2009 Enterprise Transformation Research Summit
Facilitating Communities of Practice and Benchmarking
J. Thomas Shields, LAI Research Associate and Program Manager
A robust way that LAI stays connected with the consortium is its interactions with groups of people around certain topical areas of interest. These communities of practice have developed products such as the Supplier Networks Transformation Toolset as well as being the nexus for thinking about lean in different settings such as the Product Development Community of Practice. More recently there has been energy around enterprise metrics which is motivating the initiation of its own community of practice. Each of these communities shares a common desire to share information, knowledge, and application experiences within its informal membership. LAI as a neutral broker can pull together these communities for beneficial results for industry and government members.
Benchmarking is often used to gather information and motivate action. From the beginnings of LAI benchmarking has been important with Factory Operations and Supplier major benchmarking efforts. Essentially all LAI research efforts are a kind of fact gathering that contributes to knowledge in a benchmarking sense. Some research projects of course are more focused but in aggregate the research process is very supportive of benchmarking objectives. LAI also offers benchmarking opportunities and participation that is either requested by members or fortuitous by association. An example in the latter case is the collaboration between LAI researchers and McKinsey to collect data on product development practices and correlate that information to performance outcomes.
Identifying Enterprise Leverage Points in Defense Acquisition Program Performance
Maj. Robb Wirthlin USAF, PhD Candidate, June 2009
*The views expressed in this talk are those of the author and do not reflect the official policy or position of the United States Air Force, the Department of Defense (DoD), or the U.S. Government.
Acquisition Program performance has been subjected to scrutiny over the years due to accusations of poor budget execution and schedule adherence. Several studies indicate many acquisition programs suffer from at least 30% schedule slip and cost growth. This figure has remained virtually static (or trends worse) despite several decades of reform actions of varying scope and complexity. Reflecting upon the program growth, a Lean Enterprise perspective helps to reframe the problem of these acquisition program outcomes as one of being emergent behaviors of a larger Defense Acquisition Enterprise “System.” This talk will describe recent research results and ongoing efforts towards identifying leverage points in the so-called “Big-A” (versus “little-a”) of the Acquisition system. The research uses a grounded theory approach to model overall acquisition system behavior using abstractions of key processes and decisions of the US Air Force’s implementation of defense acquisition directives.
The development of a model of the overall US Air Force Product Development process, including those portions of responsibility and authority that do not reside in the acquisition system, is an outcome of several research thrusts aimed at understanding enterprise system behaviors and identification and application of unique enterprise constructs. The talk will discuss the results of research identifying the actual state of practice within the US Air Force. Initially, acquisition personnel at all levels were interviewed regarding the way the system operates. The emergent themes were not especially surprising. They reveal resource constraints and requirements changes contribute to poor outcomes. The consequences of these issues manifest themselves through schedule and cost growth. However, they are not necessarily the root causes. The themes reflect a system that is constantly in a fire-fighting mode, trying to keep every project going despite little understanding of the system capacity required to proceed. These results underscored the need to look beyond the traditional boundaries of acquisition and helped define the objectives for the next round of interviews. This set of interviews included user representatives, individuals working within the requirements definition system and the financial system, and finally, contractors responsible for delivery of a program. Distilling all of this information, an enterprise model of system processes and decision points was created, leading to another set of interviews and research to validate the form, substance and scope of the model. This research approach not only suggests a methodology on how to examine large, complex enterprise systems, but has the potential to become a powerful tool suggesting possible enterprise leverage points that otherwise may be overlooked by more traditional, narrower approaches. It represents another addition to the growing toolkit of LAI Enterprise Products enabling a richer understanding and analyses of enterprise processes.
Making the Transition to Lean Product Development
Dr. Eric Rebentisch, LAI Research Associate
Our understanding of the application of lean principles in product development (PD) is relatively new—similar perhaps to industry understanding of lean principles shortly after The Machine That Changed the World was published nearly 20 years ago. A few descriptions of Toyota and Toyota-like practices in PD have emerged recently, but there has been no systematic examination of whether simply adopting these practices are sufficient to result in higher performance, and no effort has been made to date to link these practices to the vast existing knowledge base on best practices in PD. Finally, while PD practices associated with lean have been described, there is no discussion of how those practices might be implemented in an organizational setting different from Toyota, as well as the implications for PD interfaces to the greater enterprise, or how that transition would unfold over time.
