Department of the Navy Lean Six Sigma Way Ahead

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1 Department of the Navy Lean Six Sigma Way Ahead Nick Kunesh Deputy Assistant Secretary of the Navy (Logistics) 13 March 2007

2 Total Obligation Authority (TOA) FY 07 Budget CVN-21 DDX LCS JSF MMA V-22 ACS LPD-17 EFV LHA(R) HLR FY06 TOA $125.6B Procurement 26% RD 13% O&M 31% M&P 30% $127.3B 65% is people cost

4 SECNAV Lean Six Sigma Deployment Session 27 June 2006 SECNAV Under SECNAV ASN (RD&A) ASN (FM&C) DCMC (M&RA) NAVSUP N4B (Logistics) (Environment) GC DNS CNO ACMC ASN (M&RA) ASN (I&E) DCMC (I&L) NAVAIR NAVFAC N1 N80 (RD) ADC (P&R) BUMED CNI COO

5 Lean Six Sigma Three Year Action Plan Phase I Year 1 CY06 Leadership Kick-off and monthly progress meetings Balance process metrics across objectives & goals Plan for XX% reduction in overhead through CY08 NSPS SES / Flag fitness report bullet that recognizes LSS contributions Accelerate the journey for those who have started (AIRSpeed, Task Force Lean, et. al.) and report out financial results Start the journey with enabling service, support and transactional functions (i.e., FIN, HR, SC, IT, etc) High impact core value streams are identified, mapped, and all applicable personnel are prepared to DMAIC Accelerate Integration of organic Supply & Industrial Base with external suppliers (i.e., private industry, DLA) Identify where LSS applies to the Warfighter (i.e., wargame planning & events) Identify and clean legacy data bases for conversion to Navy ERP 1,000 Black Belts certified 2,000 Green Belts certified 25% of GS-15 /06 and above complete Champion training Synchronize LSS training body of knowledge and training methods across the Incorporate initial LSS training into all training schools (review Officer, Enlisted & Civilian career paths) Phase II Year 2 CY07 Leadership Take XX% of overhead cost out of the Department Accelerate integration w/ industrial base and be accountable for financial harvesting Re-align to 07 objectives & goals, and measure LSS output to 06 objectives and goals All military and civilian performance evaluations and fitness reports recognize LSS contributions Work Product High impact core value streams are DMAIC Continuous Improvement of those activities that started before Jan % of all major Defense contracts awarded to industry will contain a LSS incentive clause Introduce Malcolm Baldrige criteria Education and Training 1,000 additional Black Belts 4,000 additional Green Belts 100% of GS-15 /06 and above complete Champion training Optimize LSS training across enterprise; BB/GB factory; (incorporate into 5 vector model) Phase III Year 3 CY08 Take an additional XX% of overhead cost out of the Department Re-align to 08 objectives & goals, and measure LSS output to 07 objectives and goals Accelerate Enterprise maturity High impact core value streams are revisited Service, support and transactional functions are in a Continuous Improvement closed loop 25% of extended (with industry) value chains have been leaned out Train additional Black Belts equal to 1% of affected workforce Train additional Green Belts equal to 4% of affected workforce 100% of GS-15 / 06 and above are LSS Champions 5% of GS-15 / 06 and above are Green Belt certified

6 Leadership Kick-off and monthly progress meetings Phase I Year 1 CY06 Leadership Balance process metrics across objectives & goals Plan for XX% reduction in overhead through CY08 NSPS SES / Flag fitness report bullet that recognizes LSS contributions Accelerate the journey for those who have started (AIRSpeed, Task Force Lean, et. al.) and report out financial results Start the journey with enabling service, support and transactional functions (i.e., FIN, HR, SC, IT, etc) Work Product High impact core value streams are identified, mapped, and all applicable personnel are prepared to DMAIC Accelerate Integration of organic Supply & Industrial Base with external suppliers (i.e., private industry, DLA) Identify where LSS applies to the Warfighter (i.e. war-game planning & events) Identify and clean legacy data bases for conversion to Navy ERP 1,000 Black Belts certified Education and Training 2,000 Green Belts certified 25% of GS-15 /06 and above complete Champion training Synchronize LSS training body of knowledge and training methods across the Incorporate initial LSS training into all training schools (review Officer, Enlisted & Civilian career paths)

