p l n 07 b o1 c mc ginnis navsea lean six sigma

E A NL

Continuous ImprovementContinuous Improvement

A l i L Si Si E blApplying Lean Six Sigma to EnableNavy Enterprise Transformation

CDR Brian McGinnis

NAVSEA 04XP

1

NAVSEA 04XP

14 Mar 2007

E A NLMaine

Pennsylvania SUPSHIP BATH

NAVSEA/PEO OrganizationNew Hampshire

NAVSHIPYD PORTSMOUTHSubmarine Maintenance EngineeringPennsylvania

NSWC Ship Systems EngineeringStation

Naval Sea Logistics Center

WashingtonIndiana

NSWC CRANE

PUGET SOUND NSY & IMFNUWC KEYPORT

Connecticut Rhode IslandNUWC HQNUWC NEWPORTSUPSHIP GROTON

N J

Submarine Maintenance Engineering,Planning & Procurement

California NSWC CARDEROCKNSWC INDIAN HEAD

Maryland

New JerseyAEGIS Technical Rep

NSWC CORONANSWC PORT HUENEME

Washington DCNAVSEA DIR & PEOs

Naval Ordnance Safety &Security Activity

Naval Explosive OrdnanceDisposal Technology Div50,000 Gov Personnel

Headquarters at WNY

Five Affiliated PEOsVirginia

NSWC HQ

NAVSHIPYD NORFOLKSUPSHIP NEWPORT NEWSNSWC DAHLGRENNSWC Combat Direction

Five Affiliated PEOs

30+ Organizations

Systems ActivitySurface Combat Systems

Center SEASPARROW Project

Support OfficeAEGIS Ballistic Missile

Defense

Florida

MississippiSUPSHIP GULF COAST

PEARL HARBOR NSY & IMF

Hawaii

2

FloridaNSWC Coastal Systems Station Naval Experimental Diving Unit South Carolina

Naval Nuclear PowerTraining Unit

As of Sep 05

COMPACFLT Claimancy/NAVSEA Tech Mgmt

E A NLNavy Ships vs Time

US Navy 40-Year Ship Force LevelActuals from 1979 to 2006 and projected through 2018

600

700

pss

High of 594 in 1987

(313 Ships by mid-2020s)

300

400

500

Act

ive

Ship

Plan is 330 in 2018

100

200

300

umbe

r of A

Low of 283 today

00 5 10 15 20 25 30 35 40 45

Year, 1979 - 2018

Nu

3

,

E A NLSECNAV Memo on LSSHonorable Donald C. Winter memo - 3 May 2006Subject: Transformation Through Lean Six-SigmaSubject: Transformation Through Lean Six SigmaTwo Great Tasks:

Fight today’s war.g yPosition the Force for an uncertain future.

The Mission:Create more readiness and assets within Navy budget through Lean Six-Sigma (LSS).

Leadership Team:Personally involved.L d hi d l i id J

4

Leadership deployment in mid-June.

E A NLThe Big FiveThe Big Five1. Drive our behavior with the Enterprises2. Transform to a Competency Aligned Organization p y g g3. Measure our output with customer driven metrics4. Focus on diversityy5. Document and Improve our processes through

Lean Six Sigma (LSS)g ( )

5

Commander’s Guidance Part III

E A NLNaval Enterprise ConstructNaval Enterprise Construct

CNO Approved

6WE MUST EXECUTE

E A NLEnterprise ProductivityEnterprise Productivity

Output Enterprise ProcessesInput $ ppp

Spen

ding

A BManagement OptionsBase

nput

: $

S B

C• A to B = More output, same $

• A to C = Same output, less $

In Output: Alignment & Cost Control

Capability Ready for TaskingCOST = Productivity

7

E A NLNAVSEA Lean Journey

Enterprise LevelMaine

PennsylvaniaNSWC Ship Systems Engineering

StationIndiana

SUPSHIP BATH

NAVAL SEA SYSTEMS COMMANDShore Activities

Connecticut Rhode Island

New HampshireNAVSHIPYD PORTSMOUTH


Submarine Maintenance Engineering, Planning & Procurement

2003 Maturing-Growing-Connecting

TFL – August 2004

Enterprise Level

Connect to Navy Value Streams

100% of the Business

NUWC KEYPORT

SUPSHIP SAN DIEGO

Washington NSWC CRANE

PUGET SOUND NSY & IMF

California

Virginia

Washington DCNAVSEA HQ & PEOs

NSWC CARDEROCKMaryland

ConnecticutNUWC HQ

SUPSHIP GROTON


NAVSHIPYD NORFOLK

Organizational changes in process

SUPSHIP PUGET SOUND

NSWC CORONANSWC PORT HUENEME

NUWC NEWPORT

NSWC HQ

NSWC INDIAN HEAD Naval Ordnance Safety &

Security ActivityNaval Explosive Ordnance

Disposal Technology Div

SUPSHIP PORTSMOUTHSUPSHIP NEWPORT NEWSNSWC DAHLGREN

Command Level Central Coordination

Connected to National Value Streams

Naval Sea Systems Command (NAVSEA)Naval Shipyard (NAVSHIPYD)Supervisors of Shipbuilding (SUPSHIP)Surface Warfare Center (NSWC)Undersea Warfare Center (NUWC)Other NAVSEA ActivitiesActivities Managed by PEOs

Guide Florida

Mississippi

SUPSHIP JACKSONVILLENSWC Coastal Systems Station Naval Experimental Diving Unit

SUPSHIP GULF COAST

South CarolinaNaval Nuclear Power

Training Unit

As of Apr 04


NSWC DAHLGREN

NSWC Combat Direction Systems Activity

Surface Combat SystemsCenter

SEASPARROW ProjectSupport Office

Maine

PennsylvaniaNSWC Ship Systems Engineering

SUPSHIP BATH

NAVAL SEA SYSTEMS COMMANDShore Activities New Hampshire

NAVSHIPYD PORTSMOUTHSubmarine Maintenance Engineering,

Planning & Procurement

2005

Organizational Level

Connected to Local Value Streams

5 % of the Business

30 % of the BusinessNUWC KEYPORT

SUPSHIP SAN DIEGO


WashingtonIndiana

NSWC CRANE

PUGET SOUND NSY & IMF

California

Virginia

Washington DCNAVSEA HQ & PEOs

NSWC CARDEROCK

Maryland

Connecticut Rhode IslandNUWC HQ

SUPSHIP GROTON


SUPSHIP PUGET SOUND

NSWC CORONA

NSWC PORT HUENEME


NUWC NEWPORT

Planning & Procurement

NSWC HQ

NSWC INDIAN HEAD Naval Ordnance Safety &

Security ActivityNaval Explosive Ordnance

Disposal Technology Div

5 % of the Business

Naval Sea Systems Command (NAVSEA)Naval Shipyard (NAVSHIPYD)Supervisors of Shipbuilding (SUPSHIP)Surface Warfare Center (NSWC)Undersea Warfare Center (NUWC)Other NAVSEA ActivitiesActivities Managed by PEOs

Guide

VirginiaNAVSHIPYD NORFOLK

Florida

Mississippi

SUPSHIP JACKSONVILLENSWC Coastal Systems Station Naval Experimental Diving Unit

SUPSHIP GULF COAST

South CarolinaNaval Nuclear Power

Training Unit

As of Apr 04

Organizational changes in process


SUPSHIP PORTSMOUTHSUPSHIP NEWPORT NEWS

NSWC DAHLGREN

NSWC Combat Direction Systems Activity

Surface Combat SystemsCenter

SEASPARROW ProjectSupport Office

8

2001-2003 2004-mid 2005 mid 2005-2007

E A NLLean Process Chart

Executive Planning Session (EPS)

