Integrating the Engineering, IT, and Business Functions at Raytheon Using Three Types of Glue Presented by Tom Lydon Director Enterprise Network Services September 25, 2003
Our Products Government and Defense A Leader in Global Technology Integration Raytheon Systems Limited Raytheon Aircraft
Who is Raytheon? More than 77,000 employees In 54 countries, in more than 150 locations Over 50 sites in the United States More than 7,000 programs More than 24,000 engineers 9,000 new graduates (within five years of Bachelors degree)
1998 Challenge - Four Cultures How to Convergence Cultures while retaining Legacy Data & Best Practices Raytheon 100,000 employees $17B Revenue 4 Strong Cultures Burning Platform Hughes E-Systems How do we do this? TI Defense 1998 1999 2000 2001 2002 2003
Challenge - Integration of Functions Integration of Engineering and Information Technology with Businesses Suppliers Partners Customers Engineering & Technology Partners Suppliers Customers Customers Suppliers Suppliers Partners Customers Partners
Process & Tools Integrated Product Development System Defines the way we plan, capture and execute programs Provides an environment for continuous process improvement Raytheon Six Sigma Provides One Company language and tools to enable program capture and successful execution Provides tools and processes that enable Integrated Product Teams to perform their tasks EVMS, IMP/IMS, CAIV Building a Process Culture - Requires Discipline!
Integrated Product Development System Strategic Plan Interest / No Interest Pursue / No Pursue Bid / No Bid Bid / Proposal Review Discipline without bureaucracy Integration across value stream Execution driven by gate reviews -1 0 1 2 3 4 1 Business Strategy Execution Business/ Strategic Program Capture/Proposal Planning Start-Up Review Internal System Function Review Contract Closure 5 Program Management 2 - Project Planning, Management and Control 11 3 Requirements and Architecture Development 6 7 4 Product Design and Development 8 5 System Integration, Test, Verification and Validation (ITV&V) 9 10 PROJECT DECISION GATES Validates process Drives discipline Allows tailoring Management involvement & oversight Planning Planning Internal Preliminary Design Review Internal Critical Design Review 6 - Production and Deployment 7 - Operations and Support Internal Test / Ship Readiness Review Internal Production Readiness Review
Integrated Product Development System 1998 1999 2000 2001 2002 2003 Cost Performance Index 1.00 2002 2001 2000 IPDS Deployment Across Raytheon 0.86 0.86 1.00 Schedule Performance Index IPDS Drives Cost and Schedule Performance, Predictability
Capability Maturity Model - Carnegie Mellon assessment of software THEN NOW Level Level 5 Optimizing Optimizing Level Level 4 Quantitatively Quantitatively managed managed 1997 1998 1999 2000 2001 2002 2003 Common Metrics Raytheon is World Class in Software Development TODAY! Level Level 3 Defined Defined Level Level 2 Managed Managed Level Level 1 Performed Performed Multiple Processes Burnham IPDS directive Software CMM Across Raytheon
Process Maturity Value Optimized Productivity Control Emerging Not Predictable Predictable Feedback Control CMM / CMM(i) ---> Prioritization Function Level Level 1 Initial Initial Level Level 2 Repeatable Repeatable Level Level 3 Defined Defined Level Level 4 Managed Managed Level Level 5 Optimizing Optimizing CMM(i)
The Foundation of R6 Process Tools Kaizen Agile DOE QFD CMI PI Lean SPC DFM DTC JIT Traditional Six Sigma cfm Tools
Design for Six Sigma is JOB 1 in Engineering Raytheon Six Sigma Classical Six Sigma Quality Function Deployment Design of Experiments Process Capability Analysis Gauge R&R Ishikawa Tools Taguchi Methods Process Mapping Statistical Process Control Design for Six Sigma Design To Cost Statistical Requirements Analysis FMECA Statistical Design Performance Simulation Software Predictive Statistical Tools Risk Management DFMA Total Quality Management Re-engineering Breakthrough Improvement Process Mapping Change Management Skills Process Improvement Teams Problem-Solving Tools Benchmarking Lean/Agile Enterprise Value Stream Analysis Single Piece Flow Agile Manufacturing Just In Time Supply Chain Management Kaizans Mistake Proofing Continuous Flow Goal Deployment Balanced Scorecard Hoshin Planning
The Five R6 Principles Specify value in the eyes of the customer. Identify value stream; eliminate waste and variation. Make value flow at pull of the customer. Involve, align, and empower employees. Continuously improve knowledge in pursuit of perfection.
Our Proven Model A Common Language!
