LAI Consortium’s Role in Enterprise Transformation: Making It Happen Presented By Prof. Deborah Nightingale LAI Plenary Conference March 23, 2004 The Journey to Lean Enterprise Transformation • Let’s take a look at where we’re headed as a consortium and an industry… • What we’ll need to get there… • And what you’ll see and hear at this Plenary that will get us there… web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 2 Working Together to Make Transformation Happen Through the LAI Knowledge Cycle 6 LAI Goals Achieve Total Enterprise Value Outcomes/ Measures Experience and Lessons Learned Requirements LAI Consortium LAI Community Implementation Knowledge Deployment Web Curriculum Workshops etc. web.mit.edu/lean Consortium Expertise Research Knowledge Collection Products/New Knowledge Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 3 Why Is An Enterprise Focus Important? Successes Through Interaction Between Functions Functional Lean Successes •Manufacturing •Product Dev. •Supplier Network Lean Applied to Enabling Processes •HR •IT, etc. Transition from Waste Minimization to Value Creation Success Through Enterprise Integration Success Through Total Enterprise Integration of All Stakeholders •Industry •Government •Suppliers •Employees “Islands” of Success web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 4 Evolution of Lean: Total Integrated Enterprise Enterprise Customers Customers Prime Contractors Gov’t Gov’t Prime Contractors Employees and Unions Partners Enterprise Employees & Unions Partners Suppliers Suppliers Connected Enterprise Total Integrated Enterprise The Journey to a Lean Total Integrated Enterprise is Extremely Challenging web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 5 Lean Journey: From the Factory Floor to the Total Enterprise “A lean enterprise is an integrated entity that efficiently creates value for its multiple stakeholders by employing lean principles and practices.” – Lean Enterprise Value, Murman et al. web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 6 LAI has a Unique Capability for Addressing Enterprise Transformation Challenges • • Engaged Members Assisting Transformation Efforts Knowledge Areas • Fact-based neutral-forum • Cutting edge enterprise-level research Knowledge Teams LAI Consortiu • Communities of practice m • Tool development • Implementation cases • Research Integrated Enterprise Toolset • Enterprise transformation, analysis and assessment Education • Education Network/Lean Academy • Lean enterprise curriculum and training Achieve Total Enterprise Value 6 LAI Goals Outcomes/ Measures • Experience and Lessons Learned LAI Community Implementation Knowledge Deployment • • Web Curriculum Workshops etc. web.mit.edu/lean Products/New Knowledge Requirements Consortiu m Expertise Research Knowledge Collection Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 7 LAI has a Unique Capability for Addressing Enterprise Transformation Challenges • • Engaged Members Assisting Transformation Efforts Knowledge Areas • Fact-based neutral-forum • Cutting edge enterprise-level research Knowledge Teams • Communities of practice • Tool development • Implementation cases • Research Integrated Enterprise Toolset • Enterprise transformation, analysis and assessment Education • Education Network/Lean Academy • Lean enterprise curriculum and training Achieve Total Enterprise Value • Requirements LAI Consortiu m Web Curriculum web.mit.edu/lean Consortiu m Expertise Research Knowledge Deployment Workshops etc. • Outcomes/ Measures Experience and Lessons Learned LAI Community Implementation • 6 LAI Goals Knowledge Collection Products/New Knowledge Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 8 LAI Has Assisted with Lean Deployment for Enterprise Transformation “The momentum generated by Lean Programs has resulted in significant gains from lean implementation by prime contractors and LAI Coalition members.” • Industry and academia contributed experts for lean deployment and training • • Government leadership has been critical to successful engagement • Projects reflect best from consortium: training, expertise, and engagement methodology Prototype projects successful at improving interface processes between industry and government Contributing LAI Members: Boeing, Lockheed Martin, Northrop Grumman, MIT, Pratt & Whitney, Raytheon, Rockwell Collins, Rolls-Royce, Textron * Source: GEIA Report “An Assessment of the Degree of Implementation of the Lean Aerospace Initiative Principle and Practices within the US Aerospace and Defense Industry”, Feb 2004 web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 9 Lean Now…A Consortium Success CTF(F/A-22) (F/A-22) CTF Installreduced reducedfrom from Install 97toto46 46hours hours 97 Team:LAI LAISME,F/A-22, SME,F/A-22, Team: SPO, MIT, LMAero, Aero, SPO, MIT, LM Boeing,Discipline DisciplineExperts Experts Boeing, AlphaContracting Contracting Alpha (GlobalHawk) Hawk) (Global AlphaContracting Contracting- -37% 37% Alpha cycletime timereduction reduction cycle Team:Northrop-Grumman, Northrop-Grumman, Team: Raytheon,MIT, MIT,Global GlobalHawk HawkSPO SPO Raytheon, ContractCloseout Closeout(F-16) (F-16) Contract Auditprocess processreduced reducedfrom from Audit 26+toto77weeks weeks 26+ Team:LAI LAISME, SME,MIT, MIT,F-16 F-16SPO, SPO,DCMA, DCMA, Team: DCAA,DFAS, DFAS,LM LMAero Aero DCAA, web.mit.edu/lean Course Course Development Development Team:LAI LAISME, SME,MIT, MIT, Team: DisciplineExperts Experts Discipline TurbineEngine EngineTest Test(AEDC) (AEDC) Turbine 10Engine EngineSPO SPOprojects projectsunderway underway 10 Team:LAI LAISME, SME,MIT, MIT,AEDC, AEDC,AFMC, AFMC,ASC, ASC, Team: AFRL,ALC, ALC,AFFTC, AFFTC,NAVAIR, NAVAIR,GE, GE,RR, RR,P&W P&W AFRL, ProcurementRequest Request Procurement (OgdenALC) ALC) (Ogden Trainingand andPR PRprocess process Training VSMcomplete complete VSM Team:MIT, MIT, Team: DisciplineExperts Experts Discipline ITSP (ESC) (ESC) ITSP Team: LAI SME, Discipline Team: LAI SME, Discipline Experts Experts © 2004 Massachusetts Institute of Technology Nightingale/032304 - 10 LAI Consortium is Working Together to bring about Enterprise Transformation 10 Lean Workshops/Facilitator Training Maturity of practice and influence Wave 2 Prototypes Begin ESC ITSP DAU 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 Wave 1 Prototypes 2002 web.mit.edu/lean CTF Deploying Lean (VSM, Kaizens, Internal Coaches, etc…) Wave 2 Prototypes AEDC Turbine Engine Test OO-ALC Procurement Request Strategic Engagements Begin OO-ALC Transition to Lean roadmap Executive Leadership Team Deployment Roadmap Lean Now Facilitators Course Developed EVSMA Strategic Objectives Current/ Future State Enterprise Enterprise Engagement Transformation 2003 © 2004 Massachusetts Institute of Technology Nightingale/032304 - 11 LAI has a Unique Capability for Addressing Enterprise Transformation Challenges • • Engaged Members Assisting Transformation Efforts Knowledge Areas • Fact-based neutral-forum • Cutting edge enterprise-level research Knowledge Teams • Communities of practice • Tool development • Implementation cases • Research Integrated Enterprise Toolset • Enterprise transformation, analysis and assessment Education • Education Network/Lean Academy • Lean enterprise curriculum and training Achieve Total Enterprise Value • Requirements LAI Consortiu m Web Curriculum web.mit.edu/lean Consortiu m Expertise Research Knowledge Deployment Workshops etc. • Outcomes/ Measures Experience and Lessons Learned LAI Community Implementation • 6 LAI Goals Knowledge Collection Products/New Knowledge Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 12 The Challenges of Complex Enterprise Requires a Systems Approach New strategic systems perspective Viewing enterprises as holistic and highly networked systems Integrating leadership processes, lifecycle processes and enabling infrastructure systems Balancing needs of multiple stakeholders working across boundaries MOVING FROM THE PAST (hierarchical) enterprise web.mit.edu/lean TOWARDS THE FUTURE (networked) enterprise © 2004 Massachusetts Institute of Technology Nightingale/032304 - 13 What are the key issues and unknowns in moving to enterprise capability? web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 14 Key Enterprise Questions • How to accelerate lean enterprise transformation? • Organizational and cultural change • Metrics for motivating desired behavior • Diffusing and sustaining lean changes • How to design future lean enterprises? • Total value stream and lifecycle value creation perspective • Integration strategies for enterprise networks • Frameworks and methods for enterprise architecting • How to evolve adaptive lean enterprises? • Evolutionary acquisition and development -- system-of-systems