Lean Principles*

Customer/ValueDValue Stream Analysis

(VSA)

Map the Value Stream

Create Flow and Pull

Seek Perfection*From

“Lean Thinking”M

Rapid Improvement Plan (RIP)

Seek Perfection Lean Thinking

by James T. Womack

ARapid Improvement Events

(RIEs)

(7 Week cycle)

Projects

(3-6 months)

Just Do Its

I( y )

5S Standard W k

Flow PullCost Reduction Reports

(CRRs)C9

Work(CRRs)C

E A NLLean Deployment Roles• Owns vision, direction, business results• Leads change• Allocates Resources• Owns Value StreamsExecutiveExecutive

LeadershipLeadership

ALLTraining Metrics

• Owns Rapid Improvement Plan

• Owns Redeployment Plan• Owns financial results• Removes Barriers

• Heads Lean Office• Owns Deployment Plan• Owns Communication Plan• Captures Metrics

Lean ChampionLean ChampionValue StreamValue Stream

ChampionsChampions1600

All Employees

• Provide data and voice of customer inputs to VSA RIE• Trains Black Belts / Green Belts

MasterMasterBlack BeltsBlack Belts

Team LeadersTeam Leaders

•RI Team or Project

5 27,363 Basic Training

customer inputs to VSA, RIE, and Projects

• Apply concepts to their own jobs and work areas TeamTeam

MembersMembersBlack BeltsBlack Belts

• Trains Black Belts / Green Belts• Leads Complex Projects • Full-time position

RI Team or Project specific support•Part-time

278

• Experts on principles and tools• Leads larger projects • Coaches Green Belts• Full-time position • Lead small-moderate

projects• Support Rapid Improvement

• RI Team or Project specific support

• Part timeGreen BeltsGreen Belts

2133

10

• Support Rapid Improvement Teams

• Full time or part time roleModel taken from “Lean Six-Sigma”

by Michael George

SECNAV Goals: BBs - 1%; GBs - 4%; Champions - 100% O-6/15 & above

E A NLLean Six-Sigma College (L6SC)

Pennsylvania

Indiana

Maryland

Maine

33

L e a n

WashingtonPUGET SOUND NSY & IMF

NUWC KEYPORT

NSWC CRANE


NAVAL Foundry & Propeller Center

SUPSHIP GROTON

NUWC HQNUWC NEWPORT

Connecticut

NAVSHIPYD PORTSMOUTHSUPSHIP BATHSUBMEPP Rhode Island

Pennsylvania

Indiana

Maryland

Maine

333333

L e a nL e a n

WashingtonPUGET SOUND NSY & IMF

NUWC KEYPORT

NSWC CRANE


NAVAL Foundry & Propeller Center

SUPSHIP GROTON

NUWC HQNUWC NEWPORT

Connecticut

NAVSHIPYD PORTSMOUTHSUPSHIP BATHSUBMEPP Rhode Island

West Coast L6SC Site –

W

East Coast L6SC Site –

Norfolk Naval Shipyard

• Producing a High Standard

California

Virginia

Maryland

SUPSHIP Bath (detachment)NSWC CORONANSWC PORT HUENEME

South West Regional Repair

NAVSHIPYD NORFOLKNSWC DAHLGRENSurface Combat Systems

NAVSEA HQ PEOsNSWC HQ

Washington DC

NSWC CARDEROCKNSWC INDIAN HEAD

California

Virginia

Maryland

SUPSHIP Bath (detachment)NSWC CORONANSWC PORT HUENEME

South West Regional Repair

NAVSHIPYD NORFOLKNSWC DAHLGRENSurface Combat Systems

NAVSEA HQ PEOsNSWC HQ

Washington DC

NSWC CARDEROCKNSWC INDIAN HEAD NSWC Port Hueneme CA Norfolk Naval Shipyard

•Validated Curriculum by Industry Experts (via USNR)

Use SMEs from Industry

Producing a High Standard of:

• Black Belts• Green Belts• Champions

Florida

Hawaii

Mississippi


SUPSHIP GULF COAST

NSWC Coastal Systems Station (Panama City)

yCenter (Dam Neck)

Mid Atlantic Regional Repair

Florida

Hawaii

Mississippi


SUPSHIP GULF COAST

NSWC Coastal Systems Station (Panama City)

yCenter (Dam Neck)

Mid Atlantic Regional Repair

Regional Training for Green Belts & Champions• Use SMEs from Industry & Government to enhance instruction•Black Belts Prepared to Earn ASQ Certification

Champions

• Integrated Approach: Lean, Six-Sigma, & Theory of Constraints

• Black Belt Training Focused 333333

•Just in Time Training of Process Improvement Team Members using Interactive Simulations (LRE & others)

• Black Belt Training Focused on DMAIC process & aligned with NAVSEA Lean

• Standardized Core Curriculum for all Classes

11

real projects, real people, real results

E A NLNAVSEA/PEO Value Stream Network

S S t Lif C lS S t Lif C l P i A ti itiP i A ti itiCustomersCustomers

WarfareWarfare

Sea Systems Life Cycle Sea Systems Life Cycle -- Primary ActivitiesPrimary Activities

T O

Navy After Next Next Navy Current Navy

R&D Acquisition MRO In-Service Support WBS

Subs

Warfare Warfare EnterprisesEnterprises

USE

Products& ServicesR

& D

DES

IGN

UIL

D &

TES

T

DIS

POSE

EET

INTR

O

MO

DER

NIZ

E

MA

INTA

IN

CER

TIFY

Subs

Carriers

ShipsProgram Mgt – Contracts – Legal

Business Financial Mgt/Comptroller

USE

NAE

SWE

BU FL M

IWS WSs

LMW WSs

Research and Systems EngineeringLogistics – Industrial Ops – Corporate Ops

Explosive Ordnance Devices (EOD) Ops

NNFE

NECCN NAVSEANon-NAVSEA

Non-Navy CustomersFunctional/Competency

Areas

End Items

12

Integrated Supporting Activities Providing Standard Processes Across All Product Lines and Primary Activities

E A NLNAVSEA/PEOs L6σ IN 5 ENTERPRISES

NAE NNFE NECEUSESWEJoint/ Other

L6σ Projects

Product LineValue Streams

CVN Const/RCOHIn-service SupportMaint AvailsModern. AvailsJoint Exec Mgt

Team

DDG51 and 1000Config ControlMSMO / Fleet IntoSmall ArmsMW ProgramsSingle CS in LCSPBL f IWS

VA Class 2-4-12Sub Maint AvailsSub Modern AvailsFMS Case DevelopVA Class Fly-By-WireWSQ-9 System InstallsSOF U d M bilit

SDVsSPS EffortsIndividual Protection

Equipment (IDE)EOD Programs

NMCI C&AClassified Spills

CompetencyProcesses

PBL for IWSMissiles, Guns, CSsOA Combat Systems

SOF Undersea MobilityUUV Work AreasUUV Test Beds

F di D tContracting ProcessFunding Documents

Paint/Preservation QAShip Design Baseline AppStrike Force CertificationAcquisition T&ESCN OutfittingConfig MgtInd Ops - Cranes, Material, ResourcesCorp Ops Admin Support

