the lean enterprise self assessment tool · aerospace initiative web.mit.edu/lean §business...

Research Sponsored By LAI

LESATThe Lean Enterprise

Self Assessment Tool

Massachusetts Institute of Technology

Nightingale - 2 © 2001 Massachusetts Institute of Technology

LeanAerospace

Initiative

web.mit.edu/lean

Overview

➢Background

➢LESAT Development Process

➢LESAT Architecture and Practices

➢Assessment Process

➢Next Steps / Schedule


LeanAerospace

Initiative

web.mit.edu/lean

Finance/HumanResources, etc.

Finance/HumanResources, etc.

CustomerCustomer

Supplier NetworkSupplier Network

Product DevelopmentProduct DevelopmentProduct SupportProduct Support

ManufacturingOperations

ManufacturingOperations

Lean Transformation Requiresan Enterprise Approach


LeanAerospace

Initiative

web.mit.edu/lean

TTLRoadmaps

TTLRoadmaps

LEM Principles & Practices


LESATSelf Assessment

LESATSelf AssessmentAssessment

LAI Enterprise Tool Triad

Best PracticesImplem

enta

tion


LeanAerospace

Initiative

web.mit.edu/lean

Lean Enterprise Model Practices and Benchmark Data

Supporting Practices(~300)Supporting Practices(~300)

Enabling Practices (~ 60)Metrics -Data - Barriers - Interactions

Enabling Practices (~ 60)Metrics -Data - Barriers - Interactions

Enterprise Level MetricsEnterprise Level Metrics

Meta-Principles/Enterprise PrinciplesMeta-Principles/Enterprise Principles

Overarching PracticesOverarching Practices

Develop RelationshipsBased on Mutual Trust &

Commitment

Continuously Focus onthe Customer

Nurture a LearningEnvironment

Ensure ProcessCapability and

Maturation

Assure SeamlessInformation Flow

Optimize Capability &Utilization of People

Identify & OptimizeEnterprise Flow

Implement IntegratedProduct & Process

Development

Maintain Challenge ofExisting Processes

Make Decisions atLowest Possible Level

Promote LeanLeadership at all Levels

Maximize Stability in aChanging Environment

Metrics - Barriers - Interactions

Data Sheets(~225)

InternetLinks(~600)

LEM


LeanAerospace

Initiative

web.mit.edu/lean

TTLRoadmaps

TTLRoadmaps







enta

tion


LeanAerospace

Initiative

web.mit.edu/lean

Long Term Cycle

Short Term Cycle

Entry/Re-entryCycle

Create & RefineTransformation Plan

Focus on ContinuousImprovement

Implement Lean Initiatives

Adopt LeanParadigm

EnterpriseStrategicPlanning

Decision to Pursue

Enterprise Transformation

Focus on theValue Stream

InitialLean

Vision

Detailed Lean

Vision

LeanTransformation

Framework

Develop Lean Structure &Behavior

Enterprise Level

Transformation Plan

Outcomes on Enterprise

Metrics

Environmental Corrective

Action IndicatorsDetailed

Corrective ActionIndicators

+

+

Enterprise Transition To Lean(TTL) Roadmap


LeanAerospace

Initiative

web.mit.edu/lean

Entry/Re-entryCycle

Focus on the ValueStream

InitialLean

Vision

Short Term Cycle


LeanTransformation

Framework

Adopt LeanParadigm




Metrics

Implement Lean InitiativesEnterprise

LevelTransformation

Plan


Detailed Lean

Vision




Decision to Pursue


•Build Vision•Convey Urgency•Foster Lean Learning•Make the Commitment•Obtain Senior Mgmt. Buy-in

•Map Value Stream•Internalize Vision•Set Goals & Metrics•Identify & Involve Key Stakeholders

•Organize for Lean Implementation•Identify & Empower Change Agents•Align Incentives•Adapt Structure & Systems

•Identify & Prioritize Activities•Commit Resources•Provide Education & Training

•Monitor Lean Progress•Nurture the Process•Refine the Plan•Capture & Adopt New Knowledge

•Develop Detailed Plans•Implement Lean Activities

Enterprise Level Roadmap

+

+

Long Term Cycle


LeanAerospace

Initiative

web.mit.edu/lean

TTLRoadmaps

TTLRoadmaps







enta

tion


LeanAerospace

Initiative

web.mit.edu/lean

What Is LESAT?

