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MANUFACTURING TECHNOLOGY
CORNERSTONE OF A RENEWED DEFENSE INDUSTRIAL BASE
Committee on the Role of the
Manufacturing Technology Program
in the Defense Industrial Base
Manufacturing Studies Board
Commission on Engineering and
Technical Systems
National Academy Press
Washington, D.C. 1987
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NOTICE: The project that is the subject of this report was approved by the
Governing Board of the National Research Council, whose members are drawn from
the councils of the National Academy of Sciences, the National Academy of
Engineering, and the Institute of Medicine. The members of the committee
responsible for the report were chosen for their special competences and with
regard for appropriate balance.
This report has been reviewed by a group other than the authors according
to procedures approved by a Report Review Committee consisting of members of
the National Academy of Sciences, the National Academy of Engineering, and the
Institute of Medicine.
The National Academy of Sciences is a private, nonprofit, self-perpetuating
society of distinguished scholars engaged in scientific and engineering
research, dedicated to the furtherance of science and technology and to their
use for the general welfare. Upon the authority of the charter granted to it
by the Congress in 1863, the Academy has a mandate that requires it to advise
the federal government on scientific and technical matters. Dr. Frank Press
is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the
charter of the National Academy of Sciences, as a parallel organization of
outstanding engineers. It is autonomous in its administration and in the
selection of its members, sharing with the National Academy of Sciences the
responsibility for advising the federal government. The National Academy
of Engineering also sponsors engineering programs aimed at meeting national
needs, encourages education and research, and recognizes the superior
achievements of engineers. Dr. Robert M. White in president of the National
Academy of Engineering.
The Institute of Medicine was established in 1970 by the National Academy
of Sciences to secure the services of eminent members of appropriate
professions in the examination of policy matters pertaining to the health of
the public. The Institute acts under the responsibility given to the National
Academy of Sciences by its congressional charter to be an adviser to the
federal government and, upon its own initiative, to identify issues of medical
care, research, and education. Dr. Samuel O. Thier is president of the
Institute of Medicine.
The National Research Council was organized by the National Academy of
Sciences in 1916 to associate the broad community of science and technology
with the Academy's purposes of furthering knowledge and ad~riaing the federal
government. Functioning in accordance with general policies determined by the
Academy, the Council has become the principal operating agency of both the
National Academy of Sciences and the National Academy of Engineering in
providing services to the government, the public, and the scientific and
engineering communities. The Council is administered jointly by both Academies
and the Institute of Medicine. Dr. Frank Press and Dr. Robert M. White are
chairman and vice chairman, respectively, of the National Research Council.
This study was supported by Contract ISI-8506440 between the National
Science Foundation and the National Academy of Sciences.
A limited number of copies
are available from:
Manufacturing Studies Board
National Research Council
2101 Constitution Avenue
Washington, D.C. 20418
Printed in the United States of America
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COMMITTEE MEMBERSHIP
WICKHAM SKINNER, Chairman, James E. Robison Professor of
Business Administration (emeritus), Harvard University,
Boston, Massachusetts
JAMES BRIMSON, Vice President, Business Development,
CAM-I, Arlington, Texas
GARY W. FRENCH, President, Colt Firearms, Hartford,
Connecticut
MARGARET B. W. GRAHAM, Associate Professor, School of
Management, Boston University, Boston, Massachusetts
HAMILTON HERMAN, Senior Vice President (retired), American
Can Company, New Canaan, Connecticut
WILLIAM A. HETZNER, Center for Social and Economic Issues,
Industrial Technology Institute, Ann Arbor, Michigan
HENRY JOHANSSON, Partner, Coopers & Lybrand, New York,
New York
ROBERT S. KAPLAN, Arthur Lowe s Dickinson Professor of
Accounting, Graduate School of Business Administration,
Harvard University, Boston, Massachusetts
PETER W. LIKINS, President, Lehigh University, Bethlehem,
Pennsylvania
ROBERT LUND, Research Professor, Center for Technology and
Policy, Boston University, Boston, Massachusetts
HERBERT L. MISCH, Vice President (retired), Ford Motor
Company, Detroit, Michigan
THOMAS D. MORRIS, Commissioner (retired), Federal Supply
Service, General Services Administration, Washington,
D.C.
