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Lean Six Sigma ClockspeedBen Goss

23/15/2006

Overview

– BAE Systems– Department of Defense Challenges– LFM Influence on Process Improvement Philosophy – Lean Six Sigma Project Notebook Required Deliverables– Process Improvement Metric – Project Clockspeed

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Headquartered in Rockville, Md.Three Operating Groups$10 Billion Annual Sales45,000 Employees

CustomerSolutions

Marshall BankerPresident

Land &Armaments

Tom RabautPresident

Electronics &Integrated Solutions

Walt HavensteinPresident

BAE SYSTEMS

Mike TurnerChief Executive Officer

Mark RonaldChief Operating Officer

BAE Systems

– Information Technology– Technology Solutions

& Services– Ship Repair

– Communication, Navigation, Identification & Reconnaissance

– Electronic Protection– Information Warfare– National Security Solutions– Platform Solutions– Sensor Systems– Advanced Systems & Technology– Center for Transformation

– Armament Systems Division– Bofors– Ground Systems Division– International Division– Land Systems– Steel Products Division

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Department of Defense (DoD) Clockspeed*

– Weapon System Acquisition (e.g. Submarine)– 10-20 year product development cycle– Billions of dollars

– Service Acquisition (e.g. Configuration Management)– 1-5 year contracts (with option years)

– Vertical Integrated– Joint Forces

– Horizontal Modular – Autonomous fighting units (e.g. Future Combat Systems)

*As used by Fine (Clockspeed, 1998)

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Department of Defense Challenges

– Significant DoD investment in Lean Six Sigma in the past 3-5 years– Growing success in lean shop floor applications (5S, Pull, Flow)– Less success with complex services

– Typical Challenges to Achieving Results1. Change is effective (produces desired result)2. Change will be approved3. Implementation is compatible with rest of ecosystem (other IT,

organizations, policies)

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LFM Inspiration #1 – Hill Climbing Algorithm

– Process Improvement Feels Like an Optimization Search Algorithm– Simplex anyone?– Heuristics, the trump card of optimization

– Lesson Learned– Feedback and Course Correction Can Converge on Results…

Quickly– Application to Lean Six Sigma Projects

– Create Project Notebook with Six Minimum Required Deliverables targeted on feedback for validation/course correction that:

1. Change is effective2. Change will be approved3. Implementation is compatible with rest of ecosystem

Not a typical focus of

Lean Six Sigma

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LGO Inspiration #2: Process Improvement Clockspeed

Ad Hoc Process

Improvement

Slow Process Improvement Clockspeed

Fast Process Improvement Clockspeed

ROI

Result

ClockspeedClockspeed

Improve

Define

Measure

AnalyzeControl

Improve

Define

Measure

AnalyzeControl

Plan

DoCheck

Act Plan

DoCheck

Act

Customer=

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LGO Gap: Change Management Philosophy

Philosophy Desired Results Approval Implementation

(Sustained Results)

Leadership Buy-In Possible Likely Fad?

Create a Sense of Urgency

Unintended Consequences

Malicious Compliance Fad?

Win-Win Robust Cut LossesSelf-Correcting (Self-Sustaining)

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Lean Six Sigma Project Notebook

Six Sigma Project Notebook Purpose

Define 1. Project Charter Feedback: Desired Result, Approve

Measure 2. Retrace the FactsCreate Facts/DataFeedback: Result, Approve, ImplementIdentify Opportunities

Analyze3. Failure Modes and Effects Analysis (FMEA)4. Process Map

Prioritize Efforts: Result, Approve, Implement

Communication

Improve5. Detailed Instructions6. Pilot Results

Designed to Validate: Result, Approve, Implement

Control 1. Project Charter (Closed) Implement to Sustain Results

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Project Notebook: 1. Project Charter

Incremental Value Delivered– Performance Commitment– Additional Deliverables– Schedule Commitment

Investment of Resources– Effort Hours– Resource Requirements– Budget

Value Proposition (Bundle)

Customer Approval (Desired Result)

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Project Notebook: 2. Retrace the Facts

WIN: EffortDate Process Step 1. Time 2. Accuracy Frustration or Best Practice

29-NovRequestor (Sue Brann) rec'd verbal request (from TA) to ship material

Reqeustor fills out on-line 1149 (788K) to return to vendor (MICRON) B

On collect shipments KASS wont allow you to input carrier or account. If pre-paid, why do 1149 at all?

