Affordability: integrating value, customer, and cost for continuous improvement

279 Pages·2017·23.05 MB·English

by  Paul Walter Odomirok Sr

AFFORDABILITY
Integrating Value, Customer, and Cost
for Continuous Improvement
Continuous Improvement Series
Series Editors:
Elizabeth A. Cudney and Tina Kanti Agustiady
PUBLISHED TITLES
Affordability: Integrating Value, Customer, and Cost for
Continuous Improvement
Paul Walter Odomirok, Sr.
Design for Six Sigma: A Practical Approach through Innovation
Elizabeth A. Cudney and Tina Kanti Agustiady
AFFORDABILITY
Integrating Value, Customer, and Cost
for Continuous Improvement
PAUL WALTER ODOMIROK, SR.
Boca Raton London New York
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Library of Congress Cataloging‑in‑Publication Data
Names: Paul Walter Odomirok, Sr., author.
Title: Affordability: Integrating Value, Customer, and Cost for Continuous
Improvement / Paul Walter Odomirok, Sr.
Description: Boca Raton : Taylor & Francis, a CRC title, part of the Taylor &
Francis imprint, a member of the Taylor & Francis Group, the academic
division of T&F Informa, plc, [2016] | Includes index.
Identifiers: LCCN 2015038582 | ISBN 9781498762403
Subjects: LCSH: Engineering mathematics. | Manufacturing
processes--Mathematical models.
Classification: LCC TA330 .P39 2016 | DDC 620.0068/4--dc23
LC record available at http://lccn.loc.gov/2015038582
Visit the Taylor & Francis Web site at
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Contents
Preface .................................................................................................................ix
Author ..............................................................................................................xiii
Chapter 1 Affordability: It’s not what we always thought it was! .......1
Chapter 2 Customers: Who really comes first? ......................................23
Customer focus .................................................................................................24
Customer and value realization .....................................................................27
Voice of the customer.......................................................................................28
VOC benefits ................................................................................................29
VOC: How to … execute the process ........................................................29
The house of quality ........................................................................................30
Brief: What is the HOQ? .............................................................................30
HOQ definition description ............................................................................32
Quality function deployment .........................................................................32
What is QFD? ...............................................................................................32
Failure modes effect analysis .........................................................................34
FMEA: The basics ........................................................................................37
Finding failure modes ................................................................................37
Criteria for analysis..........................................................................................38
Setting priorities ..........................................................................................38
Making corrective actions ..........................................................................38
Customer and cost ...........................................................................................39
Value analysis/value engineering ...........................................................40
Customer as partner ........................................................................................41
Reference ...........................................................................................................45
Chapter 3 Value and cost: The role of purpose and worth in
affordability ...............................................................................47
v
vi Contents
Chapter 4 Faster: Ease and speed ..............................................................65
Demand responsiveness .................................................................................67
Accessibility .................................................................................................68
Shorter lead times........................................................................................68
Improved flow .............................................................................................68
Efficient fulfillment .....................................................................................68
Elimination of waste ...................................................................................69
Case examples: MRAP vehicles .....................................................................69
MRAP background and purpose ..............................................................69
Chapter 5 Better: Quality and capability ................................................95
Customer quality case example: NCR—retail product total quality ......105
Service quality case example: Anixter–Lucent,
supplier–customer relationship ...................................................................108
Chapter 6 Leadership: By any other name is not management ........115
Background of affordability leadership .......................................................119
“Lead from behind”? ......................................................................................119
Leadership versus management ..................................................................120
Leaders: Are they born or made? .................................................................121
History and experience ............................................................................122
Characteristics and attributes ..................................................................123
Training and development .......................................................................125
Shared values .............................................................................................130
Strategy ..................................................................................................131
SWOT analysis ................................................................................................132
PESTLED analysis ..........................................................................................133
Strategic plan design......................................................................................135
Systems .......................................................................................................136
Structure .....................................................................................................137
Chapter 7 Change and transformation ..................................................145
Change defined ..............................................................................................145
Transformation defined.................................................................................145
Case example: SASI technical help desk .....................................................156
Case example: AT&T/NCR Retail Systems Division ................................157
Chapter 8 Creativity and innovation: From fragments of
thought to prosperity .............................................................161
Ideas .................................................................................................................163
The idea processing system ..........................................................................166
The creative process ........................................................................................167
The innovation process .................................................................................168
Idea to implementation, creativity to implementation .............................169
