Kaizen: Continuous Improvement of Our Processes

1. KAIZENContinuous Incremental Improvement of Our Processes Enterprise Excellence Group (EEG) 2 Jun 2017 Raymond N. Baker, (Lt. Col USAF Ret) ABDs of Continuous Improvement LLC (405) 550-0611 RaybakerLc@gmail.com I n t e g r i t y - S e r v i c e - E x c e l l e n c e

2. Introduction • Kaizen: Evolution & Definitions • Generic Approach • Tinker AFB Experience • Lessons Learned • More Tools and Applications • Summary

3. Lean Evolution • WWII Devastation of Japan • Automobile Industry Goes West • Automobile Industry Partial Move Back • Lean Aircraft Initiative • Mass Institute of Tech (MIT) • Aircraft Industry

4. Toyota Production System What is the purpose of the Toyota Production System? • Customer Satisfaction by providing • What the customer wants • When the customer wants it • In the exact quantity the customer requires All with the minimum amount of resources!

5. Toyota Production System The key to the Toyota Production System is a clear understanding that: Change must be the way of life Change must be based onfacts Change must occur for a purpose Change must be rapid It’s never “good enough”

6. Value Adding and Waste Elimination We Must Understand • Our customers are only willing to pay for value • Value adding means performing work that the customer is willing to pay for • Waste means adding cost but not adding value Being Wasteful Makes Us Less Competitive

7. Because in Reality It is not Instead it is [ Cost ] + [ Profit ] = [ Selling Price ] [ Selling Price ] - [ Cost ] = [ Profit ]

8. Definitions • Kaizen: Japanese Word for Continuous Incremental Improvement from Within • Lean: Improve the Value Stream of any Process • Value: An activity is value-added if it TRANSFORMS the DELIVERABLES of the project in such a way that theCustomers recognize the transformation and are Willing to Pay Money for it ($)

9. Value Expanded • Enhance all Value Added Efforts • Reduce or Eliminate Low Value Efforts • Wake up Sleeping Parts, Papers, Electrons, People • Level and Speed up the Flow

10. Kaizen Approach • 5S+1: Sort, Straighten, Shine, Standardize, Sustain, Safety • Determine Customer Demand & TAKT Time • Level Load each Step in Process • Start at End Point • Produce Equally Throughout Month • Cellular Layout: Allows Single Piece Flow vs. Batch • Reduce Steps and Improve Multi-Tasking • Define Flow to Make Flow Days, Plan, Schedule • Point of Use Materiel and Tooling • Kit Carts and Tool Racks • Improved Materiel Handling

11. Continuous Improvement Players • Start with Senior Management – Training and Buy-In • Continue Kaizen with Cross Section of Participants • Production Employees • Material Handling • Scheduling • Engineering & Planning • Quality & Safety • Plant Management • Union • Train the Workforce: Paradigm Shift at ~ 60% • Dedicate a Continuous Improvement Office • Customer • Supplier

12. Tinker Process Overview • Problem Statement & Charter • Measure & Analyze Current State • Improve with Lean/Kaizen • Control with Metrics & Buy-In • Go Deep with F100 Inlet Fan • Improve the Tools • Deploy the Processes Continuous Improvement is a Journey with Many Names Pursued by Many Companies

13. F100 Liner Seal… Full FPI 11B Lab 14B Prep for Weld 05F Steam Clean 54A Heat Treat 26D Power Wash 17T Stripping 28G Weld 05C Plasma Spray 26C Annex Attach WCD 54A WCD WCD Tool Crib TF33 QEC TF33 QEC Shop F100 Comp and HPT F101 Eng Shop F108 Eng Shop TF33 Lean Cell F100 Core Shop Blast 53A Functionally Organized Shop Floor

