Original Date: 03/06/2006
Revision Date: / /
Best Practice : Integrated Product Team Structure
Raytheon-Louisville has implemented a unique Integrated Product Team structure that has been instrumental to the success of its business success since 1999. The foundation of the Integrated Product Team structure is based on its ownership of the entire value chain. This approach ensures a unified focus on customer need and mission accomplishment with all functions represented and located in team rooms for each Integrated Product Team, resulting in a more knowledgeable workforce that better understands how the performance of their duties impacts other functions.
Integrated Product Teams (IPTs) are typically cross-functional teams formed for the purpose of delivering a specific product or service to the customer. Members of the team are selected for their skills to complement other team members. Within the Raytheon traditional matrix organizational structure, IPTs could exist but not reach their full potential. One of the major shortcomings has been from the members themselves, with a complete buy-in to the team concept and ownership of the product difficult to achieve or sustain. Another deficiency of the team has been understanding how its performance affected other team members and the overall impact to the product and to the customer. IPTs in a matrix organization were not protected, meaning that individuals could be pulled from their functional organization to work on other projects at any time, essentially upsetting the focus of the IPT.
In 1999, Raytheon-Louisville started reviewing the IPTs to determine how they could be best structured in a non- matrix approach. They designed an organizational structure based on the IPT’s total ownership of the entire value stream of the product and service to the customer. In 2000, six IPTs were established for the Phalanx Rework Program to cover electronics, major subcontractors, final assembly, induction and test, material services, and services (Figure 2-9). Each team is comprised of individuals from production, production control, product engineering, procurement, quality, and the Defense Contracting Management Agency (DCMA) who report directly to the production manager. All functions are located together in team rooms for each IPT. Team rooms are positioned in close proximity to their respective production areas to ensure quick response to production requests. Team members are now exposed to all aspects of the business. The multi-discipline teams have all the people necessary to assure mission accomplishment. Team leaders rotate every 6 months to another IPT to enhance communication and business knowledge. Each IPT has an alternate leader to sustain continuity in the absence of the team leader.
This non-matrix IPT approach has greatly enhanced a unified focus on both internal and external customer needs, resulting in a more knowledgeable workforce that better understands how the performance of their duties affects other functions. Since implementing the IPT structure, Raytheon-Louisville has achieved 100% of its schedule, cost, and reliability requirements. The ratio of support people to touch labor has been reduced from 3.5 to 1.2, which represents a 60% reduction. The workforce turnover rate is now only .01%.
Figure 2-9. IPT Structure
For more information see the
Point of Contact for this survey.