RAYMOND L. RISSLER, Program Manager (retired), General
Electric Company, Louisville, Kentucky
DEAN M. ROWE, Senior Vice President, Operations, Copeland
Corporation, Sidney, Ohio
iii
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CHARLES C. SILVA, Vice President and Corporate Director of
Manufacturing (retired), Motorola, Inc., Schaumburg,
Illinois
JEROME A. SMITH, Director of Operations, Martin Marietta
Corporation, Bethesda, Maryland
JOHN M. STEWART, Director, McKinsey and Company, Inc.,
New York, New York
JOHN G. T. THORNTON, Publisher, CIM Magazine and CIM
Newslinc, Elk Grove Village, Illinois
ROBERT F. TRIMBLE, Vice President, Contracts, Martin
Marietta Corporation, Bethesda, Maryland
JOHN A. WHITE, Regents' Professor of Industrial and
Systems Engineering, Georgia Institute of Technology
Atlanta, Georgia
STAFF
GEORGE H. KUPER, Executive Director, Manufacturing
Studies Board
CAROLYN P. CASTORE, Staff Officer
JANICE E. GREENE, Staff Officer
LUCY V. FUSCO, Administrative Assistan
KENNETH M. REESE, Editor
iv
at
>
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MANUFACTURING STUDIES BOARD
WICKHAM SKINNER, Chairman, James E. Robison Professor of
Business Administration (emeritus), Harvard University,
Boston, Massachusetts
ANDERSON ASHBURN, Editor, AMERICAN MACHINIST, New York,
New York
AVAK AVAKIAN, Vice President, GTE Sylvania Systems Group,
Waltham, Massachusetts
IRVING BLUESTONE, Professor of Labor Studies, Wayne State
University, Detroit, Michigan
BARBARA A. BURNS, Manager, SYSTECON, Division of Coopers &
Lybrand, Duluth, Georgia
CHARLES E. EBERLE, Vice President, Engineering (retired),
The Procter and Gamble Company, Cincinnati, Ohio
ELLIOTT M. ESTES, President (retired), General Motors
Corporation, Detroit, Michigan
ROBERT S. KAPLAN, Arthur Lowe s Dickinson Professor of
Accounting, Graduate School of Business Administration,
Harvard University, Boston, Massachusetts
ROBERT B. KURTZ, Vice President (retired), General
Electric Corporation, Fairfield, Connecticut
JAMES F. LARDNER, Vice President, Component Group, Deere &
Company, Moline, Illinois
MARTIN J. McHALE, Vice President, Control Data Corpora-
tion, Bloomington ? Minnesota
THOMAS J. MURRIN, President, Energy and Advanced Technol
ogy Group, Westinghouse Electric Company, Pittsburgh,
Pennsylvania
ROGER N. NAGEL, Director, Manufacturing Systems Engi-
neering, Lehigh University, Bethlehem, Pennsylvania
RICHARD R. NELSON, H. C. Luce Professor of International
Political Economy, Columbia University, New York,
New York
v
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DAN L. SHUNK, Director, Center for Automated Engineering
and Robotics, Arizona State University, Tempe, Arizona
JEROME A. SMITH, Director of Operations, Martin Marietta
Corporation, Bethesda, Maryland
JOHN M. STEWART, Director, McKinsey and Company, Inc.,
New York, New York
STEVEN C. WHEELWRIGHT, Kleiner Perkins Caulfield & Byers
Professor of Management, Stanford University, Stanford,
California
JOHN A. WHITE, Regents' Professor of Industrial and
Systems Engineering, Georgia Institute of Technology,
Atlanta, Georgia
EDWIN M. ZIMMERMAN, Member, D.C. Bar, Washington, D.C.
STAFF
GEORGE H. KUPER, Executive Director
KERSTIN B. POLLACK, Director, Program Development
CAROLYN P. CASTORE, Staff Officer
JANICE E. GREENE, Staff Officer
THOMAS C. MAHONEY, Staff Officer
VERNA J. BOWEN, Administrative Assistant
LUCY V. FUSCO, Administrative Assistant
MICHAEL S. RESNICK, Administrative Assistant
vi
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PREFACE
The Manufacturing Technology (ManTech) program of the
Department of Defense (DOD) is intended to improve the
productivity and responsiveness of the U.S. defense indus-
trial base by funding the development of manufacturing
technologies. The DOD program, by providing seed funding
for development of process and equipment technology,
permits contractors to upgrade their manufacturing
capabilities. Ultimately, the program aims to produce
high-quality weapon systems with shorter lead times and
reduced acquisition costs.
The ManTech program has recently been criticized, and
its continuance has been in doubt. In the late 1970s and
early 1980s, the program was projected to grow at a rapid
pace. By 1986, however, the Army ManTech program has been
largely dismantled and the Navy program has been reduced
and redirected. The Air Force program, while remaining
stable, has not achieved its planned growth.
The Army, Navy, Air Force, and National Science
Foundation asked the National Research Council, through
its Manufacturing Studies Board, to form a committee to
answer fundamental questions being asked about the need
for and directions of the program. The committee was
directed to examine the basic principles underlying the
program and recommend the appropriate role and mechanisms
for DOD to encourage the development of manufacturing
technology. The National Science Foundation's interest
in the topic derives from its experience in developing
methodology for evaluating federal programs.
