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Lockheed Martin Corp. MS2 Tactical Systems/Clearwater: IW Best Plants Profile 2008

Lockheed Martin Corp. MS2 Tactical Systems/Clearwater: IW Best Plants Profile 2008

Hungry for Change: A 'survivor' mentality permeates the culture and drives improvement for Lockheed Clearwater.

Lockheed Martin Corp. MS2 Tactical Systems -- Clearwater Operations, Oldsmar, Fla.

Employees: 417, non-union

Total Square Footage: 208,000

Primary Product/market: ruggedized computing, data and signal processing equipment

Start-up: 1974

Achievements: Silver Recipient of Boeing's Performance Excellence Award since 2003; Northrop Grumman Platinum Source Preferred Award since 2005; 46.9% reduction in scrap/rework costs from 2004-2007

If you didn't know any better, the antistatic wristbands connecting many workers to their stations at Lockheed Martin's MS2 Tactical Systems -- Clearwater Operations might look like an odd way to improve productivity. In fact, they serve the same purpose as the smocks everyone wears and the rubber mats that guard entry to each highly sanitized work cell.

IW's 2008 Best Plants

See the other winners of IW's 2008 Best Plants award and find out how they made the top ten.

Watching each machine hum along in this spotless environment, making unfathomably meticulous movements to fasten microchips the size of a speck of pepper onto newly imprinted circuit boards, it could be easy to forget where these delicate pieces of electronics finally end up. On the floor, though, one thing is certain -- no one ever does.

"You get the best from people when there's an intrinsic value to their jobs," says manufacturing manager Craig Mackiewicz, regarding the fact that many of the plant's products are used for military operations in Iraq and Afghanistan. "They feel good about what they do, so improvement efforts don't need to be forced. They bring ideas forward on their own."

But even the most committed employee knows that the defense business is still a business. So when Lockheed had started shutting down facilities back around 1995, the Clearwater Operations (actually located in Oldsmar, Fla.) realized it could be next.

Ever since, materials manager Matthew Spear says the facility has had a "survivor" mentality that permeates through the culture. "In other plants people are fearful of change and they like the stability," Spear explains. "Here it's the opposite. If there isn't enough change happening, people get nervous."

Workers monitor production on several of Lockheed Martin's Clearwater circuit card assembly lines.

The site is even ramping up change where outsiders might say it doesn't belong. Its low-volume, high-mix model, with regular changes and irregular schedules, might not seem like a traditional fit for lean manufacturing. The plant workers, of course, respectfully disagree.

"Lean does apply here and we've been able to apply it pretty well in a non-traditional environment," Spear explains. "Yes, we have 32 diverse programs and we could sit back and play the victim. Instead, we're applying lean everywhere."

The efforts also play a large role in quality improvement. Building on the company's LM21 program, Yellow Belts were introduced to engage work cell teams and mentor new "quality belts" to add to the continuous improvement process. This adds to the 10% of the workforce already certified as Black and Green Belts.

New technologies have driven quality control to new levels as well. Both X-ray and optical inspections have been added, along with a selective solder machine and automated solder robot, which eliminate much of the manual labor that was required to make precise electrical connections.

"We really try to push the envelope on quality performance," says Spear. "You can't rely on minor improvements. You need things like optical inspection, selective solder and the solder robot. They save money and reduce quality defects."

Indeed, the integration of those technologies is largely credited for the facility's 15% reduction in cost of quality. But according to Roy Street, engineering and test manager, reducing rework costs is only one reason to invest in new technology.

"We didn't buy the solder robot, for example, just to save money and certainly not to cut jobs," Street explains. "It was because we weren't able to do that job to the quality level that we wanted."

In the last 10 years, the plant's focus on quality has resulted in a 97% reduction in defects. And even now, no one seems satisfied. "We have been performing very well, but we're still hungry," says Spear. "That's the mindset in every work cell, on every product, every day."

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Taking Stock of the Situation

Moving its material management center onsite helps Lockheed Martin Clearwater reduce waste and improve productivity.

Based on a rundown of its key characteristics, plenty of assumptions could be made about Lockheed Martin's MS2 Tactical Systems Clearwater Operations. One might be that since every product is demand dependent, built and shipped to order, inventory improvements should be the least of management's concerns.

And according to materials manager Matt Spear, that's mostly true. Over the life of the program, the facility only buys what will be needed and used by the end of each contract. "We only buy exactly the parts we know we're going to need. By the time the contract is over, we've consumed everything. It's just a matter of the details of which configuration we might need at exactly what time."

But judging from one of the plant's most recent projects, that assumption would be pretty far off base. Most recently, the best target for improvement was the location of its material management center (MMC), where most material used at Lockheed Clearwater was received, inspected, and stored. Up until about a year ago, it all took place at an offsite facility.

In January 2007 the plant embarked on a project to relocate much of the operation to the main plant in less than a year -- without impacting production. Focused on reducing waste, improving productivity and increasing customer value, the team designed a new layout to improve safety and product flow, minimize movement, and increase energy efficiency.

"We spent a lot of time and energy relocating the whole material management handling system into the back end of the building," explains Spear. "We reduced packaging and handling, speeding up the entire process to do a more supportive job of supplying material to the operators -- exactly when and where they need it -- without excess inventory on the floor."

The team was able to relocate all material in one weekend. All project goals were met and the future state resulted in a reduction in cost and footprint. Service improved by reducing reaction time to urgent material needs, while safety also improved through more ergonomic workstations and better lighting. The move also cut back on the facility's use of energy, by taking advantage of smaller, more energy-efficient conveyors and lighting.

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