Lean Enterprise Transformation: Ogden ALC Case Study Tim Christopherson Raytheon Missile Systems Alexis Stanke Massachusetts Institute of Technology
Overview Developing a strategy for enterprise transformation Building capability for managing change Learning and results A-10 Warthog F-16 Fighting Falcon 3/3/2005 Page 2
Background Ogden ALC began lean journey in 2002 by Benchmarking, Balanced Scorecard and Activity Based Costing efforts Initial lean efforts focused on the factory floor Facilitation provided by consultants Transformation Office opened on site Aug 2002 Develop in-house capability to facilitate change In 2003 lean factory projects expanded and accelerated Projects above the shop floor begun Strategic focus was missing Early project in Landing Gear 3/3/2005 Page 3
Lean Aerospace Initiative Lean Now Lean Aerospace Initiative (LAI) entered Enterprise Value phase in 2002 Lean Now projects developed to focus on Air Force value streams F/A 22, Global Hawk, other pilot programs Ogden and Oklahoma City ALCs develop strategic engagement with LAI in 2003 Leverage Government-Industry experience in Large-Scale Transformation Utilize MIT/LAI toolbox Transition To Lean (TTL) Roadmap Lean Enterprise Self Assessment Tool (LESAT) Enterprise Value Stream Mapping and Analysis (EVSMA) 3/3/2005 Page 4
Initial Deployment Schedule Collect EVSMA 2-4 data Month 1 Month 2-5 Month 3-6 Communication Plan ID Black Belt Candidates EVSMA 2-4 Data Review EVSMA 5-6 Current State Review EVSMA 7 Visioning Prioritized List of Focus Areas Create Project Teams (Leads) Maturity Model @ Enterprise Level Senior Level Project Reviews (Skip) Long Term Strategic Plan Progress Measurement @ Enterprise Level Change Process Defined Business Case Analysis Methodology Identify Project Metrics Knowledge Sharing Approach ELT Training (leading change, lean awareness, roles & responsibiliti es) Change Agent Candidate Selection Process OO-ALC Leadership Training INPUTS - Define Enterprise Boundaries - ELT - Transformation Office - LAI Consortium - Training Materials - Industry Tools/Templates - Change Agent Candidate Criteria Benchmarking Train Black Belt Candidates OUTPUTS - Transformation Office Credibility - Continuous Improvement Culture - EVSMA Completed with Projects IDÕd - Initial Black Belts IDÕd and Training Initiated - Long Term Strategic Plan Completed Project Selection, Prioritization, etc. Methodology Conduct Pilot Demonstration Legend ELT Transformation Office LAI HR Project Teams Black Belt Candidates Mentoring Project Leadership & Management Training Training Methodology (Black Belts, Green Belts, Team) Tool Training for Practitioners Change Agent Career Path Plan to Develop Tool Expertise (SMEs) Conduct Project(s) Recognition & Celebration Events Low Hanging Fruit Captured / Completed 3/3/2005 Page 5
EVSMA Process (alpha version) Enterprise Value Stream Mapping and Analysis (EVSMA) piloted at Ogden ALC in 2004 Process facilitated by MIT, Raytheon, and Boeing 2: Stakeholder Value Exchange 5: Enterprise Interactions 1: EVSMA Set-Up 3: Strategic Objectives 6: Current State Synthesis 8: Improvement Plan 4: Enterprise Processes 7: Future State Kick-off Data Collection Current State Review & Future State Visioning Implementation Plan Development Source: Massachusetts Institute of Technology 3/3/2005 Page 6
EVSMA Set Up (Step 1) Strategic transformation effort linked to Center-wide goals You are Here Executive team identified and EVSMA effort chartered High-level training conducted Burning Platform Business Case Leading Change Lean Principles Value Stream Mapping 3/3/2005 Page 7
Stakeholder Value Exchange (Step 2) Stakeholder perspectives included: End Users Customers Employees Suppliers Shareholder example below reflects views of Taxpayers and Congress Economical Force Multiplier represents an opportunity from this perspective High Current Performance Accountability Economic Use Of Funds Viable Force Multiplier for National Security Compliant Fed Law Local Law Low Low Relative Importance High 3/3/2005 Page 8
Strategic Objectives (Step 3) Analysis coincided with development of draft strategic plan for the Center Intent was to leverage the Balanced Scorecard work done earlier Center leadership was in transition New Commander No Vice Commander No Executive Director Result: No significant/meaningful analysis was done at this step There was a strategic pause on this step 3/3/2005 Page 9
Enterprise Processes (Step 4) Five enterprise level processes were mapped: Depot Supply Chain Program Mgmt Readiness plus Enablers Depot example shows seven primary steps from marketing thru overhaul to ship 3/3/2005 Page 10
Enterprise Interactions (Step 5) Interrelationships among the five enterprise level processes were mapped Yarn demonstrates handoffs Interrelationships assessed using color coded dots Red, yellow, green 3/3/2005 Page 11
Current State Synthesis (Step 6) Conducted LESAT - scores were low (average 1.6) Identified sources of waste in the enterprise and opportunities for improvement based on previous steps Training Cost reduction Acquisition process (total) Getting the right metrics/fewest # needed Sustainment activities in PM Schedule effectiveness Demand planning in SCM Sustainment feedback to requirements definition Effective communication Internal & external 3/3/2005 Page 12