The Manufacturing Studies Board accordingly set up the
Committee on the Role of the Manufacturing Technology
Program in the Defense Industrial Base. It comprises
20 members (12 original members, 8 who were added for
this report) with experience in advanced manufacturing
vii
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technology, military procurement, financial accounting,
manufacturing management, and manufacturing strategic
planning.
As is true of all Research Council committees, the Com-
mittee on the Role of the Manufacturing Technology Program
in the Defense Industrial Base was selected to balance the
"biases" of its members regarding the subject of study.
In this case, the committee had roughly equal numbers of
ManTech supporters, persons skeptical of the program, and
persons who had not yet formed an opinion of the merits
of ManTech. Through its research and deliberations, the
committee achieved a convergence of opinion, which is
reflected in this consensus report.
The committee divided its work into two phases. This
report summarizes its conclusions from phase II. In its
phase I report, The Role of the Department of Defense in
Supporting Manufacturing Technology Development, the
committee examined what role, if any, DOD should have in
supporting the development of manufacturing technology.
The committee concluded that such support is critical to
the nation's defense, and that direct funding via the
ManTech program can provide essential benefits that other
methods cannot.
During phase II, the committee directed its efforts to
determining how DOD should manage its investments in manu-
facturing technology development. The committee examined
the experience of the ManTech program and formulated its
answer in relation to the program.
Throughout the report, the committee refers to the pro-
cesses and equipment used in production as manufacturing
technology (using lower case m and t). The DOD program is
referred to as either the Manufacturing Technology program
or ManTech (using upper case M and T).
viii
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ACKNOWLEDGMENTS
The Committee on the Role of the Manufacturing
Technology Program in the Defense Industrial Base is
responsible for organizing and conducting the research and
writing the findings of this study. Our work would not
have been possible, however, without the contributions of
the Manufacturing Studies Board staff who facilitated our
work: executive director George Kuper, staff officers
Carolyn Castore and Janice Greene, and administrative
assistants Lucy Fusco and Michael Resnick. We are
grateful to the General Accounting Office for allowing
Ms. Castore to work on this project through an Interagency
Personnel Agreement.
We wish to thank the four peer reviewers--Norman
Augustine, Jacques Gansler, David Mowery, and William
Spurgeon. Their thoughtful comments on our draft report
enabled us to fine-tune its substance and presentation.
Thanks are owed to McKinsey and Company for assistance
with the computer analysis of ManTech projects and to
Gerald Susman of the Pennsylvania State University for
conducting a case study of a ManTech project. In
addition, the many people who spoke freely with the
committee provided invaluable information.
Finally, we wish to thank our liaisons in the federal
government for their assistance: Assistant Secretary of
Defense for Production and Logistics Robert Costello;
Deputy Assistant Secretary John Mittino; Richard Donnelly,
Charles Kinzey, and Lloyd Lehn of the Office of the Assis
tent Secretary of Defense for Production and Logistics;
Robert Fear and Fred Michel of the Army Materiel Command;
John McInnis and Steven Linder, Office of the Assistant
Secretary of the Navy for Shipbuilding and Logistics; Gary
Denman, Vincent Russo, and Nathan Tupper of the Air Force
Materials Laboratory; Daniel Gearing and Donald O'Brien,
ix
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Defense Logistics Agency; and George Hazelrigg of the
National Science Foundation. We particularly appreciate
Charles Kimzey's coordination of the Defense Department's
participation in this study.
This report was greatly enhanced by the willing and
open exchange of information by the officials of the
Manufacturing Technology program.
Wickham Skinner
Chairman
x
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CONTENTS
SUMMARY .
1. THE COMPETITION FOR MANUFACTURING SUPREMACY.
The Role of DOD in That Competition, 5
The Need for the ManTech Program, 5
A New ManTech Program, 6
Notes, 7
2. UNDERESTIMATING THE IMPORTANCE OF MANTECH
LIMITS ITS IMPACT. . . . . . . . . . . .
ManTech: A Collection of Small,
Low-Risk Projects, 9
The ManTech Program Needs Top
Management Attention, 12
Conclusion, 15
3. STRATEGY AND ORGANIZATION . .
. 1
. . . 4
. . . . . . . . . . . 17
What a Manufacturing Strategy Entails, 17
Organizational Relationships, 18
An Example, 20
Conclusion, 20
Notes, 21
4.
SELECTING PROJECTS AND EVALUATING THE
MANTECH PROGRAM . . . . . . . . . . .
Fundamental Program Mission, 22
Overall Program Characteristics, 22
Individual Project Objectives, 24
Evaluation Criteria, 25
xi
. 22
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5 . CONCLUS ION .
Appendix A:
ANALYSIS OF MANUFACTURING
TECHNOLOGY PROJECTS. . .
Summary of Results, 29
Results by Criterion and Service, 30
Appendix B: PROBLEMS IN MEASURING COST REDUCTION
AN EXAMPLE .............
xii
. 27
. 28
\
. . 34
