Original Date: 11/12/2001
Revision Date: 01/18/2007
Best Practice : Continuous Improvement/Lean Initiative Program Extension
Frontier Electronic Systems is extending its Continuous Improvement/Lean Initiative Program know-how to its external suppliers with a great deal of acceptance and success. The company is applying successful internal lean processes to suppliers, but in a joint environment that includes itself, the external supplier, and the customer.
One root-cause finding identified by Frontier Electronic Systems (FES), in support of customer reduced cost and lead-time targets, was the cost and delivery performance of external suppliers. Quality deficiencies and late deliveries were high-cost drivers. To further enhance its own performance in these areas, FES needed a method of initiating performance improvements within the suppliers’ organizations. FES’ success under the Lean-Pathways Pilot Program indicated that additional benefits could be attained by applying the same analysis and change implementation principles to external suppliers. The objective would be to apply these tools to the business practices used among the FES-supplier relationships with focus on improvement of overall supplier performance (including cost). After the Pilot Program ended, FES established the Continuous Improvement/Lean Initiative Program (CLIP) as a way to keep continuous improvement at the forefront. FES began extending the application of these lean principles beyond the typical scope of internal activities to include quality improvement and cost/cycle time reductions with suppliers.
One example of this extension is the initiation of a Joint Accelerated Improvement Workshop (AIW). This project focused primarily on FES’ production of the Engine Fuel Display for the F/A-18 E/F Super Hornet. The AIW included a focus on business, production, and test processes. As a result of this effort, FES and its major supplier made significant internal process changes that have primarily focused on manufacturing, material procurement, and subcontract management processes with a priority on lead-time reduction.
The extension of CLIP contributed to a 10% price reduction through cycle time reduction and streamlining business processes. Since its inception, the lead-time (from the customer’s placement of an order with FES to first delivery) has been reduced by 40% from 76 weeks to 46 weeks. This accomplishment was achieved by applying lean analysis methodologies (e.g., Value Stream Maps) to the subcontract management, procurement, production, and test processes within and between FES and its major supplier. FES anticipates additional lead-time reductions (Figure 2- 3), with the target being 26 weeks for a 66% total lead-time reduction.
Figure 2-3. Engine Fuel Display Order Cycle Time
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