In Pursuit of Understanding Lean Transformation-Capturing Local Change Journeys in a DoD Field Environment
Research conducted by:
Ted V. Shoepe, Major, USAF
USAF-MIT Lean Aerospace Initiative Fellow
2005 – 2006
Research supported by:
George Roth, Ph.D.
Massachusetts Institute of Technology
Sloan School of Management
77 Vassar Street
Room 41-205
Cambridge, MA 02139-4309
August 2006
The views expressed in this article are those of the author and do not reflect the official policy or position of
the United States Air Force, Department of Defense, or the U.S. Government.
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In Pursuit of Understanding Lean Transformation-Capturing Local Change Journeys in a DoD Field Environment
Research conducted by:
Ted V. Shoepe, Major, USAF
USAF-MIT Lean Aerospace Initiative Fellow
2005 – 2006
Abstract
The global security landscape has drastically changed since the Cold War. The attacks of
September 11 and subsequent coalition operations demonstrate that the global war on
terror is against a new breed of enemy—continuously changing and adapting to US
military strategies and tactics. Future Department of Defense (DoD) weapon system
acquisition organizations and processes must adapt with this new threat—transforming to
an enterprise that is capable of quickly delivering value to the war-fighter in a resource
constrained environment with high operational tempos and aging fleets. Guided by the
Secretary of Defense, both the USAF and USN have adopted “lean” principles as a
compass to help guide their transformational journeys.
"Lean" has been identified to explain the dramatic performance and improvement
advantages that Japanese automobile companies have over their US competitors. These
concepts are now being applied in the DoD to initiate continuous improvement activities,
deliver value to the warfighter and help cope with budget constraints. This study describes
two of the US Air Force and US Navy enterprise-level continuous process improvement
programs and the ways in which each contribute to local results in a field case setting.
Additionally, this study tests the applicability of ongoing LAI lean enterprise change
theory in the context of a DoD environment.
Three noteworthy results were discovered. First, both the Navy and USAF have been
using lean principles for years. Pockets of success in the respective enterprises have been
noted over the years; however, they have traditionally been limited to the manufacturing
floors of the Navy shipyards and USAF Air Logistic Centers. Secondly, on the foundation
of these successes, both organizations are placing the strategic leadership, vision,
infrastructure, and processes in place to proliferate continuous improvement throughout
their enterprises. This study also generated specific recommendations for each field
location to consider based upon research findings. Lastly, with minor tailoring, the
ongoing change management theory development at LAI is applicable to evaluating
enterprise change in the context of a DoD field case.
Research supported by:
George Roth, Ph.D.
Massachusetts Institute of Technology
Sloan School of Management
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Acknowledgements
I structured this research to deliver value to the participating USAF, USN enterprises and
to the LAI consortium. As such, I could not have accomplished this research project
without the support and forthcoming nature of the field locations.
I would like to issue a special thank you to the Naval Undersea Warfare Center—Division
Newport. Every employee ranging from the strategic to tactical levels of the organization
was incredibly knowledgeable and willing to actively participate. In particular, the lean
office was spectacular and served as an invaluable resource for history, data, clarifications,
and facilitation of interviews. Thank you.
A second thank you belongs to the entire C-17 Enterprise. Active participation from each
enterprise stakeholder was essential to capturing the enterprise transformational journey.
Thank you to the B&I office for coordinating the site visit and interview sessions. Lastly,
a very special thank you goes to the enterprise leadership who supported the conduct of
this research.
And to Dr. George Roth, who was instrumental in helping to gain traction on this project
and guiding me through the research process.
In upcoming sections, I will describe the DoD imperatives for change. The first is
increased operational tempo. I understand that participation in this study was an additional
duty for everyone and that the interview sessions presented an opportunity cost in terms of
fulfilling their normal responsibilities. Thank you for your time, without your support this
study would not have been completed.
The views expressed in this article are those of the author and do not reflect the official policy or position of
the United States Air Force, Department of Defense, or the U.S. Government.
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Table of Contents
ACKNOWLEDGEMENTS
5
TABLE OF CONTENTS
8
LIST OF TABLES AND FIGURES
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I. INTRODUCTION
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DOD IMPERATIVE—EVOLVING THREAT
DOD IMPERATIVE—BUDGET PLATEAU
DOD IMPERATIVE—AGING FLEETS
II. CHANGE MANAGEMENT…A COMPLICATED PLAYBOOK
WINNING AT CHANGE
THE WHEEL OF CHANGE
ENTERPRISE CHANGE CAPABILITIES
STITCHING THEM ALL TOGETHER…A CENTER OF GRAVITY FOR CHANGE?
III. LEAN ENTERPRISE CASE STUDIES AND METHODOLOGY
INTRODUCTION AND METHODOLOGY
IV. NAVAL UNDERSEA WARFARE CENTER (NEWPORT) CASE STUDY
CASE STUDY BACKGROUND—NAVSEA LEAN SIX SIGMA
Setting the Stage—Management and Functional Realignment
Establishing the End Zone and Building a Team
Formulating and Implementing the Strategy
Governing Structure and Process
FIELD LOCATION—NUWC DIVISION NEWPORT
Lean Embarkation And The First Six Months
Measuring Progress and intra-portfolio benchmarking
A Foundation for Sustainable Change is in Place
Enterprise Strategy and Structure is Employed
Multiple Organizational Innovations are Consistent and Sequenced
Distributive Leadership, People as Enablers
SUMMARY IMPRESSIONS
V. C-17 ENTERPRISE CASE STUDY
CASE STUDY BACKGROUND—AIR FORCE MATERIAL COMMAND
The Early Years…Depot Success
Lean Now Deployment…Expanding to Enterprise Transformation
Continuous Process Improvement Convergence—AFMC AFSO21
AFMC AFSO21 Next Steps and Summary Impressions
FIELD LOCATION—C-17 ENTERPRISE
Lean Enterprise Deployment—Assessing The Current State
Creating Future State Attributes, Spawning Lean Imperatives
Basic Change Capabilities Are in Place
Enterprise Strategies And Structures Are Utilized
Active Employee Involvement Meets Personnel Growth Opportunities
SUMMARY IMPRESSIONS
VI. ANALYSIS AND DISCUSSION
DIVISION NEWPORT ASSESSMENT AND OPPORTUNITIES
C-17 ENTERPRISE ASSESSMENT AND OPPORTUNITIES
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21
24
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27
27
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31
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36
37
40
42
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48
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TESTING PRECEPT APPLICABILITY TO DOD CASE SETTINGS
LIMITATIONS OF ASSESSMENT
VII. CONCLUSIONS AND RECOMMENDATIONS
DIVISION NEWPORT SUMMARY IMPRESSIONS AND RECOMMENDATIONS
C-17 ENTERPRISE SUMMARY IMPRESSIONS AND RECOMMENDATIONS
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VIII. SUGGESTIONS FOR FUTURE RESEARCH
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REFERENCES
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List of Tables and Figures
FIGURE 1, US MILITARY ACTIVE DEPLOYMENT RATES ...................................................................13
FIGURE 2, DEFENSE OUTLAYS AS A SHARE OF GDP ......................................................................... 13
FIGURE 3, AGING USAF FLEETS ..............................................................................................................14
FIGURE 4, “THE CHANGE WHEEL” .........................................................................................................18
FIGURE 5, CAPABILITIES FOR LEAN ENTERPRISE CHANGE ............................................................ 19
FIGURE 6, VIEWING AN ENEMY AS A SYSTEM ...................................................................................22
FIGURE 7, NOTIONAL TRANSFORMATIONAL CENTER OF GRAVITY .............................................23
FIGURE 8, CASE STUDY DEMOGRAPHICS ............................................................................................. 26
FIGURE 9, NAVSEA ORGANIZATION ......................................................................................................28
FIGURE 10, NAVSEA LEAN TRANSFORMATION TIMELINE ............................................................... 30
FIGURE 11, IMPLEMENTATION ACTIVITIES..........................................................................................33
FIGURE 12, NAVSEA LEAN DEPLOYMENT METRICS ..........................................................................35
FIGURE 13, NUWC DIVISION NEWPORT ................................................................................................37
FIGURE 14, NEWPORT DIVISION LEAN TRANSFORMATION TIMELINE ......................................... 39
TABLE 1, NEWPORT DIVISION ORGANIZATIONAL ASSESSMENT RESULTS................................. 41
TABLE 2, FORECASTED NEWPORT DIVISION ORGANIZATIONAL ASSESSMENT RESULTS ......42
FIGURE 15, EXAMPLE OF ENTERPRISE ORIENTATION ......................................................................45
FIGURE 16, LEAN COORDINATION PROCESS .......................................................................................48
FIGURE 17, AFMC ORGANIZATIONS .......................................................................................................52
FIGURE 18, AFMC LEAN TRANSFORMATION TIMELINE.................................................................... 54
FIGURE 19, LEAN NOW PHASES ...............................................................................................................58
FIGURE 20, AFMC AFSO21 FRAMEWORK .............................................................................................. 59
FIGURE 21, C-17 ENTERPRISE ORGANIZATIONAL COMMAND LINKAGES .................................... 64
FIGURE 22, C-17 ENTERPRISE LEAN+ TIMELINE..................................................................................66
FIGURE 23, C-17 CURRENT STATE ENTERPRISE DEPICTIONS ......................................................... 67
FIGURE 24, C-17 “NEW” ENTERPRISE .....................................................................................................71
FIGURE 25, C-17 GUIDING PRINCIPLES ..................................................................................................73
TABLE 3, SCORES AND SCALES TO ASSESS PRECEPT EVIDENCE ................................................76
TABLE 4, DIVISION NEWPORT, C-17 ENTERPRISE ASSESSMENTS...................................................77
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I. Introduction
The United States Department of Defense (DoD) faces enormous challenges in the 21st
century—an evolving threat, increased force deployments coupled with higher operational
tempos, personnel reductions, and aging fleets. Simultaneous decreasing budgets
additionally exacerbate the complexity of these issues and enhance the imperative to
transform. This section has three objectives. The first is to present a brief discussion of
each challenge in terms of the United States Navy (USN) and the United States Air Force
(USAF). These two services were selected in the context of this study for a number of
reasons to include balancing research scope and time, data access, and personal affiliation
with both the USAF and USN. The second objective of this section is to articulate the
research goals and the lastly, provide a roadmap for this paper.
DoD Imperative—Evolving Threat
Published in September of 2002, the introduction of the National Security Strategy of the
United States of America (White House, 2002) speaks best to the state and nature of this
imperative:
“Defending our Nation against its enemies is the first and fundamental commitment of
the Federal Government. Today, that task has changed dramatically. Enemies in the
past needed great armies and great industrial capabilities to endanger America. Now,
shadowy networks of individuals can bring great chaos and suffering to our shores for
less than it costs to purchase a single tank. Terrorists are organized to penetrate open
societies and to turn the power of modern technologies against us….The war against
terrorists of global reach is a global enterprise of uncertain duration. America will
help nations that need our assistance in combating terror.”
- George W. Bush
As a result of this evolving threat and the ongoing war on terrorism, from the period of
December 2001 to October 2004, the percentage of active duty forces that have deployed
reached the highest marks since the closure of WWII. Figure 1 compares historic
deployment rates for active duty forces. These marks include personnel who have
deployed multiple times (nearly 15% for war on terror); however the chart does not include
contributions for reserve or Guard forces (another 247,000 deployments).
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Historic Active Duty Deployment Rates
60%
50%
40%
30%
20%
10%
0%
Korea (1950-53)
Vietnam (1955-75)
Desert Storm
War on Terror (12/01-10/04)
Figure 1, US Military Active Deployment Rates (Derived from Powers, 2005)
DoD Imperative—Budget Plateau
In an environment of increased active duty military deployments, the Department of
Defense has seen a steady decline in budget outlays as a share of the national Gross
Domestic Product (GDP) as noted in Figure 2. These marks do not represent additional
Figure 2, Defense Outlays as a Share of GDP (Source: AF Magazine, April 06)
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Congressional appropriations to cover the costs for war in Iraq; however, the trend of
declining budgets in relation to GDP is evident. Additionally, both the USN and USAF
growth in terms of budget authority between 2005 and 2011 is nearly flat (0.95% and
0.93% respectively) which is significant considering current inflation rates of 4.15%
(Inflation Data.com, 2006). Further, the USAF has recently announced manpower
reductions of 40,000 personnel before 2011 (AFPC, 2006).
DoD Imperative—Aging Fleets
In an environment of increased deployments and stabilizing budgets, the fleets are also
aging. According to the USAF Almanac, published in May 2006 by Air Force Magazine,
40% of the USAF fleet is over 24 years old. Additionally, over two-thirds of the fleet is
over fifteen years of age. Further, the average age of a B-52 bomber is 43.8 years, the C135 is 43.6 and the C-130 is nearly 33 years. Similar USN fleet data was not available;
however, as the Navy falls under the larger DoD umbrella, one could expect similar aging
patterns. Additionally, in his 2006 guidance to the Navy, the Chief of Naval Operations
articulated the USN need to: “…transform, recapitalize, and modernize our Navy.”
Aging USAF Fleets
0.45
40%
0.4
0.35
0.3
0.25
0.2
0.15
10%
0.1
6%
0.05
10%
11%
9%
7%
5%
2%
0
0-3
3-6
6-9
9-12
12-15
15-18
18-21
21-24
24+
Age in Years
Figure 3, Aging USAF Fleets (Derived from USAF Almanac, 2006)
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The imperative to transform is clear. In his April 2003 Transformation Planning Guidance,
the US Secretary of Defense, defined transformation as:
A process that shapes the changing nature of military competition and cooperation
through new combinations of concepts, capabilities, people, and organizations that
exploit our nations advantages and protect against our asymmetric vulnerabilities
to sustain our strategic position, which helps underpin peace and stability in the
world.
Four major areas encompassed the scope of the Secretary’s vision. The first major area is
how the agency will conduct business within the Department. The second major area is
how the agency will internally function. The next area is how the agency will cooperate
with international forces in a coalition environment. The final area is how the agency will
fight and win wars. The objective of this research is to deliver value to the USAF, USN,
and the Lean Aerospace Initiative (LAI) consortium (TPG, 2003). As such, this paper will
focus on how two field operating organizations within the USAF and USN have
implemented lean capabilities as a means to transform their enterprise.
Section II will discuss change management theory in both the commercial and government
sectors and introduce ongoing work at the Lean Aerospace Initiative to develop precepts
for enterprise change. Next, section III will introduce the two DoD field operating
locations, explain why they were selected, and articulate the research methodology
employed. Subsequently, sections IV and V will discuss in detail the two local
transformational journeys and lean implementations. Lastly, an assessment of respective
enterprise opportunities will be presented in Section VI followed by an evaluation of the
LAI-developed precept applicability to DoD field case settings.
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II. Change Management…a complicated playbook
No organization can effectively firewall against the imperative to change without running
the risk of becoming irrelevant. Given this phenomena, organizational change
management has been studied for years, but with limited success in practical applications.
As Kotter explains in “Leader to Leader”, very few organizations, less than 15% that he
has studied, accomplish their transformational goals (Kotter, 1998). What are a few of the
change theories, or “plays” that an enterprise can run without throwing a desperation pass
at the end of the game? Further, what are the defensive blitzes that a change coach should
be aware of when implementing these plans? This section will present three change
management theories, introduce the concept of “centers of gravity” and synthesize case
study findings in terms of lean enterprise change capabilities.
Winning at Change
In October 2001, a Businessweek survey labeled John Kotter the “#1 leadership guru in
America” (Wikipedia, 2006). He has authored numerous best selling publications and is a
leading expert in organizational theory. In “Leader to Leader,” Kotter explains eight steps
that he has identified to transform an organization. The first is to establish a burning
platform to identify organizational opportunities. The second is to establish a “guiding
coalition”, or group of change champions that had the requisite power and influence to
orchestrate the change effort. The third step is to establish an organizational vision in
terms of the associated change and then develop the requisite plan to meet these ends.
