Taylor, LT Aaron

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Massachusetts Institute of Technology © Aaron TaylorImpact of KnowledgeManagement Tools asIntegrating MechanismsA DD(X) Case StudyLT Aaron TaylorMIT System Design & Management FellowMassachusetts Institute of Technology © Aaron TaylorDD(X): A Case StudyAgenda• The DD(X) Enterprise• The Enterprise Challenge• The KnowledgeManagement Solution• Benefits of KM Quantified• DD(X) Case StudyConclusionsMassachusetts Institute of Technology © Aaron TaylorDD(X) Enterprise• DD(X) Enterprise: A complex and diversifiedenterprise consisting of:– Over 100 public, private and academic organizations– Over 5,000 worker stakeholders, located in 35different states– Northrop Grumman Ship Systems awarded leadcontractor role with Raytheon Corporation namedcombat systems integrator– Customer stakeholder: U.S. Navy with over 100military and civilian employees assigned to theprogramMassachusetts Institute of Technology © Aaron TaylorDD(X) EnterpriseCustomer Stakeholder is challenging the enterprise valuestream to develop and procure a “cutting-edge” warshipin every aspect imaginable• Little to no re-use of current DDG-51 Destroyer Program• Latest technologies to be implemented in all systems,from stem to stern• Latest technologies to be implemented from first hullnumber –vice- slow upgrades via “flights”: thereforereducing early obsolescence• Innovative hull structure and combat systems meant toevolve surface combatants to meet current-day littoralthreatsMassachusetts Institute of Technology © Aaron TaylorDD(X) EnterpriseEnterprise SummaryThe Customer Stakeholder is demanding ahistorical product from the DD(X)enterprise; A revolutionary warship ofsignificant scope, complexity and diversitythat requires the critical mass ofintellectual assets and “know how” fromover 100 organizations for success.Massachusetts Institute of Technology © Aaron TaylorDD(X) Enterprise KnowledgeManagement ChallengeChallenge:How does an enterprise of this scope effectivelytie together all stakeholders into one efficientand cohesive team, capable of real-timecollaboration and high-velocity work flows?Answer:Investments in KM Collaboration ToolsMassachusetts Institute of Technology © Aaron TaylorThe KM Solution• Starting in 2003, and ending in June 04,the enterprise rolled-out a pair of powerfulKM collaboration tools:– Teamcenter Community® & TeamcenterEnterprise® of the UGS Corporation– Capabilities:• Network Meetings with “.jt” viewable capabilities• Web accessed data vault serving as single,authoritative source of all design documentation• Multiple other collaborative capabilitiesTeamcenter Community & Teamcenter Enterprise are registered trademarks of the UGS Corporation.Massachusetts Institute of Technology © Aaron TaylorThe KM Solution• Enterprise expected qualitative benefits from thissignificant investment:– The linking together of all stakeholders into onecohesive team in order to support Total Ship SystemEngineering: A holistic, broad-based systemsengineering and design approach to shipbuilding.• TSSE focuses on the ship as a total engineering system toinclude the hull, machinery, electronics, combat systems andhumans.– Enabling the real-time sharing of knowledge andinformation in order to meet demanding customer andend-user needs.Massachusetts Institute of Technology © Aaron TaylorThe KM SolutionKM Solution applied throughout the entireDD(X) Enterprise• Both collaboration tools available on anydesktop with a web browser• Teamcenter Community® available to 100% ofDD(X) workers• KM tools quickly adopted due to worker buy-inand intuitive GUIMassachusetts Institute of Technology © Aaron TaylorBenefits of KM to the DD(X)Program Quantified• KM Benefit Data Methodology• KM Benefit Computations• KM Benefit Figures• Benefit Figures Meaning to DD(X)EnterpriseMassachusetts Institute of Technology © Aaron TaylorBenefit Data Methodology• First, essential to identify the “core”benefits of the KM tools being used:– Reduction in Process Cycle Times– Reduction in Process Re-Work Rates• Identify any “other” significant benefits tothe program from the use of the KM tool:– Reduced travel expenses– Reduction in number of CAD/CAE licensesneededMassachusetts Institute of Technology © Aaron TaylorMethodology cont’d.