perspective • Fostering innovation across acquisition value stream • Ensuring flexibility, agility and responsiveness at Internet-speed web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 15 Focus on Three Knowledge Areas to Meet Current and Future Challenges • Enterprise Change • Strategic, enterprise-level approach to accelerating effective and sustainable improvement and change • Enterprise Architecting • Creating a future lean vision and designing an enterprise to support it • Incorporate information, organization, process, technology and strategic dimensions • Product Lifecycle • “Pushing the envelope” in the area of designing and developing aerospace products in a complex system-of-systems environment to shorten cycle time, reduce cost and increase delivery of best lifecycle value. web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 16 Systems Engineering Revitalization LAI Initiatives on Systems Engineering Fast Track SE Research Recommended Policy Changes web.mit.edu/lean SE Learnings from Lean Now Projects Workshop on System Robustness Robust SE Best Practices Study “Lean Systems Engineering” Pilot Projects Robust Engineering Guide (Updates) Best Practices & Research Reports . . . Knowledge gaps Longer Term SE Research Lean SE Practices © 2004 Massachusetts Institute of Technology Nightingale/032304 - 17 LAI has a Unique Capability for Addressing Enterprise Transformation Challenges • • Engaged Members Assisting Transformation Efforts Knowledge Areas • Fact-based neutral-forum • Cutting edge enterprise-level research Knowledge Teams • Communities of practice • Tool development • Implementation cases • Research Integrated Enterprise Toolset • Enterprise transformation, analysis and assessment Education • Education Network/Lean Academy • Lean enterprise curriculum and training Achieve Total Enterprise Value • Requirements LAI Consortiu m Web Curriculum web.mit.edu/lean Consortiu m Expertise Research Knowledge Deployment Workshops etc. • Outcomes/ Measures Experience and Lessons Learned LAI Community Implementation • 6 LAI Goals Knowledge Collection Products/New Knowledge Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 18 Role of Knowledge Teams • • • • • Developing tools based on research, practice and experience Sharing knowledge Providing guidance to research Sponsoring tests/validation of products Supporting transformation case studies Communities of Practice => Leveraging Consortium Knowledge web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 19 Knowledge Teams and Communities • Enterprise Change – – – – • Enterprise Architecting – – • EVSMA working group Supplier Networks working group Product Lifecycle – • Lean Now SME network Government LESAT working group Sustaining lean change working group Metrics working group Product development team Education and Outreach – – web.mit.edu/lean Education Network Champions Network © 2004 Massachusetts Institute of Technology Nightingale/032304 - 20 LAI has a Unique Capability for Addressing Enterprise Transformation Challenges • • Engaged Members Assisting Transformation Efforts Knowledge Areas • Fact-based neutral-forum • Cutting edge enterprise-level research Knowledge Teams • Communities of practice • Tool development • Implementation cases • Research Integrated Enterprise Toolset • Enterprise transformation, analysis and assessment Education • Education Network/Lean Academy • Lean enterprise curriculum and training Achieve Total Enterprise Value • Requirements LAI Consortiu m Web Curriculum web.mit.edu/lean Consortiu m Expertise Research Knowledge Deployment Workshops etc. • Outcomes/ Measures Experience and Lessons Learned LAI Community Implementation • 6 LAI Goals Knowledge Collection Products/New Knowledge Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 21 Integrated Enterprise Transformation Toolset How do I become a Lean Enterprise? Long Term Cycle Entry/Re-entry Cycle Focus on the Value Stream Adopt Lean Paradigm • Build Vision • Convey Urgency • Foster Lean Learning • Make the Commitment • Obtain Senior Mgmt. • Buy-in Decision to Pursue Enterprise Transformation Enterprise Strategic Planning • Create the Business Case for Lean • Focus on Customer Value • Include Lean in Strategic Planning • Leverage the Extended Enterprise Initial Lean Vision • • • • • Map Value Stream Internalize Vision Set Goals & Metrics Identify & Involve Key