DASN(L) CI Roll-out

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Department of the Navy Lean Six Sigma Way Ahead
Nick Kunesh
Special Assistant to the Secretary of the Navy
Lean Six Sigma
16 May 2007
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The pillars of Business/Financial Transformation
are the tools were employing to get a better
return on our investment in people, processes,
and systems. The Financial Improvement Program
(FIP) focuses on heightening the quality of
financial information.
DON Business Transformation
Performance Driven
Better Resource Decisions
LSS
NSPS
Financial Improvement Plan
- Measurement -
- Standardization - and Internal Controls
Processes
Systems
People
Financial Improvement Program- Auditability and
Internal Controls
Accurate, Timely, and Transparent Financial
Visibility
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DoN Total Obligation Authority (TOA)
FY 07 DoN Budget
OM
CVN-21 DDX LCS JSF MMA
V-22 ACS LPD-17 EFV LHA(R) HLR
Procurement
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26
RDTE
MP
FY06 TOA 125.6B
13
30
127.3B 65 is people cost
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• Assign a CPI/LSS focal point to coordinate with
  the DoD CPI/LSS Program Office.
• Establish a 12 to 18 month workforce training
  objective of 1 LSS black belt trained and 5
  green belt trained personnel. Personnel selected
  should include top-rated staff members.
• Include CPI/LSS in individual employee
  performance objectives.
• Provide support to the DoD CPI/LSS Program Office
  in DoD-wide process improvement initiatives.
• Report progress and outcomes of ongoing and
  completed CPI/LSS projects and activities to the
  DoD CPI/LSS Program Office every 30 days
  initially.

