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Linking revenue with desired serviceability of IAF fighters

Aviation maintenance operations require planning solutions that support “conditional” repair or “as required” planning capabilities as well as multiple demand and supply streams to optimise inventory assets

Issue: 03-2018By Air Marshal Sukhchain Singh (Retd)Photo(s): By IAF

The issue of aircraft availability has been a problem for the Indian Air Force (IAF) for many years. However, it has come to prominence in recent years largely because of the intense pressures on the defence budget. The decreasing allocation in real terms for revenue expenditure, requires the utmost efficiency from the IAF to offset the dwindling numbers of operational squadrons and delays in the new aircraft inductions. From the perspective of the Ministry of Defence (MoD), while the demand for higher allocations is genuine, the IAF must be fully geared up to utilise the available resources in a time-bound manner. There is hardly any merit in asking for more resources while the present capacity to utilise the available resources, particularly those under the capital head, is constrained. The defence establishment must, therefore, look inward and find lasting solutions to procurement impediments.

In the regime of aviation, the complexity and high value of the equipment that is to be maintained, requires provisioning of spare parts. As aircraft availability is fundamental to air operations, low availability of spare parts will result in compromised operational capability and impose additional costs of expediting and failure recovery. Frequently, the required “time to repair” will be measured in hours rather than days - which will mean that spare parts inventories will have to be kept in several locations to minimise transportation time to the point of use, creating complex multi-echelon networks.

However, levels of spare parts availability has to be balanced by the need to keep inventory levels to a minimum. Sophisticated methods for determining Target Stocking Levels at each location, driven by desired levels of availability, cost constraints and by location is of course, a complex task. It is important to evaluate what the results will be in advance of putting the controlling inventory management configuration parameters into place. In some cases, the manufacturing life cycle may have finished before the service life cycle has even begun and planners may be faced with the need to calculate an “all time buy” quantity or to rely on repair or aftermarket parts distributors.

Aviation maintenance operations require planning solutions that support “conditional” repair or “as required” planning capabilities as well as multiple demand and supply streams to optimise inventory assets and throughput. Internal demand for Line Replaceable Units (LRUs), Shop Replaceable Units (SRUs), Sub-Shop Replaceable Units (SSRUs), components and consumables are dependent on ‘as required’ rates for a given system, which may vary by demand or customer environment.

The spares procurement in the IAF is based on the model of consumption pattern corrected by the forecast factor which depends on the projected utilisation of the war platform. The maximum potential of storage is defined by the stocks in hand plus those under contract and those indented. This potential cannot exceed five or three years holding depending on foreign or Indian vendors. This review of procurement is done annually and processed for contract through the delegated financial powers of the Air Officer-in-Charge Maintenance (AOM) at Air Headquarters or the MoD. If these reviews are not converted to contracts every year, it will adversely affect the sustainability of the fleet.

There is a serious contention on the spares so projected vis-a-vis the revenue budgetary allocations and one is forced to undertake some sort of prioritisation resulting in sub-optimal acceptance of the spares package which will affect the sustainability figures. Fleetwise revenue spending versus serviceability achieved on a year-on-year basis, should have been the yardstick to measure the efficacy of the procurement process. This has not been the model followed resulting in insurmountable unserviceability and nearly all the fleet of the IAF have been stuck at serviceability figures of about 60 per cent. This issue needs to be viewed with the spending versus outcomes in a modern IAF.

To meet the objectives of PBL, both government and Industry must agree on business practices that provide the greatest value for all parties

There are two models which need serious consideration by the IAF. These are, firstly changing the IAF provisioning system internally to make the sparing solution linked to cost of this solution with the achievable or desired serviceability of the war platform. Secondly, to look at the external vendors who can assure a desired serviceability of the platform by taking responsibility obviously at a cost on models based on Performance-Based Logistics (PBL). Both these are quantifiable and traceable models to assure sustainability, but, need deeper analysis internally to assess the needs for different fleets.


Equipment and supply chain managers are often required to estimate the parts they will need to sustain a system. Such systems are typically composed of major components namely structural elements, engines, electronics, communications, power, hydraulics, etc., which, in turn, are composed of a multitude of different parts. When failures occur, those components must be repaired or replaced with a spare part before the system can resume operation. Managers must walk a fine line between buying too few spare parts and having their systems sit idle or buying too many parts and wasting valuable resources.

Multi-Echelon Technique for Recoverable Item Control (METRIC) Inventory Optimisation is a set of algorithms that calculates supply requirements to support a desired availability target or service level across a network of repair locations. These targets are either called out by maintenance contracts or internally determined. METRIC can apply service level targets specified as aircraft availability fill rates, allowable backorders and their rates, etc. Fleet availability, the probability that an aircraft is airworthy at any point in time, is a common optimisation criterion. METRIC calculates the target stocking levels and fill rates required to achieve the desired fleet availability or part fill rate target. With METRIC, overall supply and repair costs are minimised.

