How IEs Create a Step Change in Performance

In a recent assignment with a multi-billion aerospace manufacturing and repair center, the senior executive team had just received an intriguing presentation and tour from one of the engine suppliers as to their progress in implementing lean manufacturing. The results presented by the contractor were intriguing but represented an opportunity in just one third of the core business base. What the client required was an overarching strategy which fully integrated the entire enterprise, not just the production floor shops. The most important aspect though, is making the strategy actionable and leading the organization through the change. Even in the most challenging operational conditions it is possible to achieve breakthrough results – the key is in transforming the dialogue and relationships within the organization. During the next few weeks, I will list a few examples of how a long term consulting project helped an organization dramatically increase their productivity and their profits.

Here is one of our extended engagements:

• A major aerospace repair center had not produced an operating profit in its entire history. In the plant’s best years, it managed to break even and get the product out the door, though the production flow days had grown significantly. Misalignment of resources, poor capacity planning and utilization, ineffective product lifecycle management (including failure to maintain and upgrade the capital equipment), sub-optimized materiel requirements planning and purchasing were just a few of the principal symptoms. The situation was further exacerbated by organizational communication barriers across the enterprise. Over time, these conditions resulted in deteriorating relationships with the primary customers who were becoming increasingly upset with the trend towards rising costs and missed delivery dates.

The first step was to craft a vision of the center as a state-of-the-industry standard setter. Seeing through the current conditions to what is possible is the way great companies come into form. To create a sense of ownership of the vision, the next step was to enroll the enterprise from executive management to the newest employee. We opened the organization to listen to all parts of the extended enterprise which included the primary customers, suppliers, original equipment manufacturers, contracted repair companies etc. Our approach to building a great company included creating an internal transformation activity which included staffing from the top companies in America – including those from supporting industries. Key to communicating the vision was unifying the management and labor executives in a one-team partnership.

We began the process by assembling an in-house team to develop the contract for the expertise we needed to fully staff the program office and develop the master contract. From there we began the change management process from the board room to the lunch room. Simultaneously we exponentially expanded the number of black belts and green belts on staff through extensive training with one of the principal suppliers well known for its progress in Six Sigma. As all of this was taking place, we began planning the early-win projects and facilities moves which would serve as the indicators to the workforce that change was underway. Mass education of the workforce was led by the production division leadership, further reinforcing that the change was internally, rather than externally driven. As the employees increased their understanding of lean cellular operations, they were eager to contribute to the cell design process, increasing their pride in craftsmanship. We kept the focus on what was going right – and before long, organizational behaviors that had impeded production, quality and profitability began to fall away.

Once the Master Transformation Team was in place, the center was ready to accelerate. Production flow days, a key cost and performance measure -- decreased by a third on several major product lines. One product line was so successful, that they were able to transfer the savings generated from improved operations to two additional aircraft scheduled for the following year – essentially repairing the aircraft for free! As progress accelerated in transforming the production processes, the supporting key back shop processes such as finance, materiel planning, inventory management, bill of materials planning and maintenance and engineering data management came under increasing scrutiny – truly giving this an enterprise wide perspective. Ensuring that all levels of the organization were involved in the detail planning was the key to owning the new way of doing business.

Confronting the need for massive change in the business can be a daunting task. Choosing the right advisors to help lead the way is fundamental. We help you uncover the operational value that can easily be lost in the clutter of day-to-day operations. In the right hands, a poorly performing company can make the step change to market leader.

EL
CEO 24/7