Research Sponsored By LAI Lean Enterprise Self-Assessment Tool (“LESAT”) January 30, 2001 Lean Aerospace Initiative Supplier Networks Research Team Presented By: Debbie Nightingale MIT
Research Sponsored By LAI
Lean Enterprise Self-Assessment Tool
(“LESAT”)January 30, 2001
Lean Aerospace InitiativeSupplier Networks Research
Team
Presented By:Debbie Nightingale
MIT
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LeanAerospace
Initiative
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Overview
➢Background
➢LESAT Development Process
➢LESAT Architecture
➢Beta Testing
➢Next Steps
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What Is LESAT?
➢ A tool for self-assessing the presentstate of leanness of an enterprise and itsreadiness to change
➢ Comprised of:
➢ Capability maturity model for enterpriseleadership, life cycle and enabling processes
➢ Supporting materials: (instructions manual,scoring guide, etc.)
Ass
essm
ent M
atrix
WorldClass
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TTLRoadmaps
TTLRoadmaps
LEM Principles & Practices
LEM Principles & Practices
LESATSelf Assessment
LESATSelf AssessmentAssessment
LAI Enterprise Tool Triad
Best PracticesImplem
enta
tion
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Approach: Evaluation of ExistingAssessment Tools
➢ Conducted analysis of existing tools vs. requirements
➢ Types of assessment tools
➢ Maturity matrices (Boeing, SEI, SAE J4000)
➢ Quality of document processes (Baldrige, Shingo Prize)
➢ Outcome based, measured change in performance (Evidence ofLean, Financial Scorecard)
➢ None of the existing tools met key requirements
➢ Did not address entire enterprise (most focused on factory floor)
➢ Did not provide both a measure of lean and gap analysis
➢ Did not identify “next steps” to take
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LESAT Tool Requirements(Survey of LAI Stakeholders)
➢ Simple, easy to use and minimal time to create
➢ Instructions and mechanism for use
➢ Standard and clear definitions
➢ Focus on lean attributes
➢ Alignment with business performance planning (goalsand results)
➢ Provides guidance for “next steps”
➢ Gap analysis capability
➢ Ability to accommodate both single and alignedorganizations (teaming, partnerships, suppliers) withinan enterprise
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Needs / Requirements
Candidate Tool Process
Assesses Degree of “Lean-ness” for anEnterprise and all its Core Processes
Provides Feedback for Improvement.Provides Guidance for “Next Steps”
Objective Evidence / Data Driven
Matches / Aligns with LEM Attributes
Leverages LAI / Industry Tools
Minimal Time / Effort to Create Tool
Scaleable / Flexible for Different Users
Simple - Easy to Use
Aligns with Business Planning Process /Goals and Results
Able to Accommodate Simple andPartnership Self-Assessments
Wt.MaturityMatrix
BaldrigeType
OutcomeBased
5
5
3
3
3
3
3
3
1
1
Maturity Model ApproachScores Highest
132
250 130 80
114 78 36
240 120
36 32 26
230
96 78 114
32 30 30
102 9090
150
75108 63
1218 816 718
547834
48
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5
4
3
2
1
0
Cap
abili
ty L
evel
LESAT Enterprise Process Areas
Current Capability
A Company’s Strategic Plan for a Tailored Capability Goal matched to the business objectives.
LESAT Desired Score Can beTailored for Each Process Area
Gap
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Enterprise Level Module Enterprise Level Module
Lean Enterprise Self AssessmentTool Architecture
Sub-enterprise Level Modules Sub-enterprise Level Modules
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Consortium Involvement
AirframeBoeing Military Aircraft and Missile Systems Group
Boeing Phantom WorksBoeing Commercial Airplane Group
Lockheed Martin Aeronautical Systems SectorNorthrop Grumman ISS
PropulsionRolls Royce Allison
Avionics/MissilesNorthrop Grumman ESSS Engineering & Manufacturing
Raytheon Systems and Electronics SectorRockwell Collins, Inc.