14. F100 Inlet Fan Repairs

15. Project Title: F100 Inlet Fan Flowdays Black Belt: Ray Baker Project ID #: Problem Statement: OC-ALC current flowday performance exceeds plan. Defects result in slower flowdays to customers than Planned = holes in field = reduced readiness Defect Definition: Defect is flowday performance greater than 38 days Data Source: ITS, Gen Atomic’s SKIL, Module WRE, MRB Database Benchmark P&W –220 performance on offload contract OC-ALC “Y” Production Financial Benefit = One flowday = $845,652 Cost Avoidance ..... $845,652/Flowday Productivity ............. Level Loaded Shops Travel Distance Red Consistent Forecast Cluster: Black Belt: John Di Silvestro Target Report-out Schedule: MA: IC: Project Approval & Summary Key Contributors NameFunction • Al Jackson Shop 1st Line • Eliazar Colunga Process Owner • Raul Rodriguez Repair Cell Lead • Bernice Rivera Shop Scheduler • Shop PMT • Mark Boydstun Shop Planner • Tom Savage General Atomics • Julian Garcia LPF – Customer • Robert Swift LPPE Engineering • Becky Earp LG ITS Lead • Frank Fry LPP Flowday POC OC-ALC Impact: (“Fill Color” or “X” all appropriate boxes) Readiness x X TAT X X Other Job Enhancement / Workout Green Belt Financial Impact Estimate: Enter a range in the space provided for initial project approval. A Finance reviewed value is required for the MA report-out. Estimated ranges: $0 - $25K $25K - $100K $100K - $500K $500K - $1M >$1M Command: OC-ALC

16. Shop Floor Metric F100-220 Inlet Fan Flowdays LPP Actual P&W Benchmark P&W Actual P&W Contract 140 125 Takt TimeEvent 120 109 Materiel Flow Kaizen Event LPP Actuals ZERO MICAPS 100 82 81 78 74 72 71 80 Workdays P&W Goal / “Contract” = 62 60 P&W Actual = 43 40 LPP Standard/Goal =38 20 0 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02

18. F100-100/-220 Inlet Fan 2001-2002Mission Capability & Backorders

19. AFTER BEFORE F100 INLET FAN ASSEMBLY TRAVEL Overview Benchmarking Successes Other Benchmarking Initiatives What Have We Done Lately?

20. INLET FAN ASSEM. TRAVELWithin The New Work Area 7630 Feet 603 Feet 35 MINUTES 3 MINUTES 91% Reduction in TRAVEL TIME 92% Reduction in TRAVEL DISTANCE

21. OEM Corp. Contract GLSC DLA IPV DLA PMXG Assembly Dis-Assembly LGS MRB DRMO 3 Scrap 2 Repairable 1 PMXG/CMXG ITS Kits GLSC Materiel Cage PMXG CMXG Serviceable As-Is Goals: - Reduce mechanic’s time gathering material - Focus Management Attention with Inventory Tracking System - Forecast parts problems

22. Materiel Kit Separate Point of Use Kits for each Workstation - One in Materiel Cage being Filled - One at Workstation being Used

23. Bench Stock Material Kits

24. F100 Inlet Fan Production Production Week of Mon Tue Wed Thu Fri Sat Sun Total In Out OWO In Out OWO In Out OWO In Out OWO In Out OWO Daily Disassembly Requirement In Out Month Daily Assembly Requirement Quarter In Out Planned OWO

25. Generic Lean Project Team Objectives • Reduce lead time by 50% • Reduce Work In Process by 70% • Eliminate at least one batch processing operation • Improve productivity by 10% • Reduce setup time by 50% • Identify equipment bottlenecks

26. F100 Inlet Fan Progress • Flowdays Reduced by 43% from 120 to 68 • Reduced Work in process by 56% • One time Cost Avoidance of $17.5M • Returned Assets in the Depot Pipeline • Assets On-Work-Order at Depot reduced from 99 to 43 • Gave 56 Inlet Fans back to the Operating Units

27. Words I’ve Heard • “You know Col, I’ve been working here for 25 years and this is the first time that management ever asked me what I thought we could do better – then actually listened, and we made the changes” • “I never new that what I was doing, was actually hurting the process.” • Working a whole batch at a time • Gathering my parts early • Tearing down another one when I had slack time • We’re going to have to do this Kaizen stuff to make sure Tinker is here for my kid’s jobs

28. Summary • Problem Statement & Charter • Measure & Analyze Current State • Improve with Lean/Kaizen • Control with Metrics & Buy-In • Go Deep with F100 Inlet Fan • Improve the Tools • Deploy the Processes Continuous Improvement is a Journey with Many Names Pursued by Many Companies

29. Generic Lessons Learned • Lean was Born and Succeeded in the Auto Industry and it works in the Depot Community • Principle are being Deployed Across the Depot, Including Offices and Program Management • Top Management/Stakeholder Support Mandatory • Using Kaizen to Let Improvements Come from Within and Stay • Including Suppliers and Customers • Training is Key – Paradigm Shift at 60% • Get Professional Help to Learn to Fish • Lean is a Journey not a Destination

