Weapons’ Life Cycle Cost: The Key of Success in Logistics

THEODOROS ZIKOS1, NIKOLAOS V. KARADIMAS2, ALEXANDROS TSIGKAS3, KYRIAKI

SIDIROPOULOU4

Abstract: - Optimal cost management in terms of logistics systems and the utilization of the science of

"Logistics", as it has been shaped with modern technology, lead the exported cost elements to the most important

factor in decision making. One of the tools that contribute to the decision-making process is the cost of life cycle

of weapon systems. This tool can be extremely useful as it contains information, such as codified materials, and

spare parts according to NATO Codification System, which assists and facilitates the work of the logisticians in

supporting army’s weapon systems. Furthermore, the degree of dependence of a material or a spare part (which

make up a weapon system) by its OEM (Original Equipment Manufacturer) and the significant role of it, could

consist of an extra key in changing all the life cycle support of the weapon system and the decisions related to it.

Key-Words: Life Cycle Costs, Decision Making, Weapon System.

Received: July 17, 2021. Revised: February 22, 2022. Accepted: March 27, 2022. Published: April 19, 2022.

1 Introduction

A huge development in software was observed

during the previous decades (mainly after 1970) in

the stages of production control and process

management, as a consequence of the great

development in the field of information technology.

The fact that industries have been looking for

additional or alternative ways in their effort to reduce

lost sales and meet supply and demand with less

inventory, led to the adoption of concepts,

forecasting and cost. The goal was to achieve the

concept of "optimal" by delivering the combination

of maximum result and minimum cost.

It is thus concluded that the development and use of

new cost tools, such as Life Cycle Cost (LCC), in

decision-making regarding the evaluation of defense

materials based on the specific standards of the army,

is absolutely necessary. Decision-makers in

companies and headquarters in the army, having this

tool (LCC) in their quiver, will be now able to make

more accurate and right decisions on options

presented to them. These options can include

evaluation of future expenditure, comparison among

various solutions, management of existing budgets,

guidance for system acquisition and cost reduction

opportunities.

As it is common knowledge, that all decisions

include the factor of risk, sometimes smaller and

other times larger, this tool is coming to reduce it and

alleviate their fear.

Especially, when the decision-makers know that

what they decide is going to drive their chain of

command, to change production lines to a desired

more beneficial one, or for the army the timing to

replace a weapon system with another one. One of

the factors that affect their decision and is introduced

here, is the degree of dependency of a weapon system

by the manufacturers. So, it is interesting to

understand how all these risks, LCC, and degree of

dependency are incorporated in a way, in order to

take the right decision.

2 Problem Formulation

The main aim of the current study is to present and

propose a methodology for the evaluation of a

weapon system - equipment. Its purpose is through

the utilization of key process variables such as the

degree of dependency of spare parts towards the

manufacturers through the life cycle costs, to

1Deputy Director of Ordnance Directorate of Hellenic Army General Staff, Hellas (GR)

2Ass. Professor, Div. of Mathematics and Engineering Science, Dept. of Military Science, Hellenic Army

Academy, Hellas (GR)

3Ret. Professor, Alexandros Tsigkas, Div. of Production and Management Engineering, Democritus

University of Thrace, Hellas (GR)

4Staff Officer of Logistics Support Directorate of Hellenic Army General Staff, Hellas (GR)

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contribute to the most efficient benchmarking of

defense weapons systems - units.

2.1 Definitions

At this point, it is advisable for some definitions of

the defense materials used in the armed forces to be

given, which will assist the reader to drive to a more

complete understanding of the presentation but also

to draw a conclusion as well [1].

2.1.1 Weapon System

It is called any complete combination of Main

Materials (when it consists of more than one Main

Materials), systems and subsystems of military

specifications, whose main mission is a defense

activity or to support this activity.

The weapon system can consist of more than one

Main Materials, either as interdependent parts or as

cooperating autonomous systems.

2.1.2 Main Material

It is called any combination of finished systems,

components and other materials into a complete

system, which is ready to carry out the mission for

whom it was built.

2.1.3 Configuration

The set of functional and physical characteristics of a

weapon system or main material is defined as it has

been determined by the technical specification or its

documentation and has been integrated into it [2].

2.1.4 Tree Configuration

Tree configuration is a way to represent graphically

the hierarchy of a weapon system structure. It is

defined as the physical representation of the weapon

system in the form of a tree.

