-
F1 VIRGINIA PRODUCTIVITY CENTER
00_-
Mv
00The Study of
Productivity Measurement
I and Incentive Methodology(Phase III - Paper Test)
'*~4 Volume III
- MAR 2 51987
Virginia Polytechnic Institute
[ and State University- Blacksburg, Virginia 24061
Lt~~c s~~d1 87 3 20 0 33
-
...
THIS DOCUMENT IS BEST QUALITY AVAILABLE. THE COPY
FURNISHED TO DTIC CONTAINED
A SIGNIFICANT NUMBER OF
PAGES WHICH DO NOT
REPRODUCE LEGIBLY,
-
S
The Study of
Productivity Measurement
and Incentive Methodology
(Phase III - Paper Test)
Volume III
FINAL REPORT
March, 1986
Defense Supply Service - Washington
Contract MDA 903-85-C-0237
VIRGINIA PRODUCTIVITY CENTER
VPI & STATE UNIVERSITY -; -
Blacksburg, VA 24061
.. l- . . 4 . . . .. .. . . " . . .
" .tS
-
DISCLAIMER NOTICE
THIS DOCUMENT IS BEST QUALITYPRACTICABLE. THE COPY FURNISHEDTO
DTIC CONTAINED A SIGNIFICANTNUMBER OF PAGES WHICH DO NOTREPRODUCE
LEGIBLY.
I
*1
-
C.iRITY CLASSIFICATION OF THIS PAGE fith) gq~REPORT
DOCUMENTATION PAGE
'a. REPORT SECURITY CLASSIFICATION 1b. RESTRICTIVE MARKINGS
IVOA. -ISECURITY CLASSIFICATION AUTHORITY 2. DIST RI BUT
ION/AVAILAILITY OF REPORT
,DECLASSi FiCATI ON/DOWNGRADING SCHEDULE
01~-771.8,P770A1-'L,4/~
4.PERFORMING ORGANIZATION REPORT NUMBERII 5. MONITORING
ORGANIZATION REPORT NUMBERIS)
CO-Z 2 l NO . IV00 -99 - &.0- C - 403 4g
Sa. NAME OF PERFORMING ORGANIZATION l. OFFICE SYMBOL 7a. NAME OF
MONITORING ORGANIZATIONk~~C(M/~9 ~ If lapplicoblej 5)s
- ALOF.ESS tCt,, St.;!g ala ZIP Code, 7b. ADDRESS 'Ca'., Stote
and ZIP Coc'e
Sa. N AME OF FUNDING 'SPONSORING B~b. OFFICE S YMBO L 9.
PROCURENINRM DETFCAONUBR~~~~~,S~N fATRI IDENTIFICATIO NUMBER-A'D4
93- 5C 03ORGANIZATION j(if applicable) AM V/o~ - M~~a A19riA i
L&q7l ____________
__________111__-9_03_-_6______C_-_11_7
Sc. ADDRESS (City. S:ate and ZIP Code) 0 SOURCE 0F FUNDING NOS.
_______~s.4ee ~'~-~aPROGRAM PROJECT TASK WORK UNIT~r ~ £~.7
O~-~CELEMENT NO. NO. NO. NO
11. TITLE finlnude Securits Classificatin)
% or,-7~~V dW,0a71C,-1V7-/#aI,~I7~V2.PERSONAL AUTHOR(S)
0. XCO77- XISV~ .4W.O0.4i'.3a. TYPE OF REPCRT 13b. TIME COVERED
)14. DATE OF REPORT (Yr., .,Dy 15. PAGE COUNT
~FROM ____TO___ 9 ,4 '/8s* 1E. SUPPLEMENTARY NOTATION
17COSATI CODES 18. SU BJECT TE RMS fCon tinue on reverse if
necessar anid iden till by block 'num berl
FI BE LOD GROUP I SUB. G R. vAW~::7Y1/y A~S'iW4 ""ZW;7.'~~
7~
AfV"79ABSTRACT (Continue on revjerse if necessary and identfyb
by block number,;
~ 0Vz~26'~Q ~ ~ ~A- ~A- PM9 - -77.40Y $425-
7Z>4~?Vq.'~.E-~0
77V
/At Phlf-W Z. 7-hil iI'..~ AuJ' 7 l9h'~77alV *oA-70 .s ZM-l
Q=E7i9 r,4,'ACl*917- -Y f-dAmZ/C .Tr7- AA- C--'/.4 72V 4 a~C 7
~7L~
JA' A'7#V- 0A-,~0~ 4-r 7V7 77..5-
D0 ISTRIBUTION/AVJAILABILITY OF ABSTRACT 21. ABSTRACT SECUI
CLASSIFICATION
-v .2CLASSIFIEDIUNLIMITED.A SAME AS RPT. E3[Tic USERtS1/ 22e.
NAME OF RESPONSIBLE INDIVIDUAL 1 20 TELEPHONE NUMBER 22c OFFICE
SYMBOL
tinc lude .~ri' Ct~d. -
@4 D FO0RM 1473, 83 APR EDITION OF I JAN 73 IS OBSOLETESECuR,'r
CLASSIFICATION OF TIl CAGE
I, %
-
THE STUDY OFPRODUCTIVITY MEASUREMENT
ANDINCENTIVE METHODOLOGY(Phase III - Paper Test)
FINAL REPORT
14 March 1986
Contract MDA 903-85-C-0237Defense Supply Service - Washington
--
Contract No. N00039-84-C-0346 DistVPI and State University I
Principal Investigator: . .lVirginia Productivity Center,
UPI
D. Scott Sink, Ph.D., P.E. (Director)
Marvin H. Agee, Ph.D. (Co-Director) I" "'Chell A. Roberts
(Research Associate) 'rpyMarty Simpson (Administrative Assistant)
.. Eo
Subcontractors:
LTV Aerospace and DefenseVought Aero Products Division
Shoni Dhir, Manager Productivity RequirementsRay Thornton,
Productivity Measurement StaffLen Thorpe, Manager Productivity
Measurement
Price WaterhouseWilliam T. Muir, PrincipalEugene J. Klein,
ManagerBetty B. Thayer, Senior Consultant
Westinghouse Electric CorporationDefense Group, Manufacturing
Systems andTechnology Center
Richard L. Engwall, Manager Systems PlanningAnalysis, and
Assurance
Maryland Center for Productivity andQuality of Working Life
University of MarylandThomas C. Tuttle, Director
,r *
L11 11 "4Nt11115 K C C111 , w
-
VOLUME III
3 TABLE OF CONTENTSPage
VIII. Final Report Briefing Presentations
A. Final Report Draft Presentations - ......... .698January 17,
1 6 -Ft. Belvoir, VA
1. Introductory Conments/ExecutiveSummary (VPC)
2. LTV/VAPD Integrated Approacha. LTV Presentationb. VPC Paper
Test
3. CDEFa. Price Waterhouse Presentationb. LTV Paper Test
4. MFPMMa. VPC Presentationb. LTV Paper Test
5. DCF/SSAU a. Westinghouse Presentationb. LTV Paper Test
6. Summary Remarks/Conclusions andRecommendations (VPC)a.
Summary Remarksb. Conclusions & Recommendations
B. Final Report Briefing Presentation -. ........ .813February
18, 1986, Pentagon, Washington, D.C.