The Engineering & Technology Starpoint Technical Career Ladder Rewards & Recognition Strategy Retention Strategy Diversity Initiative Learning & Development Strategy Career Development Team Development Engineering People Strategy Technology Strategy Technology Networks IR&D Allocation Process IDEA Program University Research Process & Tool Strategy Process & Tool Strategy Common Process Development Interface to Enterprise Process Process Deployment Roadmaps Policies & Procedures CMMI Raytheon Six Sigma Engineering & Technology Council (E&TC) One Company Approach Technology Strategy Performance Excellence Communication & Collaboration CMMI Metrics Gate Review Process Program Execution Raytheon Six Sigma Web-based Communication Collaborative Product Development (CPD) Newsletters Symposiums, etc
Integrated Technology Strategies Strategic Business Area Technology Areas MS IDS Business Units IIS NCS RAC SAS Missile Defense Precision Strike ISR Homeland Defense RF RF EO/Lasers Processing Arch/Syst Int Correlate Rationalize Strategize EO/Lasers Processing Arch/Syst Int Mat l & Structure Mat l/struct Deliver Technology Area roadmaps Articulate what is possible and when Coordinate Joint Business Unit IR&D projects Shape Customer Technology Vision and Create CRAD Opportunities Rationalize Common Component Technology Sourcing through - Make/Buy Process - Strategic Alliances
Tomorrow s Technology Future Technologies 5-10 Years Product Introductions 0-10 Years Strategic Thrusts 0-15 Years Component Technologies Systems Technologies Thrust Areas CEC NanoTechnology-(MIT) $50M NanoElectronics $32M Gallium Nitride T/R Modules $10M Focal Plane Arrays $25M Solid State Lasers (HP) $36M Next Gen T/R Modules $10M Cum Investment (IRAD+CRAD) Directed Energy Weapons BMD Hit To Kill Weapons Cooperative Engagement Network Centric Systems DEW Missile Defense Intel, Surv., Recon Precision Strike Homeland Defense Systems Integration Modeling & Simulation Re-shaping the company through innovation
Architecture & Systems Integration - The Domain Horizontally & Vertically Integrated Multi-Spectrum Coverage Robust Time Critical Targeting Networked Collaboration Dynamic Engagement Control Global Battlespace Visualization
Cross-Enterprise Collaboration Raytheon Council Structure: Both Enterprise and Engineering cross-business councils focusing on leveraging One Company solutions for: - People, Process & Tools, Collaboration, Technology and Performance Excellence Raytheon Corporate Program Leadership Council Engineering & Tech Council Supply Chain Council BD Council G O V T & D E F E N S E N o n G O V T A I R C R A F T
Productivity is evident in our results ($000) Sales Per Employee 250 240 230 220 210 200 190 180 170 160 150 179 180 4-year CAGR = 7% 194 217 235 1999 2000 2001 2002 2003P ($M) 800 700 600 500 400 300 200 100 0 Annual Cost Takeout From Productivity 2000 2001 2002 2003P turns 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 Avg. Working Capital Turns (G&D) 1999 2000 2001 2002 2003P Drivers of this success R6 IPDS (Process Discipline) IPDS (Program Management)
evident to our customers CPI Earned Value Performance History 1.16 1.14 1.12 1.1 1.08 1.06 1.04 1.02 1 0.98 0.96 0.94 0.92 0.9 0.88 2000 1999?? 2001 Target Area 2002 0.88 0.9 0.92 0.94 0.96 0.98 1 1.02 1.04 1.06 1.08 1.1 1.12 1.14 1.16 SPI 60 50 40 30 20 10 0 Customer CPAR (Yellow & Red Programs) 2000 2001 2002 As rated by customer 100% 90% 80% Award Fee History 82% 90% 94% R6 saves lives 70% 60% 50% 40% 30% 20% 10% - Stephen Majerowicz MALTA Ground Terminal US Department of Defense 0% 2000 2001 2002
IPDS: The Results! 1998 1999 2000 2001 2002 2003 UNDER UNDER COST AT COST AT OVER LATE ON-TIME EARLY SCHEDULE OVER LATE ON-TIME SCHEDULE EARLY IPDS Deployment Across Raytheon
Three Types of Glue Pulling Teams Together Cultural Convergence while retaining Legacy Data & Best Practices Raytheon Hughes E-Systems ipds R6s CMMI TI Defense 1998 1999 2000 2001 2002 2003
IPDS + R6 + CMMI HR Processes Strategic Planning Annual Operating Plan Customer Focused Marketing Glue #2 RISE * Productivity Integrated Supply Chain Information Glue #3 EVMS Fix Programs Glue #1 * Raytheon Integrated Synthetic Environment Innovation will flourish on the bedrock of discipline