Raytheon Integrated Air Defense Center: IW Best Plants Profile 2010

Raytheon Integrated Air Defense Center: IW Best Plants Profile 2010

Charting a New Course: Now into the seventh year of its lean journey, Raytheon is targeting the beginning of product lifecycle.

Raytheon Integrated Air Defense Center, Andover, Mass.

Employees: 4,223, union

Total Square Footage: 1.7 million

Primary Product/Market: Patriot Missile Defense Systems

Start-Up Date: 1970

Achievements: 6% productivity improvements since 2007; reduced manufacturing floor space by 45,000 square feet in 2009; 20% reduction in standard order- to- delivery lead time reduction for missiles since 2007



It's only 11 a.m., but the roar of a crowd emanating from Raytheon Integrated Air Defense Center's Andover, Mass., cafeteria is unmistakable. It sounds more like overtime of an NBA game than late-morning in a manufacturing facility.

A worker at Raytheon Integrated Air Defense Centers Andover, Mass., facility performs a precision hand solder to a circuit in the circuit card assembly department. The department has achieved a 50% reduction in changeover time over the past three years.

Upon closer inspection, all the commotion derives from a pep session for a team of two dozen operators that has pitched ideas on how to improve its department workflow. The team competes against 135 other groups at Raytheon's Andover facility. And make no mistake, the competition here is fierce.

That emotional stake is the very essence of how Raytheon Andover was able to not just overcome the potential shuttering of its doors a decade ago, but ultimately rebound to become one of the most advanced production centers for defense systems in the U.S.

Since 2007, Raytheon Andover has seen productivity improvements of 6%. One of its largest programs, the Patriot Missile, has had 100% on-time delivery over the past two years and registered a 0% customer reject rate since 2005. In 2009 alone, Raytheon's continuous-improvement campaign resulted in the reduction of manufacturing floor space requirements by 45,000 square feet.

Seven years into its continuous improvement journey, Raytheon has refined its processes and engaged its workforce. Now the leadership team finds itself in a position many advanced CI companies do, which is to forge the next evolution of lean.

IW's 2010 Best Plants

See the other winners of IW's 2010 Best Plants award and find out how they made the top ten.

"When we started this journey, I had no idea how long a journey it was going to be," says Michael Shaughnessy, senior director of operations at Raytheon's Andover facility. "There's still so much opportunity to be gained. Today, I have more to do in the next six months in improving how we run this operation than I did three or four years ago. That's unexpected."

Shaughnessy says Raytheon has cultivated relationships throughout its supply chain to focus on continuous improvement. The company has begun discussing with suppliers new ways to reduce cost, make products more affordable and improve quality.

Raytheon has recently undertaken several intriguing long-term CI projects. Two years ago, for instance, it instituted an interdependent approach to supplier management, creating communications elements within project lifecycle to spur faster flow and responsiveness to the customer from engineering, operations, supply chain and quality.

It has also begun a collaborative scheduling project to align the disconnects between the MRP (manufacturing) and ADT (engineering) systems, which schedule from opposite points of view -- manufacturing from the back end and engineering from the front end. Raytheon instituted a virtual business system to track all engineering, supply chain and operations progress when a program is brought into production, ensuring visibility and management of detailed milestones all the way to the supplier level.

But the real opportunity, Shaughnessy says, is to implement continuous improvement at the beginning of the product lifecycle, not during production. To do that, he says, requires "shifting resources, be it operations, engineering or supply chain, to the front-end of the process versus the latter end where we are today. That's gradually happening each year."

Bringing Energy and Fun to Continuous Improvement

Using competition and an emotionally vested workforce, Raytheon's Andover facility sees a 6% rise in productivity.

Six months of continuous improvement suggestions land on the table with such an audible sound, it can't even be described as a thud. Think more along the lines of a leaden crunch.

There are over 600 entries in the volume. One suggests creating foam cutouts for each operator's tool kit as a means of keeping work stations and drawers neater to prevent confusion and lost tools; another addresses how to clean messy spills on carpets without bringing out heavy equipment to save time.

"Each entry is a kaizan plaque and each of those is real savings," says Louis Varrichione, director of operational excellence at Raytheon Integrated Air Defense Center's facility in Andover, Mass. "It might be two hours at a time or $1,500 worth of material, but it adds up quick."

