Lean Enterprise Value

Lean Enterprise ValueInsights from MIT’s

Lean Aerospace Initiative

Earll MurmanThomas Allen

Kirkor BozdoganJoel Cutcher-Gershenfeld

Hugh McManusDeborah Nightingale

Eric RebentischTom ShieldsFred Stahl

Myles WaltonJoyce Warmkessel

Stanley WeissSheila Widnall

© The Lean Enterprise Value Foundation, Inc. 2002Softcover reprint of the hardcover 1st edition 2002 978-0-333-97697-5

All rights reserved. No reproduction, copy or transmission ofthis publication may be made without written permission.

No paragraph of this publication may be reproduced, copied ortransmitted save with written permission or in accordance withthe provisions of the Copyright, Designs and Patents Act 1988,or under the terms of any licence permitting limited copyingissued by the Copyright Licensing Agency, 90 Tottenham CourtRoad, London W1T 4LP.

Any person who does any unauthorised act in relation to thispublication may be liable to criminal prosecution and civilclaims for damages.

The authors have asserted their right to be identified as the authors of this work in accordance with the Copyright,Designs and Patents Act 1988.

First published 2002 byPALGRAVEHoundmills, Basingstoke, Hampshire RG21 6XS and175 Fifth Avenue, New York, N.Y. 10010Companies and representatives throughout the world

PALGRAVE is the new global academic imprint of St. Martin’s Press LLC Scholarly and Reference Division andPalgrave Publishers Ltd (formerly Macmillan Press Ltd).

ISBN 978-1-349-42997-4 ISBN 978-1-4039-0750-9 (eBook)

DOI 10.1057/9781403907509

This book is printed on paper suitable for recycling andmade from fully managed and sustained forest sources.

A catalogue record for this book is availablefrom the British Library.

Library of Congress Cataloging-in-Publication Data

Lean enterprise value : insights from MIT’s Lean AerospaceInitiative / Earll Murman … [et al.].

p. cm.Includes bibliographical references and index.

1. Airplanes, Military—Design and construction—Costs. 2.Massachusetts Institute of Technology—Research. 3. Industrialefficiency. 4. Aerospace industries—Cost effectiveness.I. Murman, Earll M., 1942-.

TL685.3 .L38 2002658.5’15—dc21 2001059824

Editing and origination byAardvark Editorial, Mendham, Suffolk

10 9 8 7 6 5 4 3 2 111 10 09 08 07 06 05 04 03 02

We dedicate this book to the men and women of the US aer ospace community –whether in industry, government, organized labor or universities, including ourgraduate students and MIT faculty colleagues – who have inspired this book

through their contributions to the Lean Aerospace Initiative, and whosetalents and dedication are helping to shape the future of aerospace

CONTENTS

List of Boxes x

List of Figures and Tables xii

Foreword xiv

Acknowledgements xx

List of Abbreviations xxiii

Part I Higher, Faster, Farther 1

Chapter 1 The 21st-Century Enterprise Challenge 3Lean Enterprise Value 4Value as ‘True North’ 8Principles of Lean Enterprise Value 12The Aerospace Challenge 14Moving Forward 24

Chapter 2 The Cold War Legacy 251945–69: A Bullish Quarter-Century 271970–89: Shifting National Priorities 38Challenges of the Cold War Legacy 54

Chapter 3 Monuments and Misalignments 55Dynamics of Industrial Innovation 56Actions and Reactions 66Barriers to Change 73The Challenge Ahead 82

Part II Better, Faster, Cheaper 85

Chapter 4 Lean Thinking 87Lean Thinking Defined 89Lean Thinking in its Historical Context 96Lean Thinking and Other System-Change Initiatives 107Implications of Lean Thinking for the Aerospace Industry 114

Chapter 5 Islands of Success 117A Herculean Island:Transforming Production on the C-130J 118A Byte-Sized Island: Improving Code Generation 120A Better-Practice Island: Manufacturing F-22 and RAH-66

