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How to avoid life cycle costs with COTS

Posted by Gretchen Alper on Wed, Apr 3, 2013

Commercial Off-the-Shelf (COTS) products are appealing solutions for global security applications in order to have lower product costs, a shorter time to market and use of the latest technologies, but life cycle costs must also be considered.

With continued reductions in budgets over the last few years, there has been less funding for high-tech development projects, and a further emphasis on maintaining existing platforms.  Still, advanced capabilities are required to take advantage of new technologies and provide further connectivity.  Latest camera technology is one example where upgrades are required to extend to higher quality surveillance video. Sophisticated vision systems are essential to increase the safety of personnel as well as the protection of innocent people.  With the increased use of unmanned vehicles and the desire to extend detection distances, there is a need to improve legacy systems but at low costs.

A critical factor against using COTS products is obsolescence control. For example, the commercial supplier could change, or even worse, discontinue the COTS product without notice because of developments in their original industry. The long-term supply chain, maintenance and availability are just as important to global security customers as the product itself. 

A recent article in Military Embedded Systems looked into just how much insufficient obsolescence management can cost:  http://mil-embedded.com/articles/obsolete-cycle-costing-you/

From the article:

In the cases where the system’s life cycle was underestimated, obsolescence management solutions then fall to engineering teams, who are working to comply under current legislation, struggling under budget constraints, lacking access to original IP, and fighting sliding repair and service timelines. The Defense Microelectronics Activity (DMEA) currently estimates that a single incident of obsolescence can run up to $2.4 million and 64 weeks to resolve. One way to estimate reactive cost impacts on an embedded board is by counting ASICs. Each obsolete ASIC could cost up to $1.5 million per component, not including recertification fees, and costs of downtime and repair.

 

The easiest way to avoid this is to work with a specialized COTS supplier who can understand the specific concerns of the global security market and can guarantee long-term supply.  This means not just maintaining form, fit, and function for a period, but freezing the product configuration and specification for production as long as required.

It is of course challenging to estimate how long the product will be required and electronic components frequently go obsolete.   A supplier can manage this through large last time buys/safety stock management.  There are also other steps a supplier can take to support long-term programs to keep their costs down.

Here is an example from our own experience.

When we were approached more than 11 years ago to provide a camera for a specific identification system for a government program, we knew that product consistency was just as important as performance. 

Very soon after we went into volume production, an insignificant component went obsolete.  We purchased a large safety stock of the component to prevent any issues in the short term.  We integrated the new component into a few prototypes to allow the system designer to perform tests and analysis.  More than 1 year was allowed for this process and it was verified that the small component change presented no issues.

We made the transition to the camera with the changed component, and we continued without any complications.  

When another component went obsolete several years later, we decided it was necessary to plan an end of life for the camera.  We purchased significant quantities of the obsolete component and proper storage facilities for them.  We gave more than two years notification of end of life to all of our customers of the camera and its derivatives, and successfully discontinued production at the end of 2010. 

For this particular customer, this was not enough time to meet commitments to their customers.  Because of the safety stock volume and planning and communication with the customer, we were able to continue production for another 3 years beyond end of life.  This allowed time for the next generation camera with significant improvements in resolution and functionality to align with their plans for overall system improvements.

Through close cooperation with our customer and suppliers, we were able to manage obsolescence, minimize product changes and maintain a product for more than 10 years.

Adimec-COTS-obsolescence

 

When the supplier is committed to supporting long term programs as are typical with global security, then component obsolescence can be managed in a cost-effective way enabling an efficient use of COTS products.

Topics: Applications, Vision System Optimization

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