Appendix A. Distribution List ...... ................. ..
814
.e(
-
VIII.A.1 -Introductory Comzments/Executive Summary
me
-
i@Pi
i "PS
iII
q41
4- ;..'
V44
698
o w '.@4 .
'-
-
IO 2FINAL AGENDA
FORFINAL PRESENTATION
17 January 1985Fort Belvoir, VA
0900 Introduction(s) Mr. David Acker (TCO)
0920 Introduction, Review Agenda, D. Scott Sink (PI)and
Rxecutive Suary
Paper Tests:1000 LTV Integrated Approach S.Dbir
VPC Evaluation Sink
1200 LUNCH
1330 CDE?:Price Waterhouse Thayer/ClmeLTV/VAPD Dhir
1415 NFPIOE:VIC SInk/lobertsLTV/VAD Dhir/Thorpe
1500 BREK
1 515 DCF/LKI/WestinghouseWestinghouse Engvall/___LTV/VAPD
Thorton/D-hrViC Agee
1600 Sumary/Conclusions/ Sink/Age.Recommenda tions
1615 Q&A's, Reco me ndationsfrom Advisory Board.Next
Steps
1630 Adjourn
699
WE~
-
W-11
*-- C-ON =6- = -p _ 4= NW
-~~ = = Flm
C-w 4= 1_-
--- *-J =- W .
_ C~ 4= _4= -E --- 4 55
4= a"0=% = *0'i 4=
~~~g-- 4=-C =)~ -___~- -- nCj =:I - w
= W= w- =- 4 = & =OW O- M- PQ -%o r
U- MI #%04 ~
U-.- W4 =
3 __ ~ C -4= 5-U700 ~
-
-7)
E- CD Coo
9= CO.O 0% Cr CA_ v J E- -
-4~l _24 1
0-4 =r i- W= gaa cc m PC--- Cov w z; = 4U, =~.
PQ = = s- = w- CL4 =P P- CFl * -: 4=0
_~~ CODam= -~--2. P" PQ l-454c~~*-
4= E- E-- E1
-S-
-S-
701
-
U
TOLUEI ITABLE OF COMI Pa
I. zxecutive Sumiary . . . • . . . . • • • . . . . . . • •
II. background
A. Overall Project Goals . . • ....... • • . . . 12B. Phases I
& II Results . . . . . . . . . . ..... 16C. Phase III Goals
.............. . . 28D. Phases IV & V Goals ................
30
Ill. Introduction Phase UIl Results ............ 36
IV. Field Site Description (Objective 7)
A. LTV/Vought Aero Products Division . . . o o . . . . 43Z.
Typical Aerospace and Defense
Contractor/Subcontractor . . . . . . * .. . . 46C. Westinghouse
Site Description . . . o o .*. . . . * 53
V. Approach and Result
A. General Approach . ........ • 0 . . 641. Description of Each
Model .... . . . .o o . . 66
1. CDI?2. DCF/SSA3. NFPO4. LTV Integrated Approach
C. Applications of Each Model (Objective 5) • • • . 2541. CDEI2.
DCP/SSA3. Krm
D. Comparison and lEvaluatiom Methodology(Objectives 3 A 6)
(Generic asd Modal Specific Criteria) . . . . . 2731. Generic
Criteria2. Specific Criteria
1. Evaluation of Each Model a a ProductivityMeasurement and
Incentives MethodologyModel . . . . . . •.. . .. 282
P. Evaluation of Combined Models Approach . . . . . . 293
VI. Recommendations and Conclusions(Objectives 1. 8, 9) 295
702
-
VOLUIR 1ITAILS O CONTENTS
VII. Detailed Analysis of Each Model (Objectives 2 | 4)(Paper
Test) . . . . . . 308
A. CDIB. DC/SSAC. KPiBID. LTV Paper Test of Three Models
(Each Detailed Analysis Contais thefollowing Elements)
1. Purpose of the Model2. Applications - bow the model Is
intended/has been applied.3. Unit of Analysis for Model4. Input
Data Requlreme-ts5. Output Data6. Operating Scenario - how It
functions, paper testmethodology
7. Resource Requirements - personhours, equIpment,
software,expertise
8. Analysis of Model for Test Site9, Recomendations
E. Responses to Questions Raised in Paper Tests . . . 670
703
;.4 ..
-
IME
0 p* uI~ P6riW
4-~ 41 42
di C
0 ~~~ 0..i" -
booo
0 PO
0 0 4-4 4
*.p Q Aei* PC .
-
0 PON0 PON "
coo
100
00 - 0 o
0~~~ po o W w p
ou 00 Q~ ,4; ^~ PC
PC pp40 S
705 IS m Z
-~~~~~ ~~~ PIN'p* ~ * **?'~ *'~
-
IG rFIGURE 11-1
Generic Productivity Management Methodologyas Related to Defense
Industry
Corporate Strategic Plani STAGE I
* Disclosure Statement
* CDEF* MFPMH (LTV)
+
IFactory/Division/Proect Analysisi STAGE 2
Incentives 0 Developmental Plans0 Challenge Budgets (LTV)
* S Cost Driver Analysis (LTV)0 Top Down IDEF, Node
Structure
Macro
+
Identification of Projects STAGE 3MEP vs. HIP ,
* Nominal Group Technique (LTV)* IDEF (CDEF)* ROM Potential
Savings/ROI
+
ISelection of Projects] STAGE 4
. Decision Analysis* NCP/PMT (LTV)* CRA
7o6
-
Figure 111-i (cant.)aGeneric Productivity Management Methodology
1
As Related to Defense Industry
ISources of Fundal STAGE 5
0 Man Tech 0 Budget & IR&D 0 IMIP 0 Profit
Various Return Analysis/Decision AnalysisTechniques Depending
Upon
Audience/Funding (i.e. 1)11, CIA, Westinghouse, DCF)
NO DifferentNegotiations * ~Source of STAGE 6 GO Funds (Lost
Profit in+ GO -Case of no
go IMIP)
I IMPLEMENTATION1 STAGE 7
+
ICost-Benef it Trackingi STAGE 8
+
Shared Savings Approach STAGE 9I Incentive* Rates and Factors
Issues* Projects vs. Overall Improvement
Issue" Validation Is sues" CIT
Improed PoducivitSTAGE 100 Improved Competitiveness
(OUTCOMES)
Is orovermn
ove 707p!, 7.. 'g , , 7 p-"7 77
-
S
4.'.
VIII.A.2 - LTV/VAPD Integrated Approach
a. LTV Presentation
s9
€,9.
-
J
*1
* .4
-p.
4-
.4
4/
4.
4..
4, .4.,
.4.
4-
4.4.
V4
4
4..4 4~4*
-4 44
44 4.4
U
p.,.
p.
- .40 .4
4 7 UO
- . .. *.*.***.*.******.*.4 ~
-
&w
Iw
3.'a
3,an
Z CL
wk>
0 L l
w zal
L) 2CL U
3 U ,
709
* -.. ~ a q~/a a~ .p 9 .~ *l'V.
