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The Lean Enterprise In Aerospace Marketing EssayFor assignment help please contact
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Today most people identify lean with reducing waste, which is to take a
very narrow view of this exciting idea. Reduction of waste isn't the sole
focus of lean. In lean, waste reduction and value creation are two parallel
concepts which must be executed simultaneously to meet the demands of
the end customer.
Womack, Jones and Roos argue in their book, The Machine That Changed
the World- How Lean Production Revolutionized the Global Car Wars,
that while lean thinking can be applied by any company anywhere in the
world, its fullest potential is only realized when it is applied across the
spectrum of the enterprise. And they called such an enterprise as Lean
Enterprise.
'Lean Enterprise is an integrated entity that efficiently creates value for
its multiple stakeholders by employing lean principles and practices.'
(Murman et al, 2002)
Lean enterprise is a firm that embraces lean principles. The
organizational structure of a lean enterprise is intolerant of waste and
every member of the organization proactively seeks improvement in the
existing processes. Lean enterprise prioritizes customer value and every
activity within the organization aligns itself to achieve that goal. Another
trait of a lean enterprise is its outreach. As Womack et al points out in
their work, Toyota reached out to its suppliers and not only involved
them in the design process but also encouraged them to come up with
their own innovations. They encouraged their big suppliers to consolidate
the smaller suppliers to cope with the high demand from emerging
markets. Toyota itself holds an equity stake in its major suppliers.
The Toyota success story points out the importance of cooperation and
co-ordination between the firm and its various suppliers. In increasingly
complex world of Aerospace, most of the aircraft manufacturers are
acting as system integrators and rely on their first tier suppliers for
manufacturing individual parts of an aircraft and these lessons from
Toyota story are invaluable to the aerospace industry to understand the
firm and supplier relationship.
In this context, lean enterprise's definition needs to be extended to
include the phenomenon of outreach. Therefore, lean enterprise can be
defined as a collective group of organizations working together to
achieve a set of common goals. This collective group formulates a
common strategy to manage the value streams extending from one
organization to another, share gains and profit, manage targets for
improvement, and eliminate waste.
Murman et al in their book, Lean Enterprise Value, identify five
principles of Lean Enterprise Value. They fuse together the words lean
and value to emphasize the importance of simultaneously eliminating
waste and creating value in a lean enterprise. Enterprise represents a
firm centric approach rather than factory floor approach. An organization
can truly become lean only when the principles of eliminating waste and
value creation are applied across the spectrum of the firm. Five
principles of Lean Enterprise Value are,
Principle 1: Create Lean value by doing the job right and by doing the
right job.
This argues for a dynamic approach where exists a constructive
relationship between doing the job right and doing the right job.
Principle 2: Deliver value only after identifying stakeholder value and
constructing robust value propositions.
Value delivery is facilitated by a well structure value proposition and of
course, a solid value proposition can't be structure around poorly
identified value.
Principle 3: Fully realize lean value only by adopting an enterprise
perspective.
It is very important that lean is implemented at the enterprise level
otherwise overall net gain would be limited. A study conducted by Cook
and Graser for RAND Corporation suggests that all aerospace
manufacturers in the United States have adopted lean to a certain
degree. The problem is that these adoptions tend to be localized and as a
consequence there benefits. This creates isolated success stories of 'lean
projects.' Murman et al call these success stories as 'islands of success.'
Principle 4: Address the interdependencies across enterprise levels to
increase lean value.
There are different levels of enterprise and they are all interdependent.
Detail discussion of the various levels of enterprises follows.
Principle 5: People, not just processes, effectuate lean value.
In order to eliminate waste and create value, knowledge and capability
must exist at three distinct levels of enterprise, value identification, value
proposition and value delivery. For this to happen, people working an
enterprise to understand and facilitate lean principles. Talking about
Toyota Production Systems, Sugimori et al highlight the central role of
people.
"…'respect for human' systems where the workers are allowed to
display in full their capabilities through active participation in running
and improving their own workshops." (Sugimori et al, 1977)
Value Stream
Second step in formulation of research question is to define value stream.
Value Stream is broadening of Porter's concept of value chain. Porter
defines value chain as a basic tool for conducting a systemic analysis of
all of the activities (and their interactions) that a firm performs, in order
to understand the sources of competitive advantage.