13Engaging High Impact Core Value Streams

ResourcesCorp Ops - Admin Support, Manpower Budgets, Payroll Process

E A NL

CIR Logic Map Draft 5.igx

Continuous Improvement Flow Mapg p g

Navy Enterprise Leadership

Priorities Execution Plans

Enterprise Outputs

Dialogue on I t t th

Command Goals and Objectives ( f O )

Strategic Plan

Voice of the

Customer

gMeeting Goals and Objectives

Command O t t

Inputs to the Enterprises

NAVSEA Corporate Leadership(Strategic)

(Define Outputs)

Executive Leadership CouncilEPS

g

Monthly Review

Outputs

Tactical

Product Lines Competency Processes

Portfolio of NAVSEA Value Streams and Processes Engaged with LSS

LSS Plans, Goals, ObjectivesEPSs / VSAs

Continuous Improvement Reports (CIRs)

for Major Value Streams and Processes Engaged

Resources

Operational LSS Improvement EventsRIEs, Projects, JDIs

Train and Deploy Experts (GBs and BBs)

Cost Reduction Reports (CRRs)(or Equivalent)

14Closed Loop Continuous Improvement

E A NLAligning to “The Main Thing”

Strategy

FRP & Surge NavySea Enterprise / Enterprise Construct

NAVSEA Lean Business Strategy

Fleet ReadinessCustomersProcesses

NAVSEA LeanOne SY – Resource & Inf. Sharing

Right ForceRight ReadinessRight Operational Availability

Fleet ReadinessSafe, Reliable, and Affordable Naval Ships and Weapons Systems

People

– Standard Processes Warfare Center AlignmentTechnical AuthorityStreamlined Business Processes

– Seaport-e

Right Operational AvailabilityRight Cost

Seaport e – Distance Support 21st Century Workforce – Total Force

– revitalize workforce, skills mix – training, career path, leadership development

Safety - care, well being, work place

15

Model taken from “The Power of Alignment”

by George Labovitz & Victor RosanskyRecognition – incentives, motivation, satisfaction, value/worthCulture – Lean thinking, agile, responsive, safety, quality, accountability

E A NLSY Lean – Creating Alignment :

National Value Stream Management

Platform NVS (TierPlatform NVS (Tier--One)One)4 NSYs +2 Private Carrier Carrier Submarine NVS

Industrial Process Industrial Process NVSNVS PSNSY LeadPSNSY LeadTw

o)Tw

o)

2 Private NVSNVSNAVSEA 04XNAVSEA 04X

SSN 688 SSN 688 SSBN/SSGNSSBN/SSGN

NAVSEA 04XNAVSEA 04X

Project Management Project Management NVSNVS–– NSSG LeadNSSG Lead

NVSNVS–– PSNSY LeadPSNSY Lead

VS (T

ier

VS (T

ier--

TT

Acr

oss

Acr

oss

Lifting & Handling NVS Lifting & Handling NVS –– NNSY LeadNNSY Lead

tiona

l NV

tiona

l NV

ardi

zing

Aar

dizi

ng A

NSY

sN

SYs

Material NVSMaterial NVS––(1) Integrating & Aligning (1) Integrating & Aligning

(2) Creating Accountability(2) Creating Accountability

ss/F

unct

ss/F

unct

Stan

daSt

andaSEA04L LeadSEA04L Lead

Training NVSTraining NVS––NNSY LeadNNSY Lead

16Proc

esPr

oces

Standardizing Across PlatformsStandardizing Across PlatformsResource Management Resource Management

NVSNVS–– SEA04X LeadSEA04X Lead

E A NLKey Challenges

Align to Navy EnterprisesRespond to their Prioritiesp

Capture and Report Results at Value Stream LevelNew CIR Process

Mature Lean MetricsMaintain Change Pace but Involve more Peopleg pImprove Utilization of GBs and BBsGet RIEs going at HeadquartersGet s go g at eadqua te sImprove Industry Partnerships and ProjectsCommunicate Results

17

Communicate Results

E A NLKey Points

For Major Processes and Value StreamsPEOs/PMs for Product LinesCompetency Leads for Processes

Aligned to Navy EnterprisesMonthly TempoPartnerships Encouragedp gShow Status/Maturity

Chartered – Projected – Realizedj

Cover all Appropriate MetricsShow Total Cost Picture – Puts and Takes

18

E A NL

BACKUPBACKUP

19

E A NLCIRContinuous Improvement Report (CIR)

Reporting Organization: _______________ Date: _________________ Competency/PEO: _________________ 1. Value Stream/Process Engaged Value Stream/Process (Title): ____________________________________________________ Description: __________________________________________________________________ POCs: Champion (VSC): __________________ BB/Sensei: _________________________ Dollar Value for Specified Value Stream/Process: (By fiscal year)______________________ 2. Alignment Warfare Enterprise: _________________ Customer(s): _______________________ National VS: ________________________ National VSC: ______________________ Product (WBS): _____________________ Competency Area: ___________________ 3. Status of Lean Events VSA Date: _____________ Pass: (First, Second, etc) Quad Chart Date: (Latest Update) Rapid Improvement Plan (RIP) Projected Comp Date: _______________ RIEs Projects JDIs Number Planned Number Completed 4. Process Changes Description: (Briefly explain changes made to processes)_________________________

20

How Institutionalized: (Explain changes made to Instructions, Procedures, SOPs)_____ Redeployment: (Number of personnel reassigned to other work or left organization)____ 5. Benefits Describe Benefits: ________________________________________________________

E A NLCIR (Continued)Metrics Table: Provide table of key metrics showing performance before and after continuous improvement transformation efforts, such as following:(Note: These are example metrics - Actual metrics should align to Navy Enterprises)

Output Metric Before After Percent Change Safety Quality Schedule (On Time Delivery)

Time Delivery)Cycle Time Cost Productivity Inventory

6. Cost Benefit Analysis For each Warfare Enterprise/Customer, identify fiscal year and following info: Type of Cost Benefit: _______ (1) Actual cost reduction to customer budget (2) Potential cost reduction from reducing cycle time (3) Cost avoidance / Intangible benefits to customer Investment Costs: _________________________________________________________ Other Costs: ______________________________________________________________ Projected Cost Reduction: __________________________________________________ Projected Net Cost Reduction: _______________________________________________ Status: _____________ (1) Chartered - Forecast based on planned work (2) Projected - Accurate estimate based on Lean work

(3) Validated Confirmed by financial representative (3) Validated - Confirmed by financial representative (4) Realized - Actual cost returns based on completed Lean work Actual Realized Cost Reduction when Complete: ______________________________ (Define total cost reduction and basis - specify in terms of $ per unit output where possible) Projected Validated Cost Reduction over FYDP: (Based on historical data and workload projections - state assumptions)

21

Enterprise Value Stream FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 7. Risk Analysis: Traditional risk cube - Probability of success vs Impact of event 8. Comments:

E A NL

Examples of Value Stream TransformationsTransformations

Naval Shipyards – Puget Tank Work, TGI FlowW f C CAD/PAD T d C lWarfare Centers – CAD/PAD, Torpedoes, Crane examplesProjects with Industry PartnersH d t S l E l

22

Headquarters – Several Examples

E A NLGood News Story - Lean in Action

USS ABRAHAM LINCOLN TANK VALUE STREAM TEAM at PSNS & IMF

Best output before Lean: 10 tanks in 6 month drydock period

23

Output in LINCOLN after Lean: 18 tanks in 3.5 month drydock period

210% improvement in throughput

E A NLPNSY – SSN 720 EOH – TGI Flow

B i M i Li SSN 720 TGI Fl

Multiple Value Streams

Boeing Moving Line SSN 720 TGI Flow

24

Fundamental Change in Ship Availability Management

E A NLNSWC Indian Head: CAD/PADLean Transformation Journey

CAD Lean Manufacturing CellsLean manufacturing cells were

set up with in-line digital X-ray eq ipmentequipment.

