Bringing Digital Sense to a Global Enterprise

Nov. 10, 2010
While the world has grown smaller thanks to technology and globalization, it's also challenged companies to tighten their alignment on departments separated by oceans and cultures.

Lockheed Martin's next generation of fighter jets will use stealth technology to make them invisible to radar, possess uncommon agility to make sharp cuts and spins, and employ the most extensive sensor package ever incorporated into a military plane.

The Joint Strike Fighter F-35 also represents the largest program in Pentagon aviation history, with an eventual price tag in the United States at just under $323 billion. Only the first jets of an expected 2,600 are beginning to roll off the production lines, but already the program is under considerable pressure from Washington to sharply reduce cost, while managing a sprawling production system that spans 600 suppliers in 30 countries around the world.

Even more daunting, Lockheed Martin and its 600 international suppliers are at a critical stage of development in which production, which as recently as October was on schedule to complete two F-35s a month, will accelerate rapidly over the next four years, doubling exponentially, until it averages 30 planes a month by 2016.

"We'll ultimately hit a point where we ramp to a tact time of one a day," explains Amy Gowder, director of performance excellence for Lockheed Martin. "For us, the knee of the curve, if you will, is between 2011 and 2014, when we start doubling production. So we had to align our supply base for that next level of performance and consider new ways of being operationally more effective."

That meant rethinking its global system in a way that the company had never needed before. Lockheed Martin's design team, for instance, incorporates 140 different sites around the world, demanding visibility, unprecedented collaboration and the ability for 6,500 different designers to speak the same design language.

Production of Lockheed Martin's F-35 will rapidly accelerate over the next four years until it averages 30 planes a month by 2016. For this reason, Lockheed Martin aligned its production system with a digital thread, allowing models from engineering to be used by manufacturing, inspections and tooling. Lockheed Martin's challenge is an increasingly common one across every spectrum of manufacturing today. The world, in many ways, has grown smaller thanks to technological advances and globalization. Burgeoning markets in the Far East, South America and the Middle East have created prime opportunities for high growth, but they have also placed new forms of strain on companies to tighten their alignment on an ever-expanding design process, production base and supply chain.

"You see this with organizations that are national going international and with companies that have built global empires," says Paul Strzelec, CEO of Digital Tempus, a consulting firm that focuses on strategic and operational planning capabilities. "The issue of culture is paramount. It becomes one of a global agenda and getting everybody on the same page, with the same vision. Too often, you see global companies that have grown so far, so fast, that it becomes hard to pull everybody together."

Lockheed Martin went to great efforts to avoid this by tying together its F-35 design team through the use of what it calls a "digital thread," using a customized suite of Siemens' PLM Teamcenter. The system allows for 3D exact solid models from engineering design to be used directly by manufacturing for programming, inspections and tooling, according to Don Kinard, technical deputy for F-35 Global Production Operations at Lockheed.

But added complexity to the picture comes from the need to manage an information portfolio that is only going to grow in scale. Gowder notes, for instance, that on a weekly basis, Lockheed Martin manages 75 gigabytes of data, with 25,000 parts per bill of material. In a given year, she estimates, the design team is managing 108 workflows and 24,000 changes.

An Issue of Culture

The digital thread established design standards and allowed for all of Lockheed Martin's various design offices to work through the same process. But the first step, said Gowder, was thinking about the issue on a human level -- not in terms of technology.

Laying a Global Architecture

• Set a common framework worldwide for engineering and manufacturing

• Use supply planning models to manage demand volatility and forecast

• Develop young talent in emerging markets who can navigate the unique needs of a region

• Actively engage each department before instituting a common system
"We spent some time thinking of what our design standards are and the parameters everyone is filing and what we wanted to accomplish, which was a single system with the same workflow," says Gowder. "It was very critical to making sure there was no disconnect in, say, tolerances or even units of measure."

Many companies have struggled to be agile and adaptive in the face of fast-changing circumstances. Three years ago, Nalco, a manufacturer of industrial water treatment products, underwent a considerable evolution in reorganizing its global operations in order to more accurately gauge planning capabilities and create more visibility globally.

Integrating business management is equal parts capturing the imaginations of the organization's employees, as well as bringing everybody online in a single electronic system. The first step, according to Al Beninati, Nalco's solutions manager for engineering and business development, is making everyone recognize the importance of the project, then listening to their concerns and feedback.

"It's really a cultural shift," says Beninati. "Each region is a profit and loss center and they tend to operate independently. We realized that not every region necessarily has the same ERP system, so just getting folks on board with even knowing what products they have in some countries took a fair bit of work."

