History of CALM

To understand CALM, we need to understand how it has grown on the “shoulders of giants” in that lean processes and techniques are already dominant management technologies with a wide diversity of applications and successes. General Electric (GE) is famous for the concepts of Six Sigma and lean and mean, Boeing made their mark managing mass (using modular and flexible assembly options), and Toyota put it all together into a truly lean business culminating in the success of the Lexus automobile. Boeing in turn took the Toyota model and added computer-aided enforcement of lean methodologies throughout the manufacturing process.

Lean management is a methodology for efficient enforcement of process rigor and discipline to dramatically cut costs and improve cycle times of all operations of an enterprise. One of the major sources for its outgrowth was integrated definition (IDEF) modeling in aerospace manufacturing that was pioneered by the U.S. Air Force in the 1970s. IDEF is a methodology designed to model the end-to-end decisions, actions, and activities of an organization or system so that costs, performance, and cycle times can be optimized. IDEF methods have been adapted for wider use in automotive, aerospace, pharmaceuticals, and even software development industries.

IDEF methods serve as a good starting point to understand lean management processes. The IDEF process always begins by mapping the as-is functions of an enterprise, creating a graphical model, or road map, that shows what controls each important function, who performs it, what resources are required for carrying it out, what it produces, how much it costs, and what relationships it has to other functions of the organization. IDEF simulations of the to-be enterprise have been found to be efficient at streamlining and modernizing both companies and governmental agencies.

Motorola developed the Six Sigma methodology in the mid-1980’s as a result of recognizing that products with high first-pass yield rarely failed in use. At GE, it has grown into more general lean principles that are rigorously enforced throughout the organization. Software is used to make the entire manufacturing system transparent and measurable, whether it’s a light bulb, an electric generator, a jet engine factory or power plant. GE requires process mapping of the as-is condition of whatever system is to be improved, establishment of baseline metrics, identification of where the waste is occurring, planning of the improved to-be process-all shared interactively on the computer before change is authorized. Then, management controls the implementation of the innovation plan, through their New Product Introduction process, with constant reviews of performance metrics and gates for approval along the way.
As good as its technologies are, GE does not distinguish itself through innovation so much as through execution of the systems integration processes necessary to manage innovation. Whether it is a new product or the manufacture of reliable light bulbs or jet engines, they are very good at producing quality products. Through continuously scoring the performance of their people and rewarding the top performers and firing the bottom percentages, they have become famous for creating a company that is both highly successful and lean & mean.

The most famous lean root is the Toyota Process Management model, with their Lexus division’s “relentless pursuit of perfection” being its most prominent slogan. The Japanese derivatives-Kaizen (continuous step-by-step improvement through teamwork), Kaikaku (rapid improvement through shared efforts), and Jidoka (balanced responses to external forces) – can be found at the base of the process improvement methodologies of most major innovation efforts today, both inside and outside the automotive industry. Toyota begins with the mapping of existing processes, so that a plan for migration from unhealthy to healthy processes can be planned. Toyota’s methodology then is to turn attention to bottom-up process management, consisting of learning steps in which improvement skills and knowledge are rigorously taught to all employees, followed by standards building, so that metrics of improvement can be mapped. Only then does the “do” action start (e.g., this is where we perceive Six Sigma fits with the Toyota Process Management). In particular, Toyota made significant improvements in dealing with its subcontractors through lean systems engineering. Toyota realized that everything-from just-in-time inventory delivery to total quality management and rapid adoption of new innovations-depended as much on the performance of its outside suppliers as on performance within the company itself. Boeing, Lockheed Martin, and countless other great corporations throughout the world have adopted and adapted Toyota’s model.

Perhaps the best-developed evolution of the IDEF model beyond Toyota is at Boeing. Their project life-cycle process has grown into a rigorous software system that links people, tasks, tools, materials, and the environmental impact of any newly planned project, before any building is allowed to begin. Routinely, more than half of the time for any given project is spent building the precedence diagrams, or three-dimensional process maps, integrating with outside suppliers, and designing the implementation plan-all on the computer. Once real activity is initiated, an action tracker is used to monitor inputs and outputs versus the schedule and delivery metrics in real time throughout the organization. When the execution of a new airplane design begins, it is so well organized that it consistently cuts both costs and build time in half for each successive generation of airframe. And, of course, it is paperless. Boeing created a complex lean management process called define and control airplane configuration/manufacturing resource management (DCAC/MRM). The process was built with the help of the operations research and computer sciences departments of the University of Pittsburg. The manufacture of the 777 was ultimately a success, and it became the precursor to succeeding generations of CALM at Boeing. Boeing is four generations beyond that airplane now, and they have succeeded in cutting the time and cost by 50% for each new generation of airplane by using CALM. Boeing’s successes in conversion from inefficient silos of manufacturing to a lean and efficient operation have become legendary.

There are many similarities between experiences in the automobile, computer, and aerospace industries and those in the energy business. All require large-scale systems integration of complex engineering processes to produce profitable products. They all involve multiple suppliers that are global, and there are many common suppliers to many owners. Lean management provides for earlier engagement of integrated process teams, improved access to new technologies, earlier rigor applied to “go/no-go” decisions, and an enhanced resource base and skill level for managers and engineers.