P-8A Multi-mission Maritime Airplane. Richard A Heerdt, Boeing VP/P-8 Program Manager

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1 I. Program Overview Organization Name/Program Name: Program Leader Name/ Position/Contact information P-8A Multi-mission Maritime Airplane Richard A Heerdt, Boeing VP/P-8 Program Manager Richard.a.heerdt@boeing.com Program Category o System level Production Program Background: What is this program all about? (No more than one page). Describe: The overarching need for this program History of the program The product that is created by this program Scope of work original & updated Expected deliverables Current status of the program I. VALUE CREATION = 20 POINTS The P-8A Poseidon, a military derivative of the Boeing Next Generation , has been described by the US Navy as the most advanced anti-submarine (ASW) and anti-surface warfare (ASuW) aircraft in the world. Designed to replace the US Navy s fleet of aging P-3C aircraft, the P-8A s world class sensors, advanced processing and open architecture mission systems all contribute to a true multi-mission aircraft that is the cornerstone of the US Navy s long-range maritime reconnaissance capability. The P-8A System Development and Demonstration (SDD) contract was awarded in June First flight was achieved in April 2009, static testing was complete in January 2011 and Initial Operational Test and Evaluation was completed in March. Live-fire testing is complete and fatigue testing is underway. Overall, SDD is 98 percent complete. Through a series of low-rate initial production (LRIP) and full- rate production (FRP) contracts, Boeing will deliver 117 P-8A aircraft, along with spares, support equipment and training devices. The first nine production aircraft have been delivered to NAS Jacksonville. All deliveries in have been on or ahead of schedule. Over the past three years, P-8A has successfully transitioned from a development program focused on engineering design and test to a world-class production program focused on delivering airplanes, supporting the fleet and incorporating new technology. The P-8A is in operational service today, demonstrating its capabilities and establishing its role as the world s most advanced anti-submarine and anti-surface warfare aircraft. Value: What is the value, competitive positioning, advantage, and return created by this program to your: Customers National interests, The P-8A provides the Department of Defense and the warfighter with the world s most advanced maritime patrol aircraft. The Navy has called P-8A the most successful major DoD acquisition program in the past 30 years -- it exceeds requirements, has achieved every major program milestone to date and has saved the government a Navy-estimated $1.2B based on initial cost projections. With P-8A, Boeing has implemented an in-line production 1

2 war fighter Company Strength, bottom line, and shareholders Scientific/technical value (particularly for R&D programs) Excellence and Uniqueness: What makes this program unique? Why should this program be awarded the Program Excellence Award? process to build a commercial derivative aircraft. The methodologies used to plan, design and build the P-8A have brought a new paradigm to military aircraft development and production with first-in-industry in-line production process efficiencies, manufacturing methods and operational availability of a highly reliable commercial aircraft into the military market. Boeing s successful implementation of inline commercial derivative production on P-8A created a profitable franchise program for Boeing and exceptional value to the US Navy, government and tax payers. The lessons learned on P-8A also led directly to Boeing s win of the KC-46A Tanker program and are being applied across other programs and products. The P-8A provides a revolutionary capability for the warfighter to execute the ASW, ASuW and ISR missions. The P-8A incorporates a cutting-edge, standards-driven open architecture that allows integration of evolutionary upgrades to existing communication, sensor and weapon systems. The core of this open system is the mission computing hardware and software, which were designed from the ground up to include modularity, scalability, technology independence and resilience to obsolescence. III. ORGANIZATIONAL PROCESSES/BEST PRACTICES: (HOW DO YOU DO THINGS) = 30 POINTS Strategic: Opportunity Management - Describe how your program has identified its operational and business opportunity, and manages this opportunity throughout the program s life cycle. Strategic Strategic Supply Chain Integration and Cost Effectiveness Management: - Describe how your program is integrating its supply chain to assure visibility and adapting long-term cost Boeing implemented an integrated risk, issue and opportunity (RI&O) board and Configuration Control Board (CCB) with its Navy customer. The program uses the RI&O and change process to help turn production breaks into opportunities by incorporating lean improvements and to identify and mitigate risks and issues. P-8A also utilizes Lean principles such as value-stream mapping to look for opportunities