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SECNAV Lean Six Sigma Deployment Session27 June
2006
SECNAV CNO
Under SECNAV ACMC
ASN (RDA) ASN (MRA)
ASN (FMC) ASN (IE)
DCMC (MRA) DCMC (IL)
NAVSEA NAVAIR
NAVSUP NAVFAC
SPAWAR N1
N4B N80
DASN (Logistics) DASN (RDTE)
DASN (Environment) ADC (PR)
GC BUMED
DNS CNI COO
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DoN Lean Six Sigma Three Year Action Plan
Phase I Year 1 CY06 Phase II Year 2 CY07 Phase III Year 3 CY08
Leadership Leadership Leadership
Leadership Kick-off and monthly progress meetings Balance process metrics across DoN objectives goals Plan for XX reduction in overhead through CY08 NSPS SES / Flag fitness report bullet that recognizes LSS contributions Accelerate the journey for those who have started (AIRSpeed, Task Force Lean, et. al.) and report out financial results Start the journey with enabling service, support and transactional functions (i.e., FIN, HR, SC, IT, etc) Take XX of overhead cost out of the Department Accelerate integration w/ industrial base and be accountable for financial harvesting Re-align to DoN 07 objectives goals, and measure LSS output to DoN 06 objectives and goals All military and civilian performance evaluations and fitness reports recognize LSS contributions Take an additional XX of overhead cost out of the Department Re-align to DoN 08 objectives goals, and measure LSS output to DoN 07 objectives and goals Accelerate Enterprise maturity
Work Product Work Product Work Product
High impact core value streams are identified, mapped, and all applicable personnel are prepared to DMAIC Accelerate Integration of organic Supply Industrial Base with external suppliers (i.e., private industry, DLA) Identify where LSS applies to the Warfighter (i.e., war-game planning events) Identify and clean legacy data bases for conversion to Navy ERP High impact core value streams are DMAIC Continuous Improvement of those activities that started before Jan 06 100 of all major Defense contracts awarded to industry will contain a LSS incentive clause Introduce Malcolm Baldrige criteria High impact core value streams are revisited Service, support and transactional functions are in a Continuous Improvement closed loop 25 of extended (with industry) value chains have been leaned out
Education and Training Education and Training Education and Training
1,000 Black Belts certified 2,000 Green Belts certified 25 of GS-15 /06 and above complete Champion training Synchronize LSS training body of knowledge and training methods across the DoN Incorporate initial LSS training into all training schools (review Officer, Enlisted Civilian career paths) 1,000 additional Black Belts 4,000 additional Green Belts 100 of GS-15 /06 and above complete Champion training Optimize LSS training across enterprise BB/GB factory (incorporate into 5 vector model) Train additional Black Belts equal to 1 of affected workforce Train additional Green Belts equal to 4 of affected workforce 100 of GS-15 / 06 and above are LSS Champions 5 of GS-15 / 06 and above are Green Belt certified
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Phase I Year 1 CY06
Leadership
Leadership Kick-off and monthly progress meetings Balance process metrics across DoN objectives goals Plan for XX reduction in overhead through CY08 NSPS SES / Flag fitness report bullet that recognizes LSS contributions Accelerate the journey for those who have started (AIRSpeed, Task Force Lean, et. al.) and report out financial results Start the journey with enabling service, support and transactional functions (i.e., FIN, HR, SC, IT, etc)
Work Product
High impact core value streams are identified, mapped, and all applicable personnel are prepared to DMAIC Accelerate Integration of organic Supply Industrial Base with external suppliers (i.e., private industry, DLA) Identify where LSS applies to the Warfighter (i.e. war-game planning events) Identify and clean legacy data bases for conversion to Navy ERP
Education and Training
1,000 Black Belts certified 2,000 Green Belts certified 25 of GS-15 /06 and above complete Champion training Synchronize LSS training body of knowledge and training methods across the DoN Incorporate initial LSS training into all training schools (review Officer, Enlisted Civilian career paths)
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Phase II Year 2 CY07
Leadership
Take XX of overhead cost out of the Department Accelerate integration w/ industrial base and be accountable for financial harvesting Re-align to DoN 07 objectives goals, and measure LSS output to DoN 06 objectives and goals All military and civilian performance evaluations and fitness reports recognize LSS contributions
Work Product
High impact core value streams are DMAIC Continuous Improvement of those activities that started before Jan 06 100 of all major Defense contracts awarded to industry will contain a LSS incentive clause Introduce Malcolm Baldrige criteria
Education and Training
1,000 additional Black Belts 4,000 additional Green Belts 100 of GS-15 /06 and above complete Champion training Optimize LSS training across enterprise BB/GB factory (incorporate into 5 vector model)
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Phase III Year 3 CY08
Leadership
Take an additional XX of overhead cost out of the Department Re-align to DoN 08 objectives goals, and measure LSS output to DoN 07 objectives and goals Accelerate Enterprise maturity
Work Product
High impact core value streams are revisited Service, support and transactional functions are in a Continuous Improvement closed loop 25 of extended (with industry) value chains have been leaned out
Education and Training
Train additional Black Belts equal to 1 of affected workforce Train additional Green Belts equal to 4 of affected workforce 100 of GS-15 / 06 and above are LSS Champions 5 of GS-15 / 06 and above are Green Belt certified
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SECNAVs Guidance for Senior Executives
Performance Align Leadership Expectations With
Workforce Accountabilities

• SECNAV Values Leaders Who
• Excel At Business / Process Improvement
• Deliver Solutions At Best Cost
• Are Change Agents
• Lead Based On Insightful Metrics
• Use LSS To Improve
• Cascade / Measure SECNAV Guidance Penetration
  Throughout Organizations