This presentation will describe an evolving research framework to understand the practices that would be part of a lean product development enterprise and how the leaders of that enterprise would select transition paths and milestones on the lean implementation journey. It will discuss research efforts underway to validate and refine the framework and principles. Two of the studies are based on surveys of PD enterprises around the world. One of the studies investigates the relationship between a wide range of PD practices (including those associated with Toyota) and organizational performance outcomes to identify which practices provide the greatest performance impact. The second study is examining the order in which lean principles are implemented in PD systems, and what interdependencies might exist between practices as they are implemented. A case study-based research effort will be discussed that is currently following one PD enterprise through its multi-year transition to more lean, high-performance PD, and understanding the steps along the way, as well as the organizational, management, and workforce issues that enable or inhibit that transition. These and other studies currently underway at LAI seek to expand our understanding of how PD system leaders might implement and benefit from lean principles and practices in their PD systems.
A Case Study of Lean Transformation at Rockwell Collins
Dr. George Roth, LAI Research Associate, and Jayakanth Srinivasan, LAI Research Associate
Case studies are one of LAI's methods for engaging with sponsors in conducting research. Case studies involve interacting with people in examining, describing, analyzing, and documenting significant events, their pre-conditions, and the outcomes of their lean efforts so that others can understand and learn from them. The session describes LAI's use of interviews, firm data, and other sources in its case study methods. This case involved interacting with Rockwell Collins' leaders, managers, and workers to study their lean changes, providing feedback, and documenting their experiences in the case study. The case study in used in teaching students, and along with other case studies for developing general theories, practices and methods on lean enterprise change and transformation.
The original LAI Rockwell Collins case study, completed by LAI researchers in 2006, describes changes from 1996, when lean efforts were just beginning. The Lean Electronics (TM) program was defined and began in 1998, and was complemented by numerous other initiatives. These other efforts complemented and leveraged lean changes and each other, and, as the case study describes, lead to steady, cumulative, and significant improvement. Based on its continued efforts, Rockwell Collins were involved in lean changes and identified new opportunities for improvement. The many cumulative and emergent change was the basis of Rockwell Collins' lean transformation. The case study, written by LAI researchers, was reviewed, discussed, and validated by Rockwell Collins' managers. The reflection that came from interviews and the case write up contributed to Rockwell Collins' managers understanding of their past efforts.
Building on the work on understanding Lean Transformation at Rockwell Collins, the second presentation focuses on understanding how the enterprise has evolved at two levels: the Strategic Enterprise Level, and the Tactical Innovation Level. Drawing primarily on publicly available data such as annual reports, SEC filings, investor calls, and other literature, we see strong evidence to support the view that Rockwell Collins is strategically architected to meet the long-term vision of the enterprise, while sufficiently retaining sufficient flexibility to meet near-term challenges. We frame this strategic view using the principles of enterprise thinking. From an innovation perspective, they have created a system of innovation that enables employee engagement, is driven by an effective governance model, and at the same time leverages improvements in the external environment. Using the examples of their 10X program, and case examples of synthetic vision and cognitive radio, we highlight both the importance and the effectiveness of the extant innovation system
Establishing Systems Competency in Enterprises: Recent Studies
Dr. Donna Rhodes, LAI Principal Research Scientist, and Caroline Twomey Lamb, PhD Candidate, September 2009
The practice of systems engineering has evolved significantly over the past decade in response to new challenges, yet at the same time the engineering workforce has declined. Several studies also cite an erosion of engineering competency, particularly in government and aerospace/defense industry. The development of systems competency is critical; yet, we lack the empirical basis for developing a truly informed strategy for addressing this need. This talk will describe past and ongoing research on systems thinking and practice that is focused on informing the development of competency models and collaboration models. Competency models define the knowledge, skills, and abilities needed by individual systems professionals in an enterprise. Collaboration models specify success factors for groups and teams within and across enterprises who collectively work on a common objective.
Establishing systems competency in enterprises involves empirical studies and case based research for the purpose of understanding how to achieve more effective systems engineering practice through understanding of the context in which systems engineering is performed and understanding the factors underlying the competency of the systems workforce. The talk will discuss three recent and ongoing research studies with highlights of interim research outcomes. The first research effort is focused on building empirical knowledge of the enablers, barriers and precursors of the development of systems thinking in individual engineers, and thus far included a study within the aerospace industry (Davidz 2006), and extended in an exploratory study within an aerospace government agency. A second line of research is looking at effective socio-technical practices of collaborative distributed systems engineering, that is, where teams are non-geographically collocated (Utter 2007). A third research project (Lamb 2008/ongoing) seeks to develop an empirical basis for collaborative systems thinking, defined as “an emergent behavior of teams resulting from the interactions of team members and utilizing a variety of thinking styles, design processes, tools, and languages to consider system attributes, interrelationships, context and dynamics towards executing systems design”. These recent and ongoing LAI studies seek to impact the effectiveness of individuals and groups to strengthen performance of modern enterprises involved in acquiring and developing complex systems.