for work transfer and other improvements during the build process. To encourage creation of additional opportunities, the program established a cash award fund. These processes have contributed to a reduction in factory assembly flow time of 85 manufacturing days. The average unit price has been reduced by ~$45M across the program s first three LRIP contracts. To best integrate and align the P-8A supply chain the Poseidon Industry Team (PIT) was formed, comprised of key suppliers and partners. The working-level PIT meets biweekly and quarterly to coordinate messages, marketing, campaigns and execution issues, as well as develop strategies and work detailed issues. Executive-level program leaders from the PIT meet annually to discuss long-term product planning, cost effectiveness initiatives and to further enhance 2

3 effectiveness up and down the supply chain. Strategic: Operational Integration and Systems Engineering Describe the challenges faced by your program in terms of integrating the system into its operational environment and its impact on systems engineering planning and management. Operational: Planning, Monitoring, and Controlling - Describe your planning and resource allocation processes. How do you monitor and review your program s progress and make corrections to keep the program on track? How have you worked with your customer to assure Quality and communication without creating non-value reviews and audits that do not fit your program effort? their relationships. P-8A has embraced Boeing s Corporate Partnering for Success (PFS) initiative to improve affordability for customers, grow the program and achieve world-class status. PFS is a partnership between Boeing and its suppliers to ensure long-term cost competitiveness by leveraging the buying power of the entire Boeing enterprise. This initiative has produced significant results as evidenced by the P-8A s yearly price reduction. To enable customer alignment, Boeing invites US Navy and DCMA personnel to attend key supplier fact-finding events, and conducts a mid-course-review during major proposals to ensure the government understands supplier cost, industry trends and Boeing activities to reduce cost in the supply base. The key to Boeing s system integration approach can best be described as early and often. The P-8A begins with a commercial 737 that is designed to incorporate unique features such as the weapons bay, additional fuel capacity and power and cooling installations during the standard production process. To provide best-value solutions at the sub-system/system level leveraging COTS products, Systems Engineering performed trade studies to find the best-value solution at the systems/platform level. This aircraft-level optimization resulted in an overall system that meets or exceeds its intended use for the best value. Systems integration began at the supplier level before being integrated into the Boeing Mission Systems Integration Lab. Systems then spent extensive time being integrated in the Weapons System Integration Lab prior to entering aircraft ground and flight test. Integrating software and systems within that context, using real-world scenarios and Navy personnel, allowed the program to discover and resolve operational issues prior to formal flight test. P-8A follows a disciplined Boeing top down, bottom up scheduling process. The resulting product is a documented agreement within and across integrated product teams (IPTs), ensuring all tasks are identified and sequenced, and interdependencies within and between IPTs are established. The schedule baseline is then used to time-phase the budget resources into the performance measurement baseline (PMB) P-8A uses joint schedule risk assessment (SRA) and integrated baseline review (IBR) processes to collaborate with the Navy to identify high schedule risks and focus on joint development of solutions. These events help Boeing and the Navy assess whether the PMB covers the entire work scope, is realistic and satisfies all objectives. These processes have resulted in the successful achievement of all major program 3

4 Operational: Supply Chain and Logistics Management -- What processes, tools and relationship-building methods have you used to develop, refine and improve supply chain and stakeholder integration? Please indicate also methods used to analyze/fact-find regarding supplier proposals. This is one of the most imperative needs of our industry please provide specific details and data that assisted you in gauging the effectiveness. milestones to date. Ongoing program execution efforts include a series of metrics (weekly earned value cost and schedule) and meetings between Boeing and the Navy, which ensure a high level of control and customer alignment. Any schedule variation greater than 500 hours requires a formal recovery plan and Root Cause Corrective Action (RCCA) that is monitored weekly until resolved. Throughout the program Boeing and the Navy have made sure that communication and decision making happen at the appropriate levels without creating nonvalue reviews and audits. The cornerstone of the P-8A battle rhythm is the weekly