1. Using Lean Principles to Eliminate Proposal Waste
June 3, 2010
Roger Campbell
Pratt & Whitney Rocketdyne
I will briefly introduce myself – I’m an experienced Capture/Proposal Process Manager, Capture Team Leader and Proposal Manager at Rocketdyne and formerly Boeing. I have led pursuits of up to $2B. I have an interest in Lean Principles, but I’m not an expert. I will provide and overview of what Lean is and share some examples of how I have applied it in the proposal environment.

2. Outline How can you Benefit? What are Lean Principles?
Applying Lean Principles to proposals
Reviews – single piece flow
Do/Don’t Use – defect elimination
Top down – eliminating overproduction waste
Recap
I plan to touch on the benefits to the audience (principally Proposal Managers). I will provide a very brief introduction to Lean Principles. This is a subject that can take a lifetime to master. I will also provide some suggested reading at the end for those who want to know more. I will provide ~4 examples of ways that I have applied these principles to produce proposals in a more efficient way.

3. How can you Benefit?
Lean principles can help you create proposals more efficiently
Reducing Bid and Proposal costs
Enhancing team communication and commitment
The obvious benefit of doing proposals more efficiently is the reduction of bid an proposal costs. The more significant (and less quantifiable) benefit is the result of enhancing team clarity and dedication to what we are trying to accomplish.
The examples that I provide lead to a proposal effort that is more transparent to the team. This has several benefits. The team understands what they are trying to accomplish and they seldom see their hard work wasted. A poorly planned and managed proposal has a lot of waste and rework. This not only requires additional effort, it also undermines the proposal team members enthusiasm and commitment to the proposal.
The use of visual controls (e.g., colored dots) makes it obvious to everyone who is or isn’t on track. The most effective motivator in a well functioning team is peer pressure. The desire to “pull ones weight” and not let the team down drives team members to excel. 2 3

4. What are Lean Principles?
Toyota origin
Specify value
Identify value stream
Make flow visible
Let customer pull
Eliminate waste
Not just tools (e.g., 5S)
Toyota
Production System
Just-In-Time
Right part,
Right amount,
Right time,
Flow,
Pull
Jidoka
(Built in Quality)
Stop the line,
Intelligent
Automation
Leveling
Kaizen (Continuous Improvement),
Standard Work (5S)
Lean Principles are the underlying philosophy of the Toyota Production System. They were developed between 1948 – 1975 principally by Taiichi Ohno. They also draw inspiration from approaches created by Toyota’s founder, Sakichi Toyoda, W. Edwards Deming and Henry Ford. They also drew inspiration from Piggly Wiggly supermarkets for the key concept of Just In Time (JIT).
A simplified representation of the Toyota Production System (TPS) is shown by the house diagram. There are many different variations on this diagram. The main objectives of the TPS are to design out overburden (muri) and inconsistency (mura), and to eliminate waste (muda). The key elements are Leveling, JIT and Jidoka (or Built in Quality). The 5 Principles that we will build on today are specify value, identify the value stream, make flow visible, let the customer pull, and eliminate waste. There are many individual tools within Lean, such as 5S, Kanbans, U-shaped work cells, etc. Implementing any one of these tools may provide some benefit, but it is beneficial to understand the guiding principles to provide the appropriate context.
Focus on Lean Principles, not just Lean tools 3 4

5. Understanding customers key to determining Value
Value & Value Streams
As measured by the customer
Make to use
Actions to take product from material to delivery
Let’s first address the principles of Value and Value Streams. The Value of a product is only meaningful from the perspective of the customer. Though we, as the creators of the product, would like to think that we determine value, customers frequently use products in unanticipated ways, or value features of the product that we do not originally anticipate.
The idea of “Make to Use” is to have an understanding of how the product will be used to drive what we make. Have we really understood how our product will be used (e.g., how the proposal will be evaluated) and how it should influence our product design?
An example - Ford was simultaneously manufacturing a car model with transmissions made in Japan and the United States. Soon after the car model was on the market, Ford customers were requesting the model with Japanese transmission over the USA-made transmission, and they were willing to wait for the Japanese model. As both transmissions were made to the same specifications, Ford engineers could not understand the customer preference for the model with Japanese transmission. Finally, Ford engineers decided to take apart the two different transmissions. The American-made car parts were all within specified tolerance levels. On the other hand, the Japanese car parts had much closer tolerances than the USA-made parts - e.g., if a part were supposed to be one foot long, plus or minus 1/8 of an inch - then the Japanese parts were within 1/16 of an inch. This made the Japanese cars run more smoothly and customers experienced fewer problems.
The Value Stream is all of the actions from raw material to the delivery of a finished product to the customer. The customer only wants to pay for “value added” actions, typical value streams contain waste, “non-value added” actions.
Understanding customers key to determining Value 4 5

