Original Date: 07/25/2005
Revision Date: 09/12/2006

In the mid-1990s, Commodity Design Teams were formed to review proposed engineering designs for adherence to a Standard Parts List. A New Parts Request process was instituted that led to substantial savings through standardization of parts, streamlining of the acquisition process, and inventory management.

In the early 1990s, the Department of Defense (DoD) recommended that government contractors make increased use of Commercial-Off-The-Shelf (COTS) components and subassemblies in military systems. In the mid-1990s, Northrop Grumman Electronic Systems (NGES) implemented Commodity Design Teams (CDTs) to support the product design and production processes. The primary duties of the CDTs are to review parts lists and the Bills of Material (BOMs) of proposed designs to determine if the parts are on the current Standard Parts List (SPL). When a proposed part is not on the SPL, a New Part Request (NPR) form must be filled out with detailed documentation and submitted for review. Approval is not automatic due to significant overhead and other administrative costs involved in introducing a new part into plant inventory, approximately $10,000 according to one respected accounting firm’s estimate. This estimate does not include the cost of part failures, and sophisticated statistical models for physics-of- failure modes are used to provide preliminary estimates of the reliability and integrity of the part in worst environments such as uninhabited airborne or space.

Another CDT, Component Design teams, are charted to review and approve components such as analog integrated circuits, digital devices, discrete semiconductors, and electromechanical devices. Technology Discriminator teams review COTS subassemblies such as RF/microwave devices and power supplies. Command Media defines the qualification criteria for subassemblies to include an electrical checklist, a manual checklist, and a supportability checklist as part of an assembly management plan. A third type of CDT is formed as needed for specific products and reviews fabricated elements such as cable assemblies, structures, and shelters. These teams are absorbed back into the general organization after they have performed their reviews.

The SPL is composed of parts approved by the appropriate CDT depending on part type. Criteria for placement on the SPL come from several engineering organizations and the Purchasing Department. Components engineering focuses on parts standardization, qualification data, configuration control, and potential obsolescence. Design engineering is concerned with appropriate applications, technology trends, and maintaining options; and quality engineering is concerned with a manufacturer’s capability, performance history, reliability, certifications, and approvals. Manufacturing engineering focuses on manufacturability and packaging, while Purchasing is concerned with the availability of reasonably priced parts from preferred sources.

Through application or parts from the SPL, NGES has realized significant savings. In one 6-month period, a total of 595 NPRs were handled, with only 27 added to the SPL for a savings of $6 million.

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