➢ A tool for self-assessing thepresent state of “leanness” of anenterprise and its readiness tochange

➢ Comprised of:

➢ Capability maturity model forenterprise leadership, life cycleand enabling processes

➢ Supporting materials:(Facilitator’s Guide,Glossary, etc.)

Source: Lean Aerospace Initiative, MIT © 2001


LeanAerospace

Initiative

web.mit.edu/lean

How Do I Assess My Progress?

➢ Enterprise TTL application highlighted need forassessment tool

➢ Lean Enterprise Self Assessment Tool (LESAT)developed by joint industry / government / MIT team incollaboration with UK LAI

➢ LESAT supports both

➢ “As-Is” Analysis AND

➢ “To-Be” Vision

➢ Targeted at Enterprise Leadership Team


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Tool Requirements(Survey of LAI Stakeholders)

➢ Simple, easy to use by enterprise leadership

➢ Focus on lean attributes

➢ Alignment with business performance planning (goalsand results)

➢ Provides guidance for “next steps”

➢ Gap analysis capability

➢ Ability to accommodate both single and alignedorganizations (teaming, partnerships, suppliers)within an enterprise


LeanAerospace

Initiative

web.mit.edu/lean

Life Cycle Processes

Enabling InfrastructureProcesses

Enterprise Leadership Processes

Process ArchitectureView of Lean Enterprise



LeanAerospace

Initiative

web.mit.edu/lean

§Business Acquisition and Program Management§Requirements Definition§Product/Process Development§Supply Chain Management§Production§Distribution and Support

§Finance§Information Technology§Human Resources§Quality Assurance§Facilities and Services§Environment, Health and Safety

§Strategic Planning§Business Models§Managing Business Growth§Strategic Partnering§Organizational Structure and Integration§Transformation Management


Enabling Infrastructure Processes


Lean Enterprise ProcessArchitecture



LeanAerospace

Initiative

web.mit.edu/lean

Section I Section II Section III

Lean

Transformation

/ Leadership

Life

Cycle

Processes

Life

Cycle

Processes

Enabling

Infrastructure

Processes


Enabling InfrastructureProcesses


LESAT Structure is Consistent withEnterprise Architecture



LeanAerospace

Initiative

web.mit.edu/lean

LESAT Maturity Matrix Template

Source: U.S. and U.K. Lean Aerospace Initiative, © 2001

Statementdescribingworld-classbehavior for thislean practice

Level 5Level 4Level 3Level 2

Outcomes and lean behaviors that an enterprise will exhibit as it proceeds on its Leantransformation

LeanIndicators

Inputs to plans of action to leverage opportunities or to move to the desired level of capabilityOpportunities

Supporting data utilized in assessing the current capability level of the Enterprise on this leanpractice

Evidence

Statementdescribing littleawareness of thislean practice

A specific leanpracticeassociatedwith thisGroup

Sound bitphrase

Level 1

Capability LevelsLeanPracticesLP#

1.0 Generic questions regarding the performance of the enterprise relative to this Group of practicesDiagnosticQuestions

Section, Group # and Group Name: Brief description of this Group number. In Section I, the Group isone of the Primary Activities from the Transition-to-Lean (TTL) Roadmap

C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

Capability Maturity Levels

Level 1 Some awareness of this practice; sporadic improvementactivities may be underway in a few areas.

Level 2

Level 3

Level 4

Level 5

General awareness; informal approach deployed in a fewareas with varying degrees of effectiveness and sustainment.

A systematic approach/methodology deployed in varyingstages across most areas; facilitated with metrics; goodsustainment.

On-going refinement and continuous improvement across theenterprise; improvement gains are sustained.

