The Air Force commitment to lean initatives Published June 20, 2008 Thank you very much, Beth. [Elizabeth McGrath, Principal Deputy Under Secretary of Defense (Business Transformation)] You know, part of CPI turns out to be variance analysis, so if you are looking at your watch, one of the things that you try to do is not just beat your schedule, but keep it under control. It's great to be here this morning. I appreciate the Department of Defense organizing this Continuous Process Improvement Symposium. Dr. Kaplan of Virginia Mason University will follow me. He has been kind enough to come in on the red eye, so if you would, I would say to you, please pay attention. He is one of our great industry partners who has helped us a lot. It is a real opportunity that you all have to really apply your managerial skills and your leadership talent and taking what I would say is an upside down approach to leadership. Removing Barriers to Progress Because one of the things that I have always felt is that it is the goal of leaders to remove barriers to progress. We are seeing leadership that wants to identify barriers to better performance. Then they are going to work to remove those barriers. Improving Organizations I've always thought to myself that one of the things that happens is that if everybody who comes to work in the morning comes with an idea of leaving in the afternoon having made the organization better off from a number of circumstances. And that we're all volunteers coming in, and we're all volunteers going out. Hopefully, we have made a difference. And what a nice thing it is when we see leadership that wants us to identify barriers to better to performance, and they want to go to work removing it. So it really pleases me to be here this morning to help kick off this first Department of Defense Continuous Process Improvement Symposium. Involvement with CPI My background includes military service in the Air Force. I came out and was, I would call it not in a big Air Force but in a little Air Force because I was a second lieutenant all the way up to captain. But it got to be part of the team that made the AC-130 work, the Spectre Gunship. Efficient, effective, and still improving. Then I spent ten years in industry as a developer and provider of complex defense systems. Before becoming Secretary of the Air Force, as Beth mentioned, I was in the office of the Secretariat as a purchaser of complex acquisition systems. So I have seen what we refer to as Continuous Process Improvement from the perspective of active duty, from industry, and now as a senior leader in the Defense Department. Air Force Smart Operations 21 Continuous Process Improvement, as you probably expect or suspect, has long been a passion of mine, a journey. So when I came to the Air Force, I got with the Chief of Staff of the Air Force, General Buzz [T. Michael] Moseley and we established an Air Force Smart Operations for the 21st century program -- which is longhand for AFSO21. AFSO21 is a set of facilities, tools, education, training and methods that we provide to the entire Air Force, including Guard, Reserve and civilian members. As I mentioned before, we start with the premise that we're all volunteers, joining with our talents to build a better Air Force. I allow that it is no different across our entire department where I've had some experience; and truly, no different in any of the other military services, where the dedication is palpable and always on display. So I am quite honored to be here to pass on my passion to this group of leaders. We use Air Force Smart Operations 21 to find cost savings, but we also use it to improve the quality of work life, and improve the quality of life in general. Air Force Smart Operations 21 is a disciplined, structured method for unearthing process improvements. Since it is disciplined and structured, we can implement Air Force Smart Operations 21 consistently every time we conduct an event at a unit or a base. AFSO21 does much more than just produce straight-forward results because it promotes a culture that eliminates waste, shares best practices, and reduces cycle times for delivering effective combat capability. It empowers Airmen to effect change. It facilitates their learning about how to design more effective work processes. It builds on the basic principles of lean and six sigma. I will tell you, some of the improvements were quite impressive. At a couple of bases they just got pedometers and they decided they would wear pedometers for about a week and find out the average number of steps they took to accomplish their job. Then they decided they would just reduce the number of steps by 40 percent and see where it took them. It took them into civilian civil engineering projects; it took them into rearranging work stations; it took them into directions that they found they could do a lot of self-help to simply reduce the number of steps that they had to take to do their job every day. This was across the board, from our shop in engineering, to our shop in administration, to maintenance, to medicine. Everywhere we went to apply [AFSO21], we found this just swept the Air Force as a really interesting tool to start the process. And it did, at a basic level, empower those airmen to come forward and say you know what? You can move the hazardous waste disposal a lot closer and it would save me a lot of time. And so we did. We found, we went through all the regs, and made sure that safety