Producibility Elements Highlighted:
Primary: 3.1 Identify
Perform Trade Studies on Alternative Product and Process Designs
Northrop Grumman established a proactive cost reduction plan for the F/A-18 E/F aircraft program which has become a model for other affordability initiatives within the company. The company also defined a standard procedure for affordability/producibility management of the F/A-18 program. Key elements of this procedure include:
- Establishing baseline and target costs for each component of the aircraft;
- Constructing a database that contains all cost estimate, projection, and affordability data;
- Assigning responsibility for initial and follow-through proposals for each work package down to the team leader level;
- Conducting trade studies to identify alternatives and impacts for cost reduction measures;
- Coordinating and integrating affordability and producibility initiatives;
- Creating affordability status reports; and
- Quantifying, tracking, and validating all savings.
Northrop Grumman's standard process procedure has several different affordability goals or allocations, such as average unit production cost (flyaway cost); initial support investment cost; and operating and support costs. These affordability goals are allocated by the work breakdown structure and flowed down to the team leader level.
The company has tracked and maintained cost baseline and affordability initiatives since 1992. Through cost reduction measures, Northrop Grumman has been able to keep aircraft flyaway and life-cycle costs within contractual requirements despite configuration changes and increased material cost. Cost reduction measures have also been responsible for a 10% savings in flyaway costs which helped offset a 12% increase in flyaway costs due to configuration and other changes.