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Nick Kunesh Deputy Assistant Secretary of the Navy (Logistics) 2005 Spring Product Support Conference Naval Logistics Transformation Clearwater Beach,

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Presentation on theme: "Nick Kunesh Deputy Assistant Secretary of the Navy (Logistics) 2005 Spring Product Support Conference Naval Logistics Transformation Clearwater Beach,"— Presentation transcript:

1 Nick Kunesh Deputy Assistant Secretary of the Navy (Logistics) 2005 Spring Product Support Conference Naval Logistics Transformation Clearwater Beach, FL May 10, 2005

2 “We simply have to transform this place. It is every bit as important to the success of the global war on terrorism as the other things we're doing.” Donald B. Rumsfeld Secretary of Defense “…transforming the military. What is different today is this sense of urgency: The need to build this future force while fighting this present war. It is like overhauling a car engine while you are going 80 miles an hour.” George W. Bush President of the United States “…we will create an enterprise culture and achieve Operational Excellence….like most major corporations, we need to build a process centered organization that eliminates the variation between goals and results through Six Sigma improvements.” Gordon R. England Secretary of the Navy The Need to Transform What Are Our Leaders Saying? “…I am the one Chief that is asking for fewer people. This year 7,900, without getting into details I believe I can expect that curb to continue because what I'm trying to do is to figure out how to learn from industry and lean manufacturing techniques and the things that will allow us to provide the greatest opportunity to the people who decide they are going to commit themselves in our profession.” ADM Vern Clark Chief of Naval Operations

3 Secretary of the Navy’s Near Term Priorities Combat Capability –Win the War on Terrorism People –Ensure quality of service Technologies –Recapitalize our Forces Improving Business Practices –Transform the Business of Defense Process characteristics needed to support SECNAV’s priorities: »Speed »Agility »Flexibility »Sustainment (TAV, ITV)

4 DoN Total Obligation Authority (TOA) $119.4B 65% is people cost FY04 TOA $115.1B

5 Navigation to TAV/ITV Analogy Lead-time Reduction Open Ocean fix accuracy 30-50 NM 4 NM 1 NM xxxx yds Electronic Age 1911 2200 BC ERP AIT-UID/RFID eProcurement 2005 Line of Sight COASTLINE Latitude 1 LOP 2 fixes/day SEXTANT 6-8 fixes/day SATNAV On Demand GPS 2050 Polaris Celestial Reference Point SEXTANT SATNAV LOS GPS FORCEnet Omni-Object Intelligence

6 JCS/ OSD and Services Logistics Transformation Roadmap Destination Focused Logistics Capability Areas: 1.Joint Deployment / Rapid Distribution 2.Agile Sustainment 3.Operational Engineering 4.Multi-National Logistics 5.Force Health Protection 6.Information Fusion 7.Joint Theater Logistics Management Today R O A D M A P Focused Logistics |

7 Sea Power 21 Key is cost

8 Transformation Enablers Sea Trial Sea Warrior Sea Enterprise Lean /Six Sigma Lean /Six Sigma AIRSpeed AIRSpeed Task Force Lean Task Force Lean Enterprise Resource Planning Enterprise Resource Planning Human Capital Strategy Human Capital Strategy SYSCOM Alignment SYSCOM Alignment Productive Ratios Productive Ratios Performance Based Logistics Performance Based Logistics Naval Logistics Integration Naval Logistics Integration Navy Readiness Integrated Navy Readiness Integrated Improvement Program Improvement Program Ship Maintenance Program Ship Maintenance Program Task Force EXCEL Task Force EXCEL Strategic Sourcing Strategic Sourcing Navy-Marine Corps Intranet Navy-Marine Corps Intranet Commander, Navy Installations Commander, Navy Installations ACNO-IT ACNO-IT EXAMPLES

9 Joint Operations Area Not to Scale SPOD APOD Strategic Airlift Strategic Sealift Strategic Airlift Strategic Sealift High Speed Sealift High Speed Connectors (HSC) Shuttle Ships Austere SPODs Advanced Base Military/Commercial Re-supply CONUS Sea Base Intermediate Log Source Intra-theater Aircraft Surface Air Future-TBD The sea base is an inherently maneuverable, scalable aggregation of distributed, networked platforms that enable the global power projection of offensive and defensive forces from the sea, and includes the ability to assemble, equip, project, support, and sustain those forces without reliance on land bases within the Joint Operations Area. Sea Base Vision Commercial Resupply Air/Surface

