Lean broadens reach at Rockwell Collins -- Web Exclusive PDF
On a journey to eliminate waste and improve productivity, Rockwell Collins' material and supply operation extends Lean to its supply chain
By Susan Avery -- Purchasing, 5/19/2005 2:00:00 AM
Click here to download more information about Rockwell Collins' Lean Supply Program.
Each year at its annual Supplier Conference the material and supply operation at Rockwell Collins honors its top performing suppliers at an award ceremony. Presented to the suppliers by chairman, president and CEO Clay Jones, the awards provide recognition for participating in the company's Lean initiative. This year, Jones rewarded Ellsworth Adhesives of Germantown, Wis. "for truly embracing the Lean initiative and taking it to the next level."
Among Ellsworth's achievements: Incorporating Lean so completely in the company's culture that employees make continuous improvements on their own. (See sidebar on page 40).
The "Lean Supplier of the Year Award" recognizes a supplier for its achievements based upon commitment to the Lean initiative, innovative out-of-the-box process improvements, ability to perform and other subjective criteria, says Roger Weiss, vice president of material and supply at Rockwell Collins in Cedar Rapids, Iowa. Ellsworth Adhesives is one of 55 suppliers that's participated in the company's Lean initiative. Other suppliers taking part range from manufacturers of printed circuit boards, semiconductors, machined and sheetmetal components, magnetics, RF products, crystal products and steel, as well as some subcontract suppliers.
Rockwell Collins is a $2.5 billion global company that provides aviation electronics for the world's aircraft manufacturers and more than 400 airline customers, as well as many of the world's military forces. Its annual buy is approximately $1 billion.
Lean Electronics/Manufacturing initiatives (based on the Toyota Production System and other principles) focus on reducing leadtime, reducing assets and improving flexibility and customer responsiveness by eliminating waste. To do this, a company participates in such processes as value stream mapping, improvement workshops/radical process improvement and 5S (sorting, simplifying, sweeping/systematic cleaning, standardizing, and sustaining) activities. These efforts help simplify processes and improve productivity.
Through the Lean Electronics initiative, suppliers to Rockwell Collins have improved product flow by as much as 90%, identified and reduced non-value-added activities by as much as 67%, reduced cycle time by as much as 60% and reduced work-in-process by as much as $150,000.
The journey
When Rockwell Collins embarked on its Lean initiative early in 1998, it began with two fundamental requirements: One, management wanted to ensure that the company continue its focus on providing value to customers. And two: once the company implemented Lean principles, management wanted to ensure that the initiative be sustaining, and not something seen by employees as an "initiative-of-the-month."
Early on, management recognized that providing value to the customer does not begin with Rockwell Collins. It starts much earlier in the supply chain—at the supplier's facility. As such, the materials and supply operation developed a Lean Supply program focused on developing a Lean Supply chain. It moved individuals from the organization's procurement group to the program, including Lean project managers Brad Sleep and Mary McCullough and devoted additional resources to their education and training.
"As the Lean Supply process has evolved over the years, the goal has remained the same—to work with key suppliers and ensure the creation of value for the customer," says Philip D. Krotz, director, Lean Supply, material and supply, Rockwell Collins. "Remaining focused on this goal translates and links key Lean electronics strategies through the entire supply chain."
Krotz recalls that in the early days of the program, the Lean Supply team measured its success based on the number of improvement workshops (or kaizens) it held with suppliers. Soon they discovered that measuring performance with this metric did not help create a Lean culture for these suppliers. The Lean Supply team found that once they left a facility, the supplier was not able to maintain the gains they had achieved.
That's when the Lean Supply team decided to involve the Rockwell Collins commodity teams in the process. At Collins, a commodity team is a cross-functional strategic team responsible for managing a commodity, both direct and indirect. Its purpose is to support the company's business objectives to ensure total customer satisfaction. One of the responsibilities of the commodity teams now is to nominate candidate suppliers for the Lean Supply initiative and to see them through the process.
From input of the commodity teams, the Lean Supply team learned that the improvement workshop model it used was a one-size-fits-all approach that did not suit all suppliers. The team worked to improve the model. Now it includes workshops entitled: Executive Level Training, Value Stream Mapping, Process Improvement Workshops and 5S activities as well as training and mentoring of an internal individual at the participating supplier to continue as Lean Champion once the Collins onsite activity is complete.
In three years, the Lean Supply team worked with 22 suppliers, improving cycle time, set-up time and travel distance in internal processes. One supplier realized $117,000 free cash by reducing work-in- process while another supplier freed up space for four additional machining centers.
