Obsolescence is a broad and often-misunderstood term because it is defined in different ways by different constituencies and industry sectors. While very closely related, obsolescence is not exactly the same as DMSMS. Obsolescence deals with the process or condition by which a piece of equipment becomes no longer useful, or a form and function no longer current, or available for production or repair. Implementation of new technology causes older technology to become less supportable due to diminished available of parts and suppliers. Obsolescence must be resolved before DMSMS begins to occur, especially if the system is still in production.
The American Production and Inventory Control Society Dictionary (Ninth Edition, 1998), for example, defines obsolescence as:
- The condition of being out of date: a loss of value occasioned by new developments that place the older property at a competitive disadvantage (a factor in depreciation).
- A decrease in the value of an asset brought about by the development of new and more economical methods, processes and machinery.
- The loss of usefulness or worth of a product or facility as a result of the appearance of a better or more economical product, methods or facilities.
The Dictionary of Accounting Terms (Barrons, 1987) defines obsolescence as:
- A major factor in depreciation resulting from technological or market changes. Wear and tear from use and natural deterioration through interaction of the elements are other factors that cause depreciation in assets. It is also a big factor in inventory risk.
One common theme in these definitions is the presence of either economic or physical degradation until an asset has zero residual value or no demands. In simple terms, the market for obsolescent items, and therefore availability, shrinks to the point where it becomes unprofitable for a commercial entity to continue to manufacture or support the items. When this occurs, any customer (e.g., DoD) that continues to have a requirement for those items will find it increasingly difficult to obtain them, and the cost will be markedly higher due to scarcity. Obsolescence occurs within DoD when:
- Weapon system capability becomes degraded due to reduced availability of parts and sources.
- New technology displaces old.
- Costs becomes unaffordable for production, support, and sustainment.
An important obsolescence mitigation strategy is
Performance Based Logistics (PBL). PBL directly attacks the problem of aging by instituting incentives between the government and the weapon system
Product Support Integrator (PSI) to ensure support providers continuously modernize and improve their systems and methods of support. Each Military Service has ongoing initiatives to execute continuous modernization throughout the life of a product. These initiatives lower sustainment costs, improve availability, and continue modernization efforts. These initiatives will be significantly enhanced as PBL continues to be implemented throughout DoD.