Electronics Using Commercial Practices 123

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An Engineering Support Island:The F-16 Build-To-Package Center 125A Cultural Island: New Ideas and Methods for

777 Floor Beams 127An Island Chain:The Pratt & Whitney Story 130An Awakening Island: Diffusing Lean Practices to the

Delta IV Launch Vehicle 133An Island of ‘Pull’: Integrating Supplier and Material

Management at GE Lynn 135A Mini-Enterprise Island: Joint Direct Attack Munition 138Summing Up 141

Chapter 6 Lean Enterprises 142The ‘Whats’ of a Lean Enterprise: Lean Principles and Practices 146The ‘Hows’ of Lean Enterprise Transformation 154Assessing the ‘Where’ on a Lean Journey 156Integrated Entities 159Enterprise Stakeholders 168A Long Journey 172

Part III Creating Enterprise Value 175

Chapter 7 A Value-Creation Framework 177What is Value? 178Value Streams and Doing the Job Right 180Introducing the Framework 182Value Identification 184Value Proposition 185Value Delivery 187Linking the Value-Creation Framework Across Three Levels

of Enterprise 187Summing Up 187

Chapter 8 Program Value 190Value Identification 193Program Value Proposition 200Delivering Program Value 207Adapting to Change 212Summing Up 215

Chapter 9 Value in Corporate and Government Enterprises 217A Value Stream Approach to Understanding Enterprise

Integration Challenges 217Above the Level of a Single Program Value Stream 218Identifying Value Across the Enterprise 220Creating Enterprise Value Propositions 228Delivering Enterprise Value 241Summing Up 246

viii Contents

Chapter 10 Value at National and International Levels 247A ‘Crisis’ in Defense Aerospace? 248Value Identification 251Creating the Value Proposition 260Value Delivery 265Summing Up 278

Chapter 11 Future Value 281Five Guiding Principles for Lean Enterprise Value 281Conclusion 289

Part IV Appendices 291

Appendix A Lean Aerospace Initiative Member Organizations (October 2001) 293Airframe 293Avionics/Electronics 293Propulsion, Power Systems and Controls 293Space 294US Air Force 294Other Government Entities 294Invited Participants – Labor 294Invited Participants – Industry and Government 295

Appendix B LAI Supported Students Completing Theses 296Other Graduate Students Participating in LAI 297Other Graduate Students Whose Theses have

Contributed to LAI 297

Notes 298

Index 323

Contents ix

LIST OF BOXES

Chapter 1Programs, Projects, Platforms, and Products 7

Chapter 2Spies in the Sky:The U-2 31Spies in Space:The Corona Satellite Program 32Selected ‘Kelly’s Rules’ for Lockheed Skunk Works 34The NASA Budget: What Goes Up Must Come Down 36Supersonic Transports: A Victim of Shifting Priorities 44Airbus Challenges US Dominance 47The Space Shuttle: A Compromise Program 50Desert Storm: High-Water Mark for US Military Institutions of the Cold War 52

Chapter 3A Shift Spurred by Airline Deregulation 57Three Characteristic Phases of Innovation 59‘Faster, Better, Cheaper’ at NASA 71There Will Always Be Monuments 72Education as a Monument 77F-20 Tigershark: A High-Risk Maneuver 81

Chapter 4Origins of the Term ‘Lean Production’ 90The Seven Wastes 94Building Blocks for Lean Thinking: Womack and Jones 98The Cross-Cultural Diffusion of Lean Thinking 106Raytheon’s ‘Lean’ Six Sigma Program 112

