Original Date: 05/01/2000
Revision Date: 01/18/2007

Like most defense contractors, Northrop Grumman Defensive Systems Division (DSD) manages multiple programs within a single facility. In the past, each program operated under its own quality plan based on individual contract requirements; specified its own array of redundant testing, reporting, and inspection requirements; and generated its own manufacturing processes for specific customer requirements. This approach produced redundant processes and failed to recognize the similarity among the programs. To resolve this situation, Northrop Grumman DSD established Best Value Manufacturing (BVM) as a quality assurance (QA) method for the fabrication, assembly, inspection, testing, and delivery of electronic systems, components, and spares which meet or exceed specified customer requirements. The method was developed through a culmination of lessons learned during the manufacture of over 4,000 electronic warfare systems as well as a teaming effort with suppliers and customers.

BVM specifies a single, common set of manufacturing and QA processes based on commercial and industry standards, specifications, and test methods. In addition, BVM fosters the Department of Defense’s (DOD’s) Single Process Initiative (SPI) and is applicable to current/future military and commercial products produced at Northrop Grumman DSD. BVM supports performance-based specifications, allowing the company to determine the minimum test, inspection, and data requirements for the product to meet end-item requirements. Next, BVM passes quality responsibility for the manufactured product to the (internal or external) operator or organization producing the product. This approach greatly reduces the need for independent oversight, excessive data requirements, and other non-value-added costs. BVM does not, however, change the specified performance or reliability required by the applicable system or end-item specifications (e.g., power levels, frequencies, vibration, temperature range, reliability levels) for the piece-parts, assemblies, or final installed system.

Also used for contract proposals, BVM enables Northrop Grumman DSD to specify common manufacturing and QA packages for all new programs, but still provide flexibility for tailored requirements. The main difference from the previous method is that each tailored requirement requested by the customer incurs a specific cost break-out for changing the standard BVM package. As a result, the customer can see the actual cost associated with the special request, which helps them make informed decisions on whether the benefit is worth the extra cost.

Northrop Grumman DSD is currently using BVM on its production ALQ-135 and ALQ-162 programs, and has recently submitted a SPI proposal to incorporate BVM on all programs. Since implementing BVM, the company has reduced the cost of the ALQ-162 Block 4 as much as 50% from Lot 3 by eliminating unnecessary tests, inspections, and reports. Northrop Grumman DSD also decreased its QA organizational size by over 70% without adversely affecting product quality. Concurrently, the company reduced material lead times by 50% to 70%; incoming backlogs from 2,000 to 34 lots; and incoming inspectors from 70 to five. The QA, Program Office, and Contracts organizations are working together to ensure that all proposals generated for future business specify the BVM approach.

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