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AME/APQC Benchmarking CoP Virtual Networking Event July 26, 2011

Effective Benchmarking Glenn Marshall - Supply Chain Quality Bill McHenry - Human Resources Newport News Shipbuilding

2 ©2011 APQC. ALL RIGHTS RESERVED.

Housekeeping All lines are muted.

You can submit questions/comments at any time. We will address all questions during the Q&A session at the end of today’s presentation.

Links to the slides and recording will be made available and sent to all attendees via e-mail.

Follow-up survey to provide more feedback.

AME/APQC Benchmarking CoP Virtual Networking Event July 26, 2011

Effective Benchmarking Glenn Marshall - Supply Chain Quality Bill McHenry - Human Resources Newport News Shipbuilding


Session Agenda 10:00 a.m. Welcome/Housekeeping

10:05 CoP Business

10:10 Benchmarking Presentation

10:45 Open Q&A

11:00 Adjourn


2011 Benchmarking CoP Calendar

Month Session Information Status

January Cost Factors Considered When Locating Manufacturing Facilities Complete

February Supplier Relationship Management Research Findings Complete

March AME Award Winner Showcase: DJO Global, Inc. Complete

April AME Award Winner Showcase: Parker Hannifin Hydraulic Filter Division Complete

June Knowledge Management at Rockwell Collins, Inc. Complete

July Effective Benchmarking Today

August Moving Beyond the Improvement Tools – Michael Bremer Aug. 23

September The Quality Journey in K-12 Education TBD

October Face-to-Face BCoP meeting at AME National Conference TBD

November AME Award Winner Showcase TBD

December AME Award Winner Showcase TBD


AME Events (www.ame.org) 08/03 Tinley Park, Illinois

Lean A3 & PCDA Thinking at Panduit

08/11 Minneapolis, MN, Minnesota Sustaining 5S & Visual Management Efforts

08/16 - 08/18 Lexington, Kentucky Lexington 2011 Regional Conference—America’s Heartland of Lean

08/23 - 08/24 Redmond, Washington Visual Management-Visual Controls FULL

08/24 Fishers, Indiana TWI Introduction Seminar: Learn by Doing

08/24 Mildord, Delaware Visual Controls in the Workplace

08/30 - 09/01 West Monroe, Louisiana Breakthrough Kaizen & Benchmarking

08/31 - 09/01 Huntsville, Alabama Lean Bronze Certificate Preparation Course & Exam

10/24 – 28 Dallas, Texas AME Dallas 2011!!!! - http://www.ameconference.org

http://www.ame.org/

http://www.ameconference.org/

http://www.ameconference.org/


APQC Events Upcoming Benchmarking Projects

Supplier Category Management: Driving Value Through the Procurement Organization

Harnessing Enterprise Quality Measurement to Create Business Value

Improving the Transfer of Knowledge in Product Development

Scientific and Technical Talent Management

Building Strong Process Management Capabilities

More Information: http://www.apqc.org/best-practice-studies

APQC Fall Process Conference and Member Meeting November 7 – 11, 2011

Houston, Texas

More Information: www.apqc.org/process-conference-2011-overview

http://www.apqc.org/best-practice-studies







http://www.apqc.org/process-conference-2011-overview







Benchmarking

Using Self Assessments &

Gallup Survey To Increase

Engagement

HUNTINGTON INGALLS INDUSTRIES COPYRIGHT 2011

Glenn Marshall

Supply Chain Quality

Bill McHenry

Human Resources

26 July 2011

2

Newport News Shipbuilding A Division of Huntington Ingalls Industries

Builder of the most complex ships in the world for the past 125 years


3

• Sole supplier of U.S. Navy aircraft carriers, the world’s

largest warships

• One of two builders constructing the Virginia-class

nuclear submarines

• Largest industrial employer in Virginia—nearly 19,000

employees

• Exclusive provider of refueling services for nuclear-

powered aircraft carriers

• Handles and stores more Aircraft Carrier and

Submarine fuel than any other non-governmental

agency

• Largest non-governmental provider of fleet

maintenance services to the Navy

• Home of the Western Hemisphere’s largest

dry dock and crane

Newport News Shipbuilding


4

Quality - A Historical Perspective


Our Continuous Improvement Journey


“Always

Good

Ships”

