by Richard Tomkins
London (UPI) Aug 6, 2014
Military budget constraints around the world are fueling growth in the in-service support sector of the defense industry, according to new report.
Market analysis firm Frost & Sullivan, in its Global Military Systems Support-in-Service Market Assessment, said scarcer money has brought about a shift from large-scale platform procurement to ongoing systems support and that it anticipates market earned revenues of the support-in-service sector -- $16.36 billion in 2013 -- will rise to $21.10 billion in 2022 for land, air and sea systems.
"MODs (ministries of defense) are looking to engage service providers that are willing to break down scheduled heavy maintenance into on-going systems support, thus enabling 24/7 platform availability while reducing the burden of holding a large inventory of spares," the company said.
"With this rising need for more efficient, cost-effective maintenance procedures, performance-based contracts are gaining prominence.
"The advent of data-driven, IT-infrastructure-guided maintenance programs that continuously monitor military platforms has added momentum to the implementation of performance-based logistic processes."
The upward trend for in-service support, however, has hurdles. Negotiating platform-availability terms with customers is a challenge, involving the military maintenance infrastructure, platform fleet size, service-provider capability, and supply-chain mechanics. In-service contracts tend to be short-term since shrinking military budgets restrict militaries from issuing long-term performance-based contracts, and the pullback from international military operations decreases platform utilization.
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