Reduction of Total Ownership Cost

Abstract

This paper addresses incentives that can be employed to encourage life cycle cost perspective. It examines the critical issues associated with understanding and implementing the TOC concept and provides recommendations to assist PMs to knowledgeably execute a TOC plan. Metrics necessary to ensure appropriate implementation are explored. Various methods of controlling and reducing TOC are evaluated, including communication among stakeholders, CAIV documentation, tradeoff analysis, Reliability-Centered Maintenance (RCM); Performance-Based Logistics (PBL), Commercial Operations & Support Savings Initiative (COSSI), Earned Value Management System (EVMS), Activity-Based Costing (ABC), Value Engineering, and lessons from R-TOC Pilots.