Packaging Ipt Principles

Packaging Ipt Principles

DoD PACKAGING PILOT PROGRAM Status Update Packaging Pilot IPT 23 August 2000 Background OSD directs pilot implementation GEAE Evendale, Lynn / GEES Strother, Ontario, Cincinnati Honeywell Phoenix / Tempe/Tucson Formal OSD Pilot Program Consulting Group Oversight Oversight, Metrics, Lessons Learned & Reporting Pilot Program executed by Block Change modifications All existing contracts and orders at participating facilities Prime contractors enable GE/AS to utilize commercial packaging arrangements on all subcontracts Rapid Improvement Team Deployment Guideline Development and Scorecard GEAE and Honeywell Metrics Quantitative metrics show positive trends Cost Reductions/Savings are occurring Cycle Time is being reduced No warranty returns due to packaging problems Insufficient data to date for statistical inferences Innovations are being implemented Anecdotal information positive Proposed Pilot Program Expansion Current Pilot is engine focused Minimal data to date Provides little insight into other commodities Data gathered to date insufficient to support any macro policy decisions Proposed Pilot Expansion Broaden Pilot to include other Sectors within the two contractors business base Use other Sectors Use existing two commercial POCs as liaison Apply Packaging Scorecard and Metrics review process Utilize existing packaging IPT for technical coordination Identify and implement expansion during 2nd & 3rd quarter FY00 Gather objective data to support policy development Proposed Honeywell Sites Aerospace Electronic Systems Boyne City, Michigan Aircraft Instruments Implementation: 1 May 2000

Engine Systems and Accessories Rocky Mount, NC Hydromechanical Controls Implementation: 1 May 2000 Expansion Candidates (Initial Candidate List) AM General Corp South Bend, IN B.F. Goodrich Landing Gear Cleveland, OH Bell Helicopter Textron Ft. Worth, TX Boeing Aircraft and Missile Philadelphia, PA Boeing Aircraft and Missile Wichita, KS L-3 Communications East Camden, NJ Lockheed Martin Astronautics Denver, CO Lockheed Martin Vought Systems Dallas, TX Northrop Grumman St. Augustine, FL Raytheon Missile Systems Tucson, AZ Raytheon Systems Ft. Wayne, IN Rockwell Collins Cedar Rapids, IA Sikorsky Aircraft Stratford, CT Sundstrand San Diego, CA Additional Expansion Candidates *Second Candidate List* Electronics and Communications Lockheed Martin/Denver COSent Pkg to Bill Manning Raytheon/Lexington MA Sent Pkg to Bob Elden Interested Conference Call Boeing Solid State Electronics/Kent WA Contacted Meredith Murphy Northrop Grumman/Rolling Meadows IL Contacted Donna Livesay GTE Unknown DynCorp

Unknown Rockwell Collins/Cedar Rapids IA Not Contacted General Aerospace Sikorsky/Stratford CT Unknown United Tech/Pratt Whitney/Hartford CT Sent Pkg to Paul Robert and DCM. Wants to Pilot. Additional Expansion Candidates *Second Candidate List* -contd DoD Overall Vehicles GeneralDynamics/LimaArmyTank/Muskegon MI Unknown Carlyle Group Unknown Borg-Warner(Spring Drummer)Automotive/Chicago IL Sent Pkg to K. Dutkiewicz RENCO/AM General Corp/South Bend IN Contacted DCM Stewart & Stevenson/Sealy TX Left Msg with DCM Oshkosh Truck/Oshkosh WI Left Msg with DCM DoD Ships Gen Dynamics/Electric Boat/Groton CT Unknown Newport News Shipbuilding/Newport News VA Unknown Litton Industries/Marine/Charlottesville VA Unknown Lockheed Martin/Naval Electronics/Syracuse NY Contacted DCM. No Interest by DCM. GE Aircraft Engines QMI Implementation Lot (MMTs ) Cycle Reduction

Jul-00 Jun-00 May-00 Mar-00 Apr-00 Jan-00 Feb-00 Dec-99 Oct-99 Nov-99 Sep-99 Aug-99 Jul-99 Jun-99 May-99 Mar-99 Apr-99 Feb-99 1998 Jan-99 Quality PSS Implementation 1998 Benchmark