Business Process Review (BPR) meeting. At BPR, program leadership meets to review critical metrics in production, development and sustainment. The purpose of BPR is to identify and resolve critical program risks/issues, and to ensure that program leadership is aligned and focused. The program has deployed supplier program managers to act as the primary liaison between the program and its critical suppliers. They build relationships, manage supplier performance, lead program efforts in cost reduction and lean activity and serve as technical interface between a supplier and the IPT. Additionally, P-8A utilizes supplier conferences, strategic executive discussions and IPT tactical interaction to increase program transparency and receive feedback from the supply base. P-8A is implementing consumption-based ordering contracts with its suppliers to provide a seamless well-functioning supply chain. This visibility allows suppliers to assess current shop demand and provide inventory at pre-established levels. In order to drive continuous improvement and competition, P-8A requires new procurements to go through a formal make/buy evaluation. The purpose is to ensure that Boeing Centers of Excellence are utilized for critical technology and to maximize internal and external competition. Formal business cases are prepared for program and/or Boeing executive leadership review. For buy decisions, all procurements are routed through a Supplier Management competition advocate prior to solicitation. They review pending procurements and ensure that competition and small/diverse businesses are utilized to the greatest extent. P-8A has implemented a fact-finding/cost analysis process that ensures the Navy gets best value. The IPT and procurement financial analyst develop a technical analysis and a price/cost analysis to establish a price target for each system that is based on technical complexity, design maturity, 4

5 industry trends, etc. The analysis reports are shared with the government early in the process and the government is invited to participate in all supplier fact-finding sessions. Operational: System Integration, Testing & Reviews - Describe the activities and processes used to succeed in your system integration, and testing. How did you conduct system design and technical reviews? What innovations in processes or tools were used to further evolve this capability? Operational: Risk / Opportunity Management Describe the processes used to identify both risks and opportunity and to assure potential for both is addressed effectively Please indicate any forward-leaning processes to support. The P-8A mission system was initially integrated in a desktop environment and then transitioned through a series of development labs before installation on test aircraft. More than 25 million software lines of code were developed and integrated by Boeing and its partners. The P-8A early and often integration approach included running mission scenarios with a joint (supplier/boeing/navy) development test and operational test team in the labs, which enabled early discovery and resolution of issues prior to aircraft-level testing. This test approach allowed Boeing to understand operational impacts of deficiencies and provide fixes prior to formal operational testing. The process and tools used to integrate P-8A-unique features into the commercial 737 line were developed jointly for the program by Boeing Commercial Airplanes (BCA) and Boeing Defense, Space & Security (BDS) to manage engineering commitments, release drawings, support airworthiness certification and conduct design reviews. In addition to the best of Boeing, P-8A leveraged industry and military development best practices, including design reviews. As an example, the Navy System Engineering Technical Review guidelines were jointly tailored to meet the program needs. Design reviews began with the major suppliers, built up to the major segments (mission systems, aircraft systems, etc.) and then rolled up to the program level. This approach worked well for P-8A as evidenced by Boeing receiving no requests for action at the program Critical Design Review. RI&O management on P-8A is integrated into the organizational structure through participation by IPT members. Via a web-based software toolset, all P-8A personnel are responsible for RI&O management within their respective domains and can identify and assess RI&Os. P-8A has implemented the systematic and continuous practice of identifying, analyzing, assessing handling options, and communicating and tracking RI&Os. The assessment methodology used to evaluate and compare risks and opportunities employs a five-by-five assessment matrix. The process incorporates predefined tables of risk likelihood/consequence criteria and opportunity likelihood/benefit criteria. The RI&O review board, composed 5