Fig. 1 Tree Structure

Initially, the levels at which the basic materials

compose and fully describe the weapon system

(assemblies - subassemblies) in tree form are

determined. Synonymous terms in the literature are

the following: modular design, structural

decomposition, and tree representation [3].

So, in Fig. 1 if the weapon system is a tank, then

as system 01 is considered the tank itself. The main

materials are the cannon 02 and the radio transmitter

03. The subsystems are the vessel 0107 and the turret

0108 of the tank. Respectively the other parts until

the smallest piece namely a spare part, show of what

it is composed.

Fig. 2 Tree Levels Analysis

The countries’ armed forces usually have six

levels in their tree configuration form and are

structured as seen in Fig. 2. The lowest level is the

"F», and the other levels are shaped, having based on

it. It is important to be mentioned that there is no

obligation for all the weapon systems to have six

levels in their tree configuration. For example, the

gun G3A3 has only two levels: Level A which is

consisted of barrel-slide-stock-magazine and Level B

with the spares of them.

2.2 Decisions-Taking

The concept of the decision is timeless and has been

interpreted from time to time in various ways. Since

ancient times it was well known already in the words

of Solon «Νουν ηγεμόνα ποιου» (let your mind reign

in your decisions), while today it can be found in

every business activity, where actually the element of

prudence required to characterize the decision.

According to Emory and Niland, the decision-

making process is a necessary step in choosing a

solution among alternatives [4].

The same conclusion is reached by Eilon who was

studying the definitions that have been given from

WEAPON SYSTEM

MAIN MATERIAL

SYSTEM 01

(SYSTEM OF MAIN

MATERIAL)

SUB SYSTEM 0107

(SUB SYSTEM OF

SYSTEM 01)

ASSEMPLY 010701

(ASSEMPLY OF

SUBSYSTEM 0107)

ASSEMPLY 010701

(ASSEMPLY OF

SUBSYSTEM 0107)

ASSEMPLY 0107XX

(ASSEMPLY OF

SUBSYSTEM 0107)

SUB SYSTEM 0108

(SUB SYSTEM OF

SYSTEM 01)

SUB SYSTEM 01XX

(SUB SYSTEM OF

SYSTEM 01)

SYSTEM 02

(SYSTEM OF MAIN

MATERIAL

SYSTEM XX

(SYSTEM OF MAIN

MATERIAL

Basic coded structure and structure of a tree system of

Main System or Main Material

Code

TREE LEVEL

A’

Β΄

C΄

D΄

Ε΄

F΄

System

Sub System

Assembly

Sub Assembly

Component

Spare

ΧΧ

000

Α΄ Level

ΧΧ

000

Β΄ Level

ΧΧ

000

C΄ Level

ΧΧ

000

D΄ Level

ΧΧ

000

Ε΄ Level

ΧΧ

ΧΧΧ

F΄ Level

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time to time in the term "decision" and found out that

the decision-maker must have many solutions in

order to be able to compare them and choose-have

namely more options after evaluating the impact of

their alternatives [5].

According to Roy and Bouyssou, the "impact of

alternatives" could be defined as any possible

outcome, that may be linked to the objectives of the

decision or the value system of one involved in the

decision process [6]. The latter has the ability to

process, support or differentiate his choices. So, each

of his choices influences his decision and the impact

of this choice can be a key point in making the next

decision.

Thus, in the case of multi-complex decisions, such

as the choice of a weapon system, which by the nature

of their object are complex, require according to

Simon, the decision-maker or the executive manager

to act within the limits of bounded rationality [7].

According to his theory, the ability of the human

brain to create and solve complex problems is small,

compared to the number of problems that need to be

solved, in order to achieve - or at least to approach to

achieve - the objective rationality in the empirical

world [8]. So, complex decisions which require in-

depth analysis and mental processing, oblige the

executive managers to gather information to achieve

the optimal solution.

The basic methodology for decision support is the

Analytical Hierarchy Process (AHP). Its widespread

use in the decision-making process for the

procurement of defense systems is highlighted by a

relevant study [9]. Moreover, in our days is more

imperative than ever, due to events that take place

such as the reduction of defense spending, the need

for optimal distribution of invested funds, the need

for enhanced transparency and efficiency and a

complex legislative framework.

