Evaluating Point-of-Sale Alternatives Within Naval Aviation

The Base Realignment and Closure Commission (BRAC) 2005 decision resulted in the consolidation of Naval Air Depots (NADEPs) and non-deployable Aircraft Intermediate Maintenance Departments (AIMDs) to form six Fleet Readiness Centers (FRCs). The intent behind this consolidation is to avoid redundant maintenance procedures, supply overhead charges and reduce aviation maintenance costs. The Department of Defense (DoD) estimates FRCs will yield $3.7 billion in net savings over 20 years. This is more savings than any other of the 2005 BRAC recommendations. This consolidation presents the opportunity to examine potentially significant changes within current NADEP, AIMD and supply support processes in order to gain the efficiencies that are required to yield the expected savings. This thesis models three Point-of-Sale (POS) alternatives to improve cost wise readiness (CWR). A POS is described as the location where a financial transaction occurs. CWR in very simple terms is dollar-for-dollar readiness. The POS alternatives are to maintain the status quo (do nothing), move the transaction closer to the customer (the Squadron), or move the transaction closer to the supplier (the Original Equipment Manufacturer). The question as to which POS alternative is the most effective and efficient arises as a result of the consolidation.