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©2008 Northrop Grumman Space and Mission Systems Corp. All Rights Reserved.

Aligning Six Sigma Projects with Program

Goals

October 15, 2008

Global Lean, Six Sigma, and Business Improvement Summit

Orlando, Florida

Mr. Donald CorpronLean Six Sigma Master Black Belt

ISRSD-2008-0067

2 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.

Introduction


Preview

We’ll cover these topics…

• Decomposing high-level goals to specific project objectives

• Balancing Customers’ goals with organization’s goals using Quality Function Deployment

• Integrating Lean Six Sigma tools and CMMI® Levels 4 & 5 maturity

• Using Lean Six Sigma to monitor and sustain superior program performance


About Northrop Grumman – The Vision

Creating Value Through People and Technology

Be the most trusted provider of systems and technologies that ensure the security of our nation and its allies

• Customers’provider of choice

• Industry’s employer of choice

• Shareholders’ investment of choice


About Northrop Grumman

• $32 billion sales in 2007

– International sales approx. 5% of total

• 120,000 people, 50 states, 29 countries

• Leading capabilities in:

– Systems integration

– C4ISR and battle management

– Information technology and networks

– Defense electronics

– Naval shipbuilding

– Space and missile defense

Focus on Performance


About Northrop Grumman - The Business Areas

Command, Control & Communications

Intelligence, Surveillance &

Reconnaissance

Missile Systems

Enterprise Systems and

Security

IT/Network Outsourcing

Defense & Intelligence

Federal, State/Local & Commercial

ISR, Homeland Security & Health

Systems Support

Base and Infrastructure

Support

Range Operations

Training and Simulations

Technical and Operational Support

Live, Virtual and Constructive

Domains

Life Cycle Optimization

Performance Based Logistics

Lead Support Integrator (LSI)

Radar Systems

C4ISR

Electronic Warfare

Naval & Marine Systems

Navigation & Guidance

Military Space

Government Systems

Large Scale Systems

Integration

C4ISR

Unmanned Systems

Airborne Ground Surveillance / C2

Naval BMC2

Global / Theater Strike Systems

Electronic Combat

Operations

ISR Satellite Systems

Missile Defense Satellite Systems

MILSATCOM Systems

Environmental & Space Science

Satellite Systems

Software Defined Radios

Directed Energy Systems

Strategic Space Systems

INFORMATION & SERVICES ELECTRONICS AEROSPACE SHIPBUILDING

Mission Systems

Information Technology

Technical Services

Electronic Systems

Integrated Systems

Space Technology Shipbuilding

Naval Systems Integrator

Surface Combatants

Expeditionary Warfare Ships

Auxiliary Ships

Marine Composite Technology

Coast Guard Cutters

Commercial Ships

Nuclear Aircraft Carriers

Nuclear Submarines

Fleet Maintenance

Aircraft Carrier Overhaul

& Refueling

A Portfolio Positioned for the Future


Our environment…

Program A

Program B

Program B

170 active projects

• Contracts with numerous government Customers

• Range from $K to $M annual sales

• Products of “one,” more like building bridges than widgets

• “On-time” is the Critical-to-Quality attribute

• Many individual instances of “standard” processes

• Program Managers are mini CEO’s


Northrop Grumman has an infrastructure to improve the way it does business

Competitive Excellence Organization

Sector Six Sigma Program Office

Divisional Six Sigma Office

Six Sigma ChampionMaster Black Belt

Site Champions

Six Sigma Team

Six Sigma Team

Six Sigma Team

Co

rpor

ate

Se

cto

rD

ivis

ion

Op

era

tion


The opportunity

• How to get everyone in the company to pull in the same direction, towards clearly defined and delegated goals to move the performance meter?

• How to align the multiple tiers of goals in the enterprise?

• How to focus on improving the vital few things that are essential to goal achievement?