Chapter 6LAI’s Lean Enterprise Model (LEM) 148The F/A-18E/F Super Hornet: An Evolving Lean Enterprise 151The Northrop Grumman ISS Journey to Lean 152LAI’s ‘Transition-to-Lean Roadmap’ 156The Value of Assessment 157Suppliers Play a Critical Role in Extended Enterprises 164The F-22 Raptor Integrated Enterprise 165What Is a ‘Stakeholder’? 169The Stakeholder Complexity of Aerospace Enterprises 171The Critical Role of the Enterprise Leader 173

x

Chapter 8F-16 Falcon – Sustained Lifecycle Value Creation 191X-33 – The ‘Single Stage to Orbit’ Challenge 197Creating Incentives for Value Creation in Government Acquisition 199A Hypothetical Program Mission Statement – The Top Level of the

Program Value Proposition 203JDAM – Program Value Creation through Early Supplier Integration 206Creating Lean Enterprise Value in Product Development 209Value Streams and Value Stream Maps 210Value Attributes for Program Management Best Practices 211C-17: An Example of What Can Be Done with Cooperation 213

Chapter 9Instability – An Enterprise Challenge 230Why Is a Front-End Process So Important? 233Architecting Value Propositions Through Union Agreements 236New Value Propositions Across the Supply Chain – Textron’s LTA Initiative 238

Chapter 10No Value Proposition is Assured at National and International Levels 250Understanding Intellectual Capital 259Core Competencies for Value Identification 260Studies and Commissions as Change Mechanisms at the National Level 264Core Competencies for Constructing Value Propositions 265The Government’s Role in Creating the Civil Aerospace Sector 267Exploring New Paradigms for Defense Aerospace 272DARPA: A Model for Future Technology Advances? 276Core Competencies for Value Delivery 278

List of Boxes xi

LIST OF FIGURES AND TABLES

Figures

1.1 Value-creation framework for three levels of enterprise 101.2 Value creation iterates and adapts 111.3 20 years of consolidation in aerospace 191.4 Declining opportunities in military aircraft programs 21

2.1 US military aircraft production 272.2 Passenger-miles flown by US airlines 292.3 US defense budget 292.4 NASA budget as a percentage of the total US Government budget 362.5 DoD procurement budget 392.6 Development times for major US defense systems 392.7 US civil transport aircraft deliveries 402.8 Commercial aircraft orders – Boeing and Airbus 462.9 US general aviation shipments 49

3.1 Absolute airplane speed record 563.2 Dynamics of innovation 603.3 Evolution of the US aerospace industry 603.4 Industrial evolution and the emergence of the dominant design 613.5 Rapid growth in the business jet sector 663.6 Post-Cold War market performance of aerospace stocks 703.7 Aircraft orders and deliveries compared with passenger seat miles 75

4.1 A timeline of the intellectual history of lean 1004.2 The Ford production system 105

5.1 Annual cost of DoD computer systems (all types) 1205.2 Military avionics software upgrade value streams 1225.3 Lockheed Martin’s BTP Support Center 1265.4 P&W manufacturing system design (early 1997) 1325.5 P&W manufacturing system design (late 1998) 1325.6 Delta II and Delta IV integration flows 1345.7 GE Lynn supplier system 1365.8 Joint Direct Attack Munition (JDAM) improvements 140

6.1 Boeing’s Vision 2016 1436.2 Generic multi-program enterprise process architecture 1456.3 Lean enterprise model architecture 1476.4 Principles of a lean enterprise 1476.5 Northrop Grumman ISS lean enterprise system 1536.6 Enterprise-level ‘Transition-to-Lean Roadmap’ 155

xii

6.7 Program enterprise value stream 1606.8 Multi-program enterprise value streams 1606.9 National and international aerospace enterprises 1626.10 Enterprise stakeholders 168

7.1 Value-creation framework 1837.2 Value creation iterates and adapts 184

8.1 The pillars of program value creation 1908.2 Elements of program value identification 1948.3 Elements of product capability 1958.4 Elements of a program value proposition 2018.5 The impact of early program phases on eventual product cost 205