standards were kept at the highest levels. But it really worked out phenomenally well. Best Value While I was in industry my responsibilities included building high-quality space systems at competitive prices. Quality was a significant part of our daily discussions. The rocket business is one where you can be 99.9 percent successful and still have a failure. Quality was just everywhere. We wanted to exceed customer expectations, but we wanted to keep costs reasonable. This is what it meant to be best value, and what it means to be a best value provider. Give the best possible product to the customer at the right price. And we wanted to do that every time, because doing a great job on your current contract or your current job influences whether or not other promotions or other contracts in fact will follow. Setting Objective Performance Metrics Looking back, we introduced customer focused metrics, and we introduced the Japanese concept called Kan-Ban for demand planning using single line movements. We put forward clean facilities that our customers actually took pictures of for their own reference. We looked at each process very critically including, by the way, worker safety. We recognized our path as a journey about quality, about reliability and about cost. My focus on best value did not change when I moved into defense acquisition. Obviously, the roles, missions and perspective change when you go from industry to government. That's a given. But the philosophy remains the same -- you still want the best product for your customer, namely the warfighter. As the chief acquisition and technology officer, I wanted to obtain high-quality systems at a price that the nation could afford. I wanted our providers to surprise us by coming in "over" in terms of quality, and "under" in terms of cost and "faster" of course, in terms of schedule. I asked internally of our great workforce about how to best energize our dedicated workforce on ideas for improvement, and released their creativity around processes that they best understood. The Cascading Effect I am proud to say that progress has been made beyond my imagining by all of those experts that I got to rely on. In distance learning, in knowledge management, all throughout the supply chain, and within the acquisition management system. I can also say with certainty, that those foundations have been well built on with new focus and drive to fulfill warfighter requirements across the board. Again, the recognition is that it's a journey towards a goal of best that remains even as we achieve progress towards that best. It reminds me of a story that, one time I was talking to Gary Corbiss. He said he knew a friend that had made 70 percent improvement in productivity at a plant that he worked at. He got hired away by another manufacturer because of that achievement. About a year later he got a letter from his successor. His successor pointed out that he had achieved yet another 30 percent improvement and he thanked Gary for leaving some stuff undone. Because he said the senior leadership is no less demanding on me than it was on you. Adding Value One reason that I mention quality, cost and schedule is because I want to stress that Continuous Process Improvement is not always about saving money. CPI does not just drive down monetary costs. It can be used to improve all areas of the value stream. Looking at the Content of the Process When we think of Continuous Process Improvement, we focus on the content of the work process. As each step is reviewed, Continuous Process Improvement forces us to ask whether that step adds value, and if so, what value does it add? If a step does not add value, we should think about eliminating it. We should also consider new ways to do this work, perhaps combining some of the steps in the value process. We should be willing to ask whether the process itself needs to be fixed. I call this looking at the content of the process. Doing things right the first time remains very important, but whether the task should have been done at all is a value stream decision. The Heart of Continuous Process Improvement: Work Harder, Not Smarter When we look at the content of our work process, we start to see how we can work smarter. That is the heart of Continuous Process Improvement -- working smarter, and not harder. I sometimes relate to this as a lazy person's approach to productivity -- stop doing dumb things. You know, it really makes sense to me. I used to be a lifeguard. All my life I've been working my way back to that job. It reminds you of the great story of you work all your life to get a retirement, to fund a retirement, to do what? To go sit on the beach. I was sitting on the beach. [Laughter]. So I understand the lazy person's approach to productivity very well. Stop doing dumb things. Quality of Work Life - Quality of Life Sometimes working smarter generates cost savings that can be reinvested in critical programs. Most times, however, Continuous Process Improvement results in improving the quality of work life, or quality of life itself. Through CPI it is possible that we can change or enhance a process so that instead, for example, of Airmen averaging 10.5 to 11.5 hours on frontline maintenance each day, our Airmen can average 8.5 to 9 hours. Aviano Air Force Base: Maintenance This is exactly what happened at one of our bases, at Aviano Air Base in Italy. We held a rapid improvement event. In the Air Force we call them Air