Lean Enterprise Value: Insights from MIT's Lean Aerospace Initiative

369 Pages·2002·1.38 MB·English

by  Earll Murman

Lean Enterprise Value

Lean Enterprise Value
Insights from MIT’s
Lean Aerospace Initiative
Earll Murman
Thomas Allen
Kirkor Bozdogan
Joel Cutcher-Gershenfeld
Hugh McManus
Deborah Nightingale
Eric Rebentisch
Tom Shields
Fred Stahl
Myles Walton
Joyce Warmkessel
Stanley Weiss
Sheila Widnall
© The Lean Enterprise Value Foundation,Inc.2002
All rights reserved.No reproduction,copy or transmission of
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No paragraph of this publication may be reproduced,copied or
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The authors have asserted their right to be identified as the
authors of this work in accordance with the Copyright,
Designs and Patents Act 1988.
First published 2002 by
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ISBN 0–333–97697–5 hardcover
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Library of Congress Cataloging-in-Publication Data
Lean enterprise value :insights from MIT’s Lean Aerospace
Initiative / Earll Murman … [et al.].
p.cm.
Includes bibliographical references and index.
ISBN 0–333–97697–5
1.Airplanes,Military—Design and construction—Costs.2.
Massachusetts Institute of Technology—Research.3.Industrial
efficiency.4.Aerospace industries—Cost effectiveness.
I.Murman,Earll M.,1942-.
TL685.3 .L38 2002
658.5’15—dc21 2001059824
Editing and origination by
Aardvark Editorial,Mendham,Suffolk
10 9 8 7 6 5 4 3 2 1
11 10 09 08 07 06 05 04 03 02
Printed in Great Britain by
Creative Print & Design (Ebbw Vale),Wales
We dedicate this book to the men and women of the US aerospace community –
whether in industry, government, organized labor or universities, includingour
graduate students and MITfaculty colleagues – who have inspired this book
through their contributions to the Lean Aerospace Initiative, and whose
talents and dedication are helping to shape the future of aerospace

C
ONTENTS
List of Boxes x
List of Figures and Tables xii
Foreword xiv
Acknowledgements xx
List of Abbreviations xxiii
Part I Higher,Faster,Farther 1
Chapter 1 The 21st-Century Enterprise Challenge 3
Lean Enterprise Value 4
Value as ‘True North’ 8
Principles of Lean Enterprise Value 12
The Aerospace Challenge 14
Moving Forward 24
Chapter 2 TheCold WarLegacy 25
1945–69:A Bullish Quarter-Century 27
1970–89:Shifting National Priorities 38
Challenges of the Cold War Legacy 54
Chapter 3 Monuments and Misalignments 55
Dynamics of Industrial Innovation 56
Actions and Reactions 66
Barriers to Change 73
The Challenge Ahead 82
Part II Better,Faster,Cheaper 85
Chapter 4 Lean Thinking 87
Lean Thinking Defined 89
Lean Thinking in its Historical Context 96
Lean Thinking and Other System-Change Initiatives 107
Implications of Lean Thinking for the Aerospace Industry 114
Chapter 5 Islands of Success 117
A Herculean Island:Transforming Production on the C-130J 118
A Byte-Sized Island:Improving Code Generation 120
A Better-Practice Island:Manufacturing F-22 and RAH-66
Electronics Using Commercial Practices 123
vii
Contents
viii
An Engineering Support Island:The F-16 Build-To-Package Center 125
A Cultural Island:New Ideas and Methods for
777 Floor Beams 127
An Island Chain:The Pratt & Whitney Story 130
An Awakening Island:Diffusing Lean Practices to the
Delta IV Launch Vehicle 133
An Island of ‘Pull’:Integrating Supplier and Material
Management at GE Lynn 135
A Mini-Enterprise Island:Joint Direct Attack Munition 138
Summing Up 141
Chapter 6 Lean Enterprises 142
The ‘Whats’of a Lean Enterprise:Lean Principles and Practices 146
The ‘Hows’of Lean Enterprise Transformation 154
Assessing the ‘Where’on a Lean Journey 156
Integrated Entities 159
Enterprise Stakeholders 168
A Long Journey 172
Part III Creating Enterprise Value 175
Chapter 7 A Value-Creation Framework 177
What is Value? 178
Value Streams and Doing the Job Right 180
Introducing the Framework 182
Value Identification 184
Value Proposition 185
Value Delivery 187
Linking the Value-Creation Framework Across Three Levels
of Enterprise 187
Summing Up 187
Chapter 8 Program Value 190
Value Identification 193
Program Value Proposition 200
Delivering Program Value 207
Adapting to Change 212
Summing Up 215
Chapter 9 Value in Corporate and Government Enterprises 217
A Value Stream Approach to Understanding Enterprise
Integration Challenges 217
Above the Level of a Single Program Value Stream 218
Identifying Value Across the Enterprise 220
Creating Enterprise Value Propositions 228
Delivering Enterprise Value 241
Summing Up 246
Contents
ix
Chapter 10 Value at National and International Levels 247
A ‘Crisis’in Defense Aerospace? 248
Value Identification 251
Creating the Value Proposition 260
Value Delivery 265
Summing Up 278
Chapter 11 Future Value 281
Five Guiding Principles for Lean Enterprise Value 281
Conclusion 289
Part IV Appendices 291
Appendix A Lean Aerospace Initiative Member Organizations
(October 2001) 293
Airframe 293
Avionics/Electronics 293
Propulsion,Power Systems and Controls 293
Space 294
US Air Force 294
Other Government Entities 294
Invited Participants – Labor 294
Invited Participants – Industry and Government 295
Appendix B
LAI Supported Students Completing Theses 296
Other Graduate Students Participating in LAI 297
Other Graduate Students Whose Theses have
Contributed to LAI 297
Notes 298
Index 323