“Energy and persistence conquer all things.” - Ben Franklin

NNS Benchmarking Maturity Matrix


CI Initiatives Benchmarks Prior State Current State - 2006 Future State - 2012

Strategic Planning -

Hoshin Kanri

Toyota

Danaher - AME

Conference

LEAN not part of

Strategic Business

Plan

Lean Part of the Strategic Business Growth

Plan - Silo moving to VS

Lean is key business driver and Value Stream

Thinking is in place

Business / Quality

System

Toyota

Danaher - AME Silo Thinking Continuous Improvement System (CIS)

CIS System is deployed and used routinely to

prevent problems and improve quality

Lean Accounting /

Balanced Scorecard

Danaher - Lean

Accounting

Summit - AME

Traditional Metrics Adopting Measure What Matters (MWM)

Defining leading metric to support Key

Performance Indicators (KPI) for People, Q,D,C,

& Sustainability

Training Within

Industry

WW II TWI

Shipbuilding -

Toyota - ESCO

Started training

Supervisor and

Foremen

Enhanced Personal Leadership (EPL) -

Management Operating System (MOS)

TWI Pillar of CIS - Respect for People (JI) & (JR)

and Continuous Improvement (JM) -

Standardized Work

Marco Level Value

Stream

AME Conference -

NNS

Silo Process

Mapping

VS Mapping at Marco Level and some VS done

at Micro / Silo Levels with Customers &

Suppliers

Marco to Micro VS Maps drives all CI project

selections and resources distribution

Ideas Suggestion

System

Toyota - HON -

Industry Award

Winners

OFI - Buying Ideas OFI and CIS System to provide a forum for

identifying and implementing ideas

Standardized Work and sharing ideas by most

employees (%)

Maturity

Assessment

SPQA (Malcolm

Baldrige) - Shingo -

LESAT - AME

Assessing Part of

the Organization

LESAT Enterprise Wide Baseline and

developing CIS Maturity Assessment

CI Maturity Assessment for value streams

thinking and engagement by all

Employee

Engagement

AME - Ventana -

Toyota - TWI

Summit

Employee Survey Gallup Survey to measure engagement Engagement goals met by all departments for

best in class

Customer

Engagement

TEAM ONE -

NSRP - ACIBC Arms Length Building Partnerships

Partnerships built and joint decision making is

common best practice

Supplier

Engagement

VBEC - Honda -

Wal-Mart -

Raytheon - NIKE

Lowest Bidder - Lots

of suppliers

Lean Supply Management

- Reducing numbers and Supplier Delegated

Inspection (SDI) Certification

Building a small certified base - Best Value

Suppliers

Lean & Green

Sustainability

MIT - AME - GE -

DuPont - Alcoa -

Nike

Cost and Risk

Reduction

Moving from reactive initiatives to proactive

identification & elimination of Lean and Green

wastes

Total Corporate Responsibility (TCR) is a

business strategy to sustain and grow industry

reputation and market share

Benchmarking -

COP

APQC - AME

NNS,

Raytheon - Boeing

Industrial Tourists Casual Benchmarking with Guidelines moving

to an Effective Process

Proven process and learning is being shared and

deployed across value streams

Knowledge

Management

APQC - Raytheon

- Boeing

Lots of lessons

learned data base

Consolidate lessons learned with COP starting

to deploy

Consolidate lessons learned with mature COP in

place reaching out to other sectors

NNS - Benchmarking Maturity Matrix

7

Engaging People using the

Continuous Improvement System

7

Our Continuous Improvement System (CIS) provides the common

framework to better align our value streams

to assure deck plate success.


What is Benchmarking ?

Benchmarking – the systematic process of seeking out and adapting best practices and using benchmarks

Best Practice - a practice that fully satisfies customers, produces superior results in one operation, performs as reliably as any alternative and can be adapted elsewhere

Lessons Learned – the practice of recognizing and eliminating processes that once performed, lead to unintended and often undesirable results

8 HUNTINGTON INGALLS INDUSTRIES COPYRIGHT 2011

Companies who used benchmarking to measure business

performance against their peers achieved 69% faster growth and

45% greater productivity over those who did not.

