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Original Date: 08/20/2001
Revision Date: 12/14/2006
Best Practice : Micro Business 1000
Micro Business 1000 is a stand-alone program aimed at achieving the 1,000 points available under the Malcolm Baldrige criteria. This productivity improvement effort is a joint management-union endeavor featuring employee involvement and empowerment. The effort has created a total cultural change throughout Lockheed Martin Naval Electronics & Surveillance Systems-Surface Systems, and provides significant benefits to the company and its customers.
In the early 1990s, Lockheed Martin Naval Electronics & Surveillance Systems-Surface Systems (NE&SS-SS) responded to the need to reduce costs by initiating a series of continuous improvement initiatives. These initiatives were based on the foundation of an agreement between management and the labor union. The agreement, negotiated after a major downsizing event, stated that no further downsizing would occur if the union agreed to obtain efficiencies amounting to 50% cycle time and 25% cost reductions. Through the use of productivity improvement programs, these goals were obtained and followed up with new goals: 40% reductions in defects and scrap. The initiatives have gone through five phases since 1992 and each time, the stated goals were accomplished.
Lockheed Martin NE&SS-SS began planning the Micro Business 1000 phase in 1995 and fully implemented it in 1997. The goal of the current phase is to achieve 1,000 points available under the Malcolm Baldrige criteria. This voluntary participation program is implemented through a structured organization that is tailored to meet the program’s specific needs. Overall direction is provided by a steering committee composed of the company’s senior leadership team, union executive board members, and support operation members. The principal focus of the concept is based on teaming efforts to maximize employee involvement and empowerment. Accomplishment of the goals resulted in a training manual being developed for all team members. This manual is structured around the seven modules of the Baldrige criteria and includes descriptions, definitions, and criteria for achieving the 1,000 points.
The management/union team also developed “can-do” and “can’t-do” guidance, which continues to evolve. The guidance addresses various topics such as team organization, manpower schedule, opportunities for new business, hiring/firing, choosing suppliers, pay scales, ethics, supervisory administrative functions, cost control, work in process (WIP), and deviations from the process. Currently, 16 Micro Businesses are working through the seven modules toward earning the Baldrige 1,000 points. These points are awarded on a module-by-module basis, and each team member can earn a $1,000 bonus for achieving the goal. The operation of each Micro Business consists of:
Being trained in each module one at a time
Applying criteria to its own business
Demonstrating proficiency to the criteria
Receiving assessment to the criteria
Progressing to the next module
Re-validating accomplishments
Since implementing Micro Business 1000, Lockheed Martin NE&SS-SS has insourced several functions (e.g., analog/chassis/wave guide modules, power supplies, advanced processor cabinets) which previously were outsourced. The company also developed a Micro Electronics Center and is implementing a high density interconnect (HDI) facility. Shop floor employees now command leadership roles. Workers understand the business process; participate in running the business; and are compensated for their achievements. Each Micro Business team develops metrics to measure its work center as its own business. The bottom line of these continuous improvement efforts is a major cost reduction for the customer, even while order quantities have been reduced.
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