R.H.J. Vallejo MSc


A proposal for a Strategic Management tool to control the in-service support processes of second-hand capital assets of Navies

November 2012

Scientific Supervisor      : M.M.R. Kuijer MSc

 One of the challenges of physical asset management is the administration of all their sequential logistic processes: specify, design, produce, support / maintain and dispose.

As many other government organizations, Navies are a good example of an “asset intensive organization” with a large amount of different kind of physical assets which must meet their operational needs. Some of them are considered “capital assets” such as surface ships, submarines, aircrafts, naval bases, and shore facilities, because they are strategic for the purposes of the organization.


Only major Navies of developed countries, they design and build their assets. All others, due to costs and/or technology status are obliged to buy second-hand ones. In that case, the life cycle of the logistic processes is reduced to support/ maintain and dispose, being the last one shorter and far less complex. This study focuses on the Operate/Support/Maintain phase.

In the case of the Chilean Navy (C.N.) through the state own shipbuilding and ship repair, establishment ASMAR, builds only small transport and warships. Majority of their combat vessels are bought on the world-wide market. Those assets, when they are bought, they have normally an operational remaining life among 15 to 20 years.

Some years ago, due to massive obsolescence of their capital assets, CN was obliged to replace main part of their Fleet almost at the same time, taking profit of the reduction of the amount of ships in service of the Royal Navy (RN) and the Royal Netherland Navy (RNLN) decided by their respective governments. As a consequence, the CN replaced 8 frigates in a relatively short period of time.

In parallel, the head of the CN Logistic Organization “Directorate General of Logistics” contracted the master course “Asset Management Control” to upgrade the knowledge of 15 officers to help the logistic administration of the “new” fleet.

So, the problem to be solved is to study how to take profit and apply the results of that training course, translating the strategy to manage the in-service support phase of those vessels into concrete actions, during their remaining life of those assets.

After analyzing the content of the AMC approach, the integration of three elements it appears to be the most convenient: The LCM Team approach, using the Strategic Management System “Balanced Scorecard” supplemented by the continuous improvement method “PDCA methodology”. The case study was applied on CN’s M-Class Frigates.

In order to evaluate the model, two separated methods were selected. The first one was the widely known feasibility / acceptability / suitability (FAS) analysis that is applied also in the CN. The second one was a cost – benefit analysis, because they are standard methods to evaluate proposals like the one developed in this research. 

De Thesis kunt u hier bekijken (EN).

De Thesis presentatie kan hier bekeken worden (EN). 


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