Exceptional, well-defined, innovative approach is fully deployedacross the extended enterprise (across internal and externalvalue streams); recognized as best practice.



LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean

Transformation / Leadership

Section IILife

Cycle Processes

Section IIIEnabling

Infrastructure Processes


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Section I

➢Practices directly linked to enterprise Transition toLean Model (TTL)

➢Assesses the following elements:➢Strategic integration

➢Leadership and commitment

➢Value stream analysis and balancing

➢Change management

➢Structure and systems

➢Lean transformation planning, execution and monitoring

++

++

Section I: Lean Transformation/Leadership


LeanAerospace

Initiative

web.mit.edu/lean

Adopt LeanParadigm

Long Term Cycle

Short Term Cycle

Entry/Re-entryCycle



Implement Lean Initiatives


Decision to Pursue


Focus on theValue Stream

InitialLean

Vision

Detailed Lean

Vision

LeanTransformation

Framework


Enterprise Level

Transformation Plan


Metrics




+

+

Enterprise Transition To Lean(TTL) Roadmap


LeanAerospace

Initiative

web.mit.edu/lean

I.B. Adopt Lean Paradigm


Stakeholders haveinternalized the leanvision and are anactive part ofachieving it.

Level 5

Common visionof lean isshared by theextendedenterprise.

Level 4

Lean vision hasbeencommunicated andis understood bymost employees.

Level 3

Senior leadersadopt commonvision of lean.

Level 2

➢The role that lean plays in achieving the vision is clearly defined

➢The vision has been communicated to all levels and has extensive buy-in by most employees.➢The vision incorporates a new mental model of how the company would act and behave according to

lean principles and practices

LeanIndicators

Opportunities

Evidence

Senior leadershave varyingvision of lean,from none towell-defined.

LeanEnterpriseVision

New mentalmodel of theenterprise

I.B.3.

Level 1

Capability LevelsLeanPractices

LP#

1. Do enterprise leaders and senior managers understand the lean paradigm at the enterprise level?

2. Do all senior leaders and management enthusiastically support a transformation to lean?3. Has a common vision of lean been communicated throughout the enterprise and within the extended

enterprise?4. Has a compelling case been developed for the Lean transformation?

DiagnosticQuestions

I.B. Adopt Lean Paradigm - Transitioning to lean requires a significant modification to the business model of theenterprise. It is imperative that the enterprise leadership understands and buys into the lean paradigm since theywill be required to create a vision for doing business, behaving and seeing value in fundamentally different ways.

C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean




Level 5


Level 4


Level 3


Level 2




LeanIndicators

Opportunities

Evidence




I.B.3.

Level 1





DiagnosticQuestions


C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

I.B. Diagnostic Questions

➢ Do enterprise leader and senior managersunderstand the lean paradigm at the enterpriselevel?

➢ Have all senior managers made a commitment toenthusiastically support a transformation to lean?

➢ Has a common vision of lean been communicatedthroughout the enterprise and within the extendedenterprise?

➢ Has a compelling case been developed for thelean transformation?


LeanAerospace

Initiative

web.mit.edu/lean




Level 5


Level 4


Level 3


Level 2




LeanIndicators

Opportunities

Evidence




I.B.3.

Level 1





DiagnosticQuestions


C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Section I: Example

Level 1

I.B.3 Lean Enterprise Vision - new mental model of the enterprise

Senior leaders have varying visions of lean, from none towell-defined

Level 2

Level 3

Level 4

Level 5

Senior leaders adopt common vision of lean

Lean vision has been communicated and is understoodby most employees

Common vision of lean is shared by the extendedenterprise

Stakeholders have internalized the lean vision & are anactive part of achieving it



LeanAerospace

Initiative

web.mit.edu/lean

Lean Indicators

➢ The role that lean plays in achieving the vision isclearly defined

➢ The vision has been communicated to all levels andhas extensive buy-in by most employees

➢ The vision incorporates a new mental model of howthe company would act and behave according tolean principles and practices


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean


Section IILife

Cycle Processes

Section IIIEnabling



LeanAerospace

Initiative

web.mit.edu/lean

LESAT Section II

Assess:

➢ Enterprise level core processes

➢ Acquisition

➢ Program Management

➢ Requirements Definition

➢ Product/Process Development

➢ Supply Chain Management

➢ Production

➢ Distribution and Support

➢ Key integrative practices

Section II: Life Cycle Processes


LeanAerospace

Initiative

web.mit.edu/lean

II.C. Develop Product and Process


Downstreamstakeholders’ values inthe extended enterpriseare quantified andbalanced via tradeoffs,as a continuous part ofthe process.