Womack and Jones in their book Lean Thinking define value stream as
the set of all specific end-to-end and linked actions and processes and
functions necessary in transforming raw materials into a finished product
delivered to the customer, and then in providing post-sales customer
support. They argue that when value stream is mapped it gives a very
clear indication of processes and activities that a) create value, b) create
no value but are unavoidable and c) create no value and are avoidable.
This process of mapping the value stream facilitates the elimination of
waste and helps in implementation of lean principles.
Evolution of value stream is result of progress made in the sphere of
technology. In response to increasing technological complexity in recent
times, corporations have begun to concentrate all their efforts on their
core competency while outsourcing activities in the external periphery of
their value adding activities. While this approach creates a specialist
organization, it also results in loss of breadth of expertise. Johns, Crute,
and Graves (2006) argue that as a consequence, we find customers
seeking broad systemic offerings while suppliers are moving in opposite
direction of specialisation in narrow band of core competence. This
creates a vacuum which can be filled by organisations that can forge
strong supplier relationships and bring together a wide array of
specialists to develop a systemic offering and create value streams in the
process. . Aerospace Innovation and Growth Team (AIGT), a UK
government agency, reported in 2003:
"The nature of UK Aerospace Industries 2022 will have changed
considerably, driven primarily by globalisation. The business model of the
future will be value chain competing against value chain, not just single
company versus single company as we witness predominantly today.
Supply chains will have evolved to include the end-user or consumer in
value creation and through this will have become known as value chains."
While AIGT uses the phrase 'value chain', in author's opinion it
corresponds more closely with Womack and Jones' 'value stream' than
Porter's value chain! Johns, Crute and Graves' also comment on value
stream in their paper on lean supply,
"…to realise the full advantages, Lean practitioners in UK aerospace
must move beyond the current primary focus on manufacturing
techniques and optimising only their own company's part in the supply
chain as an isolated process, toward embracing a Value Stream
perspective."
This is not only true for UK but the entire industry as a whole. One
instance of failure on part of a manufacturer to involve suppliers in the
development and decision making process would be Boeing's attempt to
increase production of the 737 and 747 jumbo jets in 1997. Neither its
factories nor its suppliers could cope up with the production target and
Boeing had to shut down the production of the concerned aircrafts for a
month. This, in parts was responsible for the first net loss recorded by
Boeing in more than 50 years! Today when both big player in aerospace,
Boeing and Airbus are targeting an ambitious 40% increase in production
of single and twin aisle passenger aircraft by 2015, principles of lean
enterprise and value streams are more relevant and crucial to the
success of the industry than ever.
Lean Enterprise in Aerospace
Discussion of lean principle in context of aerospace presents its own
challenges. Lean philosophy, as discussed earlier, was developed by
Toyota in post-World War II Japan with focus on creating maximum value
with least investment of the resources whereas the rest of aerospace
industry, particularly the United States which 'was' also the
unchallenged leader in the field, had Cold War priorities. Implementing a
new business philosophy, which worked in the very dynamic market of
automobiles, in aerospace industries with its higher degree of complexity
and lower volumes is nothing short of introducing a new paradigm.
To continue the discussion further one must understand the evolution of
lean. Lean is a way of thinking and not a set of theoretical steps. Lean
philosophy was observed to work in practice and only then it was codified
into theory. This evolutionary curve provides lean it's 'legitimacy'.
Murman et al in their book, Lean Enterprise Value: Insights from MIT's
Lean Advancement Initiative put forward implications of lean thinking for
the aerospace industries. They point out the peculiar nature of
aerospace; industries are highly interdependent with a very wide
supplier base. They are both a source and importer of technological
innovation, and have a rich intellectual capital base and highly skilled
workforce. Also, failure is not an option in aerospace, the products and
systems must operate with zero failures! Another aspect of aerospace
industries which is poles apart from automobile is the lifecycle of
products. Aerospace systems and platforms have life cycles spanning
over decades with continuous evolution of the subsystems and
components. For instance, Boeing B-52 Stratofortress, a long range
strategic bomber first manufactured by Boeing in 1950s, is still in service
with the United States Air Force!
Murman et al argue for a broader and more holistic view of lean thinking,
centred on the enterprise, to be implemented in aerospace. Most of the
value addition in aerospace lies in upstream design and development
phase, which can last for years as oppose to months in case of
automobiles, and in downstream sustainment operations which typically
last for decades. These particular traits demand that lean enterprise
should be focus of the efforts of aerospace industries in implementing
lean thinking. Johns et al argue for the proliferation of value streams in
aerospace and that is another essential step in transforming aerospace
industries into 'lean enterprise'. Aerospace thrives on technological
innovation and lean's philosophy of Kaizen or continuous improvement
sits well with that trait. One can conclude on the basis of arguments laid
that lean thinking offers lots of incentives for aerospace.