Decisions involve logically a risk, which must be

managed to minimize as much as possible the

probability of failure. At this point, information

systems provide great assistance in achieving the

goal since they reduce the risk in decision making

with their accuracy and immediate use.

2.3 Risk management

Risk management is an important process for any

business, which helps to increase the chances of

success of its plans. This is achieved by protecting

the decision makers against wrong investment

decisions, by avoiding predictable risks, and by

minimizing losses from unpredictable events or

conditions.

The operation of a decision support system (like

any system) is based on its input. This information in

turn should be reliable and cover the full range of

information required. Therefore, reliability and range

are key features of such a system.

As far as the army is concerned it is the key factor

when HAGS (Hellenic Army General Staff) is going

to choose a weapon system to be supplied, its

maintenance time and finally concludes in choosing

its replacement time when it comes. A key tool in

making this decision is the cost throughout the life

cycle of the weapon system.

2.4 Weapon System Life Cycle Cost

Weapon Life Cycle is defined as the evolution of the

weapon system over time from the decision on the

necessity of its existence, until its withdrawal [10].

The idea of managing and costing the life cycle of

a weapon system dates back to 1939 when the United

States issued the first government directive on

armaments life cycle costing.

From that time until today, the life cycle cost of a

weapons system is a key parameter that must be taken

into account and approached through a detailed study

in order to implement a defense procurement

program.

The decision-makers of the countries have

realized the importance of the process of evaluating

the LCC of the systems to be procured. Indicatively,

in France, the General Directorate of Armaments

(GDA) is responsible for this process, which applies

the "integrated" concerning the older "serial" model

in order to achieve optimal results. In Germany, the

relevant body is the Military Technology and

Procurement Agency (BWB), which is responsible

for the definition, design, development, testing and

testing, production and supply of defense systems

[11].

In the case of the United Kingdom, the "Downey

Cycle" system was originally implemented by the

Ministry of Defense, because it did not work in terms

of time. It was replaced in 1998 and the principle of

smart procurement was introduced, with particular

emphasis on risk assessment in the various stages of

implementation of the process [12].

The survey found that countries have different

models for calculating life cycle costs. A calculation

model includes by definition mathematical equations

(which in turn include relations, constants and

variables) with a specific structure that must be

followed to solve the problem.

In the case of LCC evaluation standards, two main

categories of models can be distinguished:

• Prefabricated standards ("ready-made"

commercial applications used directly to

model a problem such as PRICE, CATLOC,

ACES, CRYSTAL BALL, etc.).

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• Those standards that are made-up by LCC

analysts (custom made - in house).

All models follow the basic stages of the LCC

which are the following, in terms of their succession

in time: Conception as an idea, development,

production, operation - utilization, support (support)

and retirement while the direct total life cycle cost of

the weapon system is given by equation (1).

TOC= C1 + C2 + C3 + C4 + C5 + C6 (1)

Where TOC and C1 through C6 are respectively:

Total Cost = Concept + Development + Production +

(Operation - Utilization) + Support + Retirement

As shown in Fig. 3, the use and support follow a

parallel path and extend until the withdrawal of the

weapon system. The other stages are not or partially

overlapped giving more time in decision making

process.

Fig. 3. LCC Stages

LCC is the sum of the direct and indirect

variable costs as referred to the relation (2) below.

Life Cycle Cost = Direct Cost + Indirect

Variable Cost

(2)

The term «direct» refers to the fact that it is

directly related to the existence and operational

function of the system (as well as the functions and

equipment that support it, e.g., spare parts and

maintenance work). The term «indirect» refers to

those costs which are not exclusively related to the

particular system, but to other similar ones as well

(e.g., a tank simulator involving a series of tanks

models and not the particular one which is going to

be procured or retire of the army).

The approach that says: “I buy a weapon system

based on the cost of acquisition”, can "lead" the

decision in a totally irrational direction. Thus, a

weapon system for instance, which has been chosen

by the army among others because of its low purchase

cost, may will turn to be very costly based on its life

cycle cost in comparison to others weapon systems.

This would consist of a very wrong choice and the

financial department of the army may will be not able

to support it in the future. The abovementioned

approach approves that the hidden costs which

accompany a weapon system throughout its life cycle

must be taken into account. In any case, the fact that

the purchase cost is only the "tip of the iceberg"

should, not be overlooked as shown in Fig.4 (as seen

hereunder).

