Aerospace and Defense Contract Manufacturer Key Terms

Learn some basic terminology used by aerospace and defense contract manufacturers

By Kimberly Huber

Aerospace and defense contract manufacturers are involved in the research, development and production of materials, tools and equipment used by the United States Department of Defense. They often work on projects involving other nations from around the world, and all production is done on a contract basis. In order to be involved in aerospace and defense contract manufacturing, you have to understand the processes, industry issues and business models associated with the industry.

Universal ID (UID)

The UID system provides a key for quickly referencing an item's features, uses and radio frequency identification, or RFID, for items produced for and used by the Department of Defense.
Try: Universal ID Systems manufactures UID tags and stickers. Its site gives a good summary of what UIDs are, what types are available and the ways they can be used.

Radio frequency identification (RFID)

Radio frequency identification is another means of identifying products produced for and used by the Department of Defense. Since most of the DoD contracts involve products from many different contractors, these contractors tag their products to streamline the identification process for everyone involved and prevent the use of unapproved vendor products.
Try: RFID Journal offers news and sources regarding RFID used in the aerospace and defense industries, as well as other industries.

Counterfeiting

Within the aerospace and defense industry there is an issue regarding the use of non-genuine replacement parts when maintenance is necessary. Counterfeiting not only puts the individuals using the products at risk if the parts are not up to par, but also takes revenue away from the legitimate contractor. In the defense contracting industry, a good reputation is imperative. The use of UID and RFID helps prevent this activity and protects the contractor's reputation.
Try: Electronic Supply Chain Solutions offers resources to help aerospace and defense contract manufacturers battle counterfeiting.

Value stream analysis

Value stream analysis is performed to develop plans to improve production rates and reduce waste. These plans identify issues with communication, production processes and other problems.
Try: Automation.com offers a thorough discussion of value stream analysis. The site publishes news, research and networking and job opportunities for all automation professionals, including those in the aerospace and defense industries.

Fixed price

Most contracts in the defense industry are cost-plus. Fixed-price contracts fix a total price paid, with no added bonuses later on.
Try: The Defense Contract Management Agency deals with the entire contracting process for the Department of Defense. This site gives an excellent run down on the various types of government contracts and how they work.

Cost-plus model

The cost-plus model states a base amount due, then an added amount is awarded based on a later evaluation by the ordering entity, usually the U.S. government.
Try: Acquisition.gov lays out the definition of the cost-plus model in its incentives contracts code.