0. '
-
W.4 .4 - -w,-u-.--wr-wwrVwwrrrrw.rrrrrr 'rTWVW ... 4 rir S r '.
'v -w-r -'-.- - w-V-.4-v*.4v- .r'rvvx
4,. 4*6~
.4.-.
'-3
-. 4
:4.
~44.
-. 4-
A
.4.*44.* .4
.4-
.4.4
-.4.4
4.
-. 4. * .4.4.4-...
44..
.4."S..
4...4%
.4.,
.4.4.4
.4..4,
.4.5~
P4
4;~.
V.4-.
.4-
'.4
4.
eq nO .4.4%
4-
-~ ~ : 4-.4**.4..4.44-
-
[,J -. 8 0
cc a.
cc 0
712
-
cc. oom
CLc 0
0
6: uCC4..
4.0
cr.cr
4..,
'UU
C- A
0 713 5
-
eLC
V.i
wl 0 Ln t
'I-+
7+
---- ,. -- V\V ,nS-S..*.*~S~V ~ ~ * V V~. ~ V "p~V - .~- VV i '
~ .V. < ~-
CC M-
-
:1
4
,g4,
0:
, .r.
V.
S.
V.
SI.
S.
4.
~e.V
A
-
g.r.
I. -6c=
k0
U1
z z
~ - - N
-
tit,to
-77
u.1
w. zI0I
0 07
0 '
"V. I-vil
Va717 0
Ul5
-
(nz
.J (n z U) _j
a m 0
w 0Li, M LLJ :5 L) xz 0 x m w cr. cnLL C) a. CC CC w uj LL,w -i
CC Z0 0 (L w LUm z :2 > w z(L w (j) 0 LL w 0
CL
C/) w z cn0 cnF- 0 2 2
z ww m Z w (1)j
0 mU) 0 z0 0 z 4ult :3 z w z9 a U3 u - - LLw o 2 LL,-j ix 0 wCO
2 w a:
CL CL z 0 S2 0 0. 2 09m 0 -J ZL) 22 LU uL CL w o CLw 0 >_5 0
UL M w Z cr-LL. C.) o Z- 0 w < wo
0cc(L
-
* -- -- - - r - .*~.--.-~-
7:'11
$1
* a
0>
7..J. I
a,
-J
- '1II4
719 4L* -''--I
-
U
70
us ~~V %
-
00
-- j.
Kl
@4 72j
V7 .,*.~~\v% ~'~V>N~- -
-
UL> cc
5."
Bi 040
Fc'IL
Ii
co.., ,.-- -4
L72
-
'"S
I
.5.,.
NI
N5 .
S."'"N. V
N
I'S.A I
-N
"S..S. IS.I'.S.
S. II
N- ~
N-'
a.
2..2'.2'-.
.. S..1'
S..S. '.
AA
723
%,v S.5.N- S...
-
-t--.-.w-w-----.r r *
* ao
pu
S1
-
.AI
a -L
ul4CO)t
z~
c.1
00
agoa
.4r
CL 725
-
1,, S
' '.
w , "
-
V.cc
Al Al l I
0 .
ccSncr
d.L
W 0s.
W5L
--
M.w
-5>
,55 w-C
Oc 0 0 4L
C.) C. .%* w
U)0 5
m d caC i
0 z 0 z .
S.. -
5;.5%c c
w Z .
5%i
727
-
owK q q 1 W 1 15 9 l "IT
.1*
~0 44
dz
LL
p....
M MMM!Wa
'~CO
* .+
4 728
-z
-
I;:
.1l
pp)
+-'pz
M 0
Z 729 0z Fm.
Z.XA,.
-
- . . ~ -
-J
L
p
B-.
I
F..~. A~
I-
730p..
- - -. - ~ A:.
-
Chh
I 2'
UJ W j.,
A'.Ll
* 731
-
- - - - - - - - -- - - - - - F -
00Ii'
*n 9
)J.
hWoo
s pv VM4
a.,o
a 0 0 0 0
0 11 0 o
V) 6. C4 C - V
mw vmvL i
-
Cal-
*A 0
0 5 0
SC
.40
-c 0
I,.x
733
FE .. - ..... * 4 - .. .** . ~ * - - *
-
W7V
Sw 0
tRi
LLN
l CC
V- I-1I(NOI'734
* ~ ~ ~ ~ ~ 2 Z b-*. * *~
-
I 0I z
qll
IL w
u
~~L LLU
735 1 1
al II
3. A
cc- a Il~ rd911alI All.
CC
ad735
-
tt ..
4.0
* 4o
0 .'N
I.A
z C1
im 736Ec'
* ,i -p44 ~-f-~~"Y ' \ 9 **~ 4 ~ 0:-
-
-4
944 t
N* La
4..
.4...
4.,
4~-4
.4.
4.
*17
,4~
* aI-.
4'
4!
4.
7374-'
'~* ~*' - .. 4 .4 . . . 4 *444~,44 *444444 4.-.-.". N ~ 4
-
(3
I -
~ ~ #P & ~
-
LLI
'IIL
40 U
V..f
-
IL
LU740
-
~~~~~VIII.A. 2 - LTV/VAPD Parntegrated Approach
.c
U.
j:).
S.[
1/!
-
FIGURE 111-2Depiction of LTV/VAPD's Basic Approach
to Productivity Management
Project Cost-Benefit IM HP- Incentives Anal/Track. SS Negot.
(i.e. IMIP) Use the HJ I DCF ModelMCPMH
" - IIe ElII
Strategic Development Budgets Performance Profits
Plan Plan Prod. ___S (Productivity 0 Projects Targets HCPM
Targets)
- Mkt. ShareTargets
Learning Curves
Future Bids
Comments: * Process should be self-motivated* IMIP utilized to
minimize lost profit impact
* If there were overall total productivity improvement"
incentives the company would likely do what Government
is after anyway and with less difficulty than by wayof project
focussed incentives.
.i 'F
-74
* 741
-
0 1
,44
A An- : f 3 1 j 9
", • . . .. . .. . .. . . . .. . .. .0
." a A 0
X. 4-a i- w 4. A
. 0,+ ............... -- ,- K" . . . . . . . . L . . . . . . . .
."
Im
-- 03 -- -- - --,.
- L.- - --.-- - ---- - -- - - - - - --
• .% --- - -- - -- ------- ------I - + M • I-- -- ' +
" ~- -- - - - -- - ------------U l I..U I 4 O0 --- • I--
LP
IiI
- - -I --- L - - -- - - - - - - - - - - - - - -
. . K * * * * * * . . K * * * * * K * * * K N.- - - - - -- - - -
- - - - - - - - - - - - - - - - - - - - - -
@4 7420
cU
D- 3- *0 2 LP K . ~
-
VIII.A.3 -CDEF
a. Price Waterhouse Presentation
RdA
-
d2
(cCc
CON
74
-
FT
08 Elz cc*
0. a 0 C
I-LLO0ccLL W0~
_U a ) 0-
'UU
744,
-
0
0 Z c G
0) C) C C)
wL ama4)
CLL ucO E
0) > Cl C
U. r C V (Dmc 0L
a)C00a
CDC0. 0 2M
745
-
E..f CL
0'a
., E .-_ U
0 0 Gm o7(D
O >% 4
00LL 0
AFIN
746I
5-
.V,
-
c 0
•L
EEE"o 7Cl
-W
w LL~wCu J I
V 747
-
0 Cc 0~G
0.~ 0 0
84). I 0 CCw E _0m 0 060 -0
0U- 0 0
00 CCoa. ___ (D
E 0 cc
48
I -. N
AM MMM
-
16 -P
CDC
LL.C
OCoG
1E L.
