diff --git a/docs/0003-webpack-build-config.md b/docs/0003-webpack-build-config.md
new file mode 100644
index 000000000..e5d170bde
--- /dev/null
+++ b/docs/0003-webpack-build-config.md
@@ -0,0 +1,28 @@
+# Webpack Build Configuration
+
+## Summary
+
+We are implementing a caching mechanism in our Webpack configuration to significantly reduce build times.
+
+## Context
+
+Currently, our builds are functioning properly, but any changes made to the MFEs (Micro Frontend Applications) result in the same or even longer build times. Therefore, it is an opportune moment to improve this aspect.
+
+# Decision
+
+We will introduce a caching feature to the `createConfig.js` file in `@edx/frontend-build`. This file is already implemented in most MFEs, making it convenient to enable or disable the feature on a per-MFE basis. Initially, the feature will be implemented in the production environment, but it can also be added to the development environment.
+
+
+[Webpack cache dock](https://webpack.js.org/configuration/cache/#cachecachedirectory)
+
+# Implementation
+
+To implement this feature, we will utilize the `cache` property in our Webpack configuration. We will use the filesystem type and specify a `cacheDirectory`, which will create a `.cache` directory within each MFE that has the feature enabled. To enable the feature, you need to add a new environment variable to your `.env` file with the following content:
+
+```
+ENABLE_WEBPACK_CACHE=''
+```
+
+# Follow-on Work
+
+After implementing this feature, remember to add `.cache` to the `.gitignore` file for MFEs that have the caching feature enabled. Additionally, consider extending this feature to the development environment since its scope is currently limited to the production environment.
diff --git a/lib/ConfigPreset.js b/lib/ConfigPreset.js
index e71ab2bac..548e14758 100644
--- a/lib/ConfigPreset.js
+++ b/lib/ConfigPreset.js
@@ -12,6 +12,7 @@ function ConfigPreset({
   return {
     defaultFilename,
     getDefault: () => require(require.resolve(`./${defaultFilename}`, { paths: [defaultDir] })),
+    getMfePath: () => process.cwd(),
     get defaultFilepath() {
       console.log('getting default filepath', defaultFilename, defaultDir);
       return require.resolve(`./${defaultFilename}`, { paths: [defaultDir] });
diff --git a/lib/createConfig.js b/lib/createConfig.js
index 09cefbe4f..9b01fc6db 100644
--- a/lib/createConfig.js
+++ b/lib/createConfig.js
@@ -1,7 +1,20 @@
 const { merge } = require('webpack-merge');
+const path = require('path');
 const getBaseConfig = require('./getBaseConfig');
+const presets = require('./presets');
 
 module.exports = (commandName, configFragment = {}) => {
   const baseConfig = getBaseConfig(commandName);
+
+  if (commandName === 'webpack-prod' && process.env.ENABLE_WEBPACK_CACHE !== 'false') {
+    const cacheFolderPath = presets[commandName].getMfePath();
+    baseConfig.cache = {
+      type: 'filesystem',
+      cacheDirectory: path.resolve(cacheFolderPath, '.cache'),
+    };
+
+    return merge(baseConfig, configFragment);
+  }
+
   return merge(baseConfig, configFragment);
 };