6. Flow & Customer Pull Single-piece flow vs. batch processing
Showa Coil Making, Before
First Floor
Pipe
Cutting S
Expansion S
Braze S
Finished Coil
Storage
Single-piece flow vs. batch processing
Focus on the product and its needs
Produce the product in response to a customer order S
Fin-
Press S
Clean S
Leak
Test
Intermediate Storage
Conveyor
Second Floor
Finished Coil
Storage
Finished Unit
Store &
Ship
Final Assy. Track
Final Test
Showa Coil Making, After
The concepts of flow and customer pull are also important. The diagrams shows an example of the effect on converting the Showa Coil Making Factory from batch processing to single-piece flow. This conversion resulted in freeing up one floor of the factory, primarily through elimination of storage of finished or in-work parts. In addition to this benefit, labor productivity was doubled, in process inventory was reduced 20x, throughput time to make a coil was reduced 20x.
These dramatic benefits are achieved by focusing on the needs of the product as it flows through the production process. When flow is fully implemented, it may be possible to produce the product only in response to a customer order. This is called customer pull and results in very low waste.
First Floor
Expansion
Fin-
Press
Pipe
Cutting
Test, Pack,
Ship
Parts
Storage
Flow eliminates inventory, raises productivity
Clean
Braze
Leak
Test
Final Assy. 5 6

7. Efficiency driven by waste/defect elimination at origin
Waste Elimination
Eliminate non-value added tasks
Don’t make, pass or accept defects
Seven wastes
Waste Elimination is the final element of the Lean Principles. The seven wastes, as identified by Ohno are:
transportation – has damage, loss or delay implications
inventory (raw material, WIP or finished goods)
motion (of operator or machine) – damage, wear or safety implications
waiting (of operator or machine) – most of a typical products life
over-production – engaging more resources than needed by the customer
over-processing – more processing than required by customer
defects (rework and scrap)
Focus on eliminating non-value added actions. Defects should be prevented. Train your proposal team to recognize and eliminate defects. Defects should not be tolerated.
Efficiency driven by waste/defect elimination at origin 6 7

8. Applying Lean Principles
“Sure, this stuff applies in a factory environment, but I do proposals…”
Do proposals…
Have customers?
Use processes?
Have products?
Produce waste?
If you create perfect proposals without waste, then the remainder of this presentation is not for you. If you live in the real world, where proposals are frequently more chaotic and wasteful than they should be, then the following ideas should be beneficial. These specific examples may not work for your proposals/industry, but Lean Principles can be leveraged to your situation.
Proposal processes/practices ripe for Lean use 7

9. Proposal (Pink/Red) Reviews
Batch processing
Fastest writer waits
Lost time for read ahead and production
Still valuable
Horizontal integration
Checkpoint
Independent view
Traditional Proposal independent (Pink/Red) Team reviews are batch processes, storyboards or proposal drafts are collected and reviewed as a group. We would anticipate that this batch processing approach creates waste. It usually does. If we look at a group of 10 proposal authors, some will quickly create their draft of storyboard in order to get it off of their plate. They will then do other work (potentially non-proposal related). From the viewpoint of the product this waiting is waste. Frequently, additional time is lost for proposal integration/production and read ahead.
I’m not suggesting that we do away with these reviews, they still provide valuable functions, but they can be conducted in a much leaner way.
Traditional review process wasteful 8

10. Lean reviews minimize writer downtime
Lean Proposal Reviews
Single piece flow
Writer requests (pulls) review when ready
Rolling review by Proposal Mgr
Pink/Red team members engaged (no read ahead)
Don’t integrate
No lost time for production
Collocated Implementation
- Ready for review
- Proposal Mgr approval
to engage Pink/Red
team members
- See comments, on
target
- See Proposal Mgr,
off target
In order to implement a Lean Proposal Review, we can think of the model of single piece flow. Each storyboard or draft of a proposal section should be reviewed as soon as it is ready (without waiting). There are several critical features to making this approach work:
1. The Review Team members and assignments must be identified along with the writer assignments (at the kickoff meeting).
The Review Team members must be in-briefed on the proposal and the review process early (as part of the kickoff meeting).
When the writer is ready for a review, he must have a way of alerting the Proposal Manager (or Volume Lead on a large proposal).
Once the Proposal Manager gives the OK, the author engages the assigned Review Team members to get a preliminary review.
For authors that are especially quick, they can get multiple reviews and ensure a good result at the formal Review (when their review results will be “public”).
All authors are required to get an initial review prior to the formal Review (eliminating the need for a read ahead).
The proposal is not integrated for the formal review, reducing waiting.
During the formal review, the authors are assigned to read other proposal sections to promote consistency and integration between sections.
Lean reviews minimize writer downtime 9

