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)
BALANCING QUALITY, SAFETY, RISK AND COST IN Volatile SPACE AND DEFENSE MARKETS
Program risks associated with an “up & down” business scenario
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”
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!
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”
DoD Nunn-Perry Awards Northrop Grumman World Class Team Awards Boeing Supplier of Year Awards MILI 45208 MILI 45208 MILQ 9858 Lean Journey Begins Lean Journey Begins ISO 9001-1994 ISO 9001-1994 ISO 9001-2000 USN BMP Audit USN BMP Audit AS 9100 NGST Gold NGST Gold Supply Chain Mgt System ERP 198919941999200020012005200620082009 A journey of continuous improvement
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
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
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
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
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