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Page 1: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

Principles of Lean Enterprise Transformation

University of Miami, College of EngineeringProf. Deborah Nightingale

Massachusetts Institute of TechnologyApril 19, 2012

Coral Gables, Florida

Page 2: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 2University of Miami, College of Engineering, April 19, 2012

“Everybody wants to transform, but nobody

wants to change.”

- Frederica Mathewes-Green

Page 3: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

VISIONSSRC is a vibrant, expanding

intellectual community of faculty, researchers, and

students with a shared interest in analyzing complex systems from a sociotechnical systems

perspective. SSRC’s efforts lead to the discovery of new insights and solutions to the

challenges our global community faces.

MISSION

SSRC seeks collaborative, holistic,

systems-based solutions to complex

sociotechnical challenges.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 3University of Miami, College of Engineering April 19, 2012

Page 4: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 4University of Miami, College of Engineering, April 19, 2012

Lean Advancement Initiative (LAI)

• Founded in 1993, LAI has evolved from a focus on lean processes and tools to holistic enterprise transformation and architecting

• Enables enterprises to effectively, efficiently, and reliably create value in complex and rapidly changing environments

• Works with international enterprises in multiple domains, including: automotive, aerospace, manufacturing, health care, and financial services

• International Educational Network (EdNet) with more than 70 member educational institutions around the world

Page 5: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 5University of Miami, College of Engineering, April 19, 2012

Value Creation Framework

Value Identification

Value Proposition

Value Delivery

Value Phases

Identify the stakeholders

and their value expectations

Develop a robust value proposition

to meet the expectations

Deliver on the promise with

good technical and program performance Source: Lean Enterprise Value:

Insights from MIT’s Lean Aerospace Initiative, Murman,

et. al, 2002

LEAN ENTERPRISE:A lean enterprise is an integrated entity

that effectively and efficiently creates value for its multiple stakeholders.

Page 6: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 6University of Miami, College of Engineering April 19, 2012

Enterprise Defined

Efficiency

Effectiveness

Adaptability

An enterprise is…

“…a complex, integrated, and interdependent system of people, processes, and

technology that creates value as determined by its key stakeholders.

An enterprise typically consists of

multiple organizations (e.g., suppliers, partners, regulators) rather than a

single corporation, division, or government unit.”

Amacon Press –Release: Aug. 2011

Page 7: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 7University of Miami, College of Engineering April 19, 2012

Expanding Enterprise Focus

Shop Floor

Program

BusinessUnit

Enterprise

Extended Enterprise

Networked Enterprise

Apply Lean Thinking

Enterprise Transformation

Enterprise Architecting; Action Leadership

ESAT V.2

Journal of Enterprise Transformation

Healthcare

Change Agent Network

System of Systems

LESAT V.2ESAT

Knowledge Exchange Events

Leading Indicators Guide

Seven Principles

LESAT V.1

Transition to Lean RoadmapLean Enterprise Model

Enterprise Toolkit

Phase 6

Enterprise Transformation Roadmap

Lean Now

Phase 5

PDVSM

Supplier Network ToolsetGlobal Enterprises

Enabling Enterp

rise Excelle

nce

Phases 1-4

Aircraft Aerospace All Enterprises

Page 8: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 8University of Miami, College of Engineering, April 19, 2012

Creating a Holistic Approach to Enterprise Transformation

Page 9: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 9University of Miami, College of Engineering April 19, 2012

Source: D. Nightingale and J. Srinivasan, MIT 2010

6.Ensure

stability and flow within and across the

enterprise.

5.Address

internal and external enterprise

interdependencies.

4.Focus

on enterprise effectiveness before

efficiency.

3.Identify relevant

stakeholders and determine their value propositions.

2. Secure leadership

commitment to drive and institutionalize

enterprise behaviors.

1.Adopt a

holistic approach to enterprise

transformation.

7 Principles of Enterprise Transformation

7.Emphasize

organizational learning.

Page 10: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 10University of Miami, College of Engineering April 19, 2012

• Why do most lean transformation activities fail?

• What are the key success factors in implementing lean

enterprise wide?

• How can we better assure that lean will impact bottom

line results?

