Helping to define a cost reduction strategy to achieve savings of $400 million per boat.
The US Navy’s Virginia-class submarines cost approximately $2.4 billion to produce and $50 million a year to operate and make 13-15 deployments over their 33-year lifecycle. Following a defense review, the Navy was instructed to increase production from one to two Virginia-class submarines a year – but only if it could reduce the cost of producing each submarine by $400 million.
Given the excellent performance of the Virginia-class program to date, it was imperative to aggressively drive down cost without disrupting ongoing performance.
We worked collaboratively with the Virginia-class program office and shipbuilding team to model the overall cost and schedule performance of the program from design through to full construction of 18 submarines. We evaluated the full, program-wide direct and indirect impacts of potential changes to the design and construction process in combination with other potential changes such as funding levels, engineering investments, production rates construction schedules and shipyard workforce. Using dynamic simulation and rigorous analysis, we provided a clear, realistic view of the likely savings from the changes and helped stakeholders to agree on an effective path forward to achieve the desired reductions of $400 million.
Helping to create additional savings of $2 billion through better lifecycle planning
The US Navy is the largest navy in the world, with greater battle fleet tonnage than the next 13 largest navies combined. With over 300,000 personnel in active service, it operates 288 ships, 71 submarines and more than 3,700 aircraft.
The Navy is in a position where it does not have enough submarines to support the stated fleet requirements. With defense budgets constrained and each new submarine costing billions of dollars, buying more is not an option.
Extending the lifespan of existing submarines is one way to solve this problem. However, getting the most from this high-value asset means finding the right balance between maintenance, modernization and operational activity – which will then make it possible to extend service life and minimize ‘down time’ without compromising performance.
To address these challenges, we used a dynamic simulation of the lifecycle of Virginia-class submarines to identify and coordinate a set of policy, design and maintenance changes that enabled a submarine to be deployed for an additional six months beyond its 33-year lifetime. If this approach is taken with the Navy’s other affected submarines, the extended deployment time removes the need to purchase an additional submarine worth at least $2 billion – at negligible cost.