2021-11-17-科尔尼-Should-Cost_Review_to_Improve_Affordability_4页_363kb

Should-Cost Review Summary

Definition and Purpose

Should-Cost Review (SCR) is a systematic and pragmatic method used in the aerospace and defense sector to improve affordability by reducing costs without diminishing supplier profitability. It addresses the U.S. Department of Defense's (DoD) need to cut expenses while maintaining program viability in an era of limited budgets.

Key Benefits

• SCR can reduce total system costs by 5%–15% and subsystem costs by up to 40% when implemented effectively.
• It provides enhanced cost transparency by analyzing cost drivers, granular rates, and developing a detailed fact base for better decision-making.
• SCR goes beyond traditional historical cost estimates to focus on future cost prediction and reduction opportunities.

Characteristics of Successful SCR

SCR requires specific traits to ensure success:

• Challenge the status quo: Involve aggressive cost management initiatives and question existing practices.
• Perform rigorous analysis: Gain in-depth understanding of root cost drivers in areas like supply chain, manufacturing, and program management.
• Establish the right incentives: Align incentives for both the government and suppliers to encourage collaboration and cost savings.
• Track performance: Monitor progress against targets with measurable metrics to ensure implementation and accountability.
• Use a total-systems perspective: Integrate multi-functional teams to develop actionable plans that support affordability without cutting scope or capabilities.

International Appeal

SCR is seen as a valuable tool that harmonizes best practices from defense and private sectors, offering benefits in cost reduction and transparency without eroding supplier profits. It is not a one-size-fits-all approach, but rather requires customization to fit specific program needs.

This summary is based on expert analysis highlighting SCR's role in enhancing affordability and efficiency for defense programs.