• Are there certain activities that are ideally performed

before others?

• What is the role of senior leadership in assuring

success?

Enterprise Transformation Issues

Issues Motivated Development of Enterprise Transformation Roadmap

Page 11: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 11University of Miami, College of Engineering, April 19, 2012

Creating a Holistic Approach to Enterprise Transformation

How do I transform my Enterprise?

Enterprise Transformation Roadmap

Page 12: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 12University of Miami, College of Engineering April 19, 2012

• Improve the quality of thinking and awareness of Leaders on the challenge of transforming their enterprises

• Framework for cultural, organizational & change management considerations

• Provide enterprise leaders with a balanced decision aid to:

• Identify barriers to the creation/delivery of value to each stakeholder

• Specify a vision of their future lean enterprise

• Determine significant gaps between current and future states

• Prioritize opportunities for eliminating waste and increasing value deliver for the maximum benefit of the total enterprise

• Guidance in making the transition process itself a ‘lean’ process

Motivating an Enterprise Level Transformation Roadmap

Page 13: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 14: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 15: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 15University of Miami, College of Engineering, April 19, 2012

ChipDesign Imperative for Change

• Create an enterprise agile enough to address the immediate needs of customers and also meet future needs in a changing environment

• Challenges due to changes in core technology

• Maximize utilization of its production capabilities over the next ten years

• Culture that assumes that change takes a long time

• Achievable through a combination of investment in people, process, and technology

Page 16: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 17: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 17University of Miami, College of Engineering April 19, 2012

Page 18: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 18University of Miami, College of Engineering, April 19, 2012

Stakeholders Defined

“A stakeholder is any group or individual who can affect or is affected by the achievement of

the organization's objectives”

Source:R. Edward Freeman “Strategic Management: A Stakeholder Approach”, Pitman, 1986

Source:D. Nightingale, and J. Srinivasan“Beyond the Lean Revolution: Achieving Successful and Sustainable Enterprise Transformation”, AMACOM, 2011

“The enterprise is a network of stakeholders configured by the flow of

value, which moves between the enterprise and its stakeholders”

Page 19: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 19University of Miami, College of Engineering, April 19, 2012

The Enterprise

End Users

Leadership

Society

Unions

Suppliers

Partners

Employees

Customers

Classic Stakeholder Map

Page 20: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 20University of Miami, College of Engineering, April 19, 2012

Stakeholder Analysis

• Process for aligning the enterprise with its stakeholders

• Brings to the forefront the disconnects and misalignments in the enterprise value proposition

• Structured means of reflecting on the enterprise value proposition as a whole.

Page 21: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 21University of Miami, College of Engineering, April 19, 2012

Supplier Value Exchange

High

Cu

rre

nt

Per

form

an

ce

Low

Low HighRelative Importance

Fair andEquitableTreatment

Reasonablereturn on

investment

TimelyPaymentTimely

Payment

Long TermRelationships

JointForecasting

Early/AccurateReq. ID

Page 22: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 22University of Miami, College of Engineering, April 19, 2012

Employee Value Exchange

High

Cu

rre

nt

Per

form

an

ce

Low

Low HighRelative Importance

Fair WagesBenefits

JobSatisfaction

CareerGrowth

Rewards

Training

Facilities Tools toDo Job

Security

Page 23: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 23University of Miami, College of Engineering, April 19, 2012

Customer Value Exchange

High

LowHigh

Cu

rre

nt p

erfo

rma

nce

of t

he

ent

erp

rise

in d

eliv

erin

g va

lue

Relative Importance of the value to the stakeholder

Integrity, Credibility

Attention to Customer Needs

Timely Delivery

Innovation

Cost Effectiveness

Support Service

Product Quality

Page 24: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 24University of Miami, College of Engineering April 19, 2012

Tool for executive self-

assessment of the current process maturity of an enterprise and its

readiness to change

LAI Enterprise Self Assessment Tool (LESAT)

Asse

ssm

ent M

atrix

World Class

Capability maturity

model

Supporting materials

21 3 4 5

Page 25: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 25University of Miami, College of Engineering, April 19, 2012

