F-35 program: phase II of cost reduction initiatives announced

(To Lockheed Martin)
12/07/16

Today the US Department of Defense announced two coordinated initiatives with industry to reduce the production and maintenance costs of the F-35 Lightning II. The first initiative is a two-year extension of the “Blueprint for Affordability for Production,” the program announced in 2014, and the second is the creation of a similar concept to reduce the operating and maintenance costs of the F- weapon system. 35.

The initiatives are modeled on the model Better Buying Power of the US Government, aimed at encouraging defense companies and managers of acquisition programs in the United States Government to define new and innovative ways to reduce the cost of goods and services.

La Blueprint for Affordability for the F-35 production program represents a shared commitment between government and industry to lower recurring unit flyaway costs by incentivising production cost reduction initiatives, with the goal of achieving a cost of $ 85M (value current) per aircraft by 2019.

La Blueprint for Affordability is using an initial investment capital of $ 170 million provided by Lockheed Martin along with leading partners Northrop Grumman and BAE Systems for the fiscal years from 2014 to 2016.

At the end of April, the team had allocated $ 146 million of the 170 million dollars planned for 193 approved projects and other 75 still to be defined. These 193 projects are expected to save $ 1,15 million per aircraft in the LRIP 9 production phase and $ 1,7 million for the LRIP 10 aircraft, saving $ 227 million, and saving over the entire life cycle above $ 4 billion for the remaining phases of aircraft production.

Over the next two years, the industry will invest the remaining $ 24 million from the original program and add up to $ 170 million to continue cost-cutting initiatives.

The second initiative starts from this first phase of cost reduction. In what was called Sustainment Cost Reduction Initiative - Maintenance Cost Reduction Initiative, the three companies will invest up to $ 250 million by targeting the 2018 - 2022 fiscal years to reduce 10% maintenance costs. This initiative provides for savings of at least $ 1 billion in the five years.

"The agreement Blueprint for Affordability is a successful initiative and an important step forward in our approach to the F-35 program, ”commented the Honorable Frank Kendall, Undersecretary for Acquisitions, Technology and Logistics. “The additional two-year investment by the industry to further reduce manufacturing costs will help us get to the intended Block Buy. The maintenance initiative is also an accelerator that will help us reach the goal of a 30% global reduction in operating and support costs (O&S) ”.

Under the initial agreement, the industry will recover the investment made and the commissions once the accumulated savings have been verified and below certain thresholds.

The initiatives of the Blueprint for Affordability they are of different types. Some are initiatives that aim to increase the efficiency of production plants, also through the improvement of the instrumentation and the modification of the assembly instructions. For example, through the automation of the most demanding craft work processes, with the use of injection robots to model thicker coatings or the use of hydraulic systems for the thermoforming of transparent protective shells instead of clamps fixed by hand.

In addition to cost savings flyaway applicants generated by initiatives to make production cheaper, there will be other benefits. A series of projects aimed at reducing the cost of individual parts will help reduce the cost of spare parts.

(photo: Lockheed Martin)