1

U.S. ARMY ARMAMENT RESEARCH, DEVELOPMENT AND ENGINEERING CENTER

(ARDEC)

LEAN/SIX-SIGMA

20 September 2005

Presented toPresented to

3232ndnd National Energy & Environmental Conference National Energy & Environmental Conference

PAUL E. CHIODOPAUL E. CHIODODirector, Quality Engineering & System Assurance, Director, Quality Engineering & System Assurance, RDECOM-ARDECRDECOM-ARDECChair, AMC Quality FederationChair, AMC Quality FederationCertified Lean/Six Sigma Master Black BeltCertified Lean/Six Sigma Master Black Belt

2

LEAN/SIX SIGMALEAN/SIX SIGMABOTTOM LINE UP FRONTBOTTOM LINE UP FRONT

• The Integration of Lean and Six Sigma has Provided ARDEC with a Proven Commercial Best Practice for Continuous Improvement

• In Partnership with its Customers, ARDEC has:– Increased Awareness– Improved RD&E, Manufacturing and Administrative Processes– Integrated Lean/Six Sigma into the Business Culture

Culture Change is Occurring!

3

LEAN/SIX SIGMALEAN/SIX SIGMABOTTOM LINE UP FRONTBOTTOM LINE UP FRONT

(Continued)(Continued)

• ARDEC Stood Up a Lean/Six Sigma Competency Office to Assure Consistent, Effective and Efficient Deployment, Consulting and Training

• ARDEC is Integrating Lean/Six Sigma with a Quality Management System (QMS) and Voice of the Customer (VoC) Protocols on its Journey to Enterprise ExcellenceSM

Culture Change is Occurring!

4

678133Black

N/A4271025Green

MasterCertTrainBelt

ARDEC L/6 Training & Certification

• Data from Inception (2000) to Present• Includes ARDEC, Program Executive Offices (PEO),

Contractors, and Other Government Activities• Black-Belts have Green Belt as Prerequisite

Includes Approx. 3.3% of ARDEC

Workforce

Includes Approx. 27.4% of ARDEC

Workforce

Goal: 240 Training Incidents/Yr

5

ARDEC L/6 ROI• $2.66B Savings/Avoidance to Date • 20:1 VE Validated Returns

– Value Engineering Adds Rigor• Recognized Standard• Independent Verification• Hard Numbers Only

• All Aspects of Q$SR– Q: Quality/Customer Satisfaction (91%

of Projects)– $: Cost (70% of Projects)– S: Schedule (67% of Projects)– R: Risk (84% of Projects)

• Improvement Projects in:– Engineering (35%)– Production (32%)– Business/Admin (23%)– Management (10%)

0

10

20

30

40

50

60

70

80

90

100

Figures in $M

Training Costs

VE Validated Savings

Estimated Life-Cycle Avoidance

67.3

3

2,660

6

ARDEC L/6 Timeline

Six-Sigma Initiated by PM CAS

Leadership Transitioned to ARDEC

First Certification Ceremony

Industry Benchmark Studies

First Integrated Lean/Six-Sigma Course

JUL 2000

APR 2001

JAN 2006+

ARDEC Enterprise ExcellenceSM Plan Complete

AUG 2001

JUN 2002

May 2003

OCT 2002

Phase I – Launch & Management Buy-In

JUN 2004

APR 2005

GB Training to In-house

L/6 Office Established

3rd Ceremony, 500th person trained to date at ARDEC

Phase II – Full Scale Deployment

Phase III – Self Sustain for Continuous Improvement

7

Operation Levels

ARDEC L/6 Board

Executive Champions

Black Belts

Green Belts

Team Members

Master Black Belts/L6 Comp Office

8

ARDEC Process/EBB Project Map

Enterprise Excellence

• Business Development• Configuration Mgmt• IPT/PM• System Engineering• Rapid Prototyping• Modeling & Sim

• Process Management• Budgeting Process• Funds Flow• Strategic Management• Technology Transfer• Workforce Development• Procurement

L/6s Competency

OfficeCustomer

ARDEC Mission Aiding Processes

ARDEC Mission Critical Processes

EE

EE

EE

EE

EE

EE

EE

EE

EE

EE

EE

EE

EE

CI

CI

CI

CI

CI

CI

CI

DT

RB

RB

RB

DT

TT

TT

TT

RP

RP

RP

Customer Integration

Rapid Battle-types

Disruptive Technology

Technology Transfer

Resource Planning

Enterprise ExcellenceEBB Projects

EE

CI

RB

DT

TT

RP

QMS

• Training• Consulting• Deployment

VOC

• Program Management• Funding

Products• Innovation & Engineering• Technology Transition• High Quality Products & Services