Vision 2016
'People working together as a global enterprise for aerospace leadership'
Boeing - Forever New Frontiers
Values
Leadership
Integrity
Quality
Customer Satisfaction
People working together
A diverse and involved team
Good corporate citizenship
Enhancing shareholder value
Core Competencies
Detailed customer knowledge and focus
We will seek to understand, anticipate and be responsive to our customers' needs.
Large-scale systems integration
We will continuously develop, advance and protect the technical excellence that allows us to integrate effectively the systems we design and produce.
Lean Enterprise
Our entire enterprise will be a Lean operation, characterized by the efficient use of assets, high inventory turns, excellent supplier management, short cycle times, high quality and low transaction costs.
Figure 1 Boeing's Vision 2016 (Source: The Boeing Company)
Members of MIT's Lean Advancement Initiative consortium developed
generic process architecture for lean enterprise.
Lifecycle Processes
Business Acquisition and Program Management
Requirement Definition
Product/Process Development
Supply Chain Management
Production
Distribution and Support
Enabling Infrastructure Processes
Finance
Information Technology
Human Resources
Quality Assurance
Facilities and Services
Environment, Health, and Safety
Enterprise Leadership Processes
Strategic Planning
Business Models
Managing Business Growth
Strategic Partnering
Organizational Structure and Integration
Transformation Management
Figure 2 Enterprise Process Architecture
Processes under the label 'Lifecycle Processes' comprises of value stream
activities which directly contribute towards revenue generation through
creation of products, systems and services for the customer. The next set
of processes, 'Enabling Infrastructure Processes' provide support for
'Lifecycle Processes'. 'Enterprise Leadership Processes' deal with the
human aspect of the lean enterprise and plays a critical role in the
transformation to lean.
At Toyota, manufacturing and supply chain operations were main focus of
the transformation to lean (Womack et al, 2007). But in aerospace,
manufacturing contributes a much smaller proportion to the value
associated with a product. The challenge, therefore is, how to apply
lessons from automobile industry to aerospace with its greater product
and technological complexity, much lower production volumes, very
different (and small) customer base and business practices which directly
contradict principles of continuous improvement?
In 1995, Lean Advancement Initiative at MIT developed a Lean
Enterprise Model (LEM) to better understand these challenges.
"The LEM is a synthesis of principles and practices, a hypothetical model
of a generic lean enterprise." (Murman et al, 2002)
Principles
Overarching Practices
Enabling Practices
Supporting Practices
Figure 3 Lean Enterprise Model Architecture (Source: Murman et al,
2002)
Figure 3 represents the architecture of the Lean Enterprise Model
developed by MIT researchers and LAI consortium members. First in this
hierarchy are principles of a lean enterprise.
Waste Minimization
Responsiveness to change
Right thing at right place, at right time, and in right quantity
Effective relationships within the value stream
Continuous improvement
Quality from the beginning
Figure 4 Principle of a lean enterprise (Source: Murman et al, 2002)
First principle of lean enterprise is at the very core of lean thinking.
Eliminate waste, completely eradicate non-value adding activities.
Second guiding rule for lean enterprise is its agility in responding to
changing market demand and in case of aerospace, the evolving
challenges to national defence. Third principle of lean enterprise has its
roots in 'Just-in Time' (JIT) theory. JIT corresponds to a single piece flow
at factory floor where a part is delivered at its point of need without
creating inventory or shortage. This approach should be implemented
across the spectrum of enterprise, from human resources to finance to
sales. Effective relationships within the value stream highlight the
importance of honest communication and mutual respect within various
stakeholders in a lean enterprise. Continuous improvement, like first
principle, is part of the core structure of lean. Pursue perfection, always
strive for something better. The last principle again reflects one of the
fundamental aspects of lean thinking, reduce rework, and build the best
you can from the very outset. Quality should be already built into the
product.
Some of the overarching practices of lean enterprise which support the
principle of lean enterprise are listed in figure 5.
Human-Oriented Practices
Promote Lean Leadership at all Levels: Align and involve all stakeholders
to achieve the enterprise's lean vision.
Relationships Based on Mutual Trust and Commitment: Establish stable
and on-going relationships within the extended enterprise encompassing
both customers and suppliers.