Digital X-ray equipment alleviate 16 miles of transportation from the process.process.

Manufacturing cells have demonstrated 60-90% cycle time reductions and 46% labor reductions for this portion of the process.

BeforeCY 2003

Lean Modular Workholding System Lean Miniaturization and Mobility

AfterCY 2005

25

E A NLNUWC Newport - Torpedo Enterprise MK 54 Torpedo Value Stream

Value Stream • Acquisition cost of Mk 54 torpedoes was

limiting the Navy's ability to procure sufficient quantities. This directly impacted the Fleet by

Participants

q y p yrequiring the continued use of older, less capable weapons systems to meet Non Nuclear Ordnance Requirements.

• The procurement profile of MK 54 Torpedo is d i b f f 4 f

StatusKEYPORTKEYPORT

expected to increase by ~ a factor of 4 from FY05 to FY09.

• Fence Posts - NAVSEA/PMS 404 contract award to Ready for Issue Torpedo in the bunker

Metrics/Benefits

• VSA Conducted 23-26 January 2005• Proofing Spec Review conducted on 23 Feb 2005• Failure Analysis Value Stream Conducted 8-9 March 2005• Additional Heavyweight Torpedo VSAs applicable to MK 54

F tMetrics/Benefits Future

• 2nd pass VSA tentatively scheduled for 7-11 August 2006Acquisition and Failure Analysis Rapid Improvement Plans

8 Rapid Improvement EventsFY05 – FY11 Production

19 Projects

26 Do its

Goals

49% Govt labor reduction

in excess of 1300 weapons

Mk54 Value Stream attacks both Warfare Center and Contractor Costs

26

30% Cycle Time Reduction

30% Unit Cost Reduction

E A NL

El t O ti T h l

CONTINUOUS IMPROVEMENTSECTION 3: Maximizing Value - Effectiveness

History: NSWC - Crane Division’s Electro-Optic Technology Division provides Electro-Optic (EO) and Infrared hardware and engineering and sustainment services for NAVSEA/PEOs, NAVAIR, and Naval Special Warfare in support of the Global War on Terrorism (GWOT) and Homeland Security. Continuous Improvement is paramount in assuring the Warfighter receives thousands of imaging and aiming

Project Description: This quad chart details the actions of four dedicated week-long RITs, and Lean thinking over the course of four fiscal years starting in June 2003.Project Impact: The group has successfully implemented the Continuous Improvement methodologies to improve their schedule performance at a time of i i d d Thi i h fi M d l C ll i h El O i

Electro-Optics Technology

devices each year in order to support their mission as efficiently and effectively as possible.One particular group of the Electro-Optic Technology Division, the Image Intensification (I2) group, have been the Continuous Improvement leaders within this division. This group Provides Test & Evaluation and repair of man-portable (VAS) “Visual Augmentation Systems” such as Day/Night Optics, Thermal Imagers, Image Intensifiers, Cameras, and Image Fusion devices.

increasing customer demand. This group is the first Model Cell in the Electro-Optic Technology Division. The most previous dedicated event established a complete first-in-first-out mixed model cell in this area.POC: Bradley Secrest 812 854-5943/ CAPT Mark Welsh 812 854-1210Lean Facilitators: F. Todd Knepp ASQ/DoN BB 812 854-5008, Sharon Hemmerlien BB, CDR Pat Shaffer GB.

Metrics/Benefits: Cost & Benefits:

MetricsBaseline (FY2002)

Actual (FY2006)

Actual % Change

Turn-Around-Time (days) 75.2 10.1 86.6%

Quality (QA FPY) 85% 96% 11%

Investment Cost: Team Labor $108,772Material $ 14,629

Total Investment $123,401

Cost Avoidances:Additional Labor* $782,431Equipment $ 91 000Productivity (assets/FTE) 903.8 1554.3 60.9%

TAT Standard Deviation (days) 109.9 20.0 81.8%

Customer Demand (assets per year) 5875 8362 42% *Additional Labor Cost Avoidance: Includes cumulative labor avoidances

of 0 4 FTE in FY03 0 8 FTE in FY04 1 6 FTE in FY05 and 3 5 FTE in FY06

Equipment $ 91,000Total Benefits $873,431

ROI: 7:1

27

Status as of: 11/29/2006of 0.4 FTE in FY03, 0.8 FTE in FY04, 1.6 FTE in FY05 and 3.5 FTE in FY06.

E A NL

SelfDirectedEvents Code8023

CONTINUOUS IMPROVEMENTSECTION 3: Maximizing Value - Effectiveness

Date Name Measurement Start End Improvement

8/8/06 CalibratedEquipment Spareequipmentreduction 169units 105units 62%

Self Directed Events - Code 8023Summary 3/01/07802 Mixed Model Receiver Supercell RIT Summary

September 14, 2006 1st Planned Effort Results

Reduced TAT by 49% (3 195 minutes to 1 556 minutes)

SELF DIRECTED WORK TEAMRECEIVER SUPER CELL

8/8/06 Calibrated Equipment Spare equipment reduction 169 units 105 units 62%Calibration Cost 57k 36K 63%Storage Space 210 cu ft 73 cu ft 50%

10/23/06 ALR-81 Stepsaver Reduce Travel time 12,000 steps 3375 steps 72%

Reduced TAT by 49% (3,195 minutes to 1,556 minutes) Reduced WIP by 63% (122 units to 45 units) 2nd Planned Effort Results Reduced TAT by 21% (57 days to 45.5 days) Reduced CT by 9% (45.2 hrs to 40.7 hrs) Reduced Floor Space by 52% (1,470 sq ft to 717 sq ft)

2/8/07 A/D Converter WIP Reduction 172 units 55 units 68%WRA TAT 78 days 30 days 61%SRA TAT 121 days 30 days 75%

3/2/07 APS-130 Radar Repair team WIP Reduction 90 units 33 units 63%TATreduction 17days 14days 17%

p y ( , q q ) 3rd Planned Effort

Results Reduced WIP by 60% (23 units to 12 units (wras))

TAT reduction 17 days 14 days 17%

Lean is an attitude. It must be communicated to your employees. It is critical that a link to the burning platform is evident. Use the lean tools; make them a part of your day to day work life. That is what has happened in the 80232 & 80233 labs. Experience and training are critical elements. The goal is to have the “work cell” leaders participate in greenbelt training. Everyone functions via visual management. Employees update the production control boards. Managers monitor the production control boards. If an issue exists it is addressed immediately. Employees have a sense of

t Th i t f id b th l Th bl t t d hi

LSS BB DMAIC Project • Right SRA parts available to

complete WRA• Reduce repair cost empowerment. There is a great sense of pride by the employees. They are able to set and achieve

realistic goals. Sustainment through teamwork is critical. Success is managers and employees working together to improve the process. The team have executed 4 self directed teams. The key elements of a successful self directed work team event are pre-event planning and knowing the tools of lean and how to use them. Pre-events maximize team involvement. There are tangible and intangible benefits to continuous improvement. Tangible benefits have proven to be reduced TAT and WIP. Intangible benefits include: increased & better communication by forming a cell structure, teaming between employees and management is evident resulting issues being resolved at the lowest

• Reduce repair cost• Reduces TAT• No work stoppage due to lack

of parts• Eliminating cost of maintaining

28

level.• Eliminating cost of maintaining excess inventory storage

• Units available to meet customer demand levels

E A NLProjects with Industry Partners

PEO Carriers with Northrop Grumman Newport News (NGNN) and SUPSHIP Newport News; Black Belt ( ) p ;support by VPMEP.