9.1 Value exchanges in the multi-program enterprise 2199.2 Multi-program enterprise value exchange relationships 224

10.1 Aerospace’s financial crisis in context 25310.2 US national defense as a proportion of federal outlays 255

Tables

3.1 Phases of product lifecycle 62

4.1 How craft, mass production, and lean thinking compare 97

5.1 Automatic code generation reduces Airbus software encoding errors 1225.2 Lean manufacturing results at GE Lynn 137

6.1 Overarching practices of a lean enterprise 150

7.1 Value-creation model over three levels of enterprise 188

10.1 Sustaining defense capabilities to deliver value: three generic strategies 274

List of Figures and Tables xiii

FOREWORD

This book is an outgrowth of the Lean Aerospace Initiative (LAI), aunique partnership between industry, government, labor, and academiacreated in 1993 to help transform the US Aerospace Enterprise. LAI’s veryexistence, we believe, speaks to the book’s central message: an enterprisemust create value to achieve lasting success in an envir onment of funda-mental change. We propose this central message – and the cumulativelearning experience out of which it has grown – to help guide the transfor-mation of any enterprise or industry, at whatever level it is defined.

To understand the genesis of the Lean Aerospace Initiative and theevolution of the thinking reflected in this book, let us take a step back tothe early 1990s. This was a period of considerable uncertainty for the USdefense aerospace community, in the aftermath of the demise of the formerSoviet Union. Massive cuts in defense spending and shifting defensepriorities, along with a stagnant international market in commercial aero-space, created a depressed business environment. Affordability, rather thanperformance at any cost, became the new defense acquisition imperative.To survive and succeed in such a radically new environment, the industryhad to remake itself. It was also at this time that the Department of Aero-nautics and Astronautics at MIT was thinking strategically about the futureneeds of the aerospace industry.

LAI was launched in this environment and in response to these challenges. In mid-1992, Lt. Gen. Thomas R. Ferguson, Jr – then theCommander of the Air Force’s Aeronautical Systems Center (ASC) atWright-Patterson Air Force Base, which is engaged in the acquisition of allaircraft systems for the US Air Force – was confronted with rising costswhen budgets were being drastically reduced. He had just finished readingThe Machine That Changed The World, a book summarizing the results ofMIT-based research on the world auto industry during the previous five-year period under the auspices of the International Motor Vehicle Program(IMVP). The book introduced the principles of lean production as a funda-mentally new and different system of manufacturing, one that accountedfor the significantly superior performance of some Japanese auto producers.The lean concepts evolved at Toyota had produced outstanding results inthe auto industry in terms of cost, quality, time to market, product diversity,and affordability, propelling Japanese auto companies to the front ranks ofindustrial performance worldwide.

xiv

Lt. Gen. Ferguson explored with Professor Daniel Roos of MIT, thenthe IMVP Director, whether lean principles could be applied to the defenseaerospace industry. A ‘quick look’ study was undertaken. The results werebriefed to Lt. Gen. Ferguson and the presidents of 29 aerospace companieson November 5th, 1992, at the annual ASC Presidents’ Day meeting inDayton, Ohio.

Following a transition period in order to structure what became a uniquepartnership, the Lean Aircraft Initiative was born in May 1993. It wasorganized as a consortium between MIT and major US aerospace comp-anies in partnership with the US Air Force and other federal agencies. Ledby the MIT Department of Aeronautics and Astronautics in close collab-oration with the Sloan School of Management, the program was based inthe Center for Technology, Policy and Industrial Development (CTPID),an MIT-wide interdisciplinary research center that also served as theIMVP’s home base.

The consortium defined for itself a bold charter: to help bring aboutfundamental change in both industry and government operations in defenseaerospace in order to achieve gr eater affordability of systems, incr easedefficiency, higher quality , enhanced technological superiority , and astronger US defense industrial base . This basic charter, later modified toinclude enhancing the effectiveness of the national workfor ce, continues toguide the Lean Aerospace Initiative. With the addition of the space sectorto the consortium in early 1998, the name was changed to Lean AerospaceInitiative. And when the Boeing Commercial Airplane Group joined theprogram a year later, the progressive change in the program’s scopebecame complete, covering all aspects of the aerospace industry.