Hours Number of Reports of Discrepancy (RoDs ) since implementation (5/3/99) Wrong Quantity in a unit pack Discrepant Label -- 5 -- 3 Warranty Returns Volume Avg cycle -- 0 Zero Container Failures Packaging Innovations Packaging Material Costs Dollars (000) Five reports submitted Blades in bags No metal caps Source packaging Fiberboard container edge crush test criteria Foam in Place reduction Increased Automation Rationalized fiberboard across GEAE sites Developing a Foam in Place Replacement-- Plastics Reduction -- 8 Note: 8% increase in fiberboard 1st qtr 2000 1998 1999 2000 1998 cum 1999 cum 2000 cum Military Packaging Pilot Status 12 Mo. 415K

2 0% Hours Number of Pieces Shipped Number of Warranty Returns Percentage of Warranty Returns YTD. 211 K 0 0% Currently monitoring warranty to detect any packaging related discrepancies Sep-99 Oct-99 Cycle Time - Tempe Std - Nov-99 Dec-99 Tempe Jan-00 Feb-00 Cycle Time - Tucson Std Mar-00 Apr-00 Tucson May-00 Jun-00 Cycle Time - Phoenix Std Form cavity Inserts Korvu 100% Recyclable foam Replace wet tape Reduce Glass tape 5S Phoenix Shipping area Visual tool Standardize supplier pack material Convert to commercial STD form Use cushion pak to pad pak paper Change labeling process for mechanical parts Redefine the use of desicant. Use supplier prepackaged containers Jul-00 Aug-00 Phoenix

On Order under investigation Investigating under investigation under investigation In process Building signs under investigation Complete under investigation under investigation In process In process Innovation report in process for Implemented Items Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Packaging Costs - Tempe Std Packaging Costs - Tempe Packaging Costs - Tucson Std Packaging Costs - Tucson Packaging Costs - Phoenix Std Packaging Costs - Phoenix Military Packaging Pilot Status 12 Mo. 415K 2 0% Hours Number of Pieces Shipped Number of Warranty Returns Percentage of Warranty Returns YTD.

211K 0 0% Currently monitoring warranty to detect any packaging related discrepancies Oct-99 Nov-99 Dec-99 Cycle Time - Honeywell Std - Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Cycle Time - Honeywell Total Form cavity Inserts Korvu 100% Recyclable foam Replace wet tape Reduce Glass tape 5S Phoenix Shipping area Visual tool Standardize supplier pack material Convert to commercial STD form Use cushion pak to pad pak paper Change labeling process for mechanical parts Redefine the use of desicant. Use supplier prepackaged containers On Order under investigation Investigating under investigation under investigation In process Building signs under investigation Complete under investigation under investigation In process In process Pckg Costs Sep-99

Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 Packaging Costs - Honeywell Innovation report in process for Implemented Items May-00 Jun-00 Jul-00 Aug-00 Military Packaging Pilot Status 12 Mo. 415K 2 0% Number of Pieces Shipped Number of Warranty Returns Percentage of Warranty Returns Hours/Piece 18% Reduction Currently monitoring warranty to detect any packaging related discrepancies - Form cavity Inserts Korvu 100% Recyclable foam Replace wet tape Reduce Glass tape 5S Phoenix Shipping area Visual tool Standardize supplier pack material Convert to commercial STD form Use cushion pak to pad pak paper Change labeling process for mechanical parts Redefine the use of desicant. Use supplier prepackaged containers YTD Avg On Order under investigation Investigating

under investigation under investigation In process Building signs under investigation Complete under investigation under investigation In process In process Innovation report in process for Implemented Items Savings ($K) 1998 Avg Sep-99 Q4 99 Q1 00 Q2 00 Jul / Aug 00 Savings YTD. 211K 0 0% Thoughts About the Pilot Program Contractor Comments: Process, material and equipment groups are all participating. How can we make this authority permanent? Shipping folks are taking immediate action and are empowered. Has acted as a catalyst for areas other than packaging. New ideas are pushing the envelope. The packaging suppliers have been challenged. There may not be enough time in the Pilot to prove the concept. The Pilot ROI may not be sufficient to justify participation. Warranty requirements are a concern. DCMC Comments: Working very well. More rapid and open communication; routine meetings are now the norm. Pilot Contractor as a Subcontractor Flow Up of Commercial Packaging Practices Existing subcontracts. Where [pilot contractor] is a subcontractor and the subcontract specifies packaging in accordance with a version of Mil-Std2073 or any standard other than the contractors commercial packaging practices, DCMA shall notify the prime contractor that [pilot contractor] is participating in a Pilot Program and is authorized to package items using its standard commercial packaging methods. The DoD buying activity shall modify the prime contract, if necessary, to allow [pilot contractor] to use its commercial packaging practices in performance of its subcontract Packaging Pilot Schedule 1998