As one observes in the iceberg, the purchase cost

of the weapons system is visible on the side that is

visible by once, while many other costs that are the

majority, accompany it and are not clearly visible.

These one in most cases are not taken into account in

the initial stage of purchase, resulting in wrong

decisions.

Fig. 4 Tip of the Iceberg

In this case, the point is that the total cost must be

taken into account, as this will not only have a

consequence on the specific financial burden, but

also the "mistake" will be passed on to other areas,

minimizing or depriving simultaneously the

possibility the committed funds or resources to be

used in different ways. The following Fig. 5 shows

an indicative breakdown of the cost of each stage in

relation to the total [13].

Fig. 5 Breakdown Cost

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As it seems in the Fig. 5, the largest share in the

life cycle cost of a weapon system has the stage of

operation and support at a rate of 60-80%.

The weapon system is now in operation, with the

aim of this operation to be efficient under every

necessary conditions. This stage lasts until the

operation of the weapon system is completely

stopped. That means that this stage is of highest

significance for a decision to be taken. Namely the

weapon system is going to continue its maintenance

and remain to the army or to be replaced with another.

It becomes even more important when a country such

as Northern Macedonia does not develop a new

system due to weakness and lack of know-how but

acquires it in a condition “ready for use” (so there are

no stages of research, development and production).

In addition, such a process can also prevent cases

of corruption and embezzlement of national

resources and effectively help to respond to the

conditions of an unstable geopolitical environment

[14].

2.5 Degree of Dependency

The degree of dependency defines the degree to

which a system depends on its availability from

external factors. Exogenous factors can be

considered the supply of spare parts to support the

weapon system, its maintenance requirements,

special operating conditions and support, etc. The

degree of dependence (BE) is determined by the

relation (3):

ΒΕ = 100 * (1 / Κ) (3)

where K is the number of manufacturers producing

the spare part.

For example, if there are 15 manufacturers for the

spare part then the degree of dependence of the

weapon system on this spare part is:

ΒΕ = (1:15)*100 = 6,6%. (4)

Conversely, if there is only one supplier then the

degree of dependence on this material is:

ΒΕ = (1:1)*100 = 100% (5)

Using the degree of dependence for the entire

weapon system one can define different levels for it,

depending on the degree of maintenance of the

weapon system. Maintenance is the function of

sustaining materiel in an operational status, restoring

it to a serviceable condition, or updating and

upgrading its functional utility through modification.

Modern, mechanized warfare demands an effective

maintenance system [15]. The correlation of the

degree of dependence and maintenance is as follows:

• Degree of dependence Level 1 for the 1st - 2nd

Maintenance Level which includes work

performed by the specially trained technicians

of the Unit and includes limited repairs,

adjustments, replacement of quorums and

small units, inspections, tests and inspections.

• Degree of dependence of Level 2 for the 3rd -

4th Maintenance Level which includes works

that require special technological equipment,

permanent installations, tools and means, as

well as specialized personnel for the repair of

large complexes.

• Degree of dependence of the Level 3 for the

5th Maintenance Level which includes works

that are precise and are performed in

permanent facilities of the army factories and

repair facilities in country and abroad as well

(for weapons systems where the army has no

know-how).

At this point, it is important to be understood how

the spares for each level of maintenance can be

located. Having in mind the tree structure we

discussed in previous paragraphs, each spare which

belongs to this structure is accompanied by

maintenance identification codes, named

SM&Rcodes.

Source Maintenance and Recoverability (SM&R)

Codes identify the source of spares and the levels of

maintenance authorized to maintain, repair, overhaul,

or dispose of all equipment. These codes are assigned

to each support item based on the logistic support

planned for the weapon system (end item) and its

components. Thus, the establishment of uniform

SMR codes is an essential step toward improving

overall capabilities for more effective interservice

and integrated support [16].

The uniform SMR codes format is composed of

four parts consisting of a two-position source code, a

two-position maintenance code, a one position

recoverability code, and a one position Service option

code, as seen in figure 6:

Fig. 6 SM&R Codes Analysis

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The Source codes (two positions) indicate the

source for acquiring the item for replacement

purposes (for instance, procured and stocked,

manufactured or assembled).

