Original Date: 04/28/1995
Revision Date: 01/18/2007

Lockheed Martin Electronics and Missiles (E&M) considers supplier partnerships and related practices as critical to winning new business. Within this arena, there are a number of active initiatives and thrusts including strategic alliances, teaming with suppliers, supplier membership on Integrated Product Teams (IPTs), Design for Manufacturability/Assembly flowdown to suppliers, SPC/Variability Reduction flowdown, expanding the blanket purchase and group purchase base, supplier base reductions, supplier metrics, and best value awards.

Partnerships foster joint commitments between companies and promote shared investments which focus internal research and development activities and result in ownership of products. Partners take mutual ownership of problems and solutions, and apply their complementary strengths to address weaknesses.

Lockheed Martin is rapidly moving from the traditional adversarial approach to subcontracting. This new approach to supplier partnerships is based on sharing, defining clear expectations, mutual trust and respect, commitment, responsibility, and performance. Partnerships are initiated by selecting the best technology or product available and entering into a teaming agreement with the provider. Communication is open, full, and sensitive data is shared. To encourage such communication, E&M employs confidentiality agreements that are skewed in favor of protecting the discloser’s technology versus limiting the receiver’s liability. The enclosed table shows how the key elements of partnership are applied. The company is committed to partnering and has mandated this approach for all future starts. The philosophy is also being applied to mature programs where possible.

Partnerships and alliances are a key part of the procurement process and are integrated early. Subcontractors are involved in the market analysis, pre-proposal, and proposal phases. They participate in life-of-the-program decisions, requirements specifications, design for manufacturing and assembly, manufacturing development initiatives, and concurrent engineering. Benefits of this involvement include long term contracts, design-to-unit cost pricing, mutual commitments to program goals, and utilization of commercial standards.

All supplier initiatives at Lockheed Martin E&M form an integrated process that result in best value and mission success. Unique involvement activities include Partners in Excellence Conferences, General Managers Meetings, and supplier membership on IPTs. Supplier membership on IPTs has been implemented successfully on two major programs and is mandated for all new programs. Benefits of IPT involvement include transferring build-to-print design responsibility to subcontractors with resultant savings; co-development of proposals, designs, test equipment, manufacturing tooling and processes; sharing the cost of key process development; and other cost reduction activities such as design for manufacturing and assembly which reduced the cost of an existing assembly by over 70% on one program.

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