Original Date: 08/07/1995
Revision Date: 01/18/2007

Examining its internal processes and the downstream effect of other organizations within the company, Lockheed Martin Tactical Aircraft Systems (LMTAS) has evolved its Manufacturing Resource Planning and Production (MRP II) system into a total operations control and accounting system providing data that benefits all of the Operations Division.

LMTAS established a “War Room” to devise an approach that would provide accurate data to effectively make cost and scheduling decisions. This room contained a flow of each step necessary for the MRP II system to plan and control the production of tactical aircraft with its associated costs and the impact that each particular step had on both the preceding and subsequent operations. Not only was this data used to implement the MRP II system, it also allowed LMTAS to streamline the process flow, resulting in reduced cost and schedule.

Contract cost accounting was complex prior to the total utilization of MRP II. Data was transferred to accounting by multiple systems. Prior systems had incomplete work order edits, had little part cost visibility, and contained only estimated work-in-process values. These data voids generated significant efforts to extract information within the LMTAS accounting community and generated additional costs.

Within the Operations Division, the company had separate systems for Make and Buy parts, including duplicate BOMs, scheduling, planning, and ordering systems. Buy priorities were not linked to the shop floor need dates, thereby resulting in high shortages and higher inventory levels. Inventory levels were assumed by the system.

By evolving the MRP II system into a total product control process, LMTAS has achieved zero accounting errors, eliminating that portion of manufacturing costs. Now a single system is interfaced with accounting, has on-line part cost visibility, complete work order edits, and provides a cost roll-up transfer system that generates audit visibility from lower levels. Work-in process values using its MRP II system now provide LMTAS actual cost data, thereby supplying accounting with real-time, accurate, detailed cost information.

Internal benefits on the shop floor are a single, integrated system for make-and-buy parts, one BOM, one schedule with one planning and ordering approach. The shop floor can now work to a dispatch list supported by procurement with need dates of purchased parts, and the shop floor also has actual inventory levels netted by the system. Accuracies of 98% or better have been achieved in the BOM, Inventory, and Master Schedule, thereby meeting the goals established within Federal Acquisition Regulations. LMTAS has sustained these accuracies for over two years. These benefits have allowed LMTAS to not only improve customer satisfaction, but also allowed it to reduce costs and enhance schedule performance.

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