maintain Renew/ Dispose

  5. Asset Management Basics Is enterprise wide and not siloed. Applies to asset owners, managers, and those with delegated responsibility (maintainers, suppliers, contractors). Must balance cost, risk, and performance. Both physical and intangible assets. Both public and private entities. Is strategically aligned with the organization’s goals. 6

  6. You’re the Asset ManagerWhat are the questions you need to answer? • What do I own? • Where is it? • What condition is it in? • How much longer will it function? (remaining useful life) • What is the remaining economic value?

  7. Where do I start? • Take an inventory • Prioritize your assets - Prioritizing your assets will ensure that you allocate funds to the maintenance or renewal of your most important assets. • Develop an asset management plan - Planning for the maintenance or renewal of your assets. This includes planning the resources you will need each year to maintain the operation of your system. Develop a budget and calculate required reserves. • Implement your asset management plan • Review and revise your asset management plan

  8. How do I … • Develop or verify Asset Registry • Assess the condition of the asset • Determine remaining useful life • Determine lifecycle and renewal costs • Confirm operational requirements • Determine asset criticality (risk) • Optimize operations and maintenance • Forecast recapitalization costs • Develop a funding strategy • Build the Asset Management Plan

  9. Presentation Outline • Topic description • Problem statement and proposed solution • Brief literature review • Research • Questions and objectives • Thesis statement • Level of repair model description • Case study – National Security Cutter • Discussion and conclusion

  10. Topic • The U.S. Coast Guard is responsible to adequately align vessel maintenance requirements with available resources throughout a vessel‘s life cycle. • Unfortunately, existing estimates fail to prescribe the optimal balance of Coast Guard (internal employees) and non-Coast Guard (contracted) technicians for the cost efficient execution of maintenance.

  11. Solution: An iterative Level of Repair Analysis (LORA) integrated with Business Case Analysis (BCA) elements can measure and control maintenance costs by balancing repair resources. Practical application of the proposed solution: Properly execute a LORA and BCA to control maintenance costs & resources. Directs maintenance philosophy & resourcing.

  12. Objectives • Develop a LORA model influenced by Activity-Based Cost Management theory. • Develop procedures to execute these analyses during both acquisition and sustainment life cycle phases. • Perform an analysis of National Security Cutter propulsion engine maintenance resources to determine the optimal balance of resources required to reduce life cycle costs and sustain Coast Guard technician proficiency.

  13. Thesis Statement: An optimized balance of Coast Guard technicians and commercial resources is required to reduce vessel maintenance life cycle costs and improve Coast Guard workforce proficiency.

  14. The U.S. Coast Guard (USCG, 2014) defines Level of Repair Analysis as: “An analytical methodology used to determine where an item will be replaced, repaired, or discarded based on cost considerations, unit maintenance capabilities, and operational readiness requirements.”

  15. Two purposes of LORA (USCG, 2014): • To analyze maintenance support alternatives based on economic and noneconomic factors relating to the system. • To use the results of the analysis to assist in maintenance planning process which will achieve the most effective maintenance support structure.

  16. Department of Defense • Presents a LORA framework in MIL-HDBK-1390, 29 January 2015 • Two Defense Acquisition University courses • These resources provide information and guidance on the completion of LORA without serving as a policy to mandate LORA

  17. Benjamin Blanchard • Outlines a strategic framework for the execution of a LORA in sections of his textbooks: • System Engineering and Analysis • Logistics Engineering and Management • Aligns with Coast Guard and Department of Defense • Also reflects recommendations of AS-1390 (SAE, 2014) Dr. Lucas Marino, CMRP

  18. Elements of a Level of Repair Analysis • Non-economic analysis • Economic analysis • Sensitivity Analysis (e.g., 1-way sensitivity) • Decision Analysis • *Recommend risk analysis as a component of the decision analysis Dr. Lucas Marino, CMRP

