November  2015     Edition 118
Sustainment Thinking

The definition of Sustainment

is to keep in existence; maintain, continue, or prolong: sustain an effort.

Sustainment Thinking is about

understanding the strategy and cost to maintain the value of an asset. The asset could be a hard asset, such as a piece of equipment, or a soft asset, such as the value of training, or a relationship. The cost includes money, time, people, and of course, thinking.

Sustainment thinking should occur

during the process of deciding on the original asset acquisition, i.e. it shouldn't be an afterthought, but part of the initial thinking. For example; when you buy a new smart phone, you look at the cost of the phone, the feature set, etc. You also look at what the monthly fee is, not only for the phone (if it's paid over time), but for the services you subscribe to.  These are sustainment costs.

We often overlook the cost of sustainment

. Take home ownership for example. When you buy a home, you, and certainly the bank, review your monthly loan payment, including interest, property tax and insurance. BUT ... there are many other costs associated with sustaining a home that are often overlooked ... until the bills roll in! These include your utility bills, cost to keep the lawn in shape, cost to replace things like the furnace, or the hot water heater, cost to fix a leak, cost to paint, not to mention increasing property taxes, increased insurance premiums etc. Sustaining home ownership is much more costly than just paying your loan.

When thinking about sustainment, one of the first questions to ask is

, if sustainment is actually necessary. When you buy a $399 computer, you're asked if you want a "replacement insurance policy", i.e. if your computer breaks after the warranty, it's repaired or replaced. The premium for this is often about 25% of the actual cost of the item. For me, my thinking is ... "if the computer lasts through the warranty, it will probably last for awhile, certainly long enough before I need to replace the computer with something more powerful, with more memory, etc." My sustainment thinking results in rejected these "replacement insurance policies". It also results in understanding that there are still additional costs to maintain my computer. I'll need virus protection, perhaps upgrades to software, etc.

Here's an example of an initiative with a lack of sustainment thinking

. Take the I-35 bridge between Minneapolis and St. Paul. It was build in 1967 to support the expansion of the interstate system and growing need for transport between Minneapolis and St. Paul. In 1967, there was great value in expanding this roadway, and this value continued to increase to over 100,000 crossings a day. Clearly there was value in sustaining this passageway.

But ... In 2007 it collapsed

, killing 13 people and injuring dozens more. What happened? Records show that the bridge was not maintained properly. It had failed multiple prior inspections, and rated as "structurally deficient". There are other bridges and roadways failing safety records as well. Why are they not fixed? Ah ... the Cost. Over the past 100 years, we've build hundreds of thousands of bridges, tunnels, and roads. Money was budgeted and allocated to cover the initial cost to build, but not to adequately maintain these structures. So while there is great value in many of these structures, the cost to maintain them is beyond the current means ... they cannot be adequately sustained.

There's a lot of sustainment thinking in businesses

that are "subscriber" based with recurring revenue. Take your TV / Cable / Satellite or Internet company. They spend a lot of money acquiring customers These companies also spend a lot of time and money figuring out how to keep you as a customer. They have a customer care center solely to respond to existing customers. They need to keep their prices competitive. They have financial models that show the costs of attrition (replacing a customer), and the costs to keep them. When their policies are insufficient, they lose customers faster than acquiring them and lose their market share.

Take employee training

. There's a cost (time and money) to get trained. After you're trained, how to you sustain the learning. Do you have a plan, is there follow-up, how can you practice and keep and apply the learning. If you can't sustain the value, why spend $'s and time to acquire it in the first place.

Take relationships

. There is value in them, including emotional value. But relationships have to be maintained. This generally requires work. Left to themselves, relationships will often evaporate.

The Takeaway:
Look beyond the initial "cost" of acquiring an asset, be it a purchase, a relationship, even knowledge. Should that asset be sustained, over what period of time, at what cost. Build this thinking into your decision process in the first place. For hard assets, i.e. purchases, this is often called the "total cost of ownership". For soft assets, ie. Relationships, skills training, your health ... there's a value and cost in acquiring them, AND in sustaining them. 

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