Jouney to the Award (Research Paper Sample)

Lockheed Martin Missiles and Fire control
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ABSTRACT
Quality is the conformance a set of predetermined standards. Contrary to popular opinion Americans have not always appreciated the value of quality. Back in the early years of the cold war, quality was a statistical quantity. When the Japanese challenged the might of American business on the basis of quality most businesses were reluctant to embrace the concept. The government had to devise a policy to encourage organizations to provide quality products and services within the US. This resulted in the introducing the baldrige quality award.
Lockheed martin missiles’ and fire control is an American company that engages in production of arms mainly for military organizations. They have perfected the art of delivering quality over the years. In this paper we explore the journey of the company as provided by information disclosed to National Institute of Standards and technology.
Keywords: Baldrige Quality Award, performance, 5.4 sigma, product development, customer
Important Acronyms: Lockheed Martin missiles and fire control(MFC), Enterprise Excellence System (EES), Senior Leadership Team (SLT), Enterprise Leadership Council (ELC), vision, mission, and values (VMV), Business Conduct Guidelines (BCG), Performance Excellence Plans (PEP), Integrated Talent Management Process (ITMP) Defense Contract Management Agency (DCMA), Human capital framework(HCF), information systems and global solutions (IS&GS), Strategic Planning and Execution System (SPES), Customer Performance Assessment Report (CPAR) National Institute of Standards and Technology (NIST)..
: INTRODUCTION TO BALDRIGE AWARD
The Malcolm Baldrige award was established to provide a platform for American companies to compete on a quality basis. In the early seventies Japanese companies, riding on the ignorance of American companies towards quality, perfected art of delivering quality. As a consequence American companies lost business as the market shift to Japanese products. The quality award recognizes sustained quality excellence in providence of products in the United States.
The award was established in 1987 by the U.S. Congress to raise awareness of quality management. It achieves this by acknowledging U.S. companies which have successfully implemented quality management systems. The Award focuses on six categories of production and service delivery i.e. service, manufacturing, education, small business, healthcare and nonprofit organizations. The award is named after the late Secretary of Commerce at the time of its establishment Mr. Malcolm Baldrige. He was a stout crusader for quality management and actively participated in lobbying the government to adopt a policy for encouraging provision of quality by companies in the country.
The award is administered annually by the U.S. Department of commerce National Institute of Standards and Technology (NIST). Initially the award targeted manufacturers, small and service businesses. Later in 1999 education and healthcare categories were added to eligible categories and in 2007 government and nonprofit categories were added into the fringe.
Organizations that make a claim for the Baldrige Award are evaluated by board of independent assessors. Recipients are chosen based on achievement and improvement in seven areas which are known as the Baldrige Criteria for Performance Excellence. The winners have to demonstrate commitment to delivering quality in each of the seven areas. Below is a brief of each of the criteria:
1 Leadership: examines the management strategies employed by the upper, management of the company. It also scrutinizes how the company leads within its local community.
2 Strategic planning: looks at how the company creates & plans to execute its strategic decision.
3 Customer and market focus: How the organization builds and maintains strong, lasting relationships with customers.
4 Measurement, analysis, and knowledge management: focuses on How the company collects and uses data to sustain its key processes as well as managing its’ performance.
5 Human resource focus: focuses on the empowerment and involvement of the company’s workforce.
6 Process management: focuses on how the process of designing, management of the process to improve its key processes.
7 Business performance results: the main idea here is to evaluate how the company performs in terms of customer satisfaction, human resources, finances, supplier & partner performance, operations, governance & social responsibility as well as how it compares to its competitors.
In this project we will examine theMissiles and Fire Control Company (MFC) who won the award in 2012.
: THE LOCKHEED MARTINMissiles and Fire Control COMPANY
MFC is a subsidiary of a larger company, Lockheed martin, a global security and aerospace company which is headquartered in Bethesda. Primarily MFC is involved in research, design, development, manufacture of advanced technologies which they integrate into sustainably into their products and services. For Lockheed martin large numbers defines their operations and ambitions. In 2011 alone the company made net sales of $46.5 billion! Considering that this was achieved in the backdrop of managing a whooping 120000 people we can appreciate the amount of coordination involved in the whole process of production and provision of services.
The MFC is headquartered in Dallas, Texas. They have a major facility in Orlando with additional smaller facilities located in nine U.S. states, the United Kingdom and Japan. MFC is involved in designing development and manufacture of advanced munitions, control systems and rocket propelled weaponry. This effectively means that its market comprises customers drawn mainly from the local and foreign military. With a workforce of nearly eleven thousand employees involved in production of over a hundred products, quality can be a difficult goal to achieve. The nature of their clients’ operations provides very small margins for technical malfunctions necessitating that quality be observed to the highest degree possible. As a result MFC has had to develop a high standard of conformance and a custom of cultivating quality management in their employees.
The successful implementations of these practices have seen clients benefit from a lower cost of quality as well as achieve optimal performance for the purchased product. This has seen the number of return customers improve by 32% between 2006 and 2011. As a manufacturer this is proof that their service provision is well above the market expectation. On a marketing platform the previous five years had reaped the benefit of network marketing among its customers. In that span foreign customers approaching the institution for business more than quadrupled. There is little else that emphasizes the level to which the MFC upholds its quality standards.
The general belief at MFC is to make performance the primary objective. This embodies scheduling different operations, optimizing costs and maximizing utilities. In a strategic positioning sense this was a stroke of genius that enabled the company to stabilize and maintain the lead position in a shrinking market in the 2006 to 2011. This is a major achievement for a company owing to its enormous size.
Observing a strict code of conformance has also benefited the company’s growth strategy. Lockheed Martin uses return on investment as strategic measure for growth in its daughter companies. According to information disclosed to NIST, MFC has grown at a 23% compound annual rate 10 points higher than the industry-best competitor. In 11 years preceding the award of the Baldrige award the company managed to sustain an annual growth rate of 6.2 percent in terms of its operating margin. This is a huge margin on their best placed competitor Standard & Poor’s (S&P) 500, a Capital Goods Manufacturing company, with an index of 1.5%. Truly the award is a celebration of achievement of excellence.
The level of achievement highlighted in these was made possible by the process efficiency. The results arose from efforts towards strategic planning. MFC employed a value stream mapping system to optimize the production process. The program (Strategic Planning and Execution System) employs a vigorous analysis methodology to develop strategic and tactical action plans. The plans are based on the customer, market needs and other environmental assessments. The process hence provides for performance optimization and agility while promoting long-term sustainability and accountability. It integrates metrics, work processes, and modeling and simulation to provide feedback for continuous learning. This has enabled the company to acquire crucial information about changes that can be expected. This leads to formulation of processes that address any changes in customer preferences ahead of time.
Between 2002 and 2012 the company evaluated 8500 of its processes. The mapping optimized about 90% of the enterprises direct costs and 6 percent of indirect costs. Time reductions resulting from process and performance improvement in the lines of MFC’s businesses; have led to saving of about $225 million annually. Process optimization resulted in a 100% on time deliveries in 2006 with the efficiency ranging around the figure from the 2007 until 2011. The reduction in efficiency is negligible compared to the tremendous increase in number of active orders in the same period.
Efficiency has not been limited to process. MFC has embraced a, "Procure to Pay" system that allows buyers across to make procurements while leveraging their purchasing power efficiently. MFC also has a, "make-or-buy" process to help them to decide w...