Calculating Cost Per Day: A Game-Changing Efficiency Metric for Defense Sustainment

The Department of Defense (DoD) has long utilized various metrics to assess the performance and readiness of defense systems, such as operational availability (Ao), non-mission capable supply (NMCS), and mission capability rate. While these metrics gauge performance, they lack focus on efficiency, particularly regarding cost efficiency. In response, the DoD released Instruction 3110.05 on April 24, 2024, which introduces Material Availability (Am) and Operational Availability (Ao) as primary sustainment health metrics to assess effectiveness alongside Cost Per Day of Availability (C/DA) as an efficiency metric, specifically for the Primary Mission Asset Inventory (PMAI). This white paper aims to clarify the purpose and calculation of CPD, its practical implementation via the Opus Suite, and the broader implications for the defense sector.

1. Purpose and Relevance of Cost Per Day of Availability

• Instructional Goals: The DoD's directive under Instruction 3110.05 outlines five primary goals, emphasizing how Cost Per Day of Availability supports decision-makers in measuring the effectiveness (through availability metrics) and efficiency (through Cost Per Day of Availability) of sustainment efforts.
• Modern Defense Relevance: Integrating Cost Per Day of Availability within DoD guidance reflects its importance in budgeting and strategic planning. By providing a standardized measure of cost efficiency across defense assets, C/DA benefits both the DoD and its industry partners.

2. Defining and Calculating Cost Per Day of Availability (C/DA)

• Cost Per Day Equation: C/DA is calculated by dividing the Total Maintenance Cost by the Days of Availability. This equation highlights the cost per available day for each asset, enabling more accurate budgeting and sustainment planning.
• Fundamental Components: Total Asset Inventory (TAI): This represents all assets in active missions, including those designated for training, backup, and war reserve.?Primary Mission Asset Inventory (PMAI): These are assigned to operational missions.?Time Frames: This defines the availability period for the asset in?days, allowing flexibility across different asset types.
• Sample Calculation: An aircraft fleet with 20 assets at 90% operational availability incurs a Cost Per Day of $230.33, calculated over a quarter year (using projected maintenance costs and availability days).

3. Operational Implementation Using Opus Suite

Opus Suite Overview: Opus Suite is an advanced analytics platform tailored to optimize defense sustainment solutions. It calculates and tracks the Cost Per Day of Availability (C/DA) through integrated modules.

1. OPUS10: This software optimizes logistics support by configuring maintenance strategies to achieve desired Ao and Am levels. The software can also model costs related to Ao and Am targets, creating a robust basis for calculating Cost Per Day of Availability (C/DA).
2. SIMLOX: Simulates operational scenarios to validate Ao over time, ensuring sustainment solutions meet mission requirements and improve availability over specific time frames.
3. CATLOC: Manages and captures detailed maintenance costs, facilitating accurate Cost Per Day of Availability (C/DA) calculations by aligning costs with asset availability metrics.

4. Forecasting Challenges and Considerations

• Ambiguities in Definitions: Defining “Day” and PMAI: The DoD Instruction lacks precise definitions for these terms, which impacts how Cost Per Day of Availability (C/DA) is calculated for different fleet types, such as aircraft and ground vehicles.
• Cost Components: Unaccounted Costs: Transportation and storage are not always accounted for, yet they directly impact Cost Per Day of Availability (C/DA) by affecting availability. Identifying which cost components to include remains a challenge.
• Forecasting and Early Acquisition: Opus Suite enables organizations to forecast Cost Per Day of Availability (C/DA) in both best-case and worst-case scenarios, aiding early acquisition processes and highlighting projected sustainment requirements. This predictive capacity ensures cost-efficient asset management and planning.

5. Implications for the Defense Industry

• Contractual Impact: Cost Per Day of Availability (C/DA) is anticipated to become a key performance indicator (KPI) in defense contracts, influencing OEM agreements and sustainment partnerships. This shift will require industry partners to meet DoD data requirements, particularly maintenance costs and availability metrics.
• Long-Term Impact on Sustainment Planning: Adopting the Cost Per Day of Availability (C/DA) standard in new defense programs suggests that existing sustainment strategies may also require adjustment to meet efficiency benchmarks, promoting cost-effective solutions across DoD assets.

6. Key Takeaways and Actionable Steps

• Final Insights: Cost Per Day of Availability (C/DA) offers a comprehensive efficiency metric that enhances asset sustainment assessment. It provides valuable insights for cost-effective management of defense assets and supports mission readiness.
• Recommendations: Adopting Opus Suite for CPD: Organizations already using Opus Suite for Ao calculations can easily incorporate Cost Per Day of Availability (C/DA) metrics by leveraging CATLOC and SIMLOX functionalities.
• Stakeholder Engagement: Defense stakeholders should engage with the DoD to clarify Cost Per Day of Availability (C/DA)-related definitions, especially regarding time frames and PMAI, ensuring consistent interpretation and application of the metric.

Calculating Am and Ao with Opus Suite

• OPUS10 and SIMLOX: OPUS10 provides maintenance cost and Ao/Am projections across a given time frame, while Simlox offers more granular time-based availability data.
• Modeling Both TAI and PMAI: For OPUS10 users calculating both Am and Ao within a single model, TAI and PMAI populations should be modeled as distinct system sets, even for the same variants.

Calculating C/DA

• Data Requirements: Maintenance Costs: The result table contains OPUS10’s recurring costs (CN).
• Days of Availability: Derived from Ao and the reporting time frame (e.g., multiply the time frame in days by the Ao percentage).

Clarifications Needed

1. Cost Categories Alignment: This section provides additional guidance on identifying which OPUS10 cost categories correspond with maintenance costs defined by DoDI 3110.05.
2. Definition of Available Day: A standardized definition of “available day " is required, affecting how Cost Per Day of Availability (C/DA) is calculated across different mission types and operating hours.

Summary

Opus Suite enables efficient modeling of the three superordinate metrics established by DoDI 3110.05. While Ao and Am calculations are straightforward, C/DA requires additional post-processing, but its key parameters can still be extracted easily. This combination of availability and efficiency metrics offers a comprehensive framework to optimize defense sustainment at a strategic level.

References

DoD Instruction 3110.05, Sustainment Health Metrics for Materiel Availability DoDI 3110.05