In 2002, the Lean Supply team further improved the model and its make-up. For one, it tightened the link between the Lean Supply process and the commodity teams. "There was an increased focus on communication and education between Lean Supply and these teams," says Krotz.
The material and supply organization considers 2003 "a watermark year" for the Lean Supply team: It began using performance-based criteria, developing a supplier scorecard and targeted goals. "These goals, agreed to between the supplier and commodity teams serve to enhance the top-level performance for Rockwell Collins—delivering the right product at the right time at the lowest total cost," says Krotz.
In addition, the team added "value stream alignment" to the process. Many times the cause of a supplier's inability to perform at top level for Rockwell Collins may not lie within the supplier's facility alone. The root cause may lie somewhere within the prime, or between the two companies. Through mapping and analysis of the business-to-business process, the team is working to improve communication and linkage between companies to eliminate waste and potential cause of errors and inefficiencies. "This alignment process also encourages bringing subtier companies into process improvement activities and training opportunities," says Krotz. The team also added a supplier assessment review and a sustainment process to the Lean Supply initiative.
In 2003, Rockwell Collins started to offer its suppliers basic Lean Tools training. Previously used inside Collins as part of its internal Lean certification process, this full-day class is based on simulations and learning-by-doing. Now, the company offers the training to suppliers at the end of the week of its Annual Supplier Conference. To date, representatives from 35 suppliers have participated in the class. The team plans to expand the offering, by traveling to various U.S. sites, using a symposium format. As part of a pilot program, the team held the training session for tier-one and tier-two suppliers in the Minneapolis area in October 2004.
Eye opener
Also that year, the Lean Supply team started to work with the Navy's Lean Pathways Program, an Office of Naval Research patented Lean program. This 12-month engagement model consists of a combined effort between the supplier, Rockwell Collins and the Navy. The team selected five suppliers for the prestigious program using a rigorous set of criteria.
"It was eye opening," says Krotz. "We gathered best practices from the program and did value-stream mapping of our Lean process. We found some areas where we could improve, including the way we select suppliers for the program. Now, the team picks suppliers based on an opportunity score that shows which suppliers have the most opportunity to impact the company's bottom line through improvements in delivery, quality, leadtime, and inventory management processes."
Another improvement was to increase the time spent with suppliers on Lean activities. In the past, the team would hold two or three events with a supplier. Now the engagement is up to one year in length with many activities that involve the commodity teams scheduled throughout the period. At the end, the Lean Supply team issues a report to the supplier on the activities that includes achievements and plans going forward. Then, Weiss schedules sustainment telephone communications and visits at the supplier site. These include planning additional Lean events.
"This is when the Lean project manager backs off and the commodity team works with the supplier to ensure that they are holding the additional events," says McCullough. "We know that when we walk away, there is at least one more year of Lean activity going on and that the commodity team is working with suppliers to make sure this is happening." The Lean Supply team began this phase of the initiative in December 2004, involving 10 suppliers.
As a member of the Supplier Excellence Alliance, Rockwell Collins began to involve suppliers in California in the Lean Supply initiative. SEA is a nonprofit organization whose membership is comprised of many major aerospace and defense companies that began with funding from the state of California. Its purpose is to accelerate the development of supply chain capabilities through Lean to ensure American competitiveness. The ultimate goal of this organization is to take this concept across the U.S. It launched a pilot program in Connecticut in April 2005 that will serve as the platform for the national rollout.
To improve communication and flow of information on Lean techniques and how to apply them, the team also created a Lean Supply community on its Rockwell Collins supplier website.
It also joined the Supplier Networks Working Group, a team established by the Lean Aerospace Initiative. Its mission is to support one of LAI's goals: enable a lean, value-creating supplier base. The team, established in 2001, devises implementation-focused tools and initiatives pertaining to supplier integration. McCullough serves on the team with representatives of Northrup Grumman, Boeing, Raytheon, and Lockheed Martin as well as the U.S. Armed Forces; the Army, Navy, and Air Force all have representatives on the team.
The Lean Supply team is exploring ways to expand the initiative from its tier one suppliers to tier two suppliers. To this end, it is involved with the Environmental Protection Agency's Green Suppliers Network. The group is focused on eliminating waste in such manufacturing processes as plating and painting.
For information on Rockwell Collins' Lean initiatives, see the Strategic Sourcing channel at www.purchasing.com.
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