According to Digital Tempus' Strzelec, the cultural framework has to be in place long before the technology is rolled out.

"You start with immersion," says Strzelec. "What I mean by that is, if you invest the time upfront to be around your workers, to listen to their concerns, understand how they describe their culture and their nuances, you learn from their experiences. It's critical to establishing a business model. After that, it's all execution."

Deeper Understanding

Sure sounds simple, doesn't it? It's not. Even when the dozens of offices across engineering, production and supply chain are under one system, the vastness of the operations still leaves ample room for disconnect.

Auto supplier American Axle and Manufacturing, for example, has 32 production locations in 13 different countries. Its engineering presence is spread out with 11 different centers in 11 countries. Though its processes and functions are highly regimented across the entire system, American Axle breaks up each organization according to region.

"If there's a customer in China, we want that handled by our officer and engineers in China because they have the greatest understanding of the culture and the people and the expectations of that customer," says Mark Barrett, vice president for engineering and product development at American Axle. "You can't really have a U.S.-based team designing for a Chinese market because you don't truly understand it. You can get part of the way there, maybe, but you truly don't understand it in such a way as to be competitive and to really have an advantage."

According to Barrett, many companies run into trouble by not fully understanding the unique needs of a region. Time-tested processes by which a component has been successfully brought to market in the United States or Europe might very well fail miserably in China or India, which is why American Axle has long made efforts to shift young talents from various regions around the world, learning the company system, then being brought back in an executive capacity to lead a department.

The color and trim team at General Motors' Pan-Asia Technical Automotive Center in Shanghai discuss design issues. As engineering changes and production schedules change around the world, GM has instituted a digital architecture to keep its operations on the same page. Yet some technical processes transcend cultural divides. "The one thing that I always go back to is, the engineering business is really very generic," says Barrett. "It doesn't matter whether you're talking automotive, aerospace or making plastic toys. The engineering process by itself is very disciplined and technical. So whether you're an engineer in the U.S., China or India, you're following the same basic steps in developing and executing a program. Those are standards and are very easy to follow."

Different Strokes

Though the F-35 is a technological marvel for aircraft, it's also become something of a political albatross in Washington. The government is spending close to $323 billion on the program, but there have been a flurry of cost overruns. Lockheed Martin is now making an effort to reduce estimated costs by 20%.

That pressure has created a ripple effect through every stage of production. According to Lockheed Martin's Gowder, the design process is tasked with creating a faster, more agile and cheaper jet. So while the design thread aligned its vast supply base, now it's being used to reach a different level of performance.

"Affordability is key, so I'm looking at labor hour reduction, man-time reduction, looking for improved material availability, so as production rates ramp I have the right parts when I need them," says Gowder. "The digital thread will serve as an enabler for being able to do this with less people, at a faster pace, more reliably and accurately. Then, further down the line we can respond quickly to customers' needs from a capability perspective."

When the digital thread was first unveiled, the initial challenge was bringing Lockheed Martin's far-flung design community onboard. That might have been the easiest stage of the process. Getting engineers to speak with other engineers is one thing. Bringing international manufacturing and final assembly entities into the fold is an entirely different challenge.

"Manufacturing engineers think about the airplane from the inside-out," explains Gowder. "But our design engineers think about it the other way, from the outside-in. So in trying to make changes to one element, the engineers didn't initially realize how that would impact manufacturing. It was a real process breaking down the way they think about their work and getting them to understand how they could work together and developing that into the workflow. Now you throw that on top of different cultures, different languages and you see the complexity of the issue."

Global Architectures

At any time of day or night, someone, somewhere at American Axle is engineering a product at one of its many design facilities. About half of the company's CAD work is completed in India, with the rest split between the United States, Germany and Brazil. By the time one designer closes a CAD document, another somewhere else is opening it and continuing work.

"That work gets completed during the night and by the time morning comes around we have updated map data and models so we can continue that process," says American Axle's Barrett.

Even as technology has linked the world, it has also necessitated dialogue and quicker responsiveness from manufacturers.

General Motors, for instance, entered into consortiums with about a dozen of its key global suppliers in an effort to optimize its supply network, trading best practices strategies for effective supply chain management, and how best to utilize technology to leverage information.

That information has enabled some semblance of architecture to a world that's grown ever more complex, says Bill Hurles, GM's executive director of global supply chain operations.

"When you think about production schedules, engineering changes, production planning, our global supply chain, they are all changing and they change rapidly," says Hurles. "And what everyone's had to do across manufacturing is share information across the globe as quickly and effectively as possible. Global architectures are driving a global supply base and it's added another level of complexity that has to be managed. We're all dealing with that today."

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