X-Matrix as a systems tool for enterprise alignment

0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

Sta

keho

lder

Val

ue

Strategic Objective

Met

ric

Met

ric

Met

ric

Met

ric

Met

ric

Met

ric

Met

ric

Met

ric

Met

ric

Met

ric

Strategic Objective

Strategic Objective

Strategic Objective

Enterprise Process

Strategic Objective

Strategic Objective

Enterprise Process

Strategic Objective

Strategic Objective

Strategic Objective

Strategic Objective

Enterprise Process

Sta

keho

lder

Val

ue

Sta

keho

lder

Val

ueMetricsStakeholder

Values

Key Processes

StrategicObjectives

MetricsStakeholder

Values

Key Processes

StrategicObjectives

Page 26: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

26

Measure and Analyze the Current Operating Model

Approved Regulations

Develop Acquire Field Sustain Dispose Other

HQDA Staff/Secretariat

ASAALT

AMC

ATEC

Industry

DRUs/Commands

Warfighter TRADOC

Conduct developmental test in support of EMD

Conduct operational tests to support

milestone decisions prior to LRIP and/or full

mte production.

Conduct safety/efficiency/

sustainability assessments for rapid

acquisition

Perform R&D Propose

Produce

Test

EstablishPolicy

Strategic Direction

Program Resources

Set PrioritiesAllocate

Resources & People

External Interface: OSD/Congress/

STRATCOM

Provide Technical Expertise

Provide spares

Provide Log Support

Maintain Critical Assets

Foreign GovtRequests

State Dept / Admin Policy

Coordinates International agree. FMS

Conduct ASTWGASTAG

Manage Acq. Workforce

Conduct Resourcing STRATCOMCong. Rel.

Manage Contracting

Develop TechnologyLead: RDECOMSupport: PMsContract CmdTRADOCIndustryAcedemiaATEC

Develop Programs

Provide Reqs. Thru accelerated capabilities Dev.

Provide reqs. Thru deliberate capabilities dev.

Provide forces for experimentation

Conduct Studies

Manage ProgramLead: Acq Map

PEO

Quick Reaction Capabilities

Lead: RDECOM

Refine Reqs. for accelerated

capabilities Dev.

Refine reqs. For deliberate

capabilities dev.

Provide forces for testing

Field major programs

Lead: Field / PEO

Perform capabilities integration

(request net)

Perform RESET (request Log

support)

Conduct Rapid Acq.

Conduct ASARC

DAB

S1Army Staff

S3Internal

AMC Analysis

Oversee Execution

S1MSCs

S1HQDA

D1SubordCmds

D1HQDA

D1MSCs

J&AsAcq. Strategy

Acq PlanContracting Approach

Warfighter outcomes proposed HTOs

w/PEO, TRADOC Endorsement

Review/ Approve Reqs.

Oversight / adjustments

Capture leadership

intent•Standardize Practices•Statues•Cong. Language•Admin. Guidance

S

SecDef Guidance for

Dev. Of Force (GDF)

OSD Prog GuidanceCDR’s Narrative

ADM

Develop Policy

•APPG•APGM

•ACP•POM•Budget•TAA Force Level

D

Army S&TMaster Plan

D

Approved J&As

D

ONS Director Requirement

Fielded Equipment

D

•Temp•Supp Stat•TDS•Tech read . A•Acq Strat•APB•ICE Develop

Temp

ADM

D

LOAsMOUsTreatiesMOAsIntl Data Exch.

DNew HiresRe-Hires

Trained Cert.

Workforce

D •TRADOC (future Needs)•RDECOM & Other Perf. (Opport..)•ASA(ALT) & DDR&E (framework & Priorities

Basic Research Strat.

•RDECOM & Other Perf. (incl. Acedemia)•DDR&E•Congress

D

Provision of Appropriated resources:

Determine Reqs. of Appropriated resources:

S2HHQ Policy Sch.