CVN 77 Change ControlGFE/GFI ProcessesGFE/GFI ProcessesLogistics Processes

PEO Subs with General Dynamics Electric Boat, Northrop Grumman Newport News, SUPSHIP Groton, and SUPSHIP Newport News; Black Belt support by TFL.

Align all submarine construction industry Lean Six Sigma workAlign all submarine construction industry Lean Six Sigma work and achieve construction of two VA class submarines per year for total of $4.0B ($2.0B each in FY 05 dollars) by FY 2012.

29

E A NLPEO ShipsPEO SHIPS CONTINUOUS PROCESS IMPROVEMENTS

DDG-51: THROUGH IMPLEMENTATION OF NUMEROUS LEAN INITIATIVES IN CONJUNCTION WITH PRODUCTION PROCESS IMPROVEMENTS GENERAL DYNAMICSCONJUNCTION WITH PRODUCTION PROCESS IMPROVEMENTS, GENERAL DYNAMICS HAS REDUCED THE TOTAL LABOR HOURS REQUIRED TO CONSTRUCT DDGs BY OVER 950,000 HOURS OVER THE LAST THREE SHIPS DELIVERED TO THE NAVY.DDG-1000: COST REDUCTION INITIATIVE.

SAVINGS GOALS:$267M – LEAD SHIP$213M – FOLLOW

AFFORDABILITY CONSIDERATIONSAFFORDABILITY CONSIDERATIONSESTABLISH AFFORDABILITY TARGETS FOR END ITEM AND PERMIT CAPABILITY TRADESDESIGNING FOR PRODUCIBILITYDESIGNING FOR LIFECYCLE OPTIMIZATION

A STABLE SHIPBUILDING PLAN, COUPLED WITH ONE OR MORE AFFORDABILITY STRATEGIES, PLUS A FOCUSED INDUSTRY PUSH

30

O S G S, US OCUS N US USFOR COST REDUCTION YIELDS AFFORDABLE PLATFORMS.

E A NLMulti-Ship Multi-Option (MSMO) Contract

Solicitation Process VSA

Project Description: By eliminating unnecessary waste and improving our process critical steps the MSMO Lean Team hopes to be able to solicit and award MSMO Contracts in the most efficient manner possible with a high

Status: VSA conducted in May 05•CPARS are being addressed as part of the Award Fee Evaluation Boardprocess.•PEO-SHIPS working with the RMCs to standardize the CPARS and AFEB ProcessesContracts in the most efficient manner possible with a high

degree of quality and adherence to all applicable legal and regulatory standards.Project Impact: Eliminate unnecessary waste and improving critical process steps. Improved cycle time.Value Stream Champion: Rich Chiappane

Processes.•Industrial Base concerns are being addressed & re-evaluated with each new procurement.•RMCs are reviewing their process for developing government estimates.•SEA02 has conducted an independent VSA to address contracting issuesas a whole. 8 of 8 Do Its have been completedValue Stream Champion: Rich Chiappane

M i /B fi

4 of 4 RIE goals have been completed8 of 8 Projects have been completed

C d Metrics/Benefits: Cost and Benefits:•Team Cost: $20,000.

•Benefits:• Process time reduced from 333 to 230 days

Value Stream Data Current Stae Future StateName MSMO Contract Process MSMO Contract ProcessDemand 5 5Work in Process 7 5Takt Time 49 Days 44 DaysTotal Flow Time 333 Days 115 DaysValue Added Time 11.75 Days 12 Days

(30% reduction)

•As of Feb 07, 13 of 21 MSMO Contracts planned have been awarded with the balance on schedule to be awarded by Jan 09

y yNon Value Added Touch Time 159.75 DaysWait Time 161 DaysRolling First Pass Yield 0%Process cycle efficiency 3% >10%Hand-offs >40Documents 30Reviews >30# of Signatures >60

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31

E A NLValue Stream Analysis Activity to Date

ILS Certification Process VSA

Project Description: Review FMP ILS Certification Process in t f fi ti h i t ll d PEO SHIPS PEO

Status:I iti l VSA d t d i O t 05support of configuration changes installed on PEO SHIPS, PEO

CARRIERS and PEO SUBS platforms, analyze the current state and develop a future state, in which a single, efficient, FMP ILS certification process meeting all the needs of the customer.Project Impact: Ship Program Managers will receive benefits in terms of reduced time to achieve ILS certifications for changes planned installations both inside and out of availabilities and associated cost

•Initial VSA conducted in Oct 05•Follow-up tiger team meetings have continued as requiredto work through issues• 4 Do Its planned• 1 RIEs planned• 5 Projects plannedinstallations both inside and out of availabilities and associated cost

avoidance. The fleet will benefit by receiving timely integrated logistics support for these changes. Value Steam Champion: Bob Stout/Stephanie BlaineLean Coordinator: Phil Schneider

5 Projects planned

Metrics/Benefits: Cost and Benefits:

•Team Cost: $15,000.

•Benefits:PMs, PARMs and TYCOMs will receive benefits of reduced time to achieve ILS certifications for changes planned

Carriers Surface Subs Carriers Surface Subs

Demand pe 26 23 23 26 23 23

Current State Future State

of reduced time to achieve ILS certifications for changes planned For availabilities and associated cost avoidance. The fleet will benefit by receiving timely delivery of complete,integrated logistics support for these changes

Flow Time 18.5 5.0 18.0 2 1 6Touch Time 5.0 4.8 20.0 3.5 4 12

Passes 18 6 10 6 6 6

Green Dots 6 5 3 6 2 3Red Dots 10 17 2 2 4 2Total 16 22 5 8 6 5NVA% 63% 77% 40% 25% 67% 40%VA % 38% 23% 60% 75% 33% 60%

32

VA % 38% 23% 60% 75% 33% 60%

E A NLFleet Introduction - PEO Ships

Project Description & Expected Outcome: Status:Analyze Fleet Introduction as conducted within PEO Ships addressing manpower planning, crew phasing plans, pre-commissioning, commissioning, training,

d O fi i

Event type: VSA completed 14 June 2006

Future Events: Date:and Outfitting processes.

Goal: Savings and service improvements through streamlining and standardizing, better sharing of resources, and eliminating non-value added steps.

•CSPP Aligned w/ HCO Mapping (RIE) Sep 07•Standard PEO Ships Process Instr (JDI) Mar 07•Simplified Inventory Procedures (RIE) Deferred•Common IT Structure for PreCom(Proj) Oct 062ND P VSA M 07

Metrics / Benefits: Cost and Benefits:

•2ND Pass VSA May07

$

Value Stream Champion: CDR James F. Buckley III

Projected Cost Reductions:

Team Cost = $15,000

Current State* = $8-10M/yr

Metric/Benefit Current Future Comments

Ongoing: LPD17, DDG51, LHD classFLOW TIME(Cum Days) 8549 8148 5%

$ yFuture State* = $7.5-9.4M/yrReduction* = $0.5-0.6M/yr

*

TOUCH TIME (HRS) 62016 59405 4%

Future: DDG 1000 and LCS

FLOW TIME (Cum Days) 3322 3086 7%

33

* Average combined total of all classes thru FYDPTOUCH TIME (HRS) 5503 5042 8%

E A NLSMALL ARMS EXAMPLEPEO LMW – NSWC Crane

Value Stream Repair vs. Refurbishment of Individual Weapons.

