Deborah Nightingale - 1 ? 2002 Massachusetts Institute of Technology
Examples of Commonality in Lifecycle
Operations
Commercial Airline:
– Main engine starter is common across 747-400, 767, and 767-
300ER
– 26 airports service these aircraft (11 common)
– Airline only has to stock 14 spares, as opposed to 25 if they
were not common
PMA-276
– UH-1Y and AH-1Z deploy together on the same MEU, relying
on the same mobility, maintenance, training, and sustainment
infrastructure
– 85% commonality between UH-1Y (utility) and AH-1Z (attack)
reduces the detachment maintenance personnel requirement
from between 4 and 14 people (3 to 12%)
– Nearly $1.5 billion in savings from commonality over 20 year
lifecycle of program
Deborah Nightingale - 2 ? 2002 Massachusetts Institute of Technology
Timeline of Commonality Benefits Illustrates
Linkage to Multi-Stakeholder Enterprises
Reduced
time for
source
selection
Reduce
training
time
Reduced
support
equipment
Reduced
training
equipment
Higher
spares
availability
Reduced
complexity
in supply
Reduced
downtime
Greater
interoperability
Faster
solutions to
problems
Reduced
rework
Reduced
testing
Increased
operator
competency
Design
reuse
Shared
development
costs
Fewer
maintenance
hours
Reduced DMS
Reduced
spares
inventory
Reduced
tooling
Process
reuse
Reduced
documentation
Lower
risk
Economies
of scale
Reduced
inventory
Higher
reliability
Reduced
cycle time
Higher
productivity
0
II
III
I
Deborah Nightingale - 3 ? 2002 Massachusetts Institute of Technology
SYSTEM INTEGRATOR SUPPLIER
Strategic/business
relationships
Source selection;
requirements;
order placement
Coordinated methods,
procedures & solutions
– Common technical databases & ools
– Integrated product teams (IPTs)
– Technical data exchange
– Flowdown of key characteristics
– Configuration control
– Engineering change process management
IT Solutions; training & Implementation; plans &
technical requirements
Requirements
Capabilities
General
Management
General
Management
Procurement
Customer
Liaison Manager
IT Dept.
Engineering
Engineering
IT Dept.
Program
Manager
Source: Adapted from William R. Neill, “Design Chain
Engineering: Implementing Integrated Supply Chain Product
Development , ” Presentation at an MIT Workshop
(06/24/1999)
System Integrator-Supplier Communications
Involve Interactions at Different Levels
t
Deborah Nightingale - 4 ? 2002 Massachusetts Institute of Technology
Arm’s length; interfaces
totally defined and controlled
Collaborative;
prior worksharearrangements
Collaborative and seamlessly I
integrated; architectural innovation
Virtual Team
w/o boundaries
Prime
Key Suppliers
Subtiers
“Old” Approach “Emerging”
Lean
Prime
Key Suppliers
Subtiers
“Current”
Lean
Collaborative with rigid
organizational
interfaces
Prime
Key Suppliers
Subtiers
Rigid vertical
FFF interfaces
and control
ARCHITECTURAL INNOVATION:Major modification of how components in a
system/product are linked together
? Significant improvement in system/product architecture through changes in form/structure,
functional interfaces or system configuration
?
Knowledge integration over the supplier network (value stream perspective ; prime-key
suppliers- subtiers; tapping supplier technology base)
Early Supplier Integration Results in Significant
Benefits through Architectural Innovation
but constrained by
Deborah Nightingale - 5 ? 2002 Massachusetts Institute of Technology
Observations on Architectural
Integration Approaches
Senior leadership plays a pivotal role by enabling
lifecycle analysis and integration of multiple
enterprise perspectives
Much of the challenge may be organizational rather
than technical
Portfolio strategies and processes are necessary to
obtain full benefits
Metrics and incentives that measure and reward
lifecycle value creation a key enabler
Customer enterprise structure and demand
determine applicability of this approach
Deborah Nightingale - 6 ? 2002 Massachusetts Institute of Technology
Influence Standards when Key Stakeholders
Lie outside Direct Hierarchical Control
Standards allow decentralize collective action across
enterprise boundaries
With limited control over stakeholders and product
design, emphasis shifts to “control points” in product
architecture
Standards foster innovation in the supply base by
enabling modular decoupled designs
Standards are often a strategic battleground—high-
stakes winner-take-all contests encourage some
enterprises to push proprietary standards at the
expense of a broader spectrum of stakeholders
Several models of collaborative forums exist that
successfully develop open standards
Deborah Nightingale - 7 ? 2002 Massachusetts Institute of Technology
Common Large Area Display Illustrates the
Value Delivered through the Creation and
Use of Standards
500 displays for AWACs
– But 15,000 displays for DoD
Standardized on commercial display for all of
DoD
– 60% less weight
– 90% less maintenance cost
– 11 fold increase in MTBF
– 30% power reduction
– Better resolution
Up to $100M in DoD savings
Deborah Nightingale - 8 ? 2002 Massachusetts Institute of Technology
Observations on Using Standards to
Achieve Enterprise Integration
Important to establish neutral forum or broker
to define standards that prevent bias towards
one solution
Use open architecture where possible
Consider technology clockspeed; look to
industries or sectors that more closely match
that of the system in question
Establish a common syntax to facilitate
knowledge sharing
Deborah Nightingale - 9 ? 2002 Massachusetts Institute of Technology
Northrop
Grumman
El Segundo,
CA
Lockheed Martin
Ft Worth, TX
Other Partners
& Suppliers
Customers
BAES
Samlesbury
UK
BAES Database
“mirror”
Master Database
NGC Database
“mirror”
? Virtual
Enterprise
System (VES)
provides the
backbone for
the digital
design and
manufacturing
environment
? All product
data available
real-time
worldwide
? Enables
collaborative
development
Adapted from Burbage, T. Lockheed Martin, “JSF - A Winning Environment” Presentation at MIT, March 6, 2002.
