UNCLASSIFIED
Lean Six Sigma in the Changing Business
Environment
Terry Emmert
Lean Six Sigma Program Office
Office of the Deputy Chief Management Officer
November 15, 2010
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
Breakout Session Objective and Abstract
• Objective Learn about the primary challenges key Lean Six Sigma
leaders are facing in their efforts to keep their
organizations relevant in today’s demanding business
setting
• Abstract Lean Six Sigma (LSS) is a continuous improvement
methodology that stresses process velocity and the
elimination of defects and waste. It has been applied in
both the public and private sectors to achieve significant
performance improvements. This panel will discuss how
the LSS approach, which was originally conceptualized
for the manufacturing environment, is being applied for
success at the enterprise level. Panelists will discuss
key enablers, challenges, and lessons learned
involved in moving LSS successes beyond the level
of plant, site, or other relatively self-contained
organizational unit. They will address successful
enhancements to the methodology that they have
applied to nurture systematic change in their
organizations. These insights may be required of
organizations that apply traditional improvement
approaches and intend to keep pace in an environment
that includes increasing numbers of customers,
challenges, new technologies, distribution methods, and
economic uncertainty.
2
Lean Six Sigma in a the Changing Business Environment
Key Enablers Strategic Alignment
Leadership Engagement
Lessons Learned Flexibility
Results
Project to define projects
Requirements
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
Strategic Alignment
Goal 1 Goal 2 Goal 3 Goal 4 Goal 5
Prevail in today’s
wars
Prevent and deter
conflict
Prepare to defeat
adversaries and
succeed in a wide
range of
contingencies
Preserve and
enhance the All-
Volunteer Force
Implement Reform
Agenda
OBJ 1.1.OCO: Degrade the Taliban to
levels manageable by the Afghan
National Security Force (ANSF), while
increasing the size and capability of
the ANSF.
OBJ 1.2.OCO: Execute a
responsible drawdown of the
U.S. military presence in Iraq.
OBJ 2.1.1F1: Extend a global posture
to prevail across all domains by
increasing capacity in general purpose
forces and enhancing stability
operations and foreign security force
competency.
OBJ 2.2.1F2A: Maintain a safe,
secure, and effective nuclear arsenal
to deter attack on the U.S. and on our
allies and partners
OBJ 2.3.1F3: Strengthen cooperation
with allies and partners to develop and
field robust, pragmatic, and cost-
effective missile defense capabilities.
OBJ 2.4.1X2: Ensure sufficient ISR
collection and analysis capacity for full
spectrum operations and ensure
resiliency of ISR operations.
OBJ 3.1.1F2B: Improve the
responsiveness and flexibility of
consequence management response
forces.
OBJ 3.2.1F2C: Enhance capacity to
locate, secure, or neutralize weapons
of mass destruction, key materials,
and related facilities.
OBJ 3.3.1F2C: Enhance U.S.
capabilities to train, advise, and assist
foreign security forces and their
sustaining institutions to operate with
or in lieu of U.S. forces.
OBJ 3.4.1X1: Expand capacity to
succeed against adversary states
armed with advanced anti-access
capabilities and/or nuclear weapons
and improve capabilities to conduct
effective operations in cyberspace and
space.
OBJ 3.5.2D: Maintain a strong
technical foundation within the
Department’s Science and Technology
(S&T) pgram.
OBJ 4.1.2M: Provide top-quality
physical and psychological care to
wounded warriors, while reducing
growth in overall healthcare costs.
OBJ 4.2.2P: Ensure the Department
has the right workforce size and mix,
manage the deployment tempo with
greater predictability, and ensure the
long-term viability of the Reserve
Component.
OBJ 4.3.2R: Better prepare and
support families during the stress of
multiple deployments.
OBJ 4.4.2T: Train the Total Defense
Workforce with the right competencies.
OBJ 5.1.2A: Increase use of
renewable energy and reduce energy
demand at DoD installations.
OBJ 5.2.2C: Protect critical DoD
infrastructure and partner with other
critical infrastructure owners in
government and the private sector to
increase DoD mission assurance.
OBJ 5.3.2E: Improve
acquisition processes, from
requirements definition to the
execution phase, to acquire
military-unique and
commercial items.
OBJ 5.4.2L: Provide more
effective and efficient
logistical support to forces
abroad.
OBJ 5.5.2U/2V: Increase efficiencies
in headquarters and administrative
functions, support activities, and other
overhead accounts.
3
DoD Strategic* Goals…
Execute a responsible drawdown of the U.S. military
presence in Iraq.
Provide more effective and efficient logistical support to
forces abroad.
