6.8 Contractor Manufacturing Plan

6.8 Contractor Manufacturing Plan
     6.8.1 Purpose
     6.8.2 Manufacturing Organization
     6.8.3 Make or Buy
     6.8.4 Resources and Manufacturing Capability
     6.8.5 Manufacturing Planning Data
     6.8.6 Planning for Spares

The purpose of the manufacturing plan prepared by the contractor for a specific program is to portray the method of employing facilities, machines and tooling, and the personnel resources of the contractor and selected subcontractors. The plan should reflect all time-phased actions which are required to produce, test and deliver acceptable systems on schedule and at minimum cost. The general structure of the plan should include, as a minimum, a description of the manufacturing organization, the make or buy plan, resources and manufacturing capability, and manufacturing planning data.

This section of the plan should address the contractor's organizational structure, i.e., the people responsible for the manufacturing task. It should include an organizational chart(s), identification of key individuals, and descriptions of the functional responsibilities of the key individuals. The government review of this section of the plan will focus on assuring that responsibilities are clearly defined and that all required tasks are assigned to the appropriate organizations. During the execution of the production phase of the program, this document should identify the points of contact for information and action.

This section of the plan should describe the distribution of effort between the prime and subcontractor. Of specific interest during the evaluation of the plan is the impact of the in-plant loadings on the prime contractor's overhead rates. This is of great importance in the case of a facility which is involved with many programs, because the overhead rate to be applied to the program of interest can be greatly affected by the level of activity of the other programs planned for the facility. Specific attention should be given to the contractor's rationale for specific make or buy decisions because there may be differences between overall contractor goals in structuring make or buy decisions and the goal which a PM considers appropriate for his/her specific program. The contractor should review their Make or Buy Plans to identify sole source, single source, or foreign sourced items and make contingency plans for these items.  In addition, the Make or Buy Plan should identify items that could become obsolete or a diminishing manufacturing source and make plans for these risks.

This section of the plan should describe the resources to be applied to the manufacturing task.  The facilities to be used should be described in detail, and the division of the government-furnished and contractor furnished resources should be described, including the relationship to any Industrial Modernization Incentive Programs (IMIP) which are planned. If any improvement or rehabilitization of government-owned facilities is required, these should be described and justified.

The layout of the facilities to be utilized should be described along with the work flows through the facility. Where there are other programs in the facility, the integration of the work flow should be described. The key issue is to assure that there is a reasonable expectation that sufficient equipment and personnel exist in a form that will allow a manufacturing flow reflecting minimum cost and reasonable probability of schedule attainment.

The specific skills of the personnel required should be described in terms of time-phased requirements. Where personnel are not currently on-board, the contractor should describe how the required quantities and types of personnel will be acquired. The personnel requirements need to be analyzed in relation to the other programs within the facility and the local personnel market.

The contractor should describe the materials and components which will be utilized on the program. Where new materials or components which are in short supply are to be utilized, they should be justified. The relationship of material and component selection should be discussed in terms of the producibility studies which have been accomplished (or are planned). The contractor should provide a manufacturing breakdown - one that shows the relationship between manufacturing methods and materials, tooling concepts, and facilities. Also, the manufacturing risks on the program should be assessed.

The manufacturing breakdown should be supplemented with a discussion of the plan for tooling, including special tooling and special test equipment (as defined in the FAR). The contractor should describe the overall tooling concept and approach including the planning, design, fabrication, and control of tooling and test equipment. The mix of limited life (often described as "soft") and durable (often referred to as "hard") tooling should be described along with the rationale. The government interest in the tooling and test equipment is motivated by the cost and by the potential for cost reduction through investment in tooling or test equipment capability.

Where a requirement exists for surge or mobilization, the production plan should describe the facilities and other resources required and the method of accomplishing the required increase in manufacturing output.

This section of the plan should provide the detailed delivery schedules for the total program even though the specific contract may be for only a portion of the program. The schedule shows the lead times required for the major and critical elements of the program and the time phasing of the major milestones involved with attaining the schedule. Detailed schedule requirements for activities having potential impact on the end item delivery schedule such as engineering release, material procurement, tool fabrication, facility acquisition or improvement and government-furnished property should be provided. The (PM) should carefully analyze the details of the schedule to determine its attainability, the inherent risk, and the potential to use the Defense Materials System/Defense Priorities System. One of the more visible indicators of the program during the production phase is delivery performance. An unrealistic initial schedule can force the program into such things as high cost priority efforts to attain schedule and acceptance of equipment through waivers and deviations.

The success of the contractor in meeting the defined schedule can be affected by the quality of the manufacturing control system utilized. This control system should be described in the manufacturing plan so that the PMO can assess its adequacy for detailed shop release, manufacturing performance evaluation, and corrective action.

It is often beneficial to have the contractor include in the manufacturing plan a chart that portrays the details of the process of manufacture and assembly. These are often developed in formats such as tree charts or "goes-into" charts.

The productivity of the industrial organization can have a significant impact on the effectiveness and efficiency of the manufacturing activity. Where possible, the manufacturing plan should describe the measures planned to improve organizational productivity. These measures may be directed toward improvements in the effective utilization of personnel, equipment, or materials. Where these measures are described, the impact of their successful introduction on the overall manufacturing effort should be defined.