We use the strategic alignment cycle

Capture/ Integrate “Voice of

CEO” Map Future Reality

Assess Process Maturity

Assess Results

Charter Six Sigma

Projects

Measure Robustnes

s

Identify Vital Few

Processes


About “Voice of Customer (CEO)” analysis

• Similar to “Voice of Customer” analysis

• Portrays the CEO as the “Customer” who has needs to satisfy

• Captures the strategic intent (goals) of the business

• Weighs the goals

• Progressively translates the goals of the business down to and in the language of the people that must make things happen


The importance of Goals and Strategic Intent

• "Knowing where you want to go; knowing where you are now; knowing how you get to where you want to go and then doing it are the keys to success in the 21st Century “ - David Taylor (author The Naked Leader)

• Express the strategic intent to help individuals and organizations share the common intention to survive and continue or extend themselves through time and space


“Voice of CEO” captures needs from several sources

• Flowed Down Operational Goals

• Long Range Strategic Plan

• Annual Operating Plan

• “Leadership 2.0” Vision

• Interviews

• Leadership Advisory Board

• SWOT sessions


Several “tools” are used to align goals (learned in Lean Six Sigma Training)

• Capture goals and strategic intent with “Voice of Customer” Analysis

• Identify the system’s core drivers with Reality Tree

• Weight goals with Paired Comparison Analysis

• Identify relations with House of Quality

• Measure processes’ robustness with control charts and capability charts

• Assess process maturity using the CMMI and BD-CMM models


Future reality trees use seven entity classes to uncover core drivers

• The Reality Tree is a tool to discover the system’s core drivers

• Based on the Theory of Constraints that all systems have physical, market, policy, or a combination of factors that govern the system’s performance

• The graphic approach facilitates the elicitation of factors from “Customers”


Decompose high level goals to actions

Overarching Goal of Sales

growth and Return on

Sales

Goals

Cross Project Actions

Desirable

Effects

Intermediate Effects

*Produced with Flying Logic®


Target to improve the two meta-processes that produce the value

PM&C

BAP PRP

Key

PM&C Project Management & ControlBAP Business Acquisition ProcessPRP Product Realization Process

Info Info

II

Info InfoCustomer

Customer

Assess using

BD-CMM™

Assess using CMMI®


About the BD-CMM

• Stewarded by the Business Development Institute

• Focused on Business Acquisition processes

• Based on a compilation of best practices to secure new business

• Used to assess the “maturity” of business acquisition processes

Pro

cess

Matu

rity


About the CMMI®

• Stewarded by the Software Engineering Institute

• Focused on Engineering processes

• Based on a compilation of best practices

• Used to gauge the “maturity” of engineering processes

Pro

cess

Matu

rity


CMMI specifically refers to goal flow down

Level 4 Specific Practice 1.1 (Establish the Project’s Objectives) states, “Establish traceability to the project’s quality and process performance objectives from their sources.”

® Capability Maturity Model and CMMI are registered in the U.S. Patent and Trademark Office by Carnegie Mellon University.


The relationship of CMMI to Six Sigma

Init

ial

Man

ag

ed

Defin

ed

Quan

tita

tively

M

an

ag

ed

Opti

miz

ing

• Six Sigma and CMMI are symbiotic

• Six Sigma is the improvement methodology

• CMMI is the gauge of maturity

• The engines of continuous improvement

Six Sigma is a catalyst

for high maturity


About the House of Quality

• Yoji Akao developed the House of Quality

• First implemented at the Mitsubishi Heavy Industries’ Kobe Shipyard in 1972

• John Hauser and Don Clausing popularized House of Quality in 1988 with an article in Harvard Business Review entitled, “The House of Quality”

• Helps deal with the “many to many” relationships problem

Customer Requirements

Customer

Importance

Our

Company

Company

A

Company

B

Improvement

Goal

Improvement

Factor

Sales

Point

Importance

Rating

Organizational Difficulty 5 1( =difficult, =easy)

Our Company

Company A

Company B

Target Benchmark

ProductRequirements

Correlation matrix

Interrelationship matrix

5Strong ( )

Relationship weighting factors:

( 3)

( 1)

Customer Rating LLL5 , 1 : 1 . 4

: 1 . 1

+ positive, supporting- negative, tradeoff


At least three houses usually needed to link goals and actions

1st House

2nd House

“Voice of CEO”

Vital Few Processes

3rd House

Measures

Kaizens, Projects, Actions, etc.