Textron Systems
Other GovernmentDefense Contracts Management Agency
OUSD(A&T)
US Air ForceAeronautical Systems CenterAir Force Research Laboratory
(Materials and Manufacturing Directorate)Space and Missile Center
SPOS: F-22, Training (JPATS)
Other Participants IAM
DSMC Arizona State University
Massachusetts Institute of TechnologyInternational Collaborations:
UK LAI
SpaceBoeing Space and Communications Group
GenCorp AerojetLockheed Martin Space & Strategic Missiles
MIT• Lead Researchers
Faculty and Staff
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Enterprise Level ModuleDevelopment Effort To Date
Activity
Architecture Definition
Prototype Development
Alpha VersionDevelopment & Test
Beta VersionDevelopment
NovemberJune SeptemberJuly August October December
UK LAI Input
Executive Board Approval
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Collaboration With UK LAI
➢ In August, a UK LAI meeting discovered also developingenterprise-level assessment tool
➢ Researchers exchanged “alpha” models and foundsimilar approach (e.g., both employed capability maturitymodels)
➢ Common architecture was defined and knowledge fromboth consortiums leveraged to develop LESAT Beta
➢ Multiple benefits from single model:
➢ Many common US & UK suppliers
➢ Potential single standard
➢ Synergy of research knowledge for future detailed assessmentmodules development
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Enterprise Level ModuleAlpha Testing Feedback
➢ High enthusiasm for executive-level tool
➢ Strong support for linkages to enterprise transitionto lean roadmap
➢ Suggested simplification and strong integrativefocus for practices
➢ Strategic and enterprise-level issues given highpriority
5 Companies (9 sites)7 Government (2 SPOs, 5 DCM sites),
2 Lean Aerospace Initiatives (LAI, UK LAI)
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LESAT Architecture
Section ILean
Transformation / Leadership
Section IILife
Cycle Processes
Section IIIEnabling
Infrastructure Processes
Sub-enterprise Level Modules
Enterprise Level Module
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LESAT Architecture
Section ILean
Transformation / Leadership
Section IILife
Cycle Processes
Section IIIEnabling
Infrastructure Processes
Sub-enterprise Level Modules
Enterprise Level Module
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Enterprise Level Section I
➢Practices directly linked to enterprise Transition toLean Model (TTL)
➢Assesses the following elements:➢Strategic integration
➢Leadership and commitment
➢Value stream analysis and balancing
➢Change management
➢Structure and systems
➢Lean transformation planning, execution and monitoring
++
++
Section I: Lean Transformation/Leadership
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Long Term Cycle
Short Term Cycle
Entry/Re-entryCycle
Create & RefineImplementation Plan
Focus on ContinuousImprovement
Implement Lean Initiatives
Adopt LeanParadigm
EnterpriseStrategicPlanning
Decision to Pursue
Enterprise Transformation
Focus on theValue Stream
InitialLean
Vision
Detailed Lean
Vision
LeanImplementation
Framework
Develop Lean Structure &Behavior
Enterprise Level
Implementation Plan
Outcomes on Enterprise
Metrics
Environmental Corrective
Action IndicatorsDetailed
Corrective ActionIndicators
+
+
Enterprise Level Roadmap
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Enterprise Level Section I: Example
Level 1
Lean Enterprise Vision - new mental model of the enterprise
Senior leaders have varying visions of lean, from none towell defined
Level 2
Level 3
Level 4
Level 5
Senior leaders adopt common vision of lean
Lean vision has been communicated and is understoodby most employees
Common vision of lean shared by the extended enterprise
All stakeholders have internalized the lean vision & are anactive part of achieving it
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LESAT Architecture
Section ILean
Transformation / Leadership
Section IILife
Cycle Processes
Section IIIEnabling
Infrastructure Processes
Sub-enterprise Level Modules
Enterprise Level Module
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Enterprise Level Section II
Assess:
➢ Enterprise level core processes
➢ Acquisition
➢ Program Management
➢ Requirements Definition
➢ Product/Process Development
➢ Supply Chain Management
➢ Production
➢ Distribution and Support
➢ Key integrative practices
Section II: Life Cycle Processes
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Enterprise Level Section II: Example
Level 1
Supplier relationships focus on optimizing the valuestream - partnering with suppliers