E-mails on-line 1149 to Shipping A

Traffic Office reviews and forwards to Packaging A verify UIC & JON

Packaging prints 3 copies of 1149 B

Input info to Ready Sheet Database C

Print single copy of Ready Sheet D, D-2 Eliminate printing

Match Ready Sheet and 1149 using Doc # and clip B, D, D-2

Match Ready Sheet paperwork with material B, D, D-2 Material was not available yetPackage material which came with Pre-printed label from Vendor (copy not available-affixed to bulk package)

Prepare packing slip with rq # and destination EEnclose single copy of 1149 in packing slip and attach to material B, E

Complete Ready Sheet F Reduce workload

QA Ready Sheet G Reduce workloadObjective verification

Had to go find someone to QA Ready Sheet

Send Ready Sheet and 1149 to Traffic Office B, D, D-2 Reduce travel

Traffic prints Label sends to Packaging printer HReduce Traffic workload

Label came more than 1 hour after Ready Sheet was submitted

Match label to appropriate material using RQ # and destination H

prepare material start to finish

Stage material for Carrier pick up

Receive manifest from Traffic JReduce Traffic workload

Verify piece count with manifest J verification

Load Carrier

WIN: Performance CommitmentsReference Document

C

WIN: EffortDate Process Step 1.__________ 2.__________ Frustration or Best Practice

WIN: Performance CommitmentsReference Document

C

C

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Project Notebook: 3. Failure Modes and Effects Analysis (FMEA)

Success Predictor

Easy to Change (Approval)

Easy to Sustain (Implementation)

Easy to Validate Result

0Outside of control of all stakeholders, no project charter, or no change control process

Beyond organizational capacity Unable to detect change in less than 3 months or no link between metric and customer requirement

1Project charter and change control process are ambiguous to some stakeholders, unclear whether scope is within control of project team, plus learning opportunity

More effort than status quo, but produces learning opportunities (generate new alternatives)

Worse performance than status quo, metrics react to change within 3 months, plus learning opportunity

2

Clearly defined and approved project charter, clear change control process, initial scope within control of project team, most stakeholders represented through approval signatures, plus learning opportunity

Same effort as status quo, plus learning opportunity

Same performance as status quo, metrics react to change within 1 month, plus learning opportunity

3Results within control of project team, charter changes approved in less than 1 month, all stakeholders represented through approval signatures, plus learning opportunity

Less effort than status quo, plus learning opportunity

Performance and link between metric and customer requirement all better than status quo, metrics react to change in less than 1 week, plus learning opportunity

4Results within control of project team, changes in charter approved in less than 1 week, all stakeholders represented through approval signatures or team members

More than 50% reduction in effort from status quo

More than 50% improvement in mutliple performance measures without negatively impacting customer (in other areas) Clear link between metric and customer requirement, metrics react to change in less than 1 week

5

Results within control of project team, changes in charter approved in less than 1 week, all stakeholders represented through approval signatures and team members, descretionary budget allowed for quick response to "just do it" feedback

More than 90% reduction in effort from status quo

More than 2x improvement in mutliple performance measures without negatively impacting customer (in other areas), realtime metrics are same as customer requirement

Improvement Alternative: What will be changed (focus on

action)?

How much remaining work for

approval?

Easy to Change (Approval)

How does this make life easier

for support team?

Easy to Support (Implementation)

What result will change during

pilot?

Easy to Validate Result

3 3 3

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Project Notebook: 4. Process Flow

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Project Notebook: 5. Detailed Pilot Instructions

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Project Notebook: 6. Pilot Results

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Process Improvement Metric – Project Clockspeed– Project Charter Establishes Commitment Date

– Rule of Thumb 1: Decouple Projects into 12 week Commitments– Rule of Thumb 2: First pass complete by week 6– Rule of Thumb 3: Takt time for 6 deliverables = 1 week

– Progress to Date on Government Process Improvement– 2004: Ad hoc “semi-formal”, no close-out, list of recommendations– 2005: Project Clockspeed = 10 months

– Deliverable takt time approx 1 month– Under delivering on performance commitments

– 2006: Project Clockspeed = 3-5 months– Deliverable takt time approx 1-2 weeks– Meet performance commitments

– 2007: Target Project Clockspeed = 2-3 months– 2008: Target ROI of > 200% for each bundle of projects