Starting with Lean at the Very Beginning

It’s only 11 a.m., but the roar of a crowd emanating from Raytheon Integrated Air Defense Center’s Andover, Mass., cafeteria is unmistakable. It sounds more like overtime at an NBA game than late-morning in a manufacturing facility.

Upon closer inspection, all the commotion derives from a pep session for a team of two dozen operators that have pitched ideas on how to improve their department workflow. The team competes against 135 other groups at Raytheon’s Andover facility. And make no mistake, the competition here is fierce.

That emotional stake is the very essence of how Raytheon Andover was able to not just overcome the potential shuttering of its doors a decade ago, but ultimately rebound to become one of the most advanced production centers for defense systems in the U.S.

Since 2007, Raytheon Andover has seen productivity improvements of 6%. One of its largest programs, the Patriot Missile, has had 100% on-time delivery over the last two years and registered a 0% customer reject rate since 2005. In 2009 alone, Raytheon’s continuous improvement campaign resulted in the reduction of manufacturing floor space requirements by 45,000 sq. ft.

Seven years into its continuous improvement journey, Raytheon has taken out all the low-hanging fruit, refined its processes and engaged its workforce. Now the leadership finds itself in a position many advanced continuous improvement companies do, which is to forge the next evolution of lean.

“When we started this journey, I had no idea how long a journey it was going to be,” says Michael Shaughnessy, senior director of operations at Raytheon’s Andover facility. “There’s still so much opportunity to be gained. Today, I have more to do in the next six months in improving how we run this operation than I did three or four years ago. That’s unexpected.”

According to Shaughnessy, Raytheon has cultivated relationships throughout its supply chain to focus on continuous improvement. The company hasn’t laid down strict new rules, he says, but instead opened conversations to begin considering new ways to reduce cost, make products more affordable and improve quality.

Raytheon has recently undertaken several intriguing long-term lean projects. Two years ago, for instance, it instituted an interdependent approach to supplier management, creating communications elements within project lifecycle to spur faster flow and responsiveness to the customer from engineering, operations, supply chain and quality.

It has also begun a collaborative scheduling project to align the disconnects between the MRP (manufacturing) and ADT (engineering) systems, which schedule from opposite points of view—manufacturing from the back end and engineering from the front end. Raytheon instituted a virtual business system to track all engineering, supply chain and operations progress when a program is brought into production, ensuring visibility and management of detailed milestones all the way to the supplier level.

But the real opportunity, Shaughnessy says, is to implement continuous improvement at the beginning of the product lifecycle, not when it’s in production.

“As we do more of these engagements earlier on, we have to start redeploying resources,” says Shaughnessy. “So the question becomes how do we start shifting resources, be it operations, engineering or supply chain, to the front-end of the process versus the latter end where we are today. That’s gradually happening each year.”

Peter Alpern is chief editor of MH&L’s sister publication, Business Finance, and a contributor to IndustryWeek. Learn more about the IW Best Plants program at www.iwbestplants.com.

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