S1MSCs

Develop & Build

Infrastructure

S1Army Staff

D1Army Staff

D1MSCs

PM & Other Customers(eg. REF, JIEDDO,

RDECOM)

PM & MDA or other

Customers

TRADOC PM

FORSCOM PM/DA

MDS & DOT&E

Congress

PM / JIEDDOREF /

RDECOMG3 / COCOM

Industry

PM / JIEDDOREF /

RDECOMG3 / COCOM

Industry

Execute DT / OT for system model

upgrades

TRADOC PM

FORSCOM PM/DA

PM & Milestone Decision Authority (MDA)

Conduct in-service assessments

PM / Other Customers

G3

G3 / TRADOC

PM or other customers

Deliver Materials and Service Support

Perform Sustainment (readiness as

metric)Lead: LCMC

Request Logistics Support for Units

Conduct ASARC DAB

Treaty Guidance

Chem Inventory Execute Chem

Demil

Inventory Elimination

Provide Disposal & Destruction

Perform Reuse and Recovery

Identify Items for Disposal

Sustain / Upgrade test infrastructure

PMTest Ranges

& Other customers

(REF, JIEDDO, other services

Test Ranges / Facilities

Support Socio-Economic Programs

Tactical Units & Support to toher

Enterprises.RDECOM

AFSBSACC

Fielding Quick Reaction CapabilityLead: RDECOMSPT: Contract CmdLCMCG8 / G3

Inform Total Army Reqs.

1 2 2 3 1 3 4 3 3 2 0 21 0 2 1 0 0 0 1 1 2 4 02 2 4 4 1 3 4 4 4 4 4 2

8 2 10w w w w w w w w s s

7 2 9 s w w w w w w w s

5 4 9w s s w w w s s w

0 2 2 s s

6 2 8s w w w w w s w

Res

et C

ycle

Tim

e

Equ

ipm

ent

Rea

dine

ss

Def

ense

Acq

uisi

tion

Exe

cutiv

e S

umm

ary

(DA

ES

)

Con

trac

t C

lose

out

Ord

er F

ulfil

lmen

t

Ear

ned

Val

ue M

anag

emen

t (E

VM

)

Increase capability to generate trained, ready forces to meet ARFORGEN requirementsImprove execution of sustainment and reset functions

Maintain a trained and ready military and civilian workforce

Tec

hnol

ogy

Tra

nsfe

r R

ate

Pro

duct

ion

%LI

Ns

fully

equ

ippe

d du

ring

AR

FO

RG

EN

cyc

le

% A

WF

cer

tifie

d

% A

WF

on

glid

e pa

th f

or C

LPs

Alig

nmen

t of

pro

gram

s w

ith u

ser

requ

irem

ent

Provide greater transparency and visibility of accurate data and information to enhance decision making

Establish an "enterprise focused culture" which embraces the principles of CPI

MetricsStakeholder

Values

Key Processes

StrategicObjectives

MetricsStakeholder

Values

Key Processes

StrategicObjectives

Identify the Enterprise Core Value and Map Critical Processes

Analyze the Critical Processes for Waste, Opportunities and Gaps

(Analysis Tools will Vary – depending on the Application)

Measure the Effectiveness and Lean Maturity of the Enterprise

Tool Utilized Focuses on 1) Capability Maturity Model

2) Enterprise Management and Transformation 3) Continuous Process Improvement

X-Matrix was utilized to validate / identify gaps between Strategy, Value Delivered, Processes and Metrics

Page 27: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 28: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 28University of Miami, College of Engineering, April 19, 2012

“A leader without a vision is a stamped letter

without address; it can never reach its

destination”

- Mehmet Murat Ildan

Page 29: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

29

Strategic Goal:

Become the Materiel Enterprise that serves as the benchmark for delivering fully integrated Acquisition, Logistics & Technology capabilities to America’s warfighters.*

• Equip units to 100% of ARFORGEN materiel requirements on time, every time, with a 33% cost reduction

• Reduce delivery cycle time for requirements by 50%

• Reduce Operations and Maintenance costs for systems by 50% through innovative RDT&E investments (which increase reliability and reduce logistics, energy, and total life cycle costs)

• Achieve 100% data transparency and asset visibility

• Be a credible organization respected by all

• Develop a skilled, professional, continually improving workforce and be recognized in the Top 10 Places to Work

*Extracted from Materiel Enterprise Transformation Plan 2.0, dtd 1 May 09

Page 30: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 31: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 31University of Miami, College of Engineering, April 19, 2012

