Lockheed Martin employee working on a product.

Total Cost of Ownership


Objective

Make our products more affordable by improving quality, efficiency and performance, as well as increasing resiliency and providing services to extend their useful lives.

Management

Affordability discussions often center on design, engineering, production and material costs. Those elements are important, but they typically represent less than a third of total life-cycle costs. According to the U.S. Government Accountability Office, operation and maintenance comprise on average more than 70 percent of an owner’s costs over the product life-cycle. The majority of these costs can be attributed to sustainment activities.

Lockheed Martin’s Business Areas, Sustainment Council, Corporate Engineering, Logistics & Sustainment, Emerging Technologies Collaboration and Innovation (ETCI) Team and Digital Transformation Program are working to develop innovative technologies that address Sustainment earlier in a product’s life-cycle. The focus is on employing sustainment design practices and new technologies during the concept development phase to improve product reliability, availability, maintainability and life-cycle cost. Ultimately, these efforts make Lockheed Martin products and services mission ready for the customer and at a lower cost.

Our experts are exploring the intersection of Sustainment and digital transformation to understand how to better leverage technology to achieve our goals. For example, we are developing virtual reality tools to help model the systems of our products and services, and leveraging augmented reality and remote assistance to provide support to our customers from afar. We are also exploring additive manufacturing as a means to simplify supply chains, minimize the footprint from the transportation of our products and reduce waste in the manufacturing process.

2020 SMP Goals

Add criteria to fully identify cost drivers early in product design cycle within each Business Area’s proposal planning and proposal review processes.

Achievement

Success: We successfully integrated design-to-cost into proposal planning. It has become a standard element on key captures and programs.

Achieve >$700M in cumulative corporate cost and supply chain efficiencies.

Achievement

Success: We have exceeded this goal by achieving a total $1.08 billion in cumulative realized cost and supply chain efficiencies since inception.

Generate $1 billion of life-cycle cost reductions from manufactured products related to the use of resources and impacts on human health and the environment.

Achievement

Success: We exceeded this goal with $1.35 billion in life-cycle cost reductions through the end of 2020.

Total Cost of Ownership
Sikorsky X2 Technology

Lockheed Martin is rising to meet the needs of the U.S. Army’s high-speed requirements for its Future Vertical Lift helicopters—which will replace the Sikorsky Black Hawks currently used—by deploying Sikorsky helicopters with X2 technology in the competition. Our X2 technology not only enables operation at high speeds, but also at low altitudes with supervised autonomy—on-board algorithms and software that assist the pilot with flying the aircraft under these conditions. This also helps avoid detection. Core to these requirements are speed and the ability to execute the full mission within a high threat environment, high survivability and helicopter maintainability and sustainment. Inspired by our proactive maintenance technology in vehicles, our X2 aircrafts also use sensor technology to self-monitor and predict future maintenance requirements. By integrating self-monitoring functions, we are fully leveraging digital transformation and model-based design and maintenance to reduce operating and maintenance costs for our customers by more than half.

Total Cost of Ownership
Digital Design Reduces Costs, Increases Efficiency for Future Vertical Lift Helicopters

Building on other Sikorsky aircrafts, we are proudly harnessing the power of a fully model-based digital environment to develop our Future Vertical Lift Program, which will support the fleet readiness of the U.S. Army’s next-generation helicopters. These innovations will reduce cost throughout the development, acquisition and sustainment phases and enable rapid deployment of future capability enhancements to the entire helicopter fleet. Leveraging aspects of digital transformation—such as automatic data collection, performance analysis and maintenance alerts—allows us to improve safety and quality, while also reducing risk. The combination of our innovation, expertise and digital transformation modeling and tracking tools result in a better product for our customers.

Product Impact

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