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SECNAV SMR FEEDBACK
THE SECRETARY OF THE NAVY Washington DC
May 08, 2007
MEMORANDUM FOR CHIEF OF NAVAL OPERATIONS
COMMANDANT OF THE MARINE CORPS ASSISTANT
SECRETARIES OF THE NAVY GENERAL
COUNSEL SUBJECT SECNAV Monthly Review (SMR)
Feedback from 4 May Session Thank you for the
significant effort that you and your
organizations have put into the SMR. All are
making progress towards depicting Department of
the Navy (DON) activities and programs in an
understandable way, with clear indicators of
priority and value. In particular, your listings
of the Top 5 Concerns help focus our collective
efforts to take future, meaningful action. I
would like to discipline our discussions to
center on the most significant issues, those of
near-term interest as well as those of overall
importance to the DON. I would encourage each of
you to use the SMR forum to help assemble a
cogent picture of the multi-faceted issues we
face together. I asked you last month to
improve metrics, and many improvements are
evident. Navy is commended for their progress in
the Warfare Enterprise areas, clearly the product
of hard work and careful analysis. Marine Corps
depiction of Readiness is comprehensive and
intuitive. ASN (RDA) milestone charts place key
points in context and timescale. ASN (FMC)
depicted complex reprogramming actions in an
easily understandable way. In as many areas as
possible, metrics and measures used at the SMR
should be built on an information basis,
assembling or depicting data in a structured way
that builds insight. Continue to focus efforts
on metric improvements in this regard for the
next session. The improvements in DON metrics
adds to the measure step in the DMAIC process
which underpins SMR. Continue to press your
organizations to improve SMR based on our
individual discussions last month. Though the
turn-around is quick, I would ask you to reflect
our agreements in the June SMR reports. As much
as possible, I ask you to address the Top 5
Concerns by ensuring that the strategy to
improve each one is clearly depicted in the SMR
with its accompanying metrics. Many of the Top
5 concerns should also be addressed using Lean
Six Sigma (LSS) precepts, either for the effort
itself or for its underlying processes. Where
that is the case, the LSS effort should be
clearly depicted, as well. Several good examples
were discussed in the latest session Navy
efforts in SEAL recruiting and training ASN
(MRA) Comprehensive Casualty Care Marine and
ASN (RDA) efforts in delivering Mine Resistant
Ambush Protected (MRAP) vehicles. I want to
understand how you are using LSS to move your
organizations forward. To that end, LSS reporting
should continue to document training progress to
support our reporting responsibilities to OSD in
the DoD enterprise LSS effort. High Impact Core
Value Streams should also continue to be
reported. Details of those Lean Six Sigma
efforts should be clearly depicted in the SMR
report, either in the separate LSS section or in
the details of the reporting of the activity, as
best suits. Underutilized Green and Black Belts
should be assigned to Lean Six Sigma activity
relative to your Top 5 Concerns or our
department goals and objectives. Attachment (1)
lists actions for specific organizations. Please
find the best approach to address them before our
next session on 15 June. The SIPRNet SMR
Quickplace web-site is populated with the May SMR
report, as well as archived reports from previous
months for your personal use. Please contact Mr.
Griffes, Mr. Ferko, or Mr. Tesch for further
assistance. Donald C. Winter
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CNO Guidance for 2007
2 February 2007
Focus on Execution
Each objective will be pursued using discrete,
measurable goals. The accountable Executive
Agent is listed Develop effective business
strategies for the day-to-day management of Navy
processes through the use of Lean Six Sigma and
other business practices (DNS)" The Director of
Navy Staff will develop an execution plan for the
achievement of this objectives within 60 days.
The Vice Chief of Naval Operations will review
and approve the execution plan.
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Lean Six Sigma Champions Trained or Scheduled
of Direct Reports and 1st Tier
92 (average)
Secretary of the Navy
100
Under Secretary of the Navy
100
100
100
100
100
ASN (FMC)
ASN (RDA)
ASN (MRA)
ASN (IE)
OGC
74
90
CMC
CNO
8 Dec 06
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DoN Lean Six Sigma (LSS) Journey
SECNAV Directs roll-out across all DoN Service,
Support and Transactional Activities.
DoD Senior Leadership Directs Use of LSS
ASN RDA Directs Use of LSS
2007
2006
2005
Navy and USMC Industrial Base Demonstrates Output
From LSS
2004
2003
TQL/TQM ISO 9000
2002
2001
2000
Transactional Projects Yield Output
LEAN Events on Three AIRCRAFT CARRIERS
1999
NAVSEA Task Force Lean
1990
DEPOTS and SHIPYARDS COMMENCE LEAN
NAVAL AVIATION ENTERPRISE
NAVAIR HQ AIRSPEED
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Transformational Team Leaders (TTL) Forum
LSS Network
DON LEAN SIX SIGMA Team and Process Flow
Financial Harvesting WG Jim Brice, SES NAVSEA
Education Training WG RDML Skinner NAVAIR
WG 1
WG 2
CNO
CMC
UNDER
RDA
TTL Chair Nick Kunesh SECNAV SA, LSS
FMC
MRA
IE
GC
WG 3
WG 5
Metrics WG CAPT Snedeker SECNAV OPA
Tools WG CAPT Stabile NAVAIR
WG 4
Communications WG Steve Santos, GS-15 NAVSUP
Four Outputs 1. Knowledge Based Sharing 2.
Training Standardization 3. Roll Out
Scalability 4. Financial
Harvesting
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FWG Membership