Force Smart Operations events. We considered how to revamp frontline maintenance for our two fighter squadrons that were at Aviano. It turns out that we were able to generate the same number of sorties per day but with more reasonable duty hours. At Aviano we essentially compared two processes. In Process A, each fighter squadron had dedicated maintainers. The maintainers averaged about a 12-hour work day. Then we went to Process B and we did all this, by the way, with our famous yellow sticky. In fact, I was down at a base and talking to a colonel. He said you know, this AFSO21 process is worrisome. I said why is that? He said well, if you ask an Airman to do something dumb he pulls out the yellow sticky and begins to do the process to kind of explain to you why it's dumb. He said they never did that before. But in Process B, the maintainers for both fighter squadrons consolidated functions. The two fighter squadrons now shared a single set of maintainers. The maintainers now average 8.5 to 9 hour work days. And that makes so much sense to them, and of course they now get to go home to their families a little bit earlier each day. This means that their families are probably happier. And when you have a happier and less stressful family life you can have a happier Airman. Caring for People: Where AFSO 21, Quality of Work Life, and Quality of Life Intersect If we don't take care of our people then we're not taking care of our mission. This is where quality of work life intersects with quality of life. Embracing Change One of the important points, though, is that doing things the same old way, the leadership at Aviano embraced AFSO21 in order to do things differently. They looked for creative solutions. In the process, they discovered new and more efficient ways of maintaining aircraft that also provided for a better home life for their front line maintainers. Medical One of the things we're also doing is we're reaching out. Across the board we're reaching out to airline partners, to people who run airports, to people who run subordinate facilities. You're going to be listening to one here right after me, and that is Virginia Mason Hospital. We reached out to Virginia Mason and they embraced us. Dr. Kaplan has done a phenomenal job of allowing us to essentially come in, at first dumbstruck, right? Because everybody knows that AFSO21 or lean six sigma or continuous process improvement applies very well to those fellows across the hall, but it doesn't much apply to us. Amazon In fact we were talking about having met the Chief Operations Officer of Amazon. And Amazon, as you know, sells a lot of books. When he was introducing lean six sigma and continuous process improvement at Amazon most of his relevant senior managers came to him and said wait a minute. Doesn't this just apply to the people who pack boxes? No. In fact that was the only operations part he had but it was only ten percent of his company. He said no, actually not. It applies to the rest. Dr. Kaplan has opened up Virginia Mason. I'll show you an example of what happens within the Air Force. Travis Air Force Base: Medical At David Grant Medical Center, one of our major medical facilities at Travis Air Force Base [Calif.] in our Air Force, it's an extremely busy hospital. As a result, the operating rooms can become quite backlogged. Our military personnel and their families end up waiting longer than they would like for medical care. When the team at David Grant Medical Center applied the rapid improvement event to some of their work processes they discovered something that we have seen before. They discovered that the operating rooms had static schedules and were in fact the narrow throat through which all patients had to pass. Rather than respond to supply and demand, the operating room was allocated to various parts of the hospital based on a fixed schedule. Does this sound like the maintainers? After the rapid improvement event, the hospital started allocating 25 percent of its operating room capacity dynamically, which means on a timed basis. This shift means that the operating rooms respond to changing demand curves instead of static supply curves. The shift also means that military members and their families have better access to medical care. In this example, the rapid improvement event improved the quality of work life for the medical professionals. They were very much less frustrated in dealing with their patients. But it also improved the quality of life for those seeking care at David Grant Medical Center. So you can see I'm a very firm believer in the process. When you see it work, it's like magic. Everybody benefits. We Recruit Airmen, but We Retain Families The question is, did they save any money at David Grant? Does it matter? We save so much by retaining our people because, as you know, we recruit Airmen but we retain families. The throughput there at David Grant may have been one of the metrics that helped us do that. People are Our Most Critical Asset So I am a very firm believer that people are our most critical asset. One of my goals as Secretary of the Air Force is to ensure that we do not waste our people's time. We put an incredible amount of energy, time, money, and brainpower into training and educating our Airmen. We are very proud of how knowledgeable and highly trained our workforce is. But when we have junior Airmen waiting for tools so they can do their jobs, or junior Airmen waiting for a decision so they