Lean 6-Sigma Approach to Field Service Logistics

1. Lean 6-Sigma Approach to Field Service Logistics Kirk Washburn, Jack Schrock Nancy Bernigaud, Stacy Cook, Jennifer Haxton FAA Logistics Center & Tom Landers University of Oklahoma Project # OU04-FAALC

2. Lean 6-Sigma Approach to Field Service Logistics • Goal: continuous process improvement • Problem Definition: Provide on-going research, consultation, design, and assessment support to the FAA in identifying & implementing best practices for “lean 6-sigma” initiatives. • Identify and prioritize projects • Assist in projects where expertise matches

3. Lean 6-Sigma Approach to Field Service Logistics • Value Stream: “The set of activities that convert customer needs into delivered products and services.” • Project: “An idea that can be addressed by a Lean Six Sigma project team and largely meets established screening criteria.” • Process Cycle Efficiency: “A key Lean Six Sigma metric, measured as the amount of valued-added time in a process divided by the total lead time.” Source: George, M. L., Lean Six Sigma: Combining Six Sigma Quality with Lean Speed, McGraw-Hill, 2002, pp. 129-130.

4. DEFINE MEASURE ANALYZE VALIDATE CONTROL IMPROVE Lean 6-Sigma Approach to Field Service Logistics Source: George, M. L., Lean Six Sigma: Combining Six Sigma Quality with Lean Speed, McGraw-Hill, 2002, pp. 171 (adaptation).

5. Distributor 1 Job Site MRO Center Job Site Job Site Distributor 2 Lean 6-Sigma Approach to Field Service Logistics Methodology: • Requirements definition • Study task(s) description • Project definition • Project oversight • Periodic reporting Realized/Targeted Benefits: • Systematic approach • Best practices

6. Lean 6-Sigma Approach to Field Service Logistics Project Selection Criteria • Strategic alignment • Defined value stream • Return on investment • Voice of the customer • Ease of implementation

7. Lean 6-Sigma Approach to Field Service Logistics Project Status • Short-term plan delivered 23May05 • Lean 6-Sigma bench stock training delivered 7July05 • Special task completed 16Sep05 • Long-term plan completion Dec05

8. Lean 6-Sigma Approach to Field Service Logistics FAALC Projects • Strategic sourcing • Issues effectiveness • Price variation • Bench stock point-of-use presentation • Cost of rework • Capacity planning • Material flow • New projects (product-specific)

9. Organizational Excellence Organizational Excellence Greater Capacity FAA Flight Plan Goals NAS Supply Support – Maintenance/ Repair/OH NAS Supply Support – Supply Chain Mgmt NAS Supply Support – Log Services NAS Supply Support – Financial Management NAS Supply Support – General Program Management ARC Core Business Function {EXAMPLE} Project Goals Decrease the time it takes for a technician to receive a part Increase the direct technician bench time Increase financial inventory visibility Decrease variability in bench stock costs Reduce the overall cost associated with bench stock Lean 6-Sigma Approach to Field Service Logistics

10. Lean 6-Sigma Approach to Field Service Logistics Cost estimating and forecasting methodologies • Alternative methodologies • Reliability-based • Demand-based • Cost-based • Results by cost-based approach • Product families (e.g., radar) • 80-20 (Pareto) rule • Product management groups (value/demand pattern) • Forecast segmentation (short-term v. long-term)

11. Radar System A Lean 6-Sigma Approach to Field Service Logistics