The Maintenance codes (two positions), for which

this study is interested in, entered in the third and

fourth positions of the uniform code format are as

seen below:

• Third position. The maintenance code entered

in the third position, will indicate the level of

maintenance and/or maintenance activity

authorized to remove or replace and use the

item. The decision to code the item for removal

and replacement will require that all the

resources necessary to install and assure

proper operation after installation of a

replacement item (for example, pre-

installation inspection, testing, and post-

installation checkout) are provided.

• Fourth position. The maintenance code entered

in the fourth position, indicates whether the

item is to be repaired and identifies the LOM

and/or maintenance activity with the

authority/capability to perform a complete

repair action.

• Recoverability code (one position). Code

entered in the fifth position of the uniform

format, indicates the desired disposition of the

support item.

• Reserved for Service option code (one

position). Code entered in the sixth position of

the uniform format, is used to convey specific

information to the logistic community and to

the operating forces.

So, the CODE PAGGD6 in Fig x means that the

spare is a procured and stocked item for anticipated

or known usage. This item is normally considered for

replenishment. In addition, it is removed, replaced, or

used at both afloat and ashore intermediate activities

and complete repair of support item. In this way, the

item belongs to the second level degree of

dependency.

Going back to the correlation between level of

dependency and level of maintenance, we can easily

note that for each level of degree of dependency it is

possible to proceed with material criticality studies in

order to draw conclusions and make decisions about

the degree of dependence of a weapon system in

relation to its manufacturers.

Also, a significant "gap" is presented by the

process of support and the use of the required

materials and manpower support of a system, with

the impossibility of timely and valid information of

the relevant stocks and the respective cost center.

The significant role of this "gap" is even greater if

one takes into consideration that the support process

applies almost the entire life cycle of the respective

CS. This "gap" is not the object of the present.

2.6 Codification

It is possible that the degree of dependence on the

spare parts which make it up and described above,

can be greatly reduced by using the NATO material

codification system.

The NCS has been the appropriate/most suitable

method for the identification of all managed stock

items since its first development soon after WWII.

By creating an effective relationship between the

military and its suppliers, and ensuring proper

codification, the NCS has become a critical enabler

for international and multinational military

organisations to manage stock effectively and

maintain the armed force at a high level [17].

The NATO Codification System is the official

programme under which the equipment components

and parts of the military supply systems, are

uniformly named, described, classified, and assigned

a NATO Stock Number.

Codification is the procedure that examines one

item while it compares it with other similar items and

gives one and unique number, named NATO stock

number, to the items which they have exactly the

same characteristics. So, the basic principle for

NATO codification system is one stock number for

one item.

Fig.7 NATO Codification System Principle

The NATO stock number is a thirteen number

which is divided in three parts. The first one is the

classification of the item. The classification of

materials is done by dividing them into basic

categories called groups and identified by a two-digit

number. The structure of the system allows the use of

99 groups of which currently about 78 are in use.

Then within each Group, the materials are divided

into Classes. These are distinguished by two more

digits which together with the two-digit Group Code,

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form the four-digit NATO Classification Code

(NSC). Then there are two numbers that indicate the

country that encodes the material for the first time as

for example the 12 is for France, the 01 corresponds

to USA, the 14 to Germany etc. Finally, there is a

seven-digit number which indicates the serial number

of the material that the country has coded to date. All

the above are summarized in Fig.8 [18].

Fig. 8 NATO Stock Number Analysis

These stock numbers and item descriptions are

published in supply catalogues and repair parts lists

and are used as the key identifiers within logistic

information systems. The NCS is a common supply

language which operates effectively in a multilingual

environment. It facilitates interoperability, curbs

duplication (both within nations and between

nations), permits interchange ability, and maximises

logistics support in the most economical manner

possible [19]. However, the primary goal of the

NATO Codification System is to ensure that military

personnel deployed in an operational scenario, can be

assured of getting the right items to accomplish their

mission as successfully described below in Fig.9.

Fig. 9 Need for a Common Language.

It is important to be mentioned that the NCS is so

useful and widespread that is followed by other non-

NATO nations. In these nations are included non-

NATO friendly countries as traditionally is Russia.

Moreover, the NCS is open to all manufacturers who

want to do business with NATO, offering them

unique opportunity to codify their products and be

available to all countries who have access to the

system belonging or not, to NATO /even if they are a

NATO member or not.

3 Problem Solution

At this point an approach on how all of the above are

linked to making a decision, is described.

