Managing Change in a Change

Averse Environment

Mike HerzogV.P. Quality and Mission Assurance

Pacific Scientific Energetic Materials Co.

Technologies

Safe and Arm devices Separation Devices Cartridge Activated Devices Propellant Activated Devices Vehicle Arresting Green Energetics Oil/Natural Gas Exploration

Facilities & Core CompetenciesFacilities & Core Competencies

AZ Operations Chandler - 57 Acre Site

~250 Non-Union Associates 100,000+ Square Feet Under Roof Core Competencies: Cartridge/Propellant

Actuated Devices (CAD/PAD), Specialty Devices (ISD, S&A) Initiators & Propellant Manufacturing

CA Operations Valencia Business Park Site

Advance Technology Site ~30 Non-Union Associates 37,000 Square Feet Under Roof Core Competencies: Smart Energetics

Architecture (SEATM), Smart Controllers, Detonators & Initiators

Hollister - 270 Acre Site ~360 Non Union Associates 200,000+ Square Feet Under Roof Core Competencies: CAD/PAD, Linear, Ordnance,

Electronic & Laser Systems, Vehicle Sub-Systems, High Volume & Propellant Manufacturing, Specialty Chemical Synthesis

Chandler, AZ Chandler, AZ

Valencia, CAValencia, CA

Hollister, CAHollister, CA

Space/Launch Vehicles Flight Termination Payload Deployment/Recovery Stage Separation/Termination

Missiles & Munitions Control/Initiation/Termination Munitions Deployment

Aircraft & Life Support Countermeasures/Stores Release Emergency Egress Fire Suppression

Ground Vehicles Active Protective Systems Fire Suppression

UAV Flight Termination & Recovery Engine Start / Vehicle Launch

Commercial Aircraft & Petroleum

Specialty Chemicals Borohydride Chemistry Energetic Materials

Total Annual Sales: Total Annual Sales: $150M$150M

MarketsMarkets

Change Management DilemmaChange Management DilemmaChange Management DilemmaChange Management Dilemma

For suppliers deep in the supply chain, process change approval is painful

Multiple layers of customers must approve the requested change

Contractual requirements typically dictate process, but not really

Suppliers want to avoid the ‘seek approval or beg forgiveness’ scenarioApproval process can easily stifle

continual improvement

Typical Shared Process Typical Shared Process Change ApprovalChange Approval

Typical Shared Process Typical Shared Process Change ApprovalChange Approval

PSEMCCommunication

Direct Customer

Customer Customer

Prime

Program Program

End CustomerEnd Customer

Typical layers ofTypical layers ofapprovals requiredapprovals requiredfor proposed PSEMCfor proposed PSEMCprocess changesprocess changes

Proactive Changes (Optional)Proactive Changes (Optional)

Continual improvement initiatives Design improvements Equipment and tooling improvements Lean and productivity improvements Poke-Yoke implementation PFMEA recommended actions Cost competitiveness (Ashton Carter

memorandum). Really optional?

Reactive Changes (Must)Reactive Changes (Must)

Changes as a result of FRB activities Changes as a result of a Corrective

Action Request Product or Process audit results Lot rejection Deviations and Waivers Obsolescence

Reactive change requests move through approval process relatively quickly

Industry ExpectationsIndustry Expectations

The Space and Defense Industry Quality Management System requirements include implementation of a robust change management system

Risk versus benefit of each change must be considered

An uncontrolled change is the biggest risk

Perceived small, insignificant changes do not always equal low risk

James Chiles’ James Chiles’ Inviting DisasterInviting Disaster contains several contains severalexamples of un-communicated, uncontrolled,examples of un-communicated, uncontrolled,perceived insignificant changes that resultedperceived insignificant changes that resultedin disastersin disasters

Planning for ChangePlanning for Change

Develop and implement a robust change management process to include documentation and records

Communicate to the organization that what they don’t think is a change is a change

Establish a standard forum where proposed changes can be discussed, documented and planned

Provide communication to customer(s) early on in the process

Purpose Of Change Management (PSEMC

Stance)

Purpose Of Change Management (PSEMC

Stance) To ensure that any proposed

changes are planned and implemented in a manner that ensures comprehensive validation activities are planned, scheduled, conducted and documented, PRIOR TO IMPLEMENTATION, in a way that ensures quality and reliability are not compromised.

