Naval Aviation Enterprise AIRSpeed: Transforming the End-to-End Value Stream presented to 15th Annual Conference o

1. Dale L. Moore NAVAIR AIRSpeed Deputy Corporate Deployment Champion 27 March, 2007 Naval Aviation Enterprise AIRSpeed: Transforming the End-to-End Value Streampresented to 15th Annual Conference on Quality in Space & Defense Welcome/Introduction. � NAVAIR has put a dedicated vendor in place to help us create form and structure to our AIRSpeed deployment. The George Group � internationally recognized for achieving rapid deployment of strategic initiatives - is helping us move AIRSpeed forward. � I hope this presentation helps show you where we are with AIRSpeed today. Welcome/Introduction. � NAVAIR has put a dedicated vendor in place to help us create form and structure to our AIRSpeed deployment. The George Group � internationally recognized for achieving rapid deployment of strategic initiatives - is helping us move AIRSpeed forward. � I hope this presentation helps show you where we are with AIRSpeed today.

3. DoN Total Obligation Authority (TOA)

4. Continuous Process Improvement Ingrained At The Senior Level of Navy Leadership ��faced with executing two great tasks simultaneously�fighting today�s war and positioning our Force for an uncertain future� We face additional fiscal pressures that lead us to better stewardship of taxpayer dollars�where greater efficiency leads to improved effectiveness.. �I found that both buyers and sellers who employed Lean Six Sigma (LSS) experienced greater efficiencies, increased morale and higher levels of performance� LSS is a proven business process�several elements of the Navy/Marine Corps Team have engaged�4:1 return on investment� The mission is clear: create more readiness and assets within our budget through LSS�I expect you, my Leadership Team, will personally support this initiative�injecting it into our performance objectives� �establish the next steps toward more fully employing LSS in our organization. �

6. The Dilemma This slide illustrates what we refer to as �Tired Iron�. The average age of our equipment is going up, in spite of projected decomissionings of aged aircraft/ships/subs and projected aircraft/ship/sub procurement. As the age of our assets grows, we must achieve the right balance between repairing old aircraft and buying new aircraft. The more money we spend today on current readiness, the less we�ll have in the outyears to buy new aircraft and systems. This slide illustrates what we refer to as �Tired Iron�. The average age of our equipment is going up, in spite of projected decomissionings of aged aircraft/ships/subs and projected aircraft/ship/sub procurement. As the age of our assets grows, we must achieve the right balance between repairing old aircraft and buying new aircraft. The more money we spend today on current readiness, the less we�ll have in the outyears to buy new aircraft and systems.

7. Key Organizational Concepts Three Major Concepts Converging: Naval Aviation Enterprise (NAE) Construct Competency Aligned/Integrated Product Team Concept of Operations NAE AIRSpeed Deployment of Lean Six Sigma and Theory of Constraints Continuous Process Improvement (CPI)

8. NAE BOD LOGOS This slide depicts all of the commands that comprise the Board of Directors (BOD) of the Naval Aviation Enterprise (NAE). The BOD meets regularly via VTC to discuss how well each Type/Model/Series is managing its costs and other issues that impact Naval Aviation as a whole. This slide depicts all of the commands that comprise the Board of Directors (BOD) of the Naval Aviation Enterprise (NAE). The BOD meets regularly via VTC to discuss how well each Type/Model/Series is managing its costs and other issues that impact Naval Aviation as a whole.

9. Enterprise Principles Start With the Outcome (Readiness / Cost), Improve Your Processes (AIRSpeed), Implement Residual Organization Utilize A Set Of Consistent, Integrated, And Hierarchical Metrics Ensure Full And Consistent Transparency Of Data And Information Throughout Establish And Maintain Process Discipline Throughout Establish And Maintain Accountability For Actions And Results Throughout Apply An Integrated Governance Structure This is the heart of what we do in NAE, Process is �what do we produce� and the answer is readiness at the demand signal driven by OPLANS and GNFPP requirements We use metrics, which is �apples to apples� comparison of performance, that roll-up and are �customer� focused. Is isn�t about telling the story that makes my organization look good, but the role we play in supporting the �main thing� readiness to meet customer demand Transparency-no hidden data, no �cleansing� to provide a story Discipline- process applied evenly across enterprise, regular meeting drumbeat, this is our �day job� Accountability-you�ve heard of AIP�s or W3�s, it is the hardest thing we do, ensuring people meet deadlines or at least respond back with updated deadlines. Integrated governance-all parts of the organization that contribute to readiness have to play, if not, why do we have them? This is the heart of what we do in NAE, Process is �what do we produce� and the answer is readiness at the demand signal driven by OPLANS and GNFPP requirements We use metrics, which is �apples to apples� comparison of performance, that roll-up and are �customer� focused. Is isn�t about telling the story that makes my organization look good, but the role we play in supporting the �main thing� readiness to meet customer demand Transparency-no hidden data, no �cleansing� to provide a story Discipline- process applied evenly across enterprise, regular meeting drumbeat, this is our �day job� Accountability-you�ve heard of AIP�s or W3�s, it is the hardest thing we do, ensuring people meet deadlines or at least respond back with updated deadlines. Integrated governance-all parts of the organization that contribute to readiness have to play, if not, why do we have them?