Source: Price WaterhouseCoopers

Many fortune 500 companies and other large organizations

have embraced benchmarking as an important systematic

methodology for achieving the organization’s strategic

objectives.

Benchmarking is reflected in the Malcolm Baldrige National

Quality Award criteria more extensively than any other

management concept.

Source: APQC

Why Do Benchmarking?

9 HUNTINGTON INGALLS INDUSTRIES COPYRIGHT 2011

10

―Industrial Tourists‖ VS

Effective Benchmarking

There is nothing wrong with doing benchmarking to set standards,

close gaps, or prevent reinventing the wheel.

The logic behind what works at top performers, why it works, and

what works elsewhere is barely understood, resulting in mindless

initiations.

The first things people copy are the most visible, obvious, and

frequently least important practices.

Toyota’s success is not a set of techniques or tools --- it’s their

philosophy. Instead of copying what others do, we need to understand

how they ‖think‖.

You need to ask the question about your new knowledge…..

will this really work in my company ?

HARD FACTS Dangerous Half Truths & Total Nonsense

by Jeffrey Pfeffer / Robert I. Sutton


11

How to Become

Effective at Benchmarking

Find “Trusted” Benchmarking Partners

APQC, Boeing, Raytheon, Newport News Shipbuilding, others

What We Have Learned

Use the APQC Code of Conduct and infrastructure

Understand your process ―first‖

What gaps do you want to close

Develop questions to find the right partners

Benchmarking partners are looking to get value in return

Be prepared to offer a reciprocal visit

Record findings and share the learning

Define an action plan to deploy new knowledge


12

Leveraging Internal and External

Learning Networks

Shared learning with local organizations

Association for

Manufacturing Excellence (AME)

IndustryShingo Prize

Society for

Manufacturing Engineers (SME)

Lean Accounting Summit

Training Within Industry Summit

APQC Benchmarking & KM

Academia

Society of Women Engineers

(SWE)

Shared learning with regional partners

Inte

rna

lR

eg

ion

al

Na

tio

na

l

Shared learning within an organization

Lo

ca

l

Government

Institute of Management Accountants

EPA Innovation Center Manufacturing Extension Partnership

Leveraging Learning Networks

Shared learning with local organizations

Association for

Manufacturing Excellence (AME)

IndustryShingo Prize

Society for

Manufacturing Engineers (SME)

Lean Accounting Summit


APQC Benchmarking & KM

Academia


(SWE)

Shared learning with regional partners

Inte

rna

lR

eg

ion

al

Na

tio

na

l

Shared learning within an organization

Lo

ca

l

Government

Institute of Management Accountants

EPA Innovation Center Manufacturing Extension Partnership

Leveraging Learning Networks


13

Benchmarking Process

Enables Continuous Improvement

13

IMPROVEMENT

PROJECT

IMPLEMENTATION

IMPROVEMENT

PROJECT

IMPLEMENTATION

VALUE STREAM

MAP

VALUE STREAM

MAP

Identify Performance Gap

Identify the

gap (s) to

be

improved

Review

APQC Code

Of Conduct

Define Problem Measure Analyze Improve Control

Process Improvement Project (PIP)

Define what

Is to be

benchmarked

Contact PE

Benchmarking

Champion

Conduct

bench -

mark

visit

Step 1

Step 2

Step 3

Identify

internal /

external

potential

benchmarks

Set up

benchmarking

plan / trip

Determine

data to

collect

Review

data, share

findings

Offer

reciprocal

visit

Analyze

&

document

findings

Share

findings

and

deploy

Complete

bench

marking

report

Proceed

To

Site

Visit

OR

BENCHMARKING PROCESS

Identify the

gap (s) to

be

improved

Review

APQC Code

Of Conduct



Define what

Is to be

benchmarked

Contact PE

Benchmarking

Champion

Conduct

bench -

mark

visit

Step 1

Step 2

Step 3

Identify

internal /

external

potential

benchmarks

Set up

benchmarking

plan / trip

Determine

data to

collect

Review

data, share

findings

Offer

reciprocal

visit

Analyze

&

document

findings

Share

findings

and

deploy

Complete

bench

marking

report

Proceed

To

Site

Visit

OR

Identify the

gap (s) to

be

improved

Review

APQC Code

Of Conduct



Define what

Is to be

benchmarked

Contact PE

Benchmarking

Champion

Conduct

bench -

mark

visit

Step 1

Step 2

Step 3

Identify

internal /

external

potential

benchmarks

Set up

benchmarking

plan / trip

Determine

data to

collect

Review

data, share

findings

Offer

reciprocal

visit

Analyze

&

document

findings

Share

findings

and

deploy

Complete

bench

marking

report

Proceed

To

Site

Visit

OR

BENCHMARKING PROCESS CI SCORECARD CI SCORECARD

Identify & Benchmark

Best Practices

BENCHMARKING

REPORT Company Information:

