AVIATION WEEK Lean Six Sigma for Military Forum "Taking CPI to the Next Level: Embedding Process...

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Anthony DeSantisApril 21, 2009

AVIATION WEEK Lean Six Sigma for Military Forum

“Taking CPI to the Next Level: Embedding Process Improvement

for Enterprise Success”

Distribution Statement A: Approved for Public Release; Distribution is unlimited.

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Transformation Through LSS SECNAV – May 2006

Challenge– Fight Today’s War– Position for the Future

Approach– Top Down application

of Lean – Six SigmaMission– Increase Readiness &

Assets within existing Budget

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NAVSEA Lean Journey

Organizational Level

Connected to Local Value Streams

5 % of the Business

TFL – August 2004Command Level Central

Coordination

Connected to National Value Streams

30 % of the Business

Enterprise Level Value Streams

Focus CPI

100% of the Business

2001-2003 2004-mid 2005 mid 2005-2009

NUWC KEYPORT

SUPSHIP SAN DIEGO

Maine

PennsylvaniaNSWC Ship Systems Engineering

Station

WashingtonIndiana

NSWC CRANE

SUPSHIP BATH

PUGET SOUND NSY & IMF

NAVAL SEA SYSTEMS COMMANDShore Activities

California

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

Virginia

Washington DCNAVSEA HQ & PEOs

NSWC CARDEROCKMaryland

Connecticut Rhode IslandNUWC HQ

SUPSHIP GROTON

New JerseyAEGIS Technical Rep

NAVSHIPYD NORFOLK

Florida

Mississippi

SUPSHIP JACKSONVILLENSWC Coastal Systems Station Naval Experimental Diving Unit

SUPSHIP GULF COAST

South CarolinaNaval Nuclear Power

Training Unit

New HampshireNAVSHIPYD PORTSMOUTH

As of Apr 04

Organizational changes in process

PEARL HARBOR NSY & IMF

SUPSHIP PUGET SOUND

NSWC CORONANSWC PORT HUENEME

Naval Sea Logistics Center

NUWC NEWPORT

Submarine Maintenance Engineering, Planning & Procurement

NSWC HQ

NSWC INDIAN HEAD Naval Ordnance Safety &

Security ActivityNaval Explosive Ordnance

Disposal Technology Div

SUPSHIP PORTSMOUTHSUPSHIP NEWPORT NEWSNSWC DAHLGREN

NSWC Combat Direction Systems Activity

Surface Combat SystemsCenter

SEASPARROW ProjectSupport Office

NUWC KEYPORT

SUPSHIP SAN DIEGO

Maine

PennsylvaniaNSWC Ship Systems Engineering

Station

WashingtonIndiana

NSWC CRANE

SUPSHIP BATH

PUGET SOUND NSY & IMF

NAVAL SEA SYSTEMS COMMANDShore Activities

California

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

Virginia

Washington DCNAVSEA HQ & PEOs

NSWC CARDEROCK

Maryland

Connecticut Rhode IslandNUWC HQ

SUPSHIP GROTON

New JerseyAEGIS Technical Rep

NAVSHIPYD NORFOLK

Florida

Mississippi

SUPSHIP JACKSONVILLENSWC Coastal Systems Station Naval Experimental Diving Unit

SUPSHIP GULF COAST

South CarolinaNaval Nuclear Power

Training Unit

New HampshireNAVSHIPYD PORTSMOUTH

As of Apr 04

Organizational changes in process

PEARL HARBOR NSY & IMF

SUPSHIP PUGET SOUND

NSWC CORONA

NSWC PORT HUENEME

Naval Sea Logistics Center

NUWC NEWPORT

Submarine Maintenance Engineering, Planning & Procurement

NSWC HQ

NSWC INDIAN HEAD Naval Ordnance Safety &

Security ActivityNaval Explosive Ordnance

Disposal Technology Div

SUPSHIP PORTSMOUTHSUPSHIP NEWPORT NEWS

NSWC DAHLGREN

NSWC Combat Direction Systems Activity

Surface Combat SystemsCenter

SEASPARROW ProjectSupport Office

2003

2005

Maturing-Growing-Connecting

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NAVSEA/PEO “Domain” Alignment

