Harvard Case - VIRGINIA-Class Submarine: Two for Four in 2012 (A)
"VIRGINIA-Class Submarine: Two for Four in 2012 (A)" Harvard business case study is written by Thomas Cross, Jeff Pottinger. It deals with the challenges in the field of Operations Management. The case study is 24 page(s) long and it was first published on : Sep 1, 2009
At Fern Fort University, we recommend that Newport News Shipbuilding (NNS) implement a comprehensive strategy to address the challenges of building two Virginia-Class submarines in 2012. This strategy should focus on optimizing operations strategy, supply chain management, and innovation to achieve the ambitious goal of delivering two submarines within the tight timeframe.
2. Background
The case study focuses on Newport News Shipbuilding (NNS), a major shipbuilding company tasked with constructing two Virginia-Class submarines in 2012. This ambitious goal presented significant challenges due to the complexity of the submarines, the tight timeframe, and the need to maintain high quality standards. The main protagonists of the case are the NNS management team, including the CEO, who must navigate these challenges and make critical decisions regarding resource allocation, production planning, and risk mitigation.
3. Analysis of the Case Study
The case study highlights several key issues that NNS needs to address:
Operations Strategy: NNS needs to optimize its operations strategy to achieve the desired production rate. This includes:
- Capacity planning: NNS must ensure sufficient capacity in its facilities, workforce, and equipment to handle the increased workload.
- Production planning: A robust production planning system is crucial to ensure smooth flow of materials, components, and labor.
- Process design: NNS needs to analyze and optimize its existing manufacturing processes to identify bottlenecks and improve efficiency.
Supply Chain Management: NNS must strengthen its supply chain management to ensure timely delivery of materials and components. This involves:
- Inventory management: NNS needs to implement effective inventory control strategies to minimize stockouts and reduce holding costs.
- Sourcing: NNS should explore alternative sourcing options to ensure a reliable supply of critical materials.
- Logistics: NNS must optimize its logistics processes to ensure efficient transportation and handling of materials and components.
Innovation: NNS should embrace innovation to improve its shipbuilding capabilities and enhance the performance of the Virginia-Class submarines. This can be achieved through:
- R&D: NNS should invest in R&D to develop new technologies and processes that can improve efficiency and reduce costs.
- Technology and analytics: Leveraging technology and analytics can help NNS optimize its operations, improve decision-making, and enhance its understanding of the shipbuilding process.
- Product development: NNS should continuously improve its product development processes to ensure that the Virginia-Class submarines meet the evolving needs of the Navy.
4. Recommendations
To overcome the challenges and achieve the ambitious goal of building two Virginia-Class submarines in 2012, NNS should implement the following recommendations:
Adopt a Lean Manufacturing Approach: NNS should adopt lean manufacturing principles to eliminate waste, improve efficiency, and reduce costs. This involves identifying and eliminating non-value-adding activities, streamlining processes, and implementing Just-in-Time (JIT) production where feasible.
Implement a Robust Supply Chain Management System: NNS should implement a robust supply chain management system that includes:
- Demand forecasting: Accurate demand forecasting is crucial to ensure timely procurement of materials and components.
- Materials Requirements Planning (MRP): NNS should implement MRP to optimize materials planning and minimize inventory levels.
- Supplier Relationship Management: NNS should establish strong relationships with its suppliers and implement a supplier performance management system to ensure timely delivery and high quality.
Invest in Technology and Analytics: NNS should invest in technology and analytics to improve its operations and decision-making. This includes:
- Enterprise Resource Planning (ERP): Implementing an ERP system can help NNS integrate its various business processes, improve data visibility, and enhance decision-making.
- Simulation modeling: NNS can use simulation modeling to analyze and optimize its production processes, identify bottlenecks, and evaluate different scenarios.
- Data analytics: NNS should leverage data analytics to identify trends, improve forecasting, and optimize resource allocation.
Embrace Innovation: NNS should actively pursue innovation to improve its shipbuilding capabilities and enhance the performance of the Virginia-Class submarines. This includes:
- R&D investment: NNS should invest in R&D to develop new technologies and processes that can improve efficiency, reduce costs, and enhance the performance of the submarines.
- Collaboration with universities and research institutions: NNS should collaborate with universities and research institutions to access cutting-edge technologies and expertise.
- Employee innovation programs: NNS should encourage employee innovation by implementing programs that reward creative ideas and solutions.
Implement a Comprehensive Quality Management System: NNS should implement a comprehensive Total Quality Management (TQM) system to ensure high quality standards throughout the shipbuilding process. This involves:
- Quality control: NNS should implement robust quality control procedures at every stage of the production process.
- Statistical process control (SPC): NNS should utilize SPC to monitor and control its manufacturing processes and ensure consistency in quality.
- Continuous improvement: NNS should adopt a continuous improvement mindset and implement Kaizen principles to identify and eliminate quality defects.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with NNS's core competencies in shipbuilding and its mission to deliver high-quality submarines to the Navy.
- External customers and internal clients: The recommendations address the needs of NNS's external customer, the Navy, and its internal clients, the production team and management.
- Competitors: The recommendations help NNS maintain its competitive edge by improving its efficiency, reducing costs, and enhancing the performance of its submarines.
- Attractiveness ' quantitative measures if applicable: While specific financial metrics are not provided in the case study, the recommendations are expected to improve NNS's profitability by reducing costs, improving efficiency, and enhancing its ability to secure future contracts.
- Assumptions: The recommendations assume that NNS has the resources and commitment to implement these changes.
6. Conclusion
By implementing these recommendations, NNS can effectively address the challenges of building two Virginia-Class submarines in 2012. This comprehensive strategy will optimize operations strategy, supply chain management, and innovation to achieve the ambitious goal of delivering two submarines within the tight timeframe while maintaining high quality standards.
7. Discussion
Other alternatives not selected include:
- Outsourcing: NNS could consider outsourcing some of its production activities to reduce workload and increase capacity. However, this could compromise quality control and create logistical challenges.
- Delaying the project: NNS could delay the project to give itself more time to complete the construction. However, this would likely result in penalties and damage NNS's reputation.
Key assumptions of the recommendations include:
- NNS has the resources and commitment to implement these changes.
- The Navy is willing to work with NNS to adjust the project schedule and requirements as needed.
- The global supply chain remains stable and does not experience major disruptions.
8. Next Steps
NNS should implement the recommendations in a phased approach, starting with the most critical areas. A timeline with key milestones could include:
- Phase 1 (Months 1-3): Implement lean manufacturing principles, improve inventory management, and strengthen supplier relationships.
- Phase 2 (Months 4-6): Invest in technology and analytics, including an ERP system and simulation modeling.
- Phase 3 (Months 7-9): Develop and implement innovation programs, including R&D investment and employee innovation initiatives.
- Phase 4 (Months 10-12): Continuously monitor and evaluate the effectiveness of the implemented changes and make adjustments as needed.
By following these steps, NNS can successfully navigate the challenges of building two Virginia-Class submarines in 2012, achieve its ambitious goals, and secure its position as a leading shipbuilding company.
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Case Description
The VIRGINIA-class submarine was one of the largest naval-acquisition projects in history, involving the construction of 30 submarines at an acquisition cost of $93 billion. By FY05, the VIRGINIA-class program was in its 10th year. Construction had begun on seven submarines. Unit costs were running 41% over the base-line budget, and production goals were not being met. Ship construction budget limits necessitated a 20% unit-cost reduction, an unprecedented task on a ship already in serial production. How would the program office achieve that goal and prevent the program from being truncated, the fate of its predecessor the SEAWOLF-class?
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