Lean Aerospace Initiative Supplier Networks Research Team

Research Sponsored By LAI

Lean Enterprise Self-Assessment Tool

(“LESAT”)January 30, 2001

Lean Aerospace InitiativeSupplier Networks Research

Team

Presented By:Debbie Nightingale

MIT

Nightingale - 2 © 2001 Massachusetts Institute of Technology

LeanAerospace

Initiative

web.mit.edu/lean

Overview

➢Background

➢LESAT Development Process

➢LESAT Architecture

➢Beta Testing

➢Next Steps


LeanAerospace

Initiative

web.mit.edu/lean

What Is LESAT?

➢ A tool for self-assessing the presentstate of leanness of an enterprise and itsreadiness to change

➢ Comprised of:

➢ Capability maturity model for enterpriseleadership, life cycle and enabling processes

➢ Supporting materials: (instructions manual,scoring guide, etc.)

Ass

essm

ent M

atrix

WorldClass


LeanAerospace

Initiative

web.mit.edu/lean

TTLRoadmaps

TTLRoadmaps

LEM Principles & Practices

LEM Principles & Practices

LESATSelf Assessment

LESATSelf AssessmentAssessment

LAI Enterprise Tool Triad

Best PracticesImplem

enta

tion


LeanAerospace

Initiative

web.mit.edu/lean

Approach: Evaluation of ExistingAssessment Tools

➢ Conducted analysis of existing tools vs. requirements

➢ Types of assessment tools

➢ Maturity matrices (Boeing, SEI, SAE J4000)

➢ Quality of document processes (Baldrige, Shingo Prize)

➢ Outcome based, measured change in performance (Evidence ofLean, Financial Scorecard)

➢ None of the existing tools met key requirements

➢ Did not address entire enterprise (most focused on factory floor)

➢ Did not provide both a measure of lean and gap analysis

➢ Did not identify “next steps” to take


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Tool Requirements(Survey of LAI Stakeholders)

➢ Simple, easy to use and minimal time to create

➢ Instructions and mechanism for use

➢ Standard and clear definitions

➢ Focus on lean attributes

➢ Alignment with business performance planning (goalsand results)

➢ Provides guidance for “next steps”

➢ Gap analysis capability

➢ Ability to accommodate both single and alignedorganizations (teaming, partnerships, suppliers) withinan enterprise


LeanAerospace

Initiative

web.mit.edu/lean

Needs / Requirements

Candidate Tool Process

Assesses Degree of “Lean-ness” for anEnterprise and all its Core Processes

Provides Feedback for Improvement.Provides Guidance for “Next Steps”

Objective Evidence / Data Driven

Matches / Aligns with LEM Attributes

Leverages LAI / Industry Tools

Minimal Time / Effort to Create Tool

Scaleable / Flexible for Different Users

Simple - Easy to Use

Aligns with Business Planning Process /Goals and Results

Able to Accommodate Simple andPartnership Self-Assessments

Wt.MaturityMatrix

BaldrigeType

OutcomeBased

5

5

3

3

3

3

3

3

1

1

Maturity Model ApproachScores Highest

132

250 130 80

114 78 36

240 120

36 32 26

230

96 78 114

32 30 30

102 9090

150

75108 63

1218 816 718

547834

48


LeanAerospace

Initiative

web.mit.edu/lean

5

4

3

2

1

0

Cap

abili

ty L

evel

LESAT Enterprise Process Areas

Current Capability

A Company’s Strategic Plan for a Tailored Capability Goal matched to the business objectives.

LESAT Desired Score Can beTailored for Each Process Area

Gap


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Module Enterprise Level Module

Lean Enterprise Self AssessmentTool Architecture

Sub-enterprise Level Modules Sub-enterprise Level Modules


LeanAerospace

Initiative

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Consortium Involvement

AirframeBoeing Military Aircraft and Missile Systems Group

Boeing Phantom WorksBoeing Commercial Airplane Group

Lockheed Martin Aeronautical Systems SectorNorthrop Grumman ISS

PropulsionRolls Royce Allison

Avionics/MissilesNorthrop Grumman ESSS Engineering & Manufacturing

Raytheon Systems and Electronics SectorRockwell Collins, Inc.