Next, the vision must be articulated consistently and continuously through the use of any
and every vehicle possible. The fifth step is to empower others throughout the
organization. During this stage, the leadership team must break change hurdles. The sixth
step is for the organization to adopt pilot programs to create short-term wins. Success
tends to breed success and these early victories will help to build momentum for the new
vision. The next step is to synthesize improvements and encourage the production of more
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change. The final step is to institutionalize these new approaches and make them part of
the day to day culture of the enterprise (Kotter, 1998).
Kotter goes on to describe additional ways that change happens—the most prevalent
reason is when a new manager comes into an influential position and views the status quo
as unacceptable. Additionally, he goes on to discuss that making change happen is 80%
leadership and 20% management. (Kotter, 1998) which is an interesting dichotomy to
explore in the context of military organizations. Each of these points is relevant to the
DoD case studies selected in that leadership and authority are critical elements to driving
change. These attributes will be explored further in the subsequent sections of this paper.
The Wheel of Change
The United States Army faces similar transformation imperatives to those of the USAF and
USN. In response, the Army is transforming the way they conduct business to provide
additional resources to the warfighter in the field. To this end, the Army Enterprise
Solutions Competency Center has established an on-line Change Management (TM)
Resource Center. This center was structured to put the proper tools in the hands of all
stakeholders that are involved in the enterprise transformation (TM Website, 2006).
Taking into account the importance of investing appropriate budget and resource for an
effective change program, the Army Enterprise Solutions Competency Center has adopted
eight success factors (adapted from Capgemini Government Solutions) that must be
considered prior to initiating a change program (TM Website, 2006). The first factor is
establishing a shared vision and business case for the associated change initiative. The
second factor, similar to that of Kotter’s “Guiding Coalition”, is to get the appropriate
leaders engaged and aligned with the vision. The third factor is to prepare all enterprise
stakeholders. The fourth factor is to create a high-power project team that transcends just
the change team to help foster buy-in from all members of the organization, much like
Kotter’s step to empower others to act on this new vision. The fifth factor is to ensure that
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the workforce has identified the sufficient skills (training and tools) required in
implementing the new processes and that they know the metrics and performance goals
that they will be held accountable to. The sixth factor, tightly coupled to the previous
factor, is when training modules are developed and the requisite educational program is
implemented. The next step adapts the enabling performance management processes to
support change as required. The final step, similar to Kotter’s institutionalization of the
new approaches, is to reassess the organizational behavior and respond to cultural issues.
Figure 4 depicts how each of these factors are related and linked to the lifecycle of change
management.
Figure 4, “The Change Wheel” (Source: Army ESCC, Adapted from Capgemini, June 2006)
Enterprise Change Capabilities
The Lean Aerospace Initiative is a consortium of industry and government members
headquartered at the Massachusetts Institute of Technology (MIT). The consortium
research goals are to accelerate lean enterprise transformation, design future lean
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enterprises, and to evolve adaptive lean enterprises. As such, seven research clusters have
been formed in support of these goals. These clusters are: Enterprise Modeling and
Design, Enterprise Product Development Systems and Processes, Value Based Methods
for Architecting Systems, Enterprise and Cost Metrics, Strategies for High Performance
Enterprises, Enterprise Integration Enabled by IT, and lastly Enterprise Change
Capability—the domain of which this research supports. This research cluster is the
intellectual home for case studies of lean transformations (successful and in-process)
across the aerospace sector to develop a theory or set of practices for successful enterprise
change. Figure 5 summarizes and briefly describes the current set of enterprise precepts
for lean transformation, which will serve as a guide for these case studies.
Rethinking Org. Boundaries
Enterprise-level
Rethinking
Rethinking
Org.
Boundaries
Boundaries
strategy
Enterprise-level org. structure
Enterprise-level activities
Distributing Leadership Practices
Systems orientation
Distributing
Leadership
Practices
Active in alignment
of initiatives
Orientation to customer value
Basic Change Capabilities
Consistency of principles & methods
Training & consulting
Dedicated specialists
Measurement systems
Seeking Growth Opportunities
Improvement-for-growth goals
SeekingEmployment
Growth Opportunities
security
Commitment to personnel development
innovations
Installing sets of org. innovations
Multiple initiatives
Installing
Installing
sets
Sets
of of
org.
Innovations
innovations
Consistency,
sequencing
of
initiatives
Continuity of initiatives & leadership
Pushing and Pulling Change
Strategic positioning
Pushing
and Pulling
Change
Active employee
involvement
Organizational learning
Figure 5, Capabilities for Lean Enterprise Change (Adapted from Roth, 2006)
Grounded on basic change capabilities such as enterprise strategy/vision, consistency of
lean principles, training, dedicated lean specialists, and measurement systems, the
following five capabilities represent the current proposal for lean enterprise transformation.
In a 2006 paper, Roth explains that when employed as a set, these capabilities “…create a
self-sustaining, reinforcing system that yields synergistic benefits.” The following is a
brief description of each of these five capabilities and traits as defined by Roth in 2006.
Rethinking Organization Boundaries: Viewing own organization as a part of a
contiguous value stream—extend the domain to environmental relationships. Enterprises
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that exhibited this capability were able to employ enterprise level strategies that transcend
the internal organization. Additionally, collaboration mechanisms such as special
relationships with suppliers and customers create strong ties and foster trust between
stakeholders, resulting in a focus on the health of the entire enterprise, vice individual
silos.
Installing Innovation Sets: Build upon complementaries of practice—extend the scope to
include sets of changes as coherent programs. Enterprises that illustrated this capability
were able to embark on multiple simultaneous change efforts. These activities were
consistent with the strategic vision and sequenced based upon enterprise priorities.
Additionally, leadership hand-offs were relatively seamless in regards to lean, and there
was a leadership recognition of the need for patience and persistency through periods of
marginal or poor return on investment in regards to lean.
Pushing and Pulling Change: Set in place structures and processes that enable virtuous
learning—extend the methods to integrate two change approaches. Traits that enterprises
illustrated in this regard to this capability include means to sustain improvement—striking
a balance between leadership goal setting and workforce execution to foster commitment
in the tactical trenches of the enterprise.
Seeking Growth Opportunities: Project a positive vision for continual renewal—extend
the strategy to growth and development. Enterprises that illustrated this capability made
overt commitments to their workforce in terms of personal growth and job stability.
Additionally, these enterprises were aware of positive future opportunities for longevity
and attempted to balance organic and new business growth.
Distributing Leadership Practices: Recognize interdependent roles in a system of
leadership—extend leadership to all levels of the enterprise. Enterprises that illustrated
this capability for change had leadership that all levels of the management spectrum
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actively engaged in improving the workforce, the organization, and the entire enterprise
with servant leadership towards creating customer value.
In addition to defining these capabilities for change, Roth has developed an evaluation
framework to compare and contrast enterprise maturity. This model for change was
selected to serve as the framework for this analysis because it represents a logical
methodology to compare and contrast local change activities. Additionally, the
applicability of these change precepts is tested in terms of a DoD field-case setting.
Stitching them all Together…a Center of Gravity for Change?
General Carl Von Clausewitz (1780-1831) was a Prussian soldier and military strategist
credited with numerous influential military theories and concepts. Perhaps two of the most
recognized terms or concepts attributed to Clausewitz are 1) the “fog of war,” —the chaos
of combat while one is engaged in a battle and 2) “center of gravity”—the source upon
which an enemy derives its power. In an 1873 translation of “On War” by a British Army
Colonel, JJ Graham, Clausewitz writes of the center of gravity:
…a centre of power and movement, will form itself, on which everything depends;
and against this centre of gravity of the enemy, the concentrated blow of all the
forces must be directed.
These concepts are taught to military officers throughout the world and are still applied by
modern war planners. In his article “Air Theory for the 21st Century,” (from USAF Air
Command and Staff College course material), USAF Colonel John Warden writes about
approaching an enemy as a system (Figure 6) with inter-relationships. He explains that
taking this perspective yields a number of advantages which I feel are relevant to research
on change management.
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FIELDED MILITARY FORCES
POPULATION
INFRASTRUCURE
SYSTEM ESSENTIALS
LEADERSHIP
Figure 6, Viewing an Enemy as a System (Source: Warden 1994)
First, this approach enables planners to achieve an understanding of the relative importance
between the elements. Secondly, he argues that the concept of starting from the middle of
the rings and working outward is critical to taking a strategic vice tactical view of an
engagement. Colonel Warden employed these tools when designing the air campaign of
Desert Storm and is widely respected throughout DoD. In his book “My American
Journey,” General Colin Powell writes: "The Air Force staff quickly came up with an air
campaign, the brainchild of Colonel John Warden, a brilliant, brash fighter pilot and a
leading Air Force intellectual on the use of airpower...”
Applying this theory to the context of change management leads to the question: What is
the center of gravity for transformation? After review of the previous three change
management theories, there are a number of common denominators that can logically be
grouped into eight “rings” of gravity to transform an organization as presented in Figure 7.
Clearly, establishing a sense of urgency is the center upon which all transformational
movement would form itself.
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Establish a
Sense of Urgency
Establish Basic Change Capabilities
Rethink Organizational Boundaries
Publish Vision and Roadmap
Mobilize Skilled, Empowered Teams
Push and Pull Sets of Change
Seek Growth—People, Process, Product
Institutionalize Change; Address Culture and Gaps
Figure 7, Notional Transformational Center of Gravity
In this context of center of gravity, Hammer would suggest a change program involving
eight steps that must be followed, with attention to the pitfalls that will impede a change
management program. Roth’s work suggests that a capability taken in isolation will
provide some benefit to an enterprise’s performance. Alternatively, it is when leadership
can form its transformational program around basic change capabilities, utilizing the five
precepts as a set, coupled with empowering operational improvements in the trenches of
organizations, that they will create a self-sustaining system of continuous improvement.
What is the difference between these approaches in terms of generating results? How have
the USN and USAF operating locations demonstrated Roth’s precepts for change? Are
they applicable to a DoD case setting? The first step to answering these questions will be
taken in the next section of this paper as I will discuss the research methodology and
introduce the case studies.
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III. Lean Enterprise Case Studies and Methodology
Introduction and Methodology
My participation in a group project to satisfy requirements for MIT’s Fall 2006 offering of
“Integrating the Lean Enterprise” instructed by Dr. Debbie Nightingale led to this case
study. This was my first exposure to both the Navy and USAF lean program and I was
impressed by the maturity of their journeys. I decided to pursue an in-depth study of lean
transformation at a field location and explore how the interfaces with their corporate
program contribute to their success. The field location I selected for the Navy was the
Naval Undersea Warfare Center (NUWC)—Division Newport (DIVNPT) and the C-17
Systems Product Group, located at Wright Patterson AFB, OH was the USAF site. I
selected these two services in the context of this study for a variety of reasons, but scope
balanced against time was the main driver—I wanted to be able to deliver a quality product
in the time available.
The Navy site visits occurred during the months of June and July 2006. On one of the
visits, I was joined by my LAI advisor who is studying enterprise change management in
commercial and DoD environments. During these visits I received tours of the facility,
attended relevant lean meetings that reviews weekly initiatives across the center, and
conducted numerous individual interviews. To understand the enterprise-specific change
drivers, strategic issues, and linkage to corporate process improvement initiatives, I
interviewed the commanding officer (CAPT, 0-6) and the director of his lean team.
Additionally, I met with numerous individuals in the field to gain visibility into the issues
at the tactical level. Participants in these sessions represented a broad sample—ranging
from a departmental technical director to a six sigma black belt, to a lean champion in the
field. In some cases, interviews were conducted over the phone—both before and
subsequent to the site visit. I obtained internal records, utilized the NUWC base
newspaper, and performed extensive internet searches of public documentation to support
this research.
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The USAF site visit also occurred in the month of June 2006. During this visit, I received
a tour of the facility and mission area to include an overview of the C-17 enterprise lean
journey. I also attended relevant lean meetings. To understand the enterprise-specific
change drivers, strategic issues, and linkage to corporate process improvement initiatives, I
interviewed the commanding officer (Colonel, 0-6) and a senior staff member at Air Force
Material Command (AFMC). Additionally, I facilitated a lean roundtable with numerous
stakeholders to gain insight into the issues at the tactical level. Participants in these
sessions represented a diverse group of personnel—including a technical director,
production manager, Boeing six sigma/lean experts, value stream managers, and the
Defense Contract Management Agency (DCMA). In some cases, coordination and
interviews were conducted over the phone—both before and subsequent to the site visit.
Internal records, USAF press releases, and extensive internet searches of public
documentation greatly enchanced this research.
The USN and USAF transformation imperatives are quite similar—aging fleets, plateau
budgets, and an evolving threat. As the next sections will illustrate, both enterprises have
been harvesting lean implementation results from pockets of their respective organizations
for years. Following preliminary web-research and precursory interviews prior to
commencing this study, I predicted I would find a Navy enterprise transformation program
that was slightly more structurally mature than that of the USAF. In this context, I define
maturity as degree of deployment throughout the workforce—number of people trained,
lean event execution, presence of standard processes, and reporting mechanisms. I made
this prediction as a result of finding plentiful Navy open-source data on the web. A sound
infrastructure appeared to be in place.
I also predicted that the ongoing LAI enterprise change work is not “one-size fits all.”
With the exception of a Warner Robins Air Logistics Center assessment, the precept
development has had limited exposure to DoD case settings. The profession of arms and
missions they are responsible for creates a much different culture than that of the
commercial world. More layers of approval and management coupled with higher degrees
25
of centralized command and control. Additionally, motivating factors and improvement
opportunities are not necessarily measured in terms of profitability and revenue as in the
commercial sector.
To validate or disprove my predictions, I drafted two case studies. Each will begin by
describing the enterprise lean programs (NAVSEA and AFMC), to include a discussion of
their respective lean imperatives, scope, and structures. I will then discuss implementation
at two field operating locations, using the five precepts for change that were presented in
Section II as a framework for analysis. An introductory snapshot of the organizational
demographics and relationships is provided in Table 1.
Table 1, Case Study Demographics
Organization
Major Command
Personnel
Command CPI
Program
Selected Field
Operating Location
Personnel
United States Navy
United States Air Force
Naval Sea Systems Command
Air Force Material Command
~50,000
~78,000
Lean Six Sigma
(Aug 2004)
Air Force Smart Operations 21
(Jan 2006)
Naval Undersea Warfare Center
Division Newport
(Newport, RI)
C-17 Enterprise
(Dayton, Ohio/Long Beach, CA)
~2600
~6800
26
IV. Naval Undersea Warfare Center (Newport) Case Study
Case Study Background—NAVSEA Lean Six Sigma
The nation has now been at war against terrorism longer than World War II. The Navy is
transforming to maintain a state of readiness in support of this global war while
simultaneously operating in an environment of constrained budgets and aging fleets.
Attacking waste and encouraging efficiency improvements, the USN is clearly moving out
to implement a robust Lean Six Sigma (LSS) program. In his May 2006 letter, the
Secretary of the Navy showcased tremendous successes—4 to 1 return on investment and
2,800 events and process improvement projects executed. Over 500 black belts and 1,500
green belts trained. Across the Navy Enterprise, Naval Air Systems Command (NAVAIR)
has seen process improvements in functions throughout the command to include
accounting, maintenance, human resources, and the supply chain. Similarily, NAVSEA
has harvested significant performance improvements as demonstrated by the shipyards.
Engineered refueling overhaul times were reduced by four months between FY99 and
FY01 while depot modernization periods were cut by over three months from FY00 to
FY02 (Brice, 2004). The Navy enterprise lean journey is well underway and the
commands are aligned. I selected NAVSEA as the USN enterprise of choice for this case
study given their demonstrated success in implementing lean both on and above the shop
floor.