6 Team Leadership: Team Culture and Motivation Describe how you created your team spirit and culture, and accomplished entire team integration and individual team member motivation. Given the economic environment and changes in the global marketplace, how did you assure your team changed swiftly and with agility? Team Leadership: Lessons Learned and Knowledge Management Describe how you collect lessons learned and best practices, and how they are shared with your team and company to improve performance. Also how are you capturing expertise and knowledge to assure availability over the life of the program? of Boeing and NAVAIR team members, manages the RI&Os. In addition, Quality, Systems Engineering, Sustainment and IPTs team up to perform root cause corrective action on toplevel production, technical, and/or fleet support issues to support rapid resolution. Risks associated with obsolescence are generated and managed to ensure uninterrupted parts flow into production and fleet operations. The P-8A program s culture is driven by the relentless pursuit to be a world-class production program. The P-8 leadership team, as part of monthly all hands meetings, surveys and one-on-one discussions, makes communication a priority and continually solicits ideas to help improve the workplace and instill spirit. The P-8 program manager reviews the economic environment and global market with the team on a regular basis. Employees connect with the customer through roundtable discussions, delivery ceremonies and impromptu discussions with the men and women that operate the P-8A. Numerous programs have been implemented to engage employees, including an engineering rotational program to energize and cross-train employees, employee workplace improvement teams with opportunities to win cash awards and focus teams that review employee survey results and implement improvements. Other efforts include notes from the program manager, team recognition events and a delivery photo wall, which recognizes teams for each P-8A delivery. The P-8A team collects and shares lessons learned/best practices in a variety of ways. The P-8 integrated digital environment (IDE) is a state-of-the-art collaborative environment that enables the Navy, Boeing and its supplier partners to efficiently communicate, collaborate and access technical data and program health metrics in an integrated, cost-effective and secure environment. By integrating P-8A program instructions, processes, procedures, applications and tools, the IDE securely delivers the right data to the right people using the right technology at the right time. Other tools include non-advocate reviews in which people from other parts of the company are invited to share their expertise; executive cross talks; brown bag lunches; RCCA analysis; an Insite Boeing social network that connects people and allows them to talk about and share relevant information; and enterprise-wide events held to discuss specific improvement topics. P-8A also makes use of technical lead engineers and program functional leaders to strengthen technical and process knowledge sharing/past experiences across organizational boundaries. In the manufacturing environment, assembly simulation is included in the factory mechanic work 6

7 Team Leadership: Leadership Development How do you develop team s skills and build future leaders Best (& Next) Practices: Identify your program s specific Best Practices that you believe are unique, and could be shared with others and become industry s Next Practices. instruction and includes graphical/visual instructions on the preferred, repeatable, most efficient methodology for the assembly as envisioned by Engineering and as practiced by previous installers. The P-8A team has made it a priority to find, encourage and train future leaders. P-8A leadership uses risks and issues on the program to put potential leaders in challenging situations that help them stretch and grow. Using Boeing s talent management process, the program works with the company s High Potential program to identify and create opportunities for individuals who exhibit leadership potential. Other leadership development programs include the Engineering Leadership Development Program, Program Managers Development Program, Business Careers Foundation Program and Executive Mentoring. Foundational to the P-8A one company approach was the development of a system to link, integrate, automate and oversee product definition. Insync was developed on P-8A to ensure the intent of the design is incorporated precisely into the manufacturing plan, procurement stream and delivered aircraft. That includes individual aircraft and also down to the screw, nut, bolt, washer, frame and serialized electronics level. The most current design/build data is available 24/7/365 to everyone involved. Insync has been designated as a best practice within Boeing and has been incorporated into numerous other Boeing programs. P-8A has also used critical chain project management software (Aurora) from development through initial production. The application uses a series of algorithms to calculate an optimum schedule and can be re-run at any given point during project execution. Aurora is a constraint-based scheduling tool that considers precedence, duration, space resources and labor resources. This tool allows the user to change variables independent of one another so that impacts can be isolated to one or two critical elements and variations can be quickly assessed. With that analysis, long-range commitments and decisions can be made more efficiently. This allows the factory to plan, assign and execute work based on the most critical tasks. Boeing and its industry partners, in collaboration with the Navy, have introduced the DoD should cost/will cost management initiative in aggressive pursuit of affordability and producibility opportunities. By using tactics such as supplier partnership initiatives, partnering for success, Lean+, and Value Stream Mapping, Boeing has successfully reduced production costs and passed those savings to the Navy. 7

