Lean Effects on Aerospace Programs, Raytheon AMRAAM Case StudyLean Aerospace Initiativ

Davidz, Heidi

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Research Sponsored By the Lean Aerospace InitiativeLean Effects on Aerospace ProgramsRaytheon AMRAAM Case StudyMarch 27, 2002Enterprise Value:The New Lean HorizonPresented By:Heidi DavidzMIT LAI2 - LEAP/Davidz  - 032702 © 2002 Massachusetts Institute of Technology web.mit.edu/leanHigh dependability, low cost of ownershipAMRAAMCase Study Profilem Advanced Medium-Range Air-to-Air Missilem Production and repair both at RaytheonCompany in Tucson, Arizonam Flown by air forces of 20 nationsm Deployed September 1991m Volumes per yearm Produce 450-600m Repair 100-1503 - LEAP/Davidz  - 032702 © 2002 Massachusetts Institute of Technology web.mit.edu/leanRaytheon Six Sigma/lean tools institutionalizedLean Transformation Journeym Formerly produced at both Raytheon & Hughesm Hughes Agile program in 1997m Raytheon & Hughes consolidated in Tucsonm Raytheon Six Sigmam Extensive use of IPTsm Engaging suppliersm IPPD in actionm Common parts,    processes, practices TimeImprovement19964 - LEAP/Davidz  - 032702 '  2002 Massachusetts Institute of Technology web.mit.edu/leanHighlights of RaytheonMissile Systems Awards•2000 “Lightning BoltAward” for AMRAAMEngineering Support•1999 Industry WeekAmerica’s Best PlantsAward•1998 Navy COE BestManufacturing Practices•1997 ArizonaGovernor’s Award forQualityHighlights of RaytheonMissile Systems Awards•2000 “Lightning BoltAward” for AMRAAMEngineering Support•1999 Industry WeekAmerica’s Best PlantsAward•1998 Navy COE BestManufacturing Practices•1997 ArizonaGovernor’s Award forQualityUnit cost reduced significantlyMajor Achievementsm 1999 Industry Week (Miller)m Cost from $1M to $250,000 in 7 yearsm Doubled deliveries in 12 monthsm Improved reliability to three times whatRMS contracted form Highlights from LEAP studym Manufacturing flow time decreased 71%m Defects dropped 48%m 100% of workers participate inempowered teams5 - LEAP/Davidz  - 032702 © 2002 Massachusetts Institute of Technology web.mit.edu/leanLeadership and people are key enablersKey Enablers, Processes andPracticesm Leadershipm Strong, involved enterprise leadershipm Great leadership at all levelsm Provide motivation & support for changem Key to overcoming consolidationm Peoplem Extreme pride and enthusiasm for AMRAAMm Empowered at all levelsm Extensive use of IPTs6 - LEAP/Davidz  - 032702 © 2002 Massachusetts Institute of Technology web.mit.edu/leanMore cooperation = greater level of leanGovernment Relationship as aKey Enablerm Once contractor costs reduced, governmentcosts drove missile costm Task Destination streamlined AMRAAMprocessesm Government support office personnelreduced from 300 to 60m Total System Performance Responsibility(TSPR) contractm Strong government team relationship7 - LEAP/Davidz  - 032702 © 2002 Massachusetts Institute of Technology web.mit.edu/leanLean efforts pay off in many waysMajor Findingsm Improvements using lean enabled improvedgovernment relationshipm Cooperative government relationshipenables an even greater level of leanm Initial Agile experience helped withconsolidation challengesm Strong leadership at all levels drivecontinued change8 - LEAP/Davidz  - 032702 © 2002 Massachusetts Institute of Technology web.mit.edu/leanAMRAAM is a benchmark of what is possibleConcluding Observationsm Future challengesm Government leadership transitionm Completely integrate repair and build sectionsm Reduce Lot 16-21 AMRAAM pricingm Key elements in the AMRAAM success storym Strong leadershipm Emphasis on peoplem Lean transformation and continuationm Strong government team relationship

Enterprise Value: The New Lean Horizon

http://dspace.mit.edu/bitstream/1721.1/83311/1/PLN_0302_B2_DavChris_AMRAAM.pdf

Enterprise Value: The New Lean Horizon

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