COMNAVSUPSYSCOM

(ADDU FOR LOG SPT)

COMSPAWARSYSCOM

(ADDU FOR C4I)

NAVAL SEA SYSTEMS COMMAND SUPPORT RELATIONSHIP

PERFORMANCE-BASED AGREEMENTS

PEO CARRIERS

AIRCRAFT CARRIERS

PEO IWSINTEGRATED

WARFARE SYSTEMS

PEO LMWLITTORAL AND MINE WARFARE

PEO SHIPSCOMBATANT,

AMPHIB, AUXILIARY

PEO SUBSUBMARINES

NAVSEA HQCOMMANDER

NAVAL SEA SYSTEMS COMMANDHEADQUARTERS

WARFARE CENTERS

SUPSHIPS

ASN(RD&A)NAVY ACQUISITION EXECUTIVE

CNOCHIEF OF NAVAL OPERATIONS

NAVAL SHIPYARDS

CFFCCombined Fleet Forces

Command

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The NAVSEA Strategic Business Plan: Aligned for Success!

• Provide Total Naval Workforce• Prosecute Global War on Terrorism• Build the Force for Tomorrow

• Safeguard People• Strengthen Ethics• Provide First-Rate Facilities

Secretary of the NavySecretary of the Navy

Chief of Naval OperationsChief of Naval Operations

Naval Sea Systems CommandNaval Sea Systems Command• Build an Affordable Future Fleet• Sustain Today's Fleet Efficiently and Effectively• Enable Our People

• Build a Navy for Tomorrow• Maintain Current Warfighting

Readiness• Provide for Our People

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NAVSEA/PEO Value Stream NetworkNAVSEA/PEO Value Stream Network

Subs

Carriers

Ships

IWS WSs

LMW WSs

Program Mgt – Contracting – Legal – IM/ITBusiness Financial Mgt/ComptrollerResearch and Systems Engineering

Logistics – Industrial Ops – Corporate OpsExplosive Safety/Ordnance Disposal Ops

CustomersCustomers

Warfare Warfare EnterprisesEnterprises

USE

NAE

SWE

NNFE

NECE

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

Products& Services

Non-NAVSEANon-Navy Customers

R &

D

DES

IGN

BU

ILD

& T

EST

DIS

POSE

FLEE

T IN

TRO

MO

DER

NIZ

E

MA

INTA

IN

CER

TIFY

Navy After Next Next Navy Current Navy

R&DR&D AcquisitionAcquisition MROMRO In-Service SupportIn-Service Support

Functional/Competency Areas

Functional/Competency Areas

End Items

Integrated Supporting Activities will provide standard processes across all Product Lines and Primary Activities

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NAVSEA Performance AgreementsCustomer Enterprise Demand Signal Excerpt from Improvement Objectives

NAE Naval Aviation Readiness

- ID equipment causing reduction in AO- Decrease Depot Maintenance Cost $25M/yr- Improve relationship with SWE

NECE Requisite quantities to NECC units

- Deliver 80% of EOD systems on time- Ensure NECE warfighters RFT at min cost

NNFE Accurate Battle-space picture

- Reduce cost of C4I tech upgrades 5%- Use OA to reduce tech insert cycle time- Reduce cost Ent. Display consoles 50%

SWE Readiness & Fleet Response Plan

- Map single TOC process across Enterprise- DDG-51 SCN cost avoidance $3M/ship- Deliver LCS 1 with finalized ISP for maint.- Reduce overall cycle time for modernization

USE Readiness - Complete SSGN 729, SSBN 731 EROswithin available funding- No mod deferrals due to NAVSEA processes- 2 for 4 in 12 (VIRGINIA Price)

