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
Month 1
Month 2-5
Month 3-6
Collect
EVSMA 2-4
data
Communication Plan
ID Black
Belt
Candidates
EVSMA 2-4
Data
Review
EVSMA 5-6
Current
State
Review
Business
Case
Analysis
Methodology
Change
Process
Defined
Benchmarking
Change
Agent
Candidate
Selection
Process
ELT
Training
(leading
change,
lean
awareness,
roles &
responsibiliti
es)
Senior
Level
Project
Reviews
(Skip)
Maturity
Model @
Enterprise
Level
Long Term
Strategic
Plan
Identify
Project
Metrics
Progress
Measurement @
Enterprise
Level
Knowledge
Sharing
Approach
Conduct
Pilot
Demonstration
OO-ALC
Leadership
Training
Define Enterprise Boundaries
ELT
Transformation Office
LAI Consortium
Training Materials
Industry Tools/Templates
Change Agent Candidate Criteria
Create
Project
Teams
(Leads)
Project
Selection,
Prioritization, etc.
Methodology
Train Black
Belt
Candidates
INPUTS
-
Prioritized
List of
Focus
Areas
EVSMA 7
Visioning
Training
Methodology (Black
Belts, Green
Belts, Team)
Recognition
&
Celebration
Events
Plan to
Develop
Tool
Expertise
(SMEs)
Project
Leadership
& Management
Training
Tool Training
for
Practitioners
Black Belt
Candidates
Mentoring
OUTPUTS
-
Transformation Office Credibility
Continuous Improvement Culture
EVSMA Completed with Projects IDÕ
d
Initial Black Belts IDÕ
d and Training
Initiated
- Long Term Strategic Plan Completed
Legend
ELT
Transformation Office
LAI
HR
Project Teams
Change
Agent
Career Path
Conduct
Project(s)
3/3/2005
Low
Hanging
Fruit
Captured /
Completed
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
1: EVSMA Set-Up
Kick-off
2: Stakeholder
Value
Exchange
5: Enterprise
Interactions
3: Strategic
Objectives
6: Current State
Synthesis
4: Enterprise
Processes
7: Future State
Data Collection
Source: Massachusetts Institute of Technology
Current State Review &
Future State Visioning
8: Improvement
Plan
Implementation Plan
Development
3/3/2005
Page 6
EVSMA Set Up (Step 1)
• Strategic transformation
You are Here
effort linked to Center-wide
goals
• 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
Compliant
Fed Law
Local Law
Accountability
Economic Use
Of Funds
Viable Force
Multiplier for
National Security
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
Availability Rate = # available aircraft
total # planes
F-16 aircraft availability
A-10 aircraft availability
Deployment Process
– Stakeholders
F-16 Availability Rate
Customer Survey
– Resources
Blackbelt/Greenbelt Plan
– Internal Business Processes
High Impact Process
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Training Now Team
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– Learning and Growth
# Unavailable Aircraft
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
Maintenance
Supply
On-going lean events
focused on depotpossessed aircraft
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Depot
Jan ’03 – Nov ’04 data
3/3/2005
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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
Design &
Implement
Improvements
Visualize
Achieve
Commit
Improve
Prioritize
Commit to
Change
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
Pareto of TNMCS hours
PUMP,HYD,ENG DRIVEN
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
Toptwo
twoopportunities
opportunities
equate
equatetoto9-10
9-10aircraft
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
0341G
300 HR. PHASE
0341H 46000
0
FUEL SYSTEM
Pareto100000
of TNMCM
Hours
150000
50000
200000
250000
300000
23000
TURBO FAN PWR PLANT
11000
AIRFRAME
03400
PHASED INSPECTION
14A00 45AAA 27Z00 12000
400 HR. PHASE
CREW STATION SYSTEM
TURBOFAN ENGINE LRU
PUMP,HYD,ENG DRIVEN
Top
Toptwo
twoopportunities
opportunities
equate
equatetotonearly
nearly40
40
aircraft
aircraft
PRIM FLT CONT ELECT
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
1st F-16 CCIP plane completed
two weeks ahead of schedule
using new pulse cell CCIP line
Oct 2004
– Develop lean plan for STAR
similar to CCIP
Source: Hilltop Times
3/3/2005
Page 22
Lessons Learned
• Active learning for executive leadership team through
•
•
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•
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
F-16 Availability Rate
floor can’t meet long-term
aircraft availability goals
Rotation of military
leadership creates
challenges for continuity
# Unavailable Aircraft
of alignment on long-term
goals
Jan ’03 – Nov ’04 data
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