8 IV. ADAPTING TO COMPLEXITY: (HOW DO YOU DEAL WITH YOUR PROGRAM S UNIQUE COMPLEXITIES) = 20 POINTS Identify the Program s Market Uncertainty level How new is your product to your market and users, based on the definitions below. Then describe how you deal and address this specific uncertainty: - Derivative an improvement of an existing product/system. - Platform a new generation in an existing product line. - New to the Market a product or system adopted from another market - New to the World - breakthrough product, never seen before Identify the Program s Technological Uncertainty using the definitions below. Then describe how you deal and address this uncertainty: - Low-tech: application of mature, well-established technology - Medium Technology: existing technology modified to meet new design requirements - High-Technology: recently developed new technology - Super High- Technology: nonexisting technology that needs to be developed during the program. Identify the level of your System Complexity using the definitions below. Then explain how you are dealing with this level of complexity: - An Assembly performing a single function. P-8A is a New to the Market system. At a time of defense budget uncertainty it was paramount for Boeing to provide the highest quality product with the lowest life-cycle cost. It was equally important to minimize risk to control development cost and maintain schedule. A key factor in the team s success has been its ability to leverage the production efficiencies and performance of the 4, Next-Generation aircraft currently in commercial service. Boeing also is using a firstin-industry in-line production process to build P-8A aircraft to military specifications, while leveraging the same people, processes and tooling that produce 38 commercial 737 Next- Generation aircraft per month. All aircraft structural features and other provisions unique to the P-8A are incorporated insequence during fabrication and assembly -- the most efficient way to build an aircraft. Staying on budget and on schedule have been the program s enduring goals and have led to the Navy holding it up as a model program. The P-8A program s technological uncertainty is Medium- Technology. To manage risk and cost, P-8A was structured as an integration program for existing technologies with high technology readiness levels. By incrementally improving all of the sensors and subsystems and integrating them on a proven, capable aircraft, the total system performance becomes truly revolutionary. To further enhance the built in system capability, the P-8A was designed using open architecture and as many commercial-off-the-shelf standards as possible, enabling future growth and capability expansion with minimal redesign, while avoiding technology lock in or obsolescence issues. P-8A is an Array program. The P-8A mission system integrates five different sensor technologies and three data links, as well as numerous voice and data communications systems. This system of systems is required to collect, process, exploit and disseminate intelligence products to local and remote users. By integrating and combining data from across the spectrum, P-8A is able to build and provide a more 8

9 - A Sub-system fitting within a larger system. - A System a collection of subsystems performing multiple functions. - An Array a System of Systems ; a widely dispersed collection of systems serving a common mission. Identify the Pace and Urgency of your team s effort using the definitions below. Then describe how you deal with the program s pace requirements: - Regular timing no specific time pressures. Fast/Competitive time to market is important for competitiveness. - Time Critical there is an absolute and criticalto-success deadline. - Blitz there is a crisis element driving the need for immediate response Other Complexities & Uncertainties - Describe other complexities and unknown factors faced by this program and how you addressed them. complete picture of the battlespace; act on that intelligence; and coordinate with other US Navy, joint, and coalition assets. To enable future growth, Boeing has designed margin (e.g., power, weight, cooling) into the platform. This margin will allow P-8A to accommodate additional sensors and capability as the maritime patrol mission evolves. P-8A is a Time Critical program. The legacy US Navy P-3C Orion maritime patrol fleet is well past its projected fatigue lifetime. Over the past two decades, two other programs were initiated to replace the P-3C