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Business & Career Improvement
Implementing Lean Six Sigma
- Categorized in: Six Sigma News
What do these three organizations, and numerous others, have in common? They've all implemented Lean, Six Sigma and similar initiatives and programs to improve efficiency, productivity and quality. The results often are stunning, but they do come at a price, which few people are willing to discuss, and require much more than a short-term commitment from management and labor.
Collins Aviation Services (CAS), a division of Rockwell Collins, began its lean journey in 1999, when TAT to repair a standard avionics box was a pathetic 22 days, with only six of those days spent on direct repair. That was unacceptable if CAS expected to compete in the highly competitive maintenance, repair and overhaul (MRO) business, remembered Harry Gregory, vice president and general manager. Following the implementation of Lean principles, the TAT for most repairs of radios, radars and displays dropped to just more than four days.
United Services, the maintenance division of United Airlines, began implementing Lean solutions in late 2004, initially attacking eight areas of inefficiency, including how far a part travels before it's repaired. United reduced the distance that landing gear traveled from 20,000 feet to just 3,500 feet. As a result of this and other Lean initiatives, the TAT for landing gear went from 70 days to 35.
United Services has since begun the Lean transformation process for repairing Pratt & Whitney PW4000 power plants and hopes to save $90 million in MRO-related expenses by the end of 2006.
Several years ago, the U.S. Army Materiel Command (AMC) began implementing Lean Six Sigma principles throughout its depots and some line maintenance units to improve the readiness of equipment and drive down repair costs and time. Proof of Lean and Six Sigma's value is seen clearly at the Corpus Christi Army Depot. The depot's prime mission is to overhaul the T700/CT7 engine family that powers more than 25 types of fixed-wing and rotary aircraft, including the AH-64 Apache and UH-60 Black Hawk helicopters. By implementing Lean and Six Sigma, the depot was able to reduce by 64% the overhaul time for one T700.
For the Six Sigma portion, the depot improved its repair operation's consistency by increasing the mean time between overhauls for the engine from 309 hours to more than 900 hours. Before Six Sigma, only 40% of the overhauled T700 engines passed the operational tests initially, so they had to be reworked. Now the first-time return-to-field accuracy is above 90%, according to GE.
"We can now see major success stories from implementing Lean and Six Sigma," said John Johns, special assistant to Gen. Benjamin S. Griffin, commander of the AMC. Johns is responsible for the training and implementing Lean and Six Sigma throughout AMC. Lean has found a home with the U.S. Navy, as well. Lean and Six Sigma principles have helped reduce the TAT for intermediate maintenance performed on the GE F404 engine by the Aircraft Intermediate Maintenance Department, Naval Air Station Lemoore, Calif., from 83 days to five days, as well as increased on-wing reliability by 50%. Similarly, the Navair Depot in Jacksonville, Fla., implemented Lean and Six Sigma and reduced repair times on the F404 by 50%, according to the U.S. Department of Defense (DOD).
Defining Lean can be challenging. For the lay reader, Lean is the elimination of waste and enhancement of workflow, while Six Sigma deals with improving consistency and quality of the product and processes.
Singapore Technologies Aerospace (ST Aerospace), whose MRO network includes facilities in Mobile, Ala., San Antonio, Texas, and Bournemouth, England, in addition to Singapore, uses Lean in its four-part quality assurance program, SEAL, which stands for Safety, Excellence, Accountability and Lean. Of the various elements of Lean, none is more important to ST Aerospace than Kaizen â€” the concept of eliminating waste. "It would be fair to say that Kaizen has been our main tool that has supported the company's global thrust towards greater efficiency and productivity, and the results have been extremely encouraging so far," said Ho Yuen Sang, deputy president and chief operating officer for ST Aerospace.
ST Aerospace began its Kaizen journey in 1997. Since then, Kaizen-driven projects have resulted in estimated savings of around $14.5 million system wide â€” $4 million in 2004 alone. Nearly 80% to 85% of these savings is realized and does not include individual projects conducted separately by its subsidiaries, explained company spokeswoman Audrey Tan. ST Aerospace spends on average $80,000 annually to promote the Kaizen process.
In researching this article, O&M found numerous examples of how Lean, Six Sigma and other manufacturing and service-enhancing concepts benefited civilian MROs and military depots. The magazine did not find any instances in which Lean failed, but several MROs and Lean experts indicated that applying a few Lean elements will not guarantee a successful Lean operation.
