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Affordability Aspects in the Development of Defence Equipment: Case Studies of Concept Generation in the Defence Industry
KTH, School of Industrial Engineering and Management (ITM), Machine Design (Dept.), Integrated Product Development.
KTH, School of Industrial Engineering and Management (ITM), Machine Design (Dept.), Machine Design (Div.). KTH, School of Industrial Engineering and Management (ITM), Machine Design (Dept.), Integrated Product Development.ORCID iD: 0000-0001-8790-3859
KTH, School of Industrial Engineering and Management (ITM), Machine Design (Dept.), Integrated Product Development. KTH, School of Industrial Engineering and Management (ITM), Machine Design (Dept.), Product Innovation Technology.ORCID iD: 0000-0002-6024-7908
2020 (English)In: Defence and Peace Economics, ISSN 1024-2694, E-ISSN 1476-8267Article in journal (Refereed) Published
Abstract [en]

Cost escalation for many complex defence equipment is arguably not sustainable. Customer driven requirements have led to an exponential increase in costs by pushing frontiers of technology to support primarily incremental improvements of traditional equipment concepts. Accordingly, affordability has become a more discussed subject in defence acquisition. This paper addresses the process of generating complex defence equipment concepts. The purpose is to explore how affordability is managed in that process and to identify possible leads to how an unsustainable cost escalation for this type of equipment can be curbed. This is done by studying two cases of concept generation of future combat air equipment systems from a company process perspective. This applied micro perspective on cost escalation showed that none of the concepts generated in these two cases were assessed to curb the cost escalation. Further, the innovation model for the generated concepts, with only one notable exception, was incremental. Nevertheless, the empirical observations from these two cases offer leads on how to potentially foster a more innovative and affordability-oriented concept generation process for future defence equipment, as well as indicating avenues for future research.

Place, publisher, year, edition, pages
Routledge , 2020.
Keywords [en]
Affordability, concept development, defence equipment, innovation
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
URN: urn:nbn:se:kth:diva-274294DOI: 10.1080/10242694.2020.1733896ISI: 000517374000001Scopus ID: 2-s2.0-85080986186OAI: oai:DiVA.org:kth-274294DiVA, id: diva2:1452505
Note

QC 20200706

Available from: 2020-07-06 Created: 2020-07-06 Last updated: 2024-01-10Bibliographically approved
In thesis
1. Exploring affordability in concept generation for complex defence products
Open this publication in new window or tab >>Exploring affordability in concept generation for complex defence products
2022 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

National defence budgets face pressure from intergenerational escalating costs for complex defence products, such as fighter aircraft and submarines. These escalating costs originate from ever-increasing performance requirements due to the competitive nature of warfare. In combat, only winning is good enough. Therefore, the products’ performance is considered crucial for gaining an edge over an opponent. 

As the continuous development of ever-costlier complex defence products is not sustainable, it is high time for a path change towards affordability, meaning less costly products without any compromises in terms of operational requirements. However, the fact that this cost escalation has long been recognised as unsustainable indicates that a path change towards affordability will not be easy to achieve. Such a path change will likely require radical changes in product concepts – even though costs might be reduced in other ways, product concepts are believed to have the greatest potential. 

In accordance with this assumption, this thesis suggest that the phenomenon of continuous generation of ever-costlier complex defence concepts is ultimately sealed in the front end of innovation, where opportunities are identified and product concepts are defined. Accordingly, this thesis aims to explore how firms and customers can influence activities in the front end of innovation in order to successfully manage the affordability of complex defence products. 

This aim is approached through phenomenon-driven research performed in a set of four concatenated studies, represented by five papers. By letting successive studies be informed by preceding studies, new knowledge and theory are added to this under-researched topic. Empirically, several factors and aspects influencing the front end of innovation are identified as potential barriers to or enablers of path changes towards affordability. In addition, different measures that companies and customers can adopt to support such path changes are proposed. 

The thesis contributes to extant theory by providing a definition of affordability adapted to complex defence products, and by contrasting affordability with established concepts and methods aimed at making products less costly. Furthermore, benefits and deficiencies in the industry’s handling of concept generation for complex defence products are highlighted from an affordability perspective, and the influence of specific characteristics on path changes towards affordability in relation to complex defence equipment is described and discussed. Finally, conditions supporting affordability related to opportunities, knowledge and motivations are described, and the benefits of providing those generating complex capability-oriented concepts with cost-related information are demonstrated.