7 Take XX% of overhead cost out of the Department Phase II Year 2 CY07 Leadership Accelerate integration w/ industrial base and be accountable for financial harvesting Re-align to 07 objectives & goals, and measure LSS output to 06 objectives and goals All military and civilian performance evaluations and fitness reports recognize LSS contributions High impact core value streams are DMAIC Work Product Continuous Improvement of those activities that started before Jan % of all major Defense contracts awarded to industry will contain a LSS incentive clause Introduce Malcolm Baldrige criteria 1,000 additional Black Belts Education and Training 4,000 additional Green Belts 100% of GS-15 /06 and above complete Champion training Optimize LSS training across enterprise; BB/GB factory; (incorporate into 5 vector model)

8 Phase III Year 3 CY08 Leadership Take an additional XX% of overhead cost out of the Department Re-align to 08 objectives & goals, and measure LSS output to 07 objectives and goals Accelerate Enterprise maturity High impact core value streams are revisited Work Product Service, support and transactional functions are in a Continuous Improvement closed loop 25% of extended (with industry) value chains have been leaned out Education and Training Train additional Black Belts equal to 1% of affected workforce Train additional Green Belts equal to 4% of affected workforce 100% of GS-15 / 06 and above are LSS Champions 5% of GS-15 / 06 and above are Green Belt certified

10 SECNAV s Guidance for Senior Executive s Performance Align Leadership Expectations With Workforce Accountabilities SECNAV Values Leaders Who Excel At Business / Process Improvement Deliver Solutions At Best Cost Are Change Agents Lead Based On Insightful Metrics Use LSS To Improve Cascade / Measure SECNAV Guidance Penetration Throughout Organizations

CNO Guidance for 2007 2 February 2007 Focus on Execution Each objective will be pursued using discrete, measurable goals.

11 CNO Guidance for February 2007 Focus on Execution Each objective will be pursued using discrete, measurable goals. The accountable Executive Agent is listed: Develop effective business strategies for the day-to-day management of Navy processes through the use of Lean Six Sigma and other business practices (DNS)" The Director of Navy Staff will develop an execution plan for the achievement of this objectives within 60 days. The Vice Chief of Naval Operations will review and approve the execution plan.

