Program management solutions and success in aerospace & defense 

Tackling cost and schedule overruns

Government and commercial aerospace programs face significant challenges, from changing regulations to additional requirements. Programs are increasingly over budget and late, and new research reflects that will be the case until 2020. But all is not lost. By exploring the root causes of program management issues and recommendations for sustainable improvement, aerospace and defense (A&D) organizations can increase their buying power.

The past seven years of aerospace and defense program management

Seven years ago, Deloitte published a study on cost overruns and schedule delays in the A&D sector. Although there has been progress, systemic cost and scheduling issues facing the sector have become even more critical. While the focus of this study is defense programs, manufacturers of commercial aircraft will find our conclusions and recommendations are applicable.

We delve into the progress that has been made since 2009, explore the root causes of today’s key challenges, and provide recommendations for sustainable and long-term improvement.

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Increase in cost and schedule overruns of major defense acquisition program (MDAP) portfolio

Rate of increase of program costs has significantly declined from 51 percent year-over-year (YoY) increases between 2008 and 2012, to 5 percent increases from 2012 through 2015.

The root causes of program management issues

Issues persist across the typical program lifecycle. As we looked at the information we gathered from our research, executive interviews, and DoD studies, we decided to report our findings in the context of a large program/platform development lifecycle to illustrate where in the lifecycle the issues exist and to offer solutions in that context.

​How can the sector address program management issues?

Significant and long-lasting improvements to program management in the A&D sector are possible by addressing the problem at the grassroots level. Key focus areas, among others, should include having realistic cost and schedule estimates, empowering program managers and making them accountable, and following a knowledge-based acquisition approach to programs. Discover nine recommendations for the A&D sector below and in the report.

  1. Have realistic cost and schedule estimates.
    To address cost estimation and other technical issues, contractors, and program managers should be realistic about their expectations of their programs’ timelines and budgets. Since implementing change and assessing the effects of major policy changes is a time-consuming process, program managers, and DoD leaders should be educated and encouraged to have patience.
  2. Follow a knowledge-based acquisition approach.
    Product developers should ensure significant knowledge is attained during development stages.
  3. Empower program managers and make them accountable.
    Give program managers more responsibility and make them accountable throughout the project lifecycle. No-go decisions should be taken by program managers in cases where there are substantial changes that may result in the project being unviable or delayed unreasonably.
  4. Leverage an advanced risk-based approach to managing acquisition programs.
    The issue of a complex operating environment can be overcome by developing an advanced risk-based approach to managing acquisition programs. This can be done by considering the exclusive features of the weapon systems being acquired and the circumstances (funding, geopolitical climate, etc.) in which these procurements are being executed. Program managers should analyze past data to identify and increase focus on those programs or phases of programs, which are likely to experience challenges in the future, based on empirical data.

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