From Compliance to Value Focus
Headquartered in Bethesda, MD, Lockheed Martin (NYSE: LMCO) is the world’s largest defense contractor, employing about 140,000 people worldwide. In 2005, Lockheed’s Information Systems & Global Services Division (IS & GS) was awarded a $100M+ subcontract as part of the Future Combat Systems (FCS) Initiative. FCS was the largest defense program in modern history, an attempt by the U.S. Army to create new brigades equipped with new manned and unmanned vehicles linked by an unprecedented fast and flexible battlefield network and aided by various pieces of other gear. IS & GS was responsible for the Level 1 Sensor Fusion (L1F) subsystem, which served to detect enemies and friendlies and placing them in space and time.
The L1F subprogram faced a complex set of circumstances. It was one of thirty FCS subprograms managed by the master integrator, Boeing. While already ranked #1 for performance out of is peers, the L1F subprogram faced a complex set of circumstances. Boeing dictated the delivery plan as well as the rapidly changing requirements. Progress and resource consumption were managed using a rigid Earned Value management system. Architectural changes had to be coordinated with other subprograms as well. Engineers and managers were required to use a CMMI-compliant development process. They inherited a set of process constraints that added a significant complexity burden. They were also subject to frequent compliance audits from Lockheed corporate, the local quality organization, Boeing, and DoD.
The L1F Program Manager was concerned about the long lead times and all the bureaucratic overhead for producing new software releases. L1F had to deliver multiple software builds, with each build taking approximately one year. The development value stream was a sequential progression from requirements to design, coding, integration and test. There was significant inventory buildup along the way, and rework loops also increased the total lead time for new requirements. There was also a concern that everyone was so focused on complying with imposed process standards and passing audits that they were losing touch with the idea of innovating to deliver value to the customer. Group managers and staff felt they were not empowered to make positive changes without risking problems with process standards compliance, which would potentially affect L1F’s compliance rating with auditors and its top ranking as an FCS subcontractor.
The L1F subprogram also faced a severe knowledge management challenge. In addition to dealing with the complexity of all the required design documentation, they had difficulty selecting the right components for sensor fusion to reuse. No one really had a good overview of what components already existed and their respective capabilities.
LSI initially helped L1F organize and evaluate existing software components that could be reused, resolving internal conflicts and misunderstandings. The result was a consensus on key architecture and technology decisions.
To reduce the long lead time for new releases, LSI taught courses in the Lean Systems Framework and facilitated a redesign of the L1F’s Product Development System. The redesigned product development system utilized cross-functional teams using just-in-time (pull) based scheduling, collaborative spaces and significantly simplified processes.
For maximum agility, the teams were organized around product components instead of features. LSI also helped L1F implement Kaizen for ongoing improvement and provided training in Lean Product Development, Kaizen and Kaikaku (organization redesign). To ensure ongoing learning and development, LSI helped L1F begin a Community of Practice program, with “learning tracks” dedicated to Lean and other key topic areas.
Estimated 76% reduction in lead time for new releases
Remained compliant with business process requirements imposed by several stakeholders
Reduced risk of delivery delays
Reduction in software defects
Faster diagnosis of defects detected
Greater agility for accommodating last-minute changes
Successful knowledge transfer and implementation of Lean Development practices