Continuous Process Improvement (CPI) Program Update

Colonel Ric Sherman, United States ArmyColonel Ric Sherman, United States ArmyOffice of the Assistant Deputy Under

Secretary of Defense for Materiel Readiness and Maintenance Policy

JTEG/CTMA Process Improvement Workshop

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Agenda

• CPI background and DoD’s approach

• Update on current CPI activities– DoD and OSD AT&L

• Industrial and transactional accomplishments

• CPI leverage points for DoD

• Indicators that CPI is becoming “a way of life” in DoD

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CPI in DoD

• Broad-based, structured CPI implementation method• Focus CPI implementation w/in a structure of goals

aligned to war fighter-driven, outcome based metrics• Emphasis on the management and integration of CPI

projects• Determine how well projects and organizations are

progressing with CPI initiatives, training and certification

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DoD’s CPI Approach

• Key resource to design/manage CPI efforts

• Standardizes terminology and leverages best practices

• Provides DoD CPI Deployment Cycle

• Endorses actions to facilitate DoD CPI

• Addresses full spectrum of DoD functions• Focuses upon CPI expert certification,guidance documentation, and forums toshare best practices

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DoD-Wide CPI: linked to the Warfighter and applicable to all we do

• “The Secretary and I expect that every DoD organization is focused every day on improving the effectiveness of our support to the Warfighter”

• “CPI has proven to be an important tool for improving the operating effectiveness of the DoD, not only within logistics and acquisition activities, but also across the full range of operational, administrative Science and Technology, and support functions.”

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Value Streams and the DoD Enterprise

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OSD/DoD CPI Activity

DoD-wide CPI Activity

Sponsored DoD CPI Guidebook development (May 2006)

Established DoD-wide CPI Senior Steering Committee (since Aug 06) Chartered to provide enabling criteria for DoD-wide CPI deployment in

three specific areas CPI SSC instituting:

Department-wide CPI education, certification, and training standards (complete)Department-wide CPI Knowledge Sharing website (complete)Formal Department-wide CPI policy (in coordination)

MR&MP focal point for activity and Military Service coordination (training resources, CPI guidance, and policy coordination)

DEPSECDEF established CPI/LSS PMO April 2007

Way Forward Expand activity of CPI SSC to address DSD guidance Developing organizational structure (OSD L&MR, BTA, WHS) Utilize DBSMC for resource needs Take CPI progress to “next level”

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AT&L CPI Activity

AT&L CPI Activity

Deployment Team for organization-wide CPI rollout (Feb 07 start) Memo based on DoD CPI Guidebook and linked to AT&L Strategic Plan

Operate and manage CPI Leadership Deployment Team (Mar 07) Establishing required training, leadership, project selection infrastructure Implementing AT&L cross-cutting projects for CPI implementation MBB hires underway to provide senior leader guidance Over 20 AT&L Green Belts trained (Mar 07) – projects underway for

certification 18 AT&L Champions trained (Mar 07) – sponsor and support CPI projects Several hundred AT&L personnel completed DAU CPI overview training

Way Forward Continue to develop CPI infrastructure and support project outcomes Develop CPI Deployment Guide for use by other OSD organizations

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• Human Capital• Competitive sourcing• Financial management• Expanded e-Government• Budget & Performance Integration

•Transform our Military Forces• Implement QDR

National Security Strategy

1. High Performing, Agile, & Ethical Workforce2. Strategic & Tactical Acquisition Excellence3. Focused Technology to Meet Warfighting Needs4. Cost-effective Joint-Logistics Support for the Warfighter5. Reliable & Cost-effective Industrial Capabilities Sufficient to

Meet Strategic Objectives6. Improved Governance & Decision Processes7. Capable, Efficient & Cost-Effective Installations

The President’s

Management Agenda

CPI is a strategic goal for AT&L

AT&L Goals

Goal 6.4: Continuous process improvement (CPI), using techniques such as Lean Six-Sigma.Success:• We have applied continuous process improvement to major high impact core AT&L value streams in the S&T, Acquisition, Logistics, and Installations areas, at a minimum.