Alignment

Equi

p un

its to

100

% o

f AR

FORG

EN m

ater

iel

requ

irem

ents

on -

time,

eve

ry-

time,

with

a 3

3% c

ost r

educ

tion

Redu

ce c

ycle

tim

e by

50%

Redu

ce O

pera

tions

and

M

aint

enan

ce c

osts

for s

yste

ms

by 5

0%

Achi

eve

100%

dat

a tr

ansp

aren

cy a

nd a

sset

vis

ibili

ty

Be

a cr

edib

le o

rgan

izat

ion

resp

ecte

d by

al

Dev

elop

a s

kille

d, p

rofe

ssio

nal,

conti

nual

lyim

prov

ing

wor

kfor

ce a

nd b

e re

cogn

ized

amon

g th

e to

p pl

aces

to w

ork

Beco

me

the

ME

that

ser

ves

as

the

benc

hmar

k fo

r del

iver

ing

fully

inte

grat

ed A

cqui

sitio

n,

Logi

stics

& T

echn

olog

y ca

pabi

lities

to A

mer

ica’s

w

arfig

hter

s

Stra

tegi

c G

oal

ü

ü

ü

üü

ü

ü

ü

üü

ü

ü

ü

üü

ü

ü

üü

ü

ü

ü

ü

ü

ü

üü

ü

ü

üü

Goal #5: Bus. Processes & Info Tech

Goal #4: Human Capital Strategy

Goal #3: Leadership

Goal #2: Industrial Base

Goal #1: Roles and Responsibilities

Page 32: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 33: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 33University of Miami, College of Engineering, April 19, 2012

ChipDesign Enterprise Projects

Develop a human capital growth

program

Increase awareness of transformation

through communication

Develop a standard maintenance process

Harmonize legacy systems to create an

integrated system

Define growth strategy & technology

roadmap

Educate all employees on our transformation

approach and tools

Establish a common process for managing

test wafers

Develop a new performance

measurement system

Create a cross-functional

organization

Develop new means of sharing information

– both visual and internet-based

Growth

People

Operational Excellence

Information Technology

Establish a knowledge sharing

process across shifts

Define common metrics across

functional groups

Page 34: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 34University of Miami, College of Engineering, April 19, 2012

ChipDesign Project Dependencies

Develop a human capital growth

program

Increase awareness of transformation

through communication

Develop a standard maintenance process

Harmonize legacy systems to create an

integrated system

Define growth strategy & technology

roadmap

Educate all employees on our transformation

approach and tools

Establish a common process for managing

test wafers

Develop a new performance

measurement system

Create a cross-functional

organization

Develop new means of sharing information

– both visual and internet-based

Growth

People

Operational Excellence

Information Technology

Establish a knowledge sharing

process across shifts

Define common metrics across

functional groups

Page 35: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 36: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.
Page 37: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

Understand CurrentState

• Perform Stakeholder Analysis• Analyze Processes & Interactions• Perform Enterprise Maturity

Assessment• Assess Current Performance

Measurement System

• Create Vision of Future State• Perform Gap Analysis Between

Current and Future States• Architect “To-Be” Enterprise

PLANNING CYCLE

DetermineStrategic

Imperative

• Articulate the Case for Transformation & Convey Urgency

• Focus on Stakeholder Value• Leverage Transformation Gains

Capabilities & Deficiencies Identified

Enterprise Vision

Long-TermCorrective

Action

Short-TermCorrective

Action

Strategic Implications of Transformation

Envision & DesignFutureEnterprise

Nurture Transformation & EmbedEnterprise Thinking

• Monitor Transformation Progress• Nurture Transformation• Embed Enterprise Thinking• Capture & Diffuse Lessons

Learned• Adjust and Align

Planning & Execution Cycles

A Committed Leadership Team

Implementation Results

Implement & CoordinateTransformation Plan

• Develop Detailed Project Implementation Plans

• Synchronize Detailed Plans• Commit Resources• Provide Education & Training• Implement Projects and

Track Progress

• Reconcile Systems, Policies & Vision

• Align Performance Measurement System

• Align Incentives• Empower Change Agents

Align Enterprise Structure and Behaviors

Source: Beyond the Lean Revolution, Amacon Press, August 2011, ISBN-13: 978-0814417096

