Lean Six Sigma in the Changing Business Environment · Lean Six Sigma in the Changing Business Environment Terry Emmert Lean Six Sigma Program Office ... RG-33 Base Cat II 731 RG-33

UNCLASSIFIED

Lean Six Sigma in the Changing Business

Environment

Terry Emmert

Lean Six Sigma Program Office

Office of the Deputy Chief Management Officer

November 15, 2010

Performance Management

DoD Lean Six Sigma Program Office UNCLASSIFIED

Breakout Session Objective and Abstract

• Objective Learn about the primary challenges key Lean Six Sigma

leaders are facing in their efforts to keep their

organizations relevant in today’s demanding business

setting

• Abstract Lean Six Sigma (LSS) is a continuous improvement

methodology that stresses process velocity and the

elimination of defects and waste. It has been applied in

both the public and private sectors to achieve significant

performance improvements. This panel will discuss how

the LSS approach, which was originally conceptualized

for the manufacturing environment, is being applied for

success at the enterprise level. Panelists will discuss

key enablers, challenges, and lessons learned

involved in moving LSS successes beyond the level

of plant, site, or other relatively self-contained

organizational unit. They will address successful

enhancements to the methodology that they have

applied to nurture systematic change in their

organizations. These insights may be required of

organizations that apply traditional improvement

approaches and intend to keep pace in an environment

that includes increasing numbers of customers,

challenges, new technologies, distribution methods, and

economic uncertainty.

2

Lean Six Sigma in a the Changing Business Environment

Key Enablers Strategic Alignment

Leadership Engagement

Lessons Learned Flexibility

Results

Project to define projects

Requirements



Strategic Alignment

Goal 1 Goal 2 Goal 3 Goal 4 Goal 5

Prevail in today’s

wars

Prevent and deter

conflict

Prepare to defeat

adversaries and

succeed in a wide

range of

contingencies

Preserve and

enhance the All-

Volunteer Force

Implement Reform

Agenda

OBJ 1.1.OCO: Degrade the Taliban to

levels manageable by the Afghan

National Security Force (ANSF), while

increasing the size and capability of

the ANSF.

OBJ 1.2.OCO: Execute a

responsible drawdown of the

U.S. military presence in Iraq.

OBJ 2.1.1F1: Extend a global posture

to prevail across all domains by

increasing capacity in general purpose

forces and enhancing stability

operations and foreign security force

competency.

OBJ 2.2.1F2A: Maintain a safe,

secure, and effective nuclear arsenal

to deter attack on the U.S. and on our

allies and partners

OBJ 2.3.1F3: Strengthen cooperation

with allies and partners to develop and

field robust, pragmatic, and cost-

effective missile defense capabilities.

OBJ 2.4.1X2: Ensure sufficient ISR

collection and analysis capacity for full

spectrum operations and ensure

resiliency of ISR operations.

OBJ 3.1.1F2B: Improve the

responsiveness and flexibility of

consequence management response

forces.

OBJ 3.2.1F2C: Enhance capacity to

locate, secure, or neutralize weapons

of mass destruction, key materials,

and related facilities.

OBJ 3.3.1F2C: Enhance U.S.

capabilities to train, advise, and assist

foreign security forces and their

sustaining institutions to operate with

or in lieu of U.S. forces.

OBJ 3.4.1X1: Expand capacity to

succeed against adversary states

armed with advanced anti-access

capabilities and/or nuclear weapons

and improve capabilities to conduct

effective operations in cyberspace and

space.

OBJ 3.5.2D: Maintain a strong

technical foundation within the

Department’s Science and Technology

(S&T) pgram.

OBJ 4.1.2M: Provide top-quality

physical and psychological care to

wounded warriors, while reducing

growth in overall healthcare costs.

OBJ 4.2.2P: Ensure the Department

has the right workforce size and mix,

manage the deployment tempo with

greater predictability, and ensure the

long-term viability of the Reserve

Component.

OBJ 4.3.2R: Better prepare and

support families during the stress of

multiple deployments.

OBJ 4.4.2T: Train the Total Defense

Workforce with the right competencies.

OBJ 5.1.2A: Increase use of

renewable energy and reduce energy

demand at DoD installations.

OBJ 5.2.2C: Protect critical DoD

infrastructure and partner with other

critical infrastructure owners in

government and the private sector to

increase DoD mission assurance.

OBJ 5.3.2E: Improve

acquisition processes, from

requirements definition to the

execution phase, to acquire

military-unique and

commercial items.

OBJ 5.4.2L: Provide more

effective and efficient

logistical support to forces

abroad.

OBJ 5.5.2U/2V: Increase efficiencies

in headquarters and administrative

functions, support activities, and other

overhead accounts.

3

DoD Strategic* Goals…

Execute a responsible drawdown of the U.S. military

presence in Iraq.