< - E0
474
-
.S
C0
CO CL~G
COo JI
75
-
04).
GC c
o0
.So
co 0
,U 0 M ,emm
4) C). 2
ri0
00
751
.H- G..) ,,,
-
ca)44. 6- -Cc
rc
0 CD~
. LlJ 0 z z$~~ C .
Cc
< 0 WW L4% L) moZ
LISz
752
-
o 00
LU
wO a
LULL
0O LUL 4c 0
(a go ;0 U.I- I- a.
CO0IoGo C0,U
Cu, Lu L754
-
r7
AM
9Cc Co1
MOW
z ~c
lo- D 0
4. 0
w
0 CONw--J
4 75
-
FT
AN.)'N c6
0 CO0
UU IJJ iwm -W LU ip~i C
0U 0 Co aL
UUq
-
00
~cocD )%0 OCO
0-IU .
I 756
-
cO
LIU
0 0 WX X
ca m M
0. W ZWI-.tw~I. D?
1am
75
-
.9..9..9.'
.9..
to 0011;99. 0 10 -
.9. U .5
0 z40
-
z >p
00P cc
4'., 0
2I 0
M. comI
z 3t ZWujI
-
VIII.A.3 - CDEF
b. LTV Paper Test
A
-
0
p.r
V0VL
-pi
0 U6o
~ * ~ ~ V
-
-cc
a.'a
-a,,cc
Ac
'4Ea,0
E =%."p0
Cl. E. 04%: 40 0 m 0
um w
*L 0 41.
.J0
* 4>k
CL E .
0 a 0-LL
CL t m
> Es
* a.
a....W0
co00h 04a. .~aM
0 0
-a0*#E
0 0 .-
- % *p~,.. ~ v q.~,,a. -a-~*~*a * 0*~
-
St
.4N
0I 0
aV
B7
%-
wU
cc 7E
LU CD. E.* . ~% 5. . ~ v . . . %.5 ' - , . * v .
-
VIII.A.4 - MFPM
a. VPC Presentation
lp
-
4%
(1) Basic MFPMM eqtn. Profit - Productivity x Price Recovery
R(2) SALES OUTPUT OUTPUT PICE
COSTS INPUT INPUT PRICE
(3) A Profit - A Productivity z A Price Recovery
A OUTPUT PRICE
(4) A Profit -A Prod. .a INPUT PRICE
"V
forecasted (i.e. - we knowthese from published data orcam
constrain A Output priceto gain compecitive edge.
A Input Price(5) A Product Price or * A Prod. a
A Profit
forecasted
from eqtn. (5), we cam develop strategic objectives for
producttA pricing and annual productivity improvement that are
interrelated.
FIGURE VII-C-lt Basic HPi Equationand its Derivation to Show
lowthe Model is Utilized by LTV.
763
P-LL
-
I-A
0- - - - - - -
I.'.
.0 tub
El - -,"- -N I
p 4mv I
g~. -I-
~p. - - - - - - - - - - - -76-4
-
VIII.A.4 - MFPMM
b. LTV Paper Test
-
0 c
CL r
E cao9 CL a
.9 - .0a9 cc (
.. i ?L r
c . 1r. m0
.90 cc
0.c 1 ?
'".9 X
&M. .9.L4L :CL4 Va W
Esco c
"a, c 0
.- *0
r. =0ex '0
*~.%. *9a
.9.0 c 0
0 tx ecc040 .. ot9
x L:
mI z e
"M MI 76
-
-'S 71
4,0
5,-.0
.4. -E
0. 6o a.a
Im c-- 04
.0.-
.00
-E0- a '
"'S.-o .
LL ?L .0.6~
4 ~ ~~~~~~~~ CS..''Y.? ->-' . - -
-
VIII.A.5 -DCFISSA
a. Westinghouse Presentation
-
C.)D
C. i
00
0: 0
L).
cn r. 1
CL E-
cm. . C"0 C -~E
C .- c :1, M 4
CL 41.E4
AA C
6t
MdL C1 100
-
ccJCL~
LL'
cmw1 c .'
m 0a 40 0
- E faI *1' ac cq
o do 0a
_ U.
U'.0 00
'pit
-
V
* ,i
noe use iae I eI t
Ilo I
MA, m 1 'mm Iee lawe I* ~ ~ ~ ~ n I~ am 1j 00~Ii1121h0$'l-
,b .. . I1 i 1E] Iu] ,]I0
-- us
too 3 13111 11 :3 :1 1
.S
-
I~H.Lj ;
410
WI)
L~f
INPII ao LWI1) LIS
6 6 0 o
A30 1 9~Nh U L*I* 34 L14
i Its 1J" 904 i:O: Ell)
-
S
m~,p
~
III In
w* *.AiF * mmw
.1
*
II usIn'U)I I ~* -4zzil
*411119I
- 'A.
I - tIh
.3
i
-
Ln '
£ w
L b6Ia.jP , op4 obv 4
'I-.d.Nd~ht&.h A
-
seea"e 4. 1 6. .USYRM 1. US ste 0. * .0 0. .4seeusee 9Ie~sme 0.4
0.g 1.0 0.3
Owmteeee ftesA 6.6 6.0 0 0.0a 44 loewee ee. 0.6 0.4 0.0 0.0
I ae.,eftin"e 6.6 0.g s.0 3. 0101 98.mMMUNM0 I& LO
.........
seaegave&e oo 0e .0 0.6 6. a I
vw.m4.ee9ts4 0.6 0. .0 0.3ON smaeOe "s eso" P61 be. 1 0.6 6 .0
0.3
"a Ow1 to& 6.e4 .6 0.6 6.0 .6666~164 eel ae VIOC e.s 6.e 6.0
0.3
ii .e...ee he-lmieee11..e ~... . .e..
66'64 *.eeeefee #.sl.mi e0 e.e i.e i.e'0l*$ ISOee 3s ee GoI 0.0
i.e i.e i.e
091119 If. in e * - - .- . .
9uinree&' ueen$Iv$ we"4" 0.e i.e i.e#9 he6epaee 1eege e0.0
0.0 0.0 $.
i4040"649 ftea 0.0 i.4 a's0' saeveembe Pepsin. Pilesee i.e "eIS
i4eePmege eeee'eb as** of sesme
...... .. ..
"eema~eq......... ..
Opme"94,0 401440some
e . ~ e. i ... ~..........a-P e
M e " 1 .. .. .. .. . ..... ..
low 0600ee mee de'S..1...*Dope" " "*# ... .. .. .. I .. . ' ..
.
"a" s taf (MOe,.. 1 le *te ....... 0 s. .
-
00
00
(I).