• Executive Leader Value Stream
  Champion
• Mr. Nick Kunesh, SECNAV SA Ms. Caral
  Spangler ASN (FMC)
• Team Leader Black Belt
• Mr. Jim Brice, SEA TFL Ms. Chris
  Cummings, NAVAIR
• Team Members
• Sally Reams, ASN (FMC)
• David VanDornick, Mike Hansley, Susan Yang,
  NAVSEA
• Capt. Bob Novak, NAVAIR
• Dale Criswell, NAVSUP
• Bob Kamensky, Greg Hansford, Tom Straughn,
  SPAWAR
• Dave Clifton, Pat Lynch, USMC
• Katherine Clark, NAVAUDSVC
• Carla Moore, PEO(IS)
• Gary Younes, DASN (CHR)/OCHR
• Cdr. Duane Schatz, Junius Wright, (ONR)
• Oscar Friedman PEO(LMW)
• Capt Chuck Mingonet, Cdr Steve Evans, OPNAV N8
• Gloria Tuck, OPNAV N4
• Heidi Bopp, ASN(MB)

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Benefits Categorization Types 1, 2, and 3
(Phase 1)

• Type 1 Permanent cost reduction identified to
  BLI(s)
• (Hard Savings)
• Example Elimination of non-labor cost reduced
  CSS Support elimination of whole work-year(s)
  and associated billets
• Type 2 Potential cost reduction from decreased
  cycle times or improved equipment/space
  utilization (Soft Savings)
• Example Improved resource utilization to
  produce a product (work-year reduction, but does
  not eliminate a billet, improved capital
  equipment utilization, partial footprint
  reduction)
• Type 3 Other benefits (Cost Avoidance)
• Example Improves safety, customer satisfaction,
  quality, and work-life. No financial validation
  required
• (Industry Equivalent Terms)

