BREAKING THE MOLD
Forging a Common Defense Manufacturing Vision
The views and conclusions contained in this document are those of the authors and should not be interpreted as representing the official policies, either expressed or implied, of the Defense Advanced Research Projects Agency or the U. S. Government.
NATIONAL ACADEMY PRESS
Washington, D.C.
1993
NATIONAL ACADEMY PRESS
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
This study was supported by Contract No. MDA972-89-C-0032 between the Department of Defense and the National Academy of Sciences.
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COMMITTEE ON DEFENSE MANUFACTURING STRATEGY
WILLIAM G. HOWARD, JR., Chairman, Consultant,
Scottsdale, Arizona
JOHN M. STEWART, Vice-Chairman, Director,
McKinsey & Company, New York, New York
BRIAN E. BOYER, Vice-President and Deputy Department Manager,
Business Management, Northrop Aircraft Division, Hawthorne, California
ROBERT L. CATTOI, Senior Vice-President,
Research, Engineering, and Manufacturing Processes, Rockwell International Corporation, Richardson, Texas
JACQUES S. GANSLER, Senior Vice-President and Director,
TASC, Arlington, Virginia
ROBERT H. HAYES, Philip Caldwell Professor of Business Administration,
Graduate School of Business Administration, Harvard University, Boston, Massachusetts
GEORGE PETERSON, President,
George Peterson Resources, Inc., Miamisburg, Ohio
Staff
THOMAS C. MAHONEY, Director,
Manufacturing Studies Board (from July 1990)
RICHARD A. EASTBURN, Director,
Manufacturing Studies Board (through June 1990)
KERSTIN B. POLLACK, Deputy Director,
Manufacturing Studies Board (through December 1991)
THEODORE W. JONES, Research Associate (through August 1992)
MICHAEL L. WITMORE, Research Assistant (through June 1991)
LUCY V. FUSCO, Staff Assistant
MANUFACTURING STUDIES BOARD
CHARLES P. FLETCHER, Chairman, Vice-President (Retired),
Engineering, Aluminum Company of America
SARA L. BECKMAN, Co-Director,
Management of Technology Program, University of California, Berkeley
LESLIE A. BENMARK (NAE), Manager,
Global Supply Chain Systems, E.I. DuPont de Nemours & Co., Inc.
STEVEN J. BOMBA, Vice President,
Technology, Johnson Controls, Inc.
BRIAN E. BOYER, Vice President and Deputy Department Manager,
Business Management, Northrop Aircraft Division
GARY L. COWGER, Executive in Charge,
North American Operations, General Motors Corporation
HAROLD E. EDMONDSON, Vice President (Retired),
Manufacturing, Hewlett-Packard
THOMAS G. GUNN, President,
Gunn Associates, Inc.
ALISTAIR M. HANNA, Director,
McKinsey & Co., Inc.
GEORGE J. HESS, Vice President,
Systems & Planning, The Ingersoll Milling Machine Company
CHARLES W. HOOVER, JR., Professor,
Department of Industrial and Mechanical Engineering, Polytechnic University
STEPHEN C. JACOBSEN (NAE, IOM), Professor,
Center for Engineering Design, University of Utah
RAMCHANDRAN JAIKUMAR, Professor,
Graduate School of Business Administration, Harvard University
J. B. JONES, Randolph Professor Emeritus,
Virginia Polytechnic Institute and State University
DONALD KENNEDY, Educational Representative,
International Association of Machinists and Aerospace Workers
THOMAS L. MAGNANTI (NAE), George Eastman Professor of Management Services,
Sloan School of Business Administration, Massachusetts Institute of Technology
JOE H. MIZE (NAE), Regents Professor,
School of Industrial Engineering and Management, Oklahoma State University
JACOB T. SCHWARTZ (NAS),
Department of Computer Science, Courant Institute of Mathematical Sciences, New York University
HERBERT B. VOELCKER, Charles Lake Professor of Engineering,
Sibley School of Mechanical Engineering, Cornell University
PAUL K. WRIGHT, Professor,
Department of Mechanical Engineering, University of California, Berkeley
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Acknowledgments
Over the course of the study, the committee consulted a wide variety of sources. We would like to express our gratitude to the individuals who served on the committee's four panels and to all those who briefed the committee on issues pertaining to defense manufacturing.
The panel on defense program initiatives wishes to thank Eric Abell, Wright Patterson Air Force Base; Robert Draim, Strategic Submarine Program, Naval Sea Systems Command; Allen O. Elkins, Army Material Command; Daniel Haugan, Aviation Systems Command, U.S. Army; Michael J. Kelly, Defense Advanced Research Projects Agency; William Kessler, Wright Patterson Air Force Base; Steven M. Linder, Navy Manufacturing Technology Program; and Donald F. O'Brien, Defense Logistics Agency.
