linking internal control with lean six sigma ... - pdi...

CDR Mike

DanishO f f i c e o f I n t e r n a l

C o n t r o l

CDR David

Hatchett A v i a t i o n

L o g i s t i c s C e n t e r

Linking Internal

Control with Lean

Six Sigma and ISO

9000 Quality

Management

2017ASMC PDI

U n i t e d S t a t e C o a s t G u a r d

Working

Together OMB A123/Green Book

ISO 9001

SIX SIGMA

Overview

• Internal Control• Green Book• What is it?

• OMB Circular A123• What is it?

• How does it fit in with the Green Book?

• Process Standardization• ISO9001• What is it?


• Process Improvement• DMAIC• What is it?


Entity Level Control

Control environment

Risk assessment

Control activities

Information and

communications

Monitoring activities

GAO Green Book


Control environment

Risk assessment

Control activities

Information and

communications


Executive commitment to risk management, documented

procedure, and performance measuring.


Control environment

Risk assessment

Control activities

Information and

communications


Basis of a business case analysis; identify, assess, and respond to risks. (ERM, GAR)


Control environment

Risk assessment

Control activities

Information and

communications


Document procedures and activities to ensure objectives

are met (TTP, SOPs, Desk Guides, Checklists)


Control environment

Risk assessment

Control activities

Information and

communications


Assure others you are achieving objectives, retain

support documentation; highlight gaps so others can

take action as required. (SOA, Personnel Records, ERM)


Control environment

Risk assessment

Control activities

Information and

communications


Evaluate processes to continuously improve, drive key performance indicators. (Dashboards, AIA, ICOFR)

Working

Together OMB A123/Green Book

ISO 9001

SIX SIGMA

Working

Together Control Environment

Risk Assessment

Monitoring

Information and Communication

Control Activities

OMB A123/Green Book

ISO 9001

SIX SIGMA

Process Measurement &

Control

Plan

Evaluate Design

Test Effectiveness

Conclude

Correct

Report

OMB Cir A123 - Appendix A

An Undelivered Orders (UDOs)

Example

• Is monitoring and control valuable to the organization?• Money tied up in

obligations that are no longer needed?

• Reliability of financial statements?

• Focus Areas• Travel?

• Contracts?

Plan

Evaluate Design

Test Effectiveness

Conclude

Correct

Report

Plan


Example

• Design a process to ensure obligations are valid• Establish Thresholds

• Define reviews

• Evaluate if the design is working• Statistically sample

• Extrapolate

Plan

Evaluate Design

Test Effectiveness

Conclude

Correct

Report

Evaluate

Design &

Effectiveness


Example

• Is your sample extrapolation greater than your threshold?

• Do we get the same results across at focus areas (contracts, travel, etc)

Plan

Evaluate Design

Test Effectiveness

Conclude

Correct

Report

Conclude


Example

• Re-design a process to ensure results remain under established threshold.• Don’t just fix the issues

found

• Consider the root cause

Plan

Evaluate Design

Test Effectiveness

Conclude

Correct

Report

Correct


Example

• Statement of Assurance

Plan

Evaluate Design

Test Effectiveness

Conclude

Correct

Report

Report

Working


Risk Assessment(Plan/Evaluate)

Monitoring


(Report)

Control Activities(Evaluate/Conclude)

OMB A123/Green Book

ISO 9001

SIX SIGMA

Depot Maintenance Results

FY16 Production

21 – MH-6510 – MH-60

4 – HC-1304 – HC-144

ISO 9001:14001

AS 9110

• Customer Focus • ALC values its customers

• Leadership • ALC's leaders establish unity of purpose and

direction for the organization.

• Involvement of People• Employees are the organization's most valued

assets.

• Process Approach • Processes are defined, designed, and managed to

achieve desired results.

• System Approach• Interrelated processes are managed as a system.

ISO 9001:14001 continued

• Continual Improvement • Continual improvement of processes,

products, and services.

• Factual Approach to Decision Making • Decisions are based on process

measurement data and information is captured and analyzed

• Mutually Beneficial Supplier Relationships• ALC has created clear and open

communication with its suppliers.

Working



Monitoring


(Report)


Leadership

Customer

Engage people

System

Improve

Decision making

Relationship

Process

OMB A123/Green Book

ISO 9001

SIX SIGMA

Process Improvement:

Six Sigma DMAIC Model

Define

Measure

Analyze

Improve

Control



•Set project scope including potential opportunities for improvement

• Identify process to be improved & stakeholdersDefine

Measure

Analyze

Improve

Control





• Identify key aspects of the process (critical to quality)

•Define measurements, and collect current dataMeasure

Analyze

Improve

Control







•Explain variables likely to drive variation

• Identify possible improvementsAnalyze

Improve

Control









• Implement the improvement and measure the outcomeImprove

Control









• Implement the improvement and measure the outcomeImprove

•Sustained measurement dashboards

•Management reviewControl

Process Improvement

• Define – ALC paint facility was a bottle neck slowing depot level maintenance and the return of aircraft to the operational commander.

Process Improvement

• Measure – It took 3 people 36 hours to cycle an aircraft through a full paint job.

Process Improvement

Analyze - The priority was to shorten this length to 24 hours to meet overall production goals.

- The problem was having only one paint facility. This caused the aircraft to back up in the queue, adding hours and days to the production schedule.

