Ten Years of Total Quality, Eight Years of Kaizen and What Do You Get? – A Lean Production System

1. Ten Years of Total Quality, Eight Years of Kaizen andWhat Do You Get? – A Lean Production System Don A. Blake Anthony J. Veith

2. Introduction • How many of you have… or are implementing Lean Manufacturing/Production? • How many of you have… or are implementing MRP/ERP? • How many of you have… or aredoing both? • At the same time?

3. Introduction • Whether it is MRP/ERP, Lean Manufacturing or Sales & Operations Planning… …the transition or transformation will be: • Championed by a few • Challenged by many • Uncomfortable for most • Emotional for everyone

4. Introduction • This presentation will share the approach, methods, and tools used in bringing about the Wichita Division transformation. • The following three issues will be the focus of the presentation and discussion. • Lean Production implementation approach that accounts for resistance to change, funding constraints, and pressure from top leadership for near-term results. • Evaluating the ‘maturity and capability’ of their business in the elements of Lean Production identifying the gaps to be targeted for improvement • Establish a best practices/benchmarking system with internal and external ‘collaborative learning’ partners.

5. Introduction Many have come Wichita Division to observe, understand, and train in Boeing Wichita’s approach, methods, and tools for transforming to a lean production system. Kawasaki Heavy Industries Mitsubishi Heavy Industries Wichita State University Why? USAF University of Washington Kodak University of Tennessee GM Saturn Raytheon Massachusetts Institute of Technology University of Michigan

6. Wichita Division Boeing Production System Implementation 1985 – 2002 • Quality Vision • Quality Circles • Dimensional Management • Determinant Assembly • Hardware Variability Control • SPC/Six Sigma Quality • Integrated Product Teams • Work Management 1985 1990 • Process Kaizen • Accelerated Improvement Workshops • Parts Plants Material Requirements Management 1995 • System Kaizen • Production System Design • Total Employee Involvement • Baldrige Criteria Assessment 1996 1999 2001 2003 Kansas Award for Excellence (The Business Results View) Higher Lead-time Key Point: Implementing only the tools and techniques will yield unintended consequences. A coordinated approach for both planning and execution is a must. Lower Cost Higher Lower

7. Strategies and Tactics • Momentum gathered after company leaders participate in Japan Study missions. • Bringing back a validated belief that focusing on quality and total employee involvement were the keys to competitiveness.

8. Strategies and Tactics • At the Wichita Division, it was not just viewed as embedding Total Quality • The leadership knew it meant redefining and designing the production system structurally and culturally. Processes Products People

9. Strategies and Tactics • An overall master strategy was created in 1985 that would progressively establish the foundation for an agile, responsive, and quality driven system.

10. Wichita Division Boeing Production System Implementation 1985 – 2002 • Leadership Culture • Process Management • Value Chain Management • System Kaizen • Lean Production System Academies • Supply Chain Partnerships • Continuous Quality Improvementas the Management System • Boeing Production System • JIT/Lean Manufacturing • Process Kaizen • Accelerated Improvement Workshops • World Class Competitiveness • New Boeing Production System • Total Quality Control • Leadership • Structure • Reliable Methods & Processes • Cost of Quality • System Kaizen • Lean Maturity Assessments • Quality Vision • Quality Circles • Deming • Work Management • Determinant Assembly • Hardware Variability Control (The JIT/Lean Initiatives View) Key Point: Progressive and aggressive organizational learning in the 80’s and 90’s provided the competencies, leaders, and environment to manage change. 1985 1995 2000 2003

11. Strategies and Tactics • The first elements to establish were the philosophies and tools for employee involvement and team problem solving.

12. Strategies and Tactics • Boeing Wichita Division • 1986 – Phase one of production system redesign • Team Problem Solving • Total Quality Control • Statistical Process Control • 1990 – Phase two • Work Management • Hardware Variability Control • 1995 – Phase three • Parallel implementations • MRP/ERP planning • Lean Production execution Key Point: A long term strategy with top leadership commitment must be in place. The vision and plans must be robust enough to survive the pitfalls of ‘management mobility’.