As a first approximation, the ‘quick look’ study in 1992 characterizedthe US military aircraft industry essentially as a ‘craft system with a massproduction mentality’. Clearly, the challenge would be greater than identi-fying known lean principles from the auto context and simply applyingthem in an aerospace context. While the problem-solving thrust of theeffort was centered on defense aerospace, its intellectual scope would haveto embrace a broader domain that included commercial aerospace. Also, tofocus only on conducting research, and to expect industry and governmentstakeholders to implement the results, would be too limiting. LAI deter-mined that developing implementation tools would be essential.

The solution was to structure an open, inclusive, and evolving processto foster the development of a learning community. Today, LAI bringstogether key stakeholders from industry, government, organized labor, andMIT, all united around a common vision. An Executive Board consistingof senior representatives of all member organizations provides general

Foreword xv

direction and oversight. The stakeholders work together within a partner-ship framework, with well-defined roles and responsibilities. As partners,they jointly determine broad research directions and priorities. Clearlyestablished success criteria guide overall progress.

Objective and systematic research is central to LAI’s mission. Researchis conducted by a number of teams – with membership from all stake-holders and chaired by industry, government, and MIT co-leads – in areassuch as product development, manufacturing systems, supplier networks,people and organizations, acquisition, and enterprise topics. Researchersfrom other universities participate in these teams as well. The sponsoringorganizations provide support to specific research projects, making the realworld our laboratory. The resulting stream of research products has raisedawareness and enabled implementation through a variety of means –implementation tools, workshops and conferences, and pilot projects fortesting out new ideas. This, in turn, has contributed to greater under-standing, generating new research questions and hypotheses. The manygraduate students who have actively contributed to research and latersought careers in aerospace continue to help shape the industry’s future. Avirtuous cycle – which has proven successful to the present day – has beenset in motion to create lasting value.

The Lean Aerospace Initiative has taken root, grown, and flourished as anew model of industry, government, labor, and university partnership.Accelerating lean implementation has produced enormous – and docu-mented – payoffs. Still, transforming the US Aerospace Enterprise is acomplex undertaking. Changing the established culture has proven to bethe greatest transformational challenge. Although much has been achieved,much remains to be accomplished.

MIT itself, as a stakeholder, has also changed in important ways. Theneed for rapid deployment of research results into action has engenderednew ways of interaction between MIT researchers and practitioners.Research issues not only span many engineering disciplines but also coverchallenging management and policy issues, fostering a growing emphasison integrative, multidisciplinary research that cuts across different schoolsand departments. The School of Engineering and the Sloan School ofManagement have become engaged in LAI. Following its first three-yearphase, LAI extended the program’s co-directorship to include a seniorfaculty member representing the Sloan School. More recently, a new co-director, representing the sponsoring partners, was appointed to ensure thedelivery of value for all stakeholders.

Like other key stakeholders, MIT has also realized value from itsengagement with LAI. An important benefit has been creation of basic

xvi Foreword

knowledge on principles governing fundamental industrial change, perfor-mance, and competitiveness. MIT’s degree programs and academiccurriculum already reflect this new intellectual capital. In addition,working alongside industry, government, and labor has enhanced MIT’sbasic mission to educate tomorrow’s leadership in engineering andmanagement and to advance the common good through public service. Afurther benefit has been educating the educator. LAI is an importantinvestment in MIT’s academic future.

The successful collaborative model represented by the Lean AerospaceInitiative has also been adopted internationally. One notable example is theUK Lean Aerospace Initiative (UK-LAI), a consortium of aerospacecompanies, government, and four universities in the United Kingdom(Warwick, Nottingham, Cranfield, and Bath). Another is the Lean AircraftResearch Program (LARP) in Sweden, based at Linköping University.University-to-university collaborative research alliances have been estab-lished between MIT and universities engaged in these two programs, totake advantage of synergies.

