learning from case studies - massachusetts institute of
Post on 12-Feb-2022
1 Views
Preview:
TRANSCRIPT
Learning From Case Studies~ Enterprise Transformation at Rockwell Collins ~
George RothJayakanth
SrinivasanJanuary 21, 2009
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 2
Case abstracts athttp://lean.mit.edu
Company - organizational level and change
Summary
Case Study Timeframe
Garden State Tanning Plant case on leather automobile seats (Liker 1999)
Had fallen several months behind in production; first US supplier taught lean by Toyota engineers
4 years (1992-1995)
Delphi Saginaw Plant level case on automobile steering columns (Liker 1999)
Plant produced only for General Motors (GM), but because of quality and cost problems, GM was considering finding another supplier
7 years (1991-1997)
Donnelly (Grand Haven) Plant level case on automobile mirrors (Liker 1999)
Plant was launched to serve Honda, but subsequent delivery, cost and quality issues threaten Honda’s business
2 years (1996-1997)
Freundenberg NOK Company (multi-plant) case on automotive rubber and plastic parts (Liker 1999, Womack and Jones 1996)
Business was barely profitable and lean was seen as the way to become more profitable
5 years (1992-1996)
Western Geophsyical One production line producing underwater cables (Liker 1999)
Cables produced by Western Geophysical (WG) then used by WG service crews; poor quality and lead times were hampering the success of service crews
5 years (1991-1995)
Cedar Works Company (two plant) case on bird houses and animal feeders (Liker 1999)
Experiencing exponential growth, the small company could not keep up with demand
5 years (1993-1997)
Lantech Plant level case on pallet wrapping machines (Womack and Jones 1996)
The key patent of this founder-led company had just expired and the company faced competition for the first time
4 years (1991-1994)
Wiremold Main company plant producing wire management systems (Womack and Jones 1996)
Rising costs struck the once-profitable company; Art Byrne, who had previously learned lean from Japanese experts, took over
6 years (1991-1996)
Pratt & Whitney Plant level case on aircraft engine production (Womack and Jones 1996)
Competition with General Electric and Rolls Royce was heightening; fell behind in engine market for single-aisle commercial jets
5 years (1991-1995)
United Electric Controls Plant level case on control and sensor production (Ryckebusch 1996)
Long lead times and high costs led to a record loss in 1987; a new VP of manufacturing, Bruce Hamilton, was appointed
10 years (19871996)
Gelman Sciences Plant level case on microfilter production (Liker 1999)
Did not want to fall behind the competition as US auto manufacturers had; adopted lean to become more generally competitive
5 years (1993-1997)
Porsche Assembly plant case (Womack and Jones 1996)
The strengthened Deutschemark led to decreased sales to its largest market – North America; sales plummeted
6 years (1992-1997)
Enterprise Change Case Studies
Raytheon & Paveway
Warner Robins ALC
Rockwell Collins
Ariens Company
Col. Guinn succeeded by Col. Swenson30 August 2005
HMMMV flow line operationalMay 2005
Lean launched on HMMMV RECAP programMarch 2005
$2.5 million total in refunds to Patriot & Avenger Reset programsAugust 2004
$0.99 million refund check on SOCOM GMVsFebruary 2004
$1.3 million refunds to Patriot RECAP programSeptember 2003
Lean launched on 3 other Patriot programsFeb-Oct 2003
Lean launched at LEAD on Patriot RECAP program*October 2002
Col. Guinn joins as Commander LEAD18 July 2002
Col. Guinn succeeded by Col. Swenson30 August 2005
HMMMV flow line operationalMay 2005
Lean launched on HMMMV RECAP programMarch 2005
$2.5 million total in refunds to Patriot & Avenger Reset programsAugust 2004
$0.99 million refund check on SOCOM GMVsFebruary 2004
$1.3 million refunds to Patriot RECAP programSeptember 2003
Lean launched on 3 other Patriot programsFeb-Oct 2003
Lean launched at LEAD on Patriot RECAP program*October 2002
Col. Guinn joins as Commander LEAD18 July 2002
LetterkennyArmy Depot
Finance case1. Leadership
developments at Letterkenny Army Depot (“LEAD”).