Pursue & Sustain

Enterprise Transformation

Engage Leadership in

Transformation

• Cultivate Enterprise Thinking• Obtain Executive Buy-In• Establish Executive

Transformation Council

STRATEGICCYCLE

Alignment Requirements

Identified

EXECUTION CYCLE

Create Transformation Plan• Identify Improvement Focus Areas• Determine Impact on Enterprise Performance• Prioritize, Select and Sequence Project Areas• Communicate transformation plan

© 2012 Massachusetts Institute of Technology 37

Lean Enterprise Transformation Roadmap

http://lean.mit.edu

Transformation Plan

Page 38: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 38University of Miami, College of Engineering April 19, 2012

• Facilitates enterprise focus

• Provides “sequence” for enterprise transformation

• Increases understanding of “what went wrong” in previous transformation attempts

• Focuses on people/leadership issues

• Provides an organizing framework for enterprise-wide transformation

Benefits of Enterprise Transformation Roadmap

Page 39: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 39University of Miami, College of Engineering, April 19, 2012

Creating a Holistic Approach to Enterprise Transformation

How do I design my future enterprise?

Enterprise Architecting Framework

Page 40: Principles of Lean Enterprise Transformation University of Miami, College of Engineering Prof. Deborah Nightingale Massachusetts Institute of Technology.

http://lean.mit.edu © 2012 Massachusetts Institute of Technology, Professor Deborah Nightingale - 40University of Miami, College of Engineering, April 19, 2012

Motivation for Enterprise Architecting

• In order to transform an enterprise we need to know not only where we are, but more importantly where we want to be (future state)

• In enterprise value analysis how do we define the “future state” of the enterprise?

• Once we define the future “vision” how do we design the enterprise?

• How do we incorporate the multiple dimensions or “views” at the enterprise level?

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Enterprise Architecting

Enterprise Architecting:

“Applying holistic thinking to design, evaluate, and select a preferred structure for a future

state enterprise to realize its value proposition and desired

behaviors”

Nightingale and Rhodes, 2007

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Enterprise Transformation: Provides successful strategies and

implementation approaches for transformation of an enterprise from‘as is’to‘to be’ state.

Enterprise Architecting: Provides strategies/approaches

to ensure time is spent developing and evaluating‘could be’states,

and selecting the best alternative given a set of desired properties and criteria

for the future enterprise.

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Processes

Infrastructure

Information

Knowledge

Services

Strategy

Organization

EnterpriseArchitecting

Products

Architectural View: a perspective on an enterprise describing a related set of attributes

• Effective integration – managing complex interdependencies

• System optimization, not local optimization

• Achieving desired future state characteristics

• Agility• Flexibility• Reconfigurability

Enterprise Architecting Eight “View” Elements

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Processes

Infrastructure

Information

Knowledge

Services

Strategy

Organization

Products

ECOSYSTEM

STAKEHOLDERS

8 VIEW ELEMENTS

Enterprise Architecting Ten Elements

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Architecting

Evaluating

Future State A

Future State B

Future State C

Future State D

Transformation

A DCB C

Future State

Present State

Present State

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PTSD: A Significant Pathology of War

• Challenges with Access to and Quality of Care

• Challenges with Culture and Stigma

• Consideration of Families

Resources: RAND, 2008 Invisible Wounds of War

5% to 20% prevalence

Over $2 Billion Invested

Over 125 psychological health programs

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Enterprise Systems Thinking Is Needed for Effective Psychological Health Care

The enterprise comprises numerous stakeholders and their interactions, increasing the complexity to which effective psychological health care is delivered.

