1998 Winner
U.S. Department of Defense
Innovations in American Government Awards
Sponsored By:
Innovations in American Government Awards
In the 1970s, U.S. industries were losing market share to international competitors because innovative foreign manufacturing techniques were lowering costs, increasing quality, and increasing rates of production. The Department of Defense (DOD) was particularly sensitive to this syndrome. The difficulties the DOD encountered in production rose significantly as more sophisticated weapons were developed. Delayed deliveries, unreliable weapons, huge cost overruns, and embarrassing failures were often the result of these difficulties.
In the early eighties, the Office of Naval Research determined that the solutions to many of these manufacturing difficulties already existed in scattered pockets of the defense industry, but informal rules against sharing information blocked organizations from learning about these solutions. As a result, manufacturers were spending time and money duplicating improvement efforts rather than improving on existing best practices. In 1985 the Best Manufacturing Practices Program (BMP) was created to improve the efficiency and efficacy of diffusion of solutions across the manufacturing sector and prevent different industries from "reinventing the wheel."
Begun as a modestly funded effort to improve goods procured by the Navy, BMP has grown to involve a partnership of organizations in the public, private, and academic sectors. The organization's goal, to "strengthen the U.S. industrial base by improving manufacturing practices," is mainly pursued through the identification and dissemination of best practices. These practices, defined as: "a process, technique or innovative use of equipment or resources that has a proven record of success in providing significant improvement in cost, schedule, quality, performance, safety, environment, or other measurable factors which impact the health of the company," are identified primarily through a multi-step survey.
When invited by a company, BMP assembles an expert team of up to 25 members to examine and document best practices at that company. An agenda is created and a five-day visit to the company is scheduled. The first day is an introduction to the plant, its products, and processes. The second through fourth days are spent on the factory floor examining equipment, processes, talking with employees, and analyzing data. On the last day the team presents a draft report and spends the remainder of the day reporting to management what they observed. In addition to discussions of the best practices observed in the plant, the team also advises the company on where it may be falling behind in practice. Several weeks later, BMP sends the company an edited version of the survey report to approve of its publication.
Once the report is finished, it is published in hardcopy and on the BMP website for dissemination. On the website, each company maintains a current "point of contact" so that interested companies may contact each other directly. The impact of the program has been significant. McDonald Douglas attributes a 50 percent reduction of cost in one area through BMP's benchmarking. Managers at Lockheed-Martin say that the program allowed them to view "what can be done and to move faster, to be more businesslike." BMP has concluded that in the year 1997, participating companies saved over $2.1 billion as a direct result of BMP activities. Overall, those companies have reduced the cost of production by 4.5 percent and delivery time by 5 percent, while increasing quality by 5.6 percent.
The sharing of best practices in an increasingly global market provides a partial solution to the competition that the U.S. will face in the future. With BMP, public and private industries in the United States will be able to ensure that their manufacturing processes are as competitive and cost effective as their collective ingenuity allows.
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