E _W* 0O0 0) £1 0
'0 SN
41( 0 .inONO w
*08 'S~ I~0 E
S L
go cc
p de
-
'IL
u E
0 4)
2. -
0 0C.)b
-dw 0A; A Qo C0-Lo
a0cE '4,(fl ~,Oh (u-
'Ile I
-
4) ) )L-00 0 ow
E E
00 0
EE
CLU
E E0
(n o 0
0~ .s s .
aCL I--
-
a) o
LL0 m
0~0
%. 0
Mq C
0 hU0
ol C
-
CL ONOo L. LLI
m C-
_ C
0 0
0 a '/, u -low -0
(fl CJ mCL ~
E 'P hIIIIIIIIIIIII *Sll N1111 111111 Ollil0
-
*
0C
IA
U
E_________ 0
- I 0~ .~IA
6) - 2 I
0 , ~,-I
* 4~' 0IA
0II
Up C
O~e~0LA. - q ~'I IA
Ii* C
urn., CLU -O- SI F
Ci pSI'1 £
I* J 0______ 6 1 £
6 Ua
LI
b.S0~0
''p
p W
-
164
g-
U I oat I I.. 1-
C e I
0, Is' i , it0'0 c
"• • --.U"
i iPS I- I .I I I
u~I 4i,~ L UZ
02 0
LS z
OJ ,, ,
• OOO OO". ** S*i 0
• • •
..
SIj,
.. . ..IIInI I . . .. . .n n - _I II Il
-
CC
30
(A -CU -o
% 2%.
lo "a O° X O.a -Uf
>e,.IN C>.' a.,- -"
Sch0m i5 "" "
E- 0 20- S 0
0 0
NI, 30 c'-
00
c
~2 E
781
,,,r.L " ,r, ,, , ' + , ,r *, +,
-
00
o 0r (
U..
00FAUU
o '
0-~
-
CC
F U-(~QL v 0
Q)e
783II)
-
0 -
LD• ooo
(4J
CDD
-m
00
0)E 0
3L 0
00
0 -784
-
U
I
(I,
C0
U
- 0 C~
(I)o 1... ~(U) 0 ~
0)0) = C
a~I ~ 00p -
U0 S
0 5
0)
785
i
-
.0"0C
m -0
0-
-. CL
E E U
U) U) mCL3
786 Cu
-
C,,CDC) .2
787
-
A~A~1 A..'j .SAMP!-r :C MCE
4b~ lb -
oz 1;Q u a a 4e e or a- a;-0 '
ft* SP ieee.. m
2 aj z
2 2m
CCC*C. ft3e
AD D w 0dD4 4 n b -041 a 0- a a0 ac 4 a 0 w.-p 4b5K 40f N : 40~u
ob 4D4 D f
t -0 ab 6f -0 40 4 a 4b -0 4 f 40 'D a. aUSi 4d Ce a; 1 4; 4d
I4ie 4i 4C4d4. ;A
* - 6 is- 6 -*-----~ .. **... e.ReL
*~~~~~~~~4 0-%:: : -9 . . . .. . . . . .
*CeIlC C S* iCSS m
- ~ 1 T in1mww.4mwm I~w U*WW~~inCC 6 - ~-6- S i a u ~ i C n
* 3. Al F-C~~~~ 3 C a Ia
*jobaoft~C S CC
IxC x
~-~:~ :~Qm7889
-
5 AAC:.-- 3 ?S SAMPItZ :CF MCCL'
pI al susli ls
ow Isooo
-111
a! pro!
a V a41 mm aale-
RIn. Umw:pow ob w- toi=~u
il il _ 2owl 'ooPH S
tu 789~
-
IJ
VIII.A.5 - DCF/SSA
b. LTV Paper Test
bow
* - '
-
ro- E 0 V
0 F4 0 "a0%- :E o
C
EED e E
30: lu w E =cE 0 ot - >o w 3:
It 0 = >w 2% 2 %.13 c 0 400 CL 0 c E M
c E a CLc- >% Ec -h 0 'i Ew 0 0 = C C 0w cm cr -0 0
0 c E c tv Isc 'D c 75 0-0 0 E 13 >- = 3:= 0 2.2 C 0.-)% Is c
.. = a0 00 M a c
ofo E =E 'Pei 0 r-0-0 .2 A 0LL *a Im c c -0 M v 00 E -i c 039 -i
0xE .3 a o E E0 C cr
?L 0 E t% Now 4w
el '. 0.00 tx 0 0 0 c 0 0
= c Cxc c 0:5 c .0 0
IM 4.0 0 0 12 0
S E c E 'a -- Q c c van"I... . 41a0 0 Im s o cj 0 E
p I V.W.. I W1 4 1; Ir, I I IS I C 1, C
-
.1c
ao
.10
0 c4
caaCL cc4 .
ui c E 0-
0 C.
x I
4c - 4 C . ' ' X 4 . . , b 4
-
VIII.6 - Summary Remarks/Conclusion andRecommendations
a. Summary Remarks
3-
1w
-
Table V.D.-l.-. Generic Criteria Useful inEvaluating
Productivity Kanagement
Ms thodologes (PMGC)
P9GC 0 Does the methodology incorporate a 2-5 year
strategicplanning process?
PHGC2 9 Does the planning process, by which the 2-5 year planis
developed, substantively Involve all major,relevant, and
appropriate key decisim makers in theorganization?
Pi4GC 3 * Does the methodology recognize the need for acompetent
'champion"?
P9GC4 * Does the methodology incorporate machanisiom formanaging
change within a political and sociologicalculture?
PHGC5 0 Does the methodology ensure that productivity basicsare
understood consistently by all persons in theorganizatLon?
PMC 6 0 Does the methodology consider and Incorporate aprocess
by vhich general awareness about the vin-winfeatures of
productivity improvement can be developed?
Does the methodology recognize that there are
strongpressures/restralning forces Impeding productivityImprovement
that must be forthrightly and openly dealtvith?
PM1C7 0 Does the methodology incoporate the notion of stagesof
development or evolution for the productivityeffort?
PHGC 8 a Is there gemoules, real, long-lasting top
managementsupport for the effort? Does the methodology providea
mechanism for getting and keeping the support?
i)4GC9 0 Does the methodology adequately provide forintegration
of specific models, techniques, and stepswLthia the methodology and
a mechanism for Integratingthese with other management system?
Ir PWGlO 0 Does the methodology define how the
productivitymanagement plan will integrate with the business
plan,marketing plan, capital budgeting plan, lom-range(5-25 year)
strategy plan, etc.?
PMGijl Does the metbodology utilize
stats-of-the-artparticipative management techniques, at all levels
ofmanagement, to drive productivity improvement plans?
792
P? . . . . . . .
-
Table Y.-).-.i. (coat.)
PMGC12 0 Does the ethodology specifically deal with boy to,4link
strategic productivity Improvement planning to 0.action planning
and effective Implementation?
PNGC 13 0 Does the methodology Incorporate mchanisims
thatencourage and promote disciplined manaSement ofbudgets (all
resources) at various levels ofmausgement and supervision?
PMGC 1 4 • Does the methodology Incorporate continuing
andproactive development of improvement measurement andevaluatiom
system? Does the methodology specificallyincoporate
state-of-the-art productivity measurementand evaluation
techniques?