Further, within the United States the concept has more recently beenextended to create the Lean Sustainment Initiative (LSI) and the LaborAerospace Research Agenda (LARA), both companion programs at MIT.LSI, which began in 1996, seeks to help achieve fundamental transfor-mation of the logistics, repair, and maintenance system supporting the USAir Force into a cost-effective, quality-driven, reliable, and responsivesustainment enterprise in the 21st century. This initiative, too, is beingpursued as a partnership between the US Air Force, other governmentagencies, major commercial repair organizations and suppliers, and MIT.The LARA partnership between organized labor and academia seeks tostrengthen future aerospace workforce capabilities – labor and profes-sional – through an agenda of research and derived recommendations.LARA, started in 1998, draws upon LAI member organizations as well asnon-aerospace companies for its studies.

Looking back is also instructive in looking forward. The path the LeanAerospace Initiative has taken since 1993 – mirroring the cumulativelearning experience we have tried to convey in this book – has been extra-ordinarily enriching, energized, and purposeful. We have learned impor-tant lessons and believe the insights gained can be of value to otherindustries facing fundamental change, as well as to similar partnershipinitiatives between industry, government, labor, and academia. Here areseveral insights we would like to share.

First, the Lean Aerospace Initiative represents the emergence of alearning community, initially focused on ‘low-hanging fruit’ (that is, short-

Foreword xvii

term benefits), but progressively acquiring a wider perspective and valuinglonger-term solutions.

Second, the creation of a neutral forum facilitated by MIT has provideda unique platform for dialogue, knowledge sharing, and mutual learning inan open setting.

Third, the development of a common vocabulary has been crucial tofostering communication among all stakeholders, and to bridging sectoraland cultural differences, as well as chasms between functional specializa-tions, organizational layers, and competing interests.

Fourth, the generation of a common knowledge base through systematicresearch by an impartial party has proven critical in accelerating theprocess of fundamental change.

Fifth, the presence of a trusted change agent has been indispensable tothe implementation of research-driven change strategies by all memberorganizations and across much of the aerospace supplier base.

Sixth, the program’s governance structure and the terms of engagementof all stakeholders cumulatively have provided a self-correcting and adap-tive mechanism that has proven essential in creating and delivering valueto all stakeholders.

Seventh, the transparency of the entire consortium process has helpedcreate trusting relationships across otherwise competitive enterprises,while ensuring that proprietary information has been safeguarded.

Eighth, the collective commitment of all stakeholders to work, share,learn, and build together has been essential to the program’s progress andoverall impact.

The journey taken by the Lean Aerospace Initiative, like the journeypresented in this book, continues. Gen. Lester L. Lyles, Commander of theAir Force Materiel Command, likened LAI to the building of the conti-nental railroad in the 19th century. In a keynote address to the program’sExecutive Board in December 2000, Gen. Lyles noted that we have not yetdriven down the golden spike. A great deal has changed since theprogram’s inception, as have the nature, magnitude, and composition ofthe challenges. We plan to continue the LAI journey with renewed energyand vision, by both widening and deepening the stakeholder community.

One final note: as we completed our writing of this book, the terroristattacks of September 11th, 2001, took place. These attacks are a tragicreminder of the seriousness – and diversity – of threats to national security.They also raise new demands for safe air transportation and remind us ofthe impact on our daily lives of instantaneous global communication andinformation dissemination.

xviii Foreword

We can’t predict how those events will shape the future, but we suspectthat the future will be quite different than the one we took for granted onSeptember 10th, 2001. In the preceding months, as we were writing thebook, we anticipated that aerospace would be called upon to contributefuture value to society and to face future challenges – challenges thatwould be even more compelling for the transformation already underway.We are confident that the underlying processes for determining lean enter-prise value will benefit the national and international communitiesaffected by these events as they enter uncharted waters and respond tonew threats. Efficient use of resources is needed, whether in times ofcrisis or in times of calm. The underlying principles of creating lean enter-prise value apply equally.

