Lean Implementation Discussion FM BOD August 2004

1. Lean Implementation DiscussionFM BOD August 2004 RADM W. KlemmNAVSEA 04

2. NAVSEA SUPERVISOR Functional DEPUTY SUPERVISOR Directors REPAIR OFFICER CHIEF ENGINEER CONTRACT OFFICER Technical Authority DEPUTY DEPUTY DEPUTY SIMA CO Repair Officer FISC EXECUTION PLANNING DESIGN PLM Deputy Repair Officer Repair D Level Production Officer I-Level MAIN R-1 CONSOLIDATED DIVE UNIT CO R-2 EXECUTIVE OFFICER R-3 ILS Training REPAIR PMA ADMIN R-4 SUPPLY CO R-5 MEDICAL SSMD TRAINING SCHEDULING Boat Repair N43 CINCPACFLT PLM PLM CO TECH DIRECTOR CHENG XO CODE 01 INTEGRATED COMPT ADMIN FLT LIAISON ENG SYSTEMS COMBAT SYST LOGISTICS SUP DEPT C10 DEPT C20 DEPT C90 DEPT C300 DEPT C200 DEPT C400 Resource Wheel DET PH DET EVE DET YOKO DET SAS DET SING OIC C00PH OIC C00EV OIC C00YO OIC C00SA OIC C00SN Regional Maintenance Centers What we are doing SUPSHIP INTERMEDIATE MAINTENANCE OTHER MAINT ACTIVITIES NAVAL SHIPYARD FLEET Approved for public release; Use Lean to establish value added processes. distribution is unlimited. 7

3. NAVSEA Transformation/Alignment Vision • Action: • Begin to apply Lean Principles and changes to all appropriate work processes – both Overhead (Indirect work) and Direct work. Scope includes: • Shipyards - Warfare Centers • SUPSHIPs - HQ and PEOs • All Others • Goals: • Improve productivity and return on investment • Employee participation is key; Leaders need to be able to tell their workforce that, to the best of our ability, no one will lose their job because of their participation in Lean efforts • We will manage attrition, hiring and workload to make this “true” • Participation in Lean efforts should not create immediate job risk; goal is to apply “redirected” labor toward making even more improvements • Cross-pollinate efforts across the Command/Field Activities where possible (especially in the training effort, where shipyards have a maturing capability) Adoption of Lean principles – across NAVSEA

4. Balanced Approach Six Sigma Quality Measure twice, cut once. Plan for the known, manage the unknown. Reduce rework costs. DELIVER VALUE Remove the waste. Lean Theory of Constraint Schedule Cost Do More, with less. Leverage improvements at the constraint.

5. Standard Process(Integrates Lean, Six Sigma and Benefit Realization)

6. Naval Shipyard Approach • Workforce training on Lean principles and applications • Development of Lean practitioners • Value Stream Analysis • Lean Events on Product lines, workshops, organizations, projects, etc • Learning from and work with others (NAVSEA, Fleet, DoN, DoD, NSRP, Private Sector, Academia, Consultants)

7. Achieving Critical Mass of Knowledge • Training/Education • 2000+ shipyard personnel educated in “Lean 101” • 1400+ shipyard personnel have participated in a Lean event • 70 Process Improvement Experts (PIEs) trained via the NSYs Lean Sigma College • Industrial Engineers and IE Technicians also work Lean and process improvement • Established Lean Transformation Offices within each NSY The Plan is to reinvest “Savings” into expanding the base of Lean practitioners

8. Naval Shipyards’ Lean Sigma College • Develops “Process Improvement Experts” (PIEs) • The Naval Shipyards’ Lean Sigma College • Six week classroom duration, with additional time spent on initial project. • Developed w/USNR (Raytheon, GE, Minolta, Ford) • Integrates Lean, Six Sigma, Theory of Constraints • Tailored to ship repair environment • Experienced graduates can be certified as ASQ Black Belts • PIEs work on • Process Improvement Projects • Lean Workshops • Mentor process & functional area owners • Shipyard Transformation Program initiatives

9. Naval Shipyard Transformation Plan LEAN FITS EVERYWHERE Transformation Plan Sub Best Practices Sail, Tanks, MSW/ASW, Grooming IPPTP, VLS, Steering&Diving, Torp Tubes, Hull UROs, Engr & Project Mgmt Carrier Team One ALRE Material, Process Masters, Execution Charging & Progressing, Co-yard, MCAP, etc. NSY Productivity Projects Quality initiatives, High Performance team building, personal accountability, Lean processes, CIMP, etc. Corp Programs CWP/ERM, MANTECH, CTMA, SHIPMAIN, NSRP, etc. Fleet Programs I&D Integration, Waterfront Realignment, SHIPMAIN, etc. Lean Lean A Comprehensive Business Strategy for Successful Transformation

10. Naval Shipyard Lean Projects (Examples) 157 Lean projects or events completed or in progress Elimination of Waste and Non-Value Added Activity Throughout the Value Streams

11. Conclusions / Road Ahead • Review processes and positions; not people and jobs. • Lean works in ship repair with proven results • Aggressive, comprehensive implementation is required to effect the bottom line • Lean facilitates culture change, more acceptance as a common sense approach • Collaboration between shipyards is essential and has improved • Lean is the foundation of One Shipyard. • We have made considerable progress • We are committed to sustaining the Lean journey • Current focus is taking Lean shipboard

12. NAVSEA SUPERVISOR Functional DEPUTY SUPERVISOR Directors REPAIR OFFICER CHIEF ENGINEER CONTRACT OFFICER Technical Authority DEPUTY DEPUTY DEPUTY SIMA CO Repair Officer FISC EXECUTION PLANNING DESIGN PLM Deputy Repair Officer Repair D Level Production Officer I-Level MAIN R-1 CONSOLIDATED DIVE UNIT CO R-2 EXECUTIVE OFFICER R-3 ILS Training REPAIR PMA ADMIN R-4 SUPPLY CO R-5 MEDICAL SSMD TRAINING SCHEDULING Boat Repair N43 CINCPACFLT PLM PLM CO TECH DIRECTOR CHENG XO CODE 01 INTEGRATED COMPT ADMIN FLT LIAISON ENG SYSTEMS COMBAT SYST LOGISTICS SUP DEPT C10 DEPT C20 DEPT C90 DEPT C300 DEPT C200 DEPT C400 Resource Wheel DET PH DET EVE DET YOKO DET SAS DET SING OIC C00PH OIC C00EV OIC C00YO OIC C00SA OIC C00SN Regional Maintenance What we are doing SUPSHIP INTERMEDIATE MAINTENANCE OTHER MAINT ACTIVITIES NAVAL SHIPYARD FLEET Must work together to export and exploit the opportunities of Lean 7