30. Personal Lessons Learned • Find a Real Impact of Doing Nothing • USAF Maint. Depots from 5 to 3, who’s next? • Customer Impacts of Current State • Charter: Problem Statement, Scope, Resources Estimated, Buy-In & Sponsorship • Wait for Signed Charter and Resources to Start, unless you need Current State VSM to show pain or ROI • Strive hard for Representation from every Function of Process, Including Union • Capture the before Picture with Metrics • Ask Smart People Stupid Questions • Public Praise - Let Kaizen Hero’s Brief Tours

31. Personal Lessons Learned - Continued • Publicize Progress – With Team Members Names • Pics in Base Paper = Wow! • Show Your Work – Holding Team Mtgs in Break Rooms with Flip Charts taped to the Walls was Brilliant – Not My Idea • Parking Lot Chart Mandatory • War-Rooms of Action Items Succeed • Follow-Up in 7 Weeks - Address Growing Pains • Think Old-Time Country Two-Step, • Delay Visual Factory for at Lease 7 Weeks • Look for Six Sigma Projects to Go a Mile Deep • The Peter Principle Is Alive and well • Empower is Transfer of Power, Can’t create more

32. Personal Lessons Learned - Continued • Maslow's Hierarchy of Needs is Real • Psychological: Food, Water, Warmth, and Rest • Safety: Security and Safety • Belonging & Love • Esteem: Prestige and Feelings of Accomplishment • Self Actualization: Achieving One’s Full Potential • Teaming • Forming • Storming • Norming • Performing

33. Personal Lessons Learned - Continued • When All Appears to be Chaos and Variance • Normal Paradigm isn’t Working • Listen to the Operators • Look and See what They are Actually Doing • Focus on The Value Added Segments • Validate the Problem • Pursue a Mathematical Solution to Create Stability • The Four Stages of Team Development • Forming • Storming • Norming • Performing

34. More Tools & Applications • DMAIC: Define, Measure, Analyze, Improve, and Control • Value Stream Mapping • SCOR: Supply Chain Operational Readiness Model • BSC: Balanced Score Card • Change Management • Become Promotable • Lean Addiction • Lean Relationships

35. Define Define Measure Measure Control Control Results Results Improve Improve Analyze Analyze DMAIC Process

36. Value Stream Mapping from “Learning to See” by Rother & Shook

37. Plan Plan Plan Supplier Customer Source Return Return Internal or External Internal or External Deliver Return Return Return Return Return Return SCOR (Supply Chain Operations Reference) Model Structured around Five CORE Process Types SCOR Model Make / Repair Deliver Make Source Deliver Source Make Deliver Source Customer’sCustomer Your Company Supplier’sSupplier Provides Framework for your Transformation / Improvement Projects. • Defining the boundaries / scope of the supply chain . • Evaluate the supply chain’s strengths and weaknesses. • Identifies leverage opportunities for process improvement Enables the rapid development of a total enterprise view of a supply chain

38. Balanced ScorecardWhy Strategies Fail

39. Learning/Growth Process Customer Financial GOALS GOALS GOALS GOALS MEASURES MEASURES MEASURES MEASURES Building the Balanced Scorecard “What are our financial objectives with respect to achieving our mission and vision ?” Mission & Vision “What is our organization’s vision for the future?” “At what customer measures do we need to excel to achieve our financial objectives? “At what internal processes must we excel in order to satisfy our customers?” Linking Performance Measures to Strategy “What must we do to develop our internal resources in order to excel at these processes?”

40. Balanced Scorecard Objectives

41. Balanced Scorecard Worksheet

42. Balanced Scorecard Guidelines • Vision and Mission Statements • Should be the basis for the BSC or the development of strategic statements • Key Performance Indicators < 15 • Linking Performance Measures to Strategy • Establishing Cause & Effect Linkages • Executive Leadership Must Use • Project Management Team Should Update

43. Value Added of Balanced Scorecard (BSC) • Some companies have too many metrics • Balances transitions between mgmt & admin changes • Teams lose focus outside of their project - localized optima • Lack of flow or link between metrics and Corp goals • Need to balance financial and non-financial measures • Gives a complete picture using just enough data • and no more – to provide meaningful metrics • Reflects one strategy versus multiple, independent objectives • Put everyone on the same page • Enables Proactive measures rather than Reactive responses • Set up in a Cause & Effect format • Not easy, nor urgent, but important

