In an effort to reduce the cost of raw materials, many of our clients have been interested in buying companies to vertically integrate their production or partner with other companies to produce necessary product components. While the idea of acquisition and partnership is attractive, companies are at risk of an expensive failure or production delay if not examined properly. To avoid that, we advise clients to use Manufacturing Readiness Levels (MRLs) for good decision making to prevent rising costs and late products.
What is Manufacturing Readiness Level (MRL)?
MRLs are quantitative measures used to assess the maturity of a given technology, component, or system from a manufacturing perspective. MRLs provide decision-makers with an understanding of the relative maturity and risks associated with manufacturing technologies, products, and processes.
Manufacturing risk identification and management must begin at the earliest stages of technology development and continue vigorously throughout each stage of a program’s life cycle.
Increasing Use of Manufacturing Readiness Levels
Although MRLs are essentially a background check before collaboration or integration, they are often overlooked. It's easy for companies to be so focused on achieving economies of scale that even big companies are susceptible to overlooking MRLs.
Initially developed for use by the United States Department of Defense (DoD), MRLs are now used by other branches of the American government and the EU.
The DoD is the largest purchaser of complex manufactured products, including the F-35 Joint Strike Fighter, which is built with 40,000 separate parts. But the failure to use MRL principles and metrics have resulted in the F-35 being the single most expensive development of any one project, costing approximately $400M. This result is almost double the initial estimate for the project.
But the DoD is not the only organization that has run into this problem. Major multinational companies have also failed to conduct due diligence and impartial testing. Apple is an example of a high-profile multinational company that failed to acknowledge a project's feasibility through MRLs before partnering with the now-bankrupt sapphire glass manufacturer, GT Advanced. This misstep also left Apple at a great financial loss.
9 MRL Risk Elements in the Manufacturing Readiness Level Chart
To understand where you and your suppliers are, it can be useful to focus on the risk elements. There are nine risk elements, each of which improves production and moves up the MRL scale. While there is more complexity to each risk element, below we've summarized the key considerations as reflected in the manufacturing readiness level chart:
1. Technology & the Industrial Base
Does the technology exist? And is there a manufacturing base to produce it?
Less developed countries, for example, may have access to general technology but not the industrial base to manufacture a product.
How is the product designed?
Innovative products may exist, but they cannot be manufactured economically if the design is not optimized for production.
Do the raw materials exist in the necessary quantities?
4. Cost & Funding
Is there enough funding to bring this product to full production?
5. Process Capacity and Control
Process capacity and control applies to all manufacturing. You should have a close look at the capacity and controls throughout the manufacturing process.
6. Quality Management
Having weak or non-existent quality management leads to delays and waste.
7. Manufacturing Personnel
Does the company or country have the necessary manufacturing personnel?
Many products require a highly trained and specialized workforce, so the location needs to have access to the relevant skills.
Is the facility set up for any specialization in production?
9. Manufacturing Planning, Scheduling, and Control
Manufacturing planning is vital to maintaining consistent production. The highest MRL incorporates lean manufacturing and just-in-time deliveries to keep the minimum inventory level to make production.
Failure to plan leads to excessive or insufficient supplies, production delays while waiting for materials, or unsustainable production.
Although the task may be daunting, all manufacturers can try to move up through the MRL with the following suggestions:
- Take your time.
Planning and due diligence are vital. Investigate the underlying conditions and understand where the MRL stands for the company or product by leaving enough time to validate each level before moving up.
- Start small.
Use the “crawl, walk, run” method by starting with experiments and testing to ensure that claims can be backed up and that manufacturing is feasible. As each level becomes more prominent and complicated, it's best to start at the lowest level and work your way up rather than trying to jump ahead.
- Do not commit without extensive validation.
Doing so may cause the manufacturer to go out of business, as seen in the Apple example above.
- Use statistical tools.
Use Design of Experiments (DoE) and Statistical Process Control (SPC) before making any major commitments. These tools can provide valuable insights into the current manufacturing level and the feasibility of moving up MRL levels.
Manufacturing factors are rarely related to one input. DoE can help you understand how more than one factor can affect outcomes. To learn more about SPC, check out our blogs.
MRL is a useful tool for understanding your suppliers’ manufacturing operations to make intelligent, informed business decisions. It could be the key to saving money and time when your company is due for expansion or collaboration.
If you want to understand your facility's risks and how to improve operations, schedule a complimentary consultation with CMC's consultants today.