lmmfc journey to excellence - asq orlando …...2013/10/10 · excellence provide finance and it...
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MFC Excellence - 1
Approved for Public Release DAL201302014 © 2013 Lockheed Martin Corporation. www.lockheedmartin.com/mfc
Steve Sessions Director, Supplier Quality
LMMFC
Journey To Excellence
Missiles and Fire Control
Missiles and Fire Control
MFC Excellence - 2
Approved for Public Release DAL201302014 © 2013 Lockheed Martin Corporation. www.lockheedmartin.com/mfc
1988… 1998 2000 2004 2008 2010 2013+
Mix
ed F
ocus
Str
ate
gic
PMT: Performance Management Teams: Product Based Multi-functional Manufacturing Teams
LM21 – Lockheed Martin in the 21st Century: Lean Six Sigma Deployment
ELC: LMMFC Leadership Reviews of Performance Measures
Enterprise Performance Index:
Balanced Scorecard Analysis
The Journey: Tactical to Strategic Focus on Measures
Strategic Performance Management Teams:
Supply Chain Based PMTs
Next Generation
of ELC
Metric Driven Results – A Metrics Journey
Missiles and Fire Control
MFC Excellence - 3
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Work
Processes
Work
Systems
Develop Strategic Objective
Develop Long
Range Plan
Allocate Resources
Capture The
Business
VP Human Resources
VP Quality Assurance
VP Finance & IT VP Legal Dir Ethics
Execute
Support
Plan Capture Execute Support
Plan
Plan the Program
Design the Product
Acquire the
Product
Fabricate the
Product
Support the
Product
VP Technical
Operations
VP Business Development VP Materials VP
Production Operations
Multiple VPs of Product Lines
Capture
Ensure Quality Excellence
Provide Finance and IT Support
Provide Facilities and ESH Support Provide Legal and Security Support
MFC President
Provide Human Resources
Support
The Company Work System and Work Processes
Leadership Structure Mirrors Company Work Systems and Value Stream
Missiles and Fire Control
MFC Excellence - 4
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Operations Focus Overview
• Enterprise Work Systems & Process
Development – Align customer requirements & value to business
– Establish key Work Systems: Plan, Capture, Execute,
Support
– Design Work Processes to execute work systems
– Establish business Metrics to monitor health and drive
continuous improvement
– Build company structure to manage Work System (i.e. From
Product Teams to Executive Management)
MFC Fundamental Business Principle:
“Business is not the objective … it is the result.
Performance is our objective.”
Missiles and Fire Control
MFC Excellence - 5
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Identify Key
Requirements &
Metrics
Analyze Requirements Analyze Requirements Mapping core competencies to internal and external inputs to
create customer value
Conduct Business
Performance Review
(BPR) to manage
metrics (ELC)
Identify Key Work
Processes
Identify Key Work
Systems
Refine BPR
Enterprise Work Systems Development
Update as Needed
Conduct Business
Performance
Review (BPR) to
manage metrics
(ELC)
Identify Key Work
Processes
Identify Key
Requirements &
Metrics
Identify Key Work
Systems
Analyze
Requirements
Refine BPR
Systematic Review
Missiles and Fire Control
MFC Excellence - 6
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Conduct Business
Performance Review
(BPR) to manage
metrics (ELC)
Identify Key Work
Processes
Identify Key
Requirements &
Metrics
Identify Key Work
Systems
Analyze Requirements
Refine BPR
Analyze Requirements
Identify Key Work
Systems
Identify Key Work
Processes
Identify Key
Requirements &
Metrics
Conduct Business
Performance Review
(BPR) to manage
metrics (ELC)
Refine BPR
Mapping core competencies to internal and external inputs to
create customer value
Identify Key Work Systems and encompass both current and
future performance objectives and customer value
Identify the Key Work Processes required to successfully