44. BSC Summary: Work on the Right Stuff and Lean Out the Wrong • Project Managers & Strategic Planning • A Good Balanced Scorecard Focuses, Informs & Alerts • Builds on Vision, Mission, Corporate Plans • Focuses Attention on Key Performance Indicators • Projects and Project Teams have Waste • Learn to See Office, Industrial, and Green Waste • Reducing Waste Can Improve Key Performance Indicators • Leaning the Right Waste Improves Projects and Companies

45. Implement a Change Management Model • Set Clear Behavior Expectations • Stable Stars • Rising Stars • Falling Stars • Educate, Enable, & Teach • Train All Personnel and See Who Uses It • Mentor Rising Star Employees & Managers • What’s In It for Me (WIFM) • Awards, Incentives, Recognition, Advancement • Change Management • Negative Feedback • Consequences

46. Lean’s Upward Mobility • Study Your Bosses Boss • Go the Extra Mile, Be Underpaid • Bad news never gets better with time • Solution Building: • Problem Statement with Root Cause • Define Current State of Problem Area with Metrics • Desired Future State with Metrics • Plan to Sustain Future State with Metrics • Improvement Projects: Join a Project • Lean Team • Education & Training • Lean Projects: Kaizen Blitz • Six Sigma Projects: DMAIC • Prime for Promotion

47. Application to Addiction • Do I have a Problem • Measure where I am with an Assessment • Analyze: Do I Understand the root cause of my Addiction? Can I Stop/Change on my own, or do I need help? • Improve: Ask for Professional help and Develop a new life program with a sponsor/mentor. • Control: Keep Working New Program for Rest of Our Lives • Go to Meetings • Stay Accountable • Sponsor Someone New

48. Patriots In Recovery Living Life Cycle Sober Living Higher Power Detox Treat- ment Sober Life No Longer The Path Home & Drunk

49. Patriots In Recovery Living (PIRL) 501(c)(3) Non-Profit PIRL Mission Provide a structured, safe, selective, sober program for men active in 12-Step recovery and wanting to transition to independent living and a career. PIRL Vision Provide A Leg-Up to Sober Living for Men Who Want A Drug & Alcohol Free Environment PIRL Life Cycle PIRLBenefits: • 70% of the Men who have worked our program for at least 6 months are still sober. Four have Graduated College • Learning to Work a Sober Program • Fit in & Make Lifetime Friends • Synergy of Living and Working Program with 14 Other Men in the Same Boat + Alumni Support • Continuous Care: Treatment Centers to After Care Counseling & Beyond • 9 Alumni have been Employed in the Profession of Recovery Sober Living • PIRL Features: • Accountability thru Random Drug & Alcohol Testing and Community • 15 Individual Bedrooms and 14 Baths • High Speed Internet, Flat Screens, Common Kitchens & Living Areas • Walkability: Downtown Edmond, Close Proximity to Jobs. AA, & CR • Stone-throw from UCO Campus/GIBill • A Job, an Education, and a Career Higher Power Detox/Treat-ment No Longer The Path Sober Life Home & Drunk 87 Residents since Opening in Oct 2012 in Univ of Central OK (UCO)’s Original Teacher’s Boarding House located at 313 E Edwards St Edmond OK 73034 • PIRL Donations • For Scholarships & RA Support • Furniture Continually Donated • First Fundraiser Being Planned • Federal CFC Donations, Grants Contacts: Ray & Billie Sue Baker 313 E Edwards St. Edmond OK 73034 RaybakerLc@gmail.com (405) 550-0611 Bsuekehr@cox.net www.linkedin.com/pub/ray-baker/b/745/614/ • PIRL 5 Year Plan • 3 More PIRLs on 3 New Campuses • Need $107K/Start-Up • Need $408K Financed/Start-Up Enabling Patriots to Achieve Sober Lives

50. Application to Relationships • Define Problem: Something Happened, and Feelings Kicked In • Understand the root cause of the problem or misunderstanding • Measure: Get a second opinion, not gossip, but benchmark. • Analyze: Stop again, and think about my part. • Improve: Clean up my side of the street. Apologize if necessary for my part, ASAP. • Go back to the person, and work with the problem. Not on them, but on the problem. • Control: Forgive each other and learn from it.