10 Future Capability to Project Power is Joint Sea Basing

11 Sea-Base: Open Ocean Environment Sea State 4 Whitecaps are everywhere with spray Average waves are 8´ high Significant waves are 12´ Average highest waves are 16´ Beaufort Wind Force is 6 (22–27 knots) Sea condition described as rough Sea State 4 Whitecaps are everywhere with spray Average waves are 8´ high Significant waves are 12´ Average highest waves are 16´ Beaufort Wind Force is 6 (22–27 knots) Sea condition described as rough

12 Required Enabling Capabilities Interface & Transfer Capabilities Skin-Skin Transfers At-Sea Container Transfer Heavy Unrep Integrated Logistics Platform Capabilities required to provide interface between connectors to facilitate the transfer of containers, quadcons, pallets, personnel, ordnance, and equipment. Intra-Ship Capabilities Modular Packaging Designs Selective Offload Improved Internal Cargo Handling Total Asset Visibility Without them … limited to current methods of resupply. Lean Standardization Reduce logistics footprint, decrease demand, increase commonality, joint interoperability

13 Critical Seabase Capabilities Lynchpin is Logistics Fully joint capable Maneuverable, dispersed – able to coalesce rapidly as needed Integrated command and control At-sea arrival, assembly, and transfer of material and personnel Selective, robust offload Conduct and sustain forcible entry and subsequent operations Facilitate movement ashore Force protection Re-suppliable throughout the follow-on force build-up period in adverse weather Ability to reconstitute and redeploy the force Robust in challenging seas

14 Optimization Synchronization Common Theme of Sea Base Success depends on an end-to-end supply chain with a complete IT solution that provides TAV and ITV crucial for time-phased replenishment and retrograde. Our mandate requires an order of magnitude improvement in our processes to yield speed, agility, flexibility, and sustainment in an environment of constant change (battlefield) with the difficulty of conducting distribution operations in the open ocean (sea state 4). Deputy Assistant Secretary of the Navy for Logistics View

15 Efficiency Methodologies and Tools for Continued Improvement Enablers for speed, agility, flexibility & sustainment in an affordable manner. –Information Technology Global Combat Support System (GCSS) –US Army, USAF, USMC Navy Enterprise Resource Planning (ERP) –Efficiency Methodologies Theory of Constraints (TOC) Lean Six Sigma Others : ISO 9000, Malcolm Baldridge Award, CMMI –Automation Identification Technologies (AIT) Unique Identification (UID) Radio Frequency Identification (RFID) All provide an environment for lead time reduction in the Value Chain.

16 Push to a Common Environment CDL IP TDL ISR C2 ISR JC2 DJC2 DCGS NCES OA RAPIDS/C2ERA Clients B2B Distributed Services C2 Combat Systems B2B B2C C2C GIG JTRS TCS Integrated Networks & Communications GIG-BE Key Enablers XML IP End-to-End Information Assurance Open Systems B2B = Business to Business B2C = Business to Consumer C2C = Consumer to Consumer (Enabling Publish/Subscribe Solutions) FORCEnet Target As - Is Consumers Servers Combat Systems Security Stovepipe Communications Security Representative Building Blocks

17 Current Environmental Landscape: E-2C Gyroscope Repair Example 35 25 10 52 11 7 DRAFT Quick Statistics: Physical Moves: 35 Building Moves: 25 Site Moves: 10 # of Nodes: 29 VAW-120 Pilot VAW-120 Work Center VAW-120 Maintenance Control VAW-120 Supply VAW-120 QA SRS MDU SRS Contractor DCU (Supply) AMSU (AIMD) AIMD 62A Work Center AIMD 600 Production Control ATAC Norfolk CFS ATAC Norfolk Government CFS Houston ATAC North Island CFS Building 3304 DDDC FISC Instruments Shop Pre-stage Area Instruments Shop Planner Instruments Shop Production Control Instruments Shop Work Center Container Reclamation FISC Building 36 Pack and Preservation 472 Production Control 472 Work Center SRS Materiel NAVICP Item Manager Gyroscope Organization Space Although this gyroscope is a one- for-one exchange, the repairable sent to NADEP North Island may not be sent back to Norfolk Over 400 of this type of gyroscope are in inventory 12 Intra-site Physical Flow Information Flow Inter-site Physical Flow Site Marker Building Marker Lean Maps Lean Maps No End-to-End Management Lack of Visibility Long-Cycle Times Increased Inventory Levels Limited Ability to Forecast Physical Moves Building Moves Site Moves IT Transactions Info Systems Logbooks