12 Lean Six Sigma Improvements for CVN-21 Milestone B

13 Approvals Reqmts &Programs N6/N7 (N78) Approvals PM CVN 21 Design/ Build Reqmts &Programs N6/N7 (N78) Approvals PM CVN 21 Design/ Build Each red arrow = 100 revisions!! Reqmts &Programs N6/N7 (N78) PM CVN 21 Design/ Build D USD AT&L Dir., N091 NGNN 9 Months Draft/Initial Reviews = VA D USD AT&L Dir., N091 NGNN SYS ENGR Air Team SYS ENGR Air Team ASN RDA RD&A Carriers Naval Surface Center ASN RDA RD&A Carriers Naval Surface Center Carderock ASD (N II) DIAP CSC Labs ASD (N II) DIAP CSC Labs COTF CONV. SYS. IWS Aviation 24.0 Months DO SEA 08 Nuclear LF Ship Design 05 Chief Engr. Integrated 12.5 Months NVA 2.5 Months Rework = 3 Revisions/Adjutications = NVA COTF CONV. SYS. IWS Aviation 24.0 Months DO SEA 08 Nuclear LF Ship Design 05 Chief Engr. Integrated BFM APPROVALS = NVA 9 Months 12.5 Months 2.5 Months Draft/Initial Reviews = VA D USD AT&L Dir., N091 NGNN SYS ENGR Air 4 Months Team ASN RDA RD&A Carriers Naval Surface Center ASD (N II) DIAP CSC Labs Rework = 3 Revisions/Adjutications = NVA COTF CONV. SYS. IWS Aviation DO SEA 08 Nuclear 13.5 Months LF Ship Design 05 Chief Engr. Integrated X5 OSD PA&E CAIG 017 Cost Engr. BFM 7 Months 2.5 Months BFM APPROVALS = NVA Draft/Initial Reviews = VA Rework = 100 Revisions/Adjutications = NVA APPROVALS = NVA X5 Life Cycle Support Acq & Contracts Life Cycle Support OPNAV N125 Approvals Reqmts &Programs N6/N7 (N78) Approvals Reqmts &Programs N6/N7 (N78) PM CVN 21 Design/ Build PM CVN 21 Design/ Build Approvals Reqmts &Programs N6/N7 (N78) Approvals Reqmts &Programs N6/N7 (N78) D OPNAV N795 Training OPNAV N41 D PM CVN 21 Design/ Build PM CVN 21 Design/ Build USD AT&L NAVMAC N125 Supt. Naval U/P Analysis Ctr. Dir., N091 NGNN USD AT&L Dir., N091 NGNN D 9 Months D SYS ENGR Air Dir., N091 USD AT&L Dir., N091 USD AT&L NGNN NGNN Team Draft/Initial Reviews = VA SYS ENGR Air ASN RDA RD&A Draft/Initial INTERNAL Reviews VA= VA Carriers Naval Surface Center Draft/Initial Review = VA Team Draft/Initial Reviews = VA ASD (N II) DIAP ASN RDA RD&A Carriers Naval Surface Center SYS ENGR Air 9X CSC Labs SYS ENGR Air ASN I&E ASD (N II) DIAP Team Team CSC Labs ASN RDA RD&A Carriers Naval Surface Center COTF ASN RDA RD&A Carriers Naval Surface Center CONV. SYS. Carderock IWS Aviation ASD (N II) DIAP CSC ASD (N II) DIAP Labs CSC COTF Labs DO NAV ICP Environ. CONV. SYS. SEA 08 Nuclear IWS Aviation 7.5 Months 20X COTF Ship Design SUP Months DO COTF 22.0 Months CONV. SYS. CONV. SYS. SEA 08 Nuclear Aviation DO SEA 08 Nuclear LF Ship Design 05 Chief Engr. Integrated 65.5 Months 37 Months 24 Months NVA 4.5 Months IWS IWS 05 Aviation 20X DO & TEAM SEA 08 Nuclear Rework = 3 Revisons/Adjutications = NVA LF Ship Design 05 Chief Engr. Integrated 12.5 Months 0.5 Months Rework = 1 Revision/Adjutication = NVA Integrated LF Ship Design Rework = 3 Revisions/Adjutications = NVA 05 Chief Engr. Integrated Life Cycle Support OSD PA&E CAIG 017 Cost Engr. 2 Months 5 Months 0.5 Months LF Safety TRNG NETC Logistics Chief Engr. Log. Cen. OSD PA&E CAIG NCCA Cost Analysis 017 Cost Engr. BFM Nav Fac 14.5 Months 12 Months 0.75 Months Rework = Revisions/Adjutications = NVA Acquisition & Contracts APPROVALS = NVA FLEET FORCES LANT FLEET PAC FLEET BFM APPROVALS = NVA APPROVALS = NVA APPROVALS = NVA BFM Life Cycle Support Acquisition & Contracts BFM Life Cycle Support Acq. & Contracts Life Cycle Support CVN-21 s Milestone B Documentation Effort TEMP 7 CVN-21 MS B documents analyzed: ILA Man-hours expended: 245,742 Total cost: $18.4M Total review touch points: 6,952 CARD LF Non value add (NVA) touch points: 6, different organization touch-points Average number of organizations touched per document = 22 VAR II PLCCE NVA cost: $11.171M (96%) NVA man-hours: 148,939 SR Team s Perspective $11.17M NVA touch points Note: Above data based on CVN-21 Milestone B complexity analysis. NVA determined from CVN-21 team perspective.

14 CVN-21 s Milestone B TEMP Time and Motion Study USD AT&L ASD (N II) DIAP DO D SYS ENGR CONV. SYS. LF TEMP Doc Data Summary Queue Time: included in NVA routing + 26 days for approvals ASN RDA Total Man-hours: 16,612 Total Cost: $1.246M Total Arrows: 377 Reqmts &Programs N6/N7 (N78) Dir., N091 RD&A Carriers COTF IWS SEA 08 Nuclear 05 Chief Engr. VA = 47 (12%) NVA = 330 (88%) NVA Cost = $1.091 PM CVN 21 Design/ Build NGNN Team CSC Aviation Ship Design Integrated BFM Life Cycle Support Air Naval Surface Center Labs 9 Months 24.0 Months 12.5 Months NVA 2.5 Months Draft/Initial Reviews = VA Rework = 3 Revisions/Adjutications = NVA APPROVALS = NVA Note: Arrows represent review loops, red are non value added, black are value added.