Vital Few Processes

Measures


Mesh Sector and Divisional goals using a House of Quality

Voic

e o

f D

ivsi

on G

enera

l M

anager

B

uild a

Mark

et

Leadin

g ISR

Org

aniz

ati

on

A

chie

ve $

XB

in R

evenue b

y 2

010

L

ead N

GC

's ISR

Mark

et

Str

ate

gy

W

in T

ier

1 O

pport

unit

ies

P

erf

orm

on C

urr

ent

Back

log

P

enetr

ate

New

ISR

Mark

ets

D

eliver

Financi

al Pe

rform

ance

in 2

010

P

rovid

e W

hole

Pro

duct

(Solu

tions)

V

alu

e E

mplo

yees

as

Hum

an C

apit

al

1 2 3 4 5 6 7 8 9 10

Im

port

ance

1

35

25

10

10

10

10

Perc

ent

Import

ance

2

35

25

10

10

10

10

Max =

35.0

Perc

ent

Import

ance

Min

= 1

0.0

1

2

3

4

5

6

7

Voice of Sector President

Meet Commitments

Pursue New Business Smartly & Aggressively

Improve Quality and Processes

Collaborate Across Sectors

Compete & Perform as a Tier 1 Player

Execute with Excellence

1

2

3

4

5

6

7

Importance 1

345

255

90

315

345

325

345

125

315

Percent Importance 2

14

10

4 13

14

13

14

5 13

Max = 14.0

Percent Importance

Min = 3.7

1 2 3 4 5 6 7 8 9 10

Standard 9-3-1

Strong 9.0Moderate 3.0Weak 1.0

“Voice of General

Manager”

“Voice of Sector

President”

*Produced with QFD/Capture


And they input to Project’s specific goal formation

• Meet commitments

• Estimate software development accurately

• Maintain good rapport with Customer

• Deliver “It” right and on-time

• Catch defects early

• Modularize test suites

• Engage Customer in requirements earlier

• Expand Customer base

• Proactively refresh technology

• Protect/grow funding

• Protect core staff


Use Paired Comparison Analysis to weigh the specific goals

n= 11 55 TRUEWorksheet r= 2 TRUE

Which is most important?Raw Normalized

Item 2 3 4 5 6 7 8 9 10 11 Score Score

1 Meet Milestones 1 3 4 5 1 1 1 1 1 11 6 11%2 Estimate Software Development Accurately 3 4 5 2 7 8 2 10 11 2 4%3 Maintain Good Rapport with Customer 4 5 3 3 3 3 3 11 7 13%4 Deliver It Right and On-Time 4 4 4 4 4 4 4 10 18%5 Catch Defects Early 5 7 8 5 10 11 5 9%6 Modularize Testing Suites 7 8 6 10 11 1 2%7 Engage Customers in Requirements Earlier 8 7 10 11 4 7%8 Expand Customer Base 8 10 11 5 9%9 Proactively Refresh Technology 10 11 0 0%10 Protect/Grow Funding 11 6 11%11 Protect Core Staff 9 16%

55 100%

• Compares each goal to every other goal

• Requires a consensus on which one is more important

• Forces crisp debate about relative importance


In turn, link goals to relevant processes with a House of Quality

• Match Program Goals to the corresponding processes whose outputs affect achievement of goals

• Encode the degree of “force” with a “full moon”, “half moon”, or “new moon” to represent a force multiplier of 9, 3, or 1

