LMMS has saved millions of dollars by applying the financial principles of FFPM to its manufacturing and TQM processes. ³⁴ For the MOI, the decision was made to create a full-time position of "business deputy," to serve on the project team, with the following responsibilities:

1. Propose/negotiate resources.

2. Establish budgets.

3. Direct the tracking of weekly labor and nonlabor expenses.

4. Summarize and report actuals vs. budgets and analyze variances.

5. Design/implement program-unique cost models for forecasting and reporting MOI savings.

6. Establish/oversee MOI parts forecasting and tracking system.

7. Oversee MOI performance schedules/milestone tracking system.

8. Maintain the "full-cycle mindset," ensuring that recognition of cost is integrated at each step of the process.

The individual selected for this position had a broad, well-founded financial background and several years of direct experience working with the FFPM management system.

Cost Modeling

FFPM concepts first were utilized to validate the belief that LMMS would save significant resources by outsourcing production-machining effort. Figure A.2 is an example of the cost modeling analysis, which looked beyond the mere elimination of hourly machining personnel. Also considered were all support labor costs, overhead, and G&A, which had to be compared with the increased costs for administering the MOI. FFPM tools eased the identification and costing of such tasks as transportation, source inspection, and supplier certification.

Figure A.2: Cost Modelling Process.