THE AUTHORS

Foreword xix

ACKNOWLEDGEMENTS

We would like to extend our profound thanks and appreciation to the manyorganizations and people whose support and contributions, often givenunstintingly over many years, made this book possible.

First and foremost, we recognize the member organizations of theLean Aerospace Initiative listed in Appendix A, which have providedboth financial support and encouragement. As a learning community,they joined us to give inspiration, form, and substance to this book.They also provided data and support for the research that underpins our findings and insights. We deeply appreciate our association withmembers of related initiatives: the Labor Aerospace Research Agenda at MIT; the Lean Sustainment Initiative at MIT; the UK Lean Aerospace Initiative at the Universities of Warwick, Bath, Cranfield,and Nottingham; and the Swedish Lean Aircraft Research Program atLinköping University.

Much of our thinking reflected in this book can be traced to the cumu-lative research conducted by more than a hundred talented and dedicatedgraduate students, many of whom we have personally supervised. Inimportant ways these students are the enduring products of the LeanAerospace Initiative as they pursue careers in the aerospace industry,government, or other sectors. Already 56 students have completed theirthesis research with LAI support and another 25 students have partic-ipated or are currently participating in LAI research as part of theirstudies. An additional 27 students enrolled in graduate MIT degreeprograms, mostly supported by their companies, have contributed to LAIresearch. Their names are given in Appendix B.

We also gratefully acknowledge our other MIT colleagues who havebeen engaged in the LAI research program over the years, some of whom have supervised these students: Charles Boppe, David Cochran,John Deyst, Charlie Fine, Dan Frey, Stan Gershwin, Ed Greitzer, TimGutowski, Wesley Harris, Daniel Hastings, David Hoult, Sandy Jap, JanKlein, Harvey Sapolsky, Jerry Shapiro, Duncan Simester, Anna Thornton,and Dan Whitney. We would like to recognize, in particular, the earlierleadership and guidance provided by our MIT colleagues Dan Roos andWilliam Pounds.

A number of people in industry, labor, government, and academiacontributed to or reviewed various sections, case studies, or vignettes

xx

within this book to ensure their factual accuracy and that our wording didjustice to their reality. We are grateful to the contributions, reviews, andcomments provided by Norman Augustine, Sam Autry, Lt. Col. KeithBirkholz (USMC), Rich Briggs, Tyson Browning, William Bullock,Dennis Bush, Greg Caires, Paul Carter, Chris Cool, Eugene Covert,Charlie Davis, Greg Drohat, Chuck Ebeling, Jerry Gannaway, GaryGoodman, Andrew Gore, Allen Haggerty, Don Handell, Cliff Harris,Wesley Harris, Daniel Hastings, Bob Hoffman, Sarah Hotaling, BrianIppolito, Tom Keider, Bill Kessler, Thomas Kochan, Vicki Kygar, JohnPaul MacDuffie, Andrew Martinez, Theresa McCauley, Don Meadows,Joe Mize, Mike Nipper, Curt Newill, Gordon Ramsbottom, Leon Silva, EdSchein, Lt. Gen. Richard Scofield (USAF, Ret.), Robert Seamans Jr,Steven Sleigh, Joe Stout, Bill Wansing, Heidi Wood, Randle Wright, andBob Zwitch.

At any given time, the Lean Aerospace Initiative typically has well oversix hundred active participants, and we fear that we may inadvertentlyhave failed to recognize one or more of them and their contributions to thisbook. If this is the case, we sincerely apologize.

As noted in the Foreword, the Lean Aerospace Initiative was conceivedand organized by the US Air Force. Key members of the ManufacturingTechnology Division of the USAF Research Laboratory’s Materials andManufacturing Directorate provided support and leadership that made thisbook possible: John Cantrell, Ken Feeser, Bill Kessler, Alan Taylor, andGary Waggoner.

