LM21 Operating Excellence Lean and Six Sigma Supplier Engagement

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LM21 Operating Excellence Lean and Six Sigma
Supplier Engagement
Matt Vlcek LM21 Operating Excellence Sept 24,
2002
LOCKHEED MARTIN PROPRIETARY INFORMATION
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Outline

• LM21 Operating Excellence Roadmap
• Supplier Engagement
• Approach
• Deployment
• Results
• Challenges

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LM21 Operating Excellence
Quarterly Review
Leadership
LRP
Productivity Targets Strategy
OP Plan
Leader Training
Leader Training
Leadership Council
Strategic
Program Excellence Plan
Functional Alignment
Program Value Stream Map
Review Capture - Update

• Knowledge
• Discipline

Train Deploy Experts
Team Resources
Tactical

• Engagement

Intuitive Improvement Events
Target Improvement Events PDK, Kaizen, 6S
Apply LMCs Proven Excellence Roadmap Model
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Operating Excellence Approach

• Educate LM Leadership Executive, Functional,
  Program
• Map Program Value Stream, Identify Supplier
  Issues
• Develop Program Excellence Plan

Mutual Benefit Reduce Waste, Not Margins
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Deployment Step 1 LM Leadership Alignment

• Begin With The End In Mind
• VSM Defines Objectives for Each Subcontractor
• Cost Schedule Quality Risk
• Develop Primary and Secondary Objectives for
  Each Subcontractor
• Coordinate Between Program and Functional
  Management
• Assess the Situation/Benefit to Subcontractor
  Put Yourself In Their Shoes
• Current Business Situation
• Current or Prior Improvement Targets/Programs
• Internal
• External

Concurrence on Mutual Targets Objectives
Provides Alignment with Overall Program Goals
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Deployment Step 1 Leadership Alignment
(continued)
Supplier Priority Objectives
Supplier Primary Objectives Secondary Objectives
Supplier 1 Reduce supplier variability Meet delivery requirements Reduce Lead Time Implement process control
Supplier 2 Improve Supplier Yield Implement process controls Reduce Inventories Maintain cost w/BOA
Supplier 3 Reduce Rate Production Risk Enable Schedule Flexibility Increased automation
Supplier 4 Reduce Tooling NRE Eliminate CFE
Supplier 5
Supplier 6
Supplier 7



Sample
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Deployment Step 2 Subcontractor/LM Leadership
Alignment

• Leadership Engagement With Subcontractor is
  Critical
• Relationship With Supplier Must
• Share Program Data
• Be Based on Mutual Benefit
• Rely on Trust
• Actively Drive Open, Honest, Two-Way
  Communication
• Carry Equal or Greater Importance Than Contract

People Make Things Happen
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Deployment Step 3 Resource Identification

• Effective Engagement Requires a Multifunctional
  Team Approach
• Required Resources For Effective Deployment

• Site/Program/Corporate Leadership
• Subcontract Manager
• IPT Members (Engr, Qual, etc)

• LMC Black Belt/ Greenbelts
• LM21 SME or External Consultant
• Other Functional Expertise (e.g. Welding)

Supplier Engagement Event Preparation VSM Events Rapid Improvement Events Monitoring of Supplier Progress
Site/Prog/Corp Leadership ü
Subcontract Manager ü ü ü ü ü
IPT Member(s) ü ü ü ü
Site BB/GB ü ü ü ü
LM21 SME ü ü ü
External Consultant ü ü ü
Other Functional Support ü ü
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Deployment Step 4 Scheduled Supplier Events

• Use Value Stream Mapping as Primary Strategic
  Planning Tool
• Establish a Rhythm of Events with Programs
  Supply Base

Suppliers Engagement Schedule
Sample
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Supplier Lean Deployment Results
Cost Drivers
Results
Required Space
? 75
? 64
Product Travel Distance
? 91
Work in Process
? 51
Inspection Labor
? 58
Cycle Time Reduction
? 1M
Capital Required
Capturing Substantial Opportunity Within Supply
Base
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Challenges

• One Company Face to Supplier
• Mutual Benefit /Trust
• Gain Sharing
• Margin
• Reserve Management
• Equitable Sharing
• Multi-Functional Resource Commitment
• Program Priorities