Here is a snapshot of the command. NAVSEA is a multi-program enterprise whose
mission is: “Keeping America’s Navy #1 in the world by providing the Navy
operationally superior and affordable ships, systems and ordnance throughout their life
cycle…for today, for tomorrow, for the Navy after next.” The command employs over
50,000 people (military and civilian) in over 130 locations throughout the world and has an
annual budget of over $25B—representing research, development and test for everything
that operates on or below sea (NAVSEA Homepage, 2006). A hierarchical diagram of the
command linkage to operating locations and reporting relationships is provided in Figure
9.
27
Figure 9, NAVSEA Organization (Source: Lengerich, Jan 05)
Setting the Stage—Management and Functional Realignment
The USN and Naval Sea Systems Command (NAVSEA) have been executing process
improvement initiatives and programs for years. Total Quality Leadership (TQL), the
Navy Industrial Improvement Program, Advanced Industrial Management, NAVSEA
Continuous Process Improvement (CPI), Task Force Maintenance, and One Lean Shipyard
are all CPI building blocks contributing to a broader enterprise transformation. Today,
NAVSEA aims for efficiency and effectiveness improvements in support of USN service
goals and initiatives: Sea Power 21, the Sea Enterprise, and to win the global war on
terrorism. The framework of choice is Task Force Lean—a broad sweeping, four phase
transformation program that touches the entire NAVSEA enterprise. This case study will
first describe the enterprise lean program and then focus on the implementation,
infrastructure, and results in a field case setting.
NAVSEA officially embarked on their lean journey in August 2004 following two years of
transformation activities (Figure 10). During this initial two year period, Headquarters and
Program Executive Officer (PEO) functions were realigned, reducing the number of
NAVSEA-relevant PEO offices (responsible for the development and acquisition of Naval
Sea systems) from six to five. In addition, technical authority was structured to provide
28
requisite engineering support to the PEOs. Each of these changes resulted in a refocus on
how the Navy builds and buys capabilities which senior leadership felt was critical to the
cultural adoption of lean principles.
Realignment did not stop there. Initially, the two NAVSEA warfare centers reported
directly to the NAVSEA commander (COMNAVSEA) as depicted by the white boxes in
Figure 9. Customers had multiple points of entry and interfaces with (and within) the
warfare centers. Tasking was accepted by the sites with that focus in mind and an
environment of silos inadvertently resulted. These walls were broken by a number of
changes (as depicted by the green boxes, Figure 9). A single-point entry for customers was
created by establishing Product Area Directors. Additionally, a Board of Directors was
created at the center level to facilitate task acceptance based upon each center’s core
capabilities and to better focus delivery of value to the customer. Each of these changes
was intended to create a sustainable environment and culture where the customer can pull
value from the enterprise (DIVNPT Lean Overview Training, 2006)
29
NAVSEA Funding to
kickoff lean at shipyards
War on Terrorism
Begins
Shipyard Closures
NAVSEA/CC Direction to
apply Lean Enterprise Wide
CNO Guidance
(resourcing, recap of fleet)
NAVSEA Task Force
Lean Established
NAVSEA Lean
college opens
Rapid improvement
events at all shipyards
Organizational Assessments
1990s
2001
Total Quality Leadership
2002
2003
2004
2005
2006
Shipyard Lean Implementation
NAVSEA CPI
HQ/PEO Realignment
Transformation Planning
Business Efficiencies
Assess/Reassess
Derived from multiple open sources
Figure 10, NAVSEA Lean Transformation Timeline
Task Force Lean
2007
Establishing the End Zone and Building a Team
In 2004, NAVSEA was ready to integrate lean principles throughout the enterprise. In
August of that year, Task Force Lean (TFL) was formally stood-up by COMNAVSEA and
was directed to implement lean throughout the command. The preliminary organizational
goals were straightforward—given the enterprise current state and desired future state,
expose and solve problems while creating a culture focused on continually reducing waste
and variation. Strategically aligned with the USN future blueprint, the enterprise “north
star” was to “…see world-Class improvement in productivity, lead time, factory
utilization, safety and quality.” and achieve a positive 3x or 4x return on investment from
the conduct of rapid improvement events and projects. Additionally, the enterprise set
aggressive goals of 100% participation on at least one rapid improvement team (within
three years) and obtaining perfect marks on lean organizational assessments. A lean
assessment is a NAVSEA mechanism established to audit progress against the enterpriseprescribed lean deployment model (DIVNPT Implementation Plan, March 2005)
Anticipating workforce resistance, in the TFL charter the task force emphasized that
employee jobs were secure and that “…to the best of NAVSEA’s ability, no one will lose
their job because of their participation in lean efforts.” (TFL Charter, 2004)
Redeployment plans were created to mitigate this risk and sites were encouraged to employ
visible recognition and reward programs with lean criteria in order to gain momentum and
reinforce senior leadership commitment to the enterprise lean journey.
The next step was to determine who was involved and what their respective roles were in
terms of deployment. A core team led by a COMNAVSEA-appointed senior executive
was soon established at NAVSEA. A formal letter issued shortly thereafter summarized
the TFL charter and initial plan of action and milestones. In this document, each
directorate, PEO, and field activity were tasked to assign a full time lean Point of Contact
(POC). This person’s primary function was to liaise between TFL and their respective
field locations to deploy lean and facilitate horizontal knowledge sharing. Participation did
not stop there—everyone throughout the chain of command was expected to participate.
Executive management was requested to visibly lead from the front and allocate the
required resources. Value stream champions in the field were identified at the program
level and challenged to break barriers in order to create an organic lean capability. The
responsibility of tactical execution was levied upon the employees in the trenches to
include team leaders, team members, green belts, etc (TFL Charter, 2004).
An additional element to aid deployment and fostering employee buy-in was creating lean
guiding principles and communicating the benefits of eliminating waste and reducing nonvalue added work. Mirroring Womack and Jones’ 1996 publication of “Lean Thinking”,
the NAVSEA lean vision included five fundamental elements upon which the program is
grounded. The first tenet is “Value”, defined as specifying a value for specific product or
service from a customer perspective. The second is a “Value Stream” to map and analyze
the interactions from end to end and across organization boundaries. “Flow” is described
as making value flow without interruptions…no stops, piles, or back-ups. “Pull” means to
let the customer draw value as needed from the producer. Lastly, “Perfection” speaks for
itself. TFL communicated these principles to their operating locations and advertised that
world class enterprises have enjoyed 400% productivity improvements and reduced lead
times by 90% within three to five years of deployment—there was no reason to be other
than world class (TFL Implementation Plan, 2005).
Formulating and Implementing the Strategy
With clear imperatives, principles, and defined roles, the TFL leadership crafted an
implementation strategy based upon John Kotter’s eight step process for leading change:
1) Establish a sense of urgency, 2) Create a guiding coalition, 3) Develop a vision and a
strategy, 4) Communicate the change vision, 5) Empower broad-based action, 6) Generate
short term wins, 7) Consolidate gains and produce more change, and 8) Anchor new
32
approaches in the corporate culture. In addition, TFL leadership engaged other public and
private enterprises that had harvested positive results from lean implementation
Primary elements of the NAVSEA implementation activities then included the steps shown
in Figure 11. These activities and center implementation plans are tailored by operating
location in order to better align with customer values and each center’s strategic plan,
challenges, vision, workforce demographics, etc. In addition to a thorough definition of
each activity, NAVSEA prescribed candidate durations and timing, participation, and
ownership. For example, the Executive Planning Session is notionally a two day session
where the senior enterprise executives meet to reassess strategic direction, revisit the
enterprise value proposition, explore enterprise strength, weaknesses and opportunities,
and plot a new course as required.
Executive Planning Session
Value Stream Analysis
(VSA)
Rapid Improvement
Events (RIEs)
Projects
Organizational
Assessment
Figure 11, Implementation Activities
Another example is the organizational assessment. Similar in format and structure to an
inspector general visit or commercial audit, the organizational assessment was to initially
33
occur on a quarterly basis for each organization over the first two years. At that point, the
organic capability developed at each site would be responsible to perform a selfassessment. Interviewees at an operating location explained that these assessments are
typically guided by a master sensei and performance results are collected at two levels—
the site and the value stream. An evaluation of cultural awareness and deployment
maturity is also conducted in the form of a “Toll Gate” review. The review provides an
organizational watermark on its way to becoming a self sufficient LSS organization,
operating at or approaching world class. Assessment results for a field operating location
will be presented in a subsequent section.
Governing Structure and Process
In “The Structure of Organizations”, Mintzberg writes that “Performance control systems
can serve two purposes, to measure and to motivate.” When creating enterprise
deployment metrics, TFL had four requirements. First, the metrics must encourage waste
eliminating behavior. They must be easy to get and easy to understand. Lastly, they must
be difficult to manipulate or “game”. Interviewees explained that after looking at a series
of metrics from other world class organizations, TFL issued a set of 12 metrics to the field
(Figure 12) to track the status of lean deployment. These can logically be divided into
three areas—core indicators, lean activity, and awareness depth and breadth. Core
indicators represent an enterprise’s bottom line in terms of lean implementation results—
how many cost reductions have resulted, what percent of the value streams have been
engaged, and how many people have been redeployed given successful lean
implementation. Lean activity measurements include measurements of the number of
values streams engaged as well as the number of events conducted. Awareness depth and
breadth are elements to gauge the degree of lean proliferation throughout an enterprise. As
such, these metrics include number of people trained at various levels, six sigma certified,
and participation on teams. In terms of governance, interviewees explained that TFL
receives routine updates and conducts teleconferences with all subordinate operating
locations to status progress and share knowledge horizontally across the enterprise. At the
strategic level, COMNAVSEA tracks each organization’s progress via regular Line of
34
Business and PEO Lean briefings followed by a quarterly report to the Chief of Naval
Operations (CNO) and Assistant Secretary of the Navy (ASN).
Core Indicators
Cost Reductions
Percent of Value Streams Engaged
Redeployment
Awareness Depth, Breadth
Lean Activity Measurements
# of Value Stream Analyses Performed
# of Rapid Improvement Events
# of Projects
# of Rapid Improvement Teams
# of Employees on Teams
# of Personnel in Lean Office
# Number of Black, Green Belts
Lean Champion Training
Basic Lean Education
Figure 12, NAVSEA Lean Deployment Metrics
NAVSEA is in the process of parlaying lean successes of the shipyard into an enterprisewide Lean Six Sigma Program. The principles, process, people, and infrastructure have
been designed to put a sustainable program in place that will deliver value to the warfighter
and support the Naval contribution to the global war on terror. Enterprise senior leadership
is onboard—the program was driven from the top at inception and support has not wavered
through changes in management. LSS is more than a blip on the screen for NAVSEA—it
is one of five top priorities for COMNAVSEA and interviewees in the field stated lean is
embraced by the command’s rank and file. Implementation at one of these field locations
is discussed in the following section.
“Lean is a fundamental way of thinking that should drive the way we do our work, the way
we improve our work, and the way we identify and solve our problems”
--Vice Adm Paul Sullivan, NAVSEA Commander (Feb 2006)
35
Field Location—NUWC Division Newport
The Naval Undersea Warfare Center (NUWC) is a multi-program enterprise located in
Newport, Rhode Island that reports to NAVSEA. NUWC is responsible for full-spectrum
research, development, test and evaluation, engineering and fleet support for submarines
and underwater systems—this encompasses all offensive and defensive naval assets that
operate below sea level. The center currently employs a workforce of approximately 4000
personnel (military and civilian), executing a budget of ~$1B. Four of the 12 NAVSEA
Product Area Directorates report to the NUWC Commanding Officer. In addition to the
Newport, RI location, NUWC has responsibility for operations in Keyport, WA and
numerous other geographically separated units throughout the world (NUWC Homepage,
2004).
Reporting and accountable to NUWC, the Newport division (DIVNPT) employs a
workforce of approximately 2600 personnel, who are predominately civil service scientists
or engineers. The mission of DIVNPT is “Undersea Superiority: Today and Tomorrow”,
providing the technical foundation for cradle to grave support to the fleet. The reporting
relations and functions are illustrated in Figure 13. The red shaded boxes represent
functions at DIVNPT that support the Undersea Weapons and Vehicles PAD. Blue boxes
signify support to the Command and Control PAD. Orange shading illustrates linkage to
the Analysis Assessment PAD. While the technical support and departments report to the
DIVNPT commander, the PADs facilitate assignment of taskings to the proper warfare
division and report to the NUWC commander. Their role in lean implementation will be
discussed in subsequent sections. Major DIVNPT departments include Combat Systems,
Sensors and Sonar Systems, Communications, Communications Imaging and EM Systems,
and Torpedo systems which are also considered the Newport Division value streams.
36
RADM S. Johnson
C
n
ch
Te
Division
Newport
CAPT J. Mickey
de
an
Lean
Office
an
de
r
i
l D
ica
o
ct
re
r
D. McCormack*
Assessment
Deputy
Director USW
r
ps
m
lO
m
ica ger
Co
n
ch n a
Te Ma
om
m
Director USW
Chief
System Engineer
Deputy Technical
Ops Manager
D. Aker
Science &
Technology
Test
Facilities
Torpedo
Systems Dept.
Business
Services
Platform & Payload
Integration Dept.
Field
Team
Combat
Systems Dept.
USW
Weapons &
Vehicles
Sensors & Sonar
Systems Dept
USW
Command &
Control
Comms
Imaging, and EM
Systems Dept.
USW
Analysis
Assessment
USW Analysis
Dept.
USW Fleet
Material
Readiness
Ranges, Eng., and
Analysis Dept.
Auto. Systems
and Tech. Dept.
Figure 13, NUWC Division Newport (Source: “Lean Overview Training”, May 06)
Lean Embarkation And The First Six Months
The Newport Division initiated their lean journey shortly after NAVSEA TFL was
initiated in August 2004 (Figure 14). Prior to formal kick-off, interviewees explained that
lean awareness was limited at best and the corporate program was essential to getting the
program underway. A Lean office was formally established two months later in November
with a clear purpose—implement and manage lean activities across DIVNPT. Initial
objectives were to improve productivity, increase value to the customers, reduce waste,
standardize process improvement and drive a culture change throughout the command—a
daunting task for any team. Staffed by two full time personnel and a rotating intern, the
team made immediate impact. By the end of the month, 30 green belts had received initial
training and one month later the first Executive Planning Session was conducted. This
meeting marked an important milestone for the Newport Division in that this session was
able to define lean success for the center from the perspective of the Commanding Officer.
Additionally, the value streams were defined. Required resources were identified for
successful deployment and the level of commitment was articulated from the top.
37
The following month, the first Value
Stream Analysis (VSA) was conducted on
the periscope repair process for the
National Maintenance Program. With the
ultimate goal of generating faster
turnaround times to provide better fleet
capability, the team embarked on a five
day VSA and completed four just-do-it
improvements. At the end of the exercise,
productivity was projected to improve by 78%, lead time by over 90%, hand-offs by 80%.
All with a 293% projected ROI. Lean momentum was starting to build in the Newport
Division workforce and the workforce was capturing lessons learned from implementation.
In parallel, the Newport Division Lean Office was drafting their Lean Implementation
plan, fully leveraging NAVSEA TFL implementation guidance. The document was
published in March 2005, and outlines all elements to a successful lean implementation.
Aligned with NAVSEA direction, the guide issues three year deployment goals for the
division—100% of the workforce will participate on at least one rapid improvement team
and 4% will deploy as full time lean resources (based upon belt certifications). Building
upon the three year goals, the expectation was that within five years, 80% of all lean
activities will be executed organically and the center will receive perfect marks on their
organizational assessment. From a short-term economic perspective, individual lean
events were expected to pay for themselves within a three to four month timeframe and
yield a minimum of 3:1 return on investment. Although not quantified at the Newport
Division level, the far term goal was to achieve world-class improvements throughout the
enterprise in productivity, lead time, and quality.