can finish a project, we are wasting their time and we are wasting their talent. When those delays happen, their education, training and knowledge are stagnating and sitting idle. These are the kinds of situations that very much frustrate me, and that I want to help them fix it. These are the kinds of situations that demonstrate that CPI should not focus on only saving money. It should focus on quality of work life and quality of life, and I believe the net result of all of that is yes, a savings of money. AFSO21 also Means Safer Work Environments These both intersect well around a clean and safe environment. We used the rapid improvement event to clean up a work place, to put the tools and material needed for a particular task within easy reach. We use radio frequency ID, for example, to locate ladders that travel on their own. I don't know how they travel on their own. We used to have them in a central area, and they'd just leave. But when you put an RF ID tag on it, all of a sudden everybody knows where they are and they go easily down to go get them. And now it applies to other things, too. Ground support equipment. Anything that is of reasonable value and high demand. Because, as you know, you've got to not so much contain the expediters, but deal with the expediters because what they're doing is providing a service that you as management are not providing. So as soon as you figure that out, getting technology applied to provide that service works very very well. Leaders must ensure their people have a safe and clean environment, so light up the area and take care of obstructions and provide the right equipment -- the ladders and lifting devices, and go after quality of work life. Whenever we used to have an industrial accident I would have the manager take pictures of the entire place and I'd have him send them to me, wherever I was in the world. Then I would highlight obstructions that I thought should be removed, lights that needed brighter, and I'd send him back a "to do" list. I said what we don't want to do is we don't want to have an accident occur right where an accident occurred, number one. But number two, if you can apply these same lessons to other areas in your facilities, it just makes a whole lot of sense. Nowadays, of course, I ask them to use energy efficient lighting. Why not? If you're going to apply different lighting, apply energy efficient lighting. Maybe you can save some money there as well. Organized Tool Kits It seems basic, but you might be surprised how often having an organized toolbox improves efficiency. When our people have to walk down a two story ladder to search for or retrieve a tool over three dozen times a day, their time and talent is being wasted. When they have the right tool within reach, their time and talent is being used effectively. Continuous Process Improvement also enables leaders and managers to put their talent to use. It provides a disciplined and tested method to institutionalize a set of effectiveness and efficiency. It ensures that our Airmen have work processes and work environments that are fully productive. No one joins our military or comes to work for the Air Force so they can sit around and wait for a tool to become available. They join because they believe serving their country makes a difference at home and across the globe. So we owe it to the total force to use their talents wisely. More Reliable Scheduling Another part of our program, of course, is scheduling. We would like to work smarter by removing steps in our work process and this would shorten the schedule. Again, this may or may not translate into savings immediately that you can measure in terms of dollars, but by improving our timeliness for delivering products, services and effects, we make a difference that our warfighters and civilian leadership have come to rely on. Installation Excellence Award - Team Dover Here's an example. Last week, I hosted the Air Force in an Installation Excellence Award ceremony. The award goes to an installation that excels at base level services, quality of work life, and quality of life. It is a prestigious award, and this year it went to Team Dover. One of the many accomplishments that Team Dover did was bedding down the C-17 nearly 11 months ahead of schedule. The wing had their first C-17 flying out of Dover and into theater within 36 days. With the ongoing operations in Iraq and Afghanistan, all of us are very familiar with the importance of strategic airlift. Strategic airlift means that we can move parts, supplies and people all over the globe in the course of a few hours, instead of weeks or months. Team Dover launched a new strategic lift aircraft in record time. I credit a lot of their success due to the fact that they have accepted and internalized the Air Force Smart Operations process. They didn't have to have a rapid improvement event, they just did it in a rapid improvement fashion. AFSO21 is Making a Difference The award's been around for 25 years and is competed for across our Air Force and in many of the other services. What made us proud here was the recognition that AFSO21 made a real difference in their achievement. We have used it across the large aircraft mobility world to save fuel, and increase aircraft availability. For example, our depots have reduced their flow by 40 percent and effectively added aircraft to our Air Force, all contributing to our effectiveness at the Air Force level. So my point is that