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《Integrating The Lean Enterprise》Examples of Commonality in Lifecycle perations

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Main engine starter is common across airports service these aircraft(11 common) Airline only has to stock 14 spares as
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Examples of Commonality in Lifecycle Operations 旬 Commercial airline Main engine starter is common across 747-400, 767, and 767 300ER 26 airports service these aircraft(11 common Airline only has to stock 14 spares, as opposed to 25 if they were not common 旬PMA-276 UH-1Y and AH-1Z deploy together on the same MEu, relying on the same mobility, maintenance, training and sustainment infrastructure 85% commonality between UH-1Y(utility) and AH-1Z(attack) reduces the detachment maintenance personnel requirement from between 4 and 14 people(3 to 12%) Nearly $1.5 billion in savings from commonality over 20 year lifecycle of program Deborah Nightingale- 1@2002 Massachusetts Institute of Technology

Deborah Nightingale - 1 © 2002 Massachusetts Institute of Technology Examples of Commonality in Lifecycle Operations  Commercial Airline: – Main engine starter is common across 747-400, 767, and 767- 300ER – 26 airports service these aircraft (11 common) – Airline only has to stock 14 spares, as opposed to 25 if they were not common  PMA-276 – UH-1Y and AH-1Z deploy together on the same MEU, relying on the same mobility, maintenance, training, and sustainment infrastructure – 85% commonality between UH-1Y (utility) and AH-1Z (attack) reduces the detachment maintenance personnel requirement from between 4 and 14 people (3 to 12%) – Nearly $1.5 billion in savings from commonality over 20 year lifecycle of program

Timeline of Commonality Benefits Illustrates Linkage to Multi-Stakeholder Enterprises Shared Reduced Higher development tooling Higher Reduced Greater productivity spares complexity interoperability cost availability in supply Reduced Reduced Reduced rework cycle time spares ReducedFewer maintenance Design inventory iability downtime hours reuse Reduced dms Process Lower reuse Reduced k training Reduced Reduce Increased equipment testing Economies time ing operator Reduced competency time for Faster of scale source solutions to Reduced Reduced problems inventory support: Reduced equipment documentation Deborah Nightingale-2 @2002 Massachusetts Institute of Technology

Deborah Nightingale - 2 © 2002 Massachusetts Institute of Technology Timeline of Commonality Benefits Illustrates Linkage to Multi-Stakeholder Enterprises Reduced time for source selection Reduce training time Reduced support equipment Reduced training equipment Higher spares availability Reduced complexity in supply Reduced downtime Greater interoperability Faster solutions to problems Reduced rework Reduced testing Increased operator competency Design reuse Shared development costs Fewer maintenance hours Reduced DMS Reduced spares inventory Reduced tooling Process reuse Reduced documentation Lower risk Economies of scale Reduced inventory Higher reliability Reduced cycle time Higher productivity 0 II III I

System Integrator-Supplier Communications Involve nteractions at different levels SYSTEM INTEGRATOR SUPPLIER General Managemen General Strategic/business Management Program Capabilities Manager Customer Requirements Liaison Manager Source selection Procurement requirements order placement IT Dept. IT Solutions; training Implementation; plans etsitDept Coordinated methods procedures solutions Engineering Engineering Common technical databases tools Integrated product teams lPTs) Technical data exchange Flowdown of key characteristics ingineering: Implementing Integrated Supply Chain Product Configuration control evelopment, Presentation at an MIT Workshop (06/24/1999) Engineering change process management Deborah Nightingale-3@2002 Massachusetts Institute of Technology

Deborah Nightingale - 3 © 2002 Massachusetts Institute of Technology SYSTEM INTEGRATOR SUPPLIER Strategic/business relationships Source selection; requirements; order placement Coordinated methods, procedures & solutions – Common technical databases & ools – Integrated product teams (IPTs) – Technical data exchange – Flowdown of key characteristics – Configuration control – Engineering change process management IT Solutions; training & Implementation; plans & technical requirements Requirements Capabilities General Management General Management Procurement Customer Liaison Manager IT Dept. Engineering Engineering IT Dept. Program Manager Source: Adapted from William R. Neill, “Design Chain Engineering: Implementing Integrated Supply Chain Product Development , ” Presentation at an MIT Workshop (06/24/1999) System Integrator-Supplier Communications Involve Interactions at Different Levels t

Early Supplier Integration Results in Significant Benefits through Architectural Innovation old"Approach "Current “ Emerging” Le ean Lean Prime Rigid vertical Collaborative with rigid Virtual Team FFF interfaces organizational wlo boundaries t and control interfaces Prime Key Suppliers Prim Key Suppliers Key Suppliers Subtiers Subtiers Subtiers Arms length; interfaces Collaborative; but constrained by Collaborative and seamlessly I totally defined and controlled priorworksharearrangements integrated; architectural innovation ARCHITECTURAL INNOVATION Major modification of how components in a system/product are linked together Significant improvement in system/product architecture through changes in form/structure, functional interfaces or system configuration Knowledge integration over the supplier network(value stream perspective prime-key suppliers-subtiers tapping supplier technology base Deborah Nightingale-4@2002 Massachusetts Institute of Technology