38
External Influences and Initiatives
Total Quality Leadership
War on Terrorism
Begins
NAVSEA CPI
NAVSEA/CC Direction to
apply Lean corporately
CNO Guidance (resourcing,
recap of fleet)
NAVSEA Task Force
Lean Established
SECNAV Lean
Deployment Forum
Organizational
Assessments Begin
Shipyard Closures
1990s
DoD CPI Guidebook
Published
2001
2002
2003
2004
2005
2006
Lean Office Established
Implementation Plan
2007
NUWC OA
Redeployment Tracking Process
Communication Plan
Change Drivers and Milestones
Training
Lean Champions
Black Belts
Green Belts
40
02
27
147
10
73
Events
VSA
RIE
Projects
13
14
05
42
52
61
Results
Participation
Cost Reduction
RIT Execution
Project Execution
Internal Initiatives and Results
Derived from multiple open sources and NUWC Metrics
Figure 14, Newport Division Lean Transformation Timeline
586 (39% FY06 Goal)
97% FY 06 Goal
52 Events (28% FY06 Goal)
61 Events (44% FY06 Goal)
In reviewing their program history, the lean office explained that the Spring of 2005 was
great on many lean fronts—especially training. In March, 40 lean champions and two
black belts were trained followed by an additional 27 green belts in April. Forty more lean
champions received training in May. Green and black belt training was predominantly
procured through the NAVSEA Lean Six Sigma College at Norfolk, VA. Other training
approaches included a “just-in-time” approach prior to event execution and hands-on the
job training (OJT). Division Newport was starting to build momentum in proliferating
lean throughout the workforce. The lean office also developed their FY05 Execution Plan
and published the division’s Lean Communication Plan to articulate their strategy for
advertising lean successes to both internal and external stakeholders. The summer soon
came around as did the first NAVSEA organizational assessment.
Measuring Progress and intra-portfolio benchmarking
In summer 2005, the Newport Division lean office explained during interviews that a five
member team visited all NAVSEA sites to evaluate progress along the lean deployment
model. The team was composed of lean subject matter experts from TFL, Northrop
Grumman, the shipyards, and a master sensei. The Newport Division’s assessment
occurred in August and established maturity watermarks in five areas—value stream
engagement, infrastructure, activity/intensity, exposure, organic vs external support, and
return on investment. Objective marks and DIVNPT’s assessment is provided in Table 1.
Table 1, Newport Division Organizational Assessment Results (Summer 2005)
Criteria
Objective Mark
Satisfied?
Value Stream Engagement
20—30%
Partially
1% full time black/green belts
Partially
On pace with LDM
Yes
80% sensei supported
Yes
20% of population on 1 team
Partially
Infrastructure
Intensity
Organic v Contract Support
Exposure
10% of population on 2 teams
Return
3:1
Yes
Going into the organizational assessment, there were no published minimal or acceptable
scores. The Newport Division received an aggregate final toll gate score of 0.5—on their
way to advertised Year 2 goals of 1.0. In terms of value stream engagement, the Newport
Division had executed 13 VSAs, 14 Rapid Improvement Events (RIE), and 5 projects by
early August 05 and did not fully meet objective marks. This was an area of focus for
improvement as the local team developed their FY06 execution plan. Additionally, with
the support of the division commander, the Newport Division lean team turned up the gain
on garnering full-time support from the black and green belts assigned to the division.
During interviews, respondents stated that the commanding officer’s involvement in
improving these metrics was critical.
So where are they today? At the time of interviews, the Newport Division was preparing
for their next round of organizational assessments. The team lead solicited the division’s
black belts to dry-run the audit in preparation for the NAVSEA visit. Table 2 highlights
where the center employees think they are today.
41
Table 2, Forecasted Newport Division Organizational Assessment Results (Summer 2006)
Criteria
Objective Mark
Satisfied?
Value Stream Engagement
70%
Partially
2% full time black/green belts
Partially
On pace with LDM
Partially
<80% sensei supported
Yes
20% of population on 1 team
Partially
Infrastructure
Intensity
Organic v Contract Support
Exposure
10% of population on 2 teams
Return
3:1
Yes
A Foundation for Sustainable Change is in Place
The Newport Division views enterprise change as a battle with two fronts—the physical
transformation and the cultural transformation. The physical front includes the challenges
of identifying and attacking waste in the value streams while simultaneously injecting six
sigma capabilities into the process. The organizational structure, workforce layout and
methods must support an attack on the physical front. The cultural front presents its own
unique issues—aligning the enterprise strategy, leadership, and policies while fostering
workforce buy-in. A recurring theme throughout the interviews was that the enterprise
leadership must understand that lean is not a magic beacon that can clear the fog of war
overnight—it takes patience, persistence, and participation. The lean office explained that
Division Newport has taken this two-front attack into consideration and has built a solid
four-block foundation to avoid these transformation pitfalls.
The first block is a center-wide consistency of principles and methods. Aligned with
NAVSEA, Division Newport employs five lean principles—specify value from the
customer’s perspective, map and analyze the value stream, make the value stream flow,
enable the customer to pull value, and lastly seek perfection. Via interviews, it was clear
42
that the enterprise is grounded on these principles and that they have proliferated
throughout the chain of command. During site visits, I noticed an aggressive poster
campaign dedicated to refreshing lean principles scattered throughout building hallways,
memo boards, and even the elevators.
Division Newport has also crafted a set of standardized processes that are employed
throughout the center. Standard operating procedures (SOPs) for value stream mapping,
rapid improvement teams, lean projects, and “No delay, just do-its” have been distributed
to the workforce and are being used daily. I was given copies of the SOPs to review and
immediately noted the completeness—each provides detailed overviews of the respective
processes, a week by week checklist to facilitate planning and preparation, agenda,
debriefings, and documentation guides. It was unclear to what degree the workforce is
employing these SOPs; however, the standard report templates were utilized by teams to
debrief their progress and results.
According to Division Newport, the second block for sustainable change is training and
consulting. The primary means to support lean efforts at Division Newport is the
NAVSEA Lean Six Sigma College in Norfolk, VA. Per the division’s implementation
plan, Black and Green belts both receive their training offsite whereas the rest of the
workforce would receive training “Just-in-time”. Via interviews, we discovered that
NUWC has varied from the JIT approach, electing to train the workforce prior to the
improvement events. This approach helps to emphasize the importance of the activity and
focus on key elements that are to be improved. Additionally, employees do not “show up
scared”—knowledge is transferred weeks in advance as are expectations and event rules of
engagement. An extensive array of lean training modules is posted on the internal
Division Newport Lean website and available to the Newport Division workforce for
knowledge supplementation. In terms of consulting, Division Newport leverages an
existing NAVSEA contract vehicle in place for external sensei support if required. In the
early stages of deployment, this helped to foster awareness and growth of organic lean
experts throughout the enterprise; however, the majority of lean events are now led and
facilitated by the center’s employees.
43
The next block in place is dedicated specialists. The Division Newport lean office is led
by a mid to senior level manager (ND-5, GS 14/15) and is composed of two full time
employees and one “intern” that rotates on a quarterly basis. The rotation was developed
in order to help generate awareness throughout the enterprise. Additionally, lean experts
are deployed throughout the division and occupy positions within each of the departments.
Lean is typically considered an additional duty in the field; however, via interviews I
discovered that all employees within the division now have CPI in their performance plans
and the lean office is hopeful that continued senior leadership endorsement and emphasis
will make these positions attractive to the workforce. It is important to note that each of
these billets and funding for these positions is provided by the division and sourced
through the customer agencies.
The final block in place to support sustainable change is measurement systems. Division
Newport tracks and monitors a suite of metrics in compliance with NAVSEA direction.
These are captured on a weekly basis and briefed to the Newport Division CO every Friday
during a Lean Review that he chairs. In addition to the CO, this meeting is attended by the
lean office and all value stream champions. The primary goal is to out-brief weekly results
from the field and monitor deployment progress against NAVSEA goals. Senior leader
interviews explained that two ancillary benefits result. Event leaders and value stream
champions obtain visibility in front of division senior leadership and the forum creates a
conduit to share ideas and foster horizontal communication throughout the center.
Enterprise Strategy and Structure is Employed
Division Newport employs an enterprise level strategy and structure. An enterprise
depiction of the Combat Systems Division (Figure 15) illustrates how lean deployment is
centrally commanded and controlled to interface with the external environment while
aligning with stakeholder goals and enabling decentralized execution throughout the
division.
44
Figure 15, Example of Enterprise Orientation (Source: Datta, et al 2006)
Strategic visioning is accomplished via an annual executive planning session that has taken
place each year in December. During this session, the Newport Division senior leadership
sequesters themselves to establish the strategic direction of the enterprise and develop a
roadmap that is consistent with NAVSEA direction for following year execution. Products
coming out of this meeting include a strengths, weaknesses, opportunities, threats (SWOT)
analysis, future goals and objectives, identification of target value streams, a current and
future assessment of the lean deployment model, and an update to the lean implementation
plan (if required). The lean council is then the leadership body that monitors and tracks
progress against the projected plan.
A little more about the lean council—it is an advisory committee developed to provide
Division Newport executive leadership options and advice for injection of lean into the
enterprise. The body is composed of senior leadership from each of the departments and
meets on a monthly basis. Second to the identification and prioritization of value streams,
the lean office explained that the most important function this council performs is to assist
in the removal of barriers to lean implementation, to include making the requisite resources
45
available to support lean deployment. For example, during the 06 March 06 lean council
meeting, it was noted that the time required for green and black belts to execute lean events
was not consistently acknowledged by supervisors throughout the center—some
employees did not have lean performance factors built into their annual assessments.
Although proof of compliance was not discussed with the lean office during interviews, an
action was swiftly levied upon all departments to ensure performance factors for all
supervisions included lean considerations.
The customer is involved in Division Newport’s lean implementation. Customer
advocates are deployed from the fleet (sponsors) to represent interests of the respective
value streams and are collocated with the departments in Newport, RI. This helps to
ensure the voice of the warfighter is articulated and aligned with objectives of the lean
events. It was further explained by one of the department technical directors that the
customer advocates play a key role in facilitating sponsor approvals to engage respective
value streams and participate in event execution. In fact, he has seen occasion within his
organization that the customer advocate and the constituency that they represent will
identify a lean improvement for the enterprise to implement. Additionally, at the
completion of all events, the customer will endorse the advertised cost reductions prior to
taking credit for results and briefing them out through the enterprise chain of command.
Multiple Organizational Innovations are Consistent and Sequenced
During one of the May 2006 site visits, I was invited to attend the commanding officer’s
weekly Lean Review. After a project team debrief, the Lean Office presented a detailed
calendar of upcoming events. That month, four value stream activities were conducted
along with five rapid improvement teams and eight projects. In June, six more value
stream activities were scheduled in addition to 11 rapid improvement teams and 15
projects. These events represent the entire spectrum of business at Division Newport—
both on and off the manufacturing floor. For example, in May, one of the divisions
conducted a RIT to standardize and streamline the test and evaluation post-test report
process (test logs, analysis, etc). That same week, another division was striving to improve
46
a validation auditing process. A few days later, the service cost center performed a 5
sigma event to create a standardized tooling box for programmers and operators. Results
from these events in terms of depth (people, ROI) were not available; however, the
breadth/diversity in the nature of these initiatives was noted. These events are advertised
and visible. When driving into the base on the morning of the site visit, the scrolling
marquee at the main gate had an announcement for one of the upcoming lean events.
How are these events selected and coordinated? Figure 16 details the lean coordination
process employed at Division Newport. The genesis of an event can take many forms, but
it is typically born from either the PADs or Division Newport departments. During an
interview session, one technical director emphasized this phenomena and further explained
that it is normal to see events originate from the fleet users themselves—indicating lean
extension outside of enterprise boundaries. Another key attribute of this process is the
extent to which the users are engaged throughout the process. Given Division Newport is
a Navy Capital Working Fund (not a congressional line-item), the sponsors who control
the financial purse strings must approve the resources to conduct an event. Additionally,
prior to claiming success and advertising results, the sponsor and PEO must approve the
defined cost reductions from all events. It would be interesting to explore further to what
degree this has hindered or helped; however, there is clear value in partnering with the
customer to implement activities and coordinate results.
47
Lean Coordination Process
Identify
Value Stream
• PAD/CA
• Department
Obtain Sponsor
Endorsement
• Department
Schedule
Event
• CA/PAD
• Sponsor/CA
Execute
Event
• Department
• PAD/CA
Approve/Resource
Rapid Improvement Plan
Execute
RIP
• Department
• Sponsor/CA
Define
Cost Reductions
• Department
• Sponsor/CA
• NUWC
Obtain PEO &
Sponsor Endorsement
Submit to
Lean Office
• CA/PAD
CRR
Pro
ce
ss
• Department
Note: PEO & Sponsor Endorsement will be obtained
using process defined by the applicable PEO.
Submit to
WC CFO
• Lean Office
Figure 16, Lean Coordination Process (Source: “Lean Overview Training” May 06)
Distributive Leadership, People as Enablers
Division Newport’s lean program is supported by four pillars founded upon a workforce
educated in lean principles. These pillars are senior leadership, subject matter experts,
standardized work, and a virtual lean office. Senior enterprise leadership is out on the
point—ranging from participation in lean events to continuously reinforcing lean
imperatives to rewarding their people. During interviews, I was shown emails from the
CO desk congratulating employees on obtaining recent certifications and was also invited
to witness a formal presentation of black belt certifications to four employees as witnessed
by their supervisors. In the May 2006 edition of the NUWC Scope (base paper), the CO
was quoted:
“If we keep plugging along, doing the same thing for the same cost and no
increase in quality, NUWC Division Newport will become like the dodo bird—
irrelevant and soon extinct”
48
Leadership engagement does not stop at the strategic level. In terms of operational linkage
to the Division Newport lean program, one technical director stated they are “very tightly
coupled”. Additionally, he holds weekly lean reviews within his department and requests
that his organizational lean champion attend the weekly updates of all other programs
within the portfolio. Sensei support is contracted out and can be expensive when
compared against ROI of particular projects. As such, the organic black and green belts
play an important role in keeping pace with the event execution and cost reduction goals.
Workforce participation is one area that Division Newport is striving to improve. May
2006 metrics for lean event participation were approximately 30% behind initial
projections. This created a two-sided sword—the workforce was not learning new ways to
eliminate waste nor was the organization able to harvest the prescribed cost reductions.
Additionally, it calls to question how deep lean principles have penetrated the organization
and what is provoking this barrier? The Division Newport CO subsequently made this a
focus area during the management lean reviews and metrics have shown signs of
improvement; however, actuals have not caught up with initial projections. A second
strategy that Division Newport has employed to encourage workforce buy-in is to preserve
job security. The guiding principle is clear—“manage attrition, hiring, and employee
redeployment to ensure that no employee loses their job as a result of lean initiatives.”
Initial skepticism was alleviated by walking the walk. A redeployment plan was created
during the infancy of the lean program and through the 3rd Quarter of FY 2006, over 40
personnel within Division Newport had been redeployed to other positions as a result of
lean initiatives.
Summary Impressions
DIVNPT is aligned with NAVSEA, creating an environment where the potential for
sustainable lean change can continue to ripen. In 2005, they were selected for the DoD
Continuous Improvement Award and have continued their focus on implementing lean
principles throughout the enterprise. As of May 2006, metrics showed they were well on
their way to recognizing $18M in cost reductions by FY08 and are keeping pace with their
49
2005 implementation plan. The required supporting infrastructure in terms of resources,
facilities, and funding appear to be in place. Standardized processes are established.
Metrics are collected, tracked, and reported. The requisite governing body is monitoring
progress and structured to break down change barriers. “Remember the journey never
ends” is a watermark on DIVNPT’s lean brochure—this mantra foreshadows the distinct
challenges ahead.
