Letterkenny Army Depot: The Army Teaches Business a Lesson in Lean Six Sigma

Abstract

Letterkenny Army Depot: The Army Teaches Business a Lesson in Lean Six Sigma is a case study of Letterkenny Army Depot, one of five Army maintenance depots. Letterkenny recapitalizes missiles, HMMWV's, generators, and other equipment for the United States Army. Recapitalizing equipment means completely disassembling the system, cleaning and/or replacing every component, subcomponent and part, and reassembling and testing the equipment. Col. William Guinn was assigned as depot commander in July 2002 only to find the depot was in deep financial and operational trouble. Letterkenny had experienced an operating loss of $31 million on revenues of $120 million, work flows that were dysfunctional and inefficient, the highest hourly wage rates among all the depots, and an infrastructure that was badly in need of repair. Additionally, the depot faced possible closing by the Base Realignment and Closure (BRAC) Commission in 2005. This case documents Col. Guinn’s Lean Six Sigma deployment at Letterkenny Army Depot from 2002 to 2005. Using the principles and tools of Lean, Letterkenny’s commander, senior leaders, managers, and employees successfully transformed the depot from the Army’s worst to its best performing depot in terms of productivity and cost efficiency. Three years after the depot’s Lean journey began, the 2005 BRAC Commission not only recommended keeping Letterkenny open, but also assigned it additional programs. In