The panel on defense policy wishes to thank Truxton R. Baldwin, Office of the Deputy Assistant Secretary for Procurement; Steven J. Bomba, Johnson Controls, Inc.; Dale W. Church, Pillsbury, Madison, and Sutro; Michael E. Davey, Office of Science & Technology, Library of Congress; and John M. Swihart, National Center of Advanced Technologies, Aerospace Industries Association.
The panel on defense suppliers wishes to thank Jerry Braga, Northrop Corporation Aircraft Division; William Carr, Pratt and Whitney; Lou Carrier, Northrop Corporation Aircraft Division; James C. Dever, Jr., Hughes Aircraft Company; Jack Ferrel, TRW Defense Systems Group; Otis V. Goodwin, TRW/ESG Defense Systems Group; James Hoover, Northrop Corporation Aircraft Division; and Dan Wood, Defense Contract Administration Service.
Other significant contributions were gratefully received from J. Ronald Fox, Graduate School of Business Administration, Harvard University; Robert
Costello, Hudson Institute; and Charles H. Kimzey, Steven R. Jones, and Richard E. Donnelly from the Office of the Under Secretary of Defense for Acquisition and the Assistant Secretary of Defense for Production and Logistics. Each provided valuable insight into the committee's deliberations. Finally, the committee would like to acknowledge the work of George Krumbhaar, who edited the final draft, and the staff of the Manufacturing Studies Board. This report would not have been possible without the hard work and patience of Tom Mahoney, Mike Witmore, Ted Jones, and Lucy Fusco.
William G. Howard, Jr.
Chairman
Preface
The Committee on Defense Manufacturing Strategy of the National Research Council's Manufacturing Studies Board was asked by the Under Secretary of Defense for Acquisition to advise the Department of Defense (DoD) regarding development of an effective manufacturing strategy. The committee's work was intended to help DoD identify policy options, based on changes in civilian and defense manufacturing, that would improve DoD's ability to use the total U.S. manufacturing base, to make smarter policy decisions related to the defense industrial base, and to define long-term research and investment strategies for manufacturing technology.
Given this broad scope, the committee established four working panels, each responsible for a specific aspect of defense manufacturing strategy: national manufacturing perspectives, policy, program initiatives, and suppliers. A colloquium was held June 5–6, 1990, to provide a common starting point for the panels. Dr. Jacques Gansler, a member of the committee and chairman of its Panel on National Perspective, described the scope and key issues for a defense manufacturing strategy based on economic and political trends. During the following six months, each of the panels addressed the barriers to, and opportunities for, a defense manufacturing strategy in their respective areas. The four panel reports were delivered to the committee by January 1, 1991. (Summaries of these reports are in Appendix A.)
The committee noted that the panels identified many of the same problems that have plagued the DoD for decades and have been addressed in prior studies. In fact, these problems have spawned hundreds of reports but their recommendations have resulted in little fundamental or systemic improvement in the way defense systems are designed, developed, and pro-
duced. This committee did not believe that another recital of similar recommendations for specific defense manufacturing programs was likely to be any more effective than earlier efforts.
Concurrently, Operations Desert Shield and Desert Storm were instructive to the committee's deliberations. U.S. forces in the Gulf confirmed beyond doubt that the U.S. military is equipped with superior weaponry that performs reliably, predictably, and, in some cases, amazingly. The committee, however, also was reminded of weaponry cost and questioned whether such capability can be maintained given the pressing trends of global production, escalating hardware costs, increasing levels of technological sophistication, and dependence upon offshore technologies. The committee concluded that these problems, already relevant to business executives, must be addressed by defense planners. Therefore, in fulfilling its charge, the committee framed its defense manufacturing strategy around contemporary, and evolving, principles that are shaping the management practices of leading manufacturers, including defense manufacturers. (Defense, unfortunately, lags behind commercial practice to its disadvantage in many of these practices.)
The committee holds that substantial change within the defense manufacturing sector is required. The necessary changes are by no means limited to improved acquisition regulations, and, in fact, are not limited to the DoD. The entire defense community—contractors, DoD, Congress, and the Office of Management and Budget (OMB)—must be involved in an interrelated ''Change Process'' to achieve the benefits that are possible and essential.
In this report the committee describes a process for achieving the change needed within the defense community. Dozens of reports have identified what to change in defense manufacturing. We, here, try to describe how to change; that is, a management process (already under way in U.S. industry) that should be applied. The payoff is enormous—our current arsenal could be maintained for perhaps 30 percent less cost and with higher reliability and improved responsiveness. That is worthwhile.
There no doubt will be strong resistance to the change process outlined by the committee, but similar change has already started in many manufacturing companies. The end of the Cold War has brought different missions, reduced defense spending, and shifting acquisition priorities. The committee believes that initiating a major change process will minimize the loss of critical capabilities in a shrinking defense market and, at the same time, result in very significant cost, quality, and timeliness improvements in the design and production of weapon systems. Improvement will be slow but steady, provided there is constancy of purpose at the senior levels of DoD, the Congress, and corporations. The end of the Cold War provides an unusual opportunity, unparalleled in the past five decades, to effect such a change.
William G. Howard, Jr.
Chairman