Cases builds off introduction of lean into Patriot missile recapitalization.
2. LEAD’s context: its work and the Army’s budget process.
3. LEAD’s finance innovations.
4. Extended enterprise implications of LEAD’s innovations.
testing predictiondescription theory
Research on
LeanResearch on
EnterpriseResearch on
Change
understanding description(understanding description) CEO
CFO
Quality/Manufacturing VP
George David
ACE Milestones
ACE-related Events
John Papadopolous
Fortune names UTC most admired in aerospace
UTC acquires Sundstrandforms Hamilton Sundstrand.
ACE across UTC
Yuzuru Itomoves to
CT
7/98: Ito University launched
20072004 2005 200620032000 2001 2002 20072004 2005 200620032000 2001 200219991996 1997 1998 19991996 1997 199819951992 1993 1994 19951992 1993 1994
Shingijutsu at Pratt & Whitney
新技術研究所Shingijutsu at Otis
ACE in cells ACE at site level12/06:
35 ACE Gold Sites
Chubbacquired
197919761976
Key business events
United Aircraftbecomes
1975
Tesfaye Aklilu
Ralph Wood
Dave Fitzpatrick Steve Page
Robert Daniell
divests automotivebusinesses
Kiddeacquired
Pratt formalizes Supplier
Gold
Tony Black
Flex mfg program in
North Berwick
3/07:
CEO & President commit to UTC as 70% ACE
Silver and Gold sites by end of 2009
ACE Director
Operations /Supplier Management VP
Steve Page Greg Hayes
Jim Geisler
Kent Brittan Jothi Purushotaman
Science & Technology VP Robert Hermann John Cassidy Michael
McQuad
Operations Transformation
Transformation at P&W North Berwick
Develop program for all P&W
UTC ACE Council Created
1988 Yoshiki Iwata demonstrates Kaizen at Danaher’s Jake Brake in CT seminar
1988 Nippon Otis problems teach Matsushita’s methods
“ACE”started in
P&W
UTC Corporate Leaders
RocketdyneacquiredRocketdyneacquired
Turn-backs Escapes
On-time Prod. Rev. Action Item
Closure
Class I EC' s
Std Work Action
Closure
Cost of Qual ity Warr anty Provision
Cost of Quali ty
E&D Rework
Cost of Quali ty SRR
10 Mon th FETT
Staf- fing
Train- ing
Test Hrs per En gin e
Mnth
30% red 95% 25% red 1 00% 25% red 25% red TBD 0 100% 20 hrs 30 hrs0.00%
3 3 0% 5 1 00% $1.2M 97% 17
0 0 0% 2 0% $2.4M 97% 190 0 100 % 0 1 00% $ 0 .0M 95% 160 1 No Data 3 71% No Data 99% 11
554 0 100 % 8 1 00% $0.1M $0.6M $1.7 M 11 99% 210 0 No Data 6 83% $0.7M $0.3M 2 82% 30 1 100 % 6 13% $5.2M $2.3M $5.2 M 2 93% 22
28 0 0% 6 22% $25.4M $2 2.5M $2.3 M 29 94% 120 0 100 % 3 1 00% $0.0M $1 3.7M $0.7 M 94% 10 23
5Aftermark et Service s
Sys tems Eng ineering2 001 Goal
SDCI
PSA
Modu le Cen tersSpace
Mech Co mpone nts
MPE
Eng CenterCSMC
TMC
CAN
Engineering Control TowerMetrics Summary ChartApril 2001
On Plan
Off Plan
Define MetricsMonitor Progress
Execute ProjectsPag e 210/3 0/0 1 Continuo us Imp rovement f or B usiness Resul t s. ppt
Define
Investigate
Verify
Ensure
DEF INEPROJECTS
INVEST IG AT ECAUSES
ENSUREIMPRO VEMENT
VER IFYSOL U TIO N
1
