Management Assurance System

1. Management Assurance System Kansas City Plant Jane Fitzpatrick, Director Quality, SSP & BE Barbara Rich, Technical Manager SSP & BE May 15, 2007

2. Honeywell FM&T’s History with CAS • Implemented 1st generation of CAS in August 2004 • Based on 17 attributes, each with multiple characteristics • Implemented according to DOE 226.1 requirements • Was not how we managed the business • Focused on the “Hows” rather than the “Whats” • Centered around process descriptions within our Command Media • Did not deliver step function improvement because we had good performance and good management systems in place • ISO 9001, ISO 14001, etc. • Took 23 months to implement The MAS focuses and highlights customer outcomes, an improvement over the CAS which focused on underlying processes.

3. New Oversight Model • Operating Requirements • Contract • PEP • Management Assurance System • FM&T will provide the NNSA visibility to the MAS and its components under the scope of work within the contract. The NNSA will assess adequacy of and adherence to the MAS as part of fee determination. • FM&T internal audits, self assessments, and third-party audits will validate adherence with the MAS per the operating standards. • Functional leadership will flow from FM&T’s parent organization, Honeywell. • FM&T will follow Honeywell’s leadership, core processes, policies, and recommended best practices for implementation MAS is only one element of the new oversight model

4. Critical to Quality Needs • Within the low risk nature of site operations, the KCSO and FM&T jointly developed an approach for deploying federal oversight and contractor assurance that focuses on essential outcomes. These major focus areas are: • Meeting Product Schedule • Meeting Product Specification • Cost Management • Asset Management • Meeting Contractor Standards including ES&H and National Security Oversight can be reduced without introducing additional risk to operations

6. Management Assurance System (MAS) • The purpose of MAS is to provide a means for NNSA and Honeywell FM&T leadership to monitor the health of the business • It is the methodology for identifying, implementing, measuring, and sustaining the critical to quality needs necessary for desired performance • Based upon ISO 9001 Standard

7. MAS Elements What are the needs? What are the plans for addressing these needs? What is the performance we are delivering? Are our systems functioning effectively? Technology Plan Ten Year Comprehensive Site Plan Budgets Training Plans - eLMS Staffing Management Resource Review Honeywell Performance and Development Event Reporting Issues Management Benchmarking Third Party Assessments Internal Audits and Self Assessments Lessons Learned What is the best way to build the product or provide the service? What support systems and structures are needed? What is the best way to monitor and manage progress? Design Requirements Supplier Capabilities Project/Program Performance IPDS Command Media

8. Management Responsibility • Executed through three-tier Management Operating Systems (MOS): • Honeywell • Enterprise • Functional • MOS • Systemic periodic evaluation activities taken by leadership to determine • the adequacy and effectiveness of systems • performance-related information for the applicable function or systems. • It is how we execute Management Responsibility

9. Core Functional Areas • The core functional areas that support major focus areas are: • Operations • Integrated Supply Chain • Engineering Management • Applied Technologies • Facilities Management Services • Security • National Security Programs • Program Management • Business Development • Quality, Six Sigma & Business Excellence • New Mexico Operations • Financial Management • Environmental Safety & Health Operations • Support functions include: • Human Resources • Information Technology

10. MAS, MOS, BOR • Management Assurance System (MAS) • The methodology for identifying, implementing, measuring, and sustaining the critical to quality needs necessary for desired performance • Includes four elements • Management Operating System (MOS) • It is how we execute Management Responsibility • Systemic periodic evaluation activities taken by leadership to determine • the adequacy and effectiveness of systems • performance-related information for the applicable function or systems. • Business Operations Review/Monthly Operations Reviews (BOR) • It is one activity within the MOS • Is one of the activities taken by leadership to determine • the adequacy and effectiveness of systems • performance-related information for the applicable function or systems.

11. Management Responsibility • Functional Management Operating Systems (MOS) - Directors • Key Business Issues • Performance Measures • Continuous Improvement • Financial Reviews • Enterprise MOS (President) • Enterprise Balanced Scorecard • STRAP • Business Operations Review • Honeywell D&S MOS (Wheeler) What needs to be managed? Who is accountable? Systemic periodic evaluation activities taken by leadership to determine 1) the adequacy and effectiveness of systems and 2) performance-related information for the applicable function or systems.

12. Common MOS Attributes

13. Management Operating Systems • Unresolved systemic issues are escalated through this process. • Actions and accountabilities for system improvement are assigned and monitored at each level. • Based upon these reviews leadership makes enterprise decisions regarding resource needs and actions required for continuous improvement. • The integrated linkages of the MOS structure represent a robust, flexible and adaptable Management Responsibility element in the FM&T MAS.

14. MOS Linkages Enterprise MOS Operations MOS Quality MOS

15. Customer Expectations of MAS • Accountability and Visibility • Accountability driven through • PEP/Contract Deliverables • HPD • MOS/Enterprise Balanced Scorecard • Visibility • Portal • Program Reviews • Reports/Presentations, etc.

