Northrop Pioneers Efficient, Paperless F-18 Assembly Line

With each F-18 jet fuselage that Northrop turns out, it creates 16,295 pages of manufacturing paper work. Since the F-18 program began, it has generated enough paper to equal the height of the Empire State Building.

Such monumental amounts of paper work have become a hallmark of the defense procurement system, which appears to thrive on complex and often arcane rules that require legions of workers to implement and document.

Although the trend shows few signs of reversing direction, military services and defense contractors sometimes succeed in fighting back the tide of paper or finding better ways to deal with it.

As part of a Pentagon program to encourage defense industry investment in modern capital equipment, Northrop believes that it has developed the industry’s first paperless aircraft assembly line. A computer system, which gives assembly-line workers their instructions via video display terminals and keeps track of all manufacturing operations, will eliminate the paper work on the F-18.

“Some competitors told us it would never work,� said Lauren Perreault, Northrop’s manager who developed the system. “I don’t think there is another company with anything this sophisticated.�

The program is expected to save $20 million over the remaining life of the F-18 program, which amounts to roughly $25,000 for each of the 800 or so jet fighters still to be built for the Navy.

Northrop builds the aft fuselage section of the F-18, a dual-purpose fighter and attack jet that operates from aircraft carriers. The fuselage sections are shipped by rail to the F-18 prime contractor, St. Louis-based McDonnell Douglas, where final assembly of the aircraft is conducted.

Under the Defense Department program, Northrop has invested $10 million of its own money to develop the paperless assembly line, which it calls Integrated Management Planning & Control for Assembly.

Shared Savings

Historically, defense contractors have had little incentive to invest in cost-saving manufacturing techniques in sole-source programs. That is because the government allowed a contractor to keep only the first year’s savings, taking all of the savings for the rest of the program. By lowering the future cost of the product, a contractor was also cutting his future profits.

Under a new effort called the Industrial Modernization Incentives Program, the government allows the contractor to keep a share of the saving, based on the risk of the investment and on a complex formula that measures the company’s rate of return on the investment.

But even in this case, there are numerous risks and pitfalls.

“If the program is canceled or the quantity reduced, that’s the contractor’s risk,� said Kenneth Gorter, the Navy contracting officer in charge of Northrop’s IMPCA program. “He must absorb those losses through the profits of the company. Those are the risks he accepts to participate in the savings.�

And that’s just what seems to have happened in Northrop’s IMPCA program. After Northrop invested the $10 million in the system, the Navy decided to cut the number of F-18s that it would buy to 1,156 from 1,367.

As a result, the company may not earn enough on the project to have justified making the investment in the first place. (Technically, the internal rate of return may not exceed the firm’s cost of capital.) The division of the $20 million in savings between Northrop and the Navy is still to be negotiated, but the Navy is expected to take more than half.

Nonetheless, Northrop officials are quite proud of the IMPCA system because it gives them a leg up on competitors and it may help on foreign F-18 business.

It also has a good chance of being used on the B-2 stealth bomber program. Also, the computerization should improve efficiency, an intangible benefit that is not included in the calculated $20-million savings from IMPCA.

135 Computer Screens

Other aerospace firms did not dispute Northrop’s claim that the IMPCA system marks a new approach to aircraft assembly. Lockheed, Douglas and Boeing spokesmen said their firms have increased computerization in their aircraft production, but they apparently have not eliminated paper on the assembly line.

“I can’t say we have a paperless factory, but we are moving in that direction,� said Douglas Aircraft spokesman Don Hanson. “If you go out on our assembly line, you will see computers all along the line.�

The paperless F-18 assembly line at Northrop operates by transferring all work instructions, quality control documentation and inspection records into an integrated computer system. Employees, supervisors and even Navy officials at the plant have access to the system. Along the quarter-mile-long F-18 assembly line in El Segundo, Northrop is installing 135 computer screens for assembly line workers, who are called “mechanics� in the aircraft industry. About half the line has been converted from paper to computer.

In building an aircraft, every task that a mechanic performs must be described in detailed instructions. For example, each rivet on an aircraft has a work order number. Many parts must be inspected by a quality-control official, who then certifies his inspection with a personal stamp in the records.

Since there are eight different F-18 models that move down the assembly line, the job of telling workers precisely what they will do during every minute of an eight-hour day has resulted in a massive amount of paper work.

Until now, the detailed instructions have been compiled in blue loose-leaf binders each night by a staff of clerks and distributed along the assembly line for the first and second shifts.

Subject of Rap Song

After the shifts are completed, the binders are collected, disassembled and audited to ensure that mechanics properly logged their work and that quality-control inspectors entered their personal inspection stamps.

Then, each aircraft’s records are compiled into a single, 240-pound set and shipped to a warehouse in Carson to be stored for 20 years.

By comparison, the computerized system automatically distributes the work instructions, and mechanics need only check their computer screen for work orders. Inspectors use an electronic quality stamp and rely on a secret password to protect the security of their stamps. (In the past, stamps had to be kept under lock and key.)

After a shift is completed, the computer system collects, audits and collates the records automatically. After an aircraft fuselage is shipped, the electronic records are reduced to a set of 36 microfiche cards.

Gary Lampkins, a Northrop administrator on the program, said the firm’s employees like the program. In fact, mechanics have composed a 21-verse rap song extolling the virtues of IMPCA. A sample verse of the song, written by quality assurance workers Lou Langston and Larry Pendleton, goes:

“No more missing paper

for inspectors to chase

just hit the right keys

info’s in the database.