Digging into defense

Posted on Jun 9, 2011 :: Cover Story
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Posted by , Insight on Manufacturing Staff Writer

Taking part in the U.S. Defense Department industry supply chains in Northeast Wisconsin isn’t as simple as being a high-quality, on-time supplier. Suppliers say that’s part of the equation, for sure. But first, there are specific procedures to master. Then there’s understanding that prime contractors value partners adept at fine-tuning their performance.

Defense contracts with such companies as Marinette Marine and Oshkosh Corp. could generate 30,000 to 50,000 jobs over the life of the contracts, according to Paul Jadin, Secretary of the Wisconsin Department of Commerce. Many manufacturers in the New North not already contracting with one of these companies are no doubt looking at how to get in on the action. Hundreds in the region are already signed on, and they attest that military work comes with a unique set of parameters.

“There is a significant amount of upfront documentation, if you will,” notes Gary Lofquist, CEO of MCL Industries, a Pulaski-based supplier of electrical control panels. MCL has done work for Oshkosh Defense as well as Ace Marine, a Green Bay-based sister company to Marinette Marine Corporation, which has built boats for the U.S. Coast Guard.

For critical parts on military vehicles or ships, says Lofquist, it is typical that the prime contractor will undergo a supplier certification process. The process calls for visits from quality management personnel to ensure the supplier has their quality assurance and manufacturing processes in order.

In MCL’s case, says Lofquist, being “ISO: 9001” quality certified sped up the process. Another step in becoming a supplier with access to technical drawings is making sure that your people follow appropriate International Traffic in Arms Regulations or “ITAR” rules that help control security over engineering files.

But strip away the more specialized requirements, say Lofquist and others, and becoming a trusted supplier to a major defense contractor isn’t that much different than being a strong supplier to other sophisticated original equipment manufacturers.

“They are primarily interested in who can deliver on time, who can deliver a quality product, as well as who can deliver innovation and cost savings,” says Lofquist.

One of the best ways to get involved in defense sector supply chains in the region is to attend industry events, says Aina Vilumsons, executive director of the Wisconsin Procurement Institute, a Milwaukee-based non-profit that helps Wisconsin companies with government contracting.

For example, WPI hosted a small business-industry day in Green Bay in February for businesses interested in the Littoral Combat Ship project at Marinette Marine Corporation. Other organizations (see sidebar, Tapping into the Chain, page 12), can also help.

Even though MCL has long-standing relationships with both Oshkosh Defense and Marinette Marine, Lofquist sent people to the industry day put on by WPI. “I think it’s important to continue to express a clear interest in their projects and to find out about any new requirements,” says Lofquist.

Like the rest of manufacturing, the defense sector is adopting practices such as continuous improvement and lean manufacturing. Lofquist says for MCL that can mean being asked to deliver electronic assemblies under a narrow time window of just a few days, since delivering too early would build up inventory.

Lori Okrasinski, purchasing manager and small business liaison officer for Marinette Martine, says the company is working closely with suppliers to the Littoral Combat Ship – a multi-year program for the U.S. Navy – to ensure not only initial quality, but also improving aspects such as packaging and deliveries. This can involve different ways of “kitting” parts so that related components arrive in one tidy bundle.

“In the case of an engine, we might send out the requirement for the engine, but they usually want the auxiliary items installed right on the engine, if at all possible, so it comes in one complete unit and we don’t have all these piece components to keep track of,” says Okrasinski. “We’ve also done things like kitting by zone on the ship, so maybe if we are working on a galley area to construct certain panels or doors, we may ask the supplier to kit those items so we can call out an entire skid of what is needed for the area.”

For suppliers of commercial, off-the-shelf parts (COTS in industry jargon) there isn’t the same level of collaboration. But for other suppliers, quality and improvement procedures can be rigorous. For example, Oshkosh Defense is requiring suppliers to its latest military truck program – the Family of Medium, Tactical Vehicles, or FMTVs – to adhere to an automotive industry standard called the Production Part Approval Process. Under PPAP, suppliers must demonstrate the quality assurance procedures they have in place.

Paul Gosling, VP of global procurement and supply chain for Oshkosh Defense, says that to help suppliers understand requirements like PPAP, the company uses a web-based portal to disseminate information. Oshkosh Defense engineers and quality management people also work collaboratively with suppliers on a range of design, quality, and cost reduction efforts. “When a supplier has an issue, we go in there to help, not hinder,” he says.

For some electrical or welding services businesses, it may be necessary for their technical people to have certain certifications or training to work on a military project. George Van Der Linden, chief operating officer for Faith Technologies, a Menasha-based electrical company, says that for its work on Coast Guard ships, it’s been necessary for its electricians to know U.S. Navy electrical standards.

“We have to do a little special training for our people to understand the nuances of that standard,” says Van Der Linden.

For a ship builder, he says having a nearby electrical contractor with a core group of people trained to standards is a plus because the builder can quickly ramp up the pace of electrical work without the cost of having more electricians on staff year-round. The expertise Faith Technologies has built up in marine industry electrical work also has been a boon to local educators. Northeast Wisconsin Technical College received input from Faith to help develop marine electrical curriculum, says Van Der Linden.

Longer term, workforce development is seen as one of the best ways to ensure that manufacturers in the region are ready to handle military-related contracts. Ann Franz, strategic partnerships manager at NWTC and coordinator for the North Coast Marine Manufacturing Alliance, says one of the NCMMA’s main goals is training. NWTC, an alliance member, already has begun a 41-credit marine welding program, and UW-Marinette, also an alliance member, offers shipbuilding design courses.

Companies thinking about diving into defense supply chains have to be flexible, says Lee Swindall, director of consulting services and interim executive director of the Wisconsin Manufacturing Extension Partnership. OEMs value suppliers who have enough customer mix to be financially strong, but still are able to juggle plant capacity to meet variations in demand. To pull that off profitably, he adds, suppliers may need a better demand-management foundation that spans not only classic forecasting skills, but reaches down to a deep understanding of factory floor processes and how those can be adjusted to quickly change over production to different products.

“Being a supplier to military contractors can require higher production to be turned on almost immediately,” Swindall says. “These suppliers are going to have to be able to respond to that without any significant challenge. Likewise, if demand should slacken, the supplier has to be financially robust enough to absorb that.”