Future State (Step 7) Be America s Best! We will be the Benchmark provider of logistics capability sustaining our Nation s war fighters. Support system availability at 90% or better Support Readiness at 100% 50% reduction in flow time 25% cost reduction 3/3/2005 Page 13
Improvement Plan (Step 8) Seven high-level projects were sponsored focusing on 2-3 year goals determined in Strategic Visioning Exercise Warfighter F-16 aircraft availability A-10 aircraft availability Deployment Process Stakeholders Customer Survey Availability Rate = # available aircraft total # planes F-16 Availability Rate Resources Blackbelt/Greenbelt Plan Internal Business Processes High Impact Process Learning and Growth Training Now Team Jan-03 # Unavailable Aircraft Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jan 03 May 04 data 3/3/2005 Page 14
Increasing Warfighter Satisfaction On-going lean events in Depot can t achieve 90% availability goal Depot possesses only 1/3 of all unavailable planes Must work off the shop floor Two-thirds of unavailable aircraft are not in the depot F-16 Unavailable Aircraft Breakdown On-going lean events focused on depotpossessed aircraft Jan-03 Feb-03 Jan 03 Nov 04 data Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sept '04 Oct-04 Nov-04 Maintenance Supply Depot 3/3/2005 Page 15
Blackbelt Program Initial cadre of 11 Blackbelts with plan to grow to 70 within 24 months 4 weeks of training provided by Raytheon Blackbelts mentored by Raytheon Develop self-sufficiency at Ogden within 24 months Training and Mentoring of Blackbelts by Ogden Blackbelts 3/3/2005 Page 16
Greenbelt Program Plan to grow from zero to 500 in 24 months 40hr course adapted from LAI facilitator training Taught by Hill Blackbelts Topics include: Center Transformation Lean Awareness/Tools Team Dynamics Facilitator Skills/Tools Data Analysis Design Tools Project Management 3/3/2005 Page 17
Continuous Improvement Process Imagine the Future Hold the Gains, Celebrate Achievements, Build for Tomorrow Achieve Visualize Commit Commit to Change Design & Implement Improvements Improve Prioritize Determine Improvement Priorities Characterize Source: Raytheon Define Existing Process/Leverage Points 3/3/2005 Page 18
Business Diagnostic on Supply Business Diagnostic encompasses first three steps of improvement process Visualize Commit Prioritize PUMP,HYD,ENG DRIVEN Pareto of TNMCS hours RADAR ANTENNA MODULAR LPRF POTENTIOMTR FEEDBCK BRAKE ASSY LEADING EDGE FLP RH VALVE MLG BRKE CONT GEARBOX ACCESS DR HORIZ STABILIZER RADOME ASSY NOSE Top Top two two opportunities equate equate to to 9-10 9-10 aircraft aircraft 3/3/2005 Page 19
Radar Antenna Project Antenna is repaired in backshop at Ogden ALC Project to focus on reducing TNMCS hrs, leverage previous improvement methods Characterize End-to-end Value Stream Map (VSM) to be conducted on Antenna Improve Improvements to focus on constraints from VSM Achieve Results anticipated by mid-2005 Lean Brake project reduced flow time by 90% 3/3/2005 Page 20
Increasing Warfighter Satisfaction F-16s in Field Maintenance Opportunity Analyses conducted on Field Maintenance Focusing on Phase and Fuel System 70% of Phase hours are at Air National Guard (ANG) sites Pareto of TNMCM Hours 0 50000 100000 150000 200000 250000 300000 14A00 45AAA 27Z00 12000 03400 11000 23000 0341H 46000 0341G 300 HR. PHASE FUEL SYSTEM 400 HR. PHASE TURBO FAN PWR PLANT AIRFRAME PHASED INSPECTION CREW STATION SYSTEM TURBOFAN ENGINE LRU PUMP,HYD,ENG DRIVEN PRIM FLT CONT ELECT Top Top two two opportunities equate equate to to nearly nearly 40 40 aircraft aircraft 3/3/2005 Page 21
Increasing Warfighter Satisfaction F-16s in Depot Common Configuration Implementation Program (CCIP) impacts significant portion of the F-16 fleet Prior to Blackbelt program, cellular flow line designed to reduce number of CCIP planes in depot by 10% Upcoming Structural Augmentation Roadmap (STAR) will require large amounts of depot capacity Develop lean plan for STAR similar to CCIP 1 st F-16 CCIP plane completed two weeks ahead of schedule using new pulse cell CCIP line Oct 2004 Source: Hilltop Times 3/3/2005 Page 22
Lessons Learned Active learning for executive leadership team through EVSMA Enterprise transformation requires significant capability to lead and manage change Availability can be improved without additional budget Lean events held exclusively on the shop floor can t meet long-term aircraft availability goals Rotation of military leadership creates challenges for continuity of alignment on long-term goals Jan 03 Nov 04 data F-16 Availability Rate # Unavailable Aircraft Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 3/3/2005 Page 23
Further Development EVSMA process was updated to incorporate lessons learned More logical order of analysis steps More focused analysis of pertinent data Reduced analysis time (from 6+ months down to 3 months) Deployed at Oklahoma City ALC Tinker AFB F100 engine for F-16 F-35 Joint Strike Fighter (JSF) Implications for future aircraft Apply lessons learned on F-16 and A-10 to JSF (and others) Improve aircraft availability rate over future life cycles 3/3/2005 Page 24
Summary Strategy for enterprise transformation developed and deployed Capability for managing change initiated Learning and results summarized 3/3/2005 Page 25