Level 5

Priorities ofdownstreamstakeholders arequantified as earlyas possible indesign, and used forprocess evaluationand improvement.

Level 4

Multi-functionalteams includesome downstreamdisciplines and keysuppliers.

Level 3

Manufacturing andassembly issues areconsidered earlier inprojects, but in adhoc manner.Supplier and costconsiderations arelimited.

Level 2

➢There is early consideration and incorporation of downstream stakeholders issues throughout design development

➢The scope of considerations integrated into designs has been extended to include manufacturing, assembly,serviceability and cost implications

➢Products are easier to produce and have lower life-cycle costs

Lean Indicators(Examples)

Opportunities

Evidence

Manufacturingissues areconsidered late indesign.

IncorporateDownstreamStakeholder Values(Manufacturing,Support, etc.) intoProducts and Processes

Understandingdownstream stakeholdersallows value to flowseamlessly to customer

II.C.2

Level 1

Capability LevelsLean PracticesLP#

1. Is the product development process formalized and understood?2. Are customers and other lifecycle stakeholders regularly involved in product and process development?

3. Are downstream stakeholder issues in design and development considered and incorporated as early as possible in the process?4. Have most of the unnecessary iterations in the development cycle been removed?

5. Has the development cycle been simplified and aligned to the critical path?6. Are products and processes being developed concurrently?

DiagnosticQuestions

II. C. Develop Product and Process - Product and process design decisions must be based upon value quantifications andtradeoffs that incorporate inputs from affected stakeholders.

C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean




Level 5


Level 4


Level 3


Level 2





Opportunities

Evidence




II.C.2

Level 1





DiagnosticQuestions


C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

Diagnostic Questions

➢ Is the product development process formalized andunderstood?

➢ Are customers and other lifecycle stakeholders regularlyinvolved in product and process development?

➢ Are downstream stakeholder issues in design anddevelopment considered and incorporated as early aspossible in the process?

➢ Have most of the unnecessary iterations in thedevelopment cycle been removed?

➢ Has the development cycle been simplified and aligned tothe critical path?

➢ Are products and processes being developedconcurrently?


LeanAerospace

Initiative

web.mit.edu/lean




Level 5


Level 4


Level 3


Level 2





Opportunities

Evidence




II.C.2

Level 1





DiagnosticQuestions


C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section II: Example

Level 1 Manufacturing issues are considered late in design

Level 2

Level 3

Level 4

Level 5

Manufacturing & assembly issues are considered earlier in projects, but in anad hoc manner. Supplier & cost considerations are limited

Multi-functional teams include some downstream disciplines and key suppliers

Priorities of downstream stakeholders are quantified as early as possible indesign, and used for process evaluation and improvement

Downstream stakeholders’ values in the extended enterprise are quantified, andbalanced via tradeoffs, as a continuous part of the process

II.C.2 Incorporate Downstream Stakeholder Values (Manufacturing,Support, etc.) into Products & Processes - Understanding downstreamstakeholders allows value to flow seamlessly to customer


LeanAerospace

Initiative

web.mit.edu/lean

Lean Indicators

➢ There is early consideration and incorporation ofdownstream stakeholder issues throughout designdevelopment

➢ The scope of considerations integrated into designshas been extended to include manufacturing,assembly, serviceability and cost considerations

➢ Products are easier to produce and have lower life-cycle costs


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Architecture

Section ILean


Section IILife

Cycle Processes

Section IIIEnabling



LeanAerospace

Initiative

web.mit.edu/lean

LESAT Section III

Lean Organizational Enablers

➢Finance

➢Information Technology

➢Human Resources

➢Environmental Health & Safety

Section III: Enabling Infrastructure

Lean Process Enablers

➢Standardized processes

➢Common tools and systems

➢Variation reduction


LeanAerospace

Initiative

web.mit.edu/lean

III.A. Lean Organizational Enablers


Financial systems provideseamless informationexchange across theextended enterprise, withemphasis on valuecreation for allstakeholders.

