MIL-HDBK-896, Manufacturing and Quality Program, serves as a concise collection of Manufacturing and Quality best practices. It may be cited in a Request for Proposal (Section L, Instructions to Offerors; Statement of Work; or Statement of Objectives) to clearly describe to the offerors what activities they are expected to undertake. This handbook is not intended to be a detailed, "how-to" guide. The Manufacturing Development Guide, maintained by HQ AFMC (ASC/ENSM), contains additional information and details that will be helpful in the application of this handbook. Chapter 5 of the Mil-HDBK identifies major manufacturing areas of emphasis along with an expanded description of that area.
| Industrial Capability |
Assess the capability of the industrial base to support program requirements. Identify sole sources and foreign sources and determine their risk. |
| Manufacturing Technology |
Identify and implement manufacturing technology development projects. |
| Engineering for Affordability and Producibility |
Establish and maintain formal affordability and producibility programs. Consider affordability and producibility constraints during cost and trade studies. |
| Key Characteristics |
Identify key characteristics (KCs) on the engineering drawings. |
| Trade Studies |
When performing design trade studies, consider production process capabilities and manufacturing costs. During the trade studies, treat manufacturing issues as equal to product performance issues. |
| Design Maturity |
Assess design maturity and its impact on manufacturing process and technology development. Design maturity may be assessed during technology readiness assessments, design reviews, and qualification testing. |
| Materials Maturity |
Ensure that materials are sufficiently mature and available to meet program requirements. |
| Supplier Management |
Establish, implement, and maintain a supplier management program to track and report supplier performance. This program should identify major/critical suppliers as well as suppliers with critical processes. |
| Diminishing Manufacturing Sources (DMS) and Obsolescence |
Develop and maintain a comprehensive DMS management program that addresses identification and risk mitigation of all parts and material obsolescence or discontinuation. The DMS program should encompass the DoD system, including support equipment, for which the prime contractor has design responsibility. |
| Special Handling |
Identify special handling requirements and develop special handling procedures, as needed. |
| Cost |
Estimate production costs for the program. Estimates should include the most recent design, manufacturing plans, and relevant actual manufacturing costs. During major program reviews, evaluate and present the estimated production costs and the achievability of production cost goals. Develop and execute budgets for manufacturing development and risk reduction projects. |
| Virtual Manufacturing |
Use virtual manufacturing techniques to evaluate the producibility and affordability of proposed design and manufacturing concepts before the product and process designs are released. Virtual manufacturing techniques should address material properties, production processes, tooling, test equipment, facilities, transportation, personnel, inventory levels, and resource constraints involved in producing the product. |
| Variability Reduction |
Implement a variability reduction program to reduce part to part variation of key characteristics. |
| Process Control |
Develop, document, and implement process control plans for all critical processes. Update plans based on design and process changes. |
| Process Capabilities |
Calculate the process capability index (Cpk) for each critical process. |
| Process Failure Modes Effects and Criticality Analyses (PFMECA) |
PFMECAs should be performed to identify potential failures in critical and safety-related manufacturing processes, rank the criticality of the failure types and identify actions to mitigate the failures. |
| Process Control |
Accomplish all production operations under controlled conditions. |
| Quality Systems |
The primary focus of the quality management system is defect prevention and achievement of stable and capable processes, as well as continuous improvement. In case of nonconformance, conduct root cause analyses and implement corrective actions. |
| First Article Inspections |
Perform first article inspections (FAIs) on parts that have not previously been built or on which significant design changes have been made. FAIs should only be performed on production-representative parts and processes. |
| Supplier Quality |
Establish and maintain a program to assess supplier quality. |
| Manufacturing Personnel |
Identify workforce requirements, special skills and training requirements. |
| Manufacturing Capability Assessment & Risk Management |
A formal process is needed to identify and manage manufacturing risk issues consistent with documented program risk methodology. In identifying risks, consider the capability of planned production processes to meet anticipated design tolerances. Also consider the supplier’s capacity and capabilities. |
| Factory Efficiency and Continuous Improvement |
Establish, implement, and maintain a continuous improvement program across the entire enterprise, including suppliers. This program should identify improvement opportunities both on the factory floor as well as the processes that support production. |
| Process Proofing |
Develop and implement a plan to demonstrate the proposed production processes, tooling, and test equipment (including Special Tooling and Special Test Equipment) will meet program requirements. |
| Manufacturing Integration |
The manufacturing management function should ensure the activities described in this handbook are integrated to achieve manufacturing maturity. Manufacturing approaches should be integrated with program management, engineering, and business management strategies. |
Table 10-2 Manufacturing Areas of Emphasis
10.6.1 Manufacturing Strategy
A manufacturing strategy is a detailed plan for assuring timely and cost effective production of an item which meets all operational effectiveness and suitability requirements. To be effective, the strategy must be developed in consonance with program engineering, contracting, test, and logistics strategies, considering current and projected constraints, risks, and opportunities in the industrial-technological base.
The major elements of the manufacturing strategy are listed in Table 10-3 below. For each element in the strategy, decisions must be made relatively early in the acquisition process to ensure that the required actions are taken in a timely manner. Tradeoffs are made, often within the context of the development of the program acquisition strategy.
