《Integrating The Lean Enterprise》Enterprise Integration for Value creation

Enterprise Integration for Value creation Professor debbie Nightingale November 20. 2002

Enterprise Integration for Value Creation Professor Debbie Nightingale November 20, 2002

Define Enterprise in a Lean Context a lean enterprise is an integrated entity that efficiently creates value for its multiple stakeholders by employing lean principles and practices Source: Murman et al., Lean Enterprise Value, Palgrave, 2002 Deborah Nightingale-2 0 2002 Massachusetts Institute of Technology

Deborah Nightingale - 2 © 2002 Massachusetts Institute of Technology Define Enterprise in a Lean Context “A lean enterprise is an integrated entity that efficiently creates value for its multiple stakeholders by employing lean principles and practices.” Source: Murman et al., Lean Enterprise Value, Palgrave, 2002

Integrated Enterprise → Customer Product Support Manufacturing Operations Finance, H/R, Product Legal, etc Development Supplier Network Deborah Nightingale-3 @2002 Massachusetts institute of Technology

Deborah Nightingale - 3 © 2002 Massachusetts Institute of Technology Customer Product Development Supplier Network Product Support Finance, H/R, Legal, etc... Manufacturing Operations Integrated Enterprise

Lean Enterprise system IA Lean Enterprise Requires the Integration of Processes People /Organization Information Technology Products 旬 Holistic view G Enterprise as a System

Deborah Nightingale - 4 © 2002 Massachusetts Institute of Technology Lean Enterprise System  A Lean Enterprise Requires the Integration of – Processes – People / Organization – Information – Technology – Products  Holistic View  Enterprise as a System

What Does It Mean to Integrate? 旬 Why Integrate? O] Where in the enterprise should integration take place? 旬 How much integration? O Who needs to be involved in the integration process?

Deborah Nightingale - 5 © 2002 Massachusetts Institute of Technology What Does It Mean to Integrate? Why Integrate? Where in the enterprise should integration take place? How much integration? Who needs to be involved in the integration process?

Enterprise System Issues 旬 Standardization Across products, processes, technology and information management 旬 Integration Within and across enterprise boundaries 旬Le eadership Required for complex transformation 旬" Enterprise Engineering” New expanded tool set required

Deborah Nightingale - 6 © 2002 Massachusetts Institute of Technology Enterprise System Issues  Standardization – Across products, processes, technology and information management  Integration – Within and across enterprise boundaries  Leadership – Required for complex transformation  “Enterprise Engineering” – New expanded tool set required

Leadership Issues G Optimization across multiple stakeholder objectives al Global communication and seamless information flow i Change management and enterprise transformation i Enterprise "value metrics Gl Organizational effectiveness Deborah Nightingale-78 200 setts Institute of Technology

Deborah Nightingale - 7 © 2002 Massachusetts Institute of Technology Leadership Issues  Optimization across multiple stakeholder objectives  Global communication and seamless information flow  Change management and enterprise transformation  Enterprise “value metrics”  Organizational effectiveness

Multi-program Enterprises add value beyond that Created by Programs in Isolation M Multi-program enterprises can Increase scope of possible value creation activities by allowing specialization and integration of expertise Enhance productivity through coordination and creation of enabling infrastructures Manage knowledge creation and reuse to achieve economies beyond those found in markets Deborah Nightingale-8@2002 Massachusetts Institute of Technology

Deborah Nightingale - 8 © 2002 Massachusetts Institute of Technology Multi-program Enterprises add Value beyond that Created by Programs in Isolation Multi-program enterprises can: – Increase scope of possible value creation activities by allowing specialization and integration of expertise – Enhance productivity through coordination and creation of enabling infrastructures – Manage knowledge creation and reuse to achieve economies beyond those found in markets

a Key Issue in Multi-Program Enterprise Design is Balancing Demands of Local Performance with Enterprise Integration/Capabili Program enterprises typically generate revenue streams G Multi-program enterprise typically provides enabling infrastructure as a service Overhead policy provides support for enterprise infrastructure Dilemma: how to prioritize allocation of enterprise resources between“ direct"and“ indirect functions G Important multi-program enterprise value creating activity is integrating knowledge and processes across multiple enterprise boundaries Deborah Nightingale-9@ assachusetts Institute of Technology

Deborah Nightingale - 9 © 2002 Massachusetts Institute of Technology A Key Issue in Multi-Program Enterprise Design is Balancing Demands of Local Performance with Enterprise Integration/Capability  Program enterprises typically generate revenue streams  Multi-program enterprise typically provides enabling infrastructure as a service  Overhead policy provides support for enterprise infrastructure – Dilemma: how to prioritize allocation of enterprise resources between “direct” and “indirect” functions  Important multi-program enterprise value creating activity is integrating knowledge and processes across multiple enterprise boundaries

Example of One Challenge Value Streams, Processes Program Phases New Product Product Product Business Development Build Deliv. Support F16 F16 IInt'/ Govt Customers C-130 C-130 Customers F22 F22 Customers JSF JSF Customers F117 Customers ADP ADP Customers Enabling processes Financial Integrity Staffing, On-Boarding Retention Information Management ah Nightingale- 10@ assachusetts Institute of Technology

Deborah Nightingale - 10 © 2002 Massachusetts Institute of Technology Example of One Challenge…… Value Streams, Processes & Program Phases F-16 Customers C-130 Customers F-22 Customers JSF Customers New Business Product Development Product Build & Deliv. Product Support F-16 C-130 F-22 JSF F-117 Customers F-117 ADP Customers ADP “J ” Int’l Gov’t Program Mgmt. Bus. Devel. Engineering Aero Mfg. Customer Supt. Mat’l. Mgmt. Enabling Processes Enabling Processes Financial Integrity Staffing, On-Boarding & Retention Information Management,… Gov’t Program Mgmt. Bus. Devel. Engineering Aero Mfg. Customer Supt. Mat’l. Mgmt. Program Mgmt. Bus. Devel. Engineering Engineering Aero Mfg. Customer Supt. Mat’l. Mgmt. Program Mgmt. Bus. Devel. Engineering Aero Mfg. Customer Supt. Mat’l. Mgmt. “Standardize