18 ERP Foundation A 0 Speed Cycle Time Productivity Inherently within SAP are over 20 generations of best commercial practices Lean & Six Sigma will no doubt require alignment with IT (ERP and DIMHRS) to be successful Closeness of our common reengineered processes will give us the order of magnitude improvements we seek ERP enables

19 Navy ERP Functional Scope Release 1.1 Release 1.X Release 1.0 FM SD MM PM HR IM FI CO AM PS IS-PS SAP WF BW DMS PP WMS EH&S mySAP NetWeaver QM Workforce Management – Time Management – Certification & Assignment Control – Training and Event Management Program Management – Project Management Financial Management – Financial Accounting – Revenue and Cost Controlling – Asset Accounting – Public Sector Management Plant Maintenance – Plant Maintenance – Quality Management – Environment, Health, and Safety Wholesale Supply/APS – Production Planning and Procurement Planning – Advanced Planning System (APS) Processing – Business-to-Business Procurement Materials Management – Procurement – Sales and Distribution – Inventory Management, Warehouse Management – Environment, Health, and Safety – Material Requirements Planning (Regional Level)

20 Functional Design Specifications (FDSs) Breakdown by Process Area FinancialSupplyMaintenanceAcqWFMTotal Mandated Interfaces (e.g.,WAWF/DTS/DCPS/DCPDS/ DAAS/SPS/DDRS/WINS) 3216021969 Legacy Trading Partners (e.g., NALDA/NTCSS/ U2/OOMA/CDMD-OA) 167212091 SAP Gap001315 Reports18111523875 Conversions31181124 Other18 2620688 Total (352)72123715135352

21 Lean-Pathways/AirSpeed Accelerated Improvement Workshop Onboard USS Harry S. Truman (CVN-75) 2 April 2004 700 Division BRU-32 AIR Speed The Way Ahead

22 Sink Work Bench Locker Computer Parts Locker Computer Locker Work Bench Tool Box Test Bench BRU Bench Pallet Computer Printer To GSE to Clean Parts To Hazmat Locker BRU 210 Day Inspection Cycle People distance: 3,232 feet Parts distance: 281 feet Lean Process Improvement BRU 210 Day Inspection Cycle “As is”

23 Sink Locker Computer Parts Locker Computer Locker Work Bench Tool Box Parts Washer Pallet Computer Printer BRU 210 Day Inspection Cycle 1 st Stage Disassembly kanban 2 nd Stage Disassembly 2 nd Stage Re-assembly Final Assembly and Test Lean Process Improvement BRU 210 Day Inspection Cycle “To be” People distance: 85 feet (before LEAN 3,232 ft) Parts distance: 67 feet (before LEAN 281 ft)

24 Business Financial Management Community (BFMC) Lean Pilot Project

25 BFMC Lean Pilot Solution Outcome Reimbursable Funding Documents to NAVAIR Field Activities Current State Analysis –30 plus steps (all serial) –16 queues –8 work-arounds –Multiple hard copies –12 review and approval steps –An average of 28 days processing time Future State Solution –15 steps (4 performed concurrently) –4 queues –No work-arounds –Fewer hard copies –5 review and approval steps –An average of 4 days processing time Lean Tools Moved downstream activities up front Brought all parties to table – expanded IPT Removed WAIT time (queues) Ensured complete and accurate product early Reduced rework/rejects Leveraged ERP ensuring all financial links match project plan to performing activity

26 NAVICP Lean/Six Sigma Project Performance Based Logistics (PBL) Contract Development Current State Analysis –Cycle time – 29 mo avg. –Touch time – 1.8 MY per PBL –SOW development – 21 events avg. –J&A manual process –Rerun BCA – 7 times avg. Moved to an “Event Driven” Process Removed variation in the process Removed variation in the process Standardized the SOW Standardized the SOW Reduced reviews/rework Reduced reviews/rework Reduced learning curve Reduced learning curve Future State Solution –Cycle time – 14 mo avg. –Touch time – 1 MY avg. –SOW development – 2 events –Automating J&A process –Rerun of BCA – 3 times avg.

27 Lean/Six Sigma Conclusion Continuous Improvement (CI), with Lean/Six Sigma as the cornerstone, has been endorsed by the highest leadership Lean/Six Sigma applied in the industrial base is providing “order of magnitude” throughput improvements returning Aircraft, Submarines and Marine Corps assets faster to our warfighters Squadrons of Aircraft and Helicopters have been more effectively utilized –Squadrons did not need to be purchased Intensive Lean/Six Sigma education and training focused on Value Streams including non-industrial activities –From leadership to sailors, marines, and civilians at all levels

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