The STANDARD Missile (SM) program has historically used traditional methods to develop new Automatic Equipment (ATE). The Test Equipment (TE) hardware was built and then came the long, difficult task of developing test Software. The Navy needs a better way to develop the next generation of TE. This paper describes how ATE simulation should be used throughout the lifecycle of the program to accelerate development schedules and reduce overall costs. Simulation models are widely used in developing complex missile hardware but not for developing ATE hardware. Using ATE simulation models in conjunction with missile simulation models would provide the following capabilities: Develop test procedures without the need for expensive ATE and missile hardware. Find testability problems before the missile or ATE hardware is built Develop and verify Built-in-Test (BIT). Verify missile and ATE changes throughout missile production. Determine why ATE testing did not find problems causing flight failures.