Supplier relationships are at arm’s-length & adversarial
Level 2
Level 3
Level 4
Level 5
Long term purchase agreements are being introduced to focus onaffordability & cost reduction; limited visibility into supplier businessprocesses
Long-term relationships are in place with a limited number of certifiedsuppliers; early involvement of suppliers in design process
Strategic alliances are in place that emphasize a high level ofinformation sharing, risk sharing, benefit sharing & synchronization ofproduction flow over the supplier network
Dynamically optimizing the value stream to achieve long termsustainable competitive advantage, thereby impacting strategicplanning
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LESAT Architecture
Section ILean
Transformation / Leadership
Section IILife
Cycle Processes
Section IIIEnabling
Infrastructure Processes
Sub-enterprise Level Modules
Enterprise Level Module
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Enterprise Level Section III
Assess critical supporting processes
➢ Finance
➢ Information Technology
➢ Human Resources
➢ Quality
➢ Environmental Health & Safety
Section III: Enabling Infrastructure
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Enterprise Level Section III: Example
Level 1
Financial system supports lean transformation - Leanrequires accurate assessment of value stream activities
Finance system provides basic balance sheet & cost accounting data;there is little awareness & exploration of broader support roles forfinance
Level 2
Level 3
Level 4
Level 5
Analytical tools are provided by the financial systems to assist users inplanning & programming activities (e.g., cash flow, returns, NPV, etc.)
Initiatives are under way to apply new & systematic approaches to theuse of financial data across the enterprise (e.g., activity-based costing,lifecycle cost accounting, total cost accounting, etc.)
Set of financial measures integrates with non-traditional measures ofvalue creation (e.g., intellectual capital, balanced scorecard, etc.)
Seamless integration across the extended enterprise with emphasis onmeasurement of value creation for all stakeholders
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Enterprise Level ModuleSupporting Materials
➢ Introductory Presentation
➢ Assessor’s Guide
➢ TTL Roadmap & Guide
➢ Summary Score Sheet
➢ Glossary of Terms
++
++
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Executive Level Module BetaTesting and Refinement
➢Utilize LESAT in actual enterprise executive levelassessments
➢Multiple industry and government sites (6-8)
➢Test site nominations have been submitted byexecutive board members
➢Subject matter experts provide detail for tooldevelopment
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Suggested Methodology forEmploying LESAT
LESAT
Lean Journey
Step 1: Facilitated meeting to introduce tool.Enterprise leader champions
Step 2: Enterprise leaders and staff conductLESAT assessment
Step 3: Leadership reconvenes to jointlydetermine present maturity level
Step 4: Leadership determinesdesired level and measures gap
Step 5: Develop actionplan and prioritizeresources
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Enterprise Level ModuleDevelopment Plan
Activity NameJanuary February March April May June July August
2001
January February March April May June July August
Beta Version Testing
Incorporate Feedback
Enterprise LevelVersion 1.0
Back up Slide
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Entry/Re-entryCycle
Focus on the ValueStream
InitialLean
Vision
Short Term Cycle
Create & RefineImplementation Plan
LeanImplementation
Framework
Adopt LeanParadigm
EnterpriseStrategicPlanning
Focus on ContinuousImprovement
Outcomes on Enterprise
Metrics
Implement Lean InitiativesEnterprise
LevelImplementation
Plan
Develop Lean Structure &Behavior
Detailed Lean
Vision
Environmental Corrective
Action IndicatorsDetailed
Corrective ActionIndicators
Decision to Pursue
Enterprise Transformation
•Build Vision•Convey Urgency•Foster Lean Learning•Make the Commitment•Obtain Senior Mgmt. Buy-in
•Map Value Stream•Internalize Vision•Set Goals & Metrics•Identify & Involve Key Stakeholders
•Organize for Lean Implementation•Identify & Empower Change Agents•Align Incentives•Adapt Structure & Systems
•Identify & Prioritize Activities•Commit Resources•Provide Education & Training
•Monitor Lean Progress•Nurture the Process•Refine the Plan•Capture & Adopt New Knowledge
•Develop Detailed Plans•Implement Lean Activities
Enterprise Level Roadmap
+
+
Long Term Cycle