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Tauber Students Engineer Huge Savings for Raytheon

9/21/2007 --

Solutions generated from a 14-week internship are expected to save the missile defense systems leader some $15 million over the next five years.

ANN ARBOR, Mich.—Transforming an assembly area to improve work flow may not be rocket science. But a pair of students working through the Ross School of Business' Tauber Institute for Global Operations could challenge that assumption.

On Sept. 14, Tauber Institute students Michael Koester and John Nanry took first prize at the annual Spotlight! competition for their consulting work at Raytheon Integrated Defense Systems. In just 14 weeks, Koester and Nanry designed and implemented a lean transformation of the Patriot Ground Electronics Assembly area at Raytheon's Integrated Air Defense Center in Andover, Mass. The results: A 45-percent reduction in manufacturing lead time and a 15-percent increase in throughput. These results are expected to deliver business growth opportunities of $102 million and savings of $15 million to Raytheon over the next five years.

"I set my expectations low," said John Favuzza, manager of Patriot Ground EA Operations and a first-time Tauber project liaison for Raytheon. "These students blew me away. In a project like this, I don't want you to walk away and leave me with a list of 'to-do's' after you leave. I want you to do it."

What Koester and Nanry did was tackle an under-performing cell plagued by an ill-conceived floor plan and a stagnant culture resistant to change. They conducted a lean analysis, consisting of value stream mapping workshops with operations and production support, benchmarking and other tools, and identified specific opportunities for improvement. Their two-part action plan resulted in improved visual management, complete with color coding and improved signage; a floor layout redesign that promoted product flow and enabled pull; practical material organization and better control measures; and standardized tool sets. Faculty advisers on the project were Eric Svaan (the Ross School) and Amy Cohn (College of Engineering). Raytheon's Lloyd Beckett was the "project champion" at the firm.

The final plan was implemented prior to the team's exit from the facility. Much to the students' surprise, the operators threw them a farewell party.

It was an out-of-character response for the Raytheon veterans, whose average age is 56 years old, said Favuzza. With 25-30 years of seniority, the operators have seen recommendations like the Tauber Institute project come and go over the years. Rarely are the plans embraced; even more rarely are they actualized.

"This is the first time we penetrated," Favuzza said, crediting that penetration to the students' preparedness, enthusiasm and rapport with operators.

"We spent a lot of time on the floor, interacting with the operators and managing those relationships," said Koester, who is working toward a master of engineering in manufacturing. "We would tread softly and always involve them in our plans. By relating to them and respecting their input we were able to create a system that worked for them."

That kind of action-based experience can't be taught in a classroom, which is the capstone of Tauber's Spotlight! competition.

"Until you get out there and do it," Koester said, "you won't really understand."

Other teams who got out there and did it tackled operational and technical aspects of production at Alcoa, Ametek, Boeing Co., Borg-Warner Morse TEC, Cordis Corp., Dell Inc., Diageo Plc, Dow Chemical Co., Detroit Edison Energy Co., General Motors, Honeywell International Inc., Intel Corp., Lockheed Martin, Merck & Co. and Indo Keramik. Teams of MBA and engineering students presented their findings to operations experts who evaluated the final projects on the basis of scope, implementation, impact, overall presentation skills and other criteria.

Second prize in the Tauber Institute's Spotlight! competition went to Kyle Chilcutt, Priya Ranjan Dass and Makarand Deshmukh for Dell Worldwide Procurement: "New Approach to Motherboard-Level Testing: Design for Testability."

Third prize also went to a Dell team¿Michael Duboe and Alex Machavariani¿for a project focused on customer service: "Optimization of Call Center Training Process."

A total of 19 teams, comprising 44 students and 36 faculty from the Ross School and the College of Engineering, participated in Spotlight! And while students vied for top prizes totaling $24,000 in scholarship funds, it is clear that firms also take away significant victories from the 14-week experience. Sponsors do cover students' salaries (and other expenses) during the internship, but the return on investment often outweighs any cost. Just ask Jim Kellso, manager of supply network research at Intel's Technology and Manufacturing Group, and a long-time sponsor of Tauber Institute projects.

"There have been years where I've paid for my entire research budget out of savings from a Tauber project," Kellso said. "You can't argue with that."

For more information about the Tauber Institute for Global Operations and to view descriptions of each project, please visit:

For more information, contact:
Deborah Holdship
Phone: (734) 647-4626