Raytheon Gets Tracking

A materials management application originally developed for a single business unit has taken off like a missile at the $18 billion defense contractor.

In the late 1990s, Raytheon Co.'s Network Centric Systems (NCS) business unit in North Texas migrated to a new mainframe system that didn't include a materials tracking program. The result was pure bedlam.

"A lot of stuff got lost, and we had no way to find it other than to go and look for it, and that could be a 15-minute or a 15-day process," says Vince Hrenak, vice president of supply chain at Raytheon. "We used to have multiple people sitting by the phones to take the calls asking where parts were."

NCS formed a cross-functional team to search for a remedy. It evaluated at least a half-dozen software packages as well as proposals solicited from commercial systems integrators before ultimately deciding to develop its own system. McKinney, Texas-based NCS had "a lot of specific business rules wrapped around custom processes," explains Rob Vettor, senior business technologist and chief architect of the new MTrak system.

"What we wanted to gain was the advantage of avoiding software costs plus having a customized solution to our unique business problems," says Gene Feighny, MTrak's lead software engineer.

Now, a little more than two and a half years later, what began as a pilot project at NCS has blossomed into an enterprisewide supply chain application that supports 13 Raytheon sites and serves more than 20,000 users. And with cost savings directly attributed to MTrak totaling $8.6 million, other Raytheon sites are lining up to get MTrak. MTrak will eventually be deployed to 45,000 employees and is expected to cut costs by another $17 million. The $18 billion defense contractor projects total savings of $26 million over four years. "This is a rare victory, in my experience," says Hrenak.

Unlocking the Data

From the start, MTrak's developers had ambitious goals: Build a system that would provide visibility to all materials such as resistors, capacitors and customized computer chips from the time of order through receiving, testing, placement in inventory and final use in a military field radio, handheld motion sensor or some other Raytheon product. The system also had to be accessible to every person in the company via a Web browser. "It was something we were missing and something in which we saw great value," says Feighny.

The team released Version 1.0 after little more than a year. It enabled workers to use bar code scanners to collect data from incoming packages and to create an electronic record of every movement a package made after its arrival at the loading dock. This information was accessible to all employees via the Web.

Next came one of the team's biggest challenges. Much of the additional supply chain data, including quality, testing and financial information that it wanted to present to users at their desktops, was locked away in mainframe applications.

The team first attempted to build a screen-scraping application that would pull out necessary mainframe data when triggered by a Web-based user who entered a purchase order or part number. But the behind-the-scenes process took too long and was too complex.

So the team evaluated three packaged middleware applications to do the same job. "We took our ugliest mainframe screens and asked the vendors to return the mainframe data to a Web page," recalls Vettor.

The first vendor gave up after eight days. The second accomplished the task in four days. The third vendor, Seattle-based WRQ Inc., got the job done in half a day. So Raytheon purchased WRQ's Verastream integration software, which uses database-style queries to access mainframe data and then filter it so that only the requested data elements are returned to the Web page. "It makes calling the mainframe look like a SQL call," Vettor says.

Building the Services

Once mainframe data could be accessed and delivered to the Web-based application, the team began building XML-based Web services using Microsoft Corp.'s .Net tools. These were written after what developers describe as an extremely thorough and painstaking review of the business processes surrounding NCS's supply chain.

"From the very beginning, Rob [Vettor] and I were in the plant, walking from drop zone to drop zone, mapping out the process so we could see how it worked to develop the system," says Michele Ellison, an industrial engineer on the development team.

They used Raytheon's integrated process-development system, a structured systems-development methodology based on Six Sigma principles and methods developed by the Newtown Square, Pa.-based Project Management Institute.

A four-member team developed MTrak 1.0 and subsequent versions using a highly iterative process that involved end users at every step.

"We were very careful about always putting out prototypes and working models," Vettor says. "When we had a screen idea, we put it out [to the user community] right away and asked for feedback. I don't think the customer was ever surprised. They were involved in making the decisions, and they got what they wanted."

MTrak's service-oriented architecture works to keep the system costs low because it guarantees reusability by other applications, says Vettor.

Indeed, one of the main advantages of developing the system in-house was that Raytheon avoided all licensing issues and costs, says Larry Thompson, application software manager. The team opted to develop the software using .Net, he says, "because we had a history with Microsoft development tools. It fit our internal skills base better [than J2EE]."

Running MTrak

Today, NCS employees scan information into MTrak from about 300 incoming packages a day, either using a bar code reader or a workstation in one of the warehouse's drop zones. Raytheon sites in Florida are piloting wireless radio frequency identification tags and scanners, which will provide real-time access to MTrak data. The devices will be deployed companywide by early 2005. A package is scanned each time it makes a stop—for inspection or testing, placement in inventory, or removal from inventory for use by manufacturing. That process includes recording data about the package, its contents, who handled it, who scanned it and the time and date. That information is uploaded about every 10 to 15 minutes from the scanners and bar-code units to two mirrored database servers running SQL Server 2000. Data from wireless scanners is immediately fed into the database.

At high-volume sites, someone does a scan every four seconds and a search every 52 seconds, on average. In addition to package-tracking data, users can access financial and other supply chain data from Raytheon mainframes using the same Web-based desktop, thanks to the WRQ tool and the XML-based Web services that the team built.

"Whenever we created an interface to any other system, such as a warehouse automation system, as a key feed to MTrak, we wanted to build it as a Web service so any other application could use it," explains Feighny. "These are kept on a UDDI server, and any developer within Raytheon will have accessibility to that. In the long run, it will save the company money from a development standpoint because we have one service that can be used by any application—not just MTrak."

In the past month, the system recorded 32,000 scans at NCS alone. "This ability to trace materials means we're better able to control our inventories, and that's a very clear savings," notes Hrenak.

On a broader scale, the visibility MTrak provides to Raytheon users enables the company to offer its customers "a higher level of confidence and commitment," says Tim Wholey, vice president of enterprise supply chain management.

"MTrak allows us very precise visibility, which is critical," especially when delivering to the military, says Wholey. "We might have a specific product like a high-end microwave assembly that is being shipped to Afghanistan or Iraq. We need to respond to them so they know when they can expect parts for a system that has failed in the field," he says. "We have people waiting for products and spare parts that their lives depend on."

Next Step: SAP

As usage of MTrak continues to grow, company officials envision it as an ideal, user-friendly bridge to SAP AG's enterprise resource planning software, which Raytheon plans to deploy worldwide beginning in 2006.

"Going forward, we envision MTrak as a way to standardize data across business units and throughout the entire company. We have this common system to grow, and it will ease our transition to SAP," says Feighny.

"There might also be an opportunity to front-end certain parts of SAP via MTrak," Vettor says. "Sometimes [ERP] software interfaces are rigid, and MTrak could be the way to have a friendly interface going up against SAP."

Raytheon plans to migrate away from DOS- and Windows-based handheld scanning devices in favor of Hewlett-Packard Pocket PCs. In the meantime, there's no question that MTrak has gone above and beyond its initial mission of creating order from chaos.

"We don't lose material anymore," says Mark Ward, manager of supply chain logistics. Before MTrak, he says, "a large part of my job used to be having other managers call me and tell me, 'You lost this or that.' It's been a year now since anyone has called me to say they can't find material."

Raytheon's MTrak Rollout
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Copyright © 2004 IDG Communications, Inc.

  
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