Looking To Get Lean? A&D Companies Turn to MES for Manufacturing Excellence
Tuesday, June 06, 2006
Kevin Reale, Simon Jacobson
According to the “Aerospace and Defense Industry IT Spending Profile, 2005-2006: Get Lean and Improve Your Data Utilization,” the application of lean manufacturing practices and better data utilization and analysis throughout the organization are major factors in A&D IT spending.
In a recent study, 51% cited ERP-related spending of the A&D IT budget as most important, while only 16% identified manufacturing operations as most important. For several A&D manufacturers, making an ERP investment is fertile enough ground, as many are considering ERP for the first time, with business pressures having tested the scalability and capacity of incumbent MRP packages. Despite ERP commanding the lion’s share of the IT budget, though, investments in manufacturing efficiencies should not go overlooked.
As business process transformations continue in the A&D sector, companies have a number of logical post-ERP implementation investments that they should consider. Foremost among these are those that increase the usability of data now available to improve processes and eliminate redundant and outdated legacy systems in the manufacturing environment.
Going paperless in the manufacturing environment creates tremendous opportunity for reducing waste and creating continuous improvement. Seeing immediate benefits in productivity and quality are not uncommon with MES deployment—see “MES Provides Long-Term Revenue and Market Benefits Beyond Easy-to-Quantify Operational Cost Savings.”
Case Study: Lockheed Martin flies lean
We recently spent time onsite with Lockheed Martin to get a first-hand view of its project to remove paper and manual processes across multiple programs, including the Joint Strike Fighter initiative, and manufacturing facilities.
Lockheed has been practicing lean manufacturing techniques for several years, as we found in a walk around its facilities, SQDCP metrics (safety, quality, delivery, cost and people) as well as 5S and pull-based replenishment processes were in abundance. These activities are all critical to eliminating waste.
Lockheed also identified waste in its ability (or inability) to respond to product/process changes, track job progress, and poka yoke (error proof) its production operations. The old method included planners making changes to existing drawings, and these changes being manually distributed to the plant floor, opening up the possibility of costly inefficiencies.
Back in early 2000, the company developed requirements to automate the process to make the operation work smarter and more efficiently. These requirements turned into electronic work instruction (EWI), which is based on the MES technology provided by Visiprise. The EWI solution, initiated in 2002 and scheduled for completion by the end of this year, is expected to be deployed to four different facilities throughout the United States.
The goal of this project is to eliminate the time, error potential, and resource management constraints that paper-based processes and a legacy mainframe system created and push efficiencies and common practices into the manufacturing environment. EWI allows for real-time communication of product/process changes, electronic assignment/tracking of work, and job level interlock—that is, only qualified production personnel can start a job assignment.
In our discussion, Lockheed identified the three initial benefits.
Quality management
By going paperless on the shop floor, Lockheed now has a standardized mechanism to better collect and examine data related to the three key metrics that organizations can use to track their quality performance: time, cost, and variance (see “Quality Management, Part II: Unify and Conquer”). It can now manage quality metrics, such as hours per unit (cost, time) and scrap and rework (cost, variance) on an individual program basis. Manufacturing planners can also now put immediate holds on orders not yet released to production and on works in progress to eliminate further quality spills.
Organizations starting down the paperless path should seek the ability to perform root-cause analysis beyond manufacture to understand the reasoning behind systemic quality issues and then remedy them with further training, process and product redesign, and supplier rationalization. This is the main benefit from this centralized quality data capture.
Lean production systems/corporate-wide performance management
The basic elements of lean manufacturing are waste elimination, continuous improvement, one piece workflow, and customer pull. When these elements target cost, quality, and delivery, you have the basis for a lean production system.
One of the challenges any aircraft program faces early in its lifecycle is engineering change notifications (ECNs) and additional product variants. The velocity at which these changes and new items can be communicated to the production floor, as they relate to engineering data and work instructions, distinguishes Lockheed from competitors. It can better reduce waste, enable error-proofing, and create continuous improvement in the manufacturing process and at human capital levels.
Elimination of waste
Lean manufacturing identifies seven types of waste:
Over-production
Inventory
Conveyance
Correction
Motion
Processing
Waiting
To improve quality and reduce costs related to these, Lockheed, using EWI, improved the following processes:
Work instructions
Order process time
Order visibility
Quality record tracking processes
Nonconformance processes
Engineering change processes
Getting people onboard
Despite the benefits of going paperless, Lockheed still has difficulty with change management. With the introduction of paperless work order dispatch and data collection, some shop-floor workers needed to be educated on basic computer skills, which were organized in tandem with the union to ensure buy in from all 10,000 workers affected by this technology.
However, once system adoption is standardized and operators are individually tied tightly to performance of a program, companies need to identify skills gaps, and then provide the necessary training to remedy these skills gaps.
The other training aspect to consider involves new employees. According to the Commission on the Future of the U.S. Aerospace Industry, the aerospace workforce is aging, with an estimated 27% of workers eligible to retire by 2008. Lockheed expects to be delivering approximately one F-35 Joint Strike Fighter aircraft per day when it reaches peak production around 2012. Bringing new production assets online and ramping up new employees to manage these assets in the coming years should be made easier with the level of automation EWI provides.
Conclusion: manufacturing needs to take off in A&D
After several years of lackluster performance, the A&D market for MES is showing signs of renewed vigor, jumping to $57M in 2004 from an estimated $23M in 2001, nearly a 150% leap, AMR Research data shows. A market opportunity is also surfacing in A&D with the large primes that need, within their extended supply networks, technology integration across distributed manufacturing to encourage faster new product development and introduction (NPDI).
As A&D manufacturers continue their demand-driven journeys and build out their supply networks to be more agile and responsive for delivery of a predictable quality product, manufacturing’s role should not be overlooked. While A&D companies are intent on ERP investments, projects such as Lockheed Martin’s EWI initiative should be considered to unearth opportunities for waste reduction and quality improvement, data collection, and workforce management improvements, which will only enhance the data that is used to feed the ERP beast.
© Copyright 2006 by AMR Research, Inc.
