Improving Air Force Purchasing and Supply Management of Spare Parts

This document was submitted as a dissertation in August 2003 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of The RAND Graduate School dissertation series reproduces dissertations that have been approved by the student's dissertation committee. RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND ® is a registered trademark. RAND's publications do not necessarily reflect the opinions or policies of its research sponsors. iii Preface This dissertation is submitted to the RAND Graduate School in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Policy Analysis. It was funded by Project Air Force and is part of the overall analytical support provided under the Project AIR FORCE study, " Designing, Implementing, and Evaluating a Purchasing and Supply Management (PSM) Demonstration for Engines, " sponsored by AF/IL-I and SAF/AQC. This research provides the Air Force with a methodology with which to evaluate various strategies for improving the procurement of spare parts and an example use of the methodology for F100 engine parts. Using exploratory analysis techniques and system dynamic modeling a structural analysis of the interaction of these changes is studied leading to a better understanding of the effectiveness of the various supplier management policies. This includes identifying those policy levers most effective in improving various measures of interest. Although this research provides a broad structure across objectives and alternatives that are often " stove-piped " between organizations, it also points out where additional research is needed to improve understanding certain relationships (e.g. the impact of contract length on quality), their functional forms and their parameters. Some parameters may require alteration for other kinds of parts in other applications. Thus, the methodology highlights achieving a broad macro understanding of purchasing management policy. The findings of this study should be of interest to policy makers in the acquisition and sustainment communities as well as those interested in the application of System Dynamic Models and exploratory analysis techniques.