We would not have been able to complete this book without thesupport of many people at MIT. We would like to acknowledge, in partic-ular, the staff of the Lean Aerospace Initiative, the staff of the Center forTechnology, Policy and Industrial Development (CTPID), the Deans of Engineering and the Sloan School of Management, our successiveProvosts and, of course, our President.

Producing a book with thirteen authors has been a challenge and alearning experience. We are grateful that the book has brought us closertogether – in our thinking and in our regard for one another. Being able totruly speak with one voice, however, was only possible with the experteditorial and writing support provided by Scott Cooper. He is a rareprofessional who understood our shared visions, asked us challengingquestions, reconciled our diverse (and sometimes divergent) writing styles,and added new clarity to the concepts.

Finally all facts, statements, opinions, and conclusions expressed hereinare solely those of the authors and do not in any way reflect those of theLean Aerospace Initiative, the US Air Force, the sponsoring companies

Acknowledgements xxi

and organizations (individually or as a group), or MIT. All but the authorsare absolved from any remaining errors or shortcomings, for which theauthors take full responsibility.

Every effort has been made to trace all the copyright holders but if anyhave been inadvertently overlooked the publishers will be pleased to makethe necessary arrangements at the first opportunity.

xxii Acknowledgements

LIST OF ABBREVIATIONS

ACC Air Combat Command (USAF)AFB Air Force BaseAFSOC US Air Force Special Operations CommandARBG Acquisition Reform Benchmarking GroupAWAC airborne warning and control (plane)BCAG Boeing Commercial Aircraft GroupBRAC Base Realignment and ClosingBTP Build-To-PackageCAB US Civilian Aeronautics BoardCEO Chief Executive OfficerCOMSTAC US Commercial Space Transportation Advisory CommitteeDARPA US Defense Advanced Research Projects AgencyDoD US Department of DefenseDSB US Defense Science BoardFAA US Federal Aviation AdministrationFARA Federal Acquisition Reform ActFASA Federal Acquisition Streamlining ActFBC ‘Faster, Better, Cheaper’G&A general and administrativeGAO US Government Accounting OfficeGDP gross domestic productGE General ElectricGPS Global Positioning SystemHPWO high-performance work organizationHR human resourcesIAM International Association of Machinists and Aerospace

WorkersICBM Intercontinental Ballistic MissileIMVP International Motor Vehicle ProgramIPPD integrated product and process developmentIPT integrated product teamISO International Standards OrganizationJDAM Joint Direct Attack MunitionJIT just-in-time (delivery)JPATS Joint Primary Aircraft Training SystemJSF Joint Strike Fighter

xxiii

LAI MIT Lean Aerospace Initiative (originally Lean AircraftInitiative)

LARA Labor Aerospace Research AgendaLEM Lean Enterprise ModelLESAT Lean Enterprise Self Assessment Tool (LAI)MILSPEC Military SpecificationMIT Massachusetts Institute of TechnologyMRP Manufacturing Requirements PlanningNASA National Aeronautics and Space AdministrationNAVAIR Naval Air Systems CommandNRO National Reconnaissance OfficeO&M operations and maintenancePPBS Planning, Programming, and Budgeting SystemR&D research and developmentS&P Standard & Poor’s (index)SLEP Service Life Extension ProgramSPC statistical process controlSPO System Program OfficeSPI Single Process Initiative (DoD)SST supersonic transportTQM total quality managementTTL Transition-to-Lean (LAI)UAW United Auto Workers – International Union of Automobile,

Aerospace and Agricultural Implement Workers of AmericaUK-LAI UK Lean Aerospace InitiativeUSAF United States Air ForceUSAFR United States Air Force ReservesUSCG United States Coast GuardUSMC United States Marine Corps

xxiv List of Abbreviations