implement and control our Work Systems
Establish business rhythm for Business Process Reviews with
senior leadership to monitor performance and drive continuous
improvement
Define Key Requirements and Measures for each Work Process
Enterprise Work Systems Development
Missiles and Fire Control
MFC Excellence - 7
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Conduct Business
Performance Review
(BPR) to manage
metrics (ELC)
Identify Key Work
Processes
Identify Key
Requirements &
Metrics
Identify Key Work
Systems
Analyze Requirements
Refine BPR
Plan
Capture
Execute
Support
Identify Key Work Systems
• Establish the Work Systems
– Strategic and Long Range Plans
– Capture the Business
– Plan, Design, Acquire, Fabricate, and Support
the Product
– Ensure Quality Excellence, Provide Finance, IT,
HR, Facilities, ESH, Legal, and Security Support
Missiles and Fire Control
MFC Excellence - 8
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Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources
Perform Situational
Assessment
Market Dynamics
Business Posture
Develop Business
Strategy
LOB Strategic Plans
Functional Segments
Step 1
MFC
Strategic
Plan
Plan
Capture
Execute
Support
Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 9
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Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources Plan
Capture
Execute
Support
Assess Current
Year Financials
Evaluate
Situational
Assessment
Characterize
Orders by LOB
MFC Long
Range Plan
Identify Risks &
Opportunities
Project Out Year
Orders, Sales, Profit
Step 2
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 10
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Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources Plan
Capture
Execute
Support
Annual Allocation
(% Sales)
New Business
Council or OIPT Capital Review
Board
NBAE and
Capital Spend
Plan Resource
Management
and Review
Step 3
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 11
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Capture The Business
Plan
Capture
Execute
Support
Market Development &
Opportunities Qualification
(Phase I)
Pursuit
Qualification
(Phase II)
Pre-Proposal
(Phase III)
Post-Proposal
(Phase V)
Proposal
Development
(Phase IV)
Step 4
Capture The Business
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 12
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Plan the Program
Design The Product
Acquire The Product
Fabricate The Product
Support The Product
Plan the Program
Design The Product
Acquire The Product
Fabricate The Product
Support The Product
Plan/Schedule Deliverables
Baseline Cost
Validate Make/Buy & Release
BOM
Staff Manpower
Establish Program Performance
Measures
Step 5
Perform Mission Analysis
Generate System Requirements
Design the System
Critical Item Development
Product Integration Verification &
Validation
Step 6
Plan
Capture
Execute
Support
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 13
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Plan the Program
Design The Product
Acquire The Product
Fabricate The Product
Support The Product Plan
Capture
Execute
Support
Review & Analyze Required
Material
Solicit & Evaluate Supplier Bids
Prepare & Definitize Contracts
Manage the Supply Chain
Close Delivered Contracts
Step 7
Analyze Material Solution
Identify Manufacturing
Technologies
Define Manufacturing Process
Build the Product (H/W or S/W)
Step 8
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 14
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Plan the Program
Design The Product
Acquire The Product
Fabricate The Product
Support The Product Plan
Capture
Execute
Support
Analyses: Product Design &
Support Systems
Develop & Design the Support
System
Deliver the Product & Support
System
Provide Operational Support to
End of System Life