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Financial Benefits Validation Process Phase 1
Project Charter Pre-Launch
Define
Measure
Control
Analyze
Improve
Validate
End
Start
(R/A) Updates DMS
(R) Projects Financial Benefits Enters project
into DMS
(R/A) Updates DMS
DC
(R) Calculates and completes initial FBW (as-is)
baseline data (DMS Metric 2)
(R) Completes FBW with Manpower and BLIs (DMS
Metrics 35)
(R) Prints out FBW and the FR Documentation of
Review Sheet and brings to TG.
(R) Examines expected benefits during define
phase. Reviews/ updates project charter. Ensures
benefits are realistic.
(R) Updates project charter benefit estimate if
root cause analysis results in any change.
(R) Requests FR from SFL (Electronically)
(R) Updates FBW (Non-Recurring and To-Be
Costs) (DMS Metric 2)
(R) Contacts FR for planning purposes
Belt
(R) Electronically notifies FR of FBW to be
reviewed/validated early in Control Phase. (NLT 2
weeks before tollgate)
(R) Identifies the appropriate FSME and informs
FSME and Belt
(R/A) Validates Process and Financial Benefits
PS
(R/A) Notifies Customers of Financial Impact to
BLIs
(R) Reviews FBW and inserts comments on the FR
Documentation of Review Sheet. (Locks Estimate
in DMS)
(R) Reviews charter for familiarization.
(R) Validates Financial Benefits (Locks Actuals
in DMS)
FR
(R) Reviews project charter and assigns FR.
Informs Belt, FR, PS and DC.
SFL
Key DC Deployment Champion (Lean
Champion) PS Project Sponsor (Value Stream
Champion) FR Financial Representative
(Independent Reviewer) SFL Site Financial
Lead CLFR Command Level Financial Rep FSME
Financial Subject Matter Expert
CLFR
(R/A) consolidates reports Command Type 1
Type 2 Benefits
FSME
Assists Belt with compilation of financial
information
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Leveraging Financial Benefits Phase 2
Execution Year
Out years
Budget Year
Start
Key CLFR Command Level Financial
Rep PM Program Manager/Responsible
Manager PEO Program Executive
Officer Ent Enterprise FMB
Navy Comptroller (ASN/FM) CNO/CMC Chief of
Naval Operations /Commandant Marine Corps
(OPNAV)
1B
Disseminates Type 1 Benefits by BLI for all
Fiscal Years and identifies as Type A or B
PBIS Report
CLFR
Enterprise is defined as follows For Navy Fleet
Readiness Enterprise for Current Readiness and
Provider Enterprise for Future Capabilities
Support of Current Readiness. For MC Deputy
Commandants, MARFOR Commanders, Commander MCSC
and Director C4I.
1A
PM/PEO Reprioritizes and Reprograms Type 1A
Benefits in YOE
PM/PEO/ OPBUD HOLDERS
PM/PEO Informs Appropriate Enterprise and CNO of
Benefits
Enterprise keeps Book on BY Benefits - Offsets
Congressional Reductions or Holds for Execution
Year
Enterprise Informed of BY Benefits
Enterprise Reprioritizes Reprograms and Informs
CNO/CMC
Enterprise Provider or Fleet Readiness
CNO/CMCACMC, DC PROG RES.
CNO/CMC Prioritizes Structures Budget in POM
Years
CNO/CMC Informed of outyear benefits
CNO/CMC Informed
FMB Approves via normal BTR or ATR process
FMB Approves via normal BTR or ATR Process
FMB
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Department of the Navy Lean Six Sigma Density
Event Metrics
As of Feb 07
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Standardization of Definitions
                  Standardize the terminology of
specific CPI programs DoN definitions have been
approved for Lean, Six Sigma, Theory of
Constraints (TOC) and Kaizen.   Lean A
systematic methodology for continuous process
improvement based on the principles of customer
value, waste elimination, and pursuit of process
perfection. Lean is unique from traditional
process improvement strategies in that its
primary focus is on eliminating non-value added
activities and creating flow and pull in the
value added activities. A major result of Lean
is an improvement in cycle time. Lean attacks
waste.   Six-Sigma A systematic methodology for
process improvement that focuses on reducing
variation, producing highly repeatable processes,
and creating customer satisfaction. Six-Sigma
utilizes the Define-Measure-Analyze-Improve-Contro
l (DMAIC) methodology to make process change
through disciplined use of facts, data, and
statistical analysis and control of existing
processes. It also includes an understanding of
customer needs and diligent attention to
managing, improving, and reinventing business
processes. Six-Sigma attacks variation.   Theory
of Constraints (TOC) A systematic approach to
optimize resource utilization by identifying,
exploiting, subordinating, elevating and
reassessing constraints in the process.
Scientific principles are applied as a set of
logical thinking processes to develop
transformational, breakthrough business
solutions. A constraint is any resource whose
capacity is less than the demand placed upon it.
TOC attacks constraints and barriers (a
restriction or other block to increases in
output).   Kaizen (also known as Kaizen Event)
A Japanese term meaning Continuous Improvement.
In Lean Six-Sigma terms, it refers to a highly
focused, short-term rapid improvement event
performed by cross-functional teams at the
work-group level that identifies and removes
waste from a process. Good Kaizen events follow
the Define-Measure-Analyze-Improve-Control
(DMAIC) recipe, can be performed quickly (usually
less than two months), and involve the use of
basic Lean Six-Sigma tools to implement process
improvement solutions. Kaizen is focused on
rapid improvement.
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Standardize DoN certification process for
   
Mentoring
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DoN/ASQ Lean Six Sigma (LSS) Black Belts
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Lean Six Sigma Software Tools

• iGrafx Process for Six Sigma
• LSS expert/Black Belt/Green Belt process mapping
  and analysis tool
• Optimizes processes via modeling and simulation
  capability
• Captures knowledge (value stream and process
  maps) for sharing and enabling replication
• Minitab
• Statistical software designed to support Lean Six
  Sigma and other quality improvement projects
• Integrates seamlessly with iGrafx
• Deployment Management System (DMS)
• Web-based application for managing
  enterprise-wide Lean Six Sigma deployment
• Currently in Phase I deployment at NAVAIR

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Lean Six Sigma Improvements for CVN-21 Milestone
B
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CVN-21s Milestone B Documentation Effort

• 7 CVN-21 MS B documents analyzed
• Man-hours expended 245,742
• Total cost 18.4M
• Total review touch points 6,952
• Non value add (NVA) touch points 6,654
• 56 different organization touch-points
• Average number of organizations touched per
  document 22
• NVA cost 11.171M (96)
• NVA man-hours 148,939