10. NAE Mission �Facilitate business process transformation and foster a culture of productivity and continuous improvement enterprise-wide. Develop and advocate high potential, cross-functional enterprise initiatives and ensure enhanced performance and organizational efficiencies are not lost in the �white space�. Ensure savings are harvested and returned to the corporation for reallocation against other corporate Navy priorities.�

11. THE NAE ORGANIZATION

12. ORGANIZATIONAL STRUCTURE

13. INTEGRATED CONCEPT OF OPERATIONSFOR LIFE CYCLE SYSTEMS MANAGEMENT

14. OUR PRODUCTS . . .

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16. NAVAIR AIRSpeed Deployment Team A picture of Art Fornari�s organization and a list of Deployment ManagersA picture of Art Fornari�s organization and a list of Deployment Managers

17. NAVAIR AIRSpeed Roles (Updated for FY07) 6 Sigma Project Team Members 6 Sigma-skilled employees will eventually be referred to as Green Belts and Yellow Belts. Any Caterpillar employee can become a Yellow Belt�over time. Problem solving, statistics, and quality tools are a few of the skills required of a Green Belt. All Belts have certification requirements. 6 Sigma Project Team Members 6 Sigma-skilled employees will eventually be referred to as Green Belts and Yellow Belts. Any Caterpillar employee can become a Yellow Belt�over time. Problem solving, statistics, and quality tools are a few of the skills required of a Green Belt. All Belts have certification requirements.

18. NAVAIR AIRSpeed Implementation Process

19. WHAT WE EXPECT Eliminate non-value added activities. Reduce cycle times. Improve quality and productivity. Develop a workforce with the right skills, focused on the right workload, at the right time, at the right cost, to deliver the right capability to the Warfighter. A fundamental cultural transformation that will help our workforce become more efficient and more productive, while facilitating the cost-wise decisions that will help us deliver Fleet aircraft ready for tasking at reduced cost. One of the greatest benefits of AIRSpeed is that it will touch NAVAIR employees directly. They will be part of the process � analyzing data, recommending changes, innovating new strategies to accomplish NAVAIR�s mission. They will become the experts, but they will need to commit to the principles of Lean, Six Sigma, and Theory of Constraints in order for the AIRSpeed program to succeed. One of the greatest benefits of AIRSpeed is that it will touch NAVAIR employees directly. They will be part of the process � analyzing data, recommending changes, innovating new strategies to accomplish NAVAIR�s mission. They will become the experts, but they will need to commit to the principles of Lean, Six Sigma, and Theory of Constraints in order for the AIRSpeed program to succeed.

20. NAVAIR AIRSpeedService/Transactional Environments Unique Attributes/Differences Fundamentally Knowledge-based �Creative� Work Value-Added Less Tangible/Quantifiable More Difficult to �Walk-the-Process� than on the shop floor Bounded within: Data, Information, Knowledge Domains Highly Complex & Inter-dependent �adhoc� Social Networks Strongly IT dependent/facilitated/institutionalized Collaboration, databases/repositories, work flow mgmt etc. High Variance: Dependent on Knowledge Capital Learning, experience, sharing, culture, knowledge mgmt etc.

21. VALUE STREAMLIFE CYCLE MANAGEMENT POC: Dr. Somoroff, Dave Steffee, Tom Yochim, Roy Harris Slide Type: Diagram POC: Dr. Somoroff, Dave Steffee, Tom Yochim, Roy Harris Slide Type: Diagram

22. Common Process Design Issues

23. TYPICAL PROCESS IMPROVEMENT EXPERIENCE W/O LSS Problems are not well �defined,� scoped or bounded; typically a �boil-the-ocean� or �grand slam� approach & challenges are too big and take too long to effectively tackle Data gathering or �measurement� is rarely or poorly conducted around root causes of specific problems Limited �analysis� tools to available Limited �improvement� tools available to develop and implement desired changes Little or no follow-through for institutional lock-in and �control� of required changes

24. LSS �DMAIC� METHODOLOGY(the scientific �data driven� method to improve existing processes) DEFINE: Properly define, decompose and scope the problem to a manageable size for a small team to tackle MEASURE: Gather pertinent, useful, statistically significant data to address the specific problem ANALYZE: Conduct analysis on the data to understand the well-defined problem and gain insights into specific solution recommendations IMPROVE: Design and prototype improvements CONTROL: Lock-in improvements w/metrics, SOPs, Institutionalization and Change Management

