Like the Level One analysis, the AAMP™ Level Two analysis also has five steps.  These are illustrated and explained below:

In the Level One analysis the materialization step produced one or more concepts on how to deliver the prioritized MEC.  But to move from this conceptual stage of defining the art of the possible to an end state where cost and schedule can be defined in quantitative terms requires more work.  Thus, Step A in the Level Two Analysis is to develop a High Level Architectural Model (HLAM).

The HLAM can be considered a system view of a potential solution.  It is not a detailed engineering design but it does contain sufficient detail both in function and implementation detail in order to identify the critical path items relating to cost, schedule, and performance.  Uncertainties about how particular functionality will be exactly engineered will remain unknown at this stage.  Because the analytical process is not an exercise in material development, elements of the design strategy will remain unaddressed.  But the challenge of the analytical team is to identify the most important issues that must be modeled, simulated, and then if possible, to find solutions.

This step requires the participation of subject matter experts who are current with the state of the art in both the defense and commercial domains.  This expertise may include not only engineering design but also manufacturing processes and methods.

Step B - In the Level Two analytical process, the objective of a properly designed modeling and simulation process is to test certain design strategies, technology assumptions, and the operational implications of the HLAM.  The output of this step provides important specific guidance to the next level of supply chain assessment (Step C).

The details of the HLAM determine what M&S tool(s) should be used.  Budget constraints define what range of variables can be tested.  The focus of the activity in this step is to identify those variables and outcomes that will assist in specifying with as much precision as possible those technology elements that are critical to the performance of the HLAM.  The outcome of this step also helps determine the direction of the more detailed supply chain assessment in the next step.

Step C - The assessment of the prospective suppliers at this stage is more thorough than Step C in the Level One analysis.  Not only are prospective suppliers identified but a level of business due diligence is performed on the company’s financials, management team, past performance, and the level of market acceptance the relevant products, systems, or technical elements have in the defense and/or commercial markets.  This analysis is summarized into a Business Readiness Index™ (BRI™) database built around a quantifiable metric produced by a proprietary method that enables the analyst and DoD decision maker to perform normalized comparisons between alternative suppliers and their technology elements.  What emerges from these BRI™ profiles are important data related to financial risk, company stability, product development, market dominance, and other factors directly relevant to the long-term viability of that technology element to the proposed HLAM.

The BRI™ profile is also directly relevant to a significant and enduring problem within DoD: diminished manufacturing sources (DMS).  Many DoD programs take a decade to advance from concept to fielding and then in many cases these products or systems are sustained for another decade or longer.  In the electronics industry it is not uncommon for parts to be phased out of production in a matter of a few years, sometimes in a year.  Thus while the compelling cost and performance advantages of a commercial technology element may make it attractive at the outset of a program, the DMS problem may loom large later in the system’s life cycle.  But this problem is not unique to DoD and technology solutions have been developed to address the problem¹.  However, it is a factor that must be considered during this phase of supplier assessment.

Step D includes a market and financial analysis that evaluates several items.  These items include but are not limited to:

1. Macro financial and economic trends that have a direct bearing on the prospective suppliers considered during Step C.  These trends include capital “cost” and availability, changes in currency valuation, and significant increases or decreases in government intervention which may impact the supplier’s market position and/or long term viability.
2. Micro financial and economic trends that impact a specific commercial technology sector and/or company.  These trends include the above but specific relevant factors such as the failure of an initial public offering (IPO) or a new government regulation that opens or closes a market for a company’s core offering (such as an FCC spectrum auction).
3. Company-specific financial and market factors such as changes in management or dramatic shifts in market share.
4. Technology and market trends that are directly relevant to the commercial technology elements under consideration for the revised HLAM.  The timeline for this trending can extend outwards to five years.

These financial, economic, business, and technology factors are then integrated with the refined HLAM to produce a comprehensive view of the prospective design strategy, supply chain, and the relevant factors that will influence this solution strategy should a development activity commence.

Step E produces the final work products of the Level Two analysis: ROM cost and scheduling estimates along with acquisition, transition, and policy information. This creates a decision matrix with greater quantification and certainty than is available today.

As mentioned previously the detailed supply chain information combined with the output of the modeling and simulation as well as the financial and economic data enables the analytical team and client to develop a refined HLAM.  This becomes the basis for determining a ROM for the BoM and the development schedule. 

The level of specificity of costing and scheduling information enables decision makers to engage in detailed trade discussions that are bounded by the art of the possible and the probability of what is doable.  This can lead to a much higher level of confidence that the proposed materiel alternative can meet the cost and schedule estimates under consideration.

The economic, financial, and business analysis inform the decision makers of critical trends that will not only affect the technology paths and trends upon which the proposed solution is following but alert them as to potential risks associated with certain supply chain strategies or even particular suppliers.

Finally, with this detail in hand, it is now possible to assess with a high degree of confidence and specificity what statutory, policy, and process issues are likely to be encountered if this strategy were to transition into an execution phase.  Acquisition and transition issues are now clearer and trades regarding these issues can be debated and resolved.