Original Date: 02/01/1991
Revision Date: 01/18/2007

Litton Guidance and Control Systems Division (GCSD) established commodity groups to benefit its parts and material selection process. Commodity groups consist of collocated personnel from related, same-item functions, and provide benefits such as improved customer satisfaction and enhanced product quality. One example of a commodity group is a Quality Engineer, Component Engineer, Material Planner, and buyer for all microelectronics. These employees are collocated for efficiency and to encourage good communication and teamwork.

Each commodity group meets weekly to discuss problems, develop interpersonal skills, and develop common objectives. They also maintain a focus on continuous improvement. A group leader is selected and may be re- selected on a continual basis. A moderator trained in employee involvement (EI) techniques attends each commodity group meeting. Minutes of the meetings are published and the agenda established for the next meeting.

All commodity groups’ goals and benefits are identical. Internal customer satisfaction is a prime concern and is the basis of many of the other goals/benefits. Lower costs are possible because of a streamlined acquisition process, use of a supplier partnership program (SPP), and minimization of inspection costs. Costs can also be lowered by reducing rework and scrap. One result of commodity groups at Litton GCSD has been an increase of first test card yields from 90% to 98%. Because the company stresses continuous improvement, it is working toward expressing this value in the parts-per-million (PPM) category.

Besides the production related goals, improvement of interpersonal skills and relationships are also objectives of the commodity groups. By attending the weekly meeting, the team increases the productivity for the remaining 39 hours of the week.

Commodity groups are used for most commodities acquired by the Division. The commodity groups are Microelectronics, ASICs, Hybrids, Fabricated Parts, Magnetics, Printed Circuitry, Rotating Components, and Capacitors/Resistors/Connectors. The functions of Receiving, Receiving Inspection, Material Review Board and Shipping, and Traffic and Transportation, are also collocated for similar reasons.

Commodity groups at Litton GCSD have increased customer satisfaction whether the customer is the internal factory or the ultimate user. Commodity groups have lowered cost, increased product quality and helped improve the skills of the workforce while continuing to improve all aspects of the Material Acquisition Process.

For more information see the Point of Contact for this survey.