but were ultimately canceled. The current fleet aircraft have become unsustainable, with diminishing material sources for key airframe components, extreme and unpredictable fatigue and corrosion issues, and limited growth to meet current and future threats. The P-8A program was created to replace this critical mission need. In addition, recent DoD strategic shifts towards the Pacific theater place even greater demands on the US Navy and the need for maritime patrol as an enabler to the Navy missions, including sea control, power projection, strategic deterrence, strategic sealift and forward presence. To address this urgent need, Boeing and the Navy established the P-8A program with a significant overlap between development and production. Successful execution of the development program and production start up has allowed the Navy to field the P-8A in time to meet the mission need. Other complexities and uncertainties include the customer s available budget and funding/contracting cycles, supplier uncertainties, concurrent development and production, and potential workforce fluctuations. The program manages these complexities by collaborating with the customer to find winwin contracting solutions, partnering with suppliers and the customer through joint development and integration to identify and resolve issues, and working across Boeing to manage work force challenges on P-8A and other programs. V. METRICS (HOW DO YOU MEASURE PROGRAM S PERFORMANCE) = 30 POINTS (Note: We are not looking for $ results, but the relative percentage achieved. In particular indicate what specific metrics and data you are using that drive the program beyond standard measures of schedule, budget, and performance, and which have contributed to your program s focus and its success.) Customer - How do you measure the impact of your program on your P-8A is formally evaluated by the customer each year under the Contractor Performance Assessment Report. The major categories include technical (quality), schedule, cost, 9

10 customer and your customer s satisfaction? Include a description of your metrics, as well as numerical evidence. Performance - How do you measure your program s performance in traditional terms such as schedule, budget, requirements, and business results? Preparing the Future - How do you measure and assess the long-term contribution of your program to the corporation/organization? Team - How do you measure and assess the impact of your program on your team development/ employee satisfaction? Unique Metrics - Describe any unique metrics you are using to measure your program s progress and how do you focus it for outstanding success. management and utilization of small business. There are 12 individual categories evaluated yearly. Additionally, the program s close working relationship with the Navy facilitates direct feedback at all levels, from the line engineer to senior program leadership. Daily and weekly customer meetings are held to provide the program direct feedback. Customer satisfaction is perhaps best measured by the fact that the P-8A program of record remains unchanged at 117 aircraft despite the current budget constraints and sequestration challenges. Support to the Fleet is measured weekly through on-site Fleet support focal feedback and metrics including average monthly aircraft utilization, sorties scheduled/completed and daily aircraft status/degraders. At the top level, P-8A performance is measured by onschedule and on-cost deliveries to the Navy. The program measures its performance on completion of SDD as well as current and future low-rate initial production and future fullrate production contracts. Business results include profit, new contracts and new customers. At the IPT level, performance is measured in cost, schedule, staffing and completion/burn down of key deliverables and risk mitigations to plan. The P-8A program s long-term contribution to the company will be measured by the successful transition from low-rate initial production to full-rate production and eventual build of 117 aircraft for the Navy. It also will be measured by the successful sale of P-8 derivatives, domestically and internationally. The P-8 One Boeing concept, applying commercial in-line build practices, has already been applied to the company s KC-46 Tanker program. Boeing conducts surveys to gain better insight as to how employees feel about policy, leadership and job satisfaction. P-8 program satisfaction has remained at a high level through the years. Attracting and retaining talent are key contributors to the program s success. The capstone metric of critical chain project management is called a fever or buffer chart, which measures the percent of buffer consumed during execution of the critical chain work statement. To measure jobs not contained in the critical chain, P-8 added a schedule control metric, which is inclusive of the entire statement of work and forecasts a likely completion date based on current schedule position. When combined, these metrics give a forward-looking view of the factory schedule and identify issues early so that course correcting decisions can be made. 10