This is a mathematical approach to determining the optimal spares mix for a system by directly relating investment in spare parts to system readiness. It provides the best way to retune inventory investments, minimising costs without sacrificing the mission or maximising system availability for a given budget constraint. The system approach to sizing spares inventories has been adopted, in varying degrees, by each of the US military services and has been of official policy of the Department ofr Defence since 1985. The Aircraft Sustainability Model followed in the US is an example of this approach.



The defence services face numerous challenges—data rights, obsolescence, frequent software upgrades, multiple configurations and many more. Airlines and governments the world over are improving their efficiency through better management of spare parts inventory, using a collection of practices that reduce the size and cost of spare parts inventory and shift more of the risk to outside parties. Operators are turning to outside providers of aftermarket services for material management programmes that promise to handle repair and maintenance of major components, including provision of spares with guarantees for parts availability. Traditionally and for the foreseeable future, the MoD and the IAF do prefer sustainment to be completed in-house or by local, indigenous industry. They look to the original equipment manufacturers to work with local industry in order to establish maintenance capabilities to quickly support the fleets incountry rather than relying on international sources that could delay availability for an aircraft due to complex and time-taking import and export procedures.

The goal of both acquisition and sustainment is to gain the most efficient and effective performance of the system for its entire life. In doing so, it is important to realise that acquisition and sustainment are not separate, but are simultaneous and integrative issues that require analysis and synthesis throughout the product life cycle.

PBL is the purchase of support as an integrated, affordable, performance package designed to optimise system readiness and meet performance goals for a weapon system through long-term support arrangements with clear lines of authority and responsibility. Application of PBL may be at the system, sub- system or major assembly level depending on the circumstances and appropriate business case analysis.

The essence of PBL is buying performance, instead of the traditional approach of buying individual parts or repair actions. PBL support strategies integrate responsibility for system support in one or more Product Support Integrators (PSI), that manage sources of support, public and private, in meeting the negotiated performance outcomes.

It is important for the private sector to understand the dynamics of different markets in order to better leverage the use of PBL

A major challenge for conversion to a PBL environment is to adopt business practices more common in commercial organisations. To meet the objectives of PBL, both government and industry must agree on business practices that provide the greatest value for all parties.


It is very important to have a meticulous process to deal with the entire supply chain in support of the war platform. PBL can be at sub-assemblies only or entire mission systems.It is therefore important that all mechanisms are well placed so the PSI can manage all the suppliers and parts as well as the logistic processes.

In this context, it is crucial to have an integrated IT infrastructure to support the PSI. The more complex a PBL is, the more relevant the IT infrastructure becomes. Companies such as SAP have developed cuttingedge solutions to successfully support the implementation of PBL in the aerospace and defence market. When a PSI chooses its IT infrastructure, it is important to consider the level of accountability that it will provide when it comes to on-time delivery, meantime between failure (MTBF), meantime between removal (MTBR), production lead time (PLT) and Inventory Turnover Rate (ITR). By having the right tools in place, the PSI will be able to share the results with the service and also have full visibility of what is necessary to achieve performance targets. The ASM model based on METRIC and similar models need to be tailored for the Indian environment which will be required for the PBL contractor.

In the past 15 years, several international defence companies have been repositioning themselves as service providers rather than pure equipment suppliers. Additionally, they have been involved more in operating defence capabilities, which has proved to be highly effective allowing the military to better understand the functionalities of weapon systems.

A first consideration is whether or not PBL support will have financial benefits for the contractor. Support services, especially performance based strategies, are increasingly becoming part of the value proposition of defence companies bidding for defence programmes. However, PBL is a long-term commitment that requires contractors to balance risks and reward through vigorous financial analysis. Secondly, as part of the bid to increase awareness of PBL in the MoD, contractors must clarify the results and expectations as also build a case for public-private cooperation.

Finally, it is important for the private sector to understand the dynamics of different markets in order to better leverage the use of PBL. Moving forward, the institutionalisation of Public Private Partnership should be encouraged in order to facilitate the understanding between the military and the manufacturers when it comes to service support to achieve performance. In order to be successful in implementing PBL, such benchmarking and improvement processes need to become routine for an organisation rather than ad-hoc actions.

Under the C-17 Globemaster III Sustainment Partnership with the US Air Force, Boeing is responsible for all C-17 sustainment activities. Boeing also partners with three US-based C-17 Air Logistics Centres. Boeing performs supply support management for more than 95 per cent of the C-17’s repairable parts. Exceeding contract requirements with a 92 percent issue effectiveness rate for assigned repairable items, PBL has been helping the C-17 achieve the highest readiness of any airlifter and has generated cost savings.

It is important to note that, although the fundamental concept of buying performance outcomes is common to each PBL arrangement, the strategy for any specific PBL programme must be tailored to the operational and support requirements of the end item. While similar in concept, the application of PBL for a tactical fighter aircraft may be very different from a PBL strategy for an Army ground combat system. There is no one-size-fits-all approach to PBL. Similarly, there is no template regarding sources of support in PBL strategies.