Stakeholders Develop Lean Structure & Behavior Detailed Lean Vision • • • • Organize for Lean Implementation Identify & Empower Change Agents Align Incentives Adapt Structure & Systems + Environmental Corrective Action Indicators Short Term Cycle Focus on Continuous Improvement • • • • Monitor Lean Progress Nurture the Process Refine the Plan Capture & Adopt New Knowledge Outcomes on Enterprise Metrics Detailed Corrective Action Indicators Lean Transformation Framework Create & Refine Transformation Plan • Identify & Prioritize Activities • Commit Resources • Provide Education & Training + Implement Lean Initiatives • Develop Detailed Plans • Implement Lean Activities Enterprise Level Transformation Plan Transition to Lean Roadmap (TTL) web.mit.edu/lean How do I analyze my enterprise and create a Lean Enterprise vision? 1: EVSMA Set-Up 2: Stakeholder Value Exchange 5: Enterprise Interactions 3: Strategic Objectives 6: Current State Synthesis 4: Enterprise Processes 7: Future State 8: Improvement Plan Enterprise Value Stream Mapping and Analysis (EVSMA) How do I assess my progress? Lean Enterprise SelfAssessment Tools (LESAT and Government LESAT) © 2004 Massachusetts Institute of Technology Nightingale/032304 - 22 Enterprise Value Stream Mapping and Analysis (EVSMA) 1: Define Enterprise EVSMA provides a coherent method for analyzing and improving enterprise performance: • • • • strategic objectives stakeholder interests process interactions enterprise opportunities web.mit.edu/lean 2: Identify Stakeholder Value Exchange 5: Analyze Enterprise Interactions 3: Specify Strategic Objectives 6: Conduct LESAT and Synthesize Current State 4: Analyze Enterprise Processes 7: Envision Future State 8: Define Prioritized Improvement Plan © 2004 Massachusetts Institute of Technology Nightingale/032304 - 23 Government Lean Enterprise Self-Assessment Tool • • • Alpha version complete and in testing May go to version 1.0 with only word changes Background: • • LESAT revised making it more appropriate for government organizational use Source: Lean Aerospace Initiative, MIT © 2001 as modified by MIT on 5/12/03 • Review of LESAT relative to SPO operation indicated 60-70% of LESAT usable in government context Alpha version developed with small team Primary focus for use is: • • SPOs Government organizations with multiple functions needed to fulfill mission Successfully Successfullytested testedwith withGlobal GlobalHawk Hawkand andC-17 C-17SPOs SPOs web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 24 Supplier Networks Transformation Toolset can Help Accelerate Industry’s Transformation C or e co nc ep ts ROADMAP ROADMAP DESK DESK REFERENCE REFERENCE Principles Principles References References Glossary Glossary for for building building lean lean supplier supplier networks networks How-to, How-to, who, who, when, when, where where RESOURCE GUIDE For smaller suppliers (Lean diagnostic; “yellow pages”) Core concepts n tio ta en em pl Im Supplier Networks Working Group Activity SUPPLIER SUPPLIER MANAGEMENT MANAGEMENT SELF-ASSESSMENT SELF-ASSESSMENT TOOL TOOL What, What, current current state, state, future future state state OBJECTIVE: Develop integrated lean supplier networks transformation toolset web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 25 Lean Enterprise Value Training Simulation • A simulation of a complex aerospace enterprise • Integrated lecture material and exercises • Provides knowledge, tools, and experiential learning • Suppliers Version 1.0 released to LAI consortium Manufacturing Plant B Lean Enterprise Business Simulation Game Plant A Design Change Request 2nd Tier 1st Tier Design Plant C Analysis Final Assembly Customer Acceptance Engineering Verification Design In/Out Box ©2004 MIT Design Systems Engineering Analysis • Refined, validated, and deployed through 20+ events • 500-600 practitioners impacted so far… • Facilitated deployment and customization to LAI members • Summer 04 short course planned “Finally, saw how lean concepts actually function” 2 day course participant March 2004 web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 26 LAI has a Unique Capability for Addressing Enterprise Transformation Challenges • • Engaged Members Assisting Transformation Efforts Knowledge Areas • Fact-based neutral-forum • Cutting edge enterprise-level research Knowledge Teams • Communities of practice • Tool