Step 9
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 15
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Ensure Quality Excellence
Provide Finance and IT Support
Provide HR Support
Provide Facilities and ESH Support
Provide Legal and Security
Support
Plan
Capture
Execute
Support
• Provide oversight and guidance in all
Key Work Systems and Processes
Ensure Quality Excellence
Provide Finance and IT Support
Provide HR Support
Provide Facilities and ESH Support
Provide Legal and Security
Support
Identify Key Work Systems
Missiles and Fire Control
MFC Excellence - 16
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Ensure Quality Excellence
Provide Finance and IT Support
Provide HR Support
Provide Facilities and ESH Support
Provide Legal and Security
Support
Plan the Program
Design The Product
Acquire The Product
Fabricate The Product
Support The Product
Capture The Business
Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources
Integrated Work Systems & Processes
Capture
Support
Develop Long Range Plan
MFC Long Range Plan
Plan & Allocate Resources
Assess and Forecast
Financials
Prepare Company Strategic Plan
Perform Situational Assessment
DevelopBusinessStrategy
MFC Strategic Plan
Plan the Program
Deliverables
Closed Loop Iterative Processes
Identify Risks and
Opportunities
Proposal Costs
R&D /Tech
Investment
Capital Expenses
Capture the BusinessMarket Development &
Opportunity QualificationPhase 1
Pursuit QualificationPhase 2
Pre-ProposalPhase 3
Proposal Development
Phase 4
Post-ProposalPhase 5
AWARDProposalProducts
Cost
Manpower
Performance Measures
Design the Product
Requirements
Design
Verification & Validation
Acquire the Material
Requirements
Solicit & Evaluate Bids
Manage the Supply Chain
Fabricate the Product
Manufacturing Technologies & Processes
Build the Product
Support the Product
Support System
Requirements
Deliver the Product
Provide Operational
Support
AWARD
ProposalProducts
Plan
Execute
Contract
DeliverablesQuality Facilities Finance Human Resources
Provide Improvements and Spirals
Contract Performance
Execute
Plan
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MFC Excellence - 17
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ALIGNED MEASURES WITH WORK
SYSTEMS & PROCESSES
Missiles and Fire Control
MFC Excellence - 18
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Bottom to Top Metric Alignment – Roll-up to Balanced Scorecard
Executive Review of
Tiered Work Systems
and Processes
Monthly
Tier 4/5: PMT Team Measures • Hours Assembly Line A
• Rejects Assembly Line B
• Etc.
Team and Product
Level Reviews
Daily / Weekly
Tier 3: Work Process Measure • Hours Per Unit Product X
• Defects Per Unit Product Y
• Etc.
Tier 2: Work Process
Multiple Measures • Hours Per Unit All Products
• Defects Per Unit All Products
• Etc.
Tier 1:
Work Process • Fabricate the Product
• Capture the Business
• Plan the Program
• Etc.
Quarterly
Next Generation: Strategic Analysis of Work
System Performance and
Trending
Metric Driven Results – Metric Alignment
Missiles and Fire Control
MFC Excellence - 19
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Robust Business Rhythm And Tiered Focus Achieves Results
• Business Rhythm
– Product Teams: Daily / Weekly
– Executive Leadership Council:
Monthly
– Senior Executive Leadership
Council: Quarterly
• Tactical and Strategic Reviews
Executive Review of
Tiered Work Systems
and Processes
Monthly
Tier 4/5: PMT Team Measures• Hours Assembly Line A
• Rejects Assembly Line B
• Etc.
Team and Product
Level Reviews
Daily / Weekly
Tier 3: Work Process Measure• Hours Per Unit Product X
• Defects Per Unit Product Y
• Etc.
Tier 2: Work Process
Multiple Measures• Hours Per Unit All Products
• Defects Per Unit All Products
• Etc.
Tier 1:
Work Process• Fabricate the Product• Capture the Business
• Plan the Program• Etc.
