LMMFC Journey To Excellence - ASQ Orlando …...2013/10/10 · Excellence Provide Finance and IT Support Provide HR Support Provide Facilities and ESH Support Provide Legal and Security

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


MFC Excellence - 2


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


MFC Excellence - 3


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


MFC Excellence - 4


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.”


MFC Excellence - 5


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


MFC Excellence - 6


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


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


MFC Excellence - 7


Conduct Business

Performance Review

(BPR) to manage

metrics (ELC)

Identify Key Work

Processes

Identify Key

Requirements &

Metrics

Identify Key Work

Systems


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


MFC Excellence - 8


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



Allocate Resources



MFC Excellence - 9




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



MFC Excellence - 10




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



MFC Excellence - 11


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




MFC Excellence - 12


Plan the Program

Design The Product

Acquire The Product

Fabricate The Product

Support The Product

Plan the Program

Design The Product

Acquire 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



MFC Excellence - 13


Plan the Program

Design The Product

Acquire 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



MFC Excellence - 14


Plan the Program

Design The Product

Acquire 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



MFC Excellence - 15




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



Provide HR Support



Support



MFC Excellence - 16




Provide HR Support



Support

Plan the Program

Design The Product

Acquire The Product


Support The Product




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


MFC Excellence - 17


ALIGNED MEASURES WITH WORK

SYSTEMS & PROCESSES


MFC Excellence - 18


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


MFC Excellence - 19


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


• Etc.

Team and Product

Level Reviews

Daily / Weekly

Tier 3: Work Process Measure• Hours Per Unit Product X


• Etc.


Multiple Measures• Hours 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


Trending

Metric Driven Results – Metric Alignment


MFC Excellence - 20


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


MFC Excellence - 21


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


MFC Excellence - 22


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



Allocate Resources



Provide HR Support



Support


Plan

Capture

Execute

Support


Acquire Product Material


Plan the Program



Allocate Resources


Support


Design The Product

Support The Product



Provide HR Support

Aligned Measures With Work Systems & Processes


MFC Excellence - 23


RESULTS


MFC Excellence - 24



Develop Strategic Objective

Develop Long Range Plan

Allocate Resources


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


MFC Excellence - 25



Plan the Program

Design the Product

Acquire the Product


Support the Product

100% First Test Design Success Over 12+ Years


Cumulative Cost Savings Due to Robust Design Process and Resulting First Test Success


MFC Excellence - 26


Supply Chain Management Best Practice

Measuring Performance at Key Locations in the

Procurement Process


MFC Excellence - 27


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


http://mymfctest.orl.lmco.com/qualitydev/test/Quality.SHAPE/

http://procure.orl.lmco.com/TrendTool/SupplierPerformance.aspx


MFC Excellence - 28


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


http://mymfctest.orl.lmco.com/qualitydev/test/Quality.SHAPE/

http://procure.orl.lmco.com/TrendTool/SupplierPerformance.aspx


MFC Excellence - 29



Plan the Program

Design the Product

Acquire the Product


Support the Product

Identification of Opportunities Increase to Maintain Steady

Cost Improvement


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


MFC Excellence - 30


Return On Investment Substantially Exceeds Industry Benchmarks


Plan the Program

Design the Product

Acquire the Product


Support the Product


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


MFC Excellence - 31


Customer Satisfaction Improving With Orders and Financial Growth


Effective Metric Instrumentation and Leadership Enable Informed Decisions Throughout

All of the Work Systems and Work Processes


$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


MFC Excellence - 32


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


• Etc.

Team and Product

Level Reviews

Daily / Weekly

Tier 3: Work Process Measure• Hours Per Unit Product X


• Etc.


Multiple Measures• Hours 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


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


MFC Excellence - 33


QUESTIONS

Documents

LMMFC Journey To Excellence - ASQ Orlando …...2013/10/10 · Excellence Provide Finance and IT Support Provide HR Support Provide Facilities and ESH Support Provide Legal and Security