MALS-31 Beaufort Ordnance Support Equipment Work Centers Processes Theory of Constraints (TOC) and LEAN Goal: Reduce Time to Reliably Replenish (TRR) Prior to CPI Analysis 1,100 Non-Ready For Issue

15 MALS-31 Beaufort Ordnance Support Equipment Work Centers Processes Theory of Constraints (TOC) and LEAN Goal: Reduce Time to Reliably Replenish (TRR) Prior to CPI Analysis 1,100 Non-Ready For Issue (NRFI) aviation ordnance support equipment (Aug 05) Average TRR for 71C was 125 days (Oct 04) Current CPI State (Aug 06) Less than 200 NRFI aviation ordnance support equipment Average TRR for 71C is 6 days, with a goal of 5 days Average TRR for 71D was 90 days (Oct 04) Travel to Ordnance center six miles Average TRR for 71D is 12 days, with a goal of 5 days Reduced travel to Ordnance center to 25 feet Co-located upstream node (Supply Department) with Ordnance to reduce TRR Established buffers at the Supply satellite site and Ordnance to reduce variability Redesigned Ordnance work spaces to ensure quick turn around Reduced number of steps for pulling parts and publications Use Buffer Management Tool (IT) to review the status of the oldest repair requests

16 Justification and Approval (J&A) Process Rapid Improvement Event Goal: Reduce J&A flow time and rework; increase review time flexibility Current State Analysis 41 day average flow time 51 Hand offs 1% first pass yield 40% submitted electronically Five serial reviews Future State Solution 5.4 day average flow time 11 Hand offs 74% first pass yield 100% submitted electronically Three serial reviews Streamlined process Increased automation -all reviews electronic --instant receipt notification Reduced serial reviews / rework Content requirements communicated to ; submittal templates created

Justification and Approval (J&A) Process Rapid Improvement Event/Value Stream Mapping JUSTIFICATION & APPROVAL "FUTURE STATE" PROCESS VSM 09/07/05 START Analyst receives electronic J&A/ Action Memo

17 Justification and Approval (J&A) Process Rapid Improvement Event/Value Stream Mapping JUSTIFICATION & APPROVAL "FUTURE STATE" PROCESS VSM 09/07/05 START Analyst receives electronic J&A/ Action Memo from respective Min: 5 min. Max: 6 min. Mode: 5 min. Analyst reads, transmits electronic copy of documents to respective office, General Counsel, and RDA Admin for DCN #. Documents reviewed in parallel. Min: 1 hr. Max: Mode: 2 days Analyst General Counsel Respective office performs internal review. Corrects A/O Analyst reviews document. Min: 1 hr. Max: Mode: 2 days General Counsel reviews document. Min: 1 hr. Max: Mode: 2 days Min: 1 min Max: 2 min Mode: 1 min. Analyst collects and assembles all reviews. Min: 30 min. Max: 3 days Mode: 2 days Review Sat No Major change Yes Contact for (substantive revisions) Yes 75% No 80 % Contact for minor clerical changes. ACQ makes changes. Min: 15 min. Max: 2 days Mode: 1 day Min: 15 min. Max: 1 hr. Mode: 30 min. (ACQ) Transmits J&A and Action Memo Min: 15 min. Max: 60 min. Mode: 30 min. Send to RDA Admin/ Front office Min: 30 min. Max: 8 hrs. Mode: 8 hrs. Capt. McManamon reviews electronic J&A document and Action Memo Min: 15 min Max: 8 hrs. Mode: 4 hrs. Staffing: J&A/ Action Memo sent electronically to Mr.Young for review and signature. Sent by CAPT. McManamon Min: 15 min Max: 8 hrs. Mode: 4 hrs. Staffing: Mr. Young Reviews Min: 30 min. Max: 3 days Mode: 2 days Min: 1 day Max: 3 days Mode: 2 days Review Sat No Contact for (substantive revisions) Wait for revisions from 98% Yes Mr. Young SIGNS Min: 10 min Max: 2 hrs. Mode: 2 hrs. Staffing: Front Office Log out & RDA ADMIN. Min: 10 min. Max: Mode: 1 hr. Staffing: Movement LEGEND END Process Mr. Essig reviews electronic J&A document and Action Memo Min: 30 min. Max: 8 hrs. Mode: 8 hrs. Mr. Thackrah reviews electronic J&A document and Action Memo Min: 30 min. Max: 8 hrs. Mode: 8 hrs. Min: Max: Mode: 5 days BRIEF Yes (ACQ) Coordinates BRIEF No 95% Wait for revisions from Min: 1 day Max: 3 days Mode: 2 days Analyst reviews and enters changes Min: 5 min. Max: 8 hrs. Mode: 8 hrs. Staffing: Min: 5 min. Max: 4 days Mode: 30 min. Staffing: Min: 5 min. Max: 8 hrs. Mode: 8 hrs. Staffing: Min: 1 hr. Max: 2 days Mode: 2 days Staffing: Informal rereview by or Legal Analyst reviews and enters changes Mr. Essig & Mr. Thackrah Re-Review Wait/Delay Decision Parallel Work Document Input