2
3
4
Disciplined Appro ach to Pr ocess Improvement
P riori tiz eO pp or tu nitie s
L ev erag eSucc es s
Financial PerformanceQuality Processes & Products Employee FulfillmentCustomer Focus
Financial PerformanceQuality Processes & Products Employee FulfillmentCustomer Focus
Establish Vision
Pratt & Whitney - 2001 RoadmapPratt & Whitney - 2001 Roadmap
Business Ethics Always
Business Ethics Always
Let The Eagle SoarLet The Eagle Soar
CU STOMER FOCUS
EMPLOYEE FULFI LLMENT
QU ALITY PROCESSES & PRODU CTS
FINANCI AL PERFORMANC E
C ustomer Scorecard > 5.5
Impr ove Emplo yee Sco re card by 0.5i n f oc us ar ea s
Ac hi eve Nex t L evel of ACE30 % reduc ti on in Es capes
Mee t Fi na nci al Co m mi tme ntsSa le s = $7 .8 B*
Change the Gam e:Be One Co mpany
Mee
t EH
&S
10X
Obj
ectiv
esM
eet E
H&
S 1
0X O
bjec
tives
• PW C demo nstrates AT FI & secures l aunch customer• Sp ace su cc es sful ly imple ments new acqui si ti ons• PW PS g rows i n n ew mark et se gm en ts• PW AS e xpands N os e-to- Tail ca pa bi l ity and achi ev es
f ina nc ial targe ts• CEB cert i fi es PW60 00 & launch es G P7000• ME deplo ys F1 19 & i nit iates JSF Eng ineering &
Ma nufac turi ng D evel op ment• Ex ecu te key a cquisi t ions & v en tures• Su cce ss ful ly compl e te res tru ctu rin g p rogra ms
• T arget 40% diversity ca nd ida tes on a ll sl ates• Achi ev e e ng ineeri ng restru cturi n g pr oducti vi ty• Earned va lue man agement system ( EVM S) imple mented• Ut il ize strate gic so urcing to drive mate ria l d efl ati on• Share info rmat ion wi th emplo ye es i n a n op en an d t imel y
m an ne r• Achi ev e ISO14001 ta rgets• M od ul e Cen ters will achie ve cos t & product i vi ty targets• Expand ACE in th e suppl y ba se• Execute y ea r 2001 p hases of ERP• An e-b usi nes s portal in pl ace for every customer
* Exclude s maj or ac qui si t ions
0.0 0%3 0% 5 1 00%0 0% 2 0%
0 100% 0 1 00%1 No Data 3 71%
55
0 100% 8 1 00% $0.1M0 No Data 6 83% $0.7M1 100% 6 13% $5.2M
0 0% 6 22% $ 25 .4M0 100% 3 1 00% $0.0M
2001 Goal METRICS
Prod
ucts
&Se
rvic
es
Process Management
QualityClinic
ProcessCharting(QCPC)
Market Feedback Analysis ( MFA )
6STotal ProductiveMaintenance (TPM)
RelentlessRoot CauseAnalysis (RRCA)
Set-Up ReductionProcess CertificationMistake ProofingStandard Work
PASSPORT
Five related case studies
1. ACE Operating System and its history
2. HMI: ACE in Production3. Internal Audit: ACE in
office work4. Turbine Module Center:
ACE in engineering5. Deficiency Reporting:
Pratt & Whitney, USAF, and DCMA cross-organizational improvement
United Technologies ACE
Rockwell Collins
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 3
Lean-centered Success
•
Eight-year strategic initiative at Rockwell Collins (COL) branded as Lean ElectronicsSM. •
“Operational Excellence through Lean ElectronicsSM”
is a strategic frame.
