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Elizabeth A. McGrath Assistant Deputy Chief Management Officer December 17, 2008

2. The simple reality of our strategic context is that operational needs are outstripping our current resourcing process. An incredibly fossilized systems approach built during the cold war at the height of the industrial age has now become an anchor dragging down the rapid/adaptive requirements

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Elizabeth A. McGrath Assistant Deputy Chief Management Officer December 17, 2008

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    1. 1

    2. 2

    3. 3 Where is the money going?

    4. 4

    5. 5 Key Elements of Change

    6. 6 Office of the Deputy Chief Management Officer FY08 National Defense Authorization Act Established DCMO as Under Secretary-Level position in OSD and designated the Under Secretaries of the MilDeps as CMOs Called for the creation of a DoD Strategic Management Plan FY09 National Defense Authorization Act Established Offices of Business Transformation within each Military Department The DCMO is the principal advisor for matters relating to management and the improvement of DoD business operations Synchronize, integrate, and coordinate Performance Management – Process Optimization Strategic Alignment Strategic Management Plan Business Transformation Agency oversight DSD memo: 30 april 07 - Assign a CPI/LSS focal point to coordinate with the DoD CPI/LSS Program Office. - Establish a 12 to 18 month workforce training objective of 1% LSS black belt trained and 5% green belt trained personnel. Personnel selected should include top-rated staff members. - Include CPI/LSS in individual employee performance objectives. Provide support to the DoD CPI/LSS Program Office in DoD-wide process improvement initiatives. Report progress and outcomes of ongoing and completed CPI/LSS projects and activities to the DoD CPI/LSS Program Office every 30 days initially.DSD memo: 30 april 07 - Assign a CPI/LSS focal point to coordinate with the DoD CPI/LSS Program Office. - Establish a 12 to 18 month workforce training objective of 1% LSS black belt trained and 5% green belt trained personnel. Personnel selected should include top-rated staff members. - Include CPI/LSS in individual employee performance objectives. Provide support to the DoD CPI/LSS Program Office in DoD-wide process improvement initiatives. Report progress and outcomes of ongoing and completed CPI/LSS projects and activities to the DoD CPI/LSS Program Office every 30 days initially.

    7. 7 DoD CMO/DCMO Management Structure

    8. 8 Example: Transformed Clearance Process Vision Reduces non-productive time for employees Reduces/eliminates clearance signing bonuses Increases market supply of cleared personnel Enables selection of best qualified vs. cleared Reduces inter-contractor poaching Enhances ability to fully staff contracts Increases ability to accurately forecast/acquire personnel on classified contracts Eliminates crossover downtimeReduces non-productive time for employees Reduces/eliminates clearance signing bonuses Increases market supply of cleared personnel Enables selection of best qualified vs. cleared Reduces inter-contractor poaching Enhances ability to fully staff contracts Increases ability to accurately forecast/acquire personnel on classified contracts Eliminates crossover downtime

    9. 9 Looking Ahead Greater focus on: Strategic Alignment of business operations Enterprise perspective (end-to-end) Performance Management: efficiencies and effectiveness Process and policy changes that enable rapid delivery of capability

    10. 10 Challenge of Culture Change

    11. 11 Questions?

    12. 12 Results Baseline: The first aircraft took over 799 days to complete and was $1.9M over cost. Improvements: Process time reduced to less than 250 days --a 64% decrease! Man-hours reduced from over 37,300 to under 27,700, representing a $1M reduction in unit cost. Work In Progress has been reduced from 21 to 13. Continuous improvement culture is ingrained in all artisans on the line—and they commit to making these improvements on a weekly basis. Positive behaviors are recognized and rewarded.Baseline: The first aircraft took over 799 days to complete and was $1.9M over cost. Improvements: Process time reduced to less than 250 days --a 64% decrease! Man-hours reduced from over 37,300 to under 27,700, representing a $1M reduction in unit cost. Work In Progress has been reduced from 21 to 13. Continuous improvement culture is ingrained in all artisans on the line—and they commit to making these improvements on a weekly basis. Positive behaviors are recognized and rewarded.

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