Architecting the Healthcare System for Stakeholder Value
Jorge Fradinho Oliveira, PhD Candidate, January 2010
The healthcare industry is a complex socio technical system comprised of multiple stakeholders driven by incentives, which often times are not aligned with one another, and with compromised ability to deliver to the patient the appropriate care, at the appropriate time, at the appropriate location, and at an adequate cost. In 2005, US healthcare expenses were more than 16% of the GDP, and hospital care alone accounted for the largest portion of expenditure 30.8%. As such, the strategies and operations developed and implemented by hospitals have a significant effect on access, quality, and cost of care, and thus the overarching focus of this research is hospitals.
This talk will describe one of the ongoing innovative partnerships that the Lean Advancement Initiative has successful pursued with a leading multi disciplinary hospital in Boston, as we begin to explore how the emerging theoretical concept of Enterprise Architecture can help hospitals, and enterprises in general, in architecting themselves most adequately to fulfill their value proposition.
Applying Enterprise Architecting within the Army Transformation
Professor Debbie Nightingale, LAI Co-Director, and LTC Doug Matty, PhD Candidate, June 2010
Overview of Partnership Model
Professor Debbie Nightingale, LAI Co-Director
Modeling and Understanding Enterprise Behavior using a Hybrid Simulation Approach
Chris Glazner, PhD Candidate, March 2009
Today, the design of enterprises is much more art than science. The complex structure and behavior of enterprises makes it difficult to untangle cause and effect amidst the enterprise’s components and their relationships. In order for managers to understand how an enterprise’s architecture affects its behavior, they need tools and techniques to help them reduce the apparent complexity of the enterprise. The practice of enterprise architecting continues to make advances in this area with frameworks that can be used to guide the decomposition and communication of enterprise architectures, but it does not provide tools to analyze the potential behavior of a proposed enterprise architecture.
This research seeks to extend the practice of enterprise architecting by developing an approach for creating simulation models of enterprise architectures that can be used for analyzing the architectural factors affecting enterprise behavior and performance. This approach matches the content of each of the “views” of an enterprise architecture framework with a suitable simulation methodology such as discrete event modeling, agent based modeling, or system dynamics, and then integrates these individual simulations into a single hybrid simulation model. The resulting model is a powerful analysis tool that can be used for “what-if” behavioral analysis of enterprise architectures. This approach was applied to create a hybrid simulation model of the enterprise architecture of a real-world aerospace enterprise. Model analysis revealed potential misalignments between the current enterprise architecture and its established strategy, and suggested relatively minor changes to the architecture that could be made to realize significant gains to enterprise performance.
Adoption of Measurement Tools at BAE Systems and Raytheon
Dr. Ricardo Valerdi, LAI Research Associate
Billions of dollars are inefficiently spent on process improvement initiatives every year; even less is spent on addressing the organizational factors that can facilitate or hinder their adoption by organizations. This is partially due to the engineering approach to problem solving which is technology centric, the lack of understanding of the factors that drive successful adoption of new ideas, and the top-down approach to dissemination in organizations. What is needed is an organization centric approach that seeks to understand the context in which the methods and tools are to be used and how this context should influence the dissemination process. At the center of this is the compatibility between the organizational culture and the “culture” embedded in the methods and tools being adopted; two elements which were not necessarily architected with each other in mind. Much of their incompatibility results from the misaligned objectives between researchers that develop methods/tools and the practitioners that aim to adopt them.
In order to identify the enablers and barriers to adoption, we provide examples of both successful and unsuccessful examples of process improvement initiatives. From the successful adoptions – particularly at BAE Systems and Raytheon – we identify the best attributes of an organization that increase their propensity to adopt as well as the particular attributes of methods and tools that make them more adoptable. From the unsuccessful cases we identify what attributes were unique about an organization and potential pitfalls of the methods and tools being considered. Ultimately, this research is aimed at improving the adoption rate of methods and tools to ensure a higher return on investment on process improvement initiatives.
LAI 2009 Enterprise Transformation Research Summit Overview
Professor John Carroll, MIT, LAI Co-Director; Professor Debbie Nightingale, MIT, LAI Co-Director; Mr. Bill Forthofer, Pratt & Whitney, LAI Research Committee Chair