Use CPI/LSS to achieve Improvement Objectives

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Project Development Process

ExecutivePlanningSession

ValueStream

Analysis

Rapid Improvement Plan• DMAIC Projects• RIE• Just Do It


ValueStream

Analysis


Ship Yards


ValueStream

Analysis



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WarfareCenters


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PEOExecutivePlanningSession

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CDL

Each Community Implements In Accordance with NAVSEA Lean Implementation Plan

Enterprise Service AgreementsCNO Agenda for ChangeNAVSEA Strategic Plan

Enterprise Service AgreementsCNO Agenda for ChangeNAVSEA Strategic Plan

SUPSHIPExecutivePlanningSession

ValueStream

Analysis



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Analysis



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CPI Deployment Roles

All Employees• Provide data and voice of

customer inputs to VSA, RIE, and Projects

• Apply concepts to their own jobs and work areas

• Owns vision, direction, business results• Leads change• Allocates Resources• Owns Value Streams

• Owns Rapid Improvement Plan

• Owns Redeployment Plan• Owns financial results• Removes Barriers

• Expert on principles and tools• Leads larger projects • Trains & Coaches Green Belts• Full-time position

• Lead and/or support CPI Events & Projects

• Full time or part time role

• Participate in CPI Events and Projects

• Part time

• Owns Deployment Plan• Owns Communication Plan• Captures Metrics DeploymentDeployment

ChampionChampionProject Project SponsorSponsor

TeamTeam MembersMembers

ExecutiveExecutiveLeadershipLeadership

Green BeltsGreen BeltsBlack BeltsBlack Belts

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

MasterMasterBlack BeltsBlack Belts

Model taken from “Lean Six Sigma” by Michael George

CPI Office Line Departments

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NAVSEA CPI Council

CPI Office(M. Wohlgemuth & Staff)

TEAMSUBS

TEAM SHIPS

PEO LMW

PEO IWS

PEO CARRIERS

Competency /Business

Units

SHIPYARDSEA 04X

SUPSHIPSEA 04Z

WARFARECENTERS

NSWCCarderock Corona CraneDahlgrenDam NeckEOD Tech Indian HeadPanama CityPort Hueneme

NUWCKeyportNewport

Bath GrotonGulf CoastNewport News

Portsmouth NorfolkPuget SoundPearl Harbor

SEA 00I SEA 00L SEA 01 SEA 02 SEA 04LSEA 04RSEA 05 SEA 08SEA 10NOSSAPrg Man

PMS 312PMS 378

PMS 340PMS 403PMS 408PMS 420PMS 480PMS 485PMS 495

SHIPS AMPMS 317PMS 320PMS 325PMS 326PMS 333PMS 377PMS 385PMS 400DPMS 400FPMS 470PMS 500PMS 501PMS 502

IWS 1.0IWS 2.0IWS 3.0IWS 4.0IWS 5.0IWS 6.0IWS 7.0

PMS 398PMS 399PMS 401PMS 404PMS 415PMS 425PMS 435PMS 450

L6S College

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PEO Integration Process/Product

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Shipyard Integration Process

SHIPYARDS

• Tier One– Carriers & Surface Ships– Submarines 688– Submarines SSBN/SSGN

• Tier Two– Industrial Processes– Project Management– Lifting and Handling– Material Management– Resource Management– Financial Management

Project ManagementProject ManagementNSSG LeadNSSG Lead

Platform NVS (TierPlatform NVS (Tier--One)One)

Lifting & HandlingLifting & HandlingNorfolk LeadNorfolk Lead

Industrial Processes Industrial Processes Puget Sound LeadPuget Sound Lead

Proc

ess/

Func

tiona

l NVS

(Tie

rPr

oces

s/Fu

nctio

nal N

VS (T

ier --

Two)

Two)

