Sierra Nevada Corporation (SNC) has a major contract to provide a lifting body spacecraft for cargo delivery to the International Space Station. In an effort to reduce lead-time, a concurrent engineering approach was established. The tooling necessary to complete the fabrication requires very tight tolerances and the ability to work in confined areas. It was expected design development would have a long lead time. Manufacturing Engineering secured Models and Tools on a consulting agreement (hourly rate) to develop conceptual tooling designs. The project escalated into an informal partnership and a time and material contract for the fabrication of one of the largest pieces of tooling for the program.
Models and Tools is a 35 million-dollar-a-year tooling and fixturing design and fabrication company. M&T has seen significant growth over the last 10 years, supporting OEMs in their tool-ups for the 787, A320, and F-35 programs. The design department has always been a support organization to feed the fabrication department. The use of this type of consulting agreement, as well as the use of a time and material contract for fabrication, was a new approach in the aerospace tooling industry.
- How a consulting agreement for conceptual design can reduce the probability of change orders in the final design and build contract
- How the use of time and material contracts can improve the concurrent engineering approach for large scale projects
- A list of suggestions and ground rules that can be utilized in the establishment of a partner relationship between an OEM and a supplier
Why Is It Important?
The concurrent engineering process has put many strains on the ability for the manufacturing engineering organization to support design engineering in order to develop just-in-time tooling and assembly fixturing to support production. In order to keep costs down, original equipment manufacturers (OEMs) have been outsourcing progressively more of the tooling design process to tooling houses that maintain a staff of dedicated tool designers. Tooling houses, desiring to secure more fabrication business, have accommodated the OEMs and staffed appropriately. The use of firm fixed price contracts, in an effort to control costs, has been the norm in awarding contracts to the tooling houses. The need for tight tolerance tooling and fixturing in today’s cutting edge aircraft and spacecraft have increased the overall design and build lead time. Maturing engineering, coupled with firm, fixed-price contracts, can put OEMs and tooling houses into a reticent type relationship as the overall tooling design efforts increase beyond the foreseen scope. This leads to general dissatisfaction from OEMs due to large change orders and from tooling suppliers having to absorb the cost of customer changes.