11. Kickoff Meeting Baselines
What are we proposing?
Program Plan
What is the win strategy?
Executive Summary
What is expected of me?
Schedule
Detailed outline
The proposal writing process is most efficient when the focus is only on communicating the offer. Clear baselines, established prior to and communicated to the proposal team at the kickoff meeting are essential to ensure that everyone is clear on what is being proposed. There are a number of baseline documents that are typically used, including the Program Plan, Executive Summary and detailed proposal outline/schedule. This is not intended to be an exhaustive list of all useful kickoff baselines. These baselines are critical to preventing defects at the source.
Clear baselines eliminate defects and rework 10

12. Another Useful Baseline
Do/Don’t Use list combines
Fact Dictionary
Glossary
“Hollow” terms
Do Use:
“We have invested $6.5M in
company funds to develop…”
Lean – A set of integrated
principles/tools focusing…”
Don’t Use:
Unique
Best-in-Class
World Class
“…55 years as the …”
An additional baseline that I’ve used is the Do/Don’t Use list. This list combines several elements that are not usually included in the other documents. This list provides facts, terms and definitions that will be needed by multiple members of the proposal team. This information eliminates defects by ensuring consistent usage across the team.
The Don’t Use list provides a list of hollow terms or common unsubstantiated claims that authors will sometimes use to try and avoid the work need to develop specific themes. The focus should be on the development of quantitative, substantiated claims not on using hollow terms that undermine the offeror’s credibility.
Most efficient to prevent defects from occurring 11

13. Bottom’s Up = Overproduction
Rough outline only
Poor page count discipline
Weak/no storyboards
Quality “inspected in”
Many rewrites
“Cut to fit”
The waste of Overproduction is considered to be the greatest waste in a traditional factory environment. Overproduction is also a major waste in typical proposals. If outlines (or other baselines) are incomplete, authors may produce large amounts of information which are off-target and require scrap/rework. Massive rewrites and redirections are also detrimental to proposal team morale. Creating and handling words and graphics that will not be used in the final proposal drive cost.
Words/graphics not used are costly 12

14. Top Down = Minimizes Waste
Executive Summary
Detailed outline with margin
Margin reduced after each review
With clear baselines including a detailed outline with appropriate margins, overproduction can be greatly curtailed. Review Teams always suggest that additional information be included in specific sections to secure a strength or eliminate a weakness in evaluation. In order to be able to accommodate these requests, it is beneficial to have additional page count to distribute. From a 100 page proposal, I would suggest allocating 90 – 95 pages at the kickoff meeting. The remaining pages should be released to address the formal review findings. The page count target and actual status should be displayed in the proposal war room and updated daily. With proper attention and discipline, “Cutting to fit” can be all but eliminated.
Avoid “cut to fit”, compliance may suffer 13

15. Top Down = Minimizes Waste (2)
Strong focus on storyboards
Daily attention to page count status
Daily Page Count Stoplight Chart
Section
Alloc.
3/29
3/30
3/31
4/1
4/2
2.1 5
4.5
2.2 6
5.5
2.3 2 3
2.4 7 8
2.5
6.5
Another beneficial visual display is a daily page count status stoplight chart. This visual control lets all members of the team understand how they are progressing in staying at or below page count. As previously mentioned, peer pressure is a valuable tool in motivating a well functioning proposal team. If not only the Proposal Manager, but other members of the team expect the writer to get on the plan, it will happen.
Only create the words/graphics that will be used 14

16. Recap Four Lean proposal examples were described, providing
Reduced Bid and Proposal costs
Enhanced team communication and commitment
Further reading:
Lean Thinking, Womack & Jones
The Toyota Way, Liker
In conclusions, inefficiency in the proposal environment can be addressed, in part, through and understanding of Lean Principles. The concepts of value, value stream, flow, pull and waste elimination are useful in looking at and improving the proposal process. Following the examples provided here should have a significant impact on proposal productivity. If you want to learn more about these ideas, the further reading suggestions are a good place to start. 15 16