- Level of production competition
- Type of production competition
- Role of producibility engineering and planning
- Quality planning
- Quality assurance approach
- Manufacturing process proofing
- Role of industrial modernization incentives program
- Manufacturing technology insertion
- Government manufacturing review process
- Tooling and test equipment
- GFP and component breakout approach
- Contract provisions and reporting
- Production rate
Table 10-3 Elements of a Manufacturing Strategy
Each element has associated with it a set of costs and risks which need to be assessed against the specific program realities and technological challenges.
10.6.2 Contract Provisions
In addition to incentives provided by the various types of contracts, there are a variety of contract provisions that may be included in contracts to motivate contractors toward desired objectives. Here are some manufacturing related provisions:
- Value Engineering (VE),
- Warranties,
- Capital Investment Incentives,
- Quality Systems,
- Manufacturing Development,
- Production, Quality and Manufacturing Efficiency, and
- Manufacturing Risk Assessments.
10.6.2.1 Value Engineering
Value engineering can help the government reduce costs, increase quality, and improve mission capabilities across the entire spectrum of DoD systems, processes, and organizations. Value engineering provisions may be included in contracts to reward voluntary value engineering suggestions or to require value engineering analysis to identify methods of performing more economically. Value engineering attempts to eliminate, without impairing essential functions or characteristics, anything that increases acquisition, operation, or support costs.
A Value Engineering Change Proposal (VECP) is a proposal submitted by a contractor under the Value Engineering (VE) provisions of the Federal Acquisition Regulation (FAR 48 Value Engineering) that, through a change in the contract, would lower the project's life-cycle cost to DoD. VECPs are applicable to all contract types, including performance based contracts. The basic VE contract provision is the VE incentive clause. The VE clause is included in most supply/service contracts when the contract price exceeds $100,000. It is also included in most spares/repair kit contracts over $25,000.
Typical VE Clauses: The contractor is encouraged to develop, prepare, and submit value engineering change proposals (VECPs) voluntarily. The contractor shall share in any net acquisition savings realized from accepted VECP's, in accordance with the incentive sharing rates outlined in paragraph (x) of this clause.
The government's objective is to motivate contractors to improve the quality and reliability of their products, so that they would reap financial benefit by avoiding the warranty cost of repairs and replacements. Warranties are no substitute for quality, and should not be used as a crutch. Simply put, when a system fails to accomplish the mission for which it was intended, the warranty can never compensate for potentially devastating results. In determining whether a warranty is appropriate for a specific acquisition, FAR Subpart 46.703 requires the contracting officer (CO) to consider the nature and use of the supplies and services, the cost, the administration and enforcement, trade practices, and reduced requirements.
The SOW/SOO may include a short paragraph stating that the Contractor shall manage warranties in accordance with Section H of the contract (this is where the warranty clause is located). The SOO may also require the Contractor to submit Failure Analysis Reports, incurred Warranty Costs Report, Warranty Activity Report, and any other special reports designated by the PM. Any additional data requirements related to the warranty may be identified in this section of the SOO. The importance of addressing the warranty in the SOO is that the Contractor will then be required to set up a work breakdown structure (WBS) for warranties and actually manage and control his warranty activities. This is especially useful if the contract includes Contractor support such as ICS or CLS. It is important that the Contractor's management plan be comprehensive and compatible with the Program Office Warranty Plan.
10.6.2.3 Industrial Modernization and Capital Investment
The government's objective is for the contractor to invest in manufacturing modernization. Industrial Modernization and Capital Investment may be negotiated and included in contracts for research, development, and/or production of weapons systems, major components, or materials. The purpose is to motivate the contractor to undertake productivity improvement efforts that can be used to drive down cost and help achieve affordability. Several programs discussed in Chapter 8 can be used to help implement industrial modernization and capital investments to include:
- Defense Production Act Title III,
- Industrial Base Innovation Fund, and
- North American Technology and Industrial Base Organization Funds.
The government's objective is for the contractor to implement an overarching quality system that ensures effective execution, integration, and administration of the design, manufacturing, and deployment processes and systems needed to manage risk, ensure achievement of all performance requirements, and prevent the generation of defective product. The system should also include a means for measuring the effectiveness of and ensuring the continuous improvement of systems and processes.
10.6.2.5 Manufacturing Development
The government's objective is for the contractor to implement processes and systems that consider manufacturing, quality, and design functions in achieving a balanced product design which meets cost, schedule, and performance requirements with acceptable risk. Implement a Manufacturing and Quality program using MIL-HDBK-896 as a guide. Appropriate practices for implementation may include production cost modeling; identification of key characteristics and processes; variability reduction; electronic simulations of the manufacturing environment; cost/performance trade studies; manufacturing capability assessments; product and process validation; and key supplier relationships.
10.6.2.6 Production, Quality and Manufacturing Efficiency
The government's objective is that the contractor implements those processes and systems to assure program affordability through product quality and manufacturing efficiency. The following elements may be considered as appropriate practices for implementation: product improvement initiatives; variability reduction on product and process; manufacturing process control and continuous improvement; and key supplier relationships.
10.6.2.7 Manufacturing Risk Assessments
The government's objective is that contractor should conduct assessments of manufacturing risk periodically, at all major technical reviews, and prior to major program milestones to assess progress towards meeting the appropriate Manufacturing Readiness Levels as they are defined in DoD Policy. Manufacturing risk assessments may be conducted in coordination with the government program office, at the prime contractor facility and at selected subcontractor facilities.