Name

Address

Point of Contact

Hosting Attendees Visiting Attendees

Purpose

Key Findings or Takeaways

Lesson Learned / Best Practices

Actions Items for Deploying Best Practice

Notes

BENCHMARKING

REPORT Company Information:

Name

Address

Point of Contact


Purpose




Notes

Document and Deploy

Best Practices

Continuous Improvement

System Close Gaps &

Improve Performance

Celebrate Success

Identify

Customers

Identify

Customers

Create

Future State

Create

Future State

Define

Products

Define

Products

LEANLEANLEAN

OFIOFIOFI

SIX SIGMASIXSIX SIGMASIGMA

MOSMOSMOS

Analyze

Current State

Analyze

Current State

Review &

Plan Next

Cycle

Review &

Plan Next

Cycle

Clarify

Customer

Requirements

Clarify

Customer

Requirements

Measure

What

Matters

Measure

What

Matters

CPAPCPAPCPAP

Continuous Improvement System

CI Lead

Team

Typical

Supporting

Initiatives

Implement

Continuous

Improvement

Action Plan

Safety Task

Teams

Safety Task Safety Task

TeamsTeams

Start

With


14

Benchmarking Guide

Leading Successful Continuous Improvement Projects

Defining the responsibilities and steps for identifying benchmarking opportunities

Outlining how to initiate benchmarking projects with internal and external sources

Describing how to share and deploy best practices across the sector, enterprise, and with our customers and suppliers

NEWPORT NEWS SHIPBUILDING Quality & Process Excellence Division

Benchmarking Guide


15

Benchmarking

DM(B)AIC Process


Identify the gap (s) to

be improved

Review APQC Code Of Conduct

Define

Problem Measure Analyze Improve Control


Define what Is to be

benchmarked

Contact PE Benchmarking

Champion

Conduct bench - mark visit

Step 1

Step 2

Step 3

Identify internal / external potential

benchmarks

Set up benchmarking

plan / trip

Determine data to collect

Review data, share

findings

Offer reciprocal

visit

Analyze &

document findings

Share findings

and deploy

Complete bench

marking report

Proceed to site visit

OR

16

Benchmarking Report

Company Information:

Name

Address

Point of Contact


Purpose




Notes

Benchmarking is Effective when

“Better Practices” are Shared and Deployed


What are the 5 Maturity Levels?

Level 1 Organization is a disaster.

• Many problems no time or interest for improvement initiatives

Level 2 Organization is just learning an improvement methodology for tool set.

• Companies at this level (approximately 30% of the industry) are slightly losing ground

Level 3 Organization knows improvement tools very well.

• Improvement activities using the tools and projects are lead by tool masters.

• Companies at this level (approximately 30% of the industry) are slightly gaining ground

• Leadership believes they are level 4, a real roadblock to transformation efforts

Level 4 Organization has begun to transform its business.

• Approx 15% of the organizations are level 4

• Organization in the top 20% of its industry can be a great place to work

• By adding value to their customers in meaningful, systematic new ways

Level 5 Organization has a culture different from any of the other four levels.

• Level 5 organizations are very rare (less than 5% of an overall industry)

• People do not try to hide problems or resolved them quietly out of sight

• Leaders are just as concerned about a near miss as they are an actual defect or error

• Employee engagement of a level 5 organizations is more than twice as high as a level

Source: Escape the Improvement Trap by Michael Bremer and Brain McKibben, CRC Press

What is your Organizational Maturity Level ?

• If you have fewer than two stars, then at best you're level 3.