As it was highlighted before, the decision whether

a weapon system can be replaced by another one or

to be kept in the country's army fleet, this carries

great risk, as the cost to be borne by the country, is

high. Therefore, the decision should have as little risk

as possible.

Knowledge plays an important role in decision

making and the more information are collected and

processed, then the better decisions one can make. At

this point, the information systems offer a great

assistance in receiving, classifying and organizing

the data in order to provide the maximum result in the

field of their utilization. An important aid in this

direction is the information extracted from the "tool"

that supplies information and is called life cycle cost.

This tool collects and provides information on all

stages of a weapon system. What is the most

important in the life cycle of the weapon system as

mentioned above, is the stage of use and support

since it determines its future (maintenance in the

weapon systems of the army or its replacement).

Speaking of support now, the most important part

concerns the spare part that the system supports. Any

information on this is valuable such as its cost,

lifetime, level of maintenance, etc.

The specific information as well as many others is

provided by the NATO codification system of spare

parts. Codification touches virtually every area of the

supply chain: in practice it addresses the challenge to

correctly identify material and exchange complex

technical data regardless of language barriers. The

technological support is a key enabler to Codification

success [20]. Manufacturers of defense equipment

seek to become subscribers of the NATO codification

system as they increase the chances of expanding

their business activities with the ultimate goal of

profiting their business. On the other hand, member

and connected to NATO no members countries,

require arms manufacturers to have NATO-coded

materials when signing defense procurement

contracts.

All materials - spare parts of a weapon system are

coded according to NATO, so the information

provided is exploitable if it is extracted from the

appropriate sources and channeled to the "tool" of the

life cycle cost. To date, it has been established that all

the information provided, focuses on the spare

material itself and is neglected by the manufacturer.

In the present study, the manufacturer is called

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upon to play a key role in decision making. As

mentioned above, the NATO stock number is a

unique number for each material - spare part. This

means that if more than one manufacturer makes the

same spare material then they use the same stock

number. Then it is very easy to derive the degree of

dependency of each spare part on its manufacturers,

as presented in a previous section.

If the degree of dependency is being included in

the life cycle of a weapon system in its usage -

maintenance, then important information can be

collected about its future. A typical example is the

one where a weapon system is in use for over of 40

years in an army and the manufacturers have stopped

to support it. The reason is that the production lines

for obsolete spare parts used by probably one user

turn to be unprofitable for the operation of their

businesses. In this way, it is easily understood that if

the manufacturer of a specific spare part is the only

one, then the weapon system leads to devaluation. In

addition, the cost of this spare part varies, depending

on the time the weapon system was manufactured and

always is increasing and often in an exponential

form.

In addition, the decision-makers are able by using

this information to locate any substitutes or

interchangeable spare parts for different materials. A

substitute of a material or a spare part is defined as

the one which can be replaced by another one for a

specific function under user’s responsibility and

without the approval of the manufacturer. An

interchangeable spare part is defined as the situation

where two or more materials can physically and

functionally replace each other in all possible

applications and have the approval of the

manufacturer [21]. In this way, the decision maker

has the opportunity to use each time alternatives,

thereby reducing the degree of dependence.

The same thing is happening when a weapon

system needs to be procured and the choice must be

made, among other weapons. Again, using the cost of

its life cycle, the degree of dependence of the spare

parts in relation to their manufacturers is chosen and

the decision of choice is among equivalent options,

which they are based on the offers with the lowest

possible degree of dependence.

Approaching a weapon system through its life

cycle cost, this serves specific needs, such as:

• The perception of the "big picture", namely, to

be perceived each time in terms of total cost of

a weapon system.

• The forecasting and timely commitment of the

required credits each time.

• Ensuring the business continuity and service of

strategic planning.

• The ability to control in terms of exploring the

cost-benefit ratio each time as well as in terms

of considering the existing policy in order to

support decisions to reduce or enhance

corresponding costs. A key advantage of the

degree of dependency through the life cycle

cost approach is that it can be applied to all

weapon systems, regardless of the level of

complexity and type of use - application.

Fig. 10 Vehicle MS 240GD

This analysis presupposes the full utilization of

the already existing information related to the

materials - spare parts - assemblies - subassemblies

of a weapon system. So, for our study the vehicle

MS240 will be used as an example. This vehicle as it

is shown in Fig. 10, is consisted by 4.297 spare parts-

major items and the army depot has repair

capabilities up to 5th Level of maintenance.