development • Implementation cases • Research Integrated Enterprise Toolset • Enterprise transformation, analysis and assessment Education • Education Network/Lean Academy • Lean enterprise curriculum and training Achieve Total Enterprise Value • Requirements LAI Consortiu m Web Curriculum web.mit.edu/lean Consortiu m Expertise Research Knowledge Deployment Workshops etc. • Outcomes/ Measures Experience and Lessons Learned LAI Community Implementation • 6 LAI Goals Knowledge Collection Products/New Knowledge Data Site Visits Workshops etc. © 2004 Massachusetts Institute of Technology Nightingale/032304 - 27 LAI Educational Network Vision: Active communication and collaboration among member schools supporting the transformation of the greater US aerospace enterprise Mission: Support continuous learning throughout the US aerospace enterprise by sharing knowledge and curriculum developed by EdNet members Photo: Judy Snow Nov 2, 2002 Adding Value by Leveraging Efforts Through Networking web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 28 Schools Engaged in the EdNet Univ of Wright State* Michigan* International Schools: University of Warwick* WPI Purdue* MIT* Stevens Institute of Technology Stanford DAU* Loyola Marymount* USC ASU Wichita State* Univ of Tennessee* UT - Arlington* Georgia Tech Univ of New Orleans* St. Louis University Embry-Riddle Univ of Missouri-Rolla © 2004 Massachusetts Institute of Technology Nightingale/032304 - 29 web.mit.edu/lean * Signed Collaborative Agreement Lean Academy Objective • • Create industry-academia partnerships • Provide course contact hours roughly equivalent to a semesters course oncampus (approx. 40 hours) • Provide combination of junior faculty, senior faculty, and experienced practitioner on the instructor team Combine faculty instruction with practical application through a job experience Make a meaningful impact to undergraduate education web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 30 New Curriculum Development • 1-week facilitator course • • • • • “Best of the best” from 5 LAI industry members and MIT Now approved for use within the consortium Course material will be available by June 2004 DAU on-line “Intro to Lean Enterprise” course Lean Academy™ 1-week student course • • • Collaborative project with LAI and EdNet members Curriculum currently under development Course material will be available by September 2004 Course materials will be available for all LAI and EdNet members for non-commercial use web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 31 Plenary Roadmap web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 32 Plenary Roadmap Tuesday Morning General Session Enterprise leaders’ perspectives on Enterprise transformation: • Maj. Gen. Thompson on transformation in the Army Materiel Command • Dr. Sandford on Boeing Integrated Defense Systems approach to enterprise transformation and results • Rear Admiral Bachmann on Naval Aviation’s transformation initiative AIRSpeed • Dr. Steward on past accomplishments and future direction of Air Force Materiel Command (AFMC) transformation and restructuring web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 33 Plenary Roadmap Breakout Sessions • Sharing enterprise transformation experiences • Enterprise transformation through knowledge transfer • Infrastructure systems for enterprise transformation • Lean success • Industry-government interface • Extending lean processes • Government enterprises • Process approaches for lean success • Enterprise transformation perspectives and experiences • Revitalizing systems engineering • Individual, team and organizational learning web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 34 Plenary Roadmap Executive Panel Session • Maj. Gen. Kevin Sullivan on leading a transformation effort at Ogden Air Logistics Center • • Ms. Lisa Kohl on process based organizational transformation • Mr. Christopher Cool on charting a journey of enterprise transformation • Col. William Guinn on the enterprise transformation at Letterkenny Army Depot Mr. Thomas Pinski on partnering with labor unions to facilitate transformation Poster Session • New LAI products • Ongoing research web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 35 Plenary Theme Enterprise Transformation: Making it Happen! web.mit.edu/lean © 2004 Massachusetts Institute of Technology Nightingale/032304 - 36