•
Interwoven improvement efforts, Lean and complementary to it.•
Enabled successful responses to “burning platforms”:•
1998 cost reduction challenge by Boeing
•
9/11/2001 airline industry reversal.•
Said to have enabled its well-regarded operational and financial performance.
•
Study finds continued applications and successes, but challenges still exist.
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 4
Successful Performance ≈1996 to 2005
•
As sales
(+22%) and headcount
(-2%) rebounded after 2001, net income* (+205%) soared.
•
Inventory turns increased from 3.9x to 5.0x (28%).
•
Customer value metrics trend to “perfection”.
•
Peer comparisons
are favorable: 4th
quartile.0.00
0.20
0.40
0.60
0.80
1.00
1.20
2001 2002 2003 2004 2005 Goal
P e r c e n t s o f 2 0 0 1 l e v e l s
Cust Accept On-time Deliv Material Flow
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2001 2002 2003 2004 2005
Year-end employ
Sales / employee
Net income / eee
* Following 9/11-related charge.
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 5
1. Branding lean creates the score: Lean ElectronicsSM
1996 1999
3. Alignment or overalignment: the relentless pursuit of improvement
2000 2001 2002 2003 20041960s
CollinsRadio as
technological innovator
1971
Rockwell International
acquires Collins Radio
2005
Sale of Rockwell Int’l’s defense businesses to
Boeing
Merger of Rockwell Collins commercial
& defense businesses
ERP efforts start
Start of cross functional teaming
efforts
Visit to Boeing: “produce for less”
Lean ElectronicsSM
begins
Start of StrategicSourcing
Leadership team offsite:
“create something special”
First SAP go live
Core Process Optimization
begins
Value Stream Mapping and Scorecard to guide efforts
Rockwell Collins Spin
off
9/11 results in 15% workforce
reduction
Renewal of Vision
Lean Roadmap
and Enterprise Scorecard
Advanced ERP
CMMI Level 3
Certification
Vision and Values
Roadmap
4. Moving to an enterprise level: new challenges
5. Joining vision with analysis: creating the structure to endure
Life Cycle Value Stream
ManagementLaunch
Lean Cost Accounting
CMMI Level 5
Certification
19981997
Lean activities explored in
manufacturing
2. Outrunning a bear: crisis to continuous improvement
Engineering Cycle Time improvement
Six SigmaProgram
Shared ServicesReorganization
210 kaizen events
870+ kaizen events
600 kaizen events
28 kaizen events
210 kaizen events
870+ kaizen events
600 kaizen events
28 kaizen events
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 6
Lean ElectronicsSM
at Rockwell Collins
•
Continual focus on improvement and waste reduction.
•
Alternately
vertical and horizontal in focus.•
Vertical: rapid process improvement events, core process optimization, enterprise scorecard, lean accounting, six-sigma, and rapid product development.
•
Horizontal: value stream mapping, integrated performance management, LCVS management.
•
Contribution of Lean efforts: “priceless”:•
Costs not quantified.
•
Part of how we work, not separate or dedicated•
Direct savings immeasurable but accepted.
•
Mixed-in with other improvement efforts.•
Responsible for new business “wins”.