Quarterly
Next Generation:Strategic Analysis of Work
System Performance and
Trending
Metric Driven Results – Metric Alignment
Missiles and Fire Control
MFC Excellence - 20
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Enterprise Performance Index
Information for Executive Leaders to Drive Strategy and Results
Element of Excellence - EPI
• Business Scorecard Instrumentation
– Flags Trends
– Adaptable to Other Businesses
– Complement to Tactical Techniques
• Discriminator in Industry
– Strategic Instrumentation Set
– Higher Understanding of Business Relationships
• Prediction Oriented Strategic Tool
Missiles and Fire Control
MFC Excellence - 21
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EPI Strategic Metric System - Hierarchy
Product Index Scorecard Process Index Scorecard
738 798 Composite
Score 762
Enterprise Score 736 + 72 = 834
834
Talent Readiness Index (+/- 100 Pts)
+72
Poor Marginal
60% 40%
Acceptable Exceptional Over
Managed
Monitors Product, Process and Human Capital Performance
Tie
r I
Tie
r I.I
Tie
r 2
Process Execution
Missiles and Fire Control
MFC Excellence - 22
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PMT Measures
(Weekly) Work Process Measure
(Monthly) Key Work Process Measures
(Monthly) EPI
Work System Measures
(Quarterly)
Plan the Program Design The
Product Acquire Product
Material Fabricate The
Product Support The
Product
Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources
Ensure Quality Excellence
Provide Finance and IT Support
Provide HR Support
Provide Facilities and ESH Support
Provide Legal and Security
Support
Capture The Business
Plan
Capture
Execute
Support
Fabricate The Product
Acquire Product Material
Ensure Quality Excellence
Plan the Program
Develop Strategic Objectives
Develop Long Range Plans
Allocate Resources
Provide Legal and Security
Support
Capture The Business
Design The Product
Support The Product
Provide Finance and IT Support
Provide Facilities and ESH Support
Provide HR Support
Aligned Measures With Work Systems & Processes
Missiles and Fire Control
MFC Excellence - 23
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RESULTS
Missiles and Fire Control
MFC Excellence - 24
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Plan Capture Execute Support
Develop Strategic Objective
Develop Long Range Plan
Allocate Resources
Capture The Business
Exceeded Orders Plans in Volatile Market
Realized Results – A Marriage of Instrumentation and Leadership
Ord
ers
$
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Rigorous Management Process Produces Sustained Market Growth
Actual
Plan
Missiles and Fire Control
MFC Excellence - 25
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Plan Capture Execute Support
Plan the Program
Design the Product
Acquire the Product
Fabricate the Product
Support the Product
100% First Test Design Success Over 12+ Years
Realized Results – A Marriage of Instrumentation and Leadership
Cumulative Cost Savings Due to Robust Design Process and Resulting First Test Success
Missiles and Fire Control
MFC Excellence - 26
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Supply Chain Management Best Practice
Measuring Performance at Key Locations in the
Procurement Process
Missiles and Fire Control
MFC Excellence - 27
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Measuring Performance at Key Locations in
the Procurement Process
Supplier Performance Trend Risk Assessment & Action Plans
Supplier Management System (SMS)
SAS SHAPE SHOT Trend Tool
Sub-Tier Risk Analysis Metric Analysis
Sub-tier Suppliers
Identification & Risk
Assessment
Shared Supplier Risk
Characterization Tool
Supplier Quality &
Deliver Performance
Analysis Tool
Rapid Supplier
Metric Summary
Integrated Supply Chain IT Tool Suite
Supply Chain Management Best Practice
Missiles and Fire Control
MFC Excellence - 28
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Sub-tier Suppliers
Identification & Risk
Assessment
Supplier Quality &
Deliver Performance
Analysis Tool
Integrated Supply Chain IT Tool Suite Our Goal is 100% Quality &
100% On-Time Delivery
Supplier Performance Trend Risk Assessment & Action Plans
Supplier Management System (SMS)
SAS SHAPE SHOT Trend Tool
Sub-Tier Risk Analysis Metric Analysis
Shared Supplier Risk
Characterization Tool
Rapid Supplier
Metric Summary
On Ti