Strategic Intent – Enterprise Production System

Aircraft WIP Status Board

UNCLAS/FOUO

Incoming

Disassy/Blast Interim Assembly Assembly Final Ground Chks Test PDM

Rmv Panels/Strip Hull Paint One DITMCO Two Paint Grd Turns Flights Certification

(15d) (50d) (5d) (17d) (10d) (17d) (9d) (13d) (6d) (3d)

MRR

1 2 1 1 1 1 1 1 1 1

1076 [12]

6019 1078 [15] +12TB 1075 [8] 1074 [13] 1073 [8]

06SEP+12TB 1077 [38] +11TB +8TB +7TB

+12TB

Incoming

Blast Interim Assembly Final Ground Test

Disassy. Strip Composite Hull Paint DITMCO Post Assembly/QA Paint Runs Flights

(5d) (4d) (5d) (21d) (4d) (4d) (36d) (7d) (5d) (5d)

SRR

1 1 1 2 1 1 4 1 1 1

1189 [36] 1185 [4]

1190 [5] +9TB +5TB

+13TB 1193 [5] 1186 [14]

6512 1192 [5] +14TB +5TB 1184 [5]

18AUG+16TB 1191 [13] 1187 [20] +6TB

+18TB +5TB

1188 [28]

+9TB

Incoming

De-Paint Disassembly OP Ground FCF Final Paint

DROP IN/ MOD(Off-Site) Induction Inspections Repairs Assembly Checks Runs Test Flights Delivery

(11d) (32d) (113d) (20d) (10d) (5d) (14d) (14d)

LRS

1 1 3 3 3 1 1 1

1502/Dmil

1312/PEI 1311 1308 2007/TCTO

1310 2003/Mod

Incoming

Strip Repairs Hangar Op Ground Flights Final Paint

(Off-Site) Induction Disassembly Inspections Modify Assembly Checks Ops QA Ops

(10d) (15d) (28d) (45d) (52d) (34d) (12d) (5d) (7d)

MRS

1 1 1 2 2 1 1 1 1

4419 4418

Buffer Minimal Buffer Buffer (#)= Planned Phase [#]= Remaining Phase Modifications & TB = Total BufferQuarantine

Available (<4wd) Exceeded Duration Duration Drop-ins Available

Process Improvement

• Improve – reduce the paint team from 3 people to 2 and work a day and a night shift.

- Paint facility was now able to paint a full air craft in 24 hours.

- The bottleneck was relieved and production schedule returned.

Strategic Intent – Enterprise Production System

Aircraft WIP Status Board

UNCLAS/FOUO

Incoming

Disassy/Blast Interim Assembly Assembly Final Ground Chks Test PDM

Rmv Panels/Strip Hull Paint One DITMCO Two Paint Grd Turns Flights Certification

(14d) (49d) (5d) (16d) (10d) (16d) (9d) (12d) (6d) (3d)

MRR

1 2 1 1 1 1 1 1 1 1

1083 [9]

+13TB

6015 1085 [9] 1084 [30] 1082 [7] 1081 [5] 1080 [1]30MAY

+7TB +16TB +12TB +13TB +2TB

NC 2305 NC 2309

[73] [1]

Incoming

Blast Interim Assembly Final Ground Test

Ind/Dissy. Strip Composite Hull Paint DITMCO Post Assembly/QA Paint Runs Flights

(6d) (5d) (5d) (21d) (4d) (4d)(36d)

(7d) (5d) (5d)

SRR

1 1 1 2 1 1 4 1 1 1

1103 [17]

6559 1108 [5] 1107 [13] 1106 [4] 1105 [36] +12TB 1101 [3] 1100 [1]30APR

+19TB +22TB +22TB +17TB +9TB +9TB

Incoming

De-PaintDisassembly

OP Ground FCF Final Paint

Drop In(Off-Site)Induction Inspections Repairs

Assembly Checks Runs Test Flights Delivery

(11d)(32d)

(113d) (20d) (10d) (5d) (14d) (14d)

LRS

1 1 3 3 3 1 1 1

2001

08MAY1315 1314/PEI 1313

Incoming

StripRepairs

Hangar Op Ground Flights Final Paint

(Off-Site)Induction

Disassembly InspectionsModify

Assembly Checks Ops QA Ops

(10d) (15d) (28d) (45d) (52d) (34d) (12d) (5d) (7d)

MRS

1 1 1 2 2 1 1 1 1

2700

2316 2701 4422 4421

13-Jun

Buffer Minimal Buffer Buffer (#)= Planned Phase [#]= Remaining Phase Modifications & TB = Total Buffer

QuarantineAvailable (<4wd) Exceeded Duration Duration Drop-ins Available

Process Improvement

• Control – a more detailed analysis was done to determine when, based on number of aircraft in production, the paint booth could return to just working day shifts.

Which is most important?

• ALL of the ABOVE• Green Book sets the principles

• OMB A-123 tells us what to do

• ISO and BPI tells us how for operations

• Federal Accounting Standards Advisory Board tells us how to account for operations in the Financial Statements

• GAO Yellow Book (Generally Accepted Governmental Auditing Standards) outlines the audit

Working



Monitoring


(Report)


Measure

Analyze

Control

Leadership

Customer

Engage people

System

Improve

Decision making

Relationship Correct

Analyze

Improve

Process

Define

OMB A123/Green Book

ISO 9001

SIX SIGMA

linking internal control with lean six sigma ... - pdi...

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