18 BFMC Lean Pilot Solution Outcome Reimbursable Funding Documents to NAVAIR Field Activities Pre-VSA State 30 plus steps (all serial) 16 queues 8 work-arounds Multiple hard copies 12 review and approval steps 28 day average processing time Current State Solution 15 steps (4 performed concurrently) 4 queues No work-arounds Fewer hard copies 5 review and approval steps 4 day average processing time Moved downstream activities up front Brought all parties to table expanded IPT Removed WAIT time (queues) Ensured complete and accurate product early Reduced rework/rejects Leveraged ERP ensuring all financial links match project plan to performing activity

19 Summer Hire Process NAVAIR AIRSpeed Type Study: KAIZEN Goal: Streamline and reduce costs of summer hire program Pre-VSA State 4,000 man hours expended to execute process 24 Process Steps 70 day Process Cycle Time $12.8K per recruit Voice of Customer not identified Current State 1,000 man hours expended to execute process 4 process Steps 45 day Process Cycle Time $2.4K per recruit Voice of Customer integrated Savings: One man-year in labor, faster, simpler, customer friendly

20 SECNAV Congressional Response Process Kaizen Project Problem/Goal Statement Problem: Currently Department of Navy Congressional Responses are not meeting internal Navy cycle time requirements of 7 work days and the quality of the responses is not consistent. SECNAV has established the ASN (I&E) project as a prototype for replication purposes. Since the beginning of 2006, the mean ASN (I&E) Process Cycle Time has been 17.8 work days. Scope: The scope of this project will include the response categories of: Congressional Constituent, Congressional Member of Congress. Goal: Decrease the mean Process Cycle Time from 17.8 to 7 work days. Business Impact Financial Impact Type I Savings none anticipated at this time Type II Savings TBD Non-Quantifiable Benefits Better customer relations with Congress Core Team Timeline Dr. Donald Winter Project Sponsor/Process Owner/Green Belt CDR Jim Aiken Deployment Champion Phil Zalesak Black Belt Steve Bonacorsci Master Black Belt Core Team Role LSS Training LT Ball SME Yellow Belt Catherine Timco SME Yellow Belt YN1 Suggs SME Yellow Belt Alan Anglin SME Yellow Belt Jim Ives SME Yellow Belt Denise Brown SME Green Belt Oral John SME Green Belt Extended Team TBD (ASN I&E) Event Date Initial tasking 7/6 Scoping 7/17 8/23 Kaizen preparation 8/24 9/9 SECNAV Brief 9/12 Kaizen 9/18 9/21 Implementation 10/2

21 Backup

https://www.metricsthatmatter.com/url/u.aspx?0cbf11b3e Guest Presenter Jay Bottelson

Defense Acquisition University Lunch n Learn Navy VAMOSC 12 April 2017 Session will start at 1230 EDT (1130 CDT). Audio will be through DCS there will be a sound check 30 minutes prior to the session.