According to the manufacturer the life cycle of

this vehicle is 30 years, and he decided the 2010 to

stop the production of this model and by 2020 to

support it. Currently there are few countries they

have MS290 to their fleet more than 40 years, so the

lifetime of this vehicle is over. So, the logisticians

confront the question about the future of their

national army vehicle. According to LCC they must

propose to their hierarchy to directly replace it. The

replacement of the national army vehicle is also a

political decision which in time of recession, that’s

difficult to be accepted by any government because

of the high cost. Having incorporated the degree of

dependency to LCC they can see:

• The 3rd Level of dependency is for all the

485spares– major items which according to

SMR codes belong to this level. Using the BE,

the logisticians realized that only 9 of them

after 2020 will be not supported anymore by

any supplier.

• The 2nd Level of dependency is for 1217 spares

– major items and using the BE only 27without

support.

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• The rest 2.595 spares belong to all levels and

are common spares. Using the BE there is no

problem in their support as there are not only a

lot of manufacturers but many substitutes and

interchangeable spares as well (average BE

20%).

Now the logisticians can come with a proposal to

hierarchy as to maintain the national vehicle to the

fleet instead to replace it, under the condition that a

production line has to be established for the 36 spares

(9 from the 3rd Level plus 27 from the 2nd Level) in

country.

This is an easy example because of the number of

spares, the repair capabilities (full repair capability

by the army) and the nature-mission of the vehicle

(without guns, canons, ammunitions etc.) and the

commonality as a vehicle to a civilian edition of it. It

was chosen only to indicate the necessity of the

degree of dependency through LCC. Going to more

complicated weapon systems, the BE is becoming a

key factor in decisions making. At this point, it is

essential to be highlighted that there are no possible

limitations in order to use the abovementioned

methodology and way of thinking. The key to success

is to have the necessary know-how.

4 Conclusion

The research questions of this study concerned the

elements of the life cycle cost analysis that should be

taken into account in the case of weapons systems

and what are the primary variables for shaping these

costs. It was also investigated whether these variables

as the degree of dependency are controllable and if

so, what are the factors that influence their change by

determining the decision that can be taken in order

the reliability, support and maintenance of a weapon

system to be achieved in the best way.

The major concern today for both, manufacturers

and army side, is to be organized in a manner which

make them able to deliver not only quantitative and

of high-quality services but cost effective as well.

This means, from a technical point of view, the

improvement of the network that decisions are taken

in the chain of command, both internally in the

companies or bases and externally between units and

their higher headquarters.

In the light of the above, it becomes clear that the

modern executive officer of a country's armed forces

is called upon to carry out the desired result in

decision-making. He must understand that he has

finite possibilities to act effectively; he must realize

the finite, depending on the ability to analyze the

complex experiential reality, his mental abilities. The

search for alternatives that will lead to a decision

must be taken into consideration as the help of

technologies which offer information processed like

LCC does.

The usefulness of this process stems first

from the need to streamline defense spending, let

alone in a period of economic downturn or

geopolitical change such as the current one. The basic

advantage of this approach is that can be applied to

all weapon systems, irrelevant to complexity level of

them and the way they are used in the field. This

happens because every weapon system has its own

life cycle and every life cycle encompasses specific

stages (concept -development –production-

operation/utilization, support, retirement stage)

associated with a cost. Thus, if we follow thoroughly

the standard procedure in calculating the LCC of a

weapon system, by adding all the costs generated by

each stage and analyzing previously some basic

parameters like risk, unpredictable conditions, BE,

etc.), then we realize easily that this approach can be

applied to all weapon systems.

So, this is of great assistance and beneficial to

decisions makers giving them the possibility to

follow the right path which is driving to the problems

solution that every time appeared.

Finally, the BE through LCC could be used by the

decision makers as a driving factor to the

development of a country’s economy. The

establishment of new production lines for spare parts

or subsystems, which cannot be supported by the

weapon systems manufacturers, can bring added

value in country (jobs creation, innovation etc.).

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Volume 19, 2022

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DOI: 10.37394/23207.2022.19.91

Theodoros Zikos, Nikolaos V. Karadimas,

Alexandros Tsigkas, Kyriaki Sidiropoulou

E-ISSN: 2224-2899

1045

Volume 19, 2022