1. 3/15/2006 1 Lean Six Sigma Clockspeed Ben Goss

2. 3/15/2006 2 Overview –BAE Systems –Department of Defense Challenges –LFM Influence on Process Improvement Philosophy –Lean Six Sigma Project Notebook Required Deliverables –Process Improvement Metric – Project Clockspeed

3. 3/15/2006 3 Headquartered in Rockville, Md. Three Operating Groups $10 Billion Annual Sales 45,000 Employees Customer Solutions Marshall Banker President Land & Armaments Tom Rabaut President Electronics & Integrated Solutions Walt Havenstein President BAE SYSTEMS Mike Turner Chief Executive Officer Mark Ronald Chief Operating Officer BAE Systems –Information Technology –Technology Solutions & Services –Ship Repair –Communication, Navigation, Identification & Reconnaissance –Electronic Protection –Information Warfare –National Security Solutions –Platform Solutions –Sensor Systems –Advanced Systems & Technology –Center for Transformation –Armament Systems Division –Bofors –Ground Systems Division –International Division –Land Systems –Steel Products Division

4. 3/15/2006 4 Department of Defense (DoD) Clockspeed* –Weapon System Acquisition (e.g. Submarine) –10-20 year product development cycle –Billions of dollars –Service Acquisition (e.g. Configuration Management) –1-5 year contracts (with option years) –Vertical Integrated –Joint Forces –Horizontal Modular –Autonomous fighting units (e.g. Future Combat Systems) *As used by Fine (Clockspeed, 1998)

5. 3/15/2006 5 Department of Defense Challenges –Significant DoD investment in Lean Six Sigma in the past 3-5 years –Growing success in lean shop floor applications (5S, Pull, Flow) –Less success with complex services –Typical Challenges to Achieving Results 1. Change is effective (produces desired result) 2. Change will be approved 3. Implementation is compatible with rest of ecosystem (other IT, organizations, policies)

6. 3/15/2006 6 LFM Inspiration #1 – Hill Climbing Algorithm –Process Improvement Feels Like an Optimization Search Algorithm –Simplex anyone? –Heuristics, the trump card of optimization –Lesson Learned –Feedback and Course Correction Can Converge on Results…Quickly –Application to Lean Six Sigma Projects –Create Project Notebook with Six Minimum Required Deliverables targeted on feedback for validation/course correction that: 1. Change is effective 2. Change will be approved 3. Implementation is compatible with rest of ecosystem Not a typical focus of Lean Six Sigma

7. 3/15/2006 7 LGO Inspiration #2: Process Improvement Clockspeed Ad Hoc Process Improvement Slow Process Improvement Clockspeed Fast Process Improvement Clockspeed ROI

8. 3/15/2006 8 LGO Gap: Change Management Philosophy Philosophy Desired Results Approval Implementation (Sustained Results) Leadership Buy-InPossibleLikelyFad? Create a Sense of Urgency Unintended Consequences Malicious Compliance Fad? Win-WinRobustCut Losses Self-Correcting (Self-Sustaining)

9. 3/15/2006 9 Lean Six Sigma Project Notebook Six SigmaProject NotebookPurpose Define1. Project CharterFeedback: Desired Result, Approve Measure2. Retrace the Facts Create Facts/Data Feedback: Result, Approve, Implement Identify Opportunities Analyze 3. Failure Modes and Effects Analysis (FMEA) 4. Process Map Prioritize Efforts: Result, Approve, Implement Communication Improve 5. Detailed Instructions 6. Pilot Results Designed to Validate: Result, Approve, Implement Control1. Project Charter (Closed)Implement to Sustain Results

10. 3/15/2006 10 Project Notebook: 1. Project Charter Incremental Value Delivered –Performance Commitment –Additional Deliverables –Schedule Commitment Investment of Resources –Effort Hours –Resource Requirements –Budget Value Proposition (Bundle) Customer Approval (Desired Result)

11. 3/15/2006 11 Project Notebook: 2. Retrace the Facts C C C

12. 3/15/2006 12 Project Notebook: 3. Failure Modes and Effects Analysis (FMEA)

13. 3/15/2006 13 Project Notebook: 4. Process Flow

14. 3/15/2006 14 Project Notebook: 5. Detailed Pilot Instructions

15. 3/15/2006 15 Project Notebook: 6. Pilot Results

16. 3/15/2006 16 Process Improvement Metric – Project Clockspeed –Project Charter Establishes Commitment Date –Rule of Thumb 1: Decouple Projects into 12 week Commitments –Rule of Thumb 2: First pass complete by week 6 –Rule of Thumb 3: Takt time for 6 deliverables = 1 week –Progress to Date on Government Process Improvement –2004: Ad hoc “semi-formal”, no close-out, list of recommendations –2005: Project Clockspeed = 10 months –Deliverable takt time approx 1 month –Under delivering on performance commitments –2006: Project Clockspeed = 3-5 months –Deliverable takt time approx 1-2 weeks –Meet performance commitments –2007: Target Project Clockspeed = 2-3 months –2008: Target ROI of > 200% for each bundle of projects