Although limited in time and scope, this case presents questions for future exploration.
Does an equation of standard work, training and event execution equate to results? What
are the centers of gravity for DoD change management? Is there a point of diminishing
return for lean management, infrastructure, and reporting? What techniques can an
enterprise employ to make lean positions (green belts, black belts) more attractive? Each
of these will be addressed in a subsequent section.
At the end of each interview, I asked why the current enterprise CPI initiative would
succeed. The following three answers were the common denominator. First, employees
felt that LSS has benefited from sustained senior management support. Frequent changes
of station and high turnover rates are commonplace within DoD, which complicates the
goal of providing consistent thrust and vector. LSS at NAVSEA and within subordinate
units has flourished as a result of consistent senior vision and smooth transitions between
senior leadership. Secondly, the imperatives for change are visible and intense. DoD must
continue to fight the global war on terror with aging fleets and constrained budgets.
Lastly, that there is a tremendous corporate push—COMNAVSEA has made LSS one of
his top five initiatives and continues to provide senior level engagement.
50
V. C-17 Enterprise Case Study
Case Study Background—Air Force Material Command
The USAF has been in a deployed posture for over 15 years—before the first shots of
Desert Storm. Transformation is required to enable continued satisfaction of worldwide
requirements in an environment of personnel reductions and aging aircraft. Major force
reductions (40,000 personnel) are slated to occur over the next six years and a 2006 force
shaping board resulted in separations for over 2,000 junior commissioned officers (AFPC,
2006). The fleet is also aging. One senior USAF officer interviewed stated that elements
of the current tanker fleet are expected to be in service for another 35 years—nearly
representing full careers for two generations of USAF officers. In his December 2005
“Letter to Airmen”, the Secretary of the USAF (SECAF) announced a two-pronged effort
to attack these issues. The first element was to expand lean concepts throughout the
enterprise, leveraging the tremendous successes harvested in the Air Logistics Centers
(Warner Robins, Ogden, and Tinker). The second element was to provide supervisors at
all levels of the force spectrum, strategic to tactical, the appropriate tools to monitor and
control resources to effect change. This effort gained significant momentum over the next
two months and culminated with the formal adoption of Air Force Smart Operations 21
(AFSO21) as directed in his March 2006 “Letter to Airmen”. In this letter, the SECAF
points to AFMC successes under the tenets of AFSO 21 and challenges all airmen to
dedicate themselves to delivering maximum value to the warfighter via minimizing waste
in all processes. No process—whether outside or on the manufacturing floor, would be
immune from a critical assessment. The USAF enterprise lean journey has been well
underway for years and AFMC is aligned. As such, I selected AFMC as the USAF
representative for this case study given demonstrated success and rich background in lean
implementation.
Here is an overview of AFMC. The command is headquartered at WPAFB, OH and is a
multi-program enterprise whose mission is to: “Deliver war-winning…technology,
acquisition, test, sustainment…expeditionary capabilities to the warfighter.” The
command employs approximately 78,000 people (military and civilian) at ten host bases—
51
representing development and technology transition, test and evaluation, and sustainment
of USAF weapon systems. A snapshot of the command linkage and organizations is
provided in Figure 17 to illustrate the scope of AFMC depth and breadth.
AFMC Headquarters
Product Centers
Air Logistics Centers
Test Centers
Specialized Units
Aeronautical Systems Center
(Wright-Patterson, OH)
Ogden ALC
(Hill AFB, UT)
Air Force Test Center
(Edwards AFB, CA)
Maintenance, Regeneration Center
(Davis Monthan AFB, AZ)
AF Security Assistance Center
(WPAFB, OH)
Electronic Systems Center
(Hanscom AFB, MA)
Oklahoma City ALC
(Tinker AFB, OK)
Arnold Engineering Dev Center
(Arnold AFB, TN)
AF Research Laboratory
(WPAFB, OH)
National Museum of USAF
(WFAFB, OH)
Air Armament Center
(Eglin AFB, FL)
Warner Robins ALC
(Robins AFB, GA)
Nuclear Weapons Center
(Kirtland AFB, OH)
Development, Fielding Group
(WPAFB, OH)
Ops and Sustainment Group
(WPAFB, OH)
Figure 17, AFMC Organizations
Each of the product centers has a unique mission contributing value to the USAF
expeditionary warfighter in terms of developing and acquiring capabilities. Aeronautical
Systems Center (ASC) is responsible for aircraft capabilities, Electronic Systems Center
(ESC) contributes Command, Control, Communications, Computers, Intelligence,
Surveillance, Reconnaissance (C4ISR) capabilities, and Air Armament Center (ASC)
serves as the for USAF armament. Systems developed from these centers are then tested at
AFMC test centers, Edwards AFB, CA and Arnold AFB, TN. Sustainment functions such
as logistics, maintenance, supply support are accomplished at one of three Air Logistics
Centers—Ogden, Oklahoma City, or Warner Robins (AFMC Factsheet, 2006).
52
The Early Years…Depot Success
The AFMC lean journey is founded upon successful lean implementation on the
manufacturing floors of the ALCs (Figure 18). Robins can be considered a multi-program
enterprise whose lean journey can be traced back to 1999. Here is a snapshot of the
installation demographics and mission at that time. With a mission to “support the goals
and objectives of Air Force Material Command (AFMC) and other related Air Force and
Department of Defense (DoD) activities by providing affordable combat superiority,
readiness and sustainability to our customers-the warfighters,” Robins was responsible for
“cradle to grave” support of the F-15, C-130, C-141, U-2, and C-5 platforms. To this end,
the ALC employed thousands of personnel (military and civilian) and had significant
economic impact in the state of Georgia (Robins History, FY99).
The F-15 avionics shop was the first to experiment with lean implementation after
receiving an offer of technical support via an Air Force Research Lab (AFRL) Lean Depot
Repair experiment. The program was initially met with resistance from the shop floor
technicians and did not spur the contagious effect that management expected. It was
speculated that the nature of the avionics repair process (specialized skills, intensive
troubleshooting, software dependent test processes) contributed to the marginal results.
The F-15 wing shop was the next division to test integration of wing principles. This time
the results were much different. Tangible benefits such as workflow improvements and
process organization were implemented, resulting in hundreds of thousands of dollars in
estimated savings that were then distributed to the employees. Intangible benefits cannot
be understated. Workforce morale improved and the contagious nature of lean started to
infest the center. Lean initiatives soon took hold within the C-130 and C-5 shops and the
ALC commander expanded efforts across the ALC. In addition, a governance structure
was established to provide routine progress reports to the center management and a
standardized process/toolset for lean events was developed to help facilitate cultural
53
War on Terrorism
Begins
Lean implementation
takes hold at Air
Logistics centers
1990 - 2000
LAI Consortium Forms
ALCs win gold, silver
Shingo medals
AFMC Senior Leader
training begins
AFMC Lean Now
Initiative
Commenced
2001
2002
2003
SECAF “Lean
Across AF” Memo
2004
2005
Robins AFB
Phase I Planning
Ogden AFB
Lightning Bolts
2007
AFSO 21
TQM
Zero Defects
2006
Full Implementation
Tinker AFB
Lean Now Engagements (F-22, F-16, Globalhawk, C-17)
Derived from multiple open sources
Figure 18, AFMC Lean Transformation Timeline
adoption (Roth, 2005). Senior leadership, patience, and persistence were key enablers to
lean adoption at Robins ALC, resulting in quality improvements and cost reductions.
Delivery times were perfect—between 2004 and late 2005, the C-5 maintenance program
yielded 100% on-time delivery to their warfighting customers and resulted in the award of
a Shingo Prize Gold Medal. The Shingo prize is an annual award, considered the “Nobel
Prize” of manufacturing.
Ogden ALC (OO-ALC) can also be considered a multi-program enterprise whose lean
journey started early in the millennium. Located at Hill AFB in Utah, Ogden ALC is
responsible for logistics, maintenance, and engineering support of a number of USAF
aircraft platforms and intercontinental ballistic missiles. The center is the largest employer
in Utah with over 23,000 personnel (military and civilian) completing an estimated 7.5
million production hours (OO-ALC Homepage, 2006). Ogden’s lean journey can be
traced back to decentralized kaizen events and six sigma efforts on the shop floor in early
2002. The commander immediately noticed the utility of lean and chartered a six-person
transformation office to develop a capability within the center and help accelerate activities
in 2003—both on and above the shop floor. OO-ALC has harvested significant
improvements via lean implementation. The F-16 Common Configuration Implementation
Program (CCIP) is credited with the USAF’s first organic cellular flow, resulting in a 30%
reduction in flow days and a 80% increase in defect-free aircraft (AF Times, 2005) while
simultaneously increasing on-time delivery to 100% and earning the Shingo Prize Silver
Medal. Improvements have not been limited to the shop floor—the center has reduced
Freedom of Information Act process steps by 37.5% and is working to improve the
Deficiency Report process (Keller, 2006). Ogden is an example of enterprise
transformation that originated from the tactical trenches, picking up momentum via
successful initiatives and event execution, evolving to an enterprise that is aligned with
strategic planning process and injecting lean cultural awareness through lean infrastructure
development (training, incentives, etc). Further, Ogden was the first USAF ALC to
partake in the LAI Enterprise Value Stream Mapping and Analysis process developed at
MIT.
Oklahoma City (OC-ALC) is the third of the three USAF ALCs. Located in Oklahoma
City at Tinker AFB, the center employs approximately 13,000 personnel and manages an
inventory of over 2,000 aircraft: primarily the B-1, B-2, B-52, C/KC-135, and E-3.
Additionally, the center manages an inventory of nearly 23,000 jet engines as well as a
variety of missile systems—wielding an economic impact of approximately $9B
(MacKenzie, Cohen, 2004). The lean journey at OC-ALC can be traced back as early as
2000; however, implementation started to take hold in the maintenance directorate in 2002
when numerous lean improvement projects were completed through 2004. The projects
were predominantly on the shop-floor, designed to create quick results, and build
momentum to sustain the initiative. Improvements were generated and the scope of
projects grew following creation of the maintenance directorate (MA). As lean activities
were centrally facilitated and coordinated through the MA, projects became
complementary in nature and could be optimized throughout the enterprise. Additionally,
training relationships were established with academia. Lean implementation was well
underway at OC-ALC when the commander had heard about results garnered at her sister
organization, Ogden ALC, and wanted to raise the bar. (MacKenzie, Cohen, 2004).
Following a successful EVSMA engagement with LAI in 2004, the enterprise leadership
team had established a long-term vision and the short-term projects required to get them
underway along the journey. The results are clear. OC-ALC reduced KC-135 PDM flow
time by 52% and the number of aircraft in-depot decreased by 49%—enhancing
expeditionary USAF capability (Lopez, 2005). OC-ALC also earned the Shingo Prize
Silver Medal in 2005. Given success in the ALCs, AFMC was now confronted with the
challenge of accelerating transformation across the acquisition enterprise.
Aggregate ALC results in terms of bottom line cost savings were not found during this
research; however, significant improvements have been made in enhancing USAF fleet
capability. For example, via KC-135 depot maintenance, AFMC returned an additional
56
100 aircraft to the operational fleet. Additionally, C-5 overhaul times have been nearly cut
in half (AF News; 2006). This generates additional depot capacity, faster turnaround
times, and increased aircraft availability to the warfighter.
Lean Now Deployment…Expanding to Enterprise Transformation
Industry had been successfully injecting lean principles into the manufacturing floor in
hopes of immunizing against waste for years. For example, during the 1990’s, Lockheed
Martin factory redesign efforts resulted in throughput reductions from 12 days to less than
3 minutes, and work in process was reduced by nearly 100% (Murman; 2002). LAI was
launched by the commander of Aeronautical Systems Center in the early 1990’s to help
DoD transform the military industrial base from operating within a cold-war performance
paradigm to a focus on affordability. LAI’s focus changed in the adolescent years when
they grew lean concepts out of the manufacturing floor into the supply chain—taking a
more enterprise centric view of lean transformation. Shortly after the turn of the last
century, the AFMC Commander and senior leadership at SAF/AQ recognized the
opportunity for LAI to support a broader enterprise transformation across the acquisition
lifecycle. The initiative was scoped to focus on the interfaces between DoD and Industry
(with participation from academia), facilitate horizontal sharing of processes and tools, and
enhance communication. Three quick-hitting pilot projects were selected that proved the
merit of a broader enterprise lean implementation (Bryan, 2004)
The first project was in the test and evaluation domain. Through application of lean, the
F/A-22 Combined Test Force (CTF) Operational Flight Program Preparation and Load
Process (OFPPLP) install times were reduced from 97 to 46 hours via significant
reductions in non-value added steps and distance parts would need to travel—providing
more time for the testers and enhancing test execution. The second and third projects were
both in the contracts domain. The F-16 System Program Office (SPO) was able to reduce
the subcontractor audit process for closing out inactive contracts from over 26 weeks down
to seven weeks. Lastly, the Global Hawk SPO was able to cut their alpha contracting
proposal process by 37% (from 265 to 166 man days) (Bryan, 2004). After completion of
57
this first wave came a second wave of successful prototype engagements, followed by
additional engagements and then broader enterprise transformation (Figure 19).
Enabling Capabilities of Lean
Enterprise Transformation
Strategic
Engagements
Begin
Lean Workshops/Facilitator Training
Maturity of practice and influence
Wave 2
Prototypes
Begin
52+
Events/Projects
for F/A-22, GH,
F-16 Hosts
Alpha
CTF
Contracting
OFP
Load
GH
GH
ICS
ISS
Contract
Lean Now
Closeout
Workshop
Developed
2002
Wave 1
Prototypes
CTF
Deploying
Lean (VSM,
Kaizens,
Internal
Coaches,
etc…)
Wave 2
Prototypes
http://lean.mit.edu
AEDC
Turbine
Engine
Test
OO-ALC
Procurement
Request
AF ALCs/AF
Acquisition
¾Transition to
Lean roadmap
¾Executive
Leadership
Team
¾Deployment
Roadmap
Lean Now
Facilitators
Course
Developed
¾EVSMA
¾Strategic
Objectives
¾Current/
Future State
Enterprise
Enterprise
Transformation
Engagement
2004/05
© 2005 Massachusetts Institute of Technology Presenter/date - 5
Figure 19, Lean Now Phases (Source: Bryan, 2005)
Continuous Process Improvement Convergence—AFMC AFSO21
In December 2005, USAF CPI endeavors were renamed to Air Force Smart Operations for
the 21st Century (AFSO21)—an effort to maximize value and minimize waste in all USAF
operations and maintain mission effectiveness in light of the FY07 President’s budget
request that directed a 40K reduction in end strength (~8% based on 2006 AF Almanac
Force Structure). In his March 2006 “Letter to Airmen”, the SECAF writes “…we must
seek to constantly give value to our ‘customers’. It’s not only the right thing to do for the
American taxpayer; it’s the smart thing to do.” He goes on to write “…it enables our
service to take our warfighters of today and grow them into the most effective and efficient
thinkers for 2010 and beyond.” (Wynne, March 2006) AFMC kicked off its three Phase
implementation strategy during January 2006.
58
Phase I, the Initiation Phase, was first. Notionally one to three years in duration, this first
stage contains six expected outcomes that serve as the foundation for implementation.
Establishing leadership commitment was the first outcome, and it came fast. In a
December 2005 letter, the SECAF communicated AF enterprise change drivers and
articulated his vision for the initiative. The second expected outcome is communication of
a shared AFMC command vision in terms of AFSO21. Establishing a governance
structure is next. This outcome includes the tasks of identifying an office lead and
supporting staff, standing up a cross-command IPT with delegates from each operating
location (functioning in a virtual fashion), and formalizing an initial governance structure.
The fourth outcome is establishing the command mission priorities and goals—to include
integration with the balanced scorecard governance structure. The balanced scorecard is a
governance tool that aids the strategic planning process and has been adopted by AFMC.