• Old way of Business (Refurbishment) : Weapons would be

Status• JDIs completed

• Model 727 5.56mm Carbine Apr 2005• Old way of Business (Refurbishment) : Weapons would be shipped back to NSWC Crane and be completely overhauled. NSWC would replace all parts on a weapon except for the Lower Receiver with brand new parts and the weapon then returned to the inventory.

• New Way of Business (Repair): Weapons are shipped back

p• M16A3 5.56mm Rifle May 2005• 12 Gauge Shotgun July 2005• M11 9mm Pistol Sept 2005• M9 9mm Pistol Oct 2005• M203 40mm Launcher Nov 2005• New Way of Business (Repair): Weapons are shipped back

to NSWC Crane where they are completely screened for damaged parts. These parts are replaced with new parts and the weapon is returned to the inventory.

• M203 40mm Launcher Nov 2005

Cost BenefitMetrics/Benefits Cost BenefitMetrics/Benefits

SAVED SAVED SAVED FY07 UNIT FY07 TOTAL

Result of new business model (Repair vice Refurbishment of Individual Weapons) April 05 thru Oct 06 (18 months).

• Total saved since inception of new business model $7,657.515.

• Type of Cost Benefit: (1) Actual cost reduction to customer budget.SAVED SAVED SAVED FY07 UNIT FY07 TOTAL

FY05 K$

FY06 K$PREV K$ REP SAVINGS TO DATE SAVINGS- Pistol, M9 0 2916 2916 4099 $394 $1,615,006$4,531,006- Pistol, M11 28 173 201 42 $320 $13,440 $214,440- Rifle, M16A3 165 900 1065 0 $497 $1,065,082- Launcher, M203 0 59 5

9142 $459 $65,178 $124,178

- Carbine, 727/M4 380 638 1018 1197 $269 $321,993 $1,339,993- Shotgun, 500A1 60 256 316 384 $174 $66,816 $382,816

g

• Projected Validated Cost Reduction over FYDP: (Based on historical data and workload projections - state assumptions)

Enterprise FY 06 FY 07 FY 08 FY 09 FY 10 FY 11

342/27/2007

SWE $5.0M $4.1M $0M $0M $0M $0M

E A NLMilestone Acquisition Documentation Kaizen

• 5 Milestone Packages, NAVAIR input, process performer input as data set

U d t d d t t t t l i

PEO LMW Description: Develop proposed MS documentation plans for MRUUVS and OASIS to reflect a 50% non-

Approach/Status Charter

• Used standard current state, waste analysis, countermeasure, future state, and Standard Work lean techniques. • Developed tailored document list, value stream, data environment, standard work and measurement plan for

value added document reduction with supporting rationale.

T P f t k h ld t

Expected Outcome: Submit plan to MDA for approval.

MRUUVS program to pilot the improved process• Plan submitted to ASN who provided guidance that would enable partial efficiencies for ACAT I,II. Greater Efficiencies achievable for ACAT III, IV.

Team: Process performers, stakeholders, customers (combined experience in 10 Milestones, and included 5 Lean Six Sigma Greenbelts). Total of 17 people.

Results Summary• Documentation reqt’s have doubled over the past 8 years.• Kaizen recommends 17 of 36 for MRUUV

U f t t il i d t k h ld b i ill id• Upfront tailoring and stakeholder buy in will provide value by reducing document number and volume• Improves quality, focus, use of scarce resources• Risk with tailoring is low.• Results consistent with NAVAIR JSOTs review

35

• A goal of 50% reduction is achievable for ACAT III, IV programs.

E A NLINNOVATION AND EFFICIENCY

OPEN ARCHITECTURE (OA) ENTERPRISE TEAMAcquisition of modular systemsCombat system solutions across multiple ship classesCombat system solutions across multiple ship classesOA Applications to major surface combatant modernization

Cruiser Modernization (FY08-FY11) upgrades seven ships (CG 52-58) from 1970s technology to Commercial-Off-The-Shelf (COTS) based computing system introducingtechnology to Commercial Off The Shelf (COTS) based computing system introducing OADDG Modernization (FY11-20) upgrades the Aegis Fleet to COTS-based computing system, and allows introduction of Interactive Behavioral Model (IABM), Sea Based Terminal BMD Multi-Mission Signal Processor Naval Integrated Fire Control–CounterTerminal BMD, Multi-Mission Signal Processor, Naval Integrated Fire Control–Counter Air (NIFC-CA), and upgrades ships for relevancy over their entire 35 year service lifeCVN-21 – Taking SSDS, DDG-1000 and Aegis Software into Single Combat SystemCOTS technology will facilitate future system upgrades within constrained budgets, b fit lif l t i t t i i d t ti d ll Fl tbenefit life cycle costs: maintenance, crew training, documentation, and overall Fleet support

Rapid Capability Insertion Program (RCIP) introduces new technology to meet evolving threats (funding starts FY09)

36

evolving threats (funding starts FY09)

E A NL

Maybe

37

E A NLL6σ Deployment Model vs Actual

2500

3000

ject

s

$300

$350

$400

Mill

ions

Projected NetCost Reduction

FY06, 07($ Millions)

Almost 2000 RIEs & Projects

Over $200M Net Cost

1500

2000

IEs

& P

roj

$200

$250

$300

uctio

n in

M

Model

Reduction Projected for FY07

285

202

1000

mbe

r of R

I

$100

$150

/ Cos

t Red

u

Actual Investment($ Millions)

3855

0

500

-04

-05

05 -05

-05

-06

06 -06

-06

-07

07 -07

-07

Y06

Y07

Num

$0

$50

Inve

stm

ent

Oct

-

Jan-

Apr-

0

Jul-

Oct

-

Jan-

Apr-

0

Jul-

Oct

-

Jan-

Apr-

0

Jul-

Oct

-

FY FY

I

CRRs – Net Cost Reduction

Implementation Plan Model

Number of RIEs & Projects (Actual)

Investment - Lean

38Task Force Lean - Focused effort over last two years

E A NLLean Engagement

45000

500006 yr plan

Even

t

30000

35000

400003 yr plan

t O

ne L

ean

E

20000

25000

30000

A t ld in

at

Least

Goal: 25K by end of 2007

10000

15000Actuals

ple

En

gag

ed

At 15K Today

0

5000

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

# P

eo At 15K Today

39At current rate of engagement, it will take 5-6 years to achieve our goal

E A NLGovernance Process

Define Measure Analyze Improve Control

Toll Gate 1 Toll Gate 2 Toll Gate 3Results

Validated

Complete

• Review Charter to satisfy definition of

• Monitor individual LSS event

• Review the changes

Define y

• Validate the changessatisfy definition of

problem, goals, objectives, scope, and deliverables.

• Assess Planned ROI

Charter&

POA&M

LSS event execution.

• Monitor Pipeline of LSS events

• Assess Objective ROI.

changes• Develop/

Implement the Control Plan

• Develop metrics• Champion the

changes• Validate the

metrics• Validate the ROI

• Evaluate Pipeline• Use charter

definition, pipeline analyses, and ROI to make recommendation

POA&M pInstitutionalization

• Ensure transition of ownership

• Look for replication recommendation.

• Toll Gate 1: Are we ready to start the LSS project?

• Toll Gate 2: Is the improvement plan developed and

opportunity

• Toll Gate 3: Have changes produced desired result?

• Results Validated: Are improvements and ROI

lid t d?

40

LSS project? developed and ready to be implemented?