*Based on crosswalk among the following strategic documents/sources: NDS, NMS, QDR, SMP, IPNSG, HPPG, GAO, OMB
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
MRAP Supply Chain is Critically Dependent on Kuwait-based
Maintenance
4
SPAWAR,
Charleston, SC
MRAP Sustainment Facility,
Kuwait
Global flow of MRAP vehicles
CONUS CENTCOM AOR
Regional Support
Activities, Iraq
• The MRAP Sustainment Facility (MSF)
Operated by Joint Program Office MRAP
Mission has evolved in its two-year life from fielding support in Iraq to remissioning for Afghanistan
Provide safe, fully mission capable vehicles in volume and locations needed to support the warfighter
Significant enabler of Afghanistan surge
28% of MRAP vehicles flowed through this facility
• MSF must master both flexibility and efficiency High mix, job shop
Variable work statement to satisfy rapidly evolving requirements
Rapid time-to-volume
New vehicles
Remissioned vehicles
Joint Program Office,
Stafford/ Quantico, VA
Regional Support Activities /
Receiving Units, Afghanistan
In November 2009, facility was
backlogged on the Cougar variant…
…since then improvement efforts
focused on throughput and cost
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
An enterprise-level assessment led to identification of ten projects
Vehicles in
Vehicles out
MRAP
Sustainment
Facility
Joint Program
Office
(CONUS)
Configuration Management
Contract
Management
Labor
Technical
Manuals
Parts Supply
While the immediate focus was
performance at the MSF… • Leadership (government oversight)
• Process (right subject matter
expertise, Lean Six Sigma)
…we had to simultaneously address
supporting programmatic processes
4 projects
1 project
1 project
1 project
5
Project Status
MaxxPro Line Improvement Closed
Requirements and Capacity
Planning Process Hold
Production Scheduling Hold
Production Execution/SAMS IE
Integration Hold
Labor Lead Time, Streamlining
and Planning Factors Hold
MSF Inventory Optimization Control
Configuration Management Measure
Technical Manuals Measure
Cataloging and Provisioning Measure
MRAP Battle Damage Repair Hold
Throughput is a
function of :
• Operations
• Inventory
• Supply
• Labor
• Facilities
• Equipment
6 projects Capacity Planning
Discussed today
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
MRAP Sustainment Facility
6
C4I Integration
Bay Maintenance Line Maintenance
Operational Stock
Basic Facts: • Production floor space: 150,000 sq ft
• Work in progress: ~150 trucks
• Direct labor: ~500 mechanics
• Parts stock space: 65,000 sq ft
• Lines stocked: ~4300
• Quantity on hand: ~140,000 parts
• Incoming lot capacity: 3000+ trucks
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
Timeline: MaxxPro Line Throughput Project
7
0.0
20.0
40.0
60.0
80.0
100.0
120.0
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Other Variants
MaxxPro Bay
MaxxPro Line
MaxxPro Avg Parts Cons
Dec Jan Feb Mar Apr May Jun
Initial
Assessment
Jul Aug Sep Oct
Measure,
Analyze Improve Control MaxxPro Line
Throughput Project
Av
g N
um
ber o
f Parts
Req
uire
d p
er T
ruck
Nu
mb
er
of
Tru
cks R
ead
y t
o S
hip
“Increasingly
Complex
Truck”
challenge
quantified
Improvement focus areas: Takt Time Execution
Work Standardization
QA Feedback
Maintenance Supply
Reconciliation
Toughest trucks, and
Incoming truck
availability became a
challenge
Two Lines / Two Shifts Two Lines / One Shifts
Requirements shift away from
MaxxPro; more variants run in
Bays
MaxxPro Base
Mission Completed
On Time
All focused on maintaining line
throughput with increasingly tough trucks
Relative difficulty
in fixing truck
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
Sum of Sum of OH QTY Column Labels
Row Labels No WON in 3 mo Zero Consumption < 1 Mo O/H 1 to 3 Mo O/H 3 to 6 Mo O/H 6 to 12 Mo O/H > 12 Mo O/H Grand Total
> 300% Fcst 3-Mo Req 4948 15021 71 1139 3920 5627 59327 90053
200-300% Fcst 3-Mo Req 131 175 23 1804 2254 940 1826 7153
100-200% Fcst 3-Mo Req 127 663 197 3545 1891 568 2243 9234
50% to 100% Fcst 3-Mo Req 12 139 1622 1340 364 285 196 3958
< 50% Fcst 3-Mo Req 47 12 1691 537 170 148 26 2631
No WON History 21573 21573
Zero Fcast Requirement 1530 841 10 48 21 14 29 2493
Grand Total 28368 16851 3614 8413 8620 7582 63647 137095
OH Qtys % of Qtys OH
Significant risk of stockout 1750 1%
Moderate risk of stockout 2480 2%
investigate 174 0%
No action required 11222 8%
Divest candidate 24066 18%
Inventory Reduction candidate 97206 71%
Timeline: Inventory Optimization Project
8
Dec Jan Feb Mar Apr May Jun
Initial
Assessment
Jul Aug Sep Oct
Inventory Optimization
Project Measure Analyze Improve Control
3645 3743 3754 4086 43855114 5439
46965101
5531
105.1 123.5 122.9
147.5 137.1
$51.71 $64.72 $64.44 $67.35 $73.21
# Lines
# Locations Quantity On-hand (thousands of parts)
Value ($M)
Inventory
trending
upward
Driven by mission mix and
requirements uncertainty…but
is it the right inventory?