Standardizing Across PlatformsStandardizing Across Platforms

Stan

dard

izin

g Ac

ross

St

anda

rdiz

ing

Acro

ss

NSY

sN

SYs

Material Management Material Management SEA 04XL LeadSEA 04XL Lead

Resource Management Resource Management Norfolk LeadNorfolk Lead

Financial Management Financial Management SEA 04XF LeadSEA 04XF Lead

(1) Integrating & Aligning (1) Integrating & Aligning

(2) Creating Accountability(2) Creating Accountability

NSY Lean – Creating Alignment : National Value Stream Management

Carriers &Carriers &Surf Ships Surf Ships

SEA 04XCSEA 04XC

SubmarinesSSN 688 SSN 688 SSBN/SSGNSSBN/SSGN

NAVSEA 04XUNAVSEA 04XU

ee aa nnLL ee aa nnLL ee aa nnLL ee aa nnLL

Directly Integrated & Aligned with Enterprises via “Team One” engagements

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Embed CPI ANS (RDA) Feb 2009

• CPI is Enabler of Benefits– Increased Capability– Reduced Cost– Decreased Cycle Time

Create & Foster a Culture that Embeds CPI into Everyday Business

• “Selection” of Strategic Projects will Accelerate Benefits

• Focus on Process Improvement & Positive Outcomes will follow

• Report Benefits– SECNAV Management Review– Echelon II Reviews– Portfolio reviews– Gate Reviews

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People Side• Single CPI Process

– Standard Work to Improve the Work• Improve the “Right Thing”

– Improvements Relative to Strategic Goals • Select the Right People

– If Moving Them Impact Organization, You Did Good! • Focus on Results “from the Start”

– Provide Clear Expectations– Avoid Focus on “Churn”

• Stay on Message at ALL Levels– “Improving the way you do the work is part of the work”– “Where is Your Charter?” “Who is on the Team”

• Integrate CPI into Personnel Performance Systems– Ensure Reward System Reinforces Message

• Communicate – Success & Lessons Learned

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CPI Strategic Alignment Notional Future State

SECNAV

ASN (RDA)

Warfare Enterprise

CNO

NAVSEA Competency

Domains

NAVSEA Affiliated

PEOs

Industry Ship Yards SUPSHIP Warfare

Centers Academia

Product/Process Integration

Enterprise Service AgreementsAcquisition Goals

Operational Requirements

Operational Guidance

Operational Goals

DoN Objectives

DoN Objectives

High Impact Core Value Streams

High Impact Core Processes

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Example – Tank Value StreamUSS ABRAHAM LINCOLN TANK VALUE STREAM TEAM at PSNS & IMF

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

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

210% improvement in throughput

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Induction Heat

Single Coat

HIGH-SOLIDS PAINT

STEEL SHIP

DFT Edge Probe

HIGH-SOLIDS PAINT

STEEL SHIP

DFT Edge ProbeDFT Edge Probe

Eliminate Stripe Coat

Phased Array UT

SSTG Slip Ring Resurfacing Without Steam

Surface Condition Measurement Tools

Eliminating Cumbersome Work Practices

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Example – VA Class Submarine Program

CNO challenged PEO Submarines to reduce the cost to construct VIRGINIA Class Submarines to $2B per hull.

Lean Six Sigma tools and methodologies in addition to production(design and construction) improvements, were applied to reduce the cost of PEO SUB/DoN acquisition processes.

At the Oct 2006 Executive Planning Session, 14 Value Streams were organized and assessed over the next 18 months. Integratedteams identified improvements to the current state, allowing quick wins of approximately $14M per hull. Long term, over the next 8Block III ships, these Lean savings are expected to save nearly $100M.

A combination of factors contributed to the success– A clear specific goal– Avid executive leadership support, strong team leadership– A highly organized improvement structure– Lean tools

Won 2008David Packard Excellence in

Acquisition Award

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Questions?

AVIATION WEEK Lean Six Sigma for Military Forum "Taking CPI to the Next Level: Embedding Process...

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