PMGC15 0 Does the methodology strongly encourage
periodicmeasurement and evaluation system audits that check
toensure that those things vhich truly constitute systemperformance
are masured?
PMGC1 6 • Does the methodology recognize the difference
betweenmeasurement and evaluation systeme for controlpurposes
versus those for development and improvementpurposes?
PtGC1 7 * Does the methodology discourage measuring A
uhilehoping for B?
PKGCj8 • Does the methodology define how various masurement Xand
evaluation systems will integrate Into a cohesive,effective
management system that supports proactive --productivity
management?
PMGC 1 9 • Does the methodology allow for personalized
scoreboardbuilding by sections, work groups, departments, etc.?
PHGC2 0 • Does the methodology promote continuing,
proactivedevelopment of control and improvement techniquesrelated
to all resorces? Does the methodologyspecifically Incorporate
state-of-the-art productivitycontrol and improvement approaches and
techniques forlabor, capital, energy, materials,
anddata/information?
PHGC 2 1 • Does the methodology encourage periodic audits
ofcontrol and improvement procedures? Do we audit whatwe really
reward?
PHGC 2 2 • Does the metbodolosy discourage rewarding A
whilehoping for B?
793
-
Table V.-D.-l.-l. (coant.)
PMGC 2 3 * Does the methodology encourage and promote
Innovationat all levels of the organization?
PHGC 2 4 * Does the methodology utilize a "cost-driver"
analysisto identify vhere improvement efforts are beatdirected?
PHGC 2 5 0 Does the methodology defrin bow to successfully
linkcontrol and improvement to measurement and evaluation,and vice
versa?
PHGC26 9 Does the methodology focus on building
effectivemanagement systems as opposed to just automating? Areour
improvement efforts piecemeal attempts to optimizesubsystems at the
expense of larger systemperformance?
MI'GC27 a Does the methodology strive to create
goal-conguity/via-win situations? If the organization wins, willthe
individual win also?
7 P PMGC28 0 Does the methodology successfully utilize
state-of-the-art participative management techniquesfor
productivity improvement plan identification,developeet, and
implementation?
(29 e Does the methodology focus on execution of
managementbasics as as early stop in productivity Improvement?
PHGC3 0 * Does the methodology hold management, staff
andeployees accountable in a disciplined, consistentgfashln?
PH"C 3 1 0 Does the methodology incopotate planning
formaintaining excellence osnce it is achieved?
PHGC3 2 • Do all levels of management and staff understand
themethodology? Does the methodology lceporte plans toinvolve
management in its development and to continueeducation as to the
methodologies execution?
P4GC3 3 0 Is the methodology designed so as to be self
motivating?
~' - PMGC 34 e Is the methodology as simple as possible?
794
-
Table V.-D.-I.-2. Generic Criteria Usefulin Evaluating
Productivity Measurement
and Evaluation Models that viiialso Support Incentive
methodology*
(PNE4 CC)
PMEMCl 0 Is the modal easy to use?- Ease of Application
PMEWGC 2 0 Ease of Application for Prime Contractors.0 Ease of
Application for Subcopntractors.
PEMGC3a 0 Does model utilize existing company data bases?-
Percent of data needed that is available.
PMEMGC3b 9 Does the model require developing new company
databases? If needed data is not available, can model bemodified to
provide valuable information?
- Nov data bases that must be developed to use model.
PMEIGC4a a What does the model measure? (directly &
indirectly)- Effectiveness- Efficiency- Quality- Productivity-
Quality of Work Life- Innovation- Profitability
PMEHGC4b a Is the model primarily designed fort:- cost/benefit,
cash flow projection and analysis?- cost/beefit, cash flow tracking
& validation?- productivity measurement A evaluation?- a
control tool?- an isprovemeat tool?- a department, function, or
workgroup analysis
tool?- a plant, division, or compsam analysis tool?- a project
or program analysis tool?
PMEMGC 5 5 Model usefulness for Maaufacturing
EfficiencyProjects? for Manufacturing lavestment Projects?
PMEC 6 0 Implementation Costs?- Seteral magnitude- design 4
development- implemantatio
*. - operation and maLtenea"
m. * Incentive Methodology in this application Infers Government
toContractor Incentive System* such as IN4?.
795
7!.
-
Table V.-D.-le-2. (cost.)
Pi4HIGC7 • Ability to meaure and allocate savIngS to
sultipleprogramt?
FKKMDC 8 • Ability to have productivity Improvement projects
andbusiness program added and deleted? Flezibility ofmodel?
PHENGC9 * Ability to delineate comnercial and goverment
programbesetits?
FKEMGC 10 a Quality of nodal output? Appropriateness of
mdaloutput portrayal? Flexibility of output for
variableaudiences?
PKEGC1 1 a Accessibility of necessary input data?
Preprocessingof Input data required?
PHE4GC1 2 * Audtability of model?
PMIEGC 1 3 a Ability of model to handle long cycle times,
multipleproducts, frequent design changes, product sixchanges?
PZNEGC 14 0 gase of translation and transfer of model
withindefense Industry?
.F-KEC1 5 : Perceived complexity of model?
PHEMGC16 A Ability of modal to satisfy needs of sultiple
users(i.e.. Congres DoD, contractor, rnsnaers, staff,etc.)?
PH C1 7 0 Uniqueness. and perceived utility of
informationprovided by model?
PKEIC 8 a Perceived implementation cost?
F4EGCJ9 0 lace of lInksags and quality of the link between
what46 the model macures and incentive methodology?
)M4DIC20 e Model's conformance to accepted coat
ccountingproactices?
PEIGC2 1 0 Does the nodal follow functional
(organizationalchart) analysis or a cost-structured approach?
PHEHGC2 2 9 Model's allowance for comparing and contrasting
Isand As Vere" cost baselines vs. "To Se costbasellos?
796
-
Table V..l-.(cost-)
II,-I
:: .
PM4N4GC23 e Ability of model to incorporate uacertainty and
risk?
EHI4D4GC2 4 Ability of model, us8g existing data, to
trackproductivity Improvemnt?
PHMENC 2 5 • Ability of model to treat ulti-dimenaionality
ofperforance and productivity, i.e., ability of modelto ezamine
cost factors and non-economic factors?
PKEMGC2 6 a Ability of model to substantively involve mrs
andpeople in the system in its development, evolution anduse?
PIEHGC2 7 • Ability of model to guide, direct, and even
motivateV?. action and implementation?
PHEMGC2 8 s Ability of model to support decisions?
PMEGC29 • Ability of model to satisfy the goals of DoD
andcontractors?
PHqEMGC30 0 Ability of model to be Integrated successfully
intotypical defense industry management systeme?
V.7
4--V...
I-
'I 797 .-
V *.
-
D. Comparison and Evaluation Hethodology
2. Specific Criteria
5 CDEF: a) Has a functional structure been used?b) Have function
groups been identified?
c) Rae the financial reporting structure been "mapped.against
the functional structure?
d) Has a comprehensive Manufacturing Cost Nodel
beenidentified,
e) Rave Critical Success Factors and the relatedperformance
measures been identified?
f) Have "as is' and 'to bee cost baselines been
established?
g) Ras project risk bees onsidered?
h) Hae the synergistic impact of the technologyImprovemnts been
considered?