Over the last three-and-a-half years, there have been over 50,000 employee-suggested improvement initiatives implemented as a result of Raytheon's "One Million $1 Ideas" program. Since 2007, Raytheon has seen a 6% rise in productivity improvements. In 2009 alone, the Andover facility implemented 828 safety, ergonomic and energy reduction improvements, along with reductions in manufacturing floor space requirements by 45,000 square feet.

While the percentages and dollar totals are impressive, the real victory isn't immediately visible until one sees the team meetings, where members present their ideas, track their improvements, then get to compete against one another playing Nintendo Wii games on a wall-sized screen.

All this is made possible by convincing the workforce that they have a vested, personal stake in their work. This is a point driven home every day, to every employee.

"Every one of these folks knows either a friend or a family member that has a son or daughter or wife or husband in Iraq or Afghanistan," says Varrichione. "When a worker sits at a bench to solder a circuit card, I don't want them to think of it as just soldering a circuit card. That card goes into a Spy 3 radar and somebody's life is depending on whether they do their job right."

When a military ship comes into Boston, Raytheon will often take 200 of its floor-level employees for a tour to see the various systems manufactured in Andover that are currently being put to use onboard. Those experiences drive home the significance of the daily work, says Varrichione.

So does the competition between lean teams. Often, as many as 600 employees will take part in the games played in the cafeteria.

"We make it fun on purpose," says Varrichione. "And we always make it results-based, not activity-based. You have to come in and show how you've added value to what you do each and every day. If you do that, we appreciate it and we'll have a good time. Everyone has really responded to that."

Raytheon Cuts the Waste and Grime in its Metal Fab

Long hindered by long set-up times and coolant costs, Andover relies on the experience of its workers.

Metal fabrication has an image problem. The work of metal machining is often synonymous with the three Ds: dark, dirty and dangerous. But walking through the metal fabrication department at Raytheon Integrated Air Defense Centers facility in Andover, Mass., one is struck by the bright, spacious layout and the lack of fumes in the air.

This was made possible through a dramatic culture change, implemented over the last two years, in which Raytheon tapped the experience of its staff and made dramatic improvements in processing.

Broken up into six different cells, each team would focus on one element, ranging from work process optimization, to safety or set-up reduction.

That type of engagement had really been missing from here and it was a big piece of the puzzle, says Michael Furey, maintenance manager at Raytheons Andover facility, a 2010 IndustryWeek Best Plants winner. We had to tap into that tribal knowledge. A lot of our workforce here is 58 years old or older.

At one of the first kaizens, the focus was on reducing large sources of waste. Almost instantly, everyone thought of the sheer time and resources that went into setting up the machinery for a job. According to Furey, set-up times averaged anywhere from eight to 16 hours.

It was constantly breaking down, setting up, breaking down, setting up, says Furey. Its astounding how much time was wasted. So we gathered everyone together and asked how they individually went about setting up their jobs and what we could do to reduce those times.

The metal fab department began standardizing its fixturing process, using best practices and establishing a library thats computerized within the machining system. Over the last two years, there has been a 50% reduction in changeover times for major equipment.

Of equal significance, the group had to address its growing waste issue. Coolant for machine tools was creating thousands upon thousands of gallons of waste. Oils such as hydraulics and way lubes, which drip into the coolant, can create bacteria that turns into sharp fumes.

The team members researched options both in and outside the company to address the issue and found that a product had recently reached the market called coalescer, which filters tramp oils out of coolant.

On a bi-weekly basis, we were dumping our coolant tanks, which is anywhere from 100 gallons to 250 gallons, says Furey. That would cause about two hours to 16 hours of downtime, depending on the size of the tank.

Instead, using the coalescer, waste is collected into a bottle the size of a household detergent container, which only needs to be changed every six months. Over the last three years, Raytheons Andover facility has seen a 44% reduction in hazardous materials. The results have had such a profound impact, in terms of reductions in waste and department cleanliness, that other Raytheon facilities are following suit.

You really have to tap into the knowledge of your workers to make any kind of significant, long-term change, says Furey. But you look around here and this doesnt look like a lot of metal fabs. Weve saved time and taken out a ton of waste.

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