Driving Business Growth

Aerospace manufacturing companies typically deal with complex, highly engineered products and stringent customer requirements. In the past, these organizations have adopted lean tools such as 5S, Six Sigma, setup reduction, visual controls, Total Productive Maintenance (TPM), and many others with the goal of getting better each day – or continuous improvement. While these tools have helped the aerospace industry improve processes, quality, efficiency, and productivity, they result in incremental improvement year after year. Companies that target Operational Excellence as their goal, however, achieve significant improvement in months.
 

The Application of OpEx in Aerospace

An aerospace manufacturer is not the typical factory that produces the same product at a steady rate. Instead, it must produce a mix of highly complex products as well as many engineered-to-order products, spare parts, and various customized products for different customers. To manufacture their products, these organizations have to work with parts that are produced through hundreds of manufacturing steps, complex routings, many batch-processing shared resources like plating and heat-treating, and a supply chain that provides services that they cannot do in-house. However, despite the complexity involved, achieving Operational Excellence is not impossible.

In fact, not only do the principles of Operational Excellence apply to the aerospace industry, they can have quite an impact on both top and bottom line growth.
 

OpEx Defined

To achieve Operational Excellence, the first step is to define it in a very clear, concise manner so that everyone in the operation knows what it is and what it will look like in its respective environments. Specifically, Operational Excellence is when, “Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.”

This means that Operational Excellence is not just a lean flow created by using lean tools. It is a self-healing flow, or flow that can be fixed without the intervention of management descending onto the value stream when something goes wrong. When Operational Excellence is implemented, the employees in the organization are able to visually distinguish normal flow from abnormal flow and execute pre-established standard work to correct abnormal flow on their own before it becomes catastrophic and disrupts the flow of product to the customer.
 

Designing for OpEx

To achieve Operational Excellence, organizations do not rely on strong leadership or management, but follow a process to design it. The process consists of eight principles that should be done in sequence, and each principle may contain many guidelines in order to complete it.

The eight basic principles of Operational Excellence are:

1. Design lean value streams.
2. Make lean value streams flow.
3. Make flow visual.
4. Create standard work for flow.
5. Make abnormal flow visual.
6. Create standard work for abnormal flow.
7. Have employees in the flow improve the flow.
8. Perform offense activities.

This process can be adapted to many different industries, although the first principle is perhaps the toughest one for the aerospace industry due to the complexity of its operations and products. But, again, the key word in the principle is design.

Designing value streams means there is no need for a team to map the current state and then brainstorm or kaizen out waste, which is the typical approach. In aerospace, just as engineers design an airplane for flight using the laws of physics and aerodynamics, the value stream flow is designed using guidelines that are applied to the current state in order to create a future state. It is a significant difference. The traditional method results in incremental improvements, while designing the flow using guidelines leads to Operational Excellence – and top line growth.
 

Importance of Flow

While traditional lean thinking teaches that creating flow is the best way to eliminate waste, in Operational Excellence, the thinking is much different. While implementing flow will eliminate a great deal of waste, make operations more efficient and productive, and force quality issues to the top, these are not the true reasons why aerospace organizations would strive to create flow.

In order to achieve Operational Excellence, flow is created simply so employees can see when flow stops. Think of it this way: Any good company can create flow in its factory, but only the great ones know what to do when flow stops.

For example, when an aircraft is being overhauled or assembled in a bay, can everyone tell if it is on time to customer demand? Now put this plane on a moving line. Can everyone tell then? The concept is that the flow of product to the customer should be so visual that a visitor can tell if the operation is on time without asking any questions. After all, if a visitor can tell if it is on time, most likely, every employee who works in the operation can, too. That is exactly the concept that Boeing applied when it built the moving line to construct 767s. If the plane stopped moving, everyone was aware and responded.

While the ability to have every employee see flow is essential, it does not mean that aerospace companies should produce everything on a moving line. It simply means that they should define what normal flow is, thereby defining what abnormal flow is. That way, the organizations can recognize when abnormal flow begins to occur. Once employees can see abnormal flow developing, they can repair that flow before it becomes catastrophic and breaks down. The key is to do all of this without management intervention, which leads to the final principle of Operational Excellence: driving top line business growth.
 

Driving Business Growth

Enabling the employees to fix the flow before it breaks down means management can spend its time working on offense, or the activities that grow the top line of the business. This might entail working on new product development, spending more time with Operations upfront in the innovation funnel to better design products for manufacturability, working more closely with existing customers and potential ones, becoming a solution or service provider rather than a part supplier, or anything else that might grow the business in either the short- or long-term.

The key is to create the ability to innovate with customers. To do this, companies must first earn that right with a factory that delivers product seamlessly to the customer, with no interruptions. The customer places an order, and the organization produces and ships it, autonomously, without management intervention. Factories – even ones in the complex aerospace industry – run like this for one simple reason: They were designed to do so using the principles and guidelines of Operational Excellence. Once this state is achieved, companies can then begin to talk to customers to create solutions that they are seeking now and in the future.

While aerospace products and the manufacturing operations that produce them are complex, these principles of Operational Excellence not only apply but, for an industry that thrives on innovations, yield better results than continuous improvement to support the top line business growth.

Institute for Operational Excellence
N. Kingstown, R.I.
www.instituteopex.org

About the author: Kevin Duggan is founder and president of the Institute for Operational Excellence. He is a expert in applying advanced lean techniques to achieve Operational Excellence and the author of three books on the subject: “Design for Operational Excellence: A Breakthrough Strategy for Business Growth,” “Creating Mixed Model Value Streams,” and “The Office That Grows Your Business – Achieving Operational Excellence in Your Business Processes.” Duggan can be reached at info@instituteopex.org or 401.667.0117.