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 7
Lean Enterprise Change
What does it take?… capabilities in each of the following areas1. Rethinking organizational boundaries
•
Long-term system view that includes relationships across units and with suppliers and customers as a common value stream
2. Installing sets of innovations•
Complementarities of changes beyond process improvement
3. Pulling and pushing change•
Based on deeper cultural assumptions that enable a virtuous learning process within a “community of scientists”
4. Seeking growth opportunities•
The positive vision for continual renewal
5. Distributing leadership•
Interdependent roles in a system of leadership
Calling these the “five capabilities for enterprise change”
Company - organizational level and change
Summary
Case Study Timeframe
Garden State Tanning Plant case on leather automobile seats (Liker 1999)
Had fallen several months behind in production; first US supplier taught lean by Toyota engineers
4 years (1992-1995)
Delphi Saginaw Plant level case on automobile steering columns (Liker 1999)
Plant produced only for General Motors (GM), but because of quality and cost problems, GM was considering finding another supplier
7 years (1991-1997)
Donnelly (Grand Haven) Plant level case on automobile mirrors (Liker 1999)
Plant was launched to serve Honda, but subsequent delivery, cost and quality issues threaten Honda’s business
2 years (1996-1997)
Freundenberg NOK Company (multi-plant) case on automotive rubber and plastic parts (Liker 1999, Womack and Jones 1996)
Business was barely profitable and lean was seen as the way to become more profitable
5 years (1992-1996)
Western Geophsyical One production line producing underwater cables (Liker 1999)
Cables produced by Western Geophysical (WG) then used by WG service crews; poor quality and lead times were hampering the success of service crews
5 years (1991-1995)
Cedar Works Company (two plant) case on bird houses and animal feeders (Liker 1999)
Experiencing exponential growth, the small company could not keep up with demand
5 years (1993-1997)
Lantech Plant level case on pallet wrapping machines (Womack and Jones 1996)
The key patent of this founder-led company had just expired and the company faced competition for the first time
4 years (1991-1994)
Wiremold Main company plant producing wire management systems (Womack and Jones 1996)
Rising costs struck the once-profitable company; Art Byrne, who had previously learned lean from Japanese experts, took over
6 years (1991-1996)
Pratt & Whitney Plant level case on aircraft engine production (Womack and Jones 1996)
Competition with General Electric and Rolls Royce was heightening; fell behind in engine market for single-aisle commercial jets
5 years (1991-1995)
United Electric Controls Plant level case on control and sensor production (Ryckebusch 1996)
Long lead times and high costs led to a record loss in 1987; a new VP of manufacturing, Bruce Hamilton, was appointed
10 years (19871996)
Gelman Sciences Plant level case on microfilter production (Liker 1999)
Did not want to fall behind the competition as US auto manufacturers had; adopted lean to become more generally competitive
5 years (1993-1997)
Porsche Assembly plant case (Womack and Jones 1996)
The strengthened Deutschemark led to decreased sales to its largest market – North America; sales plummeted
6 years (1992-1997)
Raytheon & Paveway
Warner Robins ALC
Rockwell Collins
Ariens Company
Col. Guinn succeeded by Col. Swenson30 August 2005
HMMMV flow line operationalMay 2005
Lean launched on HMMMV RECAP programMarch 2005
$2.5 million total in refunds to Patriot & Avenger Reset programsAugust 2004
$0.99 million refund check on SOCOM GMVsFebruary 2004
$1.3 million refunds to Patriot RECAP programSeptember 2003
Lean launched on 3 other Patriot programsFeb-Oct 2003
Lean launched at LEAD on Patriot RECAP program*October 2002
Col. Guinn joins as Commander LEAD18 July 2002
Col. Guinn succeeded by Col. Swenson30 August 2005
HMMMV flow line operationalMay 2005
Lean launched on HMMMV RECAP programMarch 2005
$2.5 million total in refunds to Patriot & Avenger Reset programsAugust 2004
$0.99 million refund check on SOCOM GMVsFebruary 2004
$1.3 million refunds to Patriot RECAP programSeptember 2003
Lean launched on 3 other Patriot programsFeb-Oct 2003
Lean launched at LEAD on Patriot RECAP program*October 2002
Col. Guinn joins as Commander LEAD18 July 2002
LetterkennyArmy Depot
Finance case1. Leadership
developments at Letterkenny Army Depot (“LEAD”).
Cases builds off introduction of lean into Patriot missile recapitalization.