• Level 5 company does all three consistently

A quick assessment will determine if your organization is :

• Level 3 or lower vs. level 4 or higher

• Answer these ―Three Questions ?

Source: Escape the Improvement Trap by Michael Bremer and Brain McKibben, CRC Press

Questions Rating • Have you been able to dependably sustain and replicate elsewhere the gains from

improvement projects?

• Have key overall business performance metrics (e. g., financials, new revenues, customer loyalty, strategic results) shown meaningful change as a result of improvement initiatives?

• All your employee engagement survey scores more than two times your industry average?

* Ratings: (-) Failing to do good job of this, more negative than positive. (+) inconsistent; sometimes we do it well. (*) We consistently do this very well.

Malcolm Baldrige National Quality (MBNQ) or SPQA

Self Assessment Program is the “Industry” Standard

Industry Best Practices Organizations Improvement Practices

• They have a meaningful, clear business value proposition and strategy that drives key improvement actions by listening to the voice of the customer.

Strategic Goals and Objectives:

• Their leaders create an engaging environment where people can do their best work; the environment fosters and facilitates collaborative learning, experimentation, and value creation.

Engagement & Shared Learning Initiatives:

• They focus on the vital few, meaningful metrics for current environment, and they avoid drowning in irrelevant details.

Vital Few Metrics (leading and lagging):

• People, Quality, Delivery, Cost, & Sustainability

• Their process improvement efforts maximize cross functional process performance and foster deeper process understanding, innovation, and execution of best work practices.

Process Improvement and Deployment Initiatives:

• They have an executive mindset that focuses on customer value, people development, process performance, and business-improvement outcomes, not solely on savings.

Leadership Initiatives :

Best Practices Comparison:

Top 20 % of ―Best In Class‖ and Your Organization

Benchmarking Best Practices Gaps

Benchmarking closes gaps “faster” and prevents reinventing “better or best practices”


Q&PE STRATEGIC FRAMEWORK – Supplier Quality

20

21

Johnnie

Wayne Improvement Action Plan (IAP)

Paul

Jim

Final

OwnerSupport

Needed From

Target

Completion

Additional

comments

Q&PE Strategic

Planning - Objective

Link

Develop improved process/algorithm for supplier

quality scoring (more accurate, more representative);

benchmark other companies

Blessner O58 Staff 2Q-2011Should be able to predict

failures6.1

Develop process to help assess/weight source

inspections (supplier risk, material requirements,

etc.)

Staff

Feed off of

LaToya Risk

Green Belt

2Q-2011

Help ensure sufficient time

is allocated to SI to perform

a quality inspection

6.2

Develop a method for better Forecasting Inspection

demands at Source or Receipt so staffing can be

manned in time to support workload (via OT, Roll

Increase, contract labor)

Blessner

TapajnaSimpson 2Q-2011

Business Management

better predictions and early

problem identification

6.2

Develop more granular list of approved suppliers: e.g.

* specific commodities;

* consumables;

* Level 1;

* distributors;

Include criteria for being added to each list

Staff 4Q-2011

Post on Oasis so prime

contractors will know who

we approve vice pick a

potentially poor subtier

6.3

Develop improved process for communicating

approved supplier listsBlessner 1Q-2011 Communication 6.3

Develop improved process for executing controls (Q-

Info process) over use of approved supplier listsBlessner

2Q-2011 (plan)

4Q-2011 (final)

Better control who 051 can

go to so they involve us (to

mitigate maybe) if Q-Score

<100

6.3

Evaluate feasibility of capturing Engineering

responsibility for QNs by department/functionBlessner 3Q-2011

Current QN data is not

being evaluated for

Improvement by Eng. Make

it more user friendly for Eng

to adopt ownership

6.4

Review QN process for improvement opportunities Blessner 3Q-2011 Benchmark QID NA

Develop improved set of metrics

* which metrics

* frequency of publication

* balance effort with usefulness

* Business Requirements Planning

(forecast of receipts expected)

Blessner 1Q-2011

Business Management

better predictions and early

problem identification

NA

Strategic Plans CISAP Teams Selection Log CISAP Metrics SIPOC

Division

Department

Section Section

Department

Division CI System

Continuous Improvement Self Assessment Program

(CISAP)


Process Improvement Database (PID) Listening to Our People


22

23

Engaging our People and our Customers

Top Down Leadership

Deck Plate Leadership Our Customers

Ratio of Engaged to Actively Disengaged: 1.10:1 2.07:1 2.20:1 2.33:1

Copyright © 2010 Gallup, Inc. All rights reserved. 25

NNS has managed to increase the Engaged level while maintaining the Actively Disengaged level.

