Field Report: Lean Manufacturing and Six Sigma at Raytheon IAD

By Ralph Rio, ARC Advisory Group

The Council of Supply Chain Management Professionals organized a plant tour of the Raytheon Integrated Air Defense (IAD) center in Andover, Massachusetts. This site has 4,000 employees, including 1,500 union members, and is a prime contractor for the military - characteristics that one would not normally assume are those of a leader in Lean Manufacturing and who is a recent Northeast Gold Shingo prize winner. They started with Six Sigma in 1999 and added Lean in 2003.

Excellent timing gave their Lean Manufacturing program a strong start. Three key constituencies came together at the same time. One, their prime customer, the US Navy, was ramping-up their requirements and wanted Raytheon to adopt a Lean program to improve production. Two, Raytheon had a few new members of senior management that where Lean Manufacturing advocates. Three, enlightened Union leadership approached management offering their help to keep the jobs local. Kind of like a perfect storm, but in a good way.

The Raytheon Lean Manufacturing program has, at its core, a focus on cultural change while connecting with the people who do the work with respect and integrity. The mind set transitioned from "entitlement" (not my job), to "activity" (look busy), and then to "results" (achieve the objective). Measurements in the form of dashboards are displayed in common areas. Several include large LCD monitors that are automatically updated every 15 minutes.

Raytheon's approach to the program had four distinct phases, 1) set a vision, 2) establish commitment from the executive team, 3) plan a change management process, and 4) develop people's skills. In terms of Lean Manufacturing methodologies, they have a best practice template where they are applied in a sequence steps. The typical sequence is training, quality tools, PokaYoke, 6S, Visuals, VSM (Value Stream Mapping), Cells, SMED (set-up reduction), pull (Kanban), and TPM (Total Productive Maintenance). Team members for a cell meet for 15 minutes at the start of each shift to identify issues and share best practices.

The adoption of Lean also affected their information systems. With Lean, they identified a need to facilitate cross-functional teaming. Previously, many of the software applications were independent silos of information. Now, they have connected the appropriate applications for information integration.

The tour included three major manufacturing lines within Raytheon's facility. They were electronic printed circuit board assembly (surface mount devices), metal fabrication (CNC machining and welding), and mechanical assembly. Each had its own application for managing work-in-process (WIP). The circuit board assembly area had a nice electronic Kanban application using barcodes for data entry.

During the tour, a few results where mentioned. Overall, there has been a 44 percent reduction in inventory. They where able to increase production 50 percent within the same floor space; meeting the requirements of their key customer, the Navy. And, the Union is happy with the improvements, because outsourcing was prevented and their jobs stayed local.