USAF and USN Lean Enterprise Transformation

93 Pages·2006·3.52 MB·English

In Pursuit of Understanding Lean Transformation--

Capturing Local Change Journeys in a DoD Field Environment

Research conducted by:
Ted V. Shoepe, Major, USAF
USAF-MIT Lean Aerospace Initiative Fellow
2005 – 2006

Research supported by:
George Roth, Ph.D.
Massachusetts Institute of Technology
Sloan School of Management

77 Vassar Street
Room 41-205
Cambridge, MA 02139-4309

August 2006
The views expressed in this article are those of the author and do not reflect the official policy or position of
the United States Air Force, Department of Defense, or the U.S. Government.
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In Pursuit of Understanding Lean Transformation--
Capturing Local Change Journeys in a DoD Field Environment

Research conducted by:

Ted V. Shoepe, Major, USAF
USAF-MIT Lean Aerospace Initiative Fellow
2005 – 2006

Abstract
The global security landscape has drastically changed since the Cold War. The attacks of
September 11 and subsequent coalition operations demonstrate that the global war on
terror is against a new breed of enemy—continuously changing and adapting to US
military strategies and tactics. Future Department of Defense (DoD) weapon system
acquisition organizations and processes must adapt with this new threat—transforming to
an enterprise that is capable of quickly delivering value to the war-fighter in a resource
constrained environment with high operational tempos and aging fleets. Guided by the
Secretary of Defense, both the USAF and USN have adopted “lean” principles as a
compass to help guide their transformational journeys.

"Lean" has been identified to explain the dramatic performance and improvement
advantages that Japanese automobile companies have over their US competitors. These
concepts are now being applied in the DoD to initiate continuous improvement activities,
deliver value to the warfighter and help cope with budget constraints. This study describes
two of the US Air Force and US Navy enterprise-level continuous process improvement
programs and the ways in which each contribute to local results in a field case setting.
Additionally, this study tests the applicability of ongoing LAI lean enterprise change
theory in the context of a DoD environment.

Three noteworthy results were discovered. First, both the Navy and USAF have been
using lean principles for years. Pockets of success in the respective enterprises have been
noted over the years; however, they have traditionally been limited to the manufacturing
floors of the Navy shipyards and USAF Air Logistic Centers. Secondly, on the foundation
of these successes, both organizations are placing the strategic leadership, vision,
infrastructure, and processes in place to proliferate continuous improvement throughout
their enterprises. This study also generated specific recommendations for each field
location to consider based upon research findings. Lastly, with minor tailoring, the
ongoing change management theory development at LAI is applicable to evaluating
enterprise change in the context of a DoD field case.

Research supported by:
George Roth, Ph.D.
Massachusetts Institute of Technology
Sloan School of Management
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Acknowledgements
I structured this research to deliver value to the participating USAF, USN enterprises and
to the LAI consortium. As such, I could not have accomplished this research project
without the support and forthcoming nature of the field locations.

I would like to issue a special thank you to the Naval Undersea Warfare Center—Division
Newport. Every employee ranging from the strategic to tactical levels of the organization
was incredibly knowledgeable and willing to actively participate. In particular, the lean
office was spectacular and served as an invaluable resource for history, data, clarifications,
and facilitation of interviews. Thank you.

A second thank you belongs to the entire C-17 Enterprise. Active participation from each
enterprise stakeholder was essential to capturing the enterprise transformational journey.
Thank you to the B&I office for coordinating the site visit and interview sessions. Lastly,
a very special thank you goes to the enterprise leadership who supported the conduct of
this research.

And to Dr. George Roth, who was instrumental in helping to gain traction on this project
and guiding me through the research process.

In upcoming sections, I will describe the DoD imperatives for change. The first is
increased operational tempo. I understand that participation in this study was an additional
duty for everyone and that the interview sessions presented an opportunity cost in terms of
fulfilling their normal responsibilities. Thank you for your time, without your support this
study would not have been completed.

The views expressed in this article are those of the author and do not reflect the official policy or position of
the United States Air Force, Department of Defense, or the U.S. Government.
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Table of Contents