Regardless of what customer requirements are, this process is designed to ensure PSEMC

is doing the right thing

Powder Weigh Station Case Study

Powder Weigh Station Case Study

Consolidate powder weighing, loading and pressing operations into 1 station

Weigh powder into actual parts versus vials

Eliminates batching and promotes 1 pc. Flow

Incorporate mistake proofing feature electronically connecting scale and press. Press will not operate if scale does not record acceptable value.

Utilize existing approved equipment Current process clearly defined in

manufacturing instructions

Before Process ChangeBefore Process Change

Bulk Powder

Weighing Vessel

Finished Vials

Vial poured into tooling within Press Station

Single Weigh Station Single Press Station

After Process ChangeAfter Process Change

Weigh ScaleConsolidation Press

Load Tooling

Consolidated Weigh and Press Station

Process Change Request Status

Process Change Request Status

Original communication requesting approval for change sent September 2010

Communication sent to 30 direct customers

A white paper explaining the change attached to communication

To date, 5 direct customers have approved the change

Lessons LearnedLessons Learned

No matter how simple you believe the proposed change is, the customer will think it is significant

Prepare and present a comprehensive validation plan with communication

Include ‘what’s in it for them’ in the communication

Anticipate customer questions and address them in the communication

Be prepared to field many questions and concerns

Be prepared to wait

PSEMC Change Management Process Improvements

PSEMC Change Management Process Improvements

Formal Change Management process documented

Process flow charted Proposed change form designed and

implemented Training conducted and documented Proposed changes presented by

originator at bi-weekly CCB

Change Management FormChange Management Form

ENERGETIC MATERIALS CO.

Change Management RAIL Number: _________

Describe the proposed change: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Why is this needed? (Justification/Urgency): _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Area: ____________ Date: _________ Desired Imp. Date:___________ Submitted by:___________ Cognizant Engineer:________________________ Area Manager/FFM:_____________________

CHECK ALL THAT WILL BE ADDRESSED AS A RESULT OF THIS CHANGE (MOC) Management of Change Documented Training Record (BOM) Bill of Materials Process Hazard Analysis Validation Test Plan recorded in AGILE (PFMEA) Process Failure Modes Effects Analysis Validation Report recorded in AGILE (FAI) First Article Inspection RIOS Preventative Maintenance Customer Notification/Approval (ATP) Acceptance Test Procedure Drawings Calibration Engineering Report Regulatory Approval (DCMA, BATFE, EPA) Engineering Work Order Tooling Facility layout Other (List below) Flowchart Forms Update (MP) Manufacturing Planning Internal Qualification and Report Other PSEMC Facility Notification

Recommendation(s) or Directives: Champion: ___________________________ Team Leader: __________________________________

Team Members: ______________________________________________________________________________ Signatures as required: Quality: ________________________________________________ Date: ________

Design Engineering: ______________________________________ Date: ________

EH&S: _____________________________________ Date: ________

Operations: ______________________________________________Date: ________

Manufacturing Engineering _________________________________ Date: ________

Program Management: _____________________________________Date: ________ NOTE: The signatures above only approve the proposal, the signatures do not give authority to make the change

until all relevant documentation has been reviewed, changed and/or approved and released in AGILE.

Obstacles to ChangeObstacles to Change

Legacy products and designs Cost implications Industry generally change and

risk averse No perceived benefit to

customer(s) Time to approve requested

changes Multiple tiers need to approve

requested change View may not be worth the climb

for suppliers

Overcoming ObstaclesOvercoming Obstacles

Ensure strict compliance to change management process

Ensure risks and benefits are identified Be confident in mitigating risks Ensure that appropriate actions are

planned to validate effectiveness of the change

Provide sufficient information to customers regarding proposed change so as to anticipate questions/concerns

Commit to the change…. no matter how long it may take to get approved.

In SummaryIn Summary

“Change means movement. Movement means friction. Only in the frictionless vacuum of a nonexistent abstract world can movement or change occur without that abrasive friction of conflict.”

- Saul Alinsky 1960’s writer and activist