Hemann, Justin

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Research applications •  Enterprise Value Stream Mapping and Analysis (EVSMA) helps participants set goals, create alignment, and plan. •  The system approach used here could be applied in steps 5 and 8 of EVSMA: •  Identification of enterprise interactions. •  Development of an improvement plan and selection of improvement projects. Enterprise Change Improving complex enterprises with system models Justin Hemann Master’s Candidate in Engineering Systems justinmh@mit.edu 650.823.5147  Advisor: George Roth groth@mit.edu    Key questions:     When compared to other improvement methods (TQM, 6σ, etc.) does a systems approach… •  … lead to different conclusions? •  Is it preferable? Under what circumstances? •  How does the approach influence the change process?    Methods: •  Observe the change process underway at the US Air Force Ogden Air Logistics Center. •  Apply system dynamics methods to improving F-16 availability and reducing costs. •  Develop and test hypotheses with system dynamics, and compare these with results from the current change process. About system dynamics modeling: •  SD is a worldview and a framework for analyzing problems. •  SD provides insight into the interactions between parts of a system. •  SD has been applied to Air Force sustainment before, resulting in unintuitive conclusions: cannibalization reduces F-16 mission capability. Air Logistics Centers: •  Air Force Sustainment is a complex, large, integrated, and open enterprise. •  There are unique challenges with improving an ALC that may not apply to private corporations: •  ALCs are not-for-profiit. •  There is a strong social contract prohibiting layoffs. •  Budgeting occurs years in advance, making short-term changes difficult. •  Turnover in leadership is very high. •  Do these differences suggest that change methods from industry should be adjusted for the new environment? Fix Rate Total Mission Capable RateAircraft Utilization RateFlying Scheduling EffectivenessCannibalization Rate Break RatesSustainment Costs+-Active Duty Mission Guard MissionReserve Mission+ -+++-----++--BRRRRRBRR From Keith Russel thesis, 2000 Cannibalization hurts mission capability rate while helping local performance  •  Hypothesis 2: Local optimization results in negative system behaviors. Components of availability fluctuate, but the overall availability is constant  •  Hypothesis 1: System performance is conserved; improving it will require fundamental changes to the enterprise.  •  Hypothesis 3: Reinvestment in process improvement has helped the Ogden depot maintenance organization to advance. •  In 2003 the depots had started all of the 24 process improvement initiatives identified in 2001. •  Logisics organization started only 7 of 19 initiatives. Depot organization reinvests working capital fund, supply organization cannot reinvest Phase 7: Future State A. Develop Lean Enterprise Vision B. Perform Gap Analysis Phase 1: EVSMA Set-Up A. Motivate Change B. Identify & Empower EVSMA Participants C. Describe the Enterprise T Phase 3: Strategic Objectives A. Identify Strategic Objectives B. Identify Associated Metrics C. Analyze Current Enterprise Performance Relative to Strategic Metrics Phase 4: Enterprise Processes A. Identify Major Enterprise Processes B. Collect Enterprise Process Performance Data C. Determine Resources Allocated to Each Process T Guide contains a Tool or Template for this step Completed activity ✓ Phase 6: Current State Synthesis A. Quantify Current State Interactions B. Identify the Content of Current State Interactions C. Identify Enterprise Level Waste D. Assess the Alignment of Enterprise Metrics to Stakeholder Value Delivery and Strategic Objectives E. Analyze LESAT Results T T Phase 5: Enterprise Interactions A. Apply LESAT B. Assess the Process to Process Interactions C. Assess the Process to Stakeholder Interactions D. Assess the Process to Strategic Objectives Interactions E. Assess the Strategic Objectives to Stakeholder Interactions T T T T T Ki ck-Off Meeting approx. 1 Day Data Collection approx. 2-3 Weeks EVSMA Focus Event approx. 1 Week Follow-On Planning approx. 1 Week Phase 2: Stakeholder Value Exchange A. Identify  Key Stakeholders B. Define the Value Exchange Between  Each Stakeholder and the Enterprise C. Prioritize and Quantify Stakeholder Values T T Phase 8: Improvement Plan A. Develop List of Proposed Improvement Projects B. Prioritize Improvement Projects C. Prepare EVSMA Proposal for Executive Review and Approval D. Provide Input to Develop Detailed Transformation/ Implementation Plan T Hypotheses and recommendations •  Several hypotheses have been generated from this approach (at right). •  If the hypotheses are supported by evidence then potential recommendations are: •  Enable the benefits of improvements within the logistics organization to be re-invested in further improvements. •  Re-align metrics to discourage local optimization. •  Testing and recommendations for Hypothesis 1: under development. 0200400600800100012001400NUMBER OF ACFTTAI 1360 1357 1357 1357 1356 1355 1355 1355 1349 1349 1348 1344Depot Scheduled 120 116 111 106 96 99 120 118 116 115 111 106Depot Unscheduled 13 13 15 13 12 12 11 9 8 12 12 7TNMCS 139 137 138 139 141 143 136 133 139 126 120 131NMCM 151 165 154 160 166 163 150 151 155 150 151 149AVAIL 951 926 940 939 941 938 937 944 931 946 954 951Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-040200400600800100012001400NUMBER OF ACFTTAI 1360 1357 1357 1357 1356 1355 1355 1355 1349 1349 1348 1344Depot Scheduled 120 116 111 106 96 99 120 118 116 115 111 106Depot Unscheduled 13 13 15 13 12 12 11 9 8 12 12 7TNMCS 139 137 138 139 141 143 136 133 139 126 120 131NMCM 151 165 154 160 166 163 150 151 155 150 151 149AVAIL 951 926 940 939 941 938 937 944 931 946 954 951Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04

Enterprise Change

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Enterprise Change

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