1) Ras a benefits tracking plan been developed?
WIPK: Does the model:
a) provide &a overall, Integrated measure of productivityfor
a plant, division, firm, etc.?
b) provide an analytical mechanism for evaluating pastperf
ormance?
c) provide important Inforuation for budget control?
d) provide constant value information on performance?
e) assesa and evaluate bottom-lne impact on profits fromshifts
in productivity and price-recovery?
,,t f) track results of specific productivity
improvementInterventions or track total results of allproductivity
improvement interventions?
) assist vith establishment of productivity
menagementplanning?
798 ,"'*' 9*1I'
, ,I
-
h) provide In a succinct, integrated report
containingInformation related to
- changes in resource utilisation andoutput compoeltion.
- traditional 'pie chart," cost driveranalysis data.
- partial factor, multi-factor, andtotal productivity
ratio*.
- performance indexes, changes inproductivity, price-recovery
andprofits from period to period.
- the constant-value dollar impact ofproductivity and
prLce-recoverychanges on profits.
I) provide management team vLth the ability to forecastand
simulate business conditions, cost patterns,productivity trends,
and to analyze these changes(controlled, constrained or othervLse )
on overallperformance.
J) notivate more proactive productivity managementefforts on
part of managemet teams.
k) reflect good management system design (i.e., considervho is
managing and what is being managed in relationto vhat ve are
managing vith).
1) promote total factor (energy, capital, labor.materials,
data/Laformatlon) productivity managementdecston-making.
799
S aam I&-
-
Rp R. V-V VMr
a 0a
0 - c u 4
cc . 0 u v a 6 4 0 Saw.s. .'og w 0 0 000
1*d v ~ U E 0 in u 41 4oO )4 ad. &j 0 0
641 0 0 V
0 2u 0
-4 6
10 0% &ja0 0.41 > l u a '-4 to 0 0
0) 0 lm %16.o
o 41 :8 c4
t~ 4 -45
- -
it-
0 Poll 04-4
4) 0 u' .4 u 64
a1 00.0 r 0
V a coo 'uo2 0~Z 7w 0.30 2L
00
C64
>6 001.,u AN o '%" w w -4j6 ". j9a 4014a 14 3 W 0 p.-4411. -6
a CL 0 i4 1a 0 s.4.i w " 60M.. 4 1 cb.'440, zo 0 0 wuo 0 0 '
06.a
0 0 UQA
00k340-10
4 44
-
4' V4
"4 r4
01 .08u aafOle 4) 0 $a *
-4 Id
0 '
14h 441 0
0. .4 6.A
"4 40 v0W0 04 m "40.,ao -4 &j&J0
4) &:1a 0 06
1, 44 :2
0 r 6 onv V4
.4 0
-4*-
V4 0 04)4 4 0do ~0" 4 4 00 0
:0 v 1444:8. &ii j 0. V4 .0 V4 -0 4
0.: a 26I N 6000 aJ46-
0 a*-4
W4 -.4 V4r
0 cr0
0JdA1 'a 06
0 na.. 0 0 0. d L4'
- .o -4 3a V4 i* *61 0 a"4"40 ad &J 0 0 0 0 40
:-, 0 14b"4Ud VO'a00 ir6-
aafl .. a 0 00 Id'-464 04U 00~'
0~~ .44)&4 a
a 4C00 sw o o 4 -64b 6.,40C61 410404 a .0 6j 1 0 V4 @- 061 0
4 44 V.U = 0 WV 414 0.4)&J c 0 06 6" & 'aw
"4 "4a 4 "". 4 (' ow .44Vcqe4CL ca a w "4 44 IOU0 "4 ~0 A0 i 6
0
801
-
VIII.A.6 -Summary Remarks/Conclusions andRecommenda tions
IZS b. Conclusions and Recommendations
1%%
p
p".%P '.
-
0 o0~0
bo
0-0-W P
00
WWf
7PO% -w
~. y
On C * gPoo
Vc
80
-
o
o/6 il 0 = d ::~uPC 4.J.
obflel
03
-V00 - PEA*
cd C,_ p.r Mt
I po $Poo PC Io b
";";: "" " ""2""; .2,.. -',2 .r., " ":-",''',- """ "" --. ,-,,
""v ' - ' % "Op,-'
-
0 Pow
0 ~0
o
9- o
30
-
bo
M PC
00bic
ed 0
00
0 Go 00 bO
$0CPNQPl0 - V P
IE'i
40 41 P>.b C e4 .4 P C p
I PC PPC '.
tj cd 45
5% Po o
-
---U ---- --
* a0
0 P
0 o
spm~hopm
o pro
-C *Po rw 0
0 PPC 0o C
Q 0PC,praPl
PC0*Po.0 * o
S()
-
cc
pmo.
go
~4;
IMA
oo
00 0q
ig
SQ
. PON4 ow PC
-
bbob0 Po 0c
bo 5
0 bo0rwaPo
PC,
ejA 41 P
0 Z Cwr.
FbO PC 0
4a 0 0
"r bS
-
I-C
bO 4
bo bo
po P
0~ -NO s~ pco0 4 P C
0 9
-I ~ ~\ W
-
p..
q44)
PCCS0dEIEa
C Cd
~ssiP"b
SILO
-
bOWb
4-4~
V PCPC 4)
OO1go b
PC~
0 oPC4)FP
ow ro
*PEI op 4; k r
0 PC M 0
.~~4 c x-*
-
PC~
00
-P0 C 4b0 Po
PC 4o
bbOPC
04aP-4pi U,
.0 a a POO - .
** ~*~A~ 4 -~ *~- - r.
-
S
VIII.B. Final Report Briefing Materials
(Presented by VPC to Dr. John Mittino,Deputy Assistant,
Secretary of Defense)
I.-
i
,
-C,,
*# - -. . .. . ' ' " " ."-" . . . .""""""""""' ", " ",* ' ; "
."; "
-
U: The Study. of
: . Pruductivity Measurementand
T1ncentive Methodology
Phase II
Final Report
Briefing
18 February 1986
813~
S.%-
.? S.
t.
w
-
$PE
~~PC
ic w
-
0 =
* 44j ~ ~ PC
PC~
-PC
-4-
GP
~'IpE-.~OMNI
PC
0
*rdp
a.*~~ ~.. -~~'*~J 'aa. ...> ~
-
;:ON
1 ~316
-
400
oz -W
4j a o
C~~~ PENg~ ~
0 O
pug *Iokas Il &W
Pug
-MC12 stoo u
44C
........
-
161
oo
c
spi"IU
4w,Amok
DPWiI .
ADO 16'C41
On 0 U PCOop sn o-W Ono -sowlo M>e
DPW2.