• Determine if program leadership already hasappropriate metrics in place for benefit datacollection:– Metrics that capture process cycle-times before andafter the KM tool roll-out– Metrics that capture process re-work rates before andafter the KM tool roll-out– If appropriate metrics are currently in place…simply acomputational challenge• This was not the case for our program of studyMassachusetts Institute of Technology © Aaron TaylorMethodology cont’d.• In most cases, appropriate metrics are not inplace for “easy” data collection of KM “core”benefits– Possibly due to most “accounting-centric” metricscurrently being used• Therefore, must go to the most accurate sourceof KM benefit data available: “The ProcessOwner”– Process Owner: The workers using the KM tool tosuccessfully complete their day-to-day processes inthe enterprise value stream– Strive for a representative sample of the program,process owners across the programs functionsMassachusetts Institute of Technology © Aaron TaylorKM Benefit Computations• Compute the “core” benefits:– Calculate the mean reduction in Cycle Time & Re-work time for each major segment of your program• Convert these benefits to a ‘per month’ unit for business casecalculations– Extrapolate the “core” benefits appropriately acrosseach segment of the program– Convert to dollars using workers mean hourly rate• Compute any other major benefits identified foreach segment of the program– Again, extrapolate these benefits across eachsegment of the programMassachusetts Institute of Technology © Aaron TaylorBuilding the Business Case• Since benefit data is based on process-ownerestimations, factor in uncertainty (µ,_)• Based on your benefit data extrapolations,calculate both NPV and ROI:(-)  Initial KM tool capital cost(-)  Monthly KM tool recurringcosts(+) Monthly Cycle-Time Red.Benefit(+) Monthly Re-Work Red.Benefit(+) Other significant Benefits      (i.e. Red. Travel Costs)NPV&ROI=Massachusetts Institute of Technology © Aaron TaylorDD(X) KM Benefit Figures• NGSS realized an estimated ROI of 2376% for the 6-monthperiod from KM tool roll-out and adoption (Jun 04’) to datacollection (Jan 05’).• Also, an estimated ROI of 3469% for the 18-month period ofJune 04’ to December 05’.• These benefits are a direct result of the capital investmentsmade in the KM tools due to:– Reduction in process cycle times      (46% of benefit)– Reduction in process re-work waste  (33% of benefit)– Reduction in NGSS travel expenses    (22% of benefit)• Note: these benefit figures will not be found in any NGSS financialstatementsMassachusetts Institute of Technology © Aaron TaylorWhat do these large benefit figuresmean to NGSS & the Enterprise?• These benefit figures represent how much more theDD(X) program would have cost if the KMinvestments were not made– The significant size of the figures justify the claim that theDD(X) program might not be feasible without the in-placecollaborative environment• Of Note:– 100% of interviewees attributed some of their reductionsin process cycle times and re-work to the decrease inWaiting Wastes– 66% of interviewees also identified reductions inTransportation and Unnecessary Motion Wastes due tothe KM toolsMassachusetts Institute of Technology © Aaron TaylorCase Study Conclusions1. The feasibility of the DD(X) program would bemuch more challenging without the current, in-place collaborative environment2. The KM collaborative environment is enablingthe relatively new shipbuilding philosophy ofTotal Ship Systems Engineering (TSSE)3. The KM collaborative environment haseffectively tied together over 5,000 workers inorder to deliver the customer a productcontaining historical levels of cutting-edgetechnologyMassachusetts Institute of Technology © Aaron TaylorQUESTIONS?a_taylor@mit.edu617-252-1762

Impact of Knowledge Management Tools as Integrating Mechanisms

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Impact of Knowledge Management Tools as Integrating Mechanisms

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