The final expected outcome is execution of initial training (1 day) for all command senior
leaders followed by the last expected outcome, quick visible wins. Each of these Phase I
outcomes were then linked to the AFMC AFSO21 framework in Figure 20.
Policy
Efficient
Knowledge
Management
Workforce
Development
Standardized
Process Change
Management
Effective
Events
Figure 20, AFMC AFSO21 Framework (Source: Salerno 2006)
59
The framework is composed of five domains. The policy domain includes three
deliverables—a Programming Plan (P-Plan), the governance process, and cost benefit
analysis guidance. The P-Plan is essentially the strategic implementation roadmap for
AFMC AFSO21. It sets the organizational long term vision and distributes accountability
to respective headquarter organizations and operating locations. At the time of interviews,
the strategic management resource governance process and cost benefit analysis guidance
were in draft form; however, summarily the governance process integrates the balanced
scorecard, corporate, and resource allocation processes to formulate strategy, parse
resources, and recommend initiatives prior to champion execution. Each of these
deliverables is linked to one or more Phase I expected outcomes.
The workforce development domain also includes three deliverables—a communications
strategy, a training plan, and a periodic training assessment report. The communications
strategy/plan will establish roles and responsibilities, identify the key audience/themes,
articulate the type of media interaction or vehicle, and present a tasking order.
Development of an AFMC/CC video is in progress. With the goal of full organic
capability by 2010, AFMC is structuring a training plan to align with four personnel
capability levels as defined by USAF AFSO21 guidance. Senior leadership awareness
training has been completed and the total workforce will receive a similar indoctrination
within 12 to 18 months. Additionally, a training assessment report process is also in
development to incrementally gauge enterprise progress toward the full organic capability.
All of these deliverables are linked to the Phase I initial training expected outcome.
Interviewees explained that in terms of Events, AFMC/CC requested each center/director
submit two CPI recommendations for implementation. Three strategic cross-mission focus
areas surfaced. These areas generally represent improvements to the linkages and
transitions between acquisition phases—for example, focus area one points to insufficient
sustainment consideration and planning in research, design and test. Four strategic
initiatives were borne from these focus areas—Test and Evaluation, Core Basing,
Integrated Training, and Source Selection and each have been assigned to an AFMC flag
60
officer (senior executive) for execution. To quickly generate momentum, three “quick
win” events were conducted at locations across the command. An improvement event
focused on the vehicle registration process at WPAFB has generated 46-78% time
reductions. The civilian recruitment timelines at Hanscom AFB have been reviewed and a
team identified means to produce reductions on the order of 50%. Lastly, the AFMC
command tasking process has been “leaned”. These quick wins are linked to the Phase I
Quick, visible wins/inventory expected outcome.
Knowledge management across the enterprise is enabled by two tools. The first is an
enterprise-wide community of practice available to the IPT members. It primarily serves
as an information repository, but also helps to track status of action items and taskings.
Additionally, upcoming events are advertised and a venue for on-line collaboration is
created. The second tool is a community of practice viewable on public domains.
Although it is not on-line yet, the website will include AFSO21 pertinent information,
training modules, relevant articles, and policy guidance. In support of the final domain,
process change management, AFMC is drafting a resource support plan to determine
requisite support at command headquarters, training, and contractor support.
AFMC AFSO21 Next Steps and Summary Impressions
Phase II, the Full Implementation Phase, (also three years duration) includes elements
aiming to build additional momentum. Expected outcomes of this phase include strategic
alignment with the balanced scorecard, continued/consistent leadership engagement, and
standardized processes. Additionally, a second round of improvement “passes” on the
command’s strategic areas will be conducted and required personnel deployments will be
carried out. Phase III, the Mature and Sustain Phase includes tasks and milestones to
promulgate longevity—developing an organic capability, fostering cultural awareness, and
employing advanced tool sets.
AFMC is preparing to grow an enterprise-wide CPI program from the seeds of lean
success in the ALCs. Aligned with USAF AFSO21, AFMC is applying the principles,
61
creating the process, and putting the people/infrastructure in place with designs on a
sustainable program that will deliver value to the warfighter. Senior enterprise leadership
is clearly onboard and the program is being driven from the top. It is one of the top
priorities for AFMC/CC and the command has demonstrated application of lean principles
above the manufacturing floor—as evidenced by the C-17 SG in the following section.
“We have pockets of continuous process improvement using tools like lean at our air
logistics centers…but we must take our efforts to an enterprise-wide level…”
--General Bruce Carlson, AFMC Commander (Jan 2006)
62
Field Location—C-17 Enterprise
The C-17 Enterprise is a complex organization with operating entities spread throughout
the continental United States. The government acquisition arm is the C-17 Systems Group
located at WPAFB and their prime contractor counterpart is the Boeing Corporation
operating out of southern California. The third enterprise member is the Defense Contract
Management Agency (DCMA) who is collocated with Boeing in California. Each member
plays a unique role in the development, fielding, and sustainment of the system, which will
be explored later. First, here is a brief snapshot of the C-17 mission, features, and
capabilities. The C-17 is a versatile aircraft, capable of rapidly delivering personnel and
cargo worldwide to both main operating bases and forward locations. Additionally, the
platform can perform tactical airlift and airdrop missions. At a unit cost of $202.3M
(FY98 constant dollars), the system has demanding reliability requirements—92% mission
completion success probability coupled with 20 aircraft maintenance manhours per flying
hour. The first C-17 production model was delivered in 1993, and the current fleet stands
at 134 active duty, 8 Air National Guard, and 8 Air Force Reserve—operating out of eight
different bases throughout the country (C-17 Factsheet, May 2006).
In terms of organizational structure, the C-17 SG employs approximately 200 personnel
and reports to the Mobility Systems Wing (MSW), which is…“Responsible for program
execution to develop, acquire, field, and modernize capabilities and support for life-cycle
management (in concert with the range of ALC supported and supporting commanders) of
the Mobility Portfolio to address requirements for the Mobility Air Forces”. Boeing
employs 6500 personnel and execution falls within the Precision Engagement and Mobility
Systems business profit and loss center of the Integrated Defense Systems organization.
DCMA is a government organization that employs approximately 100 personnel to
monitor contract performance on site at the contractor facility and works via agreement
with the C-17 SG.
63
DCMA (Via MOA)
(Long Beach, CA)
Aeronautical Systems Center
Program Executive Officer
Precision Engagement
& Mobility Systems
Mobility Systems Wing
Global Mobility Systems
Profit and Loss Center
C-17 Systems Group
C-17 Globemaster III
C-5 Systems Group
KC-767 Multi-mission
Tanker Programs
C-17 Enterprise
C-130 Systems Group
CD Systems Squadron
TSM Systems Squadron
LAIRCM Systems Squadron
Figure 21, C-17 Enterprise Organizational Command Linkages
The C-17 enterprise has reaped tremendous benefits from the application of Lean
principles both in terms of engineering design and manufacturing floor improvements.
The Boeing corporate webpage advertises that the C-17 horizontal stabilizer has 90%
fewer parts, is 20% lighter and requires 70% fewer tools—all resulting in a 50% reduction
in production costs. Additionally, the landing gear pod has 45% fewer parts, can be
installed in 80% less time, and with 90% fewer defects. On the manufacturing floor,
assembly areas have been reduced as have cycle times, resulting in “Industry Week”
naming the Boeing C-17 facility in Long Beach one of America’s Top 10 plants (Boeing
IDS Webpage). At what point did the application of lean expand throughout the
enterprise?
Lean Enterprise Deployment—Assessing The Current State
Interviewees affectingly attributed the start of the C-17 Lean journey …to the days of the
Three-Ks—Koslowsi, Kadish, and Kluter” and the leadership they provided during pivotal
stages of the program. It was 1993 and a Defense Science Board Task Force had just
64
submitted a report to the Under Secretary with the following findings that required
improvement:
1) C-17 range/payload would not meet contract specs, but would meet user needs
2) System engineering was ineffective and processes were in adequate
3) Engineering was understaffed
4) Transition to production and manufacturing process was inefficient
5) Needed to implement modern management engineering technologies
6) Quality system was reactive…needed to implement advanced preventive system
7) Flight test was behind schedule and would require more flight hours
After assuming their new roles, the joint management team immediately led an intense
planning session to produce an Integrated Master Plan and respond to the DSB findings
listed above. Integrated Product Teams were formed and common goals were agreed to
that were then flowed down through the enterprise (Boeing, 2005). A new culture with
embedded lean principles had been created and by the end of 1994, interviewees explained
that the program was back on its feet again.
Interviewees explained that the C-17 Lean + journey can be traced back to July 2003 with
the conduct of a lean event to improve the proposal process—47% cycle time reductions
resulted and momentum started to build (Figure 22). Two months later, in September 2003
a joint Boeing and USAF team briefed the C-17 leadership team on potential benefits of
utilizing LAI’s Enterprise Value Stream Mapping and Analysis (EVSMA) activity to
understand how lean could be deployed throughout the enterprise. Immediately, Boeing
management was on-board and committed to executing EVSMA as part of the enterprise’s
annual strategic planning process. Shortly after, the C-17 SG and DCMA commanders
agreed to support and participate in the EVSMA project. Once the triad of leadership was
committed, the enterprise was ready for the upcoming engagement in Spring 2004.
65
External Influences and Initiatives
TQL
TQM
Reengineering
Lightening Bolts
Lean gains traction
at ALCs
1990 - 2000
War on Terrorism
Begins
QDR 2001
2001
Program Restructure
Decreasing Production
Orders
Internal Change Drivers and Milestones
“Lean Across AF”
Memo
AFMC Lean Now
Initiative Commenced
AF AFSO21 Office
Chartered
AFMC Sr Leader
training begins
Operation Iraqi Freedom
2002
2003
ASC AFSO21 Office
Chartered
2004
C-17 SPO Lean
Engagements Begin
2005
Future vision
consensus achieved
Enterprise Leadership
committed to EVSMA
2006
2007
Lean embedded in joint
strategic planning process
Leadership confirms Lean
imperatives
Proposal Development PAT
Result: 47% cycle time reduction)
C-17 EVSMA Engagement
Results: Future Vision Consensus
Lean Imperatives Defined
Lean Embedded in Strategic Planning Process
Enterprise Strategic Planning Imperative
Results: Developed joint strategic goal ID process
Integrated Lean principles into SP process
Supplier Quality Imperative (15 Workshops)
Projects: Standard Corrective Action Plans (90%)
Revised Source Selection Process (90%)
Predictive Indicators to top suppliers (90 %)
Results: Improved 1st Pass Yield 60%
Cut Internal Equip Order Cycle Time (49%)
Reduced Repetitive Supplier Escapes (28.5%)
Systems Engineering Imperative (2 Workshops)
Projects: Phase A (9 Projects, 90% complete)
Phase B (8 Projects, in process)
Results: Improved joint req’s definition process
Internal Initiatives and Results
Derived from multiple open sources
Figure 22, C-17 Enterprise Lean Timeline
In March 2004, the enterprise top program leadership sequestered themselves offsite to
execute EVSMA. The events were facilitated by LAI staff and consortium members and it
was during these first few preliminary activities that the team was able to get their hands
around the enterprise current state. In support of the process, an independent consultant
was hired to conduct leadership interviews and help construct a description of the
enterprise current state. The team discovered that the enterprise was not well integrated
and that they were operating in a “siloed” environment of hand-offs. One of the enterprise
senior leaders stated during interviews that this was the “ah-ha” picture that they needed to
see. Another senior leader interviewed hypothesized that the assignment of TSPR (total
system responsibility) to Boeing might have drove this paradigm. In other words, Boeing
was the enterprise and the government was an external customer. Following the current
state analysis, the entire leadership team realized that the government (C-17 SG and
DCMA) plays essential roles in delivering value to the end-user, Air Mobility Command.
Additionally, the team had better collective insight into each organization’s respective
responsibilities.
Figure 23, C-17 Current State Enterprise Depictions (Source: Bowman et al, 2006)
The team also discovered during the current state analysis exercise that the enterprise was
using three separate value streams to execute three major contract types on the C-17
program: 1) Program Enhancement Producability Improvement, 2) Production, and 3)
Globemaster III Sustainment Partnership. Each of these value streams was linked to one
another; however, redundancies were in place that created opportunities to eliminate waste
and leverage synergies. Two examples cited during interviews included multiple releases
of the same drawing for each contract type as well as multiple purchases of the same part.
A third finding of the current state assessment was that there were five “gaps” that could be
resolved by the creation of a series of lean imperatives. These gaps included:
1) Incentive Alignment
2) Enterprise Stakeholders pull financial information
3) Finance Systems support lean transformation
4) Enterprise Empowerment
5) Optimize Capability
Creating Future State Attributes, Spawning Lean Imperatives
Interviewees explained that with three tools in hand to draft the enterprise future vision
(EVSMA, Shingo Prize, “Toyota Way”), the USAF/Boeing/DCMA team next developed a
future vision value stream to integrate the previously discussed three current state streams
and address the “gaps”. The result was a single value stream, divided into three discrete
swim lanes—leadership, lifecycle, and enabling processes. The leadership lane describes
the enterprise strategies and tactics that the lifecycle processes will employ. The lifecycle
processes are the core customer value delivery processes and the enabling lane includes
functions that support execution of the lifecycle processes. Each of the process interfaces
were identified to hone in on areas for improvement. Next, five lean imperatives were
generated.
The first two lean imperatives were development of a future vision value stream and
enterprise strategic planning. The second imperative was supplier quality—ensuring that
supplier products and services meet enterprise and program needs. The third imperative
was systems engineering—striving to deliver outstanding system management throughout
68
the development process. The last imperative is total ownership and life cycle cost—
attempting to better integrate the enterprise contracting to share risk and rewards with all
partners. Since 2004, over 29 lean workshops have been conducted, yielding positive
results (Bowman et al, 2006):
1) Reduced proposal cycle time by 47%
2) Improved first pass yield from 15% to 85%
3) Reduced internal cycle time by 49% for equipment order process
4) Reduced repetitive supplier escapes by 28.5%
5) Implemented joint requirements definition process
6) Reduced cycle time by 20% for Home Station Checks
These imperatives have become embedded into the enterprise culture and are reviewed
twice a year during senior management off-sites—reinforcing commitment to the longevity
of CPI and making game-time strategic adjustments as required. Who attends? Each of
the enterprise stakeholders shares an equal voice and representation at these meetings
which has created a thorough, balanced approach to implementation.
Basic Change Capabilities Are in Place
To affect change and implement lean within the C-17 enterprise, one of the interviewees
mentioned that you must have “attitude and aptitude” at all levels of the enterprise. In
mapping these back to the change precepts discussed in Section II, the strategic level must
demonstrate a consistency of principles and methods—vision, strategies, plans, and efforts
designed to spread lean outside the walls of the manufacturing facilities. At the
operational and tactical levels, experienced and dedicated specialists are required to
shepherd lean efforts and facilitate training to promulgate lean throughout the enterprise.
Bridging all of these layers must be effective measurement systems. These three elements
will be discussed next in the context of the C-17 enterprise.
69
The first element discussed during interviews is an enterprise-wide consistency of
principles and methods as demonstrated by the Enterprise Strategic Planning lean
imperative. With an objective to improve the overall enterprise performance and establish
common strategic goals, leadership has leveraged three tools to better align and integrate
all stakeholders. The first tool is a Strengths, Weaknesses, Opportunities, Threats (SWOT)
analysis that was originally used to assess the current state at a strategic level. Having
proved its merit, the tool is routinely employed to reassess the enterprise future vision and
update if required. The second tool is a tailored C-17 lean enterprise assessment. Loosely
based on Shingo prize criteria (Customer Satisfaction and Profitability, Quality, Cost and
Delivery, Core Operations, and Leadership and Empowerment Enablers), the enterprise
created its own scoring approach to better incorporate the future vision attributes that
senior leadership had concurred with. The last vehicle employed in support of overall
enterprise performance and strategic goal definition is joint value stream mapping
workshops targeted at the 20,000 foot level of the enterprise value streams. Each
stakeholder also has its own tool to assist maintaining alignment with corporate initiatives
and goals. The C-17 SG employs the Balanced Scorecard whereas Boeing utilized the
Business Support Plan.
