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  • Jeb Lyne

A few thoughts on tackling A&D Production Challenges (Part 4 – Management Operating System)

Wrapping Up Tackling A&D Production Challenges

This article concludes my four-part series on tackling Aerospace & Defense (A&D) production challenges and dives into the most important shortage you rarely hear discussed—a well-executed management operating system. While material shortages, labor gaps, and infrastructure limitations are critical and get most of the press, it’s the behaviors driven and enabled by the operating system that ultimately matter.

If you missed them (or want to refer to them), links to the preceding three articles are at the end of this article.

The Management Operating System – Setting the Business Cadence

A&D manufacturers must navigate a minefield. Each shortage—whether material, labor, or infrastructure—creates dissonance across the production ecosystem, potentially leading to catastrophe. However, the management operating system promotes a coordinated navigation, helping leaders identify and address perturbations before they disrupt quality, delivery, and efficiency.

The below graphic illustrates key information and decision flows of a basic management operating system. Visual Boards, etc. For the purposes of this article, we’ll explore three “flows” that are key to driving the behaviors that enable a successful production system.

Note: The graphic represents only key information and decision flows in a management operating system and excludes the elements that are included in a typical system like Leader Standard Work (LSW) and Layered Process Audits (LPA).

Three Key Flows Driving Successful Operating Systems

1. Expectations Flow

Corporate goals cascade down, filtering through programs, engineering centers, and plants. Expectations reach work centers and design teams, defining what each person and level must accomplish. Expectations are often communicated using tools like Hoshin Kanri (sometimes called Policy Deployment), SIOP (Sales, Inventory, and Operations Planning), and MPS (Master Production Schedule) and, when done well, always have metrics associated with them. Example metrics include net operating profit (NOP), labor efficiency, yield, cycle time, schedule attainment, and quality escapes.

2. Results Flow

Results flow upward. Aggregated data on deliverables such as items shipped, validated designs, purchase orders, and their variance from cost, quality, and delivery targets are reported. Shareholders and employees care deeply about the company’s performance. In the A&D industry, customers also closely monitor metrics due to the limited customer and supply base. Systemic struggles within a single A&D company can reverberate throughout the industry.

3. Escalations Flow

Bad news doesn’t improve with age. Escalations—alerts signaling issues—originate in places such as on the production floor, within material management, or in test labs. When an individual can’t address an issue within their authority, proper escalation becomes crucial. Timely routing to the right person promotes resolution. Neglecting escalations risks work stoppages, costly surprises, and production / program / development disruptions.

Optimizing Flow in Your Operating System

To optimize the flows driven by your operating system, you need to assess your current processes by answering these three questions:

  1. Are your expectations, reporting processes, and escalation processes documented and aligned with the requirements of your customers, shareholders, regulatory and legal bodies, and employees?

  2. Are these expectations and processes well-known and understood throughout your organization?

  3. How do you ensure that these processes are consistently executed and meet their targets?

Based on your answers, you may need to undertake a four-step culture change effort that includes documentation, training, coaching, and validation to improve your operating system's flow.


The production system in the A&D industry is more than a collection of machinery; it's a complex and intricate system. Addressing materials, labor, and infrastructure shortages is a key first step but long-term solving will only happen when you optimize your manufacturing operating system.

Join the Dialogue!

Share your insights: How have you successfully improved or implemented a management operating system in your organization and how did you know you needed to do it? What challenges did you face? How did you know it was on track to work right?

Also, don't forget to read Parts 1 through 3 of this series:

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