Deborah Nightingale - 4 © 2002 Massachusetts Institute of Technology Arm’s length; interfaces totally defined and controlled Collaborative; prior worksharearrangements Collaborative and seamlessly I integrated; architectural innovation Virtual Team w/o boundaries Prime Key Suppliers Subtiers “Old” Approach “Emerging” Lean Prime Key Suppliers Subtiers “Current” Lean Collaborative with rigid organizational interfaces Prime Key Suppliers Subtiers Rigid vertical FFF interfaces and control ARCHITECTURAL INNOVATION:Major modification of how components in a system/product are linked together • Significant improvement in system/product architecture through changes in form/structure, functional interfaces or system configuration • Knowledge integration over the supplier network (value stream perspective ; prime-key suppliers- subtiers; tapping supplier technology base) Early Supplier Integration Results in Significant Benefits through Architectural Innovation but constrained by

Observations on architectural Integration Approaches n Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives i Much of the challenge may be organizational rather n technical Portfolio strategies and processes are necessary to obtain full benefits i Metrics and incentives that measure and reward lifecycle value creation a key enabler 0 Customer enterprise structure and demand determine applicability of this approach Deborah Nightingale-5@2002 Massachusetts Institute of Technology

Deborah Nightingale - 5 © 2002 Massachusetts Institute of Technology Observations on Architectural Integration Approaches  Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives  Much of the challenge may be organizational rather than technical  Portfolio strategies and processes are necessary to obtain full benefits  Metrics and incentives that measure and reward lifecycle value creation a key enabler  Customer enterprise structure and demand determine applicability of this approach

Lie outside Direct Hierarchical Control ers Influence Standards when Key Stakeholders n Standards allow decentralize collective action across enterprise boundaries i With limited control over stakeholders and product design, emphasis shifts to"control points" in product architecture i Standards foster innovation in the supply base by enabling modular decoupled designs n Standards are often a strategic battleground-high stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders i Several models of collaborative forums exist that successfully develop open standards Deborah Nightingale-6@2002 Massachusetts Institute of Technology

Deborah Nightingale - 6 © 2002 Massachusetts Institute of Technology Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control  Standards allow decentralize collective action across enterprise boundaries  With limited control over stakeholders and product design, emphasis shifts to “control points” in product architecture  Standards foster innovation in the supply base by enabling modular decoupled designs  Standards are often a strategic battleground—high￾stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders  Several models of collaborative forums exist that successfully develop open standards

Common Large Area Display Ilustrates the Value Delivered through the creation and Use of standards 旬500 displays for AWACs But 15,000 displays for DoD il Standardized on commercial display for all of DOD 60%less weight 90%less maintenance cost 11 fold increase in mtBF 30% power reduction Better resolution GlUp to $100M in DoD savings

Deborah Nightingale - 7 © 2002 Massachusetts Institute of Technology Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards  500 displays for AWACs – But 15,000 displays for DoD  Standardized on commercial display for all of DoD – 60% less weight – 90% less maintenance cost – 11 fold increase in MTBF – 30% power reduction – Better resolution  Up to $100M in DoD savings

Observations on Using Standards to Achieve Enterprise Integration i Important to establish neutral forum or broker to define standards that prevent bias towards one solution i Use open architecture where possible il Consider technology clockspeed; look to industries or sectors that more closely match that of the system in question il Establish a common syntax to facilitate knowledge sharing Deborah Nightingale-8@2002 Massachusetts Institute of Technology

Deborah Nightingale - 8 © 2002 Massachusetts Institute of Technology Observations on Using Standards to Achieve Enterprise Integration  Important to establish neutral forum or broker to define standards that prevent bias towards one solution  Use open architecture where possible  Consider technology clockspeed; look to industries or sectors that more closely match that of the system in question  Establish a common syntax to facilitate knowledge sharing

Information Technology is vital to Enterprise Integration Lean Virtual Enterprise System (VES) terrartes Customers& suppers provides the backbone for the digital design and // manufacturing environment Northrop I/Lockheed Martin RAES Ft Worth. Tx E SaMlesbury All product data available real-time NGC Database Master Database BAES Database worldwide EPDME =PDM上 -PDML CATIA HCATIA CATIA VAs Enables collaborative Jv05262B development Adapted from Burbage, T. Lockheed Martin, JSF-A Winning Environment" Presentation at MIT, March 6, 2002 Deborah Nightingale-9@ 2002 Massachusetts Institute of Technology

Deborah Nightingale - 9 © 2002 Massachusetts Institute of Technology Northrop Grumman El Segundo, CA Lockheed Martin Ft Worth, TX Other Partners & Suppliers Customers BAES Samlesbury UK BAES Database “mirror” Master Database NGC Database “mirror” • Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment • All product data available real-time worldwide • Enables collaborative development Adapted from Burbage, T. Lockheed Martin, “JSF - A Winning Environment” Presentation at MIT, March 6, 2002. Information Technology is Vital to Enterprise Integration Lean

Enterprise Process Architecture Life Cycle Processes Business Acquisition and Program Management Requirements Definition Product/Process Development Supply Chain Management Production Process Distribution and Support standardization is Enabling Infrastructure Processes akey enterprise Finance Information Technology strategy 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 Deborah Nightingale- 10@ 2002 Massachusetts institute of Technology

Deborah Nightingale - 10 © 2002 Massachusetts Institute of Technology Enterprise Process Architecture Life Cycle Processes • Business Acquisition and Program Management • Requirements 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 Process standardization is a key enterprise strategy

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