The second basic change capability exhibited is dedicated specialists. In sum, there are
approximately half a dozen full-time personnel worth of effort linked to lean distributed
throughout the enterprise. The Boeing Lean Enterprise Office is composed of four full
time employees responsible for lean integration at the Long Beach site. Explicit duties
include conducting value stream mapping exercises, training and facilitation of rapid
improvement events. This team is supplemented by lean “focals” in each of the programs
who are either appointed by their managers or selected given their particular “aptitude and
interest”. Communication and coordination is accomplished via emails and weekly
telecoms within this virtual IPT. One interviewee concisely surmised the role of this team
in terms of lean: “build core competency and propagate”. The lean-wired government
team within the SG is slightly smaller and administered out of the Business and Integration
division. Additionally, each lean imperative is championed by a joint leadership team and
70
has the leadership backing to enable sourcing of effort throughout the enterprise as
required.
The final basic change capability is measurement systems—metrics are fundamental to
assisting an enterprise in transitioning from planning to execution. A common set of joint
metrics are utilized to manage contract cost, technical performance, and risk; however,
both Boeing and the SG employ discrete tools to assist in maintaining alignment with their
respective strategic performance goals. For example, Boeing utilizes a company-wide
Business Support Plan (BSP) process. The monthly reports display results with stoplight
symbology (red, yellow, green) which allows management to quickly focus on areas that
require improvement. The SG also reports on a monthly basis via a balanced scorecard
that tracks wing objectives against a number of implementation initiatives. This creates an
opportunity for improvement that will be discussed in a subsequent section.
Enterprise Strategies And Structures Are Utilized
Following a current state analysis, the C-17 enterprise redrew organizational boundaries to
reflect a new paradigm. Figure 24 illustrates this new orientation that interfaces with the
external environment and respects corporate strategic alignment, but also enhances internal
relationships and places more focus on the value stream.
Figure 24, C-17 “New” Enterprise (Source: Bowman et al 2006)
71
Interviewees explained that strategic visioning is now accomplished annually, but is
executed following an eight step process throughout the year. During the second quarter,
the joint leadership team will convene an offsite meeting to assess and understand their
current state and verify their strategic direction. This is followed by a validation of both
the short and long-term strategies. Given this direction, the enterprise then jointly
develops implementation plans and provide estimates to the leadership that scope the effort
in terms of projected results and required resources. At a subsequent fourth quarter
leadership offsite, the projects are reviewed and prioritized within the enterprise. The
strategies and deployment plans are then flowed down to the trenches for execution
following a November/December leadership team review. Throughout the year, leadership
is constantly out in front of the enterprise—monitoring progress and requiring continuous
evaluation/inflection in hopes of improving the initiatives and this process.
Enterprise-level activities enjoy diverse participation and are conducted jointly. Events
and workshops are attended by all stakeholders and CPI ideas are born from all areas of the
enterprise. In terms of training, Boeing has an established lean program. In addition to
real-time training prior to execution of VSM exercises, the company conducts regular lean
training courses, quarterly Accelerated Improvement Training, and Six Sigma training.
During interviews it was clear that Boeing believes CPI has really taken hold within the
corporation. For example, prior to a recent Six Sigma course, they received nearly 100
requests to fill 25 seats. There is no financial reward given to Boeing employees for
attending these courses or for achieving belt certifications. DCMA, the SG and Air
Mobility Command have accepted invitations to participate in these training courses. The
government has received training via event execution. Computer based lean learning
modules are available on their internal computer network, and a recent ASC “Focus Week”
(a week long, training program offered on a quarterly basis) showcased lean value
delivery.
72
Active Employee Involvement Meets Personnel Growth Opportunities
After two days of interviews and a lean roundtable discussion, I noticed a standard-issue
item that all employees wore regardless of whether their uniform was camouflage or a suit
and tie. This item transcended all ranks. Each employee I met wore a C-17 badge that
serves as a daily reminder of the enterprise vision: “Provide the world with airlift solutions
that will far exceed our customer’s quality, affordability, and readiness expectations.” Six
operating principles supporting this vision are also included as seen in Figure 25. Key
tenets include trust, shared destiny, ethics, teamwork, commitment, and to embrace
change—more specifically, operate as a lean enterprise. Is the leadership onboard? Yes—
the signature of each senior leader representing the enterprise triad is included at the end of
these badges. Is this just talking the talk? Although not quantifiable, I would suggest that
after two days of interviews adherence to these operating principles is binary, and that this
enterprise is walking the walk.
Figure 25, C-17 Guiding Principles (Source: Bowman et al 2006)
Personnel growth opportunities sponsored by the enterprise come in multiple shapes and
sizes—employment security, promotion/added responsibility, and commitment to
73
individual development are a few examples. Boeing utilizes an informal redeployment
process in the event a particular function/role is reduced in scope as the result of a lean
event. This has helped to foster trust within the workforce and alleviate skepticism that
personnel will “work themselves out of a job via lean.” Lean is a relatively new frontier
and promotions/rewards related to these endeavors are visible. As an example, one
government civilian within the SG received a prestigious Silver Eagle Award for efforts in
support of the enterprise-designated lean imperatives. Additionally, this particular
employee has been subsequently challenged with additional responsibility and leadership
opportunities in the enterprise. In reflection, this employee said that working lean and
EVSMA was the “highlight of my career.”
Summary Impressions
The C-17 enterprise is clearly one of AFMC’s “pockets of success” in terms of lean
implementation—both on and off of the manufacturing floor. The C-17 enterprise has
overcome adversity and program uncertainty in the past, but numerous challenges await in
the near term future. Plateau defense budgets will continue to be a change imperative for
the enterprise. Additionally, USAF deployment requirements will stress the government
organic capability. While not a cure-all, there is potential for tangible and intangible
results from lean implementation. During an interview session, one respondent pointed to
a unique challenge—integrating and operating as a federated system. The number of
mergers and acquisitions within DoD over the last ten years has driven the need for a
common language within their enterprise. Lean principles have served this purpose—
helping to establish common goals and standardized processes. At one point, she felt as if
her company was attempting to simultaneously “speak English, French, Italian, Spanish.”
Now it is only speaking two, which is better than before, but still not ideal..
There are improvement opportunities that AFSO21 can enable in this operating location.
A balanced training approach can help spread the “language” to the entire enterprise, and it
is anticipated that AFSO21 training modules will start to contribute in this regard during
FY07. Tools to develop and metrics to measure cultural awareness throughout the
74
enterprise will help to gauge the depth and breadth of lean proliferation and assist in
gaining ground on the lean journey.
At the end of each interview, I asked what it would take for AFSO21, the current enterprise
CPI initiative to succeed. Two answers were prevalent. Leadership transitions and vision
must be consistent in terms of lean. High turnover rates cannot be allowed to complicate
continuity. Secondly, leadership must have the long-term commitment and patience to
sustain the program when initial results are marginal. One cannot provide the upfront
investment, build momentum, and then walk away. This will likely be the largest
challenge in that it is difficult to measure return on investment and/or quantify cost
reductions.
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VI. Analysis and Discussion
Benchmarking is a useful management process tool that enterprises can utilize to measure
their performance against other organizations within their relevant fields. The practice has
been adopted throughout the private and public sectors and the utility is well known. As a
point of reference, the 2006 Malcolm Baldridge Quality Award criteria include
benchmarking as a personal and organizational learning process that will be evaluated.
The Baldridge award is an annual Presidential recognition program that signifies
excellence in seven areas—leadership, strategic planning, customer and market focus,
measurement, analysis, and knowledge management (Baldridge, 2006). In this case study,
benchmarking bridges sister military services to enable horizontal learning opportunities
across DoD and industry.
Section III presented ongoing LAI work to define a series of precepts and capabilities for
enterprise change. These precepts were drafted based upon documented cases of
organizational transformations in addition to case studies performed by LAI. I selected
them to serve as the framework for my comparative analysis for two reasons. First,
although the assessments are subjective, the precepts and variables provide bounded areas
for comparison. Secondly, to test precept applicability in a DoD setting—contributing to
ongoing development of change theory at LAI. Table 3 presents a seven-point scoring
methodology to rate the precept maturity and/or evidence within an organization.
Table 3, Scores and Scales to Assess Precept Evidence (Source: Roth 2006)
Score
Evidence: The case study provides evidence that the capability or precept is…
6
Exemplary
…well articulated and consistently practiced, providing an example for others to learn from
5
Accomplished
4
Articulated
3
Inferred
2
Unpracticed
…never mentioned and little or no relevant information available
1
Inconsistent
…in conflict with established policies and practices
0
N/A
…illustrated by actions, but not consistently articulated or communicated
…spoken to or recognized as important, but inconsistently practiced and not well illustrated
…indirectly mentioned or can be inferred from activities
…not applicable, relevant and without evidence
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Table 4 assigns subjective scores I derived via conduct of the C-17 Enterprise and Division
Newport Case studies. It is important to note that these assessments are based upon
evidence collected from leadership and subject matter expert interviews, briefings, and
open source literature vice personal experience and practice within the organizations. A
more comprehensive sampling of data throughout the enterprise could have been
accomplished with more time and would have likely resulted in different findings.
Additional limitations of these assessments and areas of future study are discussed in
subsequent sections.
Enterprise Change
Capabilities and Precepts
Table 4, Division Newport, C-17 Enterprise Assessments
Division
Newport
C-17
Enterprise
Basic Change Capabilities
5
4
Rethinking Organizational Boundaries
5
5
Installing Sets of Organizational Innovations
4
5
Pushing and Pulling Change
4
4
Seeking Growth Opportunities
4
4
Distributing Leadership Practices
4
4
Division Newport Assessment and Opportunities
During site visits and data review, evidence of basic change capabilities at Division
Newport are assessed at level 5—both accomplished and further illustrated by actions.
Plans and strategies are aligned with NAVSEA Task Force Lean and there is clear
application of lean beyond that of the manufacturing floor. A structured training program
exists and the shift from a just-in-time training approach proved an ability to assess and
adapt—making game-time adjustments to the training program to enhance workforce
effectiveness. Further, a team of dedicated specialists is in place to champion lean
activities at the center and they are supported by both deployed lean champions in each of
the departments as well as contracted-sensei (as required). The presence of measurement
systems is the final indication that basic change capabilities are in place. Deployment
metrics are utilized; however, it was not apparent during interviews that initiatives and
77
progress are continuously reviewed until all open paper and action items are closed and
projected results are validated.
Evidence of rethinking organizational boundaries was also assessed at level 5—
accomplished and illustrated. The executive planning session process and lean governing
council highlight an enterprise-level strategy that goes beyond internal organizational
boundaries. These governing bodies are chartered to prioritize the enterprise initiatives
and work to break barriers to change Additionally, the internal organization structure
reflects an external enterprise orientation—the enterprise value streams are identified and
associated champions have been assigned responsibility. Further, the enterprise engages in
training and improvement events with their customers as illustrated by alignment with the
Product Area Directorates and assigned customer advocates from the fleet organizations.
Enterprise collaboration mechanisms, specifically “relational contracting” (lower
transaction costs generated by trust and personal ties) among organizational units was not
measured or studied during this case. Given high military turnover on both the acquisition
and customer sides, I speculate that embedding these types of collaborations is a difficult
long-term challenge and would represent an interesting vein to study further.
Installing sets of organizational innovations rated a 4—articulated and partially illustrated
at Division Newport. Multiple thrusts and activities are part of the overall change effort
and on any given day, a lean event is likely occurring at the center. The lean council
process is structured to help sequence the initiatives and ensure alignment with local goals;
however, at the tactical level, enterprise-wide use of standard templates and standard
operating procedures appeared inconsistent as evidenced by the magnitude of open paper
following event execution and conversations with center employees. Additionally, team
participation on lean events throughout the division’s departments has not been consistent
with projections. Continuity of leadership and initiatives was excellent. Although
subjective, via newspaper articles, emails, impromptu award ceremonies in the CO’s
office, and open participation on this study I felt that the enterprise management is walking
the walk—formulating vision and visibly communicating that LSS is not a “flavor of the
month” initiative.
78
Characteristics for pushing and pulling change were also assessed at a level 4—articulated
and partially evidenced at Division Newport. It was explained during interviews that as a
Naval Working Capital Fund, strategic positioning and lean implementation are important
components to longevity and organizational vitality. Both were demonstrated by the lean
council and annual executive planning process. The workforce is active as illustrated by
the number of trained black belts, green belts, and number of events executed; however,
metrics pointed to an imbalance throughout the division’s departments in “pushing”
change—potentially indicating inconsistent application of lean by the value stream
managers. Given additional time, follow-up interviews with value stream managers would
have been conducted. Financial and operational metrics in terms of lean implementation
are generated on a weekly basis to track progress against NAVSEA deployment goals and
a process exists to parse these goals to the divisions within the center. These goals are
distributed based upon % of workforce (deployment measures) and magnitude of execution
authority (ROI), which potentially masks poor-performing departments or un-executable
division goals at the enterprise level
Characteristics for seeking growth opportunities were also assessed at level 4—articulated
and partially evidenced at Division Newport. Aligned with NAVSEA, Division Newport
senior leadership has overtly committed to their workforce that no person shall lose their
job as a function of lean implementation.
Redeployment plans are in place and metrics
highlighted that the process is working. Looking to bridge boundaries, enterprise
leadership invites the civilian unions to participate in relevant lean reviews. Follow-up
interviews with a representative from the redeployed pool or the union were not conducted
and would represent an interesting follow-on research thread. In addition to job security,
Division Newport demonstrated a commitment to personnel development in terms of
training opportunities. Black belts are sent to the NAVSEA lean six sigma college and
measures such as a visible recognition program and CPI criteria in performance plans have
been put in place to encourage employee involvement. Although cost reductions are
tracked at both the division and department levels, enterprise-level metrics to illustrate how
79
harvesting productivity and quality improvements have increased the enterprise workload
volume were not available.
Distributing leadership practices rated a level 4—articulated and partially evidenced. Via
interviews, it was clear that senior management throughout the enterprise understands that
no significant change will happen without top management buy-in and that a senior “push”
is not a substitute for enterprise-wide buy-in. The metrics in place to track lean status lean
deployment attempt to measure the degree of cultural awareness; however, a measurement
of workforce buy-in is difficult to produce and was not available. A second trait evidenced
at Division Newport was network leadership—it was apparent through interviews that two
of the three layers of management (executive and operational) have bought in. The third
level (engineering) was not thoroughly evaluated and therefore cannot be assessed,
although participation metrics indicated there are pockets of deployment success at the
tactical/engineering level. There is a general enterprise-wide orientation to customer value
and this approach has been built into the lean implantation process. As explained during
interviews, the customers are active participants in lean events and are required to validate
the cost reductions prior to claiming success. Additionally, one technical director explained
that it is not atypical for an end-customer to submit a process improvement idea. End user
customer satisfaction metrics were not available and therefore were not necessarily
attributable to lean implementation.
C-17 Enterprise Assessment and Opportunities
During interviews and conduct of a lean roundtable with enterprise stakeholders, evidence
of basic change capabilities within the C-17 enterprise were assessed at level 4—
articulated and partially demonstrated. Plans and strategy development follow a
regimented strategic planning process and there is clear application of lean throughout the
enterprise--well beyond the manufacturing floor. In terms of dedicated specialists, each of
the enterprise stakeholders (Boeing, SG, DCMA) has either a lean focal or a team in place
to champion these initiatives. As a whole, this virtual lean group seemed quite cohesive
and appeared to operate well. Via interviews, there was a perceived disparity noted in
terms of the degree of lean training proliferation and infrastructure (metrics to track lean
80
deployment) between the government and contractor. The presence of enterprise
measurement systems are the next indication that basic change capabilities are in place—
both the Balanced Scorecard and Vision Support Plan are utilized to ensure alignment with
strategic enterprise goals.
