Improving life-cycle cost management in the US. Army: analysis of the U.S. Army and Commercial Businesses life-cycle cost management.

Abstract

The roles and responsibilities of the Army acquisition and logistics communities, as they pertain to the life-cycle management, are undergoing fundamental change. The early identification and total control of life-cycle cost, in particular operations and sustainment costs which comprises as much as 70-80% of a systems total life-cycle cost, is a high priority for the Army. The basis of this change is adoption of commercial best practices to support the Army's goal to organize. tram. equip, and manage multiple missions in the most cost effective manner. This thesis describes how the U.S. Army and four commercial businesses (FEDEX, Boeing Commercial Airplanes, Lockheed Martin, and a Communications Systems Company) manage life-cycle costs (LCC) for the equipment they use to manufacture products or to provide services. The research analyzes how the U.S. Army compares to these commercial businesses and how they are organized to perform the key functions of acquisition and sourcing, and operations and sustainment, to provide quality products or services to their customers while controlling total life-cycle costs of the capital equipment they use to provide their product or service. The thesis concludes with recommendations on how the U.S. Army can best organize and focus to better manage the total life-cycle costs of the equipment they purchase to complete their mission.