DisciplineAdaptabilitySpeed

Label signifies Executive Black Belt (EBB) Projects that impact ARDEC Processes

VOC

CI

CI

CI

CI

CI

CI

9

Executive BB Projects

• ARDEC Enterprise Excellence– Integration of E2 (QMS, Lean/SS, VOC) with

ARDEC Strategic Plan and Development of the ARDEC E2 Deployment Plan

• ARDEC Requirements to Execution Framework & Integrated Prioritization Process– Process for prioritizing and allocating

ARDEC resources consistent with ARDEC strategic plan and customer requirements

• Rapid Battletypes– Identify opportunities to quickly deploy

innovative solutions directly to the soldier

• Enterprise Resource Planning– Increase customer satisfaction across all

users that access financial reporting

• ARDEC Technology Transition– Increase technology transitions from

ARDEC tech base to PEO/PM for fielding

10

Some L/6 Success Stories• M795 155mm Artillery Projectile Quality

– Reduced Critical Defects from 5.0% to 0.5%– $250K Annual Cost Avoidance– Safety Risk Reduction

• Smart/Precision Munitions Development– Increased use of Modeling & Simulation and Lab

Testing for Risk Reduction– $35M Cost Avoidance through Reduced Excalibur

Ballistic Testing• PAX-2A Insensitive Explosive Quality

– Increased Yield from 13% to ~ 100%– $169M Potential Life Cycle Cost Avoidance

• PAX-2A Explosive Large-Scale Production– Developed Alternate Large-scale Manufacturing

process – Cost reduced from $65/lb. to $30/lb.

(Savings: $349M lifecycle Army-wide)– Implementation on next contract

11

Some L/6 Success Stories (continued)

• Tank Training Ammunition Joint Reliability– Process Re-design– $6-14M Annual Cost Avoidance

• Artillery Ammunition Digital X-Ray Equipment – Integrated Contractor & Government’s Approval

Processes – 6 Months Reduced to 4 Months (Savings: $120K)

• M734A1 Mortar Fuze Production Yield– Analysis identified Design Deficiency– Re-design Reduced Scrap from 5.0% to 0.1%

(Savings: $50K/month)• 120mm Mortar Fin Malfunction Investigation

– Developed Corrective Actions to Release Suspended Mortar Ammunition (Stockpile worth $200M)

– Reduced Risk in Future Procurements

12

Some On-Going L/6 Projects

• Green Small Caliber Ammunition

– Elimination of Lead – Environmentally Friendly

– Producibility of Tungsten-Tin• Missile/Artillery Grenade Fuze

Removal– New Fuze Meets UXO

Requirements– Grenade Recapitalization– Estimated Savings of

$41.5M

13

Some Administrative L/6 Success Stories

• Excalibur/TCM Procurement Acquisition Lead Time

– 54% Reduction• Insensitive Munitions Waiver Process

– Streamlined Approval Process– 2+ year cycle Reduced to 7 Months

• ECP Review & Approval– Cycle Time Compliance Increased from 89 to 100%

• New-hire Integration– $78K Estimated Yearly Savings

• Printer Cartridge Recycling

14

PAX-2A Explosive Quality

Improve the yield of PAX-2A Manufacture at Lab-Scale by developing an alternate mix process that meets high-speed LAP requirements.

Type

X Engineering

Production

Business

Management

QQuality or Customer Satisfaction Co$$t

Alternate slurry mix process developed that meets minimum bulk

density requirements of 0.85 g/ccBenefited from other Q$SR areas

Benefited from other Q$SR areas

Production yield potential of 100%, up from the original mix process less than 30%. This paves the way for Large-Scale

production of PAX-2A.

SSchedule RRisk

15

M80/PAX-2A High-Speed Load, Assemble & Pack (LAP)

Increase the yield of “LAP-compatible” PAX-2A explosive production and increase the production rate of Dual-Purpose Improved Conventional Munitions (DPICM) between maintenance cycles.

