Original Date: 02/26/2001
Revision Date: 01/18/2007
Best Practice : Value Net Integration
Value Net Integration is a new form of organizational structure based on the Business Area Team structure. This organization enables General Dynamics Armament Systems to better serve its customers as a solution integrator.
In the past, General Dynamics Armament Systems’ (GDAS’) organizational focus was weapons manufacturing for the Department of Defense. The company’s functionally-designed facility was well suited for handling all aspects of manufacturing operations. Sales were good, therefore business was good. In the late 1980s and early 1990s, however, sales began falling off due to the impact of government downsizing and reductions in military hardware procurements. GDAS tried pursuing sales projects with commercial customers as a solution, but found that the company was not very competitive in the production area. After a thorough review of its business strengths and customer needsin 1998, the company identified a new direction: address the customer’s overall needs by being a solution integrator rather than a sole producer of armament systems. As a solution integrator, GDAS manages all aspects of the project from defining the needs of the customer to delivering the product. Also at this time, the company altered its organizational structure from traditional to a Value Net Integrator (VNI) to better suit its new business strategy.
The VNI organizational structure is based on Business Area Teams with a few unique refinements (Figure 2-4). At GDAS, Business Area Teams handle all of the programs. Each Team executes and implements its specific program. When appropriate, the business assigns additional projects or prgrams. Various support groups assist the Business Area Teams including Environmental, Health and Safety; Process Improvement; Operations Analysis; all of which are an integral part of the Value Net Integration structure. The next tier in the organizational structure are the suppliers which are defined by their specialties (e.g., castings, machined parts, hardware, bonding, electronics, explosives, services). A unique aspect of the structure is the Value Network, a resource pool consisting of both in- house and external partner/supplier resources for quality, facilities, production, technical, and administrative disciplines required to fill the manpower needs of the Business Area Teams. The Network is maintained and distributed by the Value Net Integration Focal Point. At the uppermost tier, Program Administration, Engineering Dedicated, Contracts, and Finance are maintained and distributed from outside the Value Network.
Since its implementation, Value Net Integration has rapidly matured. The organizational structure provides a one- stop, go-to-person for all issues (e.g., quality, production, subcontracts, facilities, environmental, health or safety, producibility, manufacturing development, cost, schedule, proposals). All VNI personnel share responsibility for the success of the operation, program, and business.
Among the benefits gained by GDAS are: Dedicated senior manager and team to support Business Area Team issues.
Accountability and shared ownership of Business Area Team’s program needs and goals.
Focus and responsibility of each program.
Flexibility in relocating resources.
Creation of an efficient business process.
Opportunity to be proactive in the mitigation or elimination of potential issues through early involvement in the program development and execution.
Among the benefits gained by VNI employees are improved alignment of their disciplines with work; improved career growth opportunities; and professional growth for those who wish to stay in functional disciplines.
Figure 2-4. Integrated Product Team Focal Point
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