Newport News Shipbuilding Engagement Scores Since 2006: Steady Progress

21% 15% 15% 15%

56%

54% 52% 50%

23% 31% 33% 35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2008 2010 2011

Engaged

Disengaged

Actively Disengaged

The Employee Value Stream

27

Transition from:

Baby Boomers to…

…the Millenials

Business Impact

Does engagement link to crucial business metrics?

28

Absenteeism

42

36

24

0

5

10

15

20

25

30

35

40

45

50

Bottom Quartile Middle Half Top Quartile

To

tal

Ho

urs

“O” Departments

Actively Disengaged employees are absent almost

twice as much as their Engaged counterparts.

Workers Compensation

88

53

29

0

10

20

30

40

50

60

70

80

90

100


Me

an

Ho

urs

“X” Departments

Our most engaged employees use significantly less

Workers Compensation than their less engaged colleagues

132%

121%

91%

0%

20%

40%

60%

80%

100%

120%

140%


TC

R t

o G

oa

l

Total Case Rate to Goal

Teams in the top quartile of engagement have fewer safety incidents than less engaged teams. Note that the top quartile is the only group to remain under goal, while other groups went over goal by as much as 32%.

Higher Engagement Leads to Increased Safety

Safety

Results

32

6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

2005 2010

Operating Margin

OperatingMargin

3.3

3.4

3.5

3.6

3.7

3.8

3.9

4

2006 2010

Engagement Grand Mean

EngagementGrand Mean

Summary

• Gallup’s analysis of Shipbuilding business metrics shows

strong linkages with Q12 survey results.

• Engaged and Top Quartile teams are more likely to

perform significantly better on:

– Safety

– Quality

– Turnover (Employee Retention)

– Workers Compensation

– Absenteeism

• Driving Engagement across the organization significantly

decreases operational costs and directly impacts quality

and productivity.

34

Benchmarking and

Self Assessment Initiatives

“Always Good Ships” HUNTINGTON INGALLS INDUSTRIES COPYRIGHT 2011

• Increase the Sharing and Deployment of Knowledge

• Use Proven Industry Standards for Benchmarking (AME & APQC)

• Validate Maturity with Industry & Self Assessment s (ASQ, MBQA, SPQA)

• Extend Value Stream Improvements to Suppliers and Navy

• Sustain Industry Presence &Transformational Initiatives Through :

Association for Manufacturing Excellence International Conference

National Benchmarking CoP through AME/APQC

National Lean Accounting Community of Practice


Virginia Business Excellence Consortium (VBEC)

Regional Communities of Practice

“Enterprise Excellence through Shared Learning”

• Focusing on processes without focusing on people isn’t sufficient

Association for Manufacturing Excellence (AME)

www.ame.org

American Productivity & Quality Center (APQC)

www.apqc.org

AME / APQC Benchmarking CoP – Open Forum

ame.org/index.aspx?page=COP

Society of Manufacturing Engineers (SME)

http://www.sme.org

American Society for Quality (ASQ)

www.asq.org


societyofwomenengineers.swe.org

Shingo Prize for Operational Excellence

www.shingoprize.org

U.S. Senate Productivity and Quality Award for Virginia (SPQA)

www.spqa-va.org

Virginia Business Excellence consortium

www.vbec.org

Hampton Roads Quality Management Community

www.hrqmc.com

Benchmarking & Self Assessment Resources


http://www.ame.org/

http://www.apqc.org/

http://ame.org/index.aspx?page=COP

http://www.sme.org/

http://www.asq.org/

http://www.asq.org/

http://www.asq.org/

http://www.asq.org/

http://www.shingoprize.org/

http://www.spqa-va.org/







http://www.vbec.org/

http://www.hrqmc.com/

36

[email protected]

757 688 2995

Come Join US!

Thank You!


www.ame.org/community-practice

mailto:[email protected]



http://www.ame.org/community-practice



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