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5.7 Maximizing Functional Flexibility and Minimum
customers, imposed the same concerns on the growing automobile safety subcon-tracting industry. Specialist automotive safety firms were established and Autoliv soon became the most prominent one. That transfer of safety thinking and safety technology was largely a matter of people with competence moving between jobs.
We know that engineers with experience from safety work at Saab went to automo-bile industry where they could apply their experience about how the products should be designed to be safer. Saab Autmobile “borrowed” engineers from Saab’s safety group on a routine basis.
Sensors for airbags are developed by Autoliv and Svensk Tryckpressgjutning is one of the subcontractors. The airbag is very demanding on the quality of the energetic material (the “gunpowder”) and of the small sensors that blow up the airbag reliably and in no time.15 This pyrotechnical technology was developed early in conjunction with the missile development at Bofors in Karlskoga. Bofors Bepab was established as a separate company and acquired in 1995 by a group of engineers at the company. Bofors Explosives (as the company was later called) developed this pyrotechnical technology further for Autoliv. This activity is now integrated with the Karlskoga based part of the French, Finnish, and Swedish-owned company Eurenco that develops both civilian applications for Autoliv and military applications for the missiles of Saab Bofors Dynamics.
Bofors also developed a mechanical sensor for a side-impact protection device for cars together with Autoliv (Fransson 1996:365). Combitech AB, a Saab consult-ing subsidiary (see Case 23), has integrated the safety-critical systems on the Volvo S80 model.
A specialized competence bloc in signal analysis, image recognition, and microwave communication has evolved around the weapons development of Saab and Saab Bofors Dynamics in Linköping. Sense and avoid technology at sea and between aircraft to avoid collision is a Saab specialty that has been derived from the Gripen systems project. It is no coincidence that Autoliv has located its automotive elec-tronics research (at Autoliv Elecelec-tronics) in Linköping. Collision alert and avoidance systems are developed there on the basis of military technology. Autoliv develops heat-sensitive cameras together with Flir Systems (originally a military technology that was developed within Swedish AGA). This automotive alert system has already been installed on the new BMW 7 series.
5.7 Maximizing Functional Flexibility and Minimum Life
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services it, and charges per hour of use. The mode of sale influences the design of the equipment. The first two characteristics are typical of military aircraft design and especially so at the procurement of the JAS 39 Gripen. The third option is more typical of civilian aircraft and engines, but really is an extension of the previous two, since the military customer has been intimately involved in the design of the product.
5.7.1 Product Design and Functional Flexibility
Achieving future functional flexibility and low maintenance and service costs requires a holistic view and a user (customer) friendly approach at the very early design stages, i.e., a holistic view of all subsystems and critical components that will play a role in determining the functionality of the complete product in use and make sure that subsystems can be reengineered at later stages of the life of the product. Such foresight will always have to be based on cooperation among a large number of design teams and the managers of the teams. Simulation has become an increasingly important technique to achieve those functionalities. How to organize that interplay is an art in itself, and particularly so when very complex products are developed. All this taken together goes under the term systems architecture, which is the core competence of a systems integrator.
The success of the JAS 39 Gripen aircraft design both in terms of flexibility and functionalities and in terms of lifetime cost effectiveness can to a large extent be explained by the close cooperation between the customer, the Swedish Government Procurement Agency (FMV), the Swedish Air Force (the user) and Saab. From the beginning, the customer demanded that the aircraft should be easy to maneuver to allow the pilot more time and attention for his main combat tasks so that in-flight shifts between the three roles of fighter, attack, and surveillance be possible, and that life cycle costs should be low both in terms of maintenance and upgrading. Hence, simple and low-cost solutions in construction, implementation, use, and mainte-nance were necessary. To achieve that, a modularized design that could be upgraded in batches was devised. Modern digital information technology not only made the flexible functionality of the aircraft in service possible but also made it possible to simulate every subsystem with a view to the whole and therefore compose an
“optimal” total JAS 39 Gripen system. Lifetime cost minimization was supported by an incentive contract.
5.7.2 Maintenance-Free Products
Operational costs have gone up faster with every new generation of fighter aircraft than have actual development and manufacturing costs. Maintenance and servicing have been a significant and increasing part of total lifetime costs of the aircraft. Reductions in the needs to maintain and service the aircraft, or any product, therefore offer large
potential cost savings and these effects begin at the expensive and complicated systems end with aircraft and aircraft engines. The key to success is to be found in the early product design and engineering stages. JAS 39 Gripen was a pioneer prod-uct in this respect because of the strict standards on both reliability of service, on costs and on availability imposed by the military customer FMV. The Swedish con-script defense and the road bases of the Swedish Air Force, hence, were critical fac-tors behind the development of an aircraft with simple operational design, low maintenance needs and rapid turn around, and hence, low life cycle costs. The very high availability of the Gripen aircraft has dramatically reduced the number of air-craft needed for a given service capacity in the air, and costs.
The higher import content of the Gripen aircraft (See Technical Supplement S1) compared to earlier Swedish military aircraft procurement, and to current practice abroad is interesting. It may look as if the practice to demand a high domestic con-tent should be negative for Swedish industry, and perhaps so in the short run. But it also means that the Gripen development process has pioneered the introduction of a distributed production technology that now, two decades later, is becoming the main technology of engineering industry. It means that the component systems that have gone into the Gripen aircraft have been filtered in globally competitive markets.
State of the art technology is therefore embodied also in the details of the aircraft.