Level 5

Financial systemscope is expandedto integrate withnon-traditionalmeasures of valuecreation (e.g.,intellectual capital,balancedscorecard, etc.).

Level 4

Finance system isoverhauled to providedata and financialinformation to supportand enable a leantransformation at anylevel.

Level 3

Initial efforts areunderway to adaptor modify systemsto compensate forthe inadequacies ofthe formal financialsystem.

Level 2

➢Financial measures that conflict with lean activity are no longer used to measure progress and performance.➢The financial system handles a balanced set of financial and non-financial measures to assist decision-making.

➢The financial system has been overhauled to ensure fast and efficient processing of information as required.

Lean Indicators

Opportunities

Evidence

Finance systemprovides basicbalance sheet andcost accountingdata; there is littleawareness andexploration ofbroader supportroles for finance.

Financial SystemSupports LeanTransformation

Lean requiresappropriatefinancial data

III.A.1

Level 1


1. Do the finance and accounting measures support the implementation of lean?2. How well have the financial and accounting systems been integrated with non-financial measures of value creation?

3. Can stakeholders retrieve financial information as required?4. Are human resource practices reviewed to assure that intellectual capital matches process needs?

5. Are the information technology systems compatible with stakeholder communications and analysis needs?6. Do processes created the least amount of environmental hazards practical?

DiagnosticQuestions

III.A. Lean Organization Enablers - The support units of an enterprise infrastructure must support the implementation of leanprinciples, practices and behavior.

C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean




Level 5


Level 4


Level 3


Level 2



Lean Indicators

Opportunities

Evidence




III.A.1

Level 1





DiagnosticQuestions


C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

Section III. Diagnostic Questions

➢ Do the finance and accounting measures support theimplementation of lean?

➢ How well have the financial and accounting systems beenintegrated with non-financial measures of value creation?

➢ Can stakeholders retrieve financial information as required?

➢ Are human resource practices reviewed to assure thatintellectual capital matches process needs?

➢ Are the information technology systems compatible withstakeholder communications and analysis needs?

➢ Do processes create the least amount of environmentalhazards practical?


LeanAerospace

Initiative

web.mit.edu/lean




Level 5


Level 4


Level 3


Level 2



Lean Indicators

Opportunities

Evidence




III.A.1

Level 1





DiagnosticQuestions


C D C D C D C D C D


LeanAerospace

Initiative

web.mit.edu/lean

Enterprise Level Section III: Example

Level 1

III.A.1 Financial system supports lean transformation -Lean requires accurate assessment of value stream activities

Finance system provides basic balance sheet and cost accounting data;there is little awareness and exploration of broader support roles forfinance.

Level 2

Level 3

Level 4

Level 5

Initial efforts are underway to adapt or modify systems to compensatefor the inadequacies of the formal financial system.

Finance system is overhauled to provide data and financial informationto support and enable a lean transformation at any level.

Financial system scope is expanded to integrate with non-traditionalmeasures of value creation (e.g., intellectual capital, balancedscorecard, etc.).Financial systems provide seamless information exchange across theextended enterprise, with emphasis on value creation for all stakeholders.


LeanAerospace

Initiative

web.mit.edu/lean

Lean Indicators

➢ Financial measures that conflict with lean activity are nolonger used to measure progress and performance.

➢ The financial system handles a balanced set of financial andnon-financial measures to assist decision-making.

➢ The financial system has been overhauled to ensure fast andefficient processing of information as required.

➢ Financial and performance measurement data can beaccessed as needed in user-defined format.