Provide more effective and efficient logistical support to

forces abroad.

*Based on crosswalk among the following strategic documents/sources: NDS, NMS, QDR, SMP, IPNSG, HPPG, GAO, OMB



MRAP Supply Chain is Critically Dependent on Kuwait-based

Maintenance

4

SPAWAR,

Charleston, SC

MRAP Sustainment Facility,

Kuwait

Global flow of MRAP vehicles

CONUS CENTCOM AOR

Regional Support

Activities, Iraq

• The MRAP Sustainment Facility (MSF)

Operated by Joint Program Office MRAP

Mission has evolved in its two-year life from fielding support in Iraq to remissioning for Afghanistan

Provide safe, fully mission capable vehicles in volume and locations needed to support the warfighter

Significant enabler of Afghanistan surge

28% of MRAP vehicles flowed through this facility

• MSF must master both flexibility and efficiency High mix, job shop

Variable work statement to satisfy rapidly evolving requirements

Rapid time-to-volume

New vehicles

Remissioned vehicles

Joint Program Office,

Stafford/ Quantico, VA

Regional Support Activities /

Receiving Units, Afghanistan

In November 2009, facility was

backlogged on the Cougar variant…

…since then improvement efforts

focused on throughput and cost



An enterprise-level assessment led to identification of ten projects

Vehicles in

Vehicles out

MRAP

Sustainment

Facility

Joint Program

Office

(CONUS)

Configuration Management

Contract

Management

Labor

Technical

Manuals

Parts Supply

While the immediate focus was

performance at the MSF… • Leadership (government oversight)

• Process (right subject matter

expertise, Lean Six Sigma)

…we had to simultaneously address

supporting programmatic processes

4 projects

1 project

1 project

1 project

5

Project Status

MaxxPro Line Improvement Closed

Requirements and Capacity

Planning Process Hold

Production Scheduling Hold

Production Execution/SAMS IE

Integration Hold

Labor Lead Time, Streamlining

and Planning Factors Hold

MSF Inventory Optimization Control

Configuration Management Measure

Technical Manuals Measure

Cataloging and Provisioning Measure

MRAP Battle Damage Repair Hold

Throughput is a

function of :

• Operations

• Inventory

• Supply

• Labor

• Facilities

• Equipment

6 projects Capacity Planning

Discussed today



MRAP Sustainment Facility

6

C4I Integration

Bay Maintenance Line Maintenance

Operational Stock

Basic Facts: • Production floor space: 150,000 sq ft

• Work in progress: ~150 trucks

• Direct labor: ~500 mechanics

• Parts stock space: 65,000 sq ft

• Lines stocked: ~4300

• Quantity on hand: ~140,000 parts

• Incoming lot capacity: 3000+ trucks



Timeline: MaxxPro Line Throughput Project

7

0.0

20.0

40.0

60.0

80.0

100.0

120.0

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Other Variants

MaxxPro Bay

MaxxPro Line

MaxxPro Avg Parts Cons

Dec Jan Feb Mar Apr May Jun

Initial

Assessment

Jul Aug Sep Oct

Measure,

Analyze Improve Control MaxxPro Line

Throughput Project

Av

g N

um

ber o

f Parts

Req

uire

d p

er T

ruck

Nu

mb

er

of

Tru

cks R

ead

y t

o S

hip

“Increasingly

Complex

Truck”

challenge

quantified

Improvement focus areas: Takt Time Execution

Work Standardization

QA Feedback

Maintenance Supply

Reconciliation

Toughest trucks, and

Incoming truck

availability became a

challenge

Two Lines / Two Shifts Two Lines / One Shifts

Requirements shift away from

MaxxPro; more variants run in

Bays

MaxxPro Base

Mission Completed

On Time

All focused on maintaining line

throughput with increasingly tough trucks

Relative difficulty

in fixing truck



Sum of Sum of OH QTY Column Labels

Row Labels No WON in 3 mo Zero Consumption < 1 Mo O/H 1 to 3 Mo O/H 3 to 6 Mo O/H 6 to 12 Mo O/H > 12 Mo O/H Grand Total