me P
erce
nt
2004 2005 2006 2007 2008 2009 2010 2011
Parts Procured
On Time %
Common ProcessesEvaluated Metric Set
Enhanced Trend Tool
Supplier Improvement Conference
Red Flag Review EPRI
40
50
60
70
80
90
100
Supp
lier P
arts
Deliv
ered
Strategic Improvements:
Reverse Report Card Financial
Risk Monitoring
Supplier PMTPerformance
ReviewsSupplier Data
Gateway
Sub-Tier MonitoringSHAPE, SCORE
Disaster WarningsTrend Tool
Action Teams
Better
Benchmark top performer = 98%
Benchmark Average = 87%
SupplierTech Support
Staffs
Parts Delivered
YTD Aug 2012
Parts DeliveredProjected Year
End Total
2012
Improvements in Managing/Developing Our Supply Chain
Processes are Driving Operational Effectiveness
Supply Chain Management Best Practice
Missiles and Fire Control
MFC Excellence - 29
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Plan Capture Execute Support
Plan the Program
Design the Product
Acquire the Product
Fabricate the Product
Support the Product
Identification of Opportunities Increase to Maintain Steady
Cost Improvement
Realized Results – A Marriage of Instrumentation and Leadership
0
100
200
300
400
500
600
700
800
900
1,000
0
100
200
300
400
500
600
700
800
900
1,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Ope
ratio
nal P
erfo
rman
ce Im
prov
emen
t ($)
Num
ber o
f Im
prov
emen
t Eve
nts
Affordability Through Continuous Learning & Improvement
Total Events Annual Cost Savings (Reduction and Avoidance) Cost Reduction
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Op
era
tio
na
l Im
pro
ve
me
nt
($)
Nu
mb
er o
f Imp
rove
me
nt E
ve
nts
Missiles and Fire Control
MFC Excellence - 30
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Return On Investment Substantially Exceeds Industry Benchmarks
Plan Capture Execute Support
Plan the Program
Design the Product
Acquire the Product
Fabricate the Product
Support the Product
Realized Results – A Marriage of Instrumentation and Leadership
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Missiles and Fire Control
MFC Excellence - 31
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Customer Satisfaction Improving With Orders and Financial Growth
Plan Capture Execute Support
Effective Metric Instrumentation and Leadership Enable Informed Decisions Throughout
All of the Work Systems and Work Processes
Realized Results – A Marriage of Instrumentation and Leadership
$2
$3
$4
$5
$6
$7
3
3.5
4
2006 2007 2008 2009 2010 2011
Follo
w-O
n Or
ders
($)
Cust
omer
Ass
essm
ent
Positive Customer Satisfaction Yields Increased Follow-On Business
MFC - >6% above
DOD Industry
4 – Exceptional
3 – Satisfactory
Missiles and Fire Control
MFC Excellence - 32
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MFC Fundamental Business Principle:
Business is not the objective … it is the result. Performance is our objective.
Executive Review of
Tiered Work Systems
and Processes
Monthly
Tier 4/5: PMT Team Measures• Hours Assembly Line A
• Rejects Assembly Line B
• Etc.
Team and Product
Level Reviews
Daily / Weekly
Tier 3: Work Process Measure• Hours Per Unit Product X
• Defects Per Unit Product Y
• Etc.
Tier 2: Work Process
Multiple Measures• Hours Per Unit All Products
• Defects Per Unit All Products
• Etc.
Tier 1:
Work Process• Fabricate the Product• Capture the Business
• Plan the Program• Etc.
Quarterly
Next Generation:Strategic Analysis of Work
System Performance and
Trending
Final Thoughts – EPI And Malcolm Baldrige
• Malcolm Baldrige Model provides the framework – Measurement of the system that includes focus on Leadership, Planning, Workforce,
Operations, with Results to the Customer
• Balanced Scorecards provide the Measurement Methodology – Identifies the measures and goals for each Key Work Process
– Identifies Ownership and Accountability
• Enterprise Performance Index provides the Strategic Analysis – Analyzes the Work Systems with the focus on the Business Long Range Plan
– Provides the Knowledge to predict and identify trends early to drive Results
Product Index Scorecard Process Index Scorecard
738 798Composite
Score762
Enterprise Score736 + 72 = 834
834
Talent Readiness Index (+/- 100 Pts)
+72
Poor Marginal
60% 40%
Acceptable ExceptionalOver
ManagedTie
r I
Tie
r I.I
Tie
r 2
ProcessExecution
Missiles and Fire Control
MFC Excellence - 33
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QUESTIONS