Contents vii
Innovation capabilities ..................................................................................170
The creative and innovative environment .................................................171
Creative leadership ........................................................................................172
Case example: NCR 7890 scanner ................................................................172
Case example: Rockwell Hellfire Missile ...................................................173
Case example: Cab cart ..................................................................................174
Chapter 9 People: The human factor ......................................................177
Affordability thinking ...................................................................................188
Six Sigma thinking (GE) ................................................................................188
Lean thinking .................................................................................................188
Affordability’s organization purpose .........................................................190
Affordability commitment............................................................................190
Maslow and affordability .............................................................................191
Customers ...................................................................................................193
Partners .......................................................................................................195
Suppliers .....................................................................................................195
Teams ..........................................................................................................195
Stakeholders ...............................................................................................196
Case example: NCR .......................................................................................197
Case example: Store Automated Systems, Inc. (SASI)—technical
help desk ..........................................................................................................197
Case example: GM stamping plant ..............................................................199
Case example: Virginia Blood Services ......................................................199
Chapter 10 Process: Work work work! .....................................................201
The power of pictures and videos ...............................................................213
Additional support methods and models ...................................................216
Dr. W. Edwards Deming’s 14 principles for management .......................217
The Malcom Baldrige criteria from the National Institute of
Standards and Technology (NIST) ..............................................................218
The Toyota Philosophy and Universal Principles published in
The Toyota Way by Dr. Jeffrey K. Liker ........................................................219
The ISO or the International Organization for Standards .......................219
Seven quality management principles ...................................................219
Case example: Anixter St. Petersburg kitting process .........................220
Case example: Siemens environmental control systems,
Alpharetta, Georgia ..................................................................................221
Conclusions .....................................................................................................221
Chapter 11 Performance: What is the score? Are we
winning or losing? ..................................................................223
Case example: E&M Atlanta 1990–1994 ......................................................230
Case example: Gwinnett County Tax Commission ..................................230
viii Contents
Chapter 12 How to........................................................................................233
Needs, musts, wants … .................................................................................235
Leaders .............................................................................................................235
People ...............................................................................................................237
Program ...........................................................................................................237
Resources and tools .......................................................................................237
Assess → design .............................................................................................238
Implement .......................................................................................................238
Maintain ..........................................................................................................239
Current state → future state .........................................................................239
Affordability quaternity chart for people ..................................................239
Case example: NCR .......................................................................................241
Case example: SASI ........................................................................................248
Case example: Northrop Grumman ...........................................................251
How to do it ....................................................................................................253
Chapter 13 The affordability challenge ..................................................255
Index ................................................................................................................259
Preface
The concept of affordability emerged in 2007 during the early part of a
project Dr. Elizabeth Cudney and I were participating in at a major defense
aerospace production facility in California. That plant, even though it
produced an excellent product, was scheduled to close in August of 2010,
and its role at that time was only to fulfill the product replacement needs
of its customer. We were there to incorporate Lean methods and behav-
iors for improvement as part of an ongoing corporate endeavor of con-
tinuous improvement. The only customer for this product was the U.S.
Department of Defense, and the product was an advanced version of a
defense aircraft that was first released in 1978. During the early days of
the project, we discovered that, although Lean implementation efforts had
been attempted in 2000, 2002, and 2004, with each try failing, we had to set
an effective aim for continuous improvement that would focus and moti-
vate the workforce, serve as a target for the alignment of improvement
efforts, and take the organization beyond its limited, short-term horizon.
The project and program became known as “Affordability.” It provided a
purpose and target consisting of the primary components of value, cus-
tomer, and cost. A few years later, by August of 2010, the product had
several customers, the unit cost was reduced by $5.1 million dollars, and
the U.S. Department of Defense ordered 124 more aircraft, saving the
American taxpayer more than $600 million, extending the life of the facil-
ity until 2020, protecting jobs, and ensuring ongoing organization success.
The then assistant secretary of defense, Dr. Ashton Carter, distributed a
memo on September 14, 2010, to all acquisition personnel professionals
entitled “Better Buying Power: Guidance for Obtaining Greater Efficiency
and Productivity in Defense Spending,” where on page 7, paragraph 3, he
refers to this product as an example of how to gain better buying power.
From this event, the concept, theory, and philosophy of affordability were
born.
Today, many leaders and managers struggle, and are frustrated with,
implementing continuous improvement. Much of their exasperation
is caused due to the fact that “continuous improvement for the sake of
continuous improvement” does not stick nor resonate with the people
ix