TASK Pilot Program Kickoff Pilot Program Charter IPT Meetings 1999 Sep - Dec Apr - Jun Oct - Dec Jan - Mar Apr - Jun Jul - Sep Oct - Dec 10/29 10/7 3/21-22 12/8 11/19 8/23 11/15 12/10 SPI Executive Approval 12/14 OSD Process 12/21 2/14 3/17 3/5 1/11 3/9 Rapid Improvement Team Implementation Final Implementation Plan Approved Pilot Prg Execution Plan 4/21 4/21 4/30 5/3 Contractor Site Visits 5/25

Contractor Transition Execution 5/26 7/30 3/17 2/8 PPCG Briefing Briefings Jul - Sep 9/10 11/5 IPT Metrics Development ACO Contract MOD Jan - Mar 2000 12/1 0 DUSD(L) & ADUSD(AR ) 2/1 4 SPI Executiv e Briefing 5/7 8/6 4/2 9/1 6/2 6/2 7 5 7 1 Frontlin SPI SPI Researc e h Forum ExecutiveExecutive Briefing Briefing Briefing 1/7 12/1 3

SPI Executiv e Briefing 4/7 6/2 3/27 6/15 SPI Executiv e Briefing SPI Executiv e Briefing 9/1 12/1 9/21 12/14 SPI Executiv e Briefing SPI Executiv e Briefing 8/23/00 PLAN FOR REPORTING AND EVALUATING RESULTS Action Pilot Launches 1999 2000 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5/3 10/1 Internal Reports 12/8 8/1 PPCG Briefing 1/7

8/1 IPT Meeting Other Briefings 12/8 6/25 9/17 SPI EC SPI EC 12/13 6/1 3/1 4/7 6/2 SPI EC ARSSG 3/27 SPI EC 9/1 12/1 12/1 11/15 8/23 3/21-22 1/11 9/1 6/15 9/21 12/14 SPI EC SPI EC SPI EC 8/23/00 Balanced Scorecard Commercial Packaging Pilot Program KEY PERFORMANCE FACTORS Quality Protection Goals (in priority order)

Performance Measures No more than 1% (project code items) returns under warranty Zero Safety Problems # of package failure results in part damage/failure Survey of enduser satisfaction Performance Drivers Supply Discrepancies Reports Warranty Cards (DCMC, DLA, AMS) Action Officer F Local DCMC Rep will log R Industry Rep will review Zero impact on readiness Interview, Questionnaire or observation with immediate reporting F IPT Sub Team Cost of Packaging New Process Operating Minimization Cost of Plastics (By end of program) Reduction in overall Pak costs of 10% over current baseline to package military items

No increase in cost of O&M due to innovation for program code item Dollars Track O&M costs trend for program code items No increase in quantity of plastic materials over 3 years No decrease in marine degradable materials over 3 years Pak Cycle Time Reduce Pak cycle time by 10% Vendor efforts to reduce plastics & increase degradables Time Tested innovations within 1 year reported to IPT that can be transferred 10% increase per year Clear input of end user RQMB, lower hassle of Introducing # of innovations submitted to DoD Survey of Vendor Personnel Innovation, increase in items offered by DoD Pac specialist Log when

submitted (briefing) Calculate the difference between baseline military packaging costs and pilot program military packaging costs. Report periodically as required Surveys-sample incrementally to baseline & look for trends Visit every 6 months for observations & discussions Baseline Log in/Log Out of current Mil Pak vs innovation Report of survey Vendors report on actions taken Sampling done along with cost baseline F Local Vendor Site F ICPs Roll up to IPT F Frank Sechrist R Local Vendor Site F Local Vendor Site Trends out of depots/Users on DD1225/364s Innovation Review Log at IPT meetings Survey prior to IPT meeting F Local Vendor Site F IPT Sub Team

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