818I
-
400
_ IM
*9819
-
a U"
4oo
P4420
m ill0
-
cpv, =
PC-,
~i
* CI-
4= SCor 4= C.. *
-~rr E- ~ **.= .4 . =
-P Cd) = = = = --~~= =.. 9cS i E
-- ~~P E-- -Q 1=4 =C) .,06 " - C A 4 = 4 = C )
06q -0 U 03 CJ M = PQ =PC')ma C-3 C-: 0-=4 -- .~
U -___- - = ~82144. 1==U-= C.)~
- ~ r .-- ------- --
-
Cori
0==
am C2C = a-.p- =6 maA-iM
'a-. ='ob mbW-4=0 0_ P-U1P- O- 0-4-. s. ___
_ - rie ,-6
-~~~m C -~~~ -2 0=_Cal CAP ;~U.~ ;~=*I. *
em 822ko ~= - . o
-
-q
~Goa
0 . C5
I*.*rw c_ ri 0riC_
16-4
_ -c>4 -_ - £='
0.. ~MC =
roi
823
-
e.4.
MC coi 4= 92.
=PE
b4,. 4
4=_ = =l = = - = E--BE0WC> .,e_3=- 4
==4= ag Fa eiCo: eo i- P& -- -
coo ac- w =gwE-- Faa
w.~~4 - =- U.
4r> = P-4
&aQ Cw M"
5-i> -c 0= &=3 1 *93. "-- 1= 4:4
=0 ril ri =
-~- w 4 -4 = O = U
"S._
~-. ..)* ~ __ .~ ri- =824
-
:hCAI
co"A
- 4= P- Corib-
w .
6-1
== U-i -
-N -
--p- ;i Eqm U4 U-E- -
H- U' =..i-
rX* .- -cu3-PWJ~j __ _
-~ = =4 =s-..825
-
Ilso
Q
-- 4 4
"4'" ' ' ./ ,a
s826
-
* 2d
0i
00_ PC
04 a~q PI PoP~0Po
2827
-
Poo
0 POO
o b4AGO
wc -
o0
bOPON
828A
-
P rw r r '. w~ -~--~- - - -- - --- - . . - r r -- - - -' r
9 2M b
o -.g~p ~ 4-o
(U-z >1 ~Jp~-
* oo
bo LitbO
PC 4;
_ a m
PCI
-ILL
-
SRO
bPo
bON
0 PO
13..
A830
-
p" b.
_0 -P Cqf*
r.~~ p"a
P04
sWMIN 0 brmP=op
PCP-4 ZbOPC~
0 PooQ" 94PC 0-
- ~q~831
-
"PON
Op"~
OPb% 4o 0 PE
0
-2
On ro 0 ta 0
p..9 Post >1 SOO
op g o awo2Co r -i.I w C4m
.11
832
-
FIGURE IIil-IGeneric Productivity Management Methodology
as Related to Defense Industry
q Corporate Strategic Plani STAGE 1
* Disclosure Statement* CDEF* MFP),( (LTV)
J.. +
IFactory/Division/ProJect Analysial STAGE 2
Incentives * Developmental Plans" Challenge Budgets (LTV)" Cost
Driver Analysis (LTV)* Top Down IDEF, Node Structure
Macro
41' denti-fication of Proj-ects STAGE 3MEP vs. MIP
o Nominal Group Technique (LTV)s, IDEF (CDEF)0 ROM Potential
Savings/ROI
Selection of Projectsl STAGE 4
0 Decision Analysis0 MCP/PMT (LTV)* CBA
833
*•
-
Figure III-1 (cont.)Generic Productivity Management
Methodology
As Related to Defense Industry
ISources of Funds STAGE 5
0 Man Tech 0 Budget S IR&D 0 IMIP 0 Profit
Various Return Analysis/Decision AnalysisTechniques Depending
Upon
Audience/Funding (i.e. LMI, CIA, Westinghouse, DCF)
q4,' -,NO Different
Negotiations Source of STAGE 6GO Funds (Lost
4 Profit in+ GO Case of no
go IMIP)
IIMPLEMENTATIONI STAGE 7
lCost-Benefit Trackingi STAGE 81 +Shared Savings Approach STAGE
9
Incentive I
* Rates and Factors Issues* Projects vs. Overall Improvement
IssueS Validation Issues* CBT
+
0 Improved Productivity STAGE 10/ Improved Competitiveness
(OUTCOMES)
" / • Improved Performance // Reduced Costs; Improved /
Quality, Improved/
~Overall Acquisition
for Government
0834
b,.-
-
FIGURE 111-2Depiction of LTV/VAPD's Basic Approach
to Productivity Management
Project Cost-Benefit IMIPIncentives Anal/Track. SS Negot.(i.e.
IMIP) Use the H DC Model
MCPMM ,
Strategic Development Budgets Performance Profits
Plan Plan Prod. ______ ____(Productivity 0 Projects Targets
HCPMTargets )
0 Mkt. ShareTargets
Learning Curves-,
Future Bids
Comments: 0 Process should be self-motivated" IMIP utilized to
minimize lost profit impact" If there were overall total
productivity improvement
incentives the company would likely do what Government gis after
anyway and with less difficulty than by wayof project focussed
incentives.
.835
835I
-
bo
Too
.4r.
-a PO
836
-
qco
two
pm" P4
0~0
Ago%
837
-
0O
II.
.% *~@PIN
%41 W ~
qPOO
0 Poo~
>-.riC4a OEM
op"1 4 $W4-POO a ol *
>% d -W
qb*0 PEI
~*PI
839
-
4b0
00
com
a-4.4
0PI
16~A
4, co
~c
0
838
PCpPC,
*U0U. DW 0
-
-~~ - - - - - - - - - - -- - -
MO
ego *peProd
0 0 O
100
484
-
-- -- - ------ -IW 7
APPENDIX A
Distribution List
........
-
Distribution List
Volumes 1, I, 111:
Dr. Richard A. StimsonDirector, Industrial
ProductivityOASD(A&L)IPRoom 2A318, The PentagonWashington, D.C.
20301
ComandanteDefense Systems Management CollegeAttention:
DSMC-DRI-RBuilding 202Ft. Belvoir, Virginia 22060-5426
Dr. Robert F. WilliamsArmy Procurement Research Office
ODCS for LogisticsBuilding 12113Fort Lee, Virginia 23801
Mr. Shoni DhirManager, Productivity and Industrial
EngineeringLTV Aerospace and Defense CompanyVought Aero Products
DivisionP.O. Box 225907Dallas, Texas 75265
Dr. Thomas C. Tuttle
DirectorThe Maryland Center for Productivity
and Quality of Working LifeUniversity of MarylandCollege Park,
Maryland 20742
Mrs. Betty ThayerSenior ConsultantPrice Waterhouse6500 Rock
Spring Drive
Bethesda, Maryland 20817
Mr. Richard Engwall
Manager, Systems Planning, Analysis
and AssuranceWestinghouse Manufacturing Systems
and Technology Center9200 Berger Road, MS 6112Columbia, Maryland
21045
81
81.4
-
Distribution List (cont.)
Volume I Only:
Mr. Douglas Reeves
Assistant to DirectorIndustrial Productivity
OASD(A&L)IPRoom 2A318, The PentagonWashington, D.C.
20301
Colonel Ronald DeepDirector, Air Force Business
Research Management CenterWright-Patterson AFB, Ohio 45433
Col. Robert L. Sims, USAFChief, Operations Research and
Economic Analysis OfficeDefense Logistics AgencyAlexandria,
Virginia 22314
Mr. Peter St. JeanDavid Taylor Ship R&D CenterBethesda,
Maryland 20854
4 8
4.,1" '
-oj
2815