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BUSINESS PERFORMANCE EXCELLENCE
The Affordability Initiative
Jason S. Kuchera, ME303.246.4524 mobile
“Everything is a process which is meant to be studied, understood, and improved upon on a never-ending basis.”
W. Edwards Deming
The system outlined herein is the core of Lockheed Martin’s EngineeringManagement Program at the University of Colorado, Boulder.
http://engineeringanywhere.colorado.edu/emp/
Increasing Governmental fiscal constraint Maintaining/Developing state-of-the-art space systems
with less $ Maintaining customer/shareholder/taxpayer confidence Increasing variability in supplier quality (ref.
Counterfeit Parts article) Retaining talented engineers Increasing employee morale and confidence vis-à-vis job
security
THE PROBLEM
“…the single, biggest threat to our national security is our debt…”Navy Adm. Mike Mullen
Chairman, Joint Chiefs of Staff
Business Performance Excellence Phase I
Policy Deployment
Phase IIA Total Asset Utilization (TAU) Customer Product/Process Rationalization (CPR)
Phase IIB Customer Quality Assurance (CQA)
Phase III Daily Management
THE SOLUTION
PHASE I: POLICY DEPLOYMENT
Establish/ Reaffirm Vision
Establish/ Reaffirm Mission
Perform Construct Analysis to
Generate KPIs and NFIs
Establish/ Reaffirm
Value Proposition
Establish/ Reaffirm Model
for Strategic Differentiation
Generate Matrix of
Level I and II KPIs and NFIs
EMEN 5040
A
PHASE I: POLICY DEPLOYMENT CONT’D
Perform Gap Analysis to Generate
Strategic Plan
Strategic Plan Developed at
Corporate/Company Level (1)
Input from CQA System
EMEN 5041
EMEN 5040
Input from TAU/CPR Analysis
Cascade to All Span of
Control Levels
A
Strategic Intents,Objectives, Focal
Points,Tactical Objectives and Check Points
PHASE IIA: CUSTOMER PRODUCT/PROCESS RATIONALIZATION
ACA
Purpose: Assessment and analysis of true cost structure
Yields: Root Causes of losses to profitability, provides focus for obvious changes in pricing & mix, based upon current conditions
Allocated Cost Accounting
EMEN 5040
PHASE IIA: TOTAL ASSET UTILIZATION
¿ 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 ∗𝐷𝑢𝑡𝑦 𝐶𝑦𝑐𝑙𝑒∗𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦∗𝑌𝑖𝑒𝑙𝑑(𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 )TAU
Purpose: Assessment and analysis of productivity
Yields: Root Causes of losses to productivity, provides focus for improvements in operations
EMEN 5040
TAU ACA
Customer/Market/Product True Profitability Analysis
Purpose: Focus improvement efforts on a horizontally-integrated, current condition basis
Yields: Improvement and problem-solving plan which maximizes return on asset dollars gained for resource dollars spent
EMEN 5040
PHASE IIA: CUSTOMER PRODUCT/PROCESS RATIONALIZATION
TAU ACA
Purpose: Create a horizontally-integrated, strategic plan for revenue growth and maximization of ROA dollars
Yields: A comprehensive plan that integrates the sales & marketing strategy with the operations/manufacturing strategy to support and facilitate the organizations model for differentiation
Strategic Product Market
AnalysisCostumer/Market/Product
Rationalization Plan
PHASE IIA: CUSTOMER PRODUCT/PROCESS RATIONALIZATION
PHASE IIB: CUSTOMER QUALITY ASSURANCEThe Principles
1. Must be integrated within the strategic & business planning process
2. The metrics within the CQA process utilized to measure customer satisfaction must show predictive validity to sales, market share, or some other targeted KPI(s)
CQA originated from SQA where “supplier quality assurance systems, qualification, and certification systems often included the requirement that suppliers maintain a high quality CQA system.”
EMEN 5041
Cost & Profitability Analysis
Supplier Selection
& Qualificati
on
Purpose: Statistically and optimally identify your truly critical suppliers and the actual critical characteristics for incoming supplies and materials.
Yields: Full Integration with your organization’s strategic & business plan.
Critical Characteristi
c Control System
SQA
SUPPLIER QUALITY ASSURANCE
PHASE III: DAILY MANAGEMENT
Establish Ownership
Define & Standardize
Data-based Communication
Daily Control
Daily Work Improveme
nt
Daily Work
EMEN 5041
PHASE III: DAILY MANAGEMENT
EMEN 5041
Establish Ownership
Define & Standardize
Data-based Communication
Daily Control
Daily Work Improvemen
t
Daily Work
Establish Ownership
Define & Standardize
Data-based Communication
Daily Control
Daily Work Improvemen
t
Daily Work
Establish Ownership
Define & Standardize
Data-based Communication
Daily Control
Daily Work Improvemen
t
Daily Work
Establish Ownership
Define & Standardize
Data-based Communication
Daily Control
Daily Work Improvemen
t
Daily Work
Establish Ownership
Define & Standardize
Data-based Communication
Daily Control
Daily Work Improvemen
t
Daily Work
Jeffrey Luftig, PhD. Associate Vice Chancellor for Process Innovation, University of
Colorado at Boulder Studied under W. Edwards Deming
Steven Ouellette, ME President/Owner, ROI Alliance, LLC Lead Consultant, Center for Business Performance Improvement
Jason Kuchera, ME Quality Systems for Product and Process Engineering Six Sigma Green Belt, ROI Alliance, LLC
CONTACTS