Above all, however, and here the Gripen aircraft compares favorably with military aircraft developed in economies where the political government has demanded a high local content such as France, it reduces the rate of obsolescence of the entire aircraft system. Components and subsystems supplied by globally competitive subcontractors are defined by standard interfaces and are constantly upgraded technologically and improved. They can be resupplied over the lifetime of the air-craft in the market, while the airair-craft built around taylor designed components and subsystems cannot easily be upgraded and will have to rely on costly storage or remanufacturing of old spare parts. Obsolescence of the entire aircraft is faster.
Earlier procedures had been to service the product at preset intervals whether needed or not, meaning both more service than needed and more down time.
Modern aircraft and aircraft engines use what is called current maintained diagnos-tics based on sensors and electronics, a technology that allows the user to determine precisely where and when service is needed. In addition, service needs can be reduced by designing the aircraft or the aircraft engine such that fewer components are needed. One instance of this is to modularize the design such that subsystems modules are used. Rather than needing specialist personnel to repair malfunction-ing parts, which is normally impossible in the field, the entire module can be replaced and without the need for specialist and highly skilled personnel. Another benefit from designing the entire aircraft around modules is that a large number of the modules are standard and available in the world market.16 One reason for the low maintenance cost of the Gripen is its design as a multirole fighter aircraft from the start. Hence, the Swedish Air Force only has to operate and service one version of the aircraft, instead of three (fighter, attack, and reconnaissance). This, in turn, could only be achieved through the intimate cooperation between the customer FMV and Saab in the design process, and at times the use of incentive contracts
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(see Sect. 8.4), which also meant that expensive redesign could be avoided.
The Swedish Air Force also claims that with the Gripen aircraft the “battle against increasing operational costs” has been won (Militaer Teknikk, 4–5/2006:2).
The flexible design of the Gripen aircraft and its almost “maintenance-free”
construction therefore was a challenge for the engineers. The in-flight swing-role capacity and the fact that the aircraft should be capable of landing and starting from regular roads and be serviced by unskilled labor in the field constitute a technical capability that has many civilian applications, notably when it comes to complex systems products and the integration of mechanical devices, electronics and software engineering. This maintenance technology has already diffused to other industries, for instance automobiles.
The flexibility features of the Gripen aircraft have also been illustrated with the conversion of the aircraft for export to South Africa in 1995 and with the Next Generation of the Gripen presented in April 2008.
5.7.3 Real Options Pricing of Flexibility
Flexibility can be achieved at a cost, and those costs can be computed and com-pared with the value of the extra flexibility in product functionalities achieved. Real options pricing is a fairly new field in the pricing of future options of increased functional flexibility that derives more or less directly from the theory of financial options (Trigeorgis 1998), a calculation technique that obviously has many business applications, and notably so when it comes to the pricing of abstract qualities asso-ciated with expensive multidimensional systems products with a long life, such as aircraft. I have already discussed the notion of innovative pricing. Building future flexibility into the design of a product normally commands an extra cost so you may think in terms of offering today, and charging for an option to change the functionalities of the product in the future. I am not only talking about a formula to use mechanically. I am talking about a way of structuring what we know about future needs and about achieving that flexibility, and assessing the risks involved for cus-tomer and developer to reach an agreement on how much flexibility in functional design is worth aiming for.
5.7.4 Lifetime Product Support
To sell a product with an expected life of up to half a century, the producer has to demonstrate technical and financial sustainability of the same duration. Spare parts, technical support, and engineering knowledge to facilitate upgrading have to be credibly guaranteed for the entire period of use, and credibility is very much depen-dent on the private profitability of the producer. This is no easy demand on the producer. For a military aircraft producer, it in practice requires that the government
of its home country has bought the aircraft in sufficient numbers and declared that it is prepared to operate the aircraft over its expected service life.
Product lifetime support is normally the responsibility of the producer and the cost for maintaining that support has to be calculated and factored into the price of the product. Obsolescence often makes it difficult/impossible to have spare parts avail-able. For products being used for half a century or more, there is no good solution except regular rebuilding of the product (the “aircraft”) and (as mentioned) the exten-sive use of “off-the-shelf” components and subsystems. This problem is not unique to aircraft even though its length of life makes the problem extreme. A luxury car brand manufacturer has to honor product lifetime support to be able to charge the price of a brand name. Developers and manufacturers of complex computer and tele-com systems will be expected to supply a smooth transition from one version to another of its system. One way of dealing with this problem has again been to develop products with a modular architecture. As long as the product architecture is the same, spare parts become spare modules that can be used on all versions of the product.
5.7.5 Product Life Management
The responsibility for lifelong product support is an ownership problem. The customer who plans to operate the product over its expected lifetime will want not only to maximize flexibility in product design but also to minimize lifetime operating costs. The producer who sells the equipment may not be as concerned about those two things. To achieve the desired lifetime functionalities the customer, and notably the military customer, gets intimately involved in the product design. Renting the equipment or charging for its use (buying the services of the equipment, “charging for power by the hour”) simplifies this decision for the customer and it is becoming increasingly common in civilian markets; for instance, civilian aircraft and aircraft engines, trucks, and automobiles (rentals). It then becomes a cost-minimizing problem for the producer to decide on the durability of the equipment, when to change parts or the entire product and/or when to modernize it. The product will be designed accordingly, and it is to be expected that the technical designs will differ depending on who will own the equipment.
How to achieve all this is a practical engineering task, even though the art of integrated production (See Table 8) has added a degree of analytical method to it.