Textron Systems

Other GovernmentDefense Contracts Management Agency

OUSD(A&T)

US Air ForceAeronautical Systems CenterAir Force Research Laboratory

(Materials and Manufacturing Directorate)Space and Missile Center

SPOS: F-22, Training (JPATS)

Other Participants IAM

DSMC Arizona State University

Massachusetts Institute of TechnologyInternational Collaborations:

UK LAI

SpaceBoeing Space and Communications Group

GenCorp AerojetLockheed Martin Space & Strategic Missiles

MIT• Lead Researchers

Faculty and Staff


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level ModuleDevelopment Effort To Date

Activity

Architecture Definition

Prototype Development

Alpha VersionDevelopment & Test

Beta VersionDevelopment

NovemberJune SeptemberJuly August October December

UK LAI Input

Executive Board Approval


LeanAerospace

Initiative

web.mit.edu/lean

Collaboration With UK LAI

➢ In August, a UK LAI meeting discovered also developingenterprise-level assessment tool

➢ Researchers exchanged “alpha” models and foundsimilar approach (e.g., both employed capability maturitymodels)

➢ Common architecture was defined and knowledge fromboth consortiums leveraged to develop LESAT Beta

➢ Multiple benefits from single model:

➢ Many common US & UK suppliers

➢ Potential single standard

➢ Synergy of research knowledge for future detailed assessmentmodules development


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level ModuleAlpha Testing Feedback

➢ High enthusiasm for executive-level tool

➢ Strong support for linkages to enterprise transitionto lean roadmap

➢ Suggested simplification and strong integrativefocus for practices

➢ Strategic and enterprise-level issues given highpriority

5 Companies (9 sites)7 Government (2 SPOs, 5 DCM sites),

2 Lean Aerospace Initiatives (LAI, UK LAI)


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean

Transformation / Leadership

Section IILife

Cycle Processes

Section IIIEnabling

Infrastructure Processes

Sub-enterprise Level Modules

Enterprise Level Module


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean


Section IILife

Cycle Processes

Section IIIEnabling





LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section I

➢Practices directly linked to enterprise Transition toLean Model (TTL)

➢Assesses the following elements:➢Strategic integration

➢Leadership and commitment

➢Value stream analysis and balancing

➢Change management

➢Structure and systems

➢Lean transformation planning, execution and monitoring

++

++

Section I: Lean Transformation/Leadership


LeanAerospace

Initiative

web.mit.edu/lean

Long Term Cycle

Short Term Cycle

Entry/Re-entryCycle

Create & RefineImplementation Plan

Focus on ContinuousImprovement

Implement Lean Initiatives

Adopt LeanParadigm

EnterpriseStrategicPlanning

Decision to Pursue

Enterprise Transformation

Focus on theValue Stream

InitialLean

Vision

Detailed Lean

Vision

LeanImplementation

Framework

Develop Lean Structure &Behavior

Enterprise Level

Implementation Plan

Outcomes on Enterprise

Metrics

Environmental Corrective

Action IndicatorsDetailed

Corrective ActionIndicators

+

+

Enterprise Level Roadmap


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section I: Example

Level 1

Lean Enterprise Vision - new mental model of the enterprise

Senior leaders have varying visions of lean, from none towell defined

Level 2

Level 3

Level 4

Level 5

Senior leaders adopt common vision of lean

Lean vision has been communicated and is understoodby most employees

Common vision of lean shared by the extended enterprise

All stakeholders have internalized the lean vision & are anactive part of achieving it


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean


Section IILife

Cycle Processes

Section IIIEnabling





LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section II

Assess:

➢ Enterprise level core processes

➢ Acquisition

➢ Program Management

➢ Requirements Definition

➢ Product/Process Development

➢ Supply Chain Management

➢ Production

➢ Distribution and Support

➢ Key integrative practices

Section II: Life Cycle Processes


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section II: Example

Level 1

Supplier relationships focus on optimizing the valuestream - partnering with suppliers