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CPI: significant outcomes in industrial and transactional applications

Pre-CPI• 4,000 man hours

expended

• 70 day Process Cycle Time

• $12.8K per recruit

Current State• 1,000 man hours

expended

• 45 day Process Cycle Time

• $2.4K per recruit

Summer Hire Process

MALS-31 Marine Corps Air Station, BeaufortOrdnance Support Equipment Work Centers

Pre-CPI• 1,100 Not-Ready

• Average repair time 125 days

• Travel to Ordnance center six miles

Current State• Less than 200

Not-Ready

• Average repair time 6 days

• Reduced travel to Ordnance center to 25 feet

Project: HUMINT Training Cycle Time

56% reduction in cycle timeper trainee

(283 work-days removed)

120 trainees per year

Old Training Process

• Decreased cycle time to more effectively support the Warfighter

• Increased quality of training

• $3.6M annual reduction in operational expense equivalent

Benefits of New Process

TIPS(40)

HOFC(20)

HCOC(5)

DSDC(25)

I-P(5)

AMSOC/ DSDC2(73)

47 66 66 90 64

Current

Proposed

TIPS(40)

HOFC(20)

HCOC(5)

DSDC/ DSDC2

(45)

I-P(5)

AMSOC(65)

10 10 10 10 10

400

218 work days (305 calendar days)

501 work days(701 calendar days)

Work Days

Analysis of Training Time vs. Queue Time

3002001000 500

TIPS(40)

HOFC(20)

HCOC(5)

DSDC(25)

I-P(5)

AMSOC/ DSDC2(73)

47 66 66 90 64

Current

Proposed

TIPS(40)

HOFC(20)

HCOC(5)

DSDC/ DSDC2

(45)

I-P(5)

AMSOC(65)

10 10 10 10 10

400

218 work days (305 calendar days)

501 work days(701 calendar days)

Work Days

Analysis of Training Time vs. Queue Time

3002001000 500

New Training Process

Doubled our Annual Output of Trained HUMINT Collectors

Project: Government Purchase Card (GPC)

Total Rebate:FY 02 - $25,595FY 03 - $58,512FY 04 - $75,524FY 05 - $61,000

Amount Spent via GPC:FY 02 - $20 MillionFY 03 - $30 MillionFY 04 - $38 MillionFY 05 - $39 Million

Rebate Per Million:FY 02 - $1,279FY 03 - $1,950FY 04 - $1,987FY 05 - $1,564

C1

Individual V

alue

10000

8000

6000

4000

2000

0

-2000

_X=5392

UCL=8670

LCL=2114

old new

Rebate Amount per Million Spent with GPC

• 319% increase in rebate per million spent with GPC

• Standardized Processes can now benefit from IT solution.

• Agency is better prepared for increased Defense Intel Enterprise footprint

Benefits of New Process

This Project Alone Pays for the Lean Six Sigma Program

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CPI leverage points for the DoD

1. Value Stream Orientation2. Customer Focus3. Outcomes4. Project management – go slow to go fast, cross-cutting criteria5. DMAIC (Define, Measure, Analyze, Improve, Control) approach Value Stream – The set of activities that convert customer

needs into delivered products and services. DoD value streams / processes typically convert internal customer needs into outputs critical to downstream value streams / processes. Particular focus should be placed on value streams that are cross-organizational and tightly linked to a larger value chain and ultimately support a HICVS. Focus is on cross-department / directorate and often some cross-

organizational (especially trigger points, inputs and feedback loops) mission and strategy

Examples: Weapons system requirements initiation, force management execution within a Command HQ, home station training requirements determination process

MeasureDefine ImproveAnalyze Control

What is important to the customer:Project SelectionTeam FormationEstablish Goal

The Process Gains:Ensure Solution

is Sustained

The Process Performance Measures:Prioritize Root CausesInnovate Pilot SolutionsValidate Improvement

How well we are doing:Collect Data

Construct Process FlowValidate Measurement System

The Process:Analyze Data

Identify Root Causes

WARFIGHTERS

Human Resource Management

Real Property & I nstallation Lifecycle Management

Financial Management

Weapon System Lifecycle Management

Materiel Supply & Service Management

Customers exist internal and external to your organizations

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2

3

5

Effective project managementrequired both in selection andimplementation

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Indicators that CPI is becoming “a way of life” in DoD

• We have a common understanding of success – and that is reinforced by a true culture change

• Every meeting we conduct naturally has “CPI” on the agenda

• We share information (about our successes as well as our failures) so we maximize outcomes to our customers and don’t reinvent the wheel