25. AIRSpeed Project Development Process Success Recipe: Right Project, Right Leader, Right Support and Right Resources

26. What Is High Impact Core Value Stream Mapping? HICVS Analysis Is A Top-Down Approach Tying Specific Activities Occurring Along a Value Stream for a Product or Product Family HICVS Mapping And Analysis Provides An End-to-End Value Stream View To Effectively Identify And Address Barriers And Constraints To Program Success Value Stream Analysis Provides A Common Framework For Decomposition And �Drill-Down� To Executable Projects Addresses Systemic Problems Attack Tactical Process Problems Results Map Back To Command Objectives Why do they need us?Why do they need us?

27. Why Are We Conducting High Impact Core Value Stream Analysis?

29. High Impact Core Value Stream Development Process

30. High Impact Core Value Stream Development Process

31. The �HICVS� View 

32. HICVS: �Clipping the Peaks� of EVM Drivers & Productivity Barriers/Degraders

33. Acquisition Program Cost Growth�Attacking the Cost Challenges with a Balanced Focus for Today and Tomorrow�

34. HICVS Productivity Improvement Process

35. NAE AIRSpeed � The Power of Replication AIRSpeed and Industry Partnership Opportunities NAVAIR and Industry �Joint Journeys� � Underway with 11 Major Industry Partners Industry Proposes Project Opportunity for Joint NAVAIR and Industry Black Belts to Execute � NAVAIR and Industry Leadership Give Joint Approval Sikorsky Cost Estimating Project Underway Bell and GE Projects are in the �Hopper� For Final Approval Key Features Non-Proprietary Project Must Benefit NAE /NAVAIR / PEO�s Must Have Strong Replication Potential Across ALL Other Industry Partners PBL�s / PET�s / Contracting Strategies All Afford Opportunities AIRSpeed and Industry Partnership Opportunities NAVAIR and Industry �Joint Journeys� � Underway with 11 Major Industry Partners Industry Proposes Project Opportunity for Joint NAVAIR and Industry Black Belts to Execute � NAVAIR and Industry Leadership Give Joint Approval Sikorsky Cost Estimating Project Underway Bell and GE Projects are in the �Hopper� For Final Approval Key Features Non-Proprietary Project Must Benefit NAE /NAVAIR / PEO�s Must Have Strong Replication Potential Across ALL Other Industry Partners PBL�s / PET�s / Contracting Strategies All Afford Opportunities

36. NAE AIRSpeed INDUSTRY/GOVERNMENT COLLABORATIVE OPPORTUNITIES AT THE SEAMS�ATTACKING THE NON VALUE-ADDED WORK/PROCESSES BETWEEN THE CUSTOMER & THE SUPPLY CHAIN�

37. AIRSpeed Deployment Management System(PowerSteering) This is an overview of the life cycle of a project The steps represent the phases in the George Group Project selection process. The direction of the arrows indicate information being put into powersteering or coming out of the system. The tool tracks projects from the ideation phase through the realization and benefits tracking phases of the project This is an overview of the life cycle of a project The steps represent the phases in the George Group Project selection process. The direction of the arrows indicate information being put into powersteering or coming out of the system. The tool tracks projects from the ideation phase through the realization and benefits tracking phases of the project

38. AIRSpeed Systems & Tools Evolution

39. Top Deployment Challenges Cultural Transformation & Change Management Significant �Information/Knowledge Diffusion� Challenge: Tools & Methodologies Ensuring Alignment/Engagement, Follow-through & Constancy of Purpose Driving Standardization & Re-use coupled with Continuous Improvement Thinking in terms of Value Streams vice Organizational Stovepipes Workforce �Breaking Lock� on Embedded Behaviors & NVA Activity Awareness Work-in-Progress (WIP) mgmt re. �Little�s Law� & Balancing Workload Priorities Project Sponsor/ Team Member Availability on Project Teams LSS/TOC in the Transactional �Knowledge� Environment vs. Manufacturing Deployment in the Federal Workplace � Training Alignment & Tailoring Inefficient Project Identification General Lack of Process Related Data: Cost, Cycle Time, Quality Business Y/Strategic �North Stars� Difficult to Determine: Step 1 to Step 2 Translation Deployment Management System (DMS) Deploying DMS capabilities across the NAE AIRSpeed Infrastructure Institutionalization Organization Structure/Governance, Financial Strategies, NAE AIRSpeed Activities Institutionalized Replication Strategy

40. Areas of Emphasis Commit to the Change � Make it Last Through Leadership Turnover Include in Performance Evaluations / FITREPs Incentivize Group Performance Goals for Senior Leadership Include Productivity Improvement Training in Leadership Development Programs Participate in the Effort Provide Executive Sponsorship for Projects Get Trained as a Green Belt Demand Data and Metrics �� Stamp Out Obfuscation Provide Resources - Vision Without Money Equals Hallucination Provide Stable Funding To Ensure Success Demand Validated Return on Investment FY07 is still a transition year � RE: Deploying AIRSpeed to realize outcomes $131M Reduction in flying hour program funds (Enterprise) $15M Reduction in Depot funding $93M Reduction in NAVAIR/NAWC/PEO fundingFY07 is still a transition year � RE: Deploying AIRSpeed to realize outcomes $131M Reduction in flying hour program funds (Enterprise) $15M Reduction in Depot funding $93M Reduction in NAVAIR/NAWC/PEO funding

41. DoN Lean Six Sigma (LSS) Continuous Process Improvement Summary DoN is fully committed to deployment of LSS CPI Extensive 2 day SECNAV Leadership training (>1300) SECNAV Monthly Metrics Reporting SECNAV Monthly Strategic Management Reviews Tracking Progress to 3 Year LSS CPI POA&M LSS CPI contains all the necessary tools Lean, Six Sigma, Theory of Constraints Leveraging enabling IT Baselining DMAICV for existing processes Leveraging High Impact Core Value Streams Self-Sustainment to drive institutionalization & results Continuous Process Improvement for Continuous Process Improvement � Maximize ROIC

42. BACKGROUND

43. BOTTOM LINE The DoN Wants: �Best-of-the-Best� LSS CPI Knowledge/Capabilities Fully Integrated LSS CPI Organizational System Self-Sustainment & Cultural Transformation Innovation for LSS CPI Transformation Acceleration DoN Enterprise LSS/CPI Commonality Maximized LSS CPI Value Proposition Quality, Speed, Cost & Safety Results

44. DoN Lean Six Sigma (LSS) Continuous Process Improvement (CPI)

45. This is the cover of the recently released Naval Aviation Vision 2020 � our roadmap to the future of Naval Aviation. This publication and this brief discuss the linkages in Naval Aviation to provide massed effects that are greater in aggregate than the contributions of single platforms. It is important for you � as leaders � to understand these linkages so you can explain to your commands how the number of helos we procure and how they are employed in ESGs, CSGs and with LCS affects a Hornet squadron and its mission and what equipment needs to be on each of those platforms to enable communications in a net-centric environment. HE2K and MMA will have to interact electronically to enhance the common operational picture of the battle space for CVN-21 and the embarked CSG. The future requires us to have coherent connectivity using common communication systems. The vision of the Naval Aviation Enterprise (NAE) is to deliver the right force with the right readiness at the right cost at the right time. Presently, our Navy and Marine Corps are undergoing a significant transformation in readiness postures, deployment strategies, and manpower initiatives. This transformation demands sweeping changes to the way we conduct the business of warfighting. We are also fully engaged in the Global War on Terror (GWOT), where we are demonstrating the unequivocal flexibility of large-deck aircraft carriers and amphibious vessels operating in concert as Carrier and Expeditionary Strike Groups, under real-world combat conditions. Naval Aviation brings many unique advantages and capabilities to the fight, and is a major contributor to the nation�s flexible response posture, so vital toward mitigating the uncertainties of asymmetric warfare.This is the cover of the recently released Naval Aviation Vision 2020 � our roadmap to the future of Naval Aviation. This publication and this brief discuss the linkages in Naval Aviation to provide massed effects that are greater in aggregate than the contributions of single platforms. It is important for you � as leaders � to understand these linkages so you can explain to your commands how the number of helos we procure and how they are employed in ESGs, CSGs and with LCS affects a Hornet squadron and its mission and what equipment needs to be on each of those platforms to enable communications in a net-centric environment. HE2K and MMA will have to interact electronically to enhance the common operational picture of the battle space for CVN-21 and the embarked CSG. The future requires us to have coherent connectivity using common communication systems. The vision of the Naval Aviation Enterprise (NAE) is to deliver the right force with the right readiness at the right cost at the right time. Presently, our Navy and Marine Corps are undergoing a significant transformation in readiness postures, deployment strategies, and manpower initiatives. This transformation demands sweeping changes to the way we conduct the business of warfighting. We are also fully engaged in the Global War on Terror (GWOT), where we are demonstrating the unequivocal flexibility of large-deck aircraft carriers and amphibious vessels operating in concert as Carrier and Expeditionary Strike Groups, under real-world combat conditions. Naval Aviation brings many unique advantages and capabilities to the fight, and is a major contributor to the nation�s flexible response posture, so vital toward mitigating the uncertainties of asymmetric warfare.

46. Contact InformationDale L. Mooredale.moore@navy.mil301-342-8000