To answer this question, project considered both…
historic consumption forecast future needs
Stocking Sweet Spot
historic consumption
futu
re n
eeds
Project delivered a monthly
review process and analytics Recommended inventory
adjustments to reduce risk of
stockout and excess
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
Configuration Management
Contract Management
Labor
TechnicalManuals
Parts Supply
4 projects
1 project
1 project
1 project
Throughput is a function of :• Operations
• Inventory• Supply
• Labor • Facilities• Equipment
6 projects
Capacity Planning
Timeline: Configuration Management, Catalog/Provision,
Technical Manual Maturity Assessment Project
9
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Configuration Management, Catalog/Provision,
Tech Manual Maturity Assessment Measure Analyze Improve Control Define
2.5
3.11.8
0.0
1.0
2.0
3.0
4.0
Configuration Management
Catalog & ProvisionTechnical Manuals
MaxxPro Platform Overall Configuration Management Maturity Scorecard
0 1 2 3 40 1 2 3 4 0 1 2 3 4
1 2 3 4 1 2 3 4 1 2 3 4
RG-33 Base Cat II 731
RG-33 CAT II PLUS 995
RG-33 Base HAGA 128
RG-33 HAGA Plus 53
RG-33 Base SOCOM 262
RG-33 SOCOM Plus 44
RG-33 AUV 38MaxxPro Cat I 2405
MaxxPro MEAP 550
MaxxPro Plus 1742
MaxxPro Plus Ambulance 505
MaxxPro Dash 1222
MaxxPro Dash DXM (ISS) 1050
RG31A2 610
RG31A2DO4 (std turning radius) 249
RG31A2DO4 RTR (reduced turning radius)424RG31A3 EM 105
RG31A2 DO7 (ISS) 256
Cougar CAT I A1 839
Cougar CAT II A1 913
Cougar CAT I A2 151
Cougar CAT II A2 142
Cougar CAT I A1 ISS 1001
Cougar CAT II A1 ISS 39
Cougar CAT I A2 ISS 49
Cougar CAT II A2 ISS 80
Cougar CAT II Surge 200
Buffalo MK II A1 (BUFF702) 71
Buffalo MK III A2 (USMC) (B6ECA) 8
Caiman CATI 1154
Caiman Plus 1692
Oshkosh M-ATV 7687
Scorecard Results
CM C&P TM
Navis
tar
OEM Variant Volume
BAE, G
DLS
FPII
BAE T
VS BA
E
Vehicle variant specific
assessments…
…analyzed across the
entire program to
identify highest priority
risks…
7,687
2,405
1,742 1,692
1,222 1,1541,050 1,001 995 913 839
731610 550 505 424 421
262 256 249 200 151 142 128 105 80 71 53 49 44 39 38 8
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
…helped to focus
improvement on 13
variants (85% of
volume) and two
OEMs
85%
Performance Management
DoD Lean Six Sigma Program Office UNCLASSIFIED
Key Enablers, Challenges, Lessons Learned
Key Enablers Challenges/ Lessons Learned
Strategic alignment Ensure results are relevant
Must be continually revisited in dynamic environment
Leadership engagement Ensure right process ownership
Breaking down barriers will be required Tough calls
Expect demonstration of results
Flexibility Expect immature processes and scant/unreliable data
Standardize on a best practice (leverage doctrine)
Sanity checks and corroborating data are better than
guesses
Use sampling
Tailor tools to situation
Results Method must deliver…
Actionable insight
Urgency to make decision
Means to monitor progress
Project is about results…not methodology If communication involves education…something’s
wrong
Project to define projects Provides the data to support mini-strategic alignment and
prioritization Performance gap assessment
Requirements clarity Customer(Warfighter) can be a source of variability
Requirements management process is critical
Particularly important at enterprise level
For government/industry partnerships, time spend upfront
on requirements, pays dividends in execution 10