Teams Perspective 11.17M NVA touch points
Note Above data based on CVN-21 Milestone B
complexity analysis. NVA determined from CVN-21
team perspective.
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CVN-21s Milestone B TEMP Time and Motion Study

• TEMP Doc Data Summary
• Queue Time included in NVA routing 26 days
  for approvals
• Total Man-hours 16,612
• Total Cost 1.246M
• Total Arrows 377
• VA 47 (12)
• NVA 330 (88)
• NVA Cost 1.091

Note Arrows represent review loops, red are non
value added, black are value added.
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Justification and Approval (JA) ProcessRapid
Improvement Event
Goal Reduce JA flow time and rework increase
review time flexibility

• Current State Analysis
• 41 day average flow time
• 51 Hand offs
• 1 first pass yield
• 40 submitted electronically
• Five serial reviews

• Future State Solution
• 5.4 day average flow time
• 11 Hand offs
• 74 first pass yield
• 100 submitted electronically
• Three serial reviews

• Streamlined process
• Increased automation -all reviews electronic
  --instant receipt notification
• Reduced serial reviews / rework
• Content requirements communicated to SYSCOM
  submittal templates created

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Justification and Approval (JA) ProcessRapid
Improvement Event/Value Stream Mapping
33
BFMC Lean Pilot Solution OutcomeReimbursable
Funding Documents to NAVAIR Field Activities

• Pre-VSA State
• 30 plus steps (all serial)
• 16 queues
• 8 work-arounds
• Multiple hard copies
• 12 review and approval steps
• 28 day average processing time

• Current State Solution
• 15 steps (4 performed concurrently)
• 4 queues
• No work-arounds
• Fewer hard copies
• 5 review and approval steps
• 4 day average processing time

• Moved downstream activities up front
• Brought all parties to table expanded IPT
• Removed WAIT time (queues)
• Ensured complete and accurate product early
• Reduced rework/rejects
• Leveraged ERP ensuring all financial links match
  project plan to performing activity

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Summer Hire ProcessNAVAIR AIRSpeed
Type Study KAIZEN
Goal Streamline and reduce costs of summer hire
program

• Pre-VSA State
• 4,000 man hours expended to execute process
• 24 Process Steps
• 70 day Process Cycle Time
• 12.8K per recruit
• Voice of Customer not identified

• Current State
• 1,000 man hours expended to execute process
• 4 process Steps
• 45 day Process Cycle Time
• 2.4K per recruit
• Voice of Customer integrated

Savings One man-year in labor, faster, simpler,
customer friendly
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SECNAV Congressional Response Process Kaizen
Project
Business Impact
Problem/Goal Statement


Problem Currently Department of Navy
Congressional Responses are not meeting internal
Navy cycle time requirements of 7 work days and
the quality of the responses is not consistent.
SECNAV has established the ASN (IE) project as a
prototype for replication purposes. Since the
beginning of 2006, the mean ASN (IE) Process
Cycle Time has been 17.8 work days. Scope The
scope of this project will include the response
categories of Congressional Constituent,
Congressional Member of Congress. Goal
Decrease the mean Process Cycle Time from 17.8 to
7 work days.

• Financial Impact
• Type I Savings none anticipated at this time
• Type II Savings TBD
• Non-Quantifiable Benefits
• Better customer relations with Congress

Timeline
Core Team

• Dr. Donald Winter Project Sponsor/Process
  Owner/Green Belt
• CDR Jim Aiken Deployment Champion
• Phil Zalesak Black Belt
• Steve Bonacorsci Master Black Belt
• Core Team Role
  LSS Training
• LT Ball SME Yellow Belt
• Catherine Timco SME
  Yellow Belt
• YN1 Suggs SME Yellow Belt
• Alan Anglin SME Yellow Belt
• Jim Ives SME Yellow Belt
• Denise Brown SME
  Green Belt
• Oral John SME Green Belt
• Extended Team
• TBD (ASN IE)

• Event Date
• Initial tasking 7/6
• Scoping 7/17
  8/23
• Kaizen preparation 8/24 9/9
• SECNAV Brief 9/12
• Kaizen 9/18
  9/21
• Implementation 10/2