Original Date: 03/06/2006
Revision Date: / /

Raytheon-Louisville, part of Raytheon Company’s Missile Systems division, is the only facility that manufactures the Phalanx Close-In Weapon System (CIWS). Located in the sixteenth largest city in the United States that hosts the famous Kentucky Derby, the Louisville facility is home to 343 employees who rely on a unique and robust Six Sigma methodology to provide continuous improvements and cost savings for its legacy weapon system. The BMP Survey was conducted at the Louisville facility during the week of March 6, 2006.

Raytheon Company, an early pioneer of defense technology since World War II, is the world’s leading missile defense organization, providing state-of-the-art systems and solutions to defend the free world. Raytheon is comprised of seven major business areas or divisions that include Missile Systems, Space & Airborne Systems, Integrated Defense Systems, Network Centric Systems, Intelligence & Information Systems, Raytheon Technical Services Company, and Homeland Security. The company’s global presence and 80,000 employees worldwide lead the industry in defense and government electronics, space, information technology, technical services, and business aviation and special mission aircraft.

Raytheon Missile Systems designs, develops, and produces missile systems for critical requirements, including air- to-air, strike, surface Navy air defense, land combat missiles, guided projectiles, exo-atmospheric kill vehicles, and directed-energy weapons. The Phalanx Close-In Weapon System (CIWS) advanced radar-controlled gun system provides superior defense against close-in air and surface threats. Phalanx is currently installed on nearly all U.S. combat ships and those of 22 allied navies.

In the mid-1990s Phalanx was nearing the end of its projected life cycle, yet it was a vital system for air and surface threats against combat ships. With the U.S. Navy cutting its budget and no congressional funding, the Phalanx system was in its sunset years. A joint effort by Raytheon-Louisville and local and state representative revitalized congressional support. In 2000 Raytheon Missile Systems began to evaluate how to add value to the Phalanx system by updating its capability, reducing its 24-month turnaround time, and reducing costs.

The leadership of the Louisville facility implemented Raytheon Six Sigma™ (R6σ) for its continuous improvement methodology, a system that had been successfully implemented and deployed in other divisions of the parent company. R6σ ™ was developed by benchmarking other companies and leveraging internal best practices. An internal team supported by in-house Six Sigma experts worked to explore approaches and to define a strategy unique to Raytheon. Guided by Raytheon’s CEO, the team planned to bring the company together by embedding R6σ™ into the fabric of the organization. The six-step approach is now an enterprisewide methodology for achieving waste elimination and cost reduction.

At the Louisville facility, there are 20 ongoing R6σ™ projects. Much of the facilitywide success of R6σ™ lies in a concerted effort to train employees and many of its suppliers. In 2001 Raytheon-Louisville instituted a two-day R6σ™ training program for all employees. Currently, 100% of the Louisville employees are trained in the specialist certification process. To be a specialist, employees must first serve on a team that has completed a project. Of the 382 trained specialists, 237 are qualified specialists and three are qualified experts. Suppliers receive the same two- day training as employees, with supplier management of different levels always onboard to ensure the proper levels of support. The combined use of the Raytheon Principles for Manufacturing (RPM), value stream mapping (VSM), and R6σ™ have given structure and integration to the facility’s continuous process improvement and is industry- unique.

With R6σ™ firmly in place, Raytheon-Louisville is well-equipped to overhaul and repair the Phalanx CIWS. When a Phalanx system comes into the facility for an overhaul, it goes into an area called “Tear Down.” From this point forward, the system is never sitting still but continues to move throughout the facility on its journey back to the Fleet. The facility’s use of performance-based logistics (PBL) provides the establishment, expansion, and operation for the Phalanx program. These services include assessment and investigation of operational problems for determination of repairability with cost commendations and developmental improvements.

The facility’s use of Integrated Product Teams (IPTs) is one of industry’s finest. This unique organizational structure has been instrumental to the facility’s success and the IPTs’ ownership of the entire value chain – an approach that ensures a unified focus on customer need and mission accomplishment, with all functions represented and 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. Alignment into IPTs has also greatly enhanced the Louisville facility’s communication and business knowledge within the team room. Team members are now exposed daily to aspects of the business in which they had no prior experience or knowledge and often no interest. The result has been a more knowledgeable workforce that better understands how the performance of their duties affects other functions.

Raytheon-Louisville has also implemented a training program following a growth in 2003 that resulted in a hiring ramp-up. The need to bring new employees into established work groups and to train them without sacrificing quality or safety extended to the need for training existing employees who had been brought into new positions. A Six Sigma team created team training modules for each IPT intended for new or transferring employees. These familiarized employees with general concepts for each IPT as well as job-specific concepts.

The Louisville facility has successfully managed to coordinate and consolidate its workforce not only through its vigorous Six Sigma process and lean manufacturing concepts but through other concepts and processes that include the use of its Raytheon Principles for Manufacturing (RPM). RPM has resulted in a production facility that can be quickly adapted to fit new requirements from the customer through the use of works cells configured to minimize operator and material movement within the work cells as well as between feeding work cells. One of the facility’s most impressive implementations has been the use of the visual factory system where everything has a defined place on the production floor, facilitating the work efforts of both support and production personnel.

Among the facility’s recent awards are the 2004 Greater Louisville, Inc. (GLI) Quality and Vision Award, the 2003 Raytheon Environmental Health & Safety (EHS) Award for the Missile Systems division, the Raytheon Missile Systems Operations Excellence Award in 2004 and 2005, the 2004 Raytheon Corporate Excellence in Operations Award, and the Kentucky Governor’s Safety Award in 2003 and 2004.

The BMP Survey Team congratulates Raytheon-Louisville for winning the 2006 Best Manufacturing Practices Award for Excellence and considers the following practices in this report to be among the best in industry and government.

TABLE OF ACRONYMS:
The following acronyms were used in this report:

For more information see the Point of Contact for this survey.