Type

Engineering

X Production

Business

Management

QQuality or Customer Satisfaction Co$$t

•PM-CAS (sponsor) indicated this effort will allow achievement of strategic goals.Increase Manufacturing yield from 13% to 50%Grenade Penetration increase of 25%Reduced Product variation- increased SPCIncreased required cone push-out force by 200%

Reduce PAX-2A Unit Cost from $132/lb to $68/lbReturn on $1.5M Program Capital investment$1.2B Future Cost Savings to Potential PAX-2A Customers for Manufacture/LAPAssets saved in ASP from enemy fireGrenade LAP cost savings of $5.41/unit

M915 Cartridge MR in 1QFY05 with IM enhancement Load & Preserve Grenades in FY02-03 under current FY97/98 LRIP contractConduct Accelerated PQT Effort by 4 MonthsImpact GMLRS/M864 RECAP Projects

Significantly Reduced Program Risk to PM-CAS managed M915 and future DPICM Artillery programs for IM insertionSignificantly increased potential for mission successIncreased survivability of engaged troops

SSchedule RRisk

16

Procurement Acquisition Lead Time (PALT)

Combined the two existing PALT processes into one streamlined (Alpha) process for XM982.

Type

Engineering

Production

X Business

Management

QQuality or Customer Satisfaction Co$$t

PM-CAS (sponsor) ecstatic in that existing schedules were high risk in meeting DA requirements.

Cost avoidance of $12 M, based on a minimum saved effort of four months.

VE Validated Savings: $8.9 M

Combined the quasi-concurrent 24-month Army PALT and the 24-month International PALT processes into a single 11 month Alpha contracting effort.

Significant risk reduction in meeting DA directed milestones for the XM982 program. The reduced PALT time eliminates a high risk factor in the program.

SSchedule RRisk

17

The E2 Framework

QMSVoC

6

Lean

Culture

EfficiencyEffectiveness

Reqm’ts

Concepts from paper by VSE Corp.

18

Why Change to “Lean/Six-Sigma Way of Doing Business”?

• ARDEC Reorganization led to Transformation from a Traditional Product-Driven Structure to an Integrated ‘Continuous Measurable Improvement’ Process-Driven Way of Doing Business

• Positive Impact Obtaining Faster, More Comprehensive, Fact Based Solutions in support of GWOT, OIF, OEF

• Need to Promote Enterprise Excellence (QMS, L/6, VOC)

– A disciplined, structured approach for process and product optimization that is focused on the effectiveness' and efficiency bottom line of the organization

Perform

Asse ssment

Lean

Process

Improve Effectiveness

Six -Sigma

Project

Process

Six -Sigma

Process

Control

Six -Sigma

Process

Improvement

Perform

Asse ssment

Quality

Management

System

Management

Improve Efficiency

Improve Customer Satisfaction

Q$SR

E2

Lau

nch

Q$SR Perform

Asse ssment

Q$SR

E2In

tegr

ation

Q$SR

Improved Organization

Lean

Workload

Balancing

Lean

Metrics

Perform

Asse ssment

Metrics

Voice of the

Customer

L/6

DFL/6

E2

Perform

Asse ssment

Lean

Process

Improve Effectiveness

Six -Sigma

Project

Process

Six -Sigma

Process

Control

Six -Sigma

Process

Improvement

Perform

Asse ssment

Quality

Management

System

Management

Improve Efficiency

Improve Customer Satisfaction

Q$SR

E2

Lau

nch

Q$SR Perform

Asse ssment

Q$SR

E2In

tegr

ation

Q$SR

Improved Organization

Lean

Workload

Balancing

Lean

Metrics

Perform

Asse ssment

Metrics

Voice of the

Customer

L/6

DFL/6

E2

19

ARDEC Lean/Six-SigmaTake-a-Ways

• Needs to be Driven from Top Management for an Effective Organizational Culture Change– Assure L/6 Projects are Properly Aligned to Customer Requirements– Provides resources and commitments

• ARDEC L/6 Competency Office Provides: – Centralized Management– Organic GB Consulting & Training Activities

• VSE Partnership Still Essential– Limited Black Belt Pool (Black Belt Distributed to Organization)

• All Phases of the Acquisition Life Cycle and All Business Processes Offer Opportunities for Improved Effectiveness & Efficiency

• L/6 is a Fundamental Component of ARDEC’s Enterprise ExcellenceSM – Structured and Disciplined Approach to Meet Mission Objectives

• Lean/Six Sigma is a Commercial Best Practice that is Providing the Army Meaningful Savings … Every Quality, Reliability and Process Improvement Equates to Real Dollars!!