May - Bath Iron Works

Pat Thomas on MaterialsPat Thomasis VP ofMaterialsand Quality, acombined groupof about 400 people.This is the conclusionof a two-part interviewwhich addressed Quality in Apriland this month, Materials.Q. Last month, you spoke about therationale behind the consolidation ofQuality and Materials responsibilitieswithin your organization. How doesthis support the Materials effort?A. Just as the backgrounds and experienceof our people in the Quality organizationcontribute to our ability to fulfillour mission of independent qualityoversight in the shipyard, the sameis true of their role with our vendorbase. The Quality organization playsa critical role in making sure theproducts bought by the Procurementorganization “conform” to specificationsand “perform” as needed throughonsite inspection at suppliers, receiptinspection at BIW, and problem resolutionon the deck plates.Q. What is the BIW Materials organizationresponsible for and how are theyperforming?A. BIW’s Materials organization is thesupply chain that includes vendors,buyers, logistics (traffic), warehousemen,yard transportation and materialhandling. Within Materials, Procurementtakes paper and computer inputsfrom various customers and translatesthem into tangible objects that arriveon the deck plates or in Facilities.Contrary to popular belief, you can’tbuy everything at the hardware store.BIW spends hundreds of millionsof dollars a year on material purchaseswhich require significant contract negotiationsfor favorable terms, price anddelivery schedules, hardware, software,documentation and services. TheProcurement group buys everythingthat the company uses, from complexequipment and steel to nuts, bolts,tools and utilities; literally hundreds of4 | May 2011 | BIW NEWSthousands of parts and services. All of thatvolume has to be managed through thesupply chain to a successful conclusion.Success is making everything availablewhen and where needed at a cost wecan afford.Through our affiliation with GeneralDynamics and the cooperative relationshipsthat we have with our competitors,I have had the opportunity to see a lot ofsupply chain organizations. We can bevery proud of the quality, breadth ofexpertise and ability of our procurementgroup, material handlers, crane operators,riggers, and heavy equipment operatorsand their supervision to provide theshipyard with what it needs. That said,we can and must do better. We are alwaysworking to reduce time, save money forboth the Navy and BIW through processimprovement, and develop and maintainmutually beneficial relationships withquality vendors who service our manyneeds.We also need your help. Material isvery expensive and contributes a very largeportion of the company’s cost. We needeveryone to help us control those costs bytaking care of delivered material, takingonly what is needed from slump areasto complete the job and practicing goodcare and protection after installation toprevent damage and rework.Q. One of the ways that you are innovatingis with technology tools. Is the reverseauction process an example of that?A. Definitely. The availability of theInternet as well as the ability to leveragethe learning and ideas of other GD companieshas helped us a great deal. In aReverse Auction, we pre-qualify vendorsso we know that everyone participatingcan provide the goods or service, is technicallyand managerially capable, andcan meet our quality standards. All documentationfor the “buy” such as tech specsand terms is available online so we nolonger mail thick, costly packages.An online auction allows a competitive,yet fair, price to emerge and we dramaticallyreduce an otherwise expensive,lengthy process of information exchangeand negotiation. On average, reverseauctions save about 6-10% over traditionalnegotiations and we can apply the processto nuts and bolts, valves, and purchasespecification equipment.Q. What else are you working on that maysave costs?A. We recently opened a new GD SmallBusiness portal where small businessescan view the needs of all GD companiesonline. When they register online as apotential vendor for any GD company, wesee them. This will help us ensure that wesource small businesses that can meet ourneeds and expand our competitive baseand that we meet our contract requirementsfor small business participation.Q. What is the workload right nowbetween DDG 51 and DDG 1000?A. BIW has served as the Class ProcurementAgent for DDG 51 ships sinceDDG 53. For Class Standard Equipment(required to be the same for every ship),BIW Engineering and Procurement as ateam complete technical analysis, writerequirements and negotiate general termsand conditions, price and delivery leadtimes for master contracts. BIW andHuntington Ingalls Industries (HII) usethese contracts to issue purchase ordersfor their ship construction needs. Usingadvanced funding, BIW has contractedfor nearly all of the DDG 51 restart classstandard equipment. Today, DDG 51 isabout 25% of our workload.When the design work for DDG 1000was consolidated within BIW, all of theClass Common Equipment (CCE) procurementwork shifted here as well. Wehave already received about 70% of DDG1000 CCE hardware and have contractedfor all of the DDG 1001 and some of theDDG 1002 CCE hardware.Generally, DDG 51 follow ships areabout 66% complete for material (excludingCSE) at the keel milestone. Those ofus who remember DDG 51 lead ship willrecall that we struggled with materialavailability the whole way. Right now,however, DDG 1000 is tracking to the 66%complete follow ship metric for materialgoing into keel.From this perspective, we are buildingDDG 1000 like a follow ship. The unitscoming together in Ultra show a remark-(continued on pg 11)