Supplier relationships are at arm’s-length & adversarial

Level 2

Level 3

Level 4

Level 5

Long term purchase agreements are being introduced to focus onaffordability & cost reduction; limited visibility into supplier businessprocesses

Long-term relationships are in place with a limited number of certifiedsuppliers; early involvement of suppliers in design process

Strategic alliances are in place that emphasize a high level ofinformation sharing, risk sharing, benefit sharing & synchronization ofproduction flow over the supplier network

Dynamically optimizing the value stream to achieve long termsustainable competitive advantage, thereby impacting strategicplanning


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean


Section IILife

Cycle Processes

Section IIIEnabling





LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section III

Assess critical supporting processes

➢ Finance

➢ Information Technology

➢ Human Resources

➢ Quality

➢ Environmental Health & Safety

Section III: Enabling Infrastructure


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section III: Example

Level 1

Financial system supports lean transformation - Leanrequires accurate assessment of value stream activities

Finance system provides basic balance sheet & cost accounting data;there is little awareness & exploration of broader support roles forfinance

Level 2

Level 3

Level 4

Level 5

Analytical tools are provided by the financial systems to assist users inplanning & programming activities (e.g., cash flow, returns, NPV, etc.)

Initiatives are under way to apply new & systematic approaches to theuse of financial data across the enterprise (e.g., activity-based costing,lifecycle cost accounting, total cost accounting, etc.)

Set of financial measures integrates with non-traditional measures ofvalue creation (e.g., intellectual capital, balanced scorecard, etc.)

Seamless integration across the extended enterprise with emphasis onmeasurement of value creation for all stakeholders


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level ModuleSupporting Materials

➢ Introductory Presentation

➢ Assessor’s Guide

➢ TTL Roadmap & Guide

➢ Summary Score Sheet

➢ Glossary of Terms

++

++


LeanAerospace

Initiative

web.mit.edu/lean

Executive Level Module BetaTesting and Refinement

➢Utilize LESAT in actual enterprise executive levelassessments

➢Multiple industry and government sites (6-8)

➢Test site nominations have been submitted byexecutive board members

➢Subject matter experts provide detail for tooldevelopment


LeanAerospace

Initiative

web.mit.edu/lean

Suggested Methodology forEmploying LESAT

LESAT

Lean Journey

Step 1: Facilitated meeting to introduce tool.Enterprise leader champions

Step 2: Enterprise leaders and staff conductLESAT assessment

Step 3: Leadership reconvenes to jointlydetermine present maturity level

Step 4: Leadership determinesdesired level and measures gap

Step 5: Develop actionplan and prioritizeresources


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level ModuleDevelopment Plan

Activity NameJanuary February March April May June July August

2001

January February March April May June July August

Beta Version Testing

Incorporate Feedback

Enterprise LevelVersion 1.0

Back up Slide


LeanAerospace

Initiative

web.mit.edu/lean

Entry/Re-entryCycle

Focus on the ValueStream

InitialLean

Vision

Short Term Cycle

Create & RefineImplementation Plan

LeanImplementation

Framework

Adopt LeanParadigm

EnterpriseStrategicPlanning

Focus on ContinuousImprovement

Outcomes on Enterprise

Metrics

Implement Lean InitiativesEnterprise

LevelImplementation

Plan

Develop Lean Structure &Behavior

Detailed Lean

Vision

Environmental Corrective

Action IndicatorsDetailed

Corrective ActionIndicators

Decision to Pursue

Enterprise Transformation

•Build Vision•Convey Urgency•Foster Lean Learning•Make the Commitment•Obtain Senior Mgmt. Buy-in

•Map Value Stream•Internalize Vision•Set Goals & Metrics•Identify & Involve Key Stakeholders

•Organize for Lean Implementation•Identify & Empower Change Agents•Align Incentives•Adapt Structure & Systems

•Identify & Prioritize Activities•Commit Resources•Provide Education & Training

•Monitor Lean Progress•Nurture the Process•Refine the Plan•Capture & Adopt New Knowledge

•Develop Detailed Plans•Implement Lean Activities

Enterprise Level Roadmap

+

+

Long Term Cycle

Documents

Lean Aerospace Initiative Supplier Networks Research Team