Several manufacturers and repair facilities said they were spending millions of dollars in transforming their facilities into Lean machines. Because today, lean means green. But everyone queried also pointed out that numerous challenges must be met.
Making Lean Work
Certain elements must be included if any Lean program is to be successful. Typically, active leadership, and partnerships between management and labor, must be part of any Lean initiative, according to several efficiency experts and MRO leaders.
"The leader has to be on the floor as a participant for change," said Collins' Harry Gregory. "Without that involvement, you will have problems."
Convincing the labor unions to embrace Lean is a must. Management needs to prove to aircraft maintenance technicians that Lean doesn't stand for "Less Employees Are Needed," quipped U.S. Air Force Col. James Hannon, commander of the 76th Aircraft Maintenance Group, Oklahoma City Air Logistics Center (ALC), which overhauls various transports and bombers for the U.S. Air Force (see sidebar on p. 30).
Labor agrees. "Many of these [Lean] change programs are useful tools, but they are not the end all unless we change the relationship and culture in the workplace," said Jim Reid, Grand Lodge Representative for the International Association of Machinists (IAM), which represents mechanics at a number of airlines. The employees have to be assured "that they won't improve themselves out of a job," said Reid, who works in the IAM's High Performance Work Organization Department, which helps foster labor/management partnerships.
Bill Norman, vice president of base maintenance for United Services, believes a key component to implementing Lean successfully is to get "ideas from the shop floor." "A number of these Lean teams are being led by our AMTs," said Norman. In time, United Services will be an integrated Lean/Six Sigma operation. But for now, the MRO is concentrating on making Lean work.
Norman emphasized that there are three fundamental elements for MRO providers to consider: 1) the operating system, which covers work on the shop floor; 2) management infrastructure, and 3) mindsets and behaviors. Norman and others consider the last element the most important.
In addition to labor and management buy in, consistency and sustainability must be maintained. There are no quick fixes and Lean is not a panacea for total success. Depending on the size of the MRO operation, the complete transformation to Lean can take between two and three years, according to Standard Aero, a leading engine repair company based in Canada. Integrating Lean and Six Sigma programs to assure continuous workflow and quality has become common among both manufacturers and maintenance groups.
A comprehensive approach implementing both Lean and Six Sigma is preferred, according to Kevin Duggan, principle with Duggan & Associates, and Andres Gutierrez, vice president of business development and government services for Standard Aero. Even General Electric, which was a driving force behind Six Sigma implementation in the U.S., has realized that combining the two may be more beneficial, said Ed Constantine, president of Simpler Consulting Inc., which helps develop Lean programs for businesses. What has happened curiously is a reverse mindset for those that promote each discipline. The Six Sigma person started to work on flow, while the Lean person started to pay more attention to quality," said Constantine. "This is why both concepts have begun to be linked up in the same breath," he added.
Linked or not, a Lean/Six Sigma program will fail unless the mindsets of all employees change. "To create a truly Lean MRO operation, the first step is to change the way people think," said Duggan, who has helped implement Lean principles at Sikorsky Aircraft, Pratt & Whitney, Messier-Dowty and United Airlines, among others. "There are a minimum number of Lean principles to be followed in any MRO operation," he said. "Adopting a few Lean events won't cut it."
Pratt & Whitney has improved its production and service processes through its Achieving Competitive Excellence, or ACE program, which combines elements of Six Sigma and Lean's value stream mapping. Improvements in on-time delivery and TAT indicate that Pratt & Whitney made the right decision when it implemented ACE in 1996. Between 2002 and 2004, engine overhaul statistics at both its engine overhaul centers, as well as at its part repair facilities, improved. Delivery performance at the overhaul center increased to 93% from 77%, and at the repair facility, it increased to 95% from 83%; TAT went from 80 days to 62 and 27 days to 22, respectively.
"By combining elements of each program, we believe that we have struck the right balance to maximize improvements of the business," said Scott Glickman, director of quality for Pratt & Whitney Aftermarket Services.
Combining elements of Lean and other efficiency tools is a concept getting some attention within the MRO community. The Thomas Group, a consultancy specializing in implementing efficiency processes, has applied its Process Value Management (PVM) program to enhance pilot training and aircraft maintenance for the U.S. Navy. Luke Gill, executive vice president of the Thomas Group, said PVM combines elements of Lean, Six Sigma and the Theory of Constraints (TOC), a concept developed by Eliyahu Goldratt, Ph.D. TOC is designed to improve the bottom-line of businesses by first dealing with an organization's constraints.