• Identifies the “vital few” processes

Im

port

ance

1

11

4

13

10

9

7

9

16

0

11

2

B

usi

ness

Acq

uis

itio

n P

roce

ss

O

pport

unit

y A

ssess

ment

C

aptu

re S

trate

gy D

evelo

pm

ent

Pre

pro

posa

l Pre

para

tion

Pro

posa

l D

evelo

pm

ent

Po

st S

ubm

itta

l A

ctiv

itie

s

Po

st A

ward

Pro

duct

Realiza

tion

Requir

em

ents

Develo

pm

ent

& M

anagem

ent

D

esi

gn

C

ode/B

uild

In

tegra

tion

Pe

er

Revie

w

Veri

fica

tion &

Validati

on

1 2 3 4 5 6 7 8 9 10

11

12

13

14

Perc

ent

Import

ance

1

12

4

14

11

10

8

10

17

0

12

2

Max =

17.4

Perc

ent

Import

ance

Min

= 0

.0

1

2

3

4

5

6

7

8

9

10

11

12

Program Goals

Meet Milestones

Maintain Good Rapport with Customer

Deliveries are Right and On-Time

Accurately Estimate Software Development

Catch Defects Early

Engage Customers in Requirements Earlier

Expand Customer Base

Protect/Grow Funding

Protect Core Staff

Proactively Refresh Technology

Modularize Testing Suites

1

2

3

4

5

6

7

8

9

10

11

12

Technical Importance 1

391

391

215

141

213

110

83

83

121

53

36

87

Percent Importance 2

20

20

11

7 11

6 4 4 6 32 5

Max = 20.3Percent Importance

Min = 1.9

1 2 3 4 5 6 7 8 9 10

11

12

13

14

Tradeoffs

Synergy 1.0Compromise -1.0

Standard 9-3-1

Strong 9.0Moderate 3.0Weak 1.0

Program Alignment Goals vs. Processes


Desired end state is a set of “robust” processes

Robust processes are both stable and capable

Chaotic

On the brink

Robust

Stability

Cap

ab

ility

Ready

Where we would like to

be

Where we often start


Evaluate robustness with Control Charts and Capability Charts

Data are from Sector Programs: https://sharecenter.myngc.com/livelink/llisapi.dll?func=ll&objId=16184610&objAction=browse&sort=-name

Measure:

Cycle Time

Performance specifications come from the Mission Systems’ 2008 Operational Goals

Specification Limit Value:

2 Weeks (10 working days)

Cycle time measures the time from start to completion of a Build

Process Name:

Code/Build

Corrective Actions: Six Sigma project originated to address cycle time capability

Impact of current performance: Current process misses target half the time.

Capability: Process is capable of performing at the goal 50% of the time. Process Sigma 1.50 0.00 1.50(should be around 3)

Stability: Process has a out-of-control point in Build 13 due to a Priority 1 DR

Build

13

Build

12

Build

11

Build

10

Build

9

Build

8

Build

7

Build

6

Build

5

Build

4

Build

3

Build

2

Build

1

13

12

11

10

9

8

Build

Work

ing D

ays

_X=9.995

UCL=12.151

LCL=7.839

1

121086420

35

30

25

20

15

10

5

0

35

30

25

20

15

10

5

0

Cycle Time (Days)

Per

cent

LB USL

LB 0Target *USL 10Sample Mean 9.99532Sample N 13StDev(Overall) 1.11005

Process DataZ.Bench 0.00Z.LB *Z.USL 0.00Ppk 0.00Cpm *

Overall Capability

% < LB 0.00% > USL 46.15% Total 46.15

Observed Performance% < LB *% > USL 49.83% Total 49.83

Exp. Overall Performance *Produced with Minitab®


Summary

• The application of various Six Sigma tools together with CMMI help to integrate goals among organizational tiers Sector, Division, and Project

• Alignment focuses energy to exceed goals


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Documents

program goals

customers goals

strategic intent goals

trusted provider of

organizations goals

systems core drivers

sigma training capture

sigma office