1. 1 NAVSEA LEAN Presented By Maggie Maguire NAVSEA Comptroller 13 June 2005 It’s a Journey – Not a Destination

2. 2 NAVSEA LEAN Goals and Objectives –Improve productivity and return on investment –Support any efforts that are already underway –Change the culture –Incorporate Lean into the line organizations

3. 3 NAVSEA Lean is… Integrated and Aligned with –ASN (RD&A) Source Document, “Blueprint for the Future” –DASN (Logistics) Lean Efforts Applicable to all lines of business, product lines, and processes across HQ/PEO/Field Activity enterprise for direct, direct support, and overhead work Consistent with NAVSEA’s overarching business strategy/approach for continuous improvement –Incorporates Lean, Six Sigma, Theory of Constraints Critical Chain Project Management, BPR…..

4. 4 LEAN CONCEPTS AND PRINCIPLES Key terms Value/ Value stream Flow Muda Type One –unavoidable in current system Type Two - avoidable Customer focus Pull Perfection

5. 5 COMMANDER NAVAL SEA SYSTEMS COMMAND SEA 00 EXEC DIR. SEA 00B P. BROWN (SES) VICE CDR/DEP CDR FLEET MAINT & MOD SEA 09 RADM A. LENGERICH CORPORATE OPERATIONS SEA 10 VADM P. BALISLE Task Force Lean Warfare Centers Naval Shipyards HQ LoB & PEO Task Force Support Functions Flag/SES level Lean Efforts Task Force Lean (TFL) Organization Contracts; legal & financial support as needed Contract Support Deploy via Command Lines of Business (LoB)

6. 6 PNSY - Ball Valve Repair “Implementation of Lean Manufacturing Techniques in the Ball Valve Shop is the first and most mature example of a process that is the best in class at PNS and throughout NAVSEA.” - Inspector General Report, March 2004 Average Ball Valve Cycle Time per Quarter Quarter 1 2 3 4 1 2 3 4 1 2 Cycle Time (days)208 176 148 140 100 82 61 53 54 45 FY 2002 FY 2003 Goal = 20 Days FY 2004 95% Decrease in Overtime Hours 28% Increase in Throughput 92% Increase in Productivity per Labor Hour 60% Improvement in Cycle Time Process Improvements FY 2002 - FY 2004

7. 7 Improving Crane Availability Portal Cranes Reduced Crane Maintenance from 98 to 37 Days Reduced Overtime Costs from $180K to $0 Portal Crane Annual Maintenance Savings $960K/Year Bridge Cranes  Category II Bridge Crane Savings $400K/YR  88% Reduction in Maintenance Cycle Time from 30 to 7 days  Eliminated Work Backlog

8. 8 38B Ordnance Shop First Pass Before Lead Time: 60 Days Manpower: 18 Sailors Inventory: Excessive Excessive Transportation Premiums paid to local contractors Unpredictable quality After Lead Time: 3-5 Days Manpower: 15 Sailors Inventory: 50% reduction Transp. waste eliminated Premiums reduced by $30K per repair not sent to UD Anecdotal quality increase Added capability to repair VLS Hatches due to improved gun repair process. Lean in SWRMC

9. 9 NAVSEA LEAN BUSINESS AND OPERATIONS Currently Approved Projects –Funding Documents –University Affiliated Research Centers –Procurement Requests

10. 10 The Lean Toolbox (NOT all inclusive) Change Management Balanced Scorecard Metrics Value Stream Analysis / Value Stream Maps Rapid Improvement Workshop Brainstorming Win/Win Prioritization 5 Why's Theory of Constraints Nominal Group Technique (NGT) Team Building & Facilitation Project Planning Process Analysis Causal Loop Diagramming Process Observation / GEMBA Six Sigma Basic Statistics Data Analysis Tools Root Cause Analysis Hypothesis Testing 5 S / Visual Controls Poke-Yoke / Error Proofing Pull Systems Supply Chain Management