Lean Six Sigma Clockspeed

1. Lean Six Sigma Clockspeed Ben Goss

2. 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

3. BAE Systems BAE SYSTEMS Mike Turner Chief Executive Officer Headquartered in Rockville, Md. Three Operating Groups $10 Billion Annual Sales 45,000 Employees Mark Ronald Chief Operating Officer Customer Solutions Marshall Banker President Electronics & Integrated Solutions Walt Havenstein President Land & Armaments Tom Rabaut President • 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

4. 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)

5. 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 Results 1. Change is effective (produces desired result) 2. Change will be approved 3. Implementation is compatible with rest of ecosystem (other IT, organizations, policies)

6. 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 effective 2. Change will be approved 3. Implementation is compatible with rest of ecosystem Not a typical focus of Lean Six Sigma

7. LGO Inspiration #2: Process Improvement Clockspeed Ad Hoc Process Improvement Slow Process Improvement Clockspeed Fast Process Improvement Clockspeed ROI

8. LGO Gap: Change Management Philosophy

9. Lean Six Sigma Project Notebook

10. 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)

11. Project Notebook: 2. Retrace the Facts C C C

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

13. Project Notebook: 4. Process Flow

14. Project Notebook: 5. Detailed Pilot Instructions

15. Project Notebook: 6. Pilot Results

16. 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