• Monitoring plan in place?

validated?

E A NL

Probably not

41

E A NLHeadquarters Work

H d t

Focus on the activities at Headquarters HeadquartersHeadquarters that enable the NAVSEA/PEO provider community to

NSYs WCs Enterprise DomainsValue

community to deliver value.

Planning Yards

Private SYs

Contractors SUPSHIPsContractors SUPSHIPs

SEALOGCEN SUBMEPP

EtcONR OPNAV FMB

42

Etc.ONR OPNAV FMB

E A NLHeadquarters ExamplesRADIAC Program

Reduced calibration frequency, streamlined calibration processes, standardized repair decision points, and centralizing parts ordering at new Lead Activities.Cost reduction $3 5M over 4 yearsCost reduction - $3.5M over 4 years.

University Affiliated Research Center (UARC) ProgramStreamlined process, eliminating one person, reduced WIP by 5% and process flow time by 33%, at same time customer base increased by over 20%.y , yFurther improvements are planned.

The Move/Add/Change (MAC) processReduced execution time by 59% and rework by 44% over a 13 week period.The NAVSEA HQ MAC process is being adopted by all SYSCOMS.

Acquisition DocumentationEstablished Standard Work Process resulting in approx $400K savings per year

d i l i iand is currently in practice. Computer Security

Improved the clean up of Classified Electronic Information Spill by 88%.Red ced National sec rit e pos re risk and lost prod cti it b $1 4M per

43

Reduced National security exposure risk and lost productivity by $1.4M per 100 affected users.

E A NLDesired Effects

Align LSS Portfolio to Command Strategic Objectives and Navy EnterprisesObjectives and Navy EnterprisesBetter Integrate Product Line and Competency Focused LSS EffortsFocused LSS EffortsActually Accomplish RIEs at HeadquartersImprove Utilization of GBs/BBsImprove Utilization of GBs/BBsAchieve Meaningful Results Valued by Customers

For the PEOs and EnterprisesFor the PEOs and EnterprisesROI - $ and/or CapabilityReturn hours to apply to value added work

44

pp y

E A NLDoN Lean Six Sigma Three Year Action Plan

Phase I Year 1CY06

Phase II Year 2CY07

Phase III Year 3CY08

Leadership

Leadership Kick-off and monthly progress meetings

Balance process metrics across DoN objectives & goals

Take XX% of overhead cost out of the Department Take an additional XX% of overhead cost out of the Department


Plan for XX% reduction in overhead through CY08

NSPS SES / Flag fitness report bullet that recognizes LSS contributions

Accelerate the journey for those who have started (AIRSpeed, Task Force Lean, et. al.) and report out financial results

Start the journey with enabling service, support and transactional functions (i.e., FIN, HR, SC, IT, etc)

Accelerate integration w/ industrial base and be accountable for financial harvesting

Re-align to DoN 07 objectives & goals, and measure LSS output to DoN 06 objectives and goals

All military and civilian performance evaluations and fitness reports recognize LSS contributions


Accelerate Enterprise maturity

Work Product

High impact core value streams are identified, mapped, and all applicable personnel are prepared to DMAIC

High impact core value streams are DMAIC High impact core value streams are revisitedpersonnel are prepared to DMAIC

Accelerate Integration of organic Supply & Industrial Base with external suppliers (i.e., private industry, DLA)

Identify where LSS applies to the Warfighter (i.e., war-game planning & events)

Identify and clean legacy data bases for conversion to Navy ERP, DIMHRS

Continuous Improvement of those activities that started before Jan 06

100% of all major Defense contracts awarded to industry will contain a LSS incentive clause

Introduce Malcolm Baldrige criteria

Service, support and transactional functions are in a Continuous Improvement closed loop

25% of extended (with industry) value chains have been leaned out

Education and Training

1,000 Black Belts certified

2,000 Green Belts certified

25% of GS-15 /06 and above complete Champion training

Synchronize LSS training body of knowledge and training methods across

1,000 additional Black Belts

4,000 additional Green Belts


Train additional Black Belts equal to 1% of affected workforce

Train additional Green Belts equal to 4% of affected workforce

100% of GS-15 / 06 and above are LSS Champions

45

Synchronize LSS training body of knowledge and training methods across the DoN

Incorporate initial LSS training into all training schools (review Officer, Enlisted & Civilian career paths)

100% of GS 15 /06 and above complete Champion training

Optimize LSS training across enterprise; BB/GB factory; (incorporate into 5 vector model)

100% of GS 15 / 06 and above are LSS Champions

5% of GS-15 / 06 and above are Green Belt certified

E A NLNAVSEA/PEO Lean Six Sigma Plan

Take an additional XX% of overhead cost out of the Department

Take XX% of overhead cost out of the DepartmentLeadership Kick-off and monthly progress meetings

Leadership


Phase II Year 2CY07

Phase I Year 1CY06

1) H d t L Ch i t bi kl


Phase II Year 2CY07

Phase I Year 1CY06 Department


Accelerate integration w/ industrial base and be accountable for financial harvesting


1) Headquarters Lean Champions meet bi-weekly2) SEA 00 meets monthly with WCs and SYs3) Command Lean Champions meet annually4) SEA ED and Director, TFL meet monthly5) Each Command reviews progress and updates deployment plans

through Executive Planning Sessions at least annually

1) Report NAVSEA Lean metrics to DASN(L)2) Identify additional process metrics and align to Navy Enterprises

by end of CY06.

1) Update LSS total cost reduction targets based on alignment to Navy Enterprises by 1 Jan 2007

1) Examine high impact core value streams to identify new / increased partnerships with industry and apply LSS principles and tools that will improve workflow, process efficiency and maximize the use of available resources and savings potential across the entire value stream

1) Update LSS total cost reduction targets by 1 Jan 2008

1) Measure success against FY07 goals and realign to new FY08 goals/objectives

High impact core value streams are revisited

Service, support and transactional functions are in a Continuous Improvement closed loop

High impact core value streams are DMAIC

Continuous Improvement of those activities that started before Jan 06

High impact core value streams are identified, mapped, and all applicable personnel are prepared to DMAIC

Work Product

1) Align NAVSEA/PEO L6S efforts to the strategic lifecycle goals, objectives, and priorities of the five Navy Warfare Enterprises (Undersea, Aviation, Surface, Net Warfare, Expeditionary). Submit Value Stream Improvement Reports to each Navy

1) Continue refinement of high impact value streams engaged and complete first pass. (Focus on SYSCOM cross-claimancy projects)

1) Continue refinement of high impact value streams engaged and commence second pass based on priorities of the Navy Enterprises.

Education and Training


Phase II Year 2CY07

Phase I Year 1CY06

Accelerate Enterprise maturity


Plan for XX% reduction in overhead through CY08

NSPS SES / Flag fitness report bullet that recognizes LSS contributions

1) Total cost reduction targets of 5-10% are set for the major value streams engaged with an overall goal of reducing total costs by $250M (about 1%) in FY 07 based on FY 05 baselines.

1) NAVSEA Flag/SES/CO/ED/DEPCOM will include fitrep/performance element to recognize LSS contributions

across the entire value stream.

1) Measure success against current DoN goals/objectives and realign to new DoN goals/objectives

1) NAVSEA attain self-sufficiency (ability to train, facilitate, and support LSS projects in-house and create results)25% of extended (with industry) value chains have been leaned out

100% of all major Defense contracts awarded to industry will contain a LSS incentive clause

Accelerate Integration of organic Supply & Industrial Base with external suppliers (i.e., private industry, DLA)

p p yEnterprise.

