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Original Date: 02/19/2007
Revision Date: / /
Information : Value Stream Organization
Raytheon Network Centric Systems Manufacturing Center in Largo, Florida, has changed its organizational structure to one centered on value stream management. The new organization and associated processes have resulted in more adept use of continuous improvement methodology across the entire value stream. Reductions in manufacturing cycle time, rework, and depot turnaround times are some of the noteworthy results.
Raytheon Network Centric Systems (NCS) consolidated the production operations of a number of facilities at Largo, Florida. The NCS Manufacturing Center in Largo initially operated with functional and business elements supported by an informal matrix organization. This organization focused on internal issues and tended to optimize activities within the individual functional areas. Optimization across the value stream was conducted with difficulty because of the inward focus of the functional areas that this organizational structure promoted. The value stream was often defined as “starting and ending within a functional area’s domain of control.”
To develop an organizational structure that would take full advantage of Raytheon Six Sigma continuous improvement methodology, Raytheon Largo mapped all major value streams of the organization. The organization then assigned leaders for each of the major value streams. Integrated Product Team (IPT) leaders all report into one of the value stream managers, and a matrix “home room” supports all the people resource needs of the IPT Leaders and their Value Stream Leaders.
This organizational change resulted in a new focus supporting a broader Lean culture by having managers assigned and accountable for optimizing the entire value stream versus optimizing only within the former stovepipe functional area. Programs are now executed by IPTs comprised of functional and program team members reporting to an IPT Leader and the Value Stream Manager. Knowledge and commonality are leveraged by organizing the value streams around common products and requirements as defined by the customer. Value Stream Leaders are responsible for the entire value stream (and eliminating waste within it) from contract development and award to customer delivery and post-production services. Post-production services (in-service support, depot and warranty) have been found to be areas of growth and importance to customer satisfaction. Team performance accountability is achieved by having all team members’ performance reported on by both the IPT leader and the functional leads. Individuals have to interview and compete for these new leadership positions, with Raytheon Largo looking for the right mix of technical and leadership skills. Positions were opened up to hourly and salaried employees, with this becoming a more formal way to get promoted than the previous system.
Benefits seen from the new value stream focused organization include:
Improved accountability to performance
Improved response to internal and external customers
Improved team building and team dynamics
Expanded depth and breadth of talent pool for future operations leaders
Improved the identification and resolution of systemic problems
Provided a formal opportunity for people to cross-train and for job rotation
Improved efficiency and competitiveness in Largo’s speed, cost, and service
The new organization and associated processes have resulted in an organization more adept at using continuous improvement methodology across the entire value stream. Reductions in manufacturing cycle time, rework, and depot turnaround times are some of the noteworthy key performance results.
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