Most likely, no one associates leanmanufacturing with building mili-tary aircraft. Government and leanjust do not seem to fit together.However, the attendees at therecent AME workshop at LockheedMartin's Ft. Worth, TX facility gotthe chance to see the implementa-tion of the lean enterprise in a real-ly unique setting. This LockheedMartin plant is building the F-16Fighter plane (see Figure 1) and isalso participating in the productionof the new F-22 Fighter.

The company was awardedthe initial development contract forthe new F-35 (Figure 2), Joint StrikeFighter (JSF), in October 2001, in afly-off competition with BoeingAircraft. Because of the new gov-ernment initiatives to contain thecosts for new weapons systems,Lockheed Martin has adopted acomplete lean supply chainapproach that includes engineer-ing, program management, suppli-ers, and production.

What we find in LockheedMartin is a prime example thatdebunks two schools of thought on"Why lean will not work in myshop:"

1. I produce in very low volumes and have a high product mix.

2. I am a union shop and the union will not buy into lean.

Lockheed MartinAeronautics: The Joint StrikeFighter Goes LeanHow a large, complex program incorporates lean principles.

John H. Puckett

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Target Volume 19, Number 4

Figure 1. The Lockheed Martin facility produces about one airplane (F-16) every 30 days; finalassembly is shown.

For the past several years theLockheed Martin facility has beenproducing about one airplane (F-16) every 30 days and they have arepresented work force with the IAMbeing the principal union. They haveindeed made lean work and are see-ing the fruits of instituting lean as acompany philosophy from top tobottom. The F-16 production rate is

currently increasing to eight permonth, due to new sales made pos-sible, in part, by the relatively lowcost on the world fighter market.

Lean History at Lockheed Martin

Lockheed Martin is not new tothe adoption of lean manufactur-ing. Back in 1991, the productionrate of the F-16 Fighter had plungedfrom the heydays of the mid 1980s,quality was slipping, and deliverieswere behind schedule. As the mili-tary focused more on cost, quality,and delivery, plant managementknew they needed to significantlyimprove their performance or risklosing critical business. By 1992,new performance improvementswere under way, but there wasmuch to be done. By 1995, a majorbenchmarking activity was startedto determine "best practices" thatcould be brought into the plant.

In 1998 a new LeanOrganization was put togetherunder the direction of Larry Pike,

Director of Lean Deployment. Asthe results of the benchmarkingstudies and the lean initiativesbegan to take effect, LockheedMartin applied for and won thehonor of being selected as oneIndustryWeek's "Top 10 Plants" in1998. Improvements from 1992through 1997 included a 38 percentreduction in manufacturing costs,despite volume reductions; 50 per-cent inventory reduction; a defectrate of 3.4 defects per plane; andreduction in order to delivery timefrom 42 months to 21.5 months.

Despite these impressiveimprovements, Lockheed Martinwas by no means finished withtheir continuous improvement pro-gram. Through the application ofkaizen methodologies to furtherimplement lean manufacturing, theplant challenged for and wasawarded the Shingo Prize forExcellence in Manufacturing in2000.

During this period, a kaizenproject in material managementreduced the time to move partsfrom receiving to stock from 30days to four hours. Another majorproject undertaken with a majorsupplier on the F-16 Radar Rackresulted in a significant cost reduc-tion on the follow-on contract. Thisproject focused on the redundanthandling and testing associatedwith a radar subsystem for the air-plane. This application of the leansupply chain philosophy along withlean design, lean project manage-ment, and lean manufacturing wereamong reasons for LockheedMartin Aeronautics winning thedevelopment contract for the newF-35 Joint Strike Fighter.

Lean Principles at Work

The principles of lean at LockheedMartin Aeronautics include: 1) trans-parency — when anyone can walk

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51Fourth Quarter 2003

Figure 2. Lockheed Martin was awarded the initial development contract for the new F-35, JointStrike Fighter (JSF), in October 2001.

History and Folklore

• Plant constructed in1942to build the B24 bomber.

• Plant's main building isover one mile in length and contains over 1.5 million square feet.

• Peak production of B-24sin 1944 was one plane per hour!

• The facility is owned by the U.S. Air Force.

into a workspace and visuallyunderstand the current situation; 2)Design for Manufacturing andAssembly (DFMA) — even the mostelegant design is useless if you can'tproduce it affordably; 3) processfocus — lean manufacturing effec-tively debunks the misguided beliefthat optimizing each operation alsooptimizes the entire process; 4) Justin Time (JIT) system — the factorywill produce only what is needed,when it is needed, and only in thequantity needed; 5) process control— what can be more wasteful thannot making something right the firsttime?; 6) standard work — standard-izing work is the best way to get thejob done in the amount of timeavailable and how to get the jobdone right the first time, every time.

It was these major lean initia-tives that prepared the way forLockheed Martin to win the JSFcompetition. Because employeeinvolvement is a basic pillar of lean,Lockheed Martin fully involvedtheir unionized workforce in thenecessity for and the principles oflean manufacturing. The future suc-cess of Lockheed Martin was goingto be tied to the successful captureof the Joint Strike Fighter and amutual effort of both the unionizedand non-unionized workforce thatwould make this possible.

Values and Culture

To survive in this competitiveenvironment, it is important thatthe whole workforce share com-mon values. Lockheed Martin set-tled on three key values that woulddrive the business: 1) collectiveaccountability by team members; 2)employee engagement; and 3) busi-ness-based decision making.Through these shared values, thebusiness would be conducted.These values set the cultural envi-ronment of the company. The four

principles of this culture were: 1. We, not me2. Customer first3. People focus4. Lead by example.