In addition to these contributions to theory, this thesis has several implications for the practice of companies and governmental customers. It highlights measures that these two sets of actors can take to shape conditions and, thereby, influence key activities in the front end of innovation to generate complex defence-product concepts that meet affordability criteria. These suggested measures constitute an embryo of an explicit approach to affordability management. 

Abstract [sv]

Nationella försvarsbudgetar är under press från de kontinuerliga kostnadsökningar som varje ny produktgeneration av komplex försvarsmateriel medför, t.ex. stridsflygplan och ubåtar. Dessa kostnadsökningar kommer av ständigt ökade prestandakrav vilka grundar sig i krigets natur som innebär att endast vinna är gott nog, och på grund av att prestandan på materielen anses ha en avgörande betydelse för att nå ett övertag över en fiende.

Denna kostnadsutveckling för komplex försvarsmateriel är uppenbart inte hållbar i längden vilket innebär att det är hög tid att byta till ett utvecklingsspår som leder mot ”affordability”, det vill säga produkter som medför lägre kostnader utan att för den delen kompromissa operativa krav. Eftersom kostnadsutvecklingen ändå har fortsatt trots att den ansetts vara ohållbar sedan lång tid tillbaka, så indikerar det att en kursändring mot ”affordability” inte sker helt enkelt. Det antas därför att en kursändring mot ”affordability” kräver radikala förändringar på produktkonceptnivå, eftersom det är produktkoncepten som anses medge den största potentialen för kostnadsreduktioner, även om kostnader till del även rimligen skulle kunna reduceras på andra sätt.

I enlighet med detta antagande föreslås det att fenomenet att allt dyrare generationer komplex försvarsmateriel utvecklas slutligen avgörs i ”front end of innovation”, där möjligheter identifieras och produktkoncept definieras. Av den anledningen är syftet med den här avhandlingen att undersöka hur företag och kunder kan påverka aktiviteterna i ”front end of innovation” avseende komplex försvarsmateriel, så att dessa aktiviteter på ett framgångsrikt omhändertar ”affordability”.

Detta syfte eftersträvades att uppnås genom en fenomendriven forskning som genomfördes med hjälp av fyra sammanlänkade studier, resulterande i fem artiklar. Genom strategin att låta efterföljande studier inriktas av föregående studier har ny kunskap och teori successivt kunnat adderas till detta sedan tidigare underutforskade område. Ur ett empiriskt underlag har ett antal faktorer och aspekter som påverkar ”front end of innovation” kunnat identifieras att utgöra hinder eller stöd för kursändringar mot ”affordability”. Dessutom har det föreslagits olika åtgärder som företag och kunder kan vidta för att stödja ”affordability”.

Avhandlingen bidrar till teoribildning genom en definition av ”affordability” som är anpassad för komplex försvarsmateriel, och genom att kontrastera ”affordability” mot etablerade koncept och metoder som på olika sätt syftar till att reducera produkters kostnader. Dessutom presenteras, från ett ”affordability” perspektiv, positiva och negativa aspekter avseende hur försvarsindustrin genomför konceptgenerering av komplex försvarsmateriel idag, samt hur specifik karaktäristik för komplex försvarsmateriel påverkar sannolikheten för kursändringar mot ”affordability”. Slutligen, beskrivs olika förhållanden, kopplade till möjligheter, kunskap och motivation, som föreslås stödja ”affordability”, samt betydelsen av att de som generar förmågeorienterade koncept erhåller kostnadsrelaterad information.

Utöver dessa bidrag till teorin så föreslås även hur företag och statliga kunder kan vidta olika åtgärder för att skapa förutsättningar för nyckelprocesserna i ”front end of innovation” att generera komplexa försvarsprodukter som möter kriterierna för ”affordability”. Dessa föreslagna åtgärder utgör därmed ett embryo till ett explicit tillvägagångssätt avseende ”affordability” management.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2022
Series
TRITA-ITM-AVL ; 2022:17
Keywords
Affordability, complex product systems, concept generation, CoPS, defence, front end of innovation, innovation management, product development, tournament goods
National Category
Other Mechanical Engineering
Research subject
Machine Design
Identifiers
urn:nbn:se:kth:diva-312130 (URN)978-91-8040-264-4 (ISBN)
Public defence
2022-06-03, E3 / https://kth-se.zoom.us/j/63746305538, Osquars backe 14, Stockholm, 10:00 (English)
Opponent
Supervisors
Available from: 2022-05-13 Created: 2022-05-12 Last updated: 2022-06-25Bibliographically approved

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Publisher's full textScopushttps://www.tandfonline.com/doi/full/10.1080/10242694.2020.1733896

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Amann, DanielKihlander, IngridMagnusson, Mats

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