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We live in a volatile world Vice President & COO

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Presentation on theme: "We live in a volatile world Vice President & COO"— Presentation transcript:

1 We live in a volatile world Vice President & COO

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3 DoD Operating & Support Costs vs. Investment % of DoD BA (Includes OCO) 1950 – 2010 Average: 36% Tension between O&S and investment will reach historic proportions Lowest investment share since the Korean War O&S (MILPERS plus O&M) Investment (RDT&E plus Procurement)

4 BALANCING QUALITY, SAFETY, RISK AND COST IN Volatile SPACE AND DEFENSE MARKETS

5 Program risks associated with an “up & down” business scenario

6 Hurry up, you are behind schedule DESIGN PROGRAMS Shortcut requirements analysis: DESIGN RE-SPINS Compromise reliability / maintainability / availability analysis: REDUCED SUPPORTABILITY Reduce scope & content of Systems / Hardware / Software Peer Reviews: MORE RE-SPINS Shortest lead time becomes principal parts selection criteria: INCREASED OBSOLESCENCE & COUNTERFEIT PARTS RISKS Hardware – Software trade-off studies scope reduced: PRODUCT DESIGN COMPROMISED Reduced emphasis on Design for Manufacturing & Test: PRODUCTION/TEST REWORK PRODUCTION PROGRAMS Shortcut work instruction preparation time: INCREASED “DO OVERS” Compromise production training: INCREASED SCRAP & REWORK Reduce rigor of first article / first build reviews: JEOPARDIZE PRODUCT INTEGRITY/SCRAP/REWORK Focus on delivery VS first time quality: MISSION FAILURE, INCREASED CUSTOMER REJECTIONS ACROSS THE BOARD RISK TO SYNERGY “CORNERS”

7 SLOW DOWN --- THE PROGRAM IS SLIPPING Design a ROLEX VS the TIMEX that the customer ordered: costs, lead times, producibility impacted Utilize science experiments to solve a problem requiring simple analysis Retain people on the program where ROI is low Introduce production changes that actually reduce producibility & testability ANOTHER DAY ON THE PROGRAM IS ANOTHER DAY OF COST!

8 Subcontractors caught in the middle Subcontract reduction/terminations/extension Delayed customer awards = Compressed Subcontractor Cycle Time Extended material/parts lead times Increased parts materials/cost: Building to ORDER VS Building to STOCK “SUBCONTRACTOR”

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10 A Native American, Woman-Owned Small Business High Reliability Manufacturing Stillwater 86,500 Sq FT Facility A SMALL BUSINESS PERSPECTIVE President & CEO

11 UAS Programs Engineering Design & production focus Maritime Programs Aircraft ProgramsSpace and Missile Programs SB-4229A(V)/SP Radar Switchboards SB-4229

12 Product Assurance Network FES-QP-1 FES Quality Plan FES-QSP FES-QSM-1 FES Quality Manual FES-QSP FES-QSM-1 FES Quality Manual FES-QSP FES-QSP

13 CORE PROCESSES Design Material Acquisition Manufacturing Product Support

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15 Developing a corporate culture of commitment & process optimization

16 Key Quality Metrics LINE of BALANCE CUSTOMER SATISFACTION ON-TIME DELIVERIES QUALITY ACCEPTANCE WARRANTY RETURNS NONCONFORMANCE CUSTOMER COMPLAINTS SUPPLIER CORRECTIVE ACTIONS SCRAP REWORK SUPPLIER PERFORMANCE RISK

17 Customer Satisfaction = % = % 2 Proposals Won = 86 Proposals Lost = 20 Total Proposals = 106 Wins ÷ Total Proposals Submitted = Proposal Win Rate Proposal Win Rate: 81.0 % FES Computed Delivery Rate: 98.8 % Warranty Returns = 4 Units Shipped = 2035 Warranty Returns ÷ Units Shipped : 4/2035 X 100 =.2% x 100 (Proposal Win Rate + FES Delivery Rate) /2 Warranty Return Rate = SCORE

18 Supplier Ratings

19 DoD Nunn-Perry Awards Northrop Grumman World Class Team Awards Boeing Supplier of Year Awards MILI MILI MILQ 9858 Lean Journey Begins Lean Journey Begins ISO ISO ISO USN BMP Audit USN BMP Audit AS 9100 NGST Gold NGST Gold Supply Chain Mgt System ERP A journey of continuous improvement

20 challenge Forced re-design of the F-18 E/F Engine Fuel Display due to LCD supplier Bankruptcy o Hardware / Software No break in production o Required 75% reduction in re-design time Focus on 1 st Time Quality to Reduce Production Cost

21 Reduce Order to First Delivery Cycle Time PO Award FES Critical Path Sub Critical Path FES & Sub Critical Path Initial State PO Award to Sub 8 wks All material received FES 25 wks All Sub material received 30 wks Sub 1st Delivery 56 wks FES 1st Delivery 76 wks 18 wks 4 wks Current State 41 wks 48 wks 20 wks Supply Chain LEAN Deployment

22 Result Achievements: DESIGN Time Cut -75% MTBF Improved +33% PRICE Reduced -48% F/A-18E/F Engine Fuel Display Redesign Engine Fuel Display Multi-Purpose Color Display Customer Recognition: Boeing’s Avionics Supplier of the Year 2001 New Up- Front Control/Dis play F

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24 Roadblocks to watch for Inadequate Training Too Much Too Early No Link to Company Objectives No Incentive Dirty fingernail gang looses clout Diverging goals and objectives Poor Communication Leadership Buy-In Backsliding

25 A Closing Thought Profitability PRICEPRICE


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