Make Decisions at Lowest Possible Level: Design the organizational
structure and management systems to accelerate and enhance decision
making at the point of knowledge, application and need.
Optimize Capability and Utilization of People: Ensure that properly
trained people are available when needed.
Continuous Focus on the Customer: Proactively understand and respond
to the needs of the internal and external customers.
Nurture a learning environment: Provide for development and growth of
both organizations' and individuals' support of attaining lean enterprise
goals.
Process-Oriented Practices
Identify and Optimize Enterprise Flow: Optimize the flow of products and
services either affecting or within the process from concept design
through point of use.
Assure Seamless Information Flow: Provide processes for seamless and
timely transfer of and access to pertinent information.
Implement integrated product and process development (IPPD): Create
products through an integrated team effort of people and organizations
that knowledgeable of and responsible for all phases of the product's life
cycle from concept definition through development, production,
deployment, operations and support.
Ensure process capability and maturation: Establish and maintain
processes capable of consistently designing and producing the key
characteristics of the product or service.
Maintain Challenges of Existing Processes: Ensure a culture and systems
that use quantitative measurement and analysis to improve processes
continuously.
Maintain Stability in Changing Environment: Establish strategies to
maintain program stability in a changing customer-driven environment.
Figure 5 Overarching Practices of Lean Enterprise(Source: Murman et al,
2002)
These practices are interdependent and interconnected. Each must be
adapted to some extent. For instance, mutual trust is essential for
seamless flow of information and for implementation of integrated
product and process development, a seamless flow of information is
paramount.
Integrated Entities
Nightingale defines three levels of enterprise based on the entity being
considered. This is the next element in the definition of enterprise.
Program Enterprises
'A program is collection of activities that produces a particular product,
system, or service that is delivered to the customer and generates
revenue.' (Nightingale, 2003)
Program is the most basic unit of a business activity. A program
enterprise encompasses the Lifecycle processes in generic process
architecture for lean enterprise (figure 2). Most program enterprises
feature one core value stream.
In aerospace, programs can range from billions of dollars, like Joint
Strike Fighter (JSF) program of United States Air Force (USAF), to those
of a few million dollars. Largest program enterprises, such as JSF are
substantial enterprise in themselves. JSF is jointly funded by the United
States, the United Kingdom, Australia, Italy, Canada, the Netherlands,
Norway, Denmark, and Turkey. Its development is spread over last two
decades and organisations and people involve in JSF program would
continue to work in enterprise through the lifecycle of aircrafts produced
under JSF.
Multi Program Enterprises
Organisations involve in execution of multiple programs are multi-
program enterprises. Multi-program enterprises provide leadership and
enabling infrastructure in generic process architecture of lean enterprise
(figure 2).
Multi-program enterprises contain multiple value streams that are part of
several program enterprises. At the risk of simplification, multi-program
enterprises can also be treated as a program enterprise comprised of
many product lines. For instance; Airbus could be considered an
enterprise with many product lines. But 'fuselage' manufacturing
division/unit at Airbus is an enterprise in itself.
National and International Enterprise
'…the collection of all entities that contribute to the creation and use of
products, systems, or services comprise a national or an international
enterprise. This would include not only the products or service providers
but also their customers, suppliers, end users, government regulators,
etc.' (Nightingale, 2003)
For example, the United Kingdom Aerospace Enterprise includes all
customers (British Airways, Royal Air Forces, Satellite service providers
etc.), government end users, manufacturers ( BAE Systems, Rolls Royce,
domestic and international suppliers etc.) , infrastructure (civilian and
military airports, maintenance depots, air traffic management), and other
related institutions and civil bodies (universities, R&D laboratories etc.)
Enterprises are global entities now with military systems being sold all
over the world. Few countries, such as India, specifically ask for some
portion of the hardware to be manufactured in their countries through
transfer of technology agreements. This creates a larger international
aerospace enterprise comprising of various countries and organisations
working in the field of aerospace, and the UK aerospace enterprise, a
national enterprise, is part of this larger international aerospace
enterprise.
Core and Extended Enterprises
Each of these three distinct levels further have distinct core and
extended enterprises.