ACKNOWLEDGEMENTS 5
TABLE OF CONTENTS 8
LIST OF TABLES AND FIGURES 10
I. INTRODUCTION 12
DOD IMPERATIVE—EVOLVING THREAT 12
DOD IMPERATIVE—BUDGET PLATEAU 13
DOD IMPERATIVE—AGING FLEETS 14
II. CHANGE MANAGEMENT…A COMPLICATED PLAYBOOK 16
WINNING AT CHANGE 16
THE WHEEL OF CHANGE 17
ENTERPRISE CHANGE CAPABILITIES 18
STITCHING THEM ALL TOGETHER…A CENTER OF GRAVITY FOR CHANGE? 21
III. LEAN ENTERPRISE CASE STUDIES AND METHODOLOGY 24
INTRODUCTION AND METHODOLOGY 24
IV. NAVAL UNDERSEA WARFARE CENTER (NEWPORT) CASE STUDY 27
CASE STUDY BACKGROUND—NAVSEA LEAN SIX SIGMA 27
Setting the Stage—Management and Functional Realignment 28
Establishing the End Zone and Building a Team 31
Formulating and Implementing the Strategy 32
Governing Structure and Process 34
FIELD LOCATION—NUWC DIVISION NEWPORT 36
Lean Embarkation And The First Six Months 37
Measuring Progress and intra-portfolio benchmarking 40
A Foundation for Sustainable Change is in Place 42
Enterprise Strategy and Structure is Employed 44
Multiple Organizational Innovations are Consistent and Sequenced 46
Distributive Leadership, People as Enablers 48
SUMMARY IMPRESSIONS 49
V. C-17 ENTERPRISE CASE STUDY 51
CASE STUDY BACKGROUND—AIR FORCE MATERIAL COMMAND 51
The Early Years…Depot Success 53
Lean Now Deployment…Expanding to Enterprise Transformation 57
Continuous Process Improvement Convergence—AFMC AFSO21 58
AFMC AFSO21 Next Steps and Summary Impressions 61
FIELD LOCATION—C-17 ENTERPRISE 63
Lean Enterprise Deployment—Assessing The Current State 64
Creating Future State Attributes, Spawning Lean Imperatives 68
Basic Change Capabilities Are in Place 69
Enterprise Strategies And Structures Are Utilized 71
Active Employee Involvement Meets Personnel Growth Opportunities 73
SUMMARY IMPRESSIONS 74
VI. ANALYSIS AND DISCUSSION 76
DIVISION NEWPORT ASSESSMENT AND OPPORTUNITIES 77
C-17 ENTERPRISE ASSESSMENT AND OPPORTUNITIES 80
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TESTING PRECEPT APPLICABILITY TO DOD CASE SETTINGS 83
LIMITATIONS OF ASSESSMENT 85
VII. CONCLUSIONS AND RECOMMENDATIONS 86
DIVISION NEWPORT SUMMARY IMPRESSIONS AND RECOMMENDATIONS 86
C-17 ENTERPRISE SUMMARY IMPRESSIONS AND RECOMMENDATIONS 88
VIII. SUGGESTIONS FOR FUTURE RESEARCH 90
REFERENCES 92

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List of Tables and Figures

FIGURE 1, US MILITARY ACTIVE DEPLOYMENT RATES ...................................................................13
FIGURE 2, DEFENSE OUTLAYS AS A SHARE OF GDP .........................................................................13
FIGURE 3, AGING USAF FLEETS ..............................................................................................................14
FIGURE 4, “THE CHANGE WHEEL” .........................................................................................................18
FIGURE 5, CAPABILITIES FOR LEAN ENTERPRISE CHANGE ............................................................19
FIGURE 6, VIEWING AN ENEMY AS A SYSTEM ...................................................................................22
FIGURE 7, NOTIONAL TRANSFORMATIONAL CENTER OF GRAVITY .............................................23
FIGURE 8, CASE STUDY DEMOGRAPHICS .............................................................................................26
FIGURE 9, NAVSEA ORGANIZATION ......................................................................................................28
FIGURE 10, NAVSEA LEAN TRANSFORMATION TIMELINE...............................................................30
FIGURE 11, IMPLEMENTATION ACTIVITIES..........................................................................................33
FIGURE 12, NAVSEA LEAN DEPLOYMENT METRICS ..........................................................................35
FIGURE 13, NUWC DIVISION NEWPORT ................................................................................................37
FIGURE 14, NEWPORT DIVISION LEAN TRANSFORMATION TIMELINE .........................................39
TABLE 1, NEWPORT DIVISION ORGANIZATIONAL ASSESSMENT RESULTS.................................41
TABLE 2, FORECASTED NEWPORT DIVISION ORGANIZATIONAL ASSESSMENT RESULTS ......42
FIGURE 15, EXAMPLE OF ENTERPRISE ORIENTATION ......................................................................45
FIGURE 16, LEAN COORDINATION PROCESS .......................................................................................48
FIGURE 17, AFMC ORGANIZATIONS .......................................................................................................52
FIGURE 18, AFMC LEAN TRANSFORMATION TIMELINE....................................................................54
FIGURE 19, LEAN NOW PHASES ...............................................................................................................58
FIGURE 20, AFMC AFSO21 FRAMEWORK ..............................................................................................59
FIGURE 21, C-17 ENTERPRISE ORGANIZATIONAL COMMAND LINKAGES....................................64
FIGURE 22, C-17 ENTERPRISE LEAN+ TIMELINE..................................................................................66
FIGURE 23, C-17 CURRENT STATE ENTERPRISE DEPICTIONS .........................................................67
FIGURE 24, C-17 “NEW” ENTERPRISE .....................................................................................................71
FIGURE 25, C-17 GUIDING PRINCIPLES ..................................................................................................73
TABLE 3, SCORES AND SCALES TO ASSESS PRECEPT EVIDENCE ................................................76
TABLE 4, DIVISION NEWPORT, C-17 ENTERPRISE ASSESSMENTS...................................................77
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