> 300% Fcst 3-Mo Req 4948 15021 71 1139 3920 5627 59327 90053

200-300% Fcst 3-Mo Req 131 175 23 1804 2254 940 1826 7153

100-200% Fcst 3-Mo Req 127 663 197 3545 1891 568 2243 9234

50% to 100% Fcst 3-Mo Req 12 139 1622 1340 364 285 196 3958

< 50% Fcst 3-Mo Req 47 12 1691 537 170 148 26 2631

No WON History 21573 21573

Zero Fcast Requirement 1530 841 10 48 21 14 29 2493

Grand Total 28368 16851 3614 8413 8620 7582 63647 137095

OH Qtys % of Qtys OH

Significant risk of stockout 1750 1%

Moderate risk of stockout 2480 2%

investigate 174 0%

No action required 11222 8%

Divest candidate 24066 18%

Inventory Reduction candidate 97206 71%

Timeline: Inventory Optimization Project

8

Dec Jan Feb Mar Apr May Jun

Initial

Assessment

Jul Aug Sep Oct

Inventory Optimization

Project Measure Analyze Improve Control

3645 3743 3754 4086 43855114 5439

46965101

5531

105.1 123.5 122.9

147.5 137.1

$51.71 $64.72 $64.44 $67.35 $73.21

# Lines

# Locations Quantity On-hand (thousands of parts)

Value ($M)

Inventory

trending

upward

Driven by mission mix and

requirements uncertainty…but

is it the right inventory?

To answer this question, project considered both…

historic consumption forecast future needs

Stocking Sweet Spot

historic consumption

futu

re n

eeds

Project delivered a monthly

review process and analytics Recommended inventory

adjustments to reduce risk of

stockout and excess




Contract Management

Labor

TechnicalManuals

Parts Supply

4 projects

1 project

1 project

1 project

Throughput is a function of :• Operations

• Inventory• Supply

• Labor • Facilities• Equipment

6 projects

Capacity Planning

Timeline: Configuration Management, Catalog/Provision,

Technical Manual Maturity Assessment Project

9

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

Configuration Management, Catalog/Provision,

Tech Manual Maturity Assessment Measure Analyze Improve Control Define

2.5

3.11.8

0.0

1.0

2.0

3.0

4.0


Catalog & ProvisionTechnical Manuals

MaxxPro Platform Overall Configuration Management Maturity Scorecard

0 1 2 3 40 1 2 3 4 0 1 2 3 4

1 2 3 4 1 2 3 4 1 2 3 4

RG-33 Base Cat II 731

RG-33 CAT II PLUS 995

RG-33 Base HAGA 128

RG-33 HAGA Plus 53

RG-33 Base SOCOM 262

RG-33 SOCOM Plus 44

RG-33 AUV 38MaxxPro Cat I 2405

MaxxPro MEAP 550

MaxxPro Plus 1742

MaxxPro Plus Ambulance 505

MaxxPro Dash 1222

MaxxPro Dash DXM (ISS) 1050

RG31A2 610

RG31A2DO4 (std turning radius) 249

RG31A2DO4 RTR (reduced turning radius)424RG31A3 EM 105

RG31A2 DO7 (ISS) 256

Cougar CAT I A1 839

Cougar CAT II A1 913

Cougar CAT I A2 151

Cougar CAT II A2 142

Cougar CAT I A1 ISS 1001

Cougar CAT II A1 ISS 39

Cougar CAT I A2 ISS 49

Cougar CAT II A2 ISS 80

Cougar CAT II Surge 200

Buffalo MK II A1 (BUFF702) 71

Buffalo MK III A2 (USMC) (B6ECA) 8

Caiman CATI 1154

Caiman Plus 1692

Oshkosh M-ATV 7687

Scorecard Results

CM C&P TM

Navis

tar

OEM Variant Volume

BAE, G

DLS

FPII

BAE T

VS BA

E

Vehicle variant specific

assessments…

…analyzed across the

entire program to

identify highest priority

risks…

7,687

2,405

1,742 1,692

1,222 1,1541,050 1,001 995 913 839

731610 550 505 424 421

262 256 249 200 151 142 128 105 80 71 53 49 44 39 38 8

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

…helped to focus

improvement on 13

variants (85% of

volume) and two

OEMs

85%



Key Enablers, Challenges, Lessons Learned

Key Enablers Challenges/ Lessons Learned

Strategic alignment Ensure results are relevant

Must be continually revisited in dynamic environment

Leadership engagement Ensure right process ownership

Breaking down barriers will be required Tough calls

Expect demonstration of results

Flexibility Expect immature processes and scant/unreliable data

Standardize on a best practice (leverage doctrine)

Sanity checks and corroborating data are better than

guesses

Use sampling

Tailor tools to situation

Results Method must deliver…

Actionable insight

Urgency to make decision

Means to monitor progress

Project is about results…not methodology If communication involves education…something’s

wrong

Project to define projects Provides the data to support mini-strategic alignment and

prioritization Performance gap assessment

Requirements clarity Customer(Warfighter) can be a source of variability

Requirements management process is critical

Particularly important at enterprise level

For government/industry partnerships, time spend upfront

on requirements, pays dividends in execution 10

Documents

Lean Six Sigma in the Changing Business Environment · Lean Six Sigma in the Changing Business Environment Terry Emmert Lean Six Sigma Program Office ... RG-33 Base Cat II 731 RG-33