Breakout Session # 1203 Bill Bellows, Associate Technical Fellow The Boeing Company

2. Thinking Beyond Interchangeable Parts - The Potential for Thinking Together and Leading Together in the 21st Century Breakout Session # 1203 Bill Bellows, Associate Technical Fellow The Boeing Company Date: Monday, April 25 Time: 2:45-3:45 PM. NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

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4. Agenda • Aim • Quality Thinking • Interchangeable Parts • Better Thinking About Thinking • Better Value • Imagine the Possibilities… NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

5. Aim Introduce the potential energy of integrating the management theories and thinking of Dr. Genichi Taguchi Dr. W. Edwards Deming Dr. Edward de Bono and many others... NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

6. Quality Thinking NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

7. W. E. Deming on Quality “A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market.” * Source: The New Economics, W. Edwards Deming, 1993 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

8. Genichi Taguchi on Quality “Quality is the minimum of loss imparted to the Society by a product after its shipment to a customer.” * Source: Introduction to Quality Engineering , G. Taguchi, 1983 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

9. Edward de Bono on Quality “The quality of our thinking will determine the quality of our future.” NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

10. Philip Crosby on Quality • “Zero defects is another way of saying ‘do it right the first time’” • Quality is defined as conformance to requirements * Source: Let’s Talk Quality, P. Crosby, 1989 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

11. Core Competencies detailed customer knowledge large-scale systems integration lean enterprise Values leadership integrity quality customer satisfaction people working together a diverse and involved team good corporate citizenship enhancing shareholder value The Boeing Company - Vision 2016 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

12. Expectations Value Expectation Disappointment NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

13. Expectation Dynamics Value Delight Expectation Satisfaction Disappointment NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

14. InThinking InThinking is about a transformation of the ways people think into effective predetermined patterns and sequences of thinking. The organization of thinking itself and the awareness that there is a choice of alternative ways of thinking when creating better solutions, presents a significant and exciting departure from traditional approaches. NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

15. Interchangeable Parts NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

16. Interchangeable Parts ?? Space Shuttle Main Engine NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

17. Interchangeable Parts ?? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

18. Quality Improvement Background: On July 21, 1995, Toyota was reported by the WSJ to have received catalysts from AlliedSignal Catalysts that were “100% defective-free”. Question: Could AlliedSignal deliver catalysts that are even higher quality ? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

19. Sorting Circles Connect the 2 of these 3 circles that are closest to being the same. B C A NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

20. Sorting Circles, Part 2 Which 2 of these 3 circles are closest to having the same diameter. diameter 0 A B C NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

21. Cutting Wood Given a piece of wood that will be cut into 2 pieces.... how many lines will be drawn across the top face before the cut is made ? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

22. Cutting Wood target NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

23. Cutting Wood target NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

24. Philip Crosby on Quality • “Zero defects is another way of saying ‘do it right the first time’” • Quality is defined as conformance to requirements * Source: Let’s Talk Quality, P. Crosby, 1989 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

25. Decisions Decisions Which 2 of these 3 circles are closest to having the same diameter? diameter 0 A B C MIN MAX NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

26. Quality Improvement Background: On July 21, 1995, Toyota was reported by the WSJ to have received catalysts from AlliedSignal Catalysts that were “100% defective-free”. Question: Could AlliedSignal deliver catalysts that are even higher quality? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

27. Taguchi’s Quality Loss Function “Loss to Society” Lower Specification Limit Upper Specification Limit TARGET (desired value of parameter) NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

28. A Better View “The Taguchi Loss Function is a better view of the world.” W. Edwards Deming Source: Out of the Crisis, W. Edwards Deming, 1986 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

29. Interchangeable Parts ?? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

30. Better Thinking About Thinking NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

31. Investment Opportunities Thinking Technology NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

32. “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.”Albert Einstein NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

33. Profit Beyond Measure This book is dedicated to the memory of Dr. W. Edwards Deming 1900-1993 May the Seventh Generation after us know a world shaped by his thinking NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

34. Perception & Thinking “How the world we perceive works depends on how we think. The world we perceive is a world we bring forth through our thinking.” H. Thomas Johnson NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

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36. The First Step Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. W. Edwards Deming NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise” Source: The New Economics, W. Edwards Deming, 1993

37. What’s Old? • Reducing Variation, Cost, Waste, Inventory, etc • Talk about “Working Together” • Striving for “Zero Defects” and “Zero Waste” • Continuous Improvement • Using Metrics for Alignment* *without a thinking transformation NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

38. What’s New? • Resource & Relationship Management (Striving for Balance) • Thinking & Learning Together - Then Working Together • Continuous Investment • Using Thinking for Alignment • InThinking and Enterprise Thinking NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

39. Twin Day NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

40. Variety Day NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

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42. Counting Straws NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

43. Counting Heads NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

44. Togetherness • What does it mean to “work together” ? • What does it mean to “learn together” ? • What does it mean to “think together” ? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

45. The First Step The first step. The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people. W. Edwards Deming NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise” Source: The New Economics, W. Edwards Deming, 1993

46. Assumptions • A better way to operate an organization is to invest resources with the ability to manage customer delight, satisfaction, and disappointment • Better investment results from discovering opportunities to invest • The discovery of opportunities for investment is limited by how thinking is conditioned NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

47. What is needed ? Thinking that promotes better discovery NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

48. Transformation Potential Energy “Better Thinking” Kinetic Energy “Better Value” NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

49. iscussion iscussion eming eming iscussion roup roup eming The New The New roup Managing Managing Leading Systems Leading Systems DDG DDG Economics Economics Variation as a Variation as a DDG (12 hrs) (12 hrs) (2nd Thursday, (2nd Thursday, (12 hrs) (14 hrs) System System (2nd Thursday, 6:30 6:30 - - 8:30pm) 8:30pm) (AKA the “Organization (AKA the “Organization 6:30 - 8:30pm) (9 hrs) (9 hrs) Workshop”) Workshop”) iscussion iscussion ngoing ngoing iscussion ngoing Enterprise Thinking Enterprise Thinking (9 hrs) (9 hrs) OD OD (AKA “Understanding Variation”) (AKA “Understanding Variation”) OD (4th week, (4th week, Kepner Kepner - - Tregoe Tregoe (4th week, Th Th /Fri, 12 /Fri, 12 - - 2pm PT 2pm PT (24 hrs) (24 hrs) Th /Fri, 12 - 2pm PT (Problem Solving and (Problem Solving and Decision Making) Decision Making) Six Thinking Six Thinking Understanding Understanding Hats Hats (8 hrs) (8 hrs) Taguchi Methods Taguchi Methods - - Part 1 Part 1 DATT DATT DATT (16 hrs) (16 hrs) (16 hrs) (40 hrs) (40 hrs) irect irect irect echniques echniques pplied pplied pplied hinking hinking hinking Lateral Thinking Lateral Thinking Understanding Taguchi Methods Understanding Taguchi Methods - - Part 2 Part 2 (16 hrs) (16 hrs) (40 hrs) (40 hrs) A Thinking Roadmap NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

50. A Thinking Roadmap TARGET AUDIENCES: Members of management, individual contributors, suppliers, and customers who are providing leadership in "enterprise thinking" activities. Family members, "members of the community" and students are welcome to attend. "Members of the community" are citizens who are involved full or part time, or in a volunteer capacity, in community related work. Examples include hospital employees, teachers, religious leaders, scouting leaders, and youth sports volunteers. NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”