2. LEAD’s context: its work and the Army’s budget process.
3. LEAD’s finance innovations.
4. Extended enterprise implications of LEAD’s innovations.
Research on
LeanResearch on
EnterpriseResearch on
Change
web.mit.edu/lean © 2008 Massachusetts Institute of Technology George Roth/ 22-24 Oct 2008 - 8
Rethinking boundaries
Installing innovation sets
Pulling & pushing change
Seeking growth
Distributing leadership
Capabilities for Enterprise Lean Change
Capabilities…•
are resources, talents, and abilities of an organization and its
people•
that have the potential for development and use, and in their use,
•
create expected outcomes while further developing themselves
The system of change
~ leads to a ~
lean enterprise system
testing predictiontheory(understanding description)
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 9
Rockwell Collins has leveraged lean to support their enterprise transformation
… but…
Is Rockwell Collins a Lean Enterprise?
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 10
Sources of Secondary Data
Other PublicationsAcademic Publications
Annual Reports
Transcripts of Investor Calls
transcripttranscript
transcripttranscript
Newsletters
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 11
Source: Nightingale & Srinivasan
2008
7. Emphasize
organizational learning.
6. Cultivate
leadership to support and drive
enterprise behaviors.
5. Ensure stability
and flow within and across the
enterprise.
4. Address internal
and external enterprise
interdependencies.
3. Focus on
enterprise effectiveness
before efficiency.
2. Identify relevant
stakeholders and determine their
value propositions.
1. Adopt a holistic
approach to enterprise value
creation.
A Principles-based Approach for Understanding Enterprises
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 12
Holistic Growth Strategy
•
Balanced Portfolio
•
Mergers and Acquisitions
•
Stock Repurchase
“grow revenue organically by reinvesting capital into innovation, research, and development, instead of growing revenue at all costs through large acquisitions”
–
Schwendinger, Kanter
and Reopel, July 2007, in
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 13
Meeting the Needs of Key Stakeholders
HUMAN CAPITAL•
Top Areas of Talent needs in A&D
•
Value proposition for people•
Redesigned Hiring Process in 2005•
Top Leadership Support
•
Climate of Organization Alignment•
Time-to-Fill to Time-to-Critical Skills Delivery
•
Ambassador –
Nan Mattai
COMMUNITY –
Iowa Floods•
Manufacturing and administrative facilities were located away from the flood plain and "largely unaffected"
•
Established a fund to help employees who have suffered losses from the high water.•
Payroll deduction, donating unused vacation time
•
Contributed $2 million to local recovery efforts.
*Source: Conference Board Report on Strategic Human Resource Management, 2006
“Rockwell Collins’s future depends on its ability to retain and develop people and
on the ability of those people to provide winning solutions for customers around the world”
-
Clay Jones*
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 14
Focusing on Effectiveness: R&D
•
Rockwell’s R&D Budget in 2008-
827 million•
Expected 2008 expenditure –
950 million
•
2009 expenditure 925 mil. to $975 mil, updated from $950 mil. to $1 bil.
“A company that is hitting on all cylinders at the operational level: Strong execution, steady growth in operating profit margins, a disciplined acquisition strategy and an innovative product pipeline underpinned by robust R&D spending”
-
Anselmo, 2007 in
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 15
Addressing Internal and External Dependencies for Innovation
The 10X program•
Initiated in 2004 to foster disruptive thinking•
Launched with a budget of USD 500,000 –
funded 8/46 ideas
•
Expanded to US Engineering in 2nd
year with USD 1 Million -
70+ ideas•
Third year -
180 proposals
Open Innovation•
Initiated in 2005 to answer the question ofHow do we collaborate smartly so that we can take ideas and come up with innovative solutions for our customers problems, faster and cheaper than our competitors?
http://leanit.mit.edu © 2008 Jayakanth Srinivasan 12/12/08 16
Other On-Going Research
•
Case studies of software organizations across software services, product development, and telecommunications
•
Case study on open source software (with Danny Gagne)
•
Boeing Phantom Works Project on Rapid Certification
top related