COST SAVINGS FROM THE BOTTOM UP


may not account for all variables, a clean-sheet provides a valu- able estimate of the production cost of an item under a specified set of assumptions.


Despite the benefits of clean-sheeting, challenges exist. It is a labor- and time-intensive process, requiring a diverse team of experts with extensive knowledge and resources to conduct the analysis. It also provides an aggressive estimate that ini- tially assumes ideal processes and pricing. For example, initial analysis is based on top-quartile industry standards and market pricing for materials that may not reflect reality or the present state of the situation or program. It assumes mature processes and efficient production volumes, when in reality the processes and teams may be new or inexperienced.


PGK WITH CANARD COVER


As a sole-sourced, first-of-its-kind product, the PGK—shown here with canard cover—was a good candidate for clean-sheet analysis, which lets the government understand the cost of an item from each component up. Without that understanding, the manufacturer has a lot more leeway to set the price higher. (Photo courtesy of Product Manager GPM2S)


In addition, low production levels and no guarantee of future orders may limit a prime contractor’s ability to procure materi- als in efficient volumes, and not all data required for an accurate clean-sheet is easily accessible or readily available.


Finally, a comprehensive database of manufacturing industry standards is required and needs to be maintained by the clean- sheet contractor, who pulls the information from subscription websites. Most importantly, at the end of the clean-sheet process, it is imperative for the PM and the contractor to analyze and understand the gaps, determine what portion of the gaps can be closed, implement applicable recommended practices and work throughout the supply chain to bring “current cost” closer to


“should cost.” For more


information, contact MAJ Kenneth B. Fowler at


Kenneth.b.fowler4mil@mail.mil. MAJ KENNETH B. FOWLER is


the PGK assistant product


manager for PM CAS, Picatinny Arsenal. He holds a B.S. in criminal justice from South Carolina State University. He is Level I certified in program management and a Lean Six Sigma black belt.


WHY PGK?


The GPS-enabled PGK attaches to explosive projectiles, using one component—its canards—to guide the projectile toward its target and make minor corrections. Clean-sheeting requires analysts to know what purpose each component serves and how it’s manufactured and to stay updated on best practices and pricing data—a challenge in budget- constrained times. (Photo courtesy of Product Manager GPM2S)


MR. ROBERT E. STEERE III is a project management officer within PM CAS at Picatinny Arsenal. He is Level III certified in engineering, Level III certified in production, quality and man- ufacturing, and a Lean Six Sigma green belt. He has a B.S. in mechanical engineering from the University of Rhode Island and holds nine U.S. patents.


110


Army AL&T Magazine April-June 2016


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