As the new corporate culturetook hold and the lean manufactur-ing training was implemented, thefoundation had now been laid for thecompany to capture the JSF program.

Management-UnionCooperation Paved theWay for Improvements

One of the first issues thatcame up that took advantage of theLockheed Martin lean efforts overthe past few years was to reducethe floor space occupied by the F-16program by 60 percent for the JSFprogram. The cooperation betweenthe company management and theunion made this possible withoutloss of any F-16 production.Another example of this coopera-tion in the implementation of leanwas the ALE-50 Pylon program. Theproduct travel distance wasreduced to 50 feet from 200 feet andthe time to produce the productwas reduced from 177 to 34 hours.

Front End Focus

As we move on now from theLockheed Martin foundations oflean and the capture of the JSF (F-35) program, we look at the mainfocus of the workshop — the appli-cation of lean principles at the frontend of a major weapons programlike the F-35. Today, successful leanorganizations have moved beyondthe manufacturing floor into thefront end of the business; andLockheed Martin has done just that.We had the opportunity to hearfrom program management, designengineering, and supply chainmanagement on how lean hastransformed their organizations

and how its use makes the F-35successful for both the customersand suppliers.

One aspect of the JSF programvision that was different from anyprevious weapons system was thatit must be "affordable." When we goback and look at the vision of anaffordable fighter, you might ask,"What does that really mean?" Hereare some of the program objectives:

1. Reduce the overall acquisitioncosts of this plane by 60 per-cent compared to current air-craft of a similar missioncapability

2. Reduce the logistical support costs by 50 percent comparedto current systems

3. Reduce design time by 50percent

4. Reduce manufacturing time by66 percent

5. Reduce tooling required to produce the aircraft by 90 percent

6. Reduce spare parts required by50 percent

7. Provide a total order-to-deliv-ery time of less than one year.

All this will be accomplishedusing a worldwide supplier net-work, producing three major plat-forms in a mixed model productionline with orders coming from gov-ernments from all over the world.Pretty ambitious!

Integrated Product Teamsand Suppliers

The whole program is run by aseries of Integrated Product Teams(IPT) that have complete responsi-bility for a portion of the aircraft. Aunique feature of this program andthe management of it is the multi-company, worldwide manufactur-ing approach that has been taken.Although Lockheed Martin is theprincipal contractor, there are two

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52Target Volume 19, Number 4

other primes as well, NorthropGrumman, and BAE Systems of theUK. In order to assure the mostcompetent people in leadershippositions within the IPTs, teamleaders were selected from amongthe three prime contractors, eventhough the team location was goingto reside in Ft. Worth, TX at theLockheed Martin facility.

In addition, many of the otherkey subcontractors are representedon the IPTs. With over 75 percent ofthe manufacturing costs comingthrough the international supplychain, having many of these keysuppliers being part of the productteams will insure close communi-cations throughout the design andproduct phases of the program.

The structure of these IPTsresembles a traditional companyorganization chart. The big differ-ence is that this organization isstrictly product-oriented. From thetop level product team that hasoverall responsibility to the small-est subsystem product team, theinterconnecting lines of communi-cation are designed to insure thebest possible performance of theproduct. This structure represents anew variation of the "virtual corpo-ration" taken to a level unseenbefore. The loyalty of the execu-tives, managers, and other teammembers is to the success of the F-35 program and not to their homecompanies. If the program is suc-cessful, each of the individual com-panies will also be successful.

What we saw during this workshop was how the principlesof lean, especially the concept ofwaste reduction, contributed tomeeting cost and schedule goalsduring the development phase. Thetraditional government contractmentality that accepted cost over-runs, schedule slips, and perform-ance compromise is just not part ofthe vocabulary here. If a systemteam has a problem with cost, per-formance, or schedule, that phaseof the program just does not pro-ceed until the issue is resolved. If aproblem involves two differentIPTs, they get together to resolvethe issue immediately. It maybecome necessary to involve thenext level in the product structureto resolve the issue, but the prob-lem gets resolved right there, at thelowest possible level.

All of these teams have beentrained in the fundamentals of leanand how to identify and eliminatewaste both in the developmentphase and in the manufacturing

process. One example we saw washow a common production toolcould be used to produce severaldifferent, but similar parts, by justchanging an inset. This reduced thetooling costs for producing theseparts by 90 percent.

This workshop was an excel-lent example of how a large, com-plex program has incorporated theprinciples of lean to 1) win a majorweapons program and 2) establisha cross-functional/cross-companyenvironment dedicated to the suc-cess of the program. As this modelproves successful on the new JSFprogram, it is likely to set the prece-dent for all future major weaponscontracting by the U.S. government.

Editor's note: The really spectacularpart of this model is that all of the keyprinciples are being taught todaythrough the AME Lean Series of sem-inars on Lean Program Management,Lean Design, Lean Supply Chain, andthe Kaizen Blitz workshop, addedJohn Puckett. AME and LockheedMartin plan an additional workshopfocusing on the manufacturingaspects of the JSF and how the leandesign transforms into lean manufac-turing. Watch for AME Lean work-shops on the website (www.ame.org).

John Puckett, owner of Visions ofExcellence in LaGrange, GA is theAME vice president of alliances.

Update on Excellence

The traditional government

contract mentality that

accepted cost over-runs,

schedule slips, and perform-

ance compromise is just not

part of the vocabulary here.

53Third Quarter 2003

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