More Noshirwani joined Raytheon in 2001, and, prior to his current post, served as vice president for operations for both the Air/Missile Defense Systems and for Integrated Defense Systems. Previously, he worked in operations and supply chain capacities with Honeywell Engines and Systems, Allied Systems and Lockheed Martin Defense Systems. A native of Pakistan, Noshirwani holds an electrical engineering degree from Indiana Institute of Technology and completed General Electric's Manufacturing Management Program.
Noshirwani: We need to adapt to the changing customer first.
The focus within DOD has shifted from products to capabilities. And, second, they have raised the awareness of mission assurance within the defense business generally and the missile defense business, in particular.
Within Raytheon, Bill Swanson, our CEO, has said we are going to take mission assurance to the next level across all our businesses. Putting that together, the challenge we have is: how do you make our supply base aware of our new expectations; and, what do mission assurance and our new business strategy mean to us? That change forces us to look at the historical supply chain in a different set of paradigms.
WT: What was the shift of objectives?
Noshirwani: We went from operating traditional purchasing and supply chain organizations to what we today call an integrated supply chain. With that, we intend to link our engineering groups and our performance excellence groups with our supplier base as early as we can in the process when building relationships with our suppliers. We need our suppliers to be an extension of ourselves.
The old routine, when dealing with our suppliers was focused on costs, quality and schedule. Lack of performance in these categories generally provided a stressful exchange. That has changed. Now, it's going to be more collaborative. We'll be working together so that we're building the right stuff on time, correct the first time. There can't be three iterations before we get it out the door.
WT: How do you do that? What is the task?
Noshirwani: One key thing: we used to be a very tactically oriented organization; we're now shifting to become more strategic. For example, we are organizing more supplier conferences at which we can establish expectations with our supply base. This past June, we had 67 of our key suppliers participating in a supplier forum. The theme of the event, "Performance Matters," focused on how mission assurance is a key element. We are communicating what mission assurance means to us to our supplier base, to make sure that their behaviors, our behaviors and our relationships all improve over time and assure no doubt for the warfighter.
WT: Ideally, what would you like to get from your suppliers?
Noshirwani: When I look at my integrated supply chain of the future, I'm going to use a phrase: a netted integrated supply chain. What does that mean? As Raytheon IDS works to become a Joint Battlespace Integrator, we will have expertise over multiple domains. The challenge for our supply chain organization, then, is to take the suppliers who are expert in certain domains and knit them together to allow us to create solutions to satisfy our customers needs and support our business vision.
WT: Does this mean that suppliers will be working with other suppliers?
Noshirwani: In some cases, absolutely. Then the question is: how do we broker them to partner with each other to bring us the best result?
WT: With this new business focus, what sort of measures do you use to determine your success?
Noshirwani: Previously, the majority of our metrics were internally focused on the supply chain. While we still have some metrics that are internally focused we now have an organizational prospective that measures the value we provide to the business. These metrics are in the area of effectiveness, efficiency, capability and capacity. We've also now established metrics that are linked directly to our business performance and to our customer's expectations. The key focus is: how do we create value for our customers and our business?
WT: Now, what are those new metrics?
Noshirwani: One of them is cash-to-cash cycle: How quickly do we collect cash from our customers?
Another one is on-time performance to contract. Do we deliver our hardware the way we said we would, when we said we would, with mission assurance and quality levels that satisfy our customers?
And third: we have a strategy within Raytheon IDS that is linked around asking: how do we improve our overall cycle time within our business?
WT: Why is that one crucial?
Noshirwani: If our customer is king-and if we need to jump through hoops to come up with a satisfactory solution for that customer - then we need to be very agile, very flexible. We will need to take on challenges we've have never taken on before. To make that possible, flexibility within the supply chain becomes a very key
WT: How would you characterize your supply chain effort?
Noshirwani: As I said, we've just reorganized our entire supply chain around the Raytheon IDS vision and our customer's expectations. That supply chain has five major capabilities in it.
One is what we call collaborative solutions. That is a group of very talented, top-notch supply chain experts who are engaged with our business development people early in the process. We have supply chain professionals who are engaged in that process, to help with the partnering suppliers, the supply selection process - who do we want to partner with to win this proposal? So that's one capability.
WT: You mentioned sub-contracting. Is there a piece for that?
Noshirwani: Yes, that's the next capability. With our business shifting from a product focused to capabilities focused solutions; Subcontract Management is a key part of our supply chain activity. Our strategy here has been to add new skills, tools and techniques to manage major subcontracts. Today, we have close to $2 billion in subcontracts that we are managing.
WT: And finally?