13. Strategies and TacticsPlanning Systems Improvement (Hybrid MRP/ERP) • In 1995, our overall production system improvement strategy included reengineering the configuration management, production planning and scheduling systems while simultaneous introducing and utilizing JIT/Lean Manufacturing techniques and tools. A A Fab Subassembly Major Assembly Prep/Ship A A A A B

14. Strategies and Tactics • The strategy and tactics for implementing improvements in planning and execution began in the summer of 1995 with a progressive replacement program for Boeing information systems that had been built in the 1960’s and 1970’s. • This included material management systems for procurement through shop floor control systems for dispatching and controlling work. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship

15. Strategies and TacticsPlanning Systems Improvement (Hybrid MRP/ERP) • Focusing on the parts fabrication business units came next. • The decision to reengineer the planning systems in the parts fabrication business units turned out to be a key success factor for the parallel implementation. How so? DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

16. Strategies and TacticsPlanning Systems Improvement (Hybrid MRP/ERP) • DCAC/MRM was launched to accomplish four key elements; • a single source of product data, • simplified ‘effectivity’, • tailored business streams, • and tailored materials management. DCAC/MRM Fab

17. Strategies and TacticsPlanning Systems Improvement (Hybrid MRP/ERP) • This implementation has been described as one of the largest computing projects ever undertaken. • The scope and magnitude of this effort in many ways lead to a higher interest and business emphasis to implement JIT/Lean Production. DCAC/MRM Fab

18. Strategies and TacticsPlanning Systems Improvement (Hybrid MRP/ERP) • The intent of the project was to replace the multiple occurrences of product definition data with a single source, thereby reducing the errors and non-value added effort associated with the multiple occurrences. • This was to be the first phase of the project, based on the fact that production data flows from the engineering bill of material (BOM) through the various planning and scheduling application into the shop floor execution system(s). DCAC/MRM Fab

19. ImplementationPlanning Systems Improvement (Hybrid MRP/ERP) • It was soon discovered that this initial approach was much more complex than anticipated. • If we started in the detail part fabrication areas of the company and replaced the old legacy systems with a commercial-off-the-shelf MRP/ERP planning, scheduling and shop floor execution application……Implementations could begin sooner. DCAC/MRM Fab COTS

20. ImplementationPlanning Systems Improvement (Hybrid MRP/ERP) • This effort was a significant impetus to the JIT/Lean Production activities. We found that our complex manufacturing processes, became even more complex when coupled with a transaction intensive MRP/ERP application. Reduce the complexity and employ simple systems DCAC/MRM Fab JIT/Lean COTS

21. ImplementationPlanning Systems Improvement (Hybrid MRP/ERP) • Due to these experiences the progressive implementations (first planned to implement by airplane model) were switched to implement by manufacturing business unit, beginning with the detail fabrication areas. DCAC/MRM Fab Fab Fab COTS

22. ImplementationPlanning Systems Improvement (Hybrid MRP/ERP) • Continued delays in necessary software functionality caused several re-plans of the schedule and extended the completion through the end of 2003. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship

23. Strategies and TacticsExecution Systems Improvement (JIT/Lean Production) • Cultural change is about people...their beliefs, values, and habits. Effective use of Just In Time (JIT) Manufacturing methods and techniques require a strategy and collection of tactics, which focus on people and how they learn and grow into new habits. • In 1995 and through 1998 three high level strategies and specific tactics were employed to first build a foundation for JIT/Lean capabilities. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

24. Penetration1 Strategies and TacticsExecution Systems Improvement (JIT/Lean Production) • The initial strategy was labeled Penetration with the intent to introduce the management team and employees to the full suite of concepts and principles demonstrated by companies such as Toyota, Hewlitt Packard, and Motorola. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

25. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1 Strategies and TacticsExecution Systems Improvement (JIT/Lean Production) • The Penetration tactics were: • Conduct focused efforts in education and demonstrate immediate usage/benefits of Boeing Production System concepts, techniques, and tools in shop areas.

26. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1 Strategies and TacticsExecution Systems Improvement (JIT/Lean Production) • The Penetration tactics were: • Develop Boeing Production System resident experts (in responsibility centers and manufacturing business units) to manage and continue penetration through process stabilization and growth in capability and capacity.

27. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1 Strategies and TacticsExecution Systems Improvement (JIT/Lean Production) • The Penetration tactics were: • Develop Boeing Production System resident experts (in responsibility centers and manufacturing business units) to manage and continue penetration through process stabilization and growth in capability and capacity.

28. Stabilization2 ImplementationExecution Systems Improvement (JIT/Lean Production) • Stabilization was the second strategy that would overlap Penetration activities. Stabilizing the production and support processes had to be done to some degree. JIT/Lean techniques require tremendous discipline and predictability. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1

29. ImplementationExecution Systems Improvement (JIT/Lean Production) • Stabilization tactics were: • Embed concepts and techniques as daily practice • Stabilize processes through standardization • Hold Gains achieved • Prepare workforce and business systems to support implementation of planned and future improvements. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1 Stabilization2

30. Growth3 ImplementationExecution Systems Improvement (JIT/Lean Production) • The Growth strategy was identified to be the opportunity to leverage the additional capabilities and capacities that the JIT/Lean business model would provide. It initially only had one general tactic: • “Use processes and systems to generate and implement continuous improvements.” DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1 Stabilization2

31. ImplementationExecution Systems Improvement (JIT/Lean Production) • Key enablers were identified to accomplish the implementation. • Lean Manufacturing improvement methods for identifying and eliminating waste • Committed, educated and experienced leadership • Measures that foster and reward desired behaviors • Effective project management DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean Penetration1 Stabilization2 Growth3

32. ImplementationSuccess Factors and Project Elements • The success of the parallel implementations was leveraged on how well the execution of the factory could be simplified so that the dilemmas and problems of a Push and Pull system could be avoided. • Both the DCAC/MRM and JIT/Lean implementation programs were initially managed under the same leadership and oversight committees. • Both programs used the same education base (APICS) to prepare the work force. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

33. A&I Model A&I Model ImplementationSuccess Factors and Project Elements Assembly & Installation Model Project • In the 1999 time frame both implementations of DCAC/MRM and JIT/Lean were planned to cross paths. • In anticipation of the crossover, a joint project between the two programs was designed to maximize the benefits and minimize the conflicts. The project was labeled Assembly & Installation Model or A&I Model for short. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

34. A&I Model A&I Model ImplementationSuccess Factors and Project Elements Assembly & Installation Model Project • The Assembly & Installation process was the crossover or intersection point for planning and execution activities. • In retrospect, this project turned out to be one of the best learning activities throughout the eight year implementation. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

35. A&I Model A&I Model ImplementationSuccess Factors and Project Elements Assembly & Installation Model Project • Understanding the limitations of the ERP elements and the power of consumption based replenishment was key in keeping material procurement policies simple and easy to maintain. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

36. A&I Model A&I Model ImplementationSuccess Factors and Project Elements Assembly & Installation Model Project • The A&I Model project proved that you could have a hybrid system that could use MRP scheduling for exotic long lead materials, while also procuring and delivering either on synchronous schedules or by direct pull signals from the consuming shops. DCAC/MRM Fab Subassembly Major Assembly Prep/Ship JIT/Lean

37. A&I Model DCAC/MRM A&I Model DCAC/MRM DCAC/MRM DCAC/MRM DCAC/MRM DCAC/MRM Lean Manufacturing Lean Manufacturing 1995 1996 1997 1998 1999 2000 2001 2002 Lean Manufacturing Lean Manufacturing Lean Manufacturing ImplementationSuccess Factors and Project Elements Planning Key Point: Parallel implementation of ERP and JIT/Lean is possible when you understand where the decoupling points will likely occur. TailoredMaterialsManagement Information Flow DCAC/MRM & Lean Manufacturing StandardWork Material Flow Work PlaceOrganization Execution

38. Assessment/Measurement • In order to figure out how to get to where you want to go, you need to know where you are. • Assessing the current capability and potential of the current business system and production system is key in developing an improvement strategy. • Gathering data and assessing the current condition to some scale was necessary.

39. MITLAILESAT KansasAwardExcellence A&MLMSAT A&IProgressMatrix Levelsof Excellence LeanProgressionMatrix General Business Practices Operational Practices Assessment/Measurement • We found that the same criteria were not always appropriate. • It depended on what level of performance was being measured and/or what capabilities of the business were being assessed.

40. MITLAILESAT KansasAwardExcellence A&MLMSAT A&IProgressMatrix Levelsof Excellence LeanProgressionMatrix General Business Practices Operational Practices Assessment/Measurement • Several tools were either acquired or created to measure maturity and capability at the following levels. • Determining what assessment tool depended on the scope of change and the focus of your limited resources.

41. Approaches and ResultsIncremental Improvement and Breakthrough Improvement • The Wichita Division learned from benchmarking and from former Toyota managers that continuous improvement at Toyota was both incremental and breakthrough. • However, the base for both is Total Employee Involvement with lots of training and opportunity for using scientific method problem solving.

42. Approaches and ResultsIncremental Improvement and Breakthrough Improvement • The vehicle used by Wichita for accelerated improvement under the scientific method since 1996 was a form of rapid improvement workshop called a ‘kaizen blitz’ by many, ‘action workout’ by others. • At Boeing the ‘kaizen blitz’ was later named Accelerated Improvement Workshop (AIW). Kaizen Blitz Action Workout Production Preparation Workshop 5 Days & A Night Accelerated Improvement Workshop Autonomous Maintenance Workshop

43. Approaches and ResultsIncremental Improvement and Breakthrough Improvement • Both incremental and breakthrough improvement depend on traceable, repeatable scientific methods. • Typical project or team based approaches take extended periods of time. • In past years, methods have been used that accelerate incremental and breakthrough improvements while still maintaining the scientific approach. Kaizen Blitz Action Workout Production Preparation Workshop 5 Days & A Night Accelerated Improvement Workshop Autonomous Maintenance Workshop

44. Approaches and ResultsIncremental Improvement and Breakthrough Improvement • The Accelerated Improvement Workshop (AIW) is a great method for accelerating discovery and change. • Events are driven by either the strategic roadmaps or used tactically in daily management. • Preparation time depends on process complexity and frequency of repeatable elements. . Accelerated Improvement Workshop • Conduct the event • Observe • Brain-Storm • Try-Storm • Simulate/Test/Establish • Document/Standardize • Celebrate • Define the goals • Define the scope • Follow-Up • Measure • Monitor • Complete open items • Horizontally deploy • Prepare the leaders • Prepare the process experts • Study the current condition

45. Approaches and ResultsIncremental Improvement and Breakthrough Improvement • Another type of workshop taught to us by former Toyota managers is the Production Preparation Process (3P) workshop. • The 3P workshop is designed to leverage incremental improvements and create breakthroughs in design and production process methods that complement design simplicity achieved during the workshop.

46. Approaches and ResultsIncremental Improvement and Breakthrough Improvement • The evolution of these methods and others are traced through the following production system development milestones. • Engaging The Workforce • The 767 Struts Implementation (1995) • The 737 Fuselage Assembly (2001) • Configuring The Value Chain • The Assembly and Installation Model • The 737 Product Definition Cell (2000) • Extending Into The Supply Chain • The Boeing Wichita /ALCOA Davenport Partnership • Organizational Learning • The Kaizen Workshop • The Lean Production Systems Academy • Leaders As Teachers • Rotational Assignments

47. Lessons Learned • Many lessons have been learned and re-learned. The categories below are the key enablers many have observed as one of the best applications of Lean concepts in aerospace. • Leadership/Sponsorship/Support • Champions/Change Agents • Promotion Office • Education/Training • Benchmarking • Curriculum Development • Interactive Demonstration • Assessment/Measurement/Project Management • Enterprise Level • Business Unit Level • Shop/Team Level

48. Summary • Whether it is MRP/ERP, Lean Manufacturing, Sales & Operations Planning or TheNextNewButNotReallyNewParadigm-ShiftingOperationalEfficientWorldClass-Methodology …the transition or transformation will be: • Championed by a few • Challenged by many • Uncomfortable for most • Emotional for everyone

49. Closing Remarks • So… • Learn to leverage your Champions • Harvest the challenges • Mitigate the discomfort • Channel the emotion

50. Contacts Don A. Blake Anthony J. Veith Session Number D-09: Ten Years of Total Quality, Eight Years of Kaizen and What Do You Get? – A Lean Production System Please return your completed session survey to the room monitor or the collection boxes near the exit