DoD Depots of the Future: Maintaining Yesterday’s and Tomorrow’s Navy October 2004 NAVSEA Vision Jim Brice, Assistant Deputy Commander for Industrial Operations, NAVSEA 04X

Outline Resources--The Imperative Navy Shipbuilding and Repair Competes for Resources Transformation Lean One Shipyard Shipyard Transformation Plan Lean Training The Future

Resource Constraint Forces Transformation The Imperative Resource Constraint Forces Transformation Fleet Response Plan SEA Enterprise 300 Ships 300 Ships $ to Sustain $ to Recapitalize Current Fleet Readiness Future Fleet Readiness Right Force Right Force Capability & Capacity Facilities Workforce Maintenance & Logistics Policies More Operational Time More Force Structure Right Readiness Right Cost Right Readiness Right Cost THE INDUSTRIAL BASE Goal is to effectively and efficiently manage the national industrial base to achieve future goals.

Last Decade: Next Decade: New Ship Construction and Submarine Availabilities Ship New Construction Environmental Scan Last Decade: Next Decade: 8 Starts 12 or More? 1990 2000 2010 SSN 774 SSGN LMSR CVN 76 MR DDG 51 Flt IIA TAKE DD 21 CVNX LHD 8 LHAR DDX CVN 21 MPF Future T-AOE(X) T-AGM Repl CG(X) LCU(X) ... ? MCS(X) ... ? CVN 77 MR 17 Designs in Progress SSN 23 MMP LPD 17 CG CONV LCS Submarine Depot Availabilities SSN/SSBN DMPs, EROs & EOHs We Are Here! Number of Submarines Scheduled in Shipyards 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 SSN SSBN SSGN Quarter of Fiscal Year 2 4 6 8 10 12 14 16 18 20

Continuing the Transformation Phase 5 IMPLEMENT LEAN PRINCIPLES & Level Two Collaboration Deploy Human Capital Strategy Aug ‘04 CNO & COMNAVSEA Annual Guidance May ‘04 Action Plans Complete Alignment Assessment Reassessment Sep ‘04 Nov ‘03 Phase 4 Improving our alignment Improving our productivity Refining our Human Capital Strategy Phase 3 Jul ‘03 100 day study complete Integrated Planning Activity Business Operations Post-CNI Supply Support / Logistics Business Efficiencies Contracting Engineering Human Systems Integration Financial Management Phase 2 Mar ‘03 100 day study complete Warfare Center Transformation Plan Naval Shipyard Transformation Plan We are here NAVSEA Commanders Conference July 2004 Action for All: Begin to apply Lean Principles and changes to all appropriate work processes Phase 1 Jul ‘02 100 day study complete HQ/PEO Realignment Technical Authority

NAVAL SEA SYSTEMS COMMAND NAVSEA Enterprise NUCLEAR PROPULSION SEA 08 COMMANDER NAVAL SEA SYSTEMS COMMAND SEA 00 VADM P. BALISLE ADM F. BOWMAN SHIPS INTEGRATED WARFARE SYSTEMS VICE CDR/DEP CDR FLEET MAINT & MOD EXEC DIR. SEA 00B P. BROWN (SES) SEA 09 RADM A. LENGERICH COMSPAWAR SYSCOM (ADDU for C4I) LITTORAL & MINE WARFARE Task Force Lean COMNAVSUP SYSCOM (ADDU for LOG SPT) CHIEF INFORMATION FLEET SUPPORT OFFICER CARRIERS MANAGEMENT SUBMARINES SEA 00I REVIEW BOARD TECHNICAL AUTHORITY COMMAND STAFF BOARD PEO Organizations ORDNANCE SAFETY SEA 00V WARFARE CENTER POLICY BOARD COMPTROLLER CONTRACTS HUMAN SYSTEMS INTEGRATION LOG, MAINT, & IND OPS SHIP DESIGN INTEGRATION & ENGINEERING WARFARE SYSTEMS ENGINEERING SEA 06 UNDERSEA WARFARE SEA 07 CORPORATE OPERATIONS SEA 10 SEA 01 SEA 02 SEA 04 SEA 03 SEA 05 NAVAL SHIPYARDS COMMANDER, NAVAL SURFACE WARFARE CENTER COMMANDER NAVAL UNDERSEA WARFARE CENTER NUWC SUPSHIPs SUBMEPP SEALOGCEN Aug 2004 NOSSA EOD-TD

Multi-ship/ Multi-year Indefinite Quantity (IDIQ) One Shipyard One Naval Repair Shipyard MSRA / ABR Contractors Partnerships Multi-ship/ Multi-year (MS/MO)contracts Other Contracts GDEB NGNN Multiple-award contracts One Naval Shipyard Indefinite Quantity (IDIQ) Indefinite Delivery One Nuclear Shipyard One Naval Repair Shipyard Resource and Infrastructure sharing across the boundaries of Public/Private will be instrumental in providing cost effective Ship construction, modernization and maintenance while maintaining core capability at the NSYs.