16. Full Circle Accountability

17. Strategic Plan into MAS Elements

18. BSC Development and Goal Deployment

19. HPD System

20. Accountability Deployment Example

21. Benchmarking • Includes • Honeywell functional recommended best practices • Traditional benchmarking activities • Corporate oversight appraisals • Participation in business excellence forums that provide opportunities for benchmarking, sharing of best practices and recognition of high performing businesses. (Excellence in MO Foundation) • May benchmark as appropriate • Removed Benchmarking WI • Benchmark activities may be documented in BOR/MOR documents on MAS web pages

22. Self Assessments • Includes • Internal Audit program • Management Operating System (MOS) activities • Scorecards • Application of six sigma methodologies • Internal peer reviews • Compliance & Performance focused (01.06.02.00.04) • The primary tool used to ensure that processes and instructions are current is the Quality Audit Organization performing independent audits in accordance with PD 01.06.09.00, Internal Quality Audit. Additional tools include self-assessments and Third Party reviews. Self assessments are an ongoing method of doing business, the results of which may be captured, communicated, and acted upon within the MAS framework such as MOR (Monthly Operations Reviews), BOR (Business Operations Reviews), Six Sigma Charters, Balanced Scorecards, etc. In lieu of options stated above, process leaders may elect to perform and document self assessments in accordance with the step action table.

23. Lessons Learned • Integrated in a wide variety of processes • Examples • Issues Management • CA and events reporting • Test Equipment engineering • Facilities • Information technology • Project management • ES&H Lessons Learned with Honeywell Corporate networks as well as NWC networks • Mistake proofing database • S3 database (Six Sigma Teams) • Honeywell functional leadership interface

24. Third Party Assessments • Includes • ISO 9001 • ISO 14001 • Excellence in MO Foundation Review • Missouri Quality Award • Based on Baldrige Criteria • Primary Standards Lab Audits • National Voluntary Laboratory Accreditation Program (NVLAP) • VPP • WI Number: 01.06.02.00.04

25. Event Reporting • Various established channels • ORPS • NCR system • SPIL hotline • Comments please • Ask Vince • ES&H concern line • ES&H email notification • Security Incident Notification System

26. Issues Management

27. Issues Management • Per PD 01.05.03.00 Issues Management System • The MAS uses a risk-based Cause Analysis / Mistake Proofing (CA / MP) process that assists FM&T identify and provide timely analysis of non-conformities, preventing their recurrence. • Analysis and solution tasks are performed by natural teams, whose corrective and preventive actions are documented in the electronic Corrective Action Tracking System (eCATS). • Performance trends are analyzed and summarized for management review and are used as a continuous improvement tool. • Corrective Action System Improvements • Phase gate process for systemic CARS • Corrective Action effectiveness measure • Effective if cause chain remains broken and event does not repeat within 12 months

28. Visibility - Portal • One stop shopping for MAS outputs • Each core function will have a page

29. Example - Quality • Hon Integration • Project Reviews with D&S CQ and SSP • FM&T Integration • D400 MOR • Functional Scorecard • Chartering Database/S3 • eIAMS • eCats • Surveys and Assessments • D400 STRAP • SPOC Minutes • NNSA Integration • NNSA Quality Meeting

30. Enterprise MAS Enterprise Balanced Scorecard

31. Enterprise MAS Operations MAS National Security Programs MAS

32. Quality MAS Project Reviews Project Impacts

33. Quality MAS Surveys & Assessments

34. Experience/Lessons Learned • System design was collaborative • Able to accommodate aggressive schedule • Common points of reference • Integrated updates with joint steering committee • Process identified gaps and led to process improvements • Improved Corrective Action Process • Functional Management Operating Systems were documented • We executed them but had not written it down • Identified opportunities for improvement • Previous CAS implementation lessons were considered • What worked well and what didn’t • Process-based vs. functionally-based • 5 focal points (MAS) vs 17 focal points for system design (CAS) • Command Media referencing 1st generation CAS

35. Controls • Controls for effective Contractor Assurance • Leadership ownership of MAS key functional performance • Ownership of Management Operating Systems for their functional responsibility • Management Operating System (MOS) activities • Internal Audit program • Balanced scorecards • Application of six sigma methodologies • Peer reviews • Third Party Assessments • Functional oversight from parent organization • Corporate oversight appraisals • Controls for NNSA Visibility • Key functional CAS coordinators • Accountability of managing visibility of MAS outputs • Limited system edit access • Information sharing via folders • Configuration control • System use monitoring • Control plan • Documented control plan for Management Assurance System • Who, what, where, when “x” happens

36. Challenges • Schedule pressure for contractor design of CAS • Five months to develop and implement new MAS • Culture shift • Considering cost effectiveness • Focusing on the critical few instead of all • Addressing the “What” not the “How” • Courage to change • Lead rather than follow customer direction on development of system

37. Successes • Simple approach that makes sense • Approach based on how we manage the business • Leveraged what was already working well • Established systems used where appropriate • Removed practices/processes from 1st CAS generation that did not work well • Leveraged parent organization best practices and processes • Partnered with KSCO to focus on the “whats” rather than the “hows” • Critical to quality needs of the customer • MAS meets the intent of 226.1 • Gap analysis worked in parallel to effort • Information accessible from single location for NNSA and Honeywell employees • Developed and implemented new system in 5 months versus 23 months