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Challenge:

Develop innovative recommendations for transforming the military

enterprise to better manage post-traumatic stress, and related

conditions, in support of our service members and their families

Post-Traumatic Stress Innovations:U.S. Military Enterprise Analysis

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Top Leadership Sponsors

Gen. Lloyd J. Austin III Vice-Chief of U.S. Army

and LTG Patricia Horoho Army Surgeon General

ARMY

Gen. Joseph F. Dunford, Jr. Assistant Commandant

of the Marine Corp

MARINE CORPS

General Philip M. Breedlove Vice Chief of U.S. Air Force

andLT. Gen. Charles B. Green Air Force Surgeon General

AIR FORCE

Admiral Mark E. Ferguson III Vice-Chief of Naval Operations

and VADM Matthew L. Nathan

Navy Surgeon General

NAVY

Jonathan Woodson, M.D.Asst. Secretary of Defense

for Health Affairs

General Martin DempseyChairman of the

Joint Chiefs of Staff

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PTSI Overview and Initial Recommendations

1. Create standard telemental health policies and practices across the enterprise

2. Assess effectiveness and scalability of the Warrior Ohana Covenant

3. Create standard and effective gateway for information about distributed services to reach different populations of families

4. Explore a consistent design for behavioral health service provision

5. Combine existing disparate data sources to improve behavioral health care across the enterprise

Interviews(500+)

Site Visits(13)

Policy Review

Published Lit. Review

CPGs Review

Data Sources

6. Develop consistent service member health risk assessments across the lifecycle

7. Design informative process and outcome measures to track system effectiveness

8. Streamline hiring, credentialing, and privileging processes across the enterprise

9. Maximize evidence based practice through standardized metrics and accountability

10. Dedicate resources and training for Rear Detachment commanders and staff

Initial Recommendations

Stakeholders

Organizations & Processes

Enterprise Performance Measurement

Resources

Analysis Lenses

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Future Work : Enterprise Architecting

As-Is Enterprise Architecture

Understand Enterprise Landscape

Understand Stakeholder Value

Capture AS-IS Architecture

Create Holistic Vision

Generate Concepts

To-Be Enterprise Architecture and Transform Enterprise

Derive Candidate Architectures

Evaluate and Select TO-BE Architecture

Detail and Validate TO-BE Architecture

Formulate Transformation Plan

Approach

Next Steps

Site Interventions Action Research Quantitative ModelingCase Studies

− PH delivery models− Performance measurement systems− Policy formulation and deployment

Survey Research− Cross-Organizational Integration

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Journal of Enterprise

TransformationVol. 1, Issue 4:

“Enterprise Transformation

in Action”

Strategic Context (4 chapters)

Lenses of Current State Analysis (5 chapters)

Achieving Transformation (3 chapters)

Hardcover and Kindle discounts at Amazon.com

Special Issue

Enterprise Transformation Publications

In collaboration with IIE and INCOSE

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MIT Professional Education CoursesOn Enterprise Transformation

July 16-17, 2012

Principles of Enterprise Transformation

Prof. Debbie Nightingale Jayakanth Srinivasan, Ph.D

This course highlights the importance of going beyond

classical lean thinking to truly embracing the enterprise

paradigm to achieve successful and sustainable transformation. Over two days, we provide a set

of enterprise principles and a transformation roadmap that

serve as the foundation for the holistic analysis framework that captures the current state, envisions the future state, and determines actions needed for

transformation.

Architecting the Future Enterprise

July 30 to Aug. 1, 2012

Prof. Debbie NightingaleDonna Rhodes, Ph.D.

Enterprises often evolve in an ad-hoc, suboptimal manner, without viewing the enterprise as a whole system. This course looks at the

enterprise as a holistic and highly networked structure

wherein planning and decisions must be accomplished by applying

a systems perspective and architecting principles,

considering all facets of the enterprise

Think Holistically

web.mit.edu/professional/index.html

MIT Campus, Cambridge, Massachusetts, USA

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“Everybody wants to transform, but nobody

wants to change.”

- Frederica Mathewes-Green

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Professor Deborah J. NightingaleDirector, MIT Sociotechnical Systems Research Center (SSRC)Co-Director, Lean Advancement Initiative (LAI)Professor of the Practice, Department of Aeronautics and Astronautics and Engineering Systems Division,

Massachusetts Institute of Technology77 Massachusetts AvenueE38-670Cambridge, MA [email protected]

Thank You!

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http://lean.mit.edu © 2011 Massachusetts Institute of Technology, Professor Deborah Nightingale - 56University of Texas at Arlington, April 13, 2011

X-Matrix as a systems tool for enterprise alignment

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