Naval Shipyard Transformation Plan Sub Best Practices Sail, Tanks, MSW/ASW, Grooming IPPTP, VLS, Steering&Diving, Torp Tubes, Hull UROs, Engr & Project Mgmt Carrier Team One ALRE Material, Process Masters, Execution Charging & Progressing, Co-yard, MCAP, etc. NSY Productivity Projects Quality initiatives, High Performance team building, personal accountability, Lean processes, CIMP, etc. Corp Programs CWP/ERM, MANTECH, CTMA, SHIPMAIN, NSRP, etc. Fleet Programs I&D Integration, Waterfront Realignment, SHIPMAIN, etc. Lean A Comprehensive Business Strategy for Successful Transformation

Any Ship, Any Time, Any Where NSY Training on Lean Any Ship, Any Time, Any Where One Master Black Belt hired from Ford Five experienced LSSC graduates certified as ASQ Six Sigma Black Belts 82 Process Improvement Engineers trained via the Naval Shipyards’ Lean Six Sigma College (NNSY, PSNS, PHNS, SIMA-N) 2515 people trained in Lean Basics 1456 people participated in Lean events 175 Lean events Training our People on Lean Six Sigma Lean Six Sigma College 6-month Training Plan Lean Six Sigma Developed & Taught with USNR and Certified Black Belts Independently Validated by Industry Integrates Lean, Six Sigma, Theory of Constraints, and Corporate Quality Tools Tailored to ship repair environment Methodology taught in a 6 month course called Lean Six Sigma College Students who complete LSSC are qualified Process Improvement Engineers (equivalent to Black Belts by Industry Standards) Corporate Process for Process Improvement Observe “As Is” Baseline ID Key Metrics & Targets Understand Define Commit Characterize Improve Implement Close Define the Problem Define the Case for Action Define Customer Value Define Expected Benefit Define Expected Costs Define the Vision Develop Draft Economic Analysis Prioritize Commit Resources Update Priorities Plan Next Steps Publicize & Recognize Results & Benefits* Knowledge Sharing Sustain & Maintain Metric Train and Deploy Implement Controls Measure Key Metrics Codify Assess and Adjust Reduce Waste Conduct Pilots Develop Implementation Plan Develop Benefits Realization Schedule* Lean Six Sigma Chronology Training may only be a presentation for self-study, with list of other learning resources “Glossary" or self-study, awareness only, with list of "lifelines" Emphasis Levels Training includes case study or equivalent; students may be ready to apply, or may need minor addl training/reading Training includes a practical example or exercise; students leave ready to apply the tool 1999 3 Six Sigma pilot projects Program Change Continuous Self Improvement (CSI) Process Re-Engineering Hierarchy of Process Improvement Summer Sabbatical with Experts (naval reservists) to develop the Lean Six Sigma concept and 6-step model 2001 Nov 2001 Flight 1 of Lean Six Sigma College starts at NNSY Hired a Ford Six Sigma Black Belt. Further developed and delivered LeanSigma College Lean Repair Exercise (LRE) The LRE is an interactive Lean Improvement exercise, developed by the Shipyards, based on the Motor Regional Repair Center, simulates variability typical of repair processes & uses LeanSigma to focus and drive improvements Dec 2001 Lean Six Sigma Toolbox Vision/Mission Development Change Management Assessment Models QPS, CLL Balanced Scorecard Value Stream Analysis Brainstorming Win/Win Prioritization 5 Why's Theory of Constraints 7 Quality Control Tools 7 Management & Planning Tools Nominal Group Technique (NGT) Team Building & Facilitation Project Planning Internal Consulting Capacity Analysis, Takt Charts Process Analysis FMEA IPO / ICOM Diagrams Causal Loop Diagramming Process Observation / GEMBA Basic Statistics Data Analysis Tools SPC, Gage R & R Sampling Theory Root Cause Analysis CTQs / CTPs Hypothesis Testing 5 S / Visual Controls Poke-Yoke / Error Proofing Process Simplification & Design Pull Systems Supply Chain Management Critical Chain Project Mgt Mar 2002 Flight 1 graduates and LeanSigma projects begin. May 2002 - Flights 2, 3, and 4 complete. June 2003 Sept 2003 PSNS, NNSY, and USNR agree to partner on LSC Oct 2003 4 PIEs certified as Six Sigma Black Belts by ASQ Lean Repair Exercise developed to teach and demonstrate the use of LSS principles in Repair Environment Dec 2003 April 2004 Master Black Belt Certified (former BB from Ford) May 2004 Flight 5 starts at NNSY with 15 students from NNSY, NFPC, and SIMA-Norfolk

The Way Ahead... We will continue to Deliver as promised on products and services to keep our Warfighters ready to win Ensure cost, scheduling, and process efficiency gains are factored to return value and needed investment monies Bottom Line: Our Industrial Base is fundamental to the Navy and the nation as it ensures that the Fleet is ready to deploy

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