'The core enterprise consists of entities tightly integrated through direct
or partnering relationships. Less tightly coupled customers, suppliers,
and government agencies encompass the extended enterprise all the
entities along an organization's value chain, from its customer's
customers to its supplier's suppliers, that are involved with the design,
development, manufacture, certification, distribution, and support of a
product or family of products. In this definition, products include all of
the goods and services that satisfy the customer's, and ultimately the end
user's, needs.' (Nightingale, 2003)
This definition suggests that extended enterprise essential acts as a base
for core enterprise. And for an enterprise to become lean, both core and
extended enterprise have to transform into lean at all three levels of the
enterprise, program, multi-program and national and international. All
these levels of enterprises are interconnected and interdependent and
lean transformation must be across these levels otherwise it would just
lead to 'islands of success.'
Enterprise Stakeholders
Nightingale argues about the importance of stakeholders in lean
enterprise. Lean has always been focused on customer pull and as such is
customer driven. But in today's world, and aerospace industries, a much
broader vision is required to balance the needs of all the stakeholders.
This is not depreciating customer to a secondary role, quite contrary to
that, Lean Enterprise encourages a focus on customer to driver up the
revenue, which ultimately satisfies all the stakeholders!
Value Creation
As discussed earlier, focus of lean enterprise should be two forked,
eliminate waste and create value. Elimination of waste and creation of
value are the driving forces in a lean enterprise. Murman et al describes
value creation for stakeholders as a three phased framework.
Value
Identification
Value
Delivery
Value
Proposition
Find Stockholder Value
Execute on the promise
Agree to and develop the approach
Figure 6 Value Creation Framework (Source: Murman et al, 2002)
First phase of this framework involves identifying the stakeholders and
part/s of project adds value to their investment. Next step involve value
proposition where enterprise structures 'value exchanges', creating a
clear picture of how stakeholder values are being met and how
stakeholders are contributing towards enterprises value. Third phase is
focussed on delivering the value to various stakeholders as well as the
customers. This phase has been focus of lean and most widely discussed
in the context of lean enterprise.
One important aspect of this framework is interconnectedness and
interdependence of each phase. Nightingale suggests that each phase
should be revisited at different phases of the product life cycle, and
iteration must take place among levels of program enterprises, as well as
between the program enterprise and multi-program and national
enterprises.
Value Phases
Enterprises
Value Identification
Value Proposition
Value Delivery
Program
Opportunities
Opportunities
Most lean principles and practices have been focussed here
Multi-program
Opportunities
Opportunities
Most lean principles and practices have been focussed here
National and International
Opportunities
Opportunities
Most lean principles and practices have been focussed here
Table 1 Opportunities for Extension of Enterprise Value Creation
(Source: Nightingale, 2003)
Table 1 shows that there are many opportunities for extending the focus
of lean enterprise from just value delivery to the entire spectrum of value
creation phases.
Case Studies
Introduction
Islands of Success
Case A
An Engineering Support Island: The F-16 Build-To-Package Centre
When problems are found on a typical aircraft production line, the
solutions usually are included in the official product definition - the Build-
To-Package (BTP). Even minor changes can considerably delay the
engineering check and result in expensive rework.
To tackle this problem, engineers at Lockheed Martin Aeronautics (LMA)
created the F-16 Build-To-Package Support Centre. Before the F-16 BTP
support centre, changes had to pass through several stations-
engineering design, manufacturing planning, manufacturing engineering,
tool planning, tool design, tool manufacturing, and various support group
- before the final approval. This used to be a time consuming process
with lots of paperwork. This state of affairs was in conflict with all lean
principles.
LMA's solution employed classic value stream approach. LMA first
mapped the existing flow by following the paperwork, identifying where
it went and who touched it. They developed this flow with several
iterations to create a new and more 'lean' flow. Figure 7 shows the BTP
centre created on the factory floor.
BTP support centre works by pulling out the technical expertise to the
centre when required. Centre is arranged in a series of engineering cells.
Each package passes through the cells in single piece flow without
waiting and supports modification with the possibility that some tasks
can be performed in parallel, allowing scheduling improvement without
the dangerous elimination of necessary steps, checks, or reviews.
Communication is face-to-face with co-located personnel to minimize
delays and miscommunication.
LMA's approach has resulted in consistent, sustainable improvements:
40% fewer steps, 75% fewer handoffs, and a 90% reduction in travel
distance. Also, there has been a 75% cycle-time reduction, greatly easing
the paperwork pressure on operations personnel.
The biggest barrier to BTP's success has been the struggle for over
stretched personnel to function at full efficiency. For all its achievements,
BTP Support Centre remains an island of success as traditional functional
organisation goals from the outside tend to subvert the value stream and
functional interactions, it struggles to maintain critical personnel and it's
costly to implement.