➢ Financial information can be extrapolated to forecastoutcomes.

➢ System provides up to date information on request andrationalizes information no longer used.


LeanAerospace

Initiative

web.mit.edu/lean

LESAT Supporting Materials

➢ Introductory Presentation

➢ LESAT Matrices & Facilitator’sGuide

➢ TTL Roadmap & Guide

➢ Summary Score Calculator

➢ Glossary of Terms

++

++


LeanAerospace

Initiative

web.mit.edu/lean

Suggested Methodology forEmploying LESAT

LESAT

Lean Journey

Step 1: Facilitated meeting to introduce tool.Enterprise leader champions

Step 2: Enterprise leaders and staff conductLESAT assessment

Step 3: Leadership reconvenes to jointlydetermine present maturity level

Step 4: Leadership determinesdesired level and measures gap

Step 5: Develop actionplan and prioritizeresources


LeanAerospace

Initiative

web.mit.edu/lean

Summary Form Example

LESAT Enterprise Self-Assessment Tool (LESAT)

Section I - Lean Transformation/LeadershipProcess Definition: Develop and deploy lean implementation plans throughout the enterprise leading to (1)- long-term sustainability, (2)-acquiring competitive advantage and (3) satisfaction of stakeholders.

Capability LevelTTL Link Lean Practice Lean Characteristic Current Desired

I.A.1 - Integration of Lean in strategicplanning process

Lean impacts growth, profitability and marketpenetration

I.A.2 - Focus on customer value Customers pull value from enterprise value streamI.A.3 - Leveraging the extended enterprise Value stream extends from customer through the

enterprise to suppliers

I.A. EnterpriseStrategic Planning

AverageI.B.1 - Learning and education in “Lean”for enterprise leaders

“Unlearning” the old, learning the new

I.B.2 - Senior management commitment Senior management leading it personallyI.B.3 - Lean enterprise vision New mental model of the enterpriseI.B.4 - A sense of urgency The primary driving force for Lean

I.B. Adopt LeanParadigm

AverageI.C.1 - Understanding current value stream How we now deliver value to customersI.C.2 - Enterprise flow “Single piece flow” of materials and informationI.C.3 - Designing future value stream Value stream to meet the enterprise visionI.C.4 - Performance measures Performance measures drive enterprise behavior

I.C. Focus on theValue Stream

AverageI.D.1 - Enterprise organizational orientation Organize to support value deliveryI.D.2 - Relationships based on mutual trust “Win-win” vs. “we-they”I.D.3 - Open and timely communications Information exchanged when requiredI.D.4 - Employee empowerment Decision-making at lowest possible levelI.D.5 - Incentive alignment Reward the behavior you wantI.D.6 - Innovation encouragement From risk aversion to risk rewardingI.D.7 - Lean change agents The inspiration and drivers of change

I.D. Develop LeanStructure andBehavior

Average


LeanAerospace

Initiative

web.mit.edu/lean

5

4

3

2

1

0

Cap

abili

ty L

evel

LESAT Enterprise Process Areas

Current Capability

A Company’s Strategic Plan for a Tailored Capability Goal matched to the business objectives.

LESAT Desired Score Can beTailored for Each Process Area

Gap


LeanAerospace

Initiative

web.mit.edu/lean

Ground Rules

➢ Perform the assessment from a total enterpriseperspective, NOT individual functional area

➢ Attempt to assess every practice; leave blank if N/A orif you don’t know

➢ Scoring the practices➢ Each level assumes that lower level criteria are met➢ If between levels, score at the lower level

➢ Note “evidence” for level selected

➢ Identify opportunities to increase maturity level

➢ Seek assistance from company facilitator


LeanAerospace

Initiative

web.mit.edu/lean

Schedule

LESAT Overview/Kickoff Today _____

Completed assessments to site coordinator

TBD _____

Scores compiled andsummarized

TBD _____

Consolidation/FeedbackSession

TBD _____

the lean enterprise self assessment tool · aerospace initiative web.mit.edu/lean §business...

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