VCS Supply Chain Manufacturing Technology Review
Project Participants: General Dynamics Electric Boat & Newport News Shipbuilding
Project Start: January 2010
Contractor furnished components make up nearly 30% of the overall cost for a VIRGINIA-Class Submarine (VCS). Of that nearly $600M, $146M is attributable to the 40 most costly components. The General Dynamics Electric Boat (GDEB) and Northrop Grumman Shipbuilding-Newport News (NGSB-NN) shipyards have identified an opportunity to reduce cost from the VCS program by identifying key cost drivers for these 40 vendor furnished components, and will leverage in-house expertise in the areas of design, engineering, procurement, and delivery to work with vendors to reduce costs where possible.
The project team will thoroughly evaluate each of these 40 components during a series of reviews, encompassing every stage of the installation process, from initial design, procurement, and receipt inspection, all the way through delivery to the ship. Design engineers will determine if current component designs have been optimized to reduce cost and schedule and if the most effective and efficient techniques are being used to manufacture them. Dimensional accuracy requirements that drive costs will be challenged where practical. Design-for-assembly (DFA) tasks affecting components or gaps where DFA should be employed will also be considered. Additionally, the project team will evaluate the vendors’ existing infrastructures for their ability to provide components for the soon to be increased two ships per year build rate.
Once all 40 components have been initially reviewed, the project team will identify the top 10 vendors for whom any recommended changes in design, engineering, manufacturing, and/or delivery will provide the greatest cost savings and probability of implementation. Following vendor commitment, GDEB will lead a series of meetings at each vendor site to discuss the proposed actions that will ideally bring down the cost of their respective components, and an implementation plan will be developed so that all stakeholders can agree upon a clear transition strategy.
Based on previous design reviews to reduce cost, it is estimated that this project could save 1% of the total cost of the ‘Top 40’ contractor furnished components. Since GDEB and NGSB currently procure these components for roughly $146M per VCS hull, this represents $1.46M in potential savings per hull. Considering a total ManTech investment of approximately $1.4M, along with the VIRGINIA shipyards’ estimated implementation cost, the investment in this project could be returned after just two ships.