  19. Methodology Noneconomic Analysis Philosophy, Training, Maintenance Data, Supply Chain, Contracting, Knowledge Resources Maintenance tasks provide detailed repair procedures Maintenance Philosophy provides current level decision MCPMH = Maintenance Cost Per Man Hour R1 = CG technicians R2 = Non-CG Technicians Economic Analysis MCPMH R1 ($) Comparative Column Chart (Max, Min, & Mean $ Per Resource/ Task) Maintenance Task (x axis) MCPMH R2 ($) Cost Scale (y axis) • Philosophy: • Integrated Logistics Support Plan • Cutter Maintenance Plan • Updates: • Training Resources • Maintenance Team Resources • Contracts Sensitivity & Risk Analyses Confirm Logistics Requirements Update Maintenance Philosophy Decision Analysis Dr. Lucas Marino, CMRP

  20. Assumptions - Coast Guard Maintenance Philosophy Dr. Lucas Marino, CMRP

  21. Assumptions: Coast Guard Labor Rates • CG technician labor rates are calculated using the CG’s Standard Personnel Cost (SPC) as a baseline. • SPC is unique to the military rank of a technician. • Each technician possesses a level of technical proficiency comparative to that of a non-Coast Guard technician. Dr. Lucas Marino, CMRP

  22. Non-economic Analysis • Informs initial support decisions and economic factors to determine the most cost-effective method to sustain a system throughout the life cycle. Asks about: • resource options • maintenance programming and philosophy • training needs • technical proficiency of staff • availability and worthiness of extant data • operating environment • supply chain Dr. Lucas Marino, CMRP

  23. NSC Maintenance Card Data (Part 1) • Maintenance type (preventive or corrective) • Title (e.g. Remove Cylinder Head) • Task data • Task hours per component • Number of technicians • Team labor hours (hrs per component / number of techs) • List of technicians • Level – E8, E7, E6, E5, E4, GS13 • Quantity – How many of each per task Dr. Lucas Marino, CMRP

  24. National Security Cutter Maintenance Card Data Dr. Lucas Marino, CMRP

  25. NSC Maintenance Card Data (Part 2) • Labor cost per hour (CG and Non-CG techs) • Total CG labor cost • Labor $ per hour • Total labor $ • Total Non-CG labor cost • Labor $ per hour • Total labor $ • Total Blend labor cost • Labor $ per hour • Total labor $ • Looks like… Dr. Lucas Marino, CMRP

  26. National Security Cutter Maintenance Card Data (cont.) Dr. Lucas Marino, CMRP

  27. NSC Economic Analysis Summary Labor rates for a one-time completion of all tasks • $21,997.09 Coast Guard team • $57,904.23 Non-Coast Guard team • $32,538.38 Blended team Sunk costs: special tools (acq), tech data (acq), and maintenance facilities Neutral costs: all supply chain costs for engine and associated components. Why? The OEM is a sole source provider! Dr. Lucas Marino, CMRP

  28. National Security Cutter Preventive Maintenance Labor Rates Dr. Lucas Marino, CMRP

  29. Decision and Risk Questions(Y-good, N-bad) • Is the cost of maintenance acceptable? Y/N • Are support elements in place to ensure success? Y/N • Items listed as Support/Training in Noneconomic Elements • Is the proposed maintenance appropriately funded? Y/N • SSL exists, project/program funding exists • Is the unit in acquisition? Y/N Dr. Lucas Marino, CMRP

  30. Decision and Risk Questions(continued) • Do non-CG resources have enough capacity? Y/N • Are external resources flexible/responsive enough? Y/N • Does the organization have the capability to complete the maintenance tasks? Y/N 9. Does the maintenance demand meet operational requirements? Y/N Dr. Lucas Marino, CMRP

  31. Dr. Lucas Marino, CMRP

  32. National Security Cutter Analysis Results (Acquisition) Dr. Lucas Marino, CMRP

  33. Discussion and Conclusion *A blend of both CG active duty and Non-CG technicians is the best solution to reduce risk, provide surge staffing, and maintain quality. • Recommend a team of (2) non-Coast Guard advanced technicians and (5) Coast Guard basic technicians to reduce risk, increase availability, • Limitations: dependence upon valid maintenance task data, limited organizational LORA restricted research, lack of industry guidance. Dr. Lucas Marino, CMRP

  34. Discussion and Conclusion Benefits to asset managers, M&R professionals! • A framework and standard forms for the completion of analysis • Provides activity-based cost management approach to the resourcing of maintenance programs, revealing potentially unseen relationships between maintenance tasks and resource costs. Dr. Lucas Marino, CMRP

  35. Thank you!Questions?

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