Evidence of rethinking organizational boundaries rated at level 5—accomplished and
illustrated by the C-17 enterprise. The strategic planning process and development of a
desired future state value stream via the LAI EVSMA process illustrate an enterprise-level
strategy that transcends internal organizational boundaries. Strategic rhythm is drummed
by aligning USAF and Boeing-discrete planning activities across the calendar year to
better harmonize visioning, planning, resource allocations, operational execution, etc. The
internal organization structure also reflects an external enterprise orientation—the future
vision value stream contains three “swimlanes” which has allowed the enterprise to focus
on improving the interactions between leadership, lifecycle and enabling processes. The
next indication of rethinking organizational boundaries is the simultaneous execution of
multiple initiatives—in this case, the C-17 enterprise strategic imperatives. Aligned with
the strategic planning process, the imperatives are jointly determined and monitored by the
leadership team, and then assigned to a joint execution team which may include customers
and suppliers as required. Lean application is not limited to the acquisition arm of the
enterprise—an example is the Home Station Check cycle time improvements noted by the
organic maintenance units and earlier discussed. Similar to the Division Newport case,
collaboration mechanisms such as “relational contracting” among organizational units was
not measured or studied during this case, although it does represent an interesting future
area of study.
Characteristics for installing sets of organizational innovations also rated a level 5—both
accomplished and illustrated by the C-17 enterprise. It was explained during interviews
that multiple thrusts and activities are critical to the overall change effort and are linked to
the strategic goals of the enterprise. The strategic planning process is the means used to
orchestrate, sequence, allocate resources, and ensure consistency with the understood
mission and vision of the enterprise. Additionally, the imperatives are routinely reviewed
81
for progress and calibrations are enabled by the process if required. Continuity of
leadership and consistency of vision appeared seamless and pragmatic—interviewees
explained that previous administrations had placed solid emphasis on lean and put a sound
process in place. Avoiding the pitfall of complacency is the next step. Although not
quantifiable, the enterprise leadership I engaged is also “walking the walk”—from open
participation and support to this study (and multiple others), to briefing successes and
lessons learned at lean conferences, they are believers in the value of lean implementation.
A final point to note is the recognition of the imperative to change and a resilience to
persist that has consistently been demonstrated by enterprise senior leadership through the
last ten years.
Pushing and pulling change was articulated and partially demonstrated by the C-17
enterprise. Four elements compose this precept. First, strategic positioning was
demonstrated—management is actively strategizing and positioning. Second, the
workforce is active, engaged, and committed to continuous improvement; however, during
the course of interviews, there is a perception of imbalance between the enterprise
stakeholders in terms of lean awareness and training throughout the organization.
Additionally, organizational learning programs in regards of lean were not consistently
demonstrated throughout the enterprise. Given additional time, further exploration of the
enterprise training programs and incentives for CPI integration would have been
conducted. Contract performance metrics (financial, technical, risk) are reviewed routinely
by the joint leadership team.
The characteristics for seeking growth opportunities were assessed at level 4—articulated
and partially evidenced by the C-17 enterprise. Overt commitment to people and
employment strategies were discussed; however, an environment of decreasing USAF
budgets and uncertain manpower drawdowns over the next five years makes this a
complex proposition for enterprise leadership. During interviews, Boeing explained that
redeployments are accounted for and worked locally by the incumbent functional manager.
In terms of personnel development, the USAF has a variety of career broadening programs
available to the workforce plus access to a number of on-line and residence training
82
programs. Boeing also discussed a number of training programs available to develop
management and workforce skills; however, only learning opportunities relevant to lean
were discussed further given time constraints. Recognition programs are visible and
personnel who have proved their mettle in regards to lean have been rewarded with
additional responsibilities and/or been targeted for promotions within the enterprise.
Additionally, the alignment of roles and responsibilities to value stream management/lean
imperative functions was demonstrated.
Finally, the characteristics for distributing leadership practices were rated at level 4—
articulated and partially evidenced by the C-17 enterprise. Via interviews, it was clear that
the enterprise leadership understands organizational transformation requires leadership
throughout the enterprise—at all levels, working together to enable change. Metrics to
monitor the degree of enterprise lean awareness (primarily training) were spoken to;
however, consistent application throughout the enterprise was not demonstrated
(proprietary data concerns prevented a thorough evaluation). Via interviews it was evident
that two of the three layers of management (executive and operational) have bought in to
the utility of implementing change. Time constraints prevented an evaluation of the third
level, engineering. Although not quantifiable, I received a general impression of servant
orientation aimed at creating value for the end customer/warfighter in the field throughout
the enterprise.
Testing Precept Applicability to DoD Case Settings
In examination of efforts leading to successful enterprise change, Roth has identified a
series of practices for managing enterprise change. Derived from theories of
organizational theory, culture, strategy, leadership, and management, he was able to link
case study findings from the commercial sector to propose a set of precepts for managing
lean enterprise change. At the time of drafting this research paper, the Robins ALC at
Warner Robins AFB was the only DoD enterprise case study that had tested these
practices. This section will address of the precepts in terms of applicability in a DoD case
setting and speak to study limitations.
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Description of basic change capabilities are relatively straightforward and can transcend all
enterprise sectors. Consistency of principles and methods, training and consulting,
dedicated specialists, and measurement systems are all elements that are inherent in DoD
operating locations and have characteristics that can be assessed for degree of evidence.
Following execution of the two DoD case studies, future consideration must be made to
include both the presence of a burning imperative for change and visionary leadership as
additional basic change capabilities.
In context of a DoD field location, rethinking organizational boundaries is also a relatively
straightforward precept and can apply to three of the four variables/elements. Employing
enterprise level strategies, structures and activities are all elements that do not have DoD
barriers in place to prevent application. Both the local Navy and USAF cases support this
position. The element of enterprise-level-collaboration mechanisms presents a challenge
for applicability given the nature of DoD contracting. Increased technical oversight and
adherence to process discipline resulting from recent acquisition scandals are likely
challenges to demonstrating relational contracting and the embedding of a network with a
few strong ties and multiple weak ones.
Both the USAF and USN local change cases demonstrated the applicability of installing
sets of organizational innovations in a DoD setting. Embarking on multiple initiatives and
consistency of same were fundamental to both change efforts. Additionally, the
importance of initiative continuity and leadership consistency cannot be understated in
either case. Although relatively “infant” when compared to Toyota in terms of program
longevity and maturity, the patience to persist through a “worse before better”
phenomenon is absolutely applicable and will be tested in the upcoming fiscal years.
The precept of pushing and pulling change also applies in its entirety to DoD field case
settings. Strategic positioning, active employee involvement, and organizational learning
are all measurable variables and can be demonstrated as illustrated by the USAF and USN
cases. Financial and operational metrics can be traced between business levels and linked
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to the goals of manager; however, complete demonstration of a balanced orientation and
financial engineering do stretch applicability in a DoD context. Bottom-line measurements
support measuring cost reductions to support recapitalization and/or fund performance
improvements vice investment in new businesses and continued growth.
In the context of these two field case studies, the precept of seeking growth opportunities
clearly applies to all four variables. Employment security and commitment to personnel
development include characteristics whose evidence is straightforward—almost binary as
evidenced by both the USN and USAF cases. Additionally, the elements pertaining to
growth improvements (volume and new business) are characteristics that can be evidenced
with the exception of profitability. Given proprietary nature of data, any improvements in
this regard were not attributable to lean implementation. Lastly, distributing leadership
practices—each of the four sub-elements can be evidenced in the context of a DoD field
case setting.
Limitations of Assessment
Both enterprises represented exemplar organizations that had many success stories to
share; however, in terms of execution, these case studies were limited in scope given time
constraints and at times data availability. Additionally, these assessments are subjective in
nature based upon data compiled during site visits and interviews. Areas of additional
study will be addressed in subsequent section.
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VII. Conclusions and Recommendations
An increased operational tempo, aging fleets, evolving threat and force structure reductions
are clear challenges confronting DoD in the 21st century. A “plateau budget” environment
further complicates these issues and is driving the imperative to transform. What are the
available change management strategies? Who needs to lead these endeavors? What are
the capabilities required to sustain lean enterprise change?
The literature review summarily addressed each of these questions. Two enterprise change
constructs were discussed that propose an eight-step, serial process for transformation.
The third theory, lean enterprise change capabilities, proposes developing and deploying
inter-related capabilities as a set, not necessarily in serial fashion. Other than the
deployment sequencing schema, what is the difference between these approaches? In
terms of results, only time will tell. The proposed center of gravity theory for change
management suggests that basic change capabilities are the hub upon which all other
activities must orient themselves. Without this capability hub, the individual efforts risk
becoming disoriented and fragmented from the enterprise vision, and yielding marginal
results attributed to the fog of war phenomena.
Section VI assessed both field operating locations in terms of Roth’s framework for
developing enterprise change capabilities. Based upon these comparisons, what are the
key findings and of areas of improvement for each organization?
Division Newport Summary Impressions and Recommendations
The process changes and infrastructure that Division Newport is implementing are
noteworthy. Standard operating processes and a governing structure is in place. Training
is ongoing and lean events occur on a regular basis—currently indicating that they are on
their way to recognizing $18M in cost reductions by 2008. How is the corporate program
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helping or hindering this local change? It is clear that NAVSEA and Task Force Lean are
playing a significant role in pushing this change to the field. The guiding vision, principles
and expectations were vertically integrated into the command and a venue for horizontal
information sharing and assessment is centrally facilitated.
Does infrastructure and process translate to effective change? Are these winds of change
sustainable? Deployment metrics are a useful gauge to provide visibility into the degree of
lean enterprise exposure; however, an organization must be conscious of the delicate
balance between fostering lean deployment and saturation of multiple layers of
management and reporting. Return on investment and cost reduction metrics provide the
bottom line measurements senior leaders require to evaluate the merit and utility of the
initiative. Unfortunately, these indices take time to produce significant improvements on
the balance sheet, further exacerbating the need for continuity and consistency in senior
leadership vision and priorities.
Three explicit recommendations for Division Newport resulted from this case study
analysis:
1) Adopt enterprise perspectives at local level. The benefits of lean have been shown
to come from optimizing efforts across organizational boundaries via a value
stream focus and delivery of value to the enterprise customers. Strive to expand
lean enterprise boundaries and better integrate additional lean enterprise
stakeholders (including industry, suppliers, academia, etc).
2) Assess “leanness” of DIVNPT program. Lean principles imply a degree of
minimal overhead—to avoid unnecessary costs and to develop distributive
leadership (spawn initiative, foster empowerment, develop dynamic followers, etc)
throughout the enterprise. Evaluate utility and degree of use for standard operating
procedures, reporting templates, etc to enhance flexibility for organizations that are
more mature within the enterprise.
3) Take additional steps to avoid complacency. Recognizing bottom-line results
typically takes time in lean enterprise engagements. Measurements and projections
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are captured; however, subsequent validation of projected cost reductions should
occur. Without developing additional tracking system, establish continuity of
effort by revisiting/validating results of process improvements during the Lean
Council and Executive Planning Sessions. Further, aggregate open items from all
lean events (open paper, write-ups) and report out routinely based upon the
individual degree of latency.
C-17 Enterprise Summary Impressions and Recommendations
On and off the manufacturing floor, the C-17 enterprise is making strides in terms of lean
implementation. This enterprise was selected for assessment in that beyond the
manufacturing floor, it is one of the more advanced USAF enterprises in terms of lean
implementation. All four basic change capabilities are in place. First, principles and
methods in terms of strategies, roadmaps, and communications that speak to lean are
consistent. Second, dedicated specialists in pursuit of lean implementation are positioned
to champion change. Lastly, both training programs and lean deployment measurement
systems are in place. These capabilities, however, are just the basic building blocks
needed in any change effort, upon which the more difficult enterprise change capabilities
can be developed. Within the C-17 enterprise, there are currently challenges in balancing
the basic capabilities equally through the enterprise.
The C-17 enterprise is not representative of USAF organizations in terms of lean maturity.
C-17, as its history showed, has been building upon lean concepts for some time. Now, the
USAF is formally beginning (AFSO21). How will the corporate AFSO21 program affect
the ongoing improvement and change efforts in the C-17 enterprise? Will it help speed
cultural awareness throughout the enterprise? Or in an environment of decreasing
resources, will newly mandated infrastructure (training, execution, and reporting
requirements) of implementation further stretch workforce tasking? The training and
awareness programs will likely have a similar federation-uniting effect that Boeing
experienced during implementation, yielding a positive, sustained return on the investment
given the infrastructure being deployed and sustained strategic leadership attention.
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Three explicit recommendations for the C-17 Enterprise resulted from this case study
analysis:
1) Promote equity in terms of lean awareness across the enterprise. The USAF
AFSO21 training materials will help proliferate lean knowledge throughout the
government stakeholders; however, it is uncertain when these modules will be fully
deployed across the enterprise. Leverage Boeing’s expertise in this domain via
informal training sessions and learning lunches. Encourage DCMA, C-17 SG
participation and incentivize attendance.
2) Create an enterprise-wide, lean community of practice within the joint Business
and Integration team. Change capabilities must be both pushed and pulled to
facilitate, leverage, and sustain learning and enterprise change. Share lessons
learned and expertise of change experts to synergize efforts—including training of
the identified change champions and deployment of lean principles throughout the
enterprise.
3) Dynamically contribute to help shape corporate lean program—a “one size fits all”
approach will likely not fully support the current implementation approach.
Engage at wing level as local AFSO21 program stands up to help strike balance
between structure (required number of events, cost reduction targets, trained
personnel, etc) and flexibility. Novice lean programs will require these types of
infrastructure for success whereas experienced organizations (C-17) will thrive
given flexibility.
In the face of similar change imperatives, both enterprises and respective CPI programs
have numerous upcoming challenges. One must continue to build momentum during the
early stages of implementation. The other must strive to minimize complacency and build
upon previous success. Regardless of maturation, sustained successful enterprise change
requires clear vision (defined value, outcomes, measures) coupled with simultaneous push
and pull from distributive leadership throughout the enterprise.
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VIII. Suggestions for Future Research
This research captured and assessed the enterprise lean journeys for two organizations
within the USAF and USN. Via on-line research, interviews, and presentations at
conferences, I discovered that lean proliferation throughout DoD is much more prevalent
than I initially understood. For example, the United States Army Material Command has a
structured Lean Six Sigma program as does the Naval Air Systems Command (NAVAIR).
Additionally, in context of military enterprises, lean implementation is not limited to
domestic shores. The British Royal Air Force is also pursuing lean principles in an effort
to improve their processes. Similar benchmarking studies to capture theses journeys will
continue to enable the cross-service, horizontal share of best practices.
This research also tested the applicability of ongoing LAI development of precepts for
enterprise change in terms of DoD settings and initiated a discussion of defining a center of
gravity for DoD change. Further DoD exposure to the enterprise change theory and
framework for evaluation will serve to enhance the comprehensiveness of the product as
well as identify additional areas that require tailoring. For example, what are DoD-unique
barriers to change? Can industry strategies to mitigate similar barriers be tailored to tackle
these DoD challenges? In a fixed budget environment (similar to DoD), how does an
enterprise express savings?
A final consideration for additional study is metrics in the context of the organizational
climate. Specifically, does an equation of lean events, training, and participation equal
success in terms of enterprise lean deployment? How are these metrics best linked to the
enterprise bottom-line: return on investment, or increased capability to the end customer.
Are these the best barometers for cultural awareness? Additional exposure to other
industry cases and international military lean applications could provide visibility into
these measures.
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