Information Technology is Vital to
Enterprise Integration Lean
Deborah Nightingale - 10 ? 2002 Massachusetts Institute of Technology
Enterprise Process Architecture
Life Cycle Processes
? Business Acquisition and Program Management
? Requirements Definition
? Product/Process Development
? Supply Chain Management
? Production
? Distribution and Support
Enabling Infrastructure Processes
? Finance
? Information Technology
? Human Resources
? Quality Assurance
? Facilities and Services
? Environment, Health, and Safety
Enterprise Leadership Processes
? Strategic Planning
? Business Models
? Managing Business Growth
? Strategic Partnering
? Organizational Structure and Integration
? Transformation Management
Process
standardization is
a key enterprise
strategy
Deborah Nightingale - 11 ? 2002 Massachusetts Institute of Technology
Market-
Focused IPTs
Lean: Shop
Floor & Above
Optimized Assets
& Technology
Deployment
A Fully Integrated Enterprise With a Shared Infrastructure
Providing Distinct Competitive Advantages
Air Combat
Systems
Airborne Early
Warning & Elect.
Warfare Systems
Airborne Ground
Surveil. & Battle
Mgmt. Systems
Human
Resources &
Admin.
Materiel
Transaction
Accounting
Information
Services
Sector HQ
Staff
Functions
Human
Resources
Procurement
Payroll
Finance
Define Value
Map Value
Stream
Establish
Flow
Implement
Pull
Strive for
Perfection
Common
Systems
Shared
Services
Leadership
Culture
Rationalized
Assets
Shared
Centers of
Excellence
Distributed
Product-
Specific
Capabilities
Joint
Synergy
Programs
Shareholder
Value
Education
Incentivized
Mgmt. Perf.
Weighted
Financial
Goals
Measuring
Underpining
S/T & L/T
Actions
Source: Cool, C. Northrop Grumman, “Journey to a Lean Enterprise” Presentation at MIT, Oct 31, 2001.
Integrated Systems Operating Concept
Deborah Nightingale - 12 ? 2002 Massachusetts Institute of Technology
Simple Financial Metrics can Misrepresent the
Value of Enterprise “Infrastructure” Investments
Research found that a military customer valued
systems engineering analyses enough to pay for
them in a military program but corporate would not in
a comparable commercial program
Spacecraft testing research also showed commercial
programs more likely to have infrastructure-related
failures
Financial results-based decisions may inhibit
capabilities development that pays dividends in the
long-term
Deborah Nightingale - 13 ? 2002 Massachusetts Institute of Technology
Parallels In Building Products and
Enterprises
ACHIEVING MULTIPLE
REQUIREMENTS
TAKES BOTH
ENTERPRISE
LM Aero – the Company
PRODUCT
F-22 Tail #5005
ENTERPRISE DEFINITION
Enterprise Architecture
PRODUCT DEFINITION
F-22 Definition Data Package
=
=
BALANCE
E
=
CUSTOMER REQUIRES
PRODUCT
ENTERPRISE
DESIGN METHODOLOGYDESIGN METHODOLOGY
?Capability
?Affordability
?Responsiveness
? Performance
? “Ilities”
? Efficiency
? Fitness
Systems Engineering “Enterprise Engineering”
Multiple
Products,
Services
Different Life
Cycle Phases
?ProcessesProcesses
?ToolsTools
?SkillsSkills
?EtcEtc
Source: er, Lockheed
Martin, 2001
Kessl