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?

The U.S. Navy Aircraft Intermediate Maintenance Depot (AIMD) Lemoore Power Plants Division (F404 engine maintenance) was a real mess. Not-Ready-For-Issue parts were everywhere. Division through-put was poor (35 engines and 190 modules awaiting maintenance), there were 30 F/A-18 aircraft with bare firewalls (no engines), the maintenance crews were working 12-hour days, manning was at 61% of authorized levels, reenlistment rates were an abysmal 50%, and crew morale was lousy. And more parts and engines arrived in daily. The Officer-in-Charge of the Aircraft Intermediate Maintenance Detachment decided to use Lean manufacturing to tackle the challenge. It would be the first application of the Lean concept to Naval Aviation.