PROCESS EFFECTIVENESS

Policy Paper prepared for the Defense Manufacturing Council

National Center for Advanced Technologies
1250 Eye Street, N. W., Suite 1100, Washington, D. C. 20005
Phone (202) 371-8451 Fax (202) 371-8458 Internet ncat@ncat.com

April 19, 1996

GENERAL POLICY

AN INTERPRETATION and A CRITICAL PROCESS LISTING

The following letter and proposed policy, interpretation, and critical process listing for process effectiveness assessment was provided to the Department of Defense in mid-April 1996. This work was a result of government/industry workshops involving members of the Industry Affordability Task Force, an NCAT White Paper (June 1995), and inputs from briefings to the Systems Engineering Steering Group (SESG) and the Defense Manufacturing Council (DMC). While the critical processes list could be debated for a long time, the NGS-IPT/JACG list of high level processes is a good place to begin in developing an assessment of a company's processes.

PROCESS EFFECTIVENESS ASSESSMENT - GENERAL POLICY

Analyses of industrial practices over the last decade show that the quality, functionality, and schedule availability of products and systems all improve significantly with the increasing relevance and effectiveness of the processes indigenous to a company's management, engineering and manufacturing organizations. Of particular significance are the existence, effectiveness, institutionalization, and continuous improvement of these processes.

As part of DoD's activity to "re-engineer" defense procurement, process effectivity assessments will be utilized as an evaluation tool for major program acquisitions. These assessments will also be a major element in common process facility initiatives. It is to be recognized that industry "owns" their management, engineering, and manufacturing processes; thus industry will identify those processes critical to the success of any program, and will define the metrics necessary to assess those processes. This will include industry's approach to demonstrating process effectiveness, where applicable. Additionally, industry will outline a program that describes the continuous process improvement activity that will keep processes at competitive levels. Source selections will give appropriate weight to the credibility of the industry proposed approach, as well as to past experiences with process effectiveness.

In this assessment initiative, the government will minimize oversight, and will rely to the maximum extent on the process definition and performance information and on demonstrations provided by an industrial supplier. Such information should be structured to show process effectivity and process management in second and/or third tier suppliers when relevant (especially with regard to specifying and enforcing open system standards and specifications for supplier product interfaces).

Industry assessments normally include a model and an analytical approach that relates process maturity to unit cost objectives and other important value parameters. These industry developed models/analyses are generally company unique and provide mechanisms for tracking process performance and projected process improvements throughout a program. These individual assessments should be considered in the overall process effectiveness assessment for the DoD.

Funding profiles for Demonstration/Validation (DV) and Engineering and Manufacturing Development (EMD) will include provisions for early demonstration of critical processes. Service weapon planning guidelines will front load programs over current practice to allow critical process demonstrations.

The services will publish and maintain a set of guidelines to implement the policy. The attached supplement to this policy provides additional detail that will form the basis for these assessment guidelines.