Tools & Partners
Eagle Services Asia, a joint venture of SIA Engineering Co. (SIAEC), a subsidiary of Singapore Airlines, and United Technologies/Pratt & Whitney, is one of the best for implementing the 5Ss, a key element of Lean that stands for Sort, Set in Order, Shine, Standardize and Sustain, said Duggan.
"Of the 5Ss, the last one, sustain, is the hardest one to achieve," admitted Greg Minor, general manager for AAR Corp.'s composites facility in Clearwater, Fla., which is in the early stages of its Lean journey. AAR Corp., which has 14 certificated repair stations systemwide, expects to reduce turnaround time on components by 30% to 40% once the Lean program is fully implemented, said Minor.
SIAEC, which performs major maintenance on widebody aircraft for numerous airlines, is known for applying mixed model value streams through which multiple products are run, such as seats and galley repair. This combination has resulted in a "significant reduction" in TATs, observed Duggan. [SIAEC is a client of Duggan's.]
Partnerships also are key to Lean's success. "To be successful at [implementing Lean/Six Sigma principles] takes a partnership with industry and, to some extent, academia," said David Pauling, U.S. assistant deputy undersecretary of defense of maintenance policy programs and resources. "We can't do it alone."
The partnership between the Corpus Christi Army Depot and GE Aircraft Engines (GEAE) was a key reason why the Lean/Six Sigma transformation was successful there. Last year, the Army gave its Aviation Materiel Readiness Award to GEAE for its support in improving the quality of work and TAT on the T700. Through a five-year depot teaming agreement, which runs through the end of this year, but may be extended, GE assisted the depot to implement Lean/Six Sigma processes at Corpus Christi.
Lean and Six Sigma principles appear to fit in with DOD's cost cutting and size reducing initiatives. In April 2004, DOD issued a broad policy that included a mandate for better maintenance processes at various depots and in the field. The mandate is part of the Continuous Process Improvement program initiated by DOD four years ago. In a recent interview, Pauling said the next phase to improve maintenance processes would require that contractors have some elements of Lean or Six Sigma in place. A DOD-led syllabus to teach Lean and other efficiency-related principles is being developed.
Determining exactly how much an MRO invested in its Lean transformation is a difficult nut to crack. A number of MROs and OEMs declined to give specific figures on implementing Lean. Part of their reticence is due to confidentiality agreements with customers. But some admitted that they didn't want to publish the exact cost to implement Lean, or the time it took to obtain the return on investment, or project revenue increases due to Lean because of how the figures might be perceived or misrepresented by competitors. However, a few MROs were willing to approximate the cost of Lean. Transforming a large maintenance facility to a Lean operation costs between $15 million and $30 million typically, said Standard Aero's Gutierrez. The variation in transformation costs is due primarily to the size of the facility to be transformed and the sophistication of the product to be serviced or manufactured. Return on investment will occur within 1.5 years, he said.
Another benefit of Lean â€” and one rarely highlighted â€” is how it helps contribute to a more environmentally friendly operation. For instance, Standard Aero's San Antonio facility is one of two in Texas to be registered ISO 14001, far above the environmental emissions standard of ISO 9001. By eliminating waste, distance traveled and having tightly controlled processes, Standard Aero reduced emissions and discharge.
Gutierrez believes the "anything Lean is great" mantra up to a point. Apart from increasing workflow and increasing the quality of product, Lean and Six Sigma principles should reduce maintenance costs ultimately.
"At some point, you need to ask about the cost of implementing Lean," Gutierrez said. A less than comprehensive lean transformation is another problem. "We've seen a lot of Lean or Six Sigma efforts fail [at other MROs] because of a lack of integration throughout the operation," said Gutierrez.
In what he described as the "mattress effect," the Lean principles initiated in one area may be successful, but the change is not facility-wide. As a result, the problem is transferred elsewhere. The savings in one area gets "masked by other inefficiencies," he added.
Some efficiency experts warn against falling into the "quick fix" trap. Some MROs have implemented Kaizen (point improvements along the manufacturing or maintenance path), such as brightening the work area and making it more organized. However, employing a few Kaizen events may improve flow, but the efficiency transformation will not be system-wide.
Lean and its brother Six Sigma appear to have proven their net worth in the highly volatile MRO market. Even the skeptics appear to concede that these principles are more than the irrational exuberance toward cost savings on the part of well-intentioned management. But even the proponents concede that those MROs that transform to Lean must apply them evenly and comprehensively and then wait patiently for change to come.
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