Noshirwani: Finally, our Integrated Supply Chain organization continues to support the products foundation for our business. Material Acquisition, Planning & Product Management and Integrated Logistics are all key elements in supporting our manufacturing operations with the right material at the right place at the right time and cost. The focus in these areas is transformational change to increase the effectiveness and efficiency of operations. Examples include all elements of e-procurement, reduction in transactions, lean supply initiatives and innovative materials handling and flow techniques including the Department of Defense requirement flow down regarding UID and RFID; new technologies we are to use to track hardware from supplier to the battlefield.
WT: That's organizational. What about people? How do the people you're looking for today differ from five or ten years ago?
Noshirwani: Traditional supply chain professionals are still very critical to the success of our organization. But, if I had a wish list and all my wishes came true tomorrow, then I would want to hire professionals from this day forward who have multi-disciplined experiences and expertise in program management, project management, engineering, operations and supply chain. Integrating these key capabilities is critical to the success of our Integrated Supply Chain.
WT: How hard is it to find such people?
Noshirwani: It's very hard to find such people. I might want to hire the next five program managers that come my way, but a lot of other places also want to hire them. The Defense Department is trying to hire those same skills. Of course, if we see people with the skills we want available on the street, we scrounge them up. Then, there's a second challenge: how do we keep these people, how do we continuously expand their responsibilities and keep them engaged. If they don't feel challenged, they're going to leave.
WT: Is finding those people the toughest part?
Noshirwani: Yes.
WT: If the people you want are at a premium, how do you meet your need?
Noshirwani: Within our new supply chain, we have created and communicated a career path for the future program managers of our business through the supply chain organization. We have set up rotational assignments that move people from engineering to business development to performance excellence - all through the supply chain organization so we create multi-dimensional people. We are sowing some of the seeds for tomorrow. At the same time, we are taking some of the veterans of these functional areas and convincing them to take a career path into integrated supply chain.
WT: Are you taking some risks with 'growing your own?'
Noshirwani: Sure we are, but since the people we want most are tough to find, we have to build human capability within our own organization. And we have to take some risks with it.
WT: Does this change much affect your IT requirements?
Noshirwani: The key IT task is connectivity. The most important question in my mind is how do I connect my programs, engineering, performance excellence, supply chain and operations professionals to the best of my ability? How do I share information across the board as fast as I can? Then, how do I drive that connectivity into my supply base? That's one thing that's required if we are to engage suppliers early in the process.
WT: Is it fair to say that the new standards you have from DOD will ripple back through your organization?
Noshirwani: In my mind it has to - the DOD is our customer. We have strong relationships with our DOD customers, built on our performance and superior solutions we provide. New standards are another aspect of the dynamics of this business. We know we need to listen and be responsive to our customer needs, and provide solutions at Ramp Speed.
WT: A final question: How important to supply chain re-engineering is support from top management?
Noshirwani: My boss, IDS president Dan Smith, will say at every meeting: if we can't get our suppliers in line, and if we can't change how we do business internally, then we're not going to get to where we need to be to. Time is of the essence. It's an absolute must-happen.
Sidebar: Raytheon Integrates Its Supply Chain To Deliver 'Mission Assurance'
With headquarters in Tewksbury, Massachusetts, Raytheon Integrated Defense Systems [IDS] is a $3.5 billion division of the Raytheon Company. Raytheon IDS has programs in integrated air defense, international integrated air defense, joint battle integration, naval integrated systems, missile defense, surveillance and sensor systems, and related areas. Its customers are international, and include the U.S. Missile Defense Agency and the U.S. armed forces.Its parent company, Raytheon, has been a leader in defense technology since the Second World War. Over that time, its work has included early development of radar to today's 'hit-to-kill' interceptors that form the background of missile defense. With 80,000 employees worldwide, the Waltham, Massachusetts-based firm registered $20 billion in sales in 2004.
Following recent changes in Department of Defense priorities, Raytheon IDS has raised its emphasis on mission assurance, which one company spokesperson defines as "assuring that the war fighter has what they need, when they need it, and that it works." In the past the DoD requisition system was based on 'specification fulfillment,' which has now been replaced by mission assurance.
In its supply chain operations, Raytheon's approach combines knowledge management, communities of practice and its already existing Six Sigma efforts. Communities of practice work to align each company unit with overall strategies and goals, in part by sharing best practices in such areas as inbound logistics, warehouse management, materials handling and outbound logistics.
While the accompanying interview focuses on supply chain change at Raytheon IDS, supply chain improvement has been a corporate-wide focus. For example, Raytheon Missile Systems received the 2004 Global and the 2004 North American awards from the Supply Chain Council for Excellence in Supply Chain Operations and Management.
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