Continuous Process Improvement is not at its core always focused on saving money. Sometimes improving the quality of the product, service or the effect being provided or the timeliness of its schedule is far more important. Sometimes CPI means funding and testing good ideas early to reap rewards later. Fundamentally, it's about working smarter, not harder. Improvement is a journey. Each step may reveal what's next. This is about facilitating tools and methods that allow progress to be measured and then claimed as an achievement. The Necessity of Having Goals I often say if you don't set objectives in the future, then achieving them is a lot like bragging. Right? You achieve them because you set the goal. Now you have an achievement. But if you achieve it and didn't set a goal, then you're just bragging because you didn't have anything to do with it in the first place. Stewardship Continuous Process Improvement occurs in the larger context of preparing for and winning the joint fight anywhere and anytime. We use CPI as one of the tools for enhancing our warfighter edge across our Air Force and across DoD. However, it is important to understand that we are merely temporary stewards of our nation's defenses. Our National Guard, for example, lays claim to a heritage of 370 years of defending the nation starting with colonial militias that protected settlers from attack. For 370 years our sentinels have stood with unwavering commitment to defend America. Certainly we're engaged in today's battles and we prepare for tomorrow's fight. But in addition to being a premier fighting force we are stewards of America's fighting force of the future. One day we're going to pass this torch to others. All of us are. The next generation of American sentinels deserves to inherit the most well equipped, the highest trained, and the most financially solvent fighting force possible. As stewards we have the responsibility to think strategically. We have to look beyond today's battles, whether those battles take place in combat zones or a milestone decision points for an acquisition program. We must consider implications of our actions across the entire Air Force or across the whole department. As stewards we must fund pilot projects that test new ideas. When these new ideas come to fruition, we must transfer this knowledge to similar activities across our enterprise. I was really pleased to see the CPI room that you have. This is an activity that can transfer across services. Good ideas, wherever they come, and allow them to blossom elsewhere. We must share best practices and adopt the best practices of others. As stewards we can't whittle away the strategic advantage provided by our military. Our commitment to democratic values and shared prosperity for all countries provides a global commons. Stable trade and the free exchange of ideas have allowed humankind to capitalize on new knowledge as soon as it is created and provide a safe, prosperous America, and a safe and prosperous world. As stewards we must remain technology leaders. The United States, particularly its military, should always push the technology envelope. Our technological advantage has undergirded America's strength for centuries. Linking Technology and CPI This technological advantage and CPI are absolutely intrinsically interrelated. Continuous Process Improvement provides a disciplined, structured method for leveraging the technology advancements to improve our processes. In some cases the technology advancement means that we will take available technology such as the intranet portals or cluster designs for satellites and implement the technology in an appropriate and purposeful way. We can always use these techniques to help us understand how our existing work process can be enhanced by technology. A good Air Force example might is a virtual MPF which is a Military Personnel Flight. When we started looking at many of our personnel processes we discovered that many were transactional in nature. In other words, a lot of our processes looked something like this: Leave your work section, drive across the base to the personnel flight, come into the office, fill out a form, wait in line. Then you wait for one of the workers, usually a junior enlisted Airman, who types the information that you just wrote on the form, types it into a computer, and a record is updated. Sound familiar? We all do it. This is very labor-intensive, time-consuming work. It's also prone to errors. We call that "fat fingering," no offense. And the process probably has to be repeated every time you move and in multiple databases. By rethinking some of these processes it turns out the workforce can focus less on transactional work and more on value added work. Our personnelists can focus less time on typing up and filling out paperwork and actually auditing what we have typed up and put in. That way they can devote more time to some of our challenging personnel management issues. This is yet another place that quality of work life and quality of life intersect. In many functional areas across the Air Force, moving from transactional work to value added work depends many times on technology solutions. We have to build and invest in the back end software to link our existing databases together. That way an input into one database automatically updates other databases. As you can imagine, personnel systems that service over 670,000 Airmen, including our civilians, are quite diverse and they