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Understanding the various sources of flying hour program (FHP) variance is key to crafting policy solutions to the causes.

• Simple planning error is one source of uncertainty in predicting flying hours in a given year. Another is external causes, such as congressional action. A third source involves Air Force decisions made after the original flying hour program is set; this issue appears to be the most problematic and frustrating for supply chain managers. Examples of this are wide-scale flying hour cuts and combat aircraft reductions. Such changes in course are among the most disruptive examples identified and are sometimes large enough to register in enterprise-wide error metrics.

FHP variance causes negative, though usually modest, downstream effects on the supply chain.

• Underflying, for example, can incur opportunity costs (leaving money on the table in the budget process). It can also incur financial costs (around $2–4 million annually in holding costs for unneeded inventory). Overflying, on the other hand, can contribute to readiness problems.

Some individual programs do experience large FHP variance and downstream effects.

• Planners can be caught off guard when sudden, radical changes to a fleet's flying hour forecast appear, with little or no communication as to why, and with little opportunity to communicate the downstream effects, such as canceled contracts.

Improved flying hour planning would not significantly improve enterprise-level spare parts forecasting.

• Flying hours are generally poor predictors of actual removals, and the Air Force bases its flying-driven parts forecasts primarily on that single variable. Better coordination and communication could help avoid many of the program-level perturbations experienced recently, but further efforts to reduce FHP variance may not have an observable effect on enterprise-level forecast accuracy because of the inherent underlying uncertainty.