A Work Breakdown Structure (WBS) (MIL-STD-881D) is a tool used to define a project in discrete work elements in a Hierarchical format. It displays and defines the product, or products, to be developed and/or produced. It relates the elements of work to be accomplished to each other and to the end product. In other words, the WBS is an organized method to break down a product into subproducts at lower levels of detail. It’s used for planning, cost estimating, execution and control.
WBS Sample from SMC Systems Engineering Handbook
Why Develop a Work Breakdown Structure (WBS)
The WBS is a means of organizing system development activities based on system and product decompositions. It is a product-oriented family tree composed of hardware, software, services, data, and facilities, which result from systems engineering efforts during the development and production of the system and its components, and which completely defines the program. The WBS is prepared from both the physical and system architectures and identifies all necessary products and services needed for the system. This top-down structure provides a continuity of flow down for all tasks. Enough levels must be provided to properly define work packages for cost and schedule control purposes. 
The Benefits of Utilizing a WBS are:
- Organizes the project deliverables and tasks
- Determines the program schedule (Integrated Master Schedule)
- Enhances communication
- Details tasks and dependencies
- Identifies all products and services a system needs
- Helps determine cost estimates
- Identify Project Phases
The Two Types of Work Breakdown Structures (WBS)
Program Manager (PM) usually has the responsibility to develop an overall program WBS and to initiate the development of contract WBSs for each contract in accordance with common DoD practice established in Mil-HDBK 881. The two types of WBS on a program are:
- Program WBS: A program WBS is established to provide the framework for program and technical planning, cost estimating, resource allocation, performance measurement, and status reporting. The WBS defines the total system of hardware, software, services, data, and facilities, and relates these elements to each other and to the end product. Program offices develop a program WBS tailoring the guidance provided in MIL-HDBK-881 and MIL-STD-881D. The WBS is also an integral part of the preparation of the Cost Analysis Requirements Description (CARD).
- Contract WBS: are part of the program WBS and relate to deliverables and tasks on a specific contract.
Initial Work Breakdown Structure (WBS) Development
The PM with the support of systems engineering develops the first three levels of the program WBS, and provides contractors with guidance for lower-level WBS development. As with most standards and handbooks, the use of MIL-HDBK-881 cannot be specified as a contract requirement. Though WBS development is a systems engineering activity, it impacts costing, scheduling, and budgeting professionals, as well as contracting officers. An integrated team representing these Stakeholders is needed to support WBS development. 
The first three Work Breakdown Structure (WBS) Levels are organized as:
- Level 1: Overall System
- Level 2: Major Elements (Segment)
- Level 3: Subordinate Components (Prime Items)
How to make a Work Breakdown Structure (WBS)
The process of developing a WBS is straightforward but requires preparation and a clear understanding of what is required to be accomplished on a project.
- Step 1: Gather Main Documentation: You need to understand the project goals and objectives. To do this gather the project charter, scope, objectives, and any requirements.
- Step 2: Identify Your Main Team Members: A WBS can’t be built in a vacuum. It takes a team of specialized people to know how to break their sections down into discreet parts.
- Step 3: Define WBS Level 1: This level is a summary of the deliverable that must be met to satisfy the project scope.
- Step 4: Create the WBS Levels: This is the step where you breakdown is WBS component into discreet events. This is the most time-consuming and important step in the process. You need to break down the work until each Element can be accomplished by a single individual or organization.
- Step 5: Create the WBS Dictionary: The Dictionary description each work element in the WBS.
- Step 6: Create the Integrated Master Schedule (IMS) and Integrated Master Plan (IMP): This created a complete plan of all the work that needs to be accomplished and by when.
How to Utilize a Work Breakdown Structure (WBS)
A Work Breakdown Structure is primarily used as a planning tool to help the Program Manager and project personnel plan, define and organize a project into discreet deliverables. It describes all the work that needs to be accomplished to help avoid any confusion. There are three main components of a WBS that help with defining the program. These are:
- Control Accounts: Control Account (CA) is a management control point at which budgets (resource plans) and actual costs are accumulated and compared to earned value for management control purposes. Any WBS Elements at which the project plans to monitor and report performance.
- Planning Packages: These are steps that have been created but are not fully defined yet into work packages.
- Work Packages: A work package is simply a task/activity or grouping of work and is the point at which work is planned, progress is measured, and earned value is computed. Natural subdivision of a Control Account. This information is described in the WBS Dictionary.
Contractor Work Breakdown Statement
The contract WBS is the Government – approved WBS for program reporting purposes and includes all program elements (for example, hardware, software, services, data, or facilities), which are the contractor’s responsibility. It includes the contractor’s discretionary extension to lower levels, in accordance with Government direction and the contract Statement of Work (SOW).
AcqLinks and References:
-  SMC Systems Engineering Handbook
- MIL-Hand Book-881: Work Breakdown Structure (WBS)
- MIL-STD-881D “DoD Standard Practice Work Breakdown Structure for Defense Materiel Items” – April 18
- Old: MIL-STD-881C DoD Standard Practice Work Breakdown Structure for Defense Materiel Items – 3 Oct 11