While these isolated islands of success demonstrate suitability and
pragmatic advantages of lean, they still remain isolate in the enterprise.
And that is the strongest argument in support of lean enterprise. Only
when the entire enterprise is transformed to lean, and all these isolate
islands are linked that enterprise would be able to truly exploit the
benefit of lean practices.
Production Problem Release BTP, Available at Point of Use
BTP Support Centre
Computer
Tools
Pull on Demand
* Canopy *Fuel Sys. *Fire Control Sys. *Harness Def. *Avionics *Elect
Planner *TMP *MRP Planner
*Propulsion *Coproduction *Buyer *NC Programmer *Tool Design
*Wiring Instl. *CRB *ECS Insti.
*Life Suppt. *Process Control *Structure *Labs *M&P *Ldg Gear *PP&C
*Parts Engrg
*Escape Sys. *Safety*Customers *DCMC *Stress *ECS Sys. *Arm Sys.
*Scheduling *Hydraulics
*Equip Instl. *Program *PQA *Planner *Frac.& Fat. *Maintainability
*Tool Mfg
Figure 7 BTP Support Centre (Source: Murman et al, 2002; Garry
Goodman, Presentation to LAI Product Development Workshop, 2000)
Case B
Integrating Supplier and Material Management at GE Lynn
At the LAI 1998 Plenary workshop, Ernie Oliveira, the GE Lynn leader of
manufacturing initiatives, gave a presentation on lean transformation at
the GE aircraft engine plan in Lynn, Massachusetts. This lean
transformation was enabled by the changes to the manufacturing and
assembly facilities, the material management system and the supply
chain.
One of the fundamental changes implemented at Lynn plant involved
scrapping the functional department approach where one department
deals with many product lines. Instead a linear process approach was
established. Resources were grouped, according to requirement for
assembly of a particular engine to constitute one linear flow. These linear
flow lines were shorter and more linear (!), which meant that product
moved a shorter distance. Also, since there were fewer units in the
product line, it was easier to identify the delayed assemblies and rectify
them. All these improvements lead to a reduction in work-in progress.
Furthermore, GE developed an electronic data exchange system to
facilitate open and real time communication with suppliers and
customers. This electronic data exchange system also provided GE with a
medium to signal suppliers for parts and financial transactions. GE also
managed to establish a replenishment system with suppliers of highest-
cost parts which bear close resemblance to Toyota's supplier
arrangements.
GE developed a kanban system with the supplier for 100 percent on time
delivery. Factory also committed to freeze requirements two weeks prior
to the actual date parts are needed. GE managed to solve the parts
shortage - the most pressing problem at the plant - through this kanban
system of pull linkages with the internal and external supplier base.
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This system helped GE to achieve 100 percent deliveries to customer's
schedule. Engines are completed, tested and loaded directly into a
customer truck every three days to match assembly requirements at the
customer site.
GE Lynn is a success story because of its lean approach to system
transformation and supplier relationship. Ernie Oliveira, who headed the
lean initiative at Lynn, also managed to involve critical stakeholders -
workforce and suppliers. The results of this transformation were
astounding as detailed in the table 2.
Performance Metric
Improvement (Actual Average)
Inventory Turnover
33%
Throughpput Time
35%
Quality (Internal -DPU's/engine)
28%
Human Effort per engine
17%
Table 2 Lean Manufacturing results at GE Lynn (Source: Murman et al
2002; LAI Plenary Workshop proceedings and presentation by Ernie
Oliveira, 'The transition to Lean Manufacturing in Lynn Engine Assembly
Operation, GE Aircraft Engines' 1998)
Case C
The Pratt & Whitney Story
During late 1992, Pratt & Whitney (P&W) refocused its energies to
reduce costs, improve manufacturing performance, and increase
competitiveness.
In 1993, in accordance with lean principles, P&W was trying to transform
its General Machining Product Centre in East Hartford, Connecticut from
a departmental layout to a series of manufacturing cells. Result of this
transformation was dramatic. Top performing cell's lead time saw a huge
reduction from eight to three weeks; average number of pieces in
process dropped from 233 to 77; travel distance went from 13,670 to
5800 feet; and average setup time shrank from 6 hour to 30 minutes.
Reference Profile (α)
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Bath May, 2006.
Johns R., Crute V., and Graves A., Lean Supply: Cost Reduction or Waste
Reduction, A preliminary study of Lean initiatives and lower tier
suppliers in the Aerospace Sector. School of Management, University of
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