are quite entrenched. They store, retrieve, access and modify data in different ways. Integrating these systems is a complex effort. But if we invest now in information systems in the right way, and make sure that the data is accessible, machine-to-machine, believe me, we will generate long-term savings. Stewardship also involves empowering our people. We have a great example of this in the Air Force. At one of our bases we have a Ministry of Defence employee, who is employed by the U.K. government but does his day-to-day work for a U.S. wing commander. He was concerned about how we handled fuel waste on the base. Obviously there are fiscal implications of wasted fuel. There are also environmental implications associated with fuel disposal. What he decided was, much like the making of coffee during World War II, that filters can be made out of many things. What he decided was that we were not applying any filters to fuel recovery so what he decided to do was essentially use a filter to recover the fuel. He cut down the number of hazardous barrels of fuel waste by about 85 percent. This also saved us money on buying fuel. And it is so easily transferred across our Air Force. As leaders it's our duty to foster such an environment, to promote innovative thinking at the lowest levels. We've got to reward and embrace changes where it comes from. Stewardship also means that we need to embrace and facilitate change where we can. Chief Management Officer What we have here is we have now a law, the "Chief Management Officer Law". At the DOD level the Congress has mandated that the chief management officer will develop a strategic management plan. This feeds right into it. It begs the question of what does business operations mean. Here we are talking about improving business operations. In the Air Force we're starting to think how do we connect the AFSO21 Process Council to these responsibilities of the chief management officer. So I think that we are ahead of the game a little bit, but it's because of the hard work of many in this audience that we can do it. So we're taking what we're doing in the Air Force Council and we are mandating them in the chief management officer operations venue. Our governing processes are plan and execute strategic initiatives. We manage programs and processes. Core Processes Our core processes, by the way, are four: develop warfighters, develop warfighting systems, deploy warfighting systems, and conduct air, space and cyber operations. Our enabling processes are caring for people, providing IT support, providing infrastructure and managing financial resources. Our next step is to have some very fundamental conversations among senior Air Force leaders about how we connect the dots between the chief management officer and our governing, core, and enabling processes. Leadership and Management as Two Sides of the Same Coin I think that we will find is we do an incredible job of establishing leadership and emphasizing leadership in our Air Force. Though I see leadership and management as two sides of the same coin, they are profoundly different. The first is motivational and conveying confidence. Leadership inspires vision, action and momentum. The second is setting objectives and measuring results. Management builds confidence through delegation and routinely monitoring performance against objectives set, usually by negotiation. What I try to convey to my top leadership team is that if you don't focus closely on the business side, you may actually hurt the warfighting side. So I emphasize that we need great leaders throughout our military, but at the same time when they become senior leaders and generals, they need management skills. So I wish you luck because this workshop is all about bringing you the tools, the techniques, the processes to make you better managers, because you already are better leaders. I think as you look at how to do the value stream, without a doubt you will see that the breakdown of the process, things jump out at you that don't need to be done any more. Success is Here Second, you'll see the successes are here. They're rolling in. They aren't distant. They're rolling in. And now what we have to do is take advantage of those and learn from them how to set the right process. So my challenge to you is to energize the workforce that you have out there working for you. Learn what you can from this symposium. But frankly, be convincing. I think that said it best. Dedication, persistence, but also a little bit of understanding the baseline tools and techniques of CPI will make it so much easier for you. I really believe that you do too, that all of this works for the betterment of the Department of Defense. CPI is a Breakthrough I'm proud to be a proponent of Continuous Process Improvement. It's a major breakthrough, I believe, for DoD. It's helping to create a department that works smarter, not harder. The work that you do every day is out there, is eliminating waste and it promotes effectiveness and efficiency. You in this room today should be proud of your association with Continuous Process Improvement. As you look through the CPI room you're going to see successes today, and I'm convinced that there's more out there. Your enthusiasm and efforts are going to be critical to building a more capable and ready force for the future. Keep up the great work! May God bless you in your work, and may God bless this great nation we all serve. Thank you very much.