Original Date: 09/14/1998
Revision Date: 01/18/2007

Raytheon Missile Systems Company (RMSC) received an award from the Air Force’s ManTech Project for the Advanced Modular Factory (AMF). The primary objective was to develop lean strategies for the AMRAAM program which would reduce product lead times and eliminate critical path waste. The project also focused on the relationship between RMSC and its suppliers.

The AMF project began by analyzing AMRAAM’s product lead time drivers. As suspected, external suppliers were the primary consumers of the critical path. Data indicated that supplier lead times accounted for 70% of the path, procurement consumed 20%, and internal factory cycle times used the remaining 10%. To reduce lead times, RMSC concentrated on strategies that would modify business practices and industrial processes. Business practices included business strategy innovations and rapid response procurement processes. Industrial processes included kaizen workshops to eliminate waste, since RMSC was the process owner for the entire supply chain. Once the methodologies were chosen, RMSC employed them on AMRAAM items which had the longest supplier lead times, progressing successively to those with shorter requirements as improvements developed. Each item was analyzed, sometimes to the second- and third-level supplier, to identify and prioritize potential corrective actions. In addition to supplier and procurement solutions, the company conducted workshops and lean training at supplier sites, and hosted supplier visits at RMSC. These strategies enabled participants to gain awareness and understanding of the overall program activities.

Since implementing the AMF project, RMSC created supplier agreements with efficient production schedules, identified opportunities for parallel rather than serial production, eliminated artificially inflated lead times, improved production processes by suppliers, and achieved better raw material procurement times. In addition, the company issued direct strategic agreements for raw materials and letter contracts for long lead items. Initial lead times were decreased by about 20%, with an additional 25% reduction in product lead times for the next AMRAAM lot. RMSC continues to apply the AMF strategies to obtain even greater reductions in lead times and critical path waste.

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