2) Address all of the NAVSEA competencies, identify the major processes, and begin to engage them with L6S to improve standardization and delivery.

3) See attached list of value streams.

1) Implement results of NAVSEA/PEO LSS projects that are completed and ensure controls are in place to sustain the gains.

2) Leverage project replication where it makes sense to maximize return on LSS investment (ROI)

1) Evaluate how to incentivize L6S activities by our

1) NAVSEA/PEO culture and behavior are changed as LSS becomes an embedded corporate value, and processes are continually improved in support of Navy Enterprise priorities and objectives.

1) High impact core value streams identified in CY06 & CY07 have completed first pass using DMAIC and L6S principles/tools.

Train additional Black Belts equal to 1% of affected workforce

Train additional Green Belts equal to 4% of affected workforce

100% of GS-15 / 06 and above are LSS Champions

1,000 additional Black Belts

4,000 additional Green Belts


1,000 Black Belts certified

2,000 Green Belts certified

1) 0.5% of population trained as BBs. Implement BB certification process.

1) 3% of population trained as GBs. Implement GB certification process.

1) 0.5% to 1% of population trained as BBs depending on LSS workload

1) 3% to 4% of population trained as GBs depending on LSS workload

1) 0.5% to 1% of population trained as BBs depending on LSS workload

1) 3% to 4% of population trained as GBs depending on LSS workload

All military and civilian performance evaluations and fitness reports recognize LSS contributions

Accelerate the journey for those who have started (AIRSpeed, Task Force Lean, et. al.) and report out financial results

Start the journey with enabling service, support and transactional functions (i e FIN HR SC IT etc)

1) Continue to accelerate L6S activities per our Lean Deployment Model, broaden engagement of Value Streams as discussed on Work Product below, and align L6S efforts with the priorities of the Navy Warfare Enterprises.

1) All military and non-union employees will include fitrep/performance element to recognize LSS contributions

NAVSEA Comments:

1. Focus on overhead only for target cost is too narrow – needs to be total cost

2. Need to include other metrics in addition to financial (readiness, safety, quality, etc.)

3. Not clear on why journey should start in transactional areas – more value in product lines

Introduce Malcolm Baldrige criteriaIdentify where LSS applies to the Warfighter (i.e., war-game planning & events)

Identify and clean legacy data bases for conversion to Navy ERP,

1) Continue to partner with industry and focus LSS activities on the goals and objectives of the Navy Warfare Enterprises.

contractors and integrate appropriate language into contract clauses where feasible iaw DoN/FAR guidance by mid FY 07.

1) Implement the Navy Performance Guidebook (when issued), which is based on Malcolm Baldrige criteria, where applicable iaw DoN objectives and guidance.

2) Continue annual assessments of LSS deployment across all NAVSEA Directorates and Field Activities

2) Second pass value stream mapping has begun to further streamline the processes and identify additional cost reductions.

NAVSEA Comments:

5% of GS-15 / 06 and above are Green Belt certified


Optimize LSS training across enterprise; BB/GB factory; (incorporate into 5 vector model)


Synchronize LSS training body of knowledge and training methods across the DoN

1) 25% of GS-15 / 06 (or NSPS equivalent) and above complete Champion / Sponsor training

1) Actively participate on Navy ETWG to sync common Body of Knowledge

1) 100% of GS-15 / 06 (or NSPS equivalent) and above complete Champion / Sponsor training

1) Adopt Navy standard training process

2) Complete incorporation of LSS training as part of Five Vector Model.

1) 100% of GS-15 / 06 (or NSPS equivalent) and above have been engaged as Champions / Sponsors

1) 5% GS-15 / 06 and above GB trained

functions (i.e., FIN, HR, SC, IT, etc)1) Continue to implement LSS across NAVSEA and PEO core

processes as well as the enabling and support functions (Competency Alignment)

2) Issue LSS HR Guidance addressing selection, training, career path, rewards and recognition, etc. for LSS specialists (GBs, BBs, and MBBs)

Identify and clean legacy data bases for conversion to Navy ERP, DIMHRS

1) Bullet on database cleansing unnecessary (See

1) Align LSS opportunities to support the priorities of the Navy Warfare Enterprises

across all NAVSEA Directorates and Field Activities, and integrate with Malcolm Baldrige Command Performance Inspection (CPI) process by end of this year.

NAVSEA Comments:

1. Some concerns over directing LSS clauses in 100% of the major contracts; needs further evaluation

2. Bullet on cleaning databases for conversion to ERP seems unnecessary – program already in place for Navy

Incorporate initial LSS training into all training schools (review Officer, Enlisted & Civilian career paths)

common Body of Knowledge

1) N/A NAVSEA Comments:

1. Numbers of BB and GB to train should be guidance or ranges, not prescriptive

2. Do not see a need to be prescriptive at this point about a certain number of GS15s and 06s being t i d GB th i l i t l d t

46

) g y (NAVSEA Comments) trained as GBs; their role is to lead events as

Champions.

E A NLCIRContinuous Improvement Report (CIR)

Reporting Organization: _______________ Date: _________________ Competency/PEO: _________________ 1. Value Stream/Process Engaged Value Stream/Process (Title): ____________________________________________________ Description: __________________________________________________________________ POCs: Champion (VSC): __________________ BB/Sensei: _________________________ Dollar Value for Specified Value Stream/Process: (By fiscal year)______________________ 2. Alignment Warfare Enterprise: _________________ Customer(s): _______________________ National VS: ________________________ National VSC: ______________________ Product (WBS): _____________________ Competency Area: ___________________ 3. Status of Lean Events VSA Date: _____________ Pass: (First, Second, etc) Quad Chart Date: (Latest Update) Rapid Improvement Plan (RIP) Projected Comp Date: _______________ RIEs Projects JDIs Number Planned Number Completed 4. Process Changes Description: (Briefly explain changes made to processes)_________________________

47

How Institutionalized: (Explain changes made to Instructions, Procedures, SOPs)_____ Redeployment: (Number of personnel reassigned to other work or left organization)____ 5. Benefits Describe Benefits: ________________________________________________________

E A NLCIR (Continued)Metrics Table: Provide table of key metrics showing performance before and after continuous improvement transformation efforts, such as following:(Note: These are example metrics - Actual metrics should align to Navy Enterprises)

Output Metric Before After Percent Change Safety Quality Schedule (On Time Delivery)

Time Delivery)Cycle Time Cost Productivity Inventory

6. Cost Benefit Analysis For each Warfare Enterprise/Customer, identify fiscal year and following info: Type of Cost Benefit: _______ (1) Actual cost reduction to customer budget (2) Potential cost reduction from reducing cycle time (3) Cost avoidance / Intangible benefits to customer Investment Costs: _________________________________________________________ Other Costs: ______________________________________________________________ Projected Cost Reduction: __________________________________________________ Projected Net Cost Reduction: _______________________________________________ Status: _____________ (1) Chartered - Forecast based on planned work (2) Projected - Accurate estimate based on Lean work

(3) Validated Confirmed by financial representative (3) Validated - Confirmed by financial representative (4) Realized - Actual cost returns based on completed Lean work Actual Realized Cost Reduction when Complete: ______________________________ (Define total cost reduction and basis - specify in terms of $ per unit output where possible) Projected Validated Cost Reduction over FYDP: (Based on historical data and workload projections - state assumptions)

48

Enterprise Value Stream FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 7. Risk Analysis: Traditional risk cube - Probability of success vs Impact of event 8. Comments: