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ROI on PHM…Is it Realistic?

by DSI Staff | Published 04/20/2009| IVHM / IPHM

Many in industry are beginning to admit that calculating Return on Investment (ROI) for PHM (Prognostics Health Management) is not as straight forward as some may suggest. Parts are omitted. Particularly, the part about ROI analyses that consider the full integrated system design. This is obviously a result of the fact that we don’t all agree what is included in costing PHM. First, we need to determine what we mean by PHM – is it limited to the prognostic studies or does it include the full integrated systems analysis, design and support of all system components? Are the ROI studies focused on the complete integrated system, or merely an abstraction of pieces here and there as chosen from within the full integrated design? Do these studies include the many factors involved in the interrelationships and effects of all contributing subsystems, the design and production process, and the operation and support environment?

If the functional interrelationships and full Life Cycle Cost factors are not understood, ROI calculations are missing over 90% of the major cost drivers.

This may seem to be in conflict with many academia studies that claim prognostics centered design and health management reduces operational and support costs. In reality, investing in systems prognostics, based on today’s technologies and experience, result in higher acquisition, and operational and support cost. This is not inferring that the prognostics studies are no value, but rather that the studies are not based on specific components of support that are interdependent with other designs and environmental elements unknown or disjointed from the data used in the studies.


$1 Trillion Total cost of F-35 Fighter Program will equal the combined outlays for fighting the Korean and Vietnam wars.

There is a need for focused prognostics based on physics of failure, Condition Based Maintenance (CBM). The traditional “failure trend” prognostics is of minimal value in attempting to determine remaining useful life of a specific operating function. Even with the application of CBM for management of critical failure modes, it has become clear that a shotgun type selection of prognostics analysis results in project risk with high cost, and excessive maintenance down time from false prognosis. To bring out a point to this discussion, the following is based on an article on needed acquisition reform published entitled “Weapons Acquisition, Spending Too Much, Getting Too Little”, in IEEE Spectrum in November 2008:

“Behind the deterioration (of the acquisition process) is a convergence of factors, say analysts both inside and outside the Defense Department. New military systems are more technologically complex than ever before, and they rely increasingly on unproven technologies.

Defense programs are now “so massive and so fanciful we don’t know how to get there,” says Katherine Schinasi, the GAO’s managing director of acquisitions and sourcing management. And engineers, scientists, and technicians skilled enough to design, build and debug such complex systems are scarce.”

“Too often, also, politics trumps technology and even common sense. DOD managers and service brass aren’t the only people who have a stake in which military systems get developed and which don’t: congressmen, defense contractors, lobbyists, and economic development officials are all aggressive players in the weapons-acquisition process, all pushing for their pet projects. The result is a proliferation of (academia type technologies and unrealistic requirements) that the Pentagon cannot fully fund and that are nearly impossible to cancel. Politics also leads contractors to overpromise on what they can deliver and this leads DOD staffers to turn a blind eye when those promises aren’t met.”

The solution to effective and low cost systems health management is the Integrated Systems Diagnostics Design (ISDD) Process©. ISDD is very effective in optimizing the balance of PHM with Diagnostics for Health Management on new Integrated Systems designs. The ISDD Process is also very effective on Legacy systems that are undergoing updates for technology infusion, obsolescence, or correction of field problems. ISDD uses proven technologies that reduce Total Ownership Cost and improves Safety, Mission Success, and Operational Availability. An important outcome of the ISDD Process is a recommendation for selective CBM based on failure mode criticality. This process needs to be implemented using a proven Integrated Diagnostics tool that supports a Systems Engineering design. The eXpress Diagnostics Engineering tool is the core of the ISDD Process. As such, eXpress is the diagnostics design and assessment tool of choice throughout industry and is being used in the US, Europe and Asia.

Any investment into Prognostics in an attempt to address PHM requirements needs assurance that it will indeed be visible and not inadvertently obscured by other interrelated subsystems that can interfere with the sensor interpretation at the system level at any time as a result of the nature of an integrated system design and/or environment. This is never obvious or available when the Prognostics studies for PHM requirements are being performed outside of the ISDD Process. The ISDD Process makes known all such inadequacies within and inclusive of the integrated system at any and all levels of the integrated systems design. This inclusive characteristic of the ISDD Process properly adjusts the ROI studies so that they can be appropriately performed and not so subjective or biased by merely ignoring the interrelatedness of many systems components not possible to consider in other methodologies.

The use of eXpress in the ISDD Process establishes all of the component and design interrelationships that call out the utility of sensor(s) and Built in Test at the integrated system level.

Integrated systems sensor integrity is also an integrated design analysis prerequisite for health management. This is where eXpress excels as a design influence and knowledge resource tool that allows rapid and accurate embedded diagnostic Test Executive and Reasoner development. The Diagnostic Markup Language (DiagML) interface between eXpress and third party applications enables the efficient reuse of design knowledge that was developed in eXpress. Using this integrated systems diagnostics information from eXpress with STAGE allows the integrated systems designs to benefit from influencing the optimum diagnosable/prognosable design to begin with; thus, synchronizing the repair/replace/remediate/reconfigure/downgrade mission decision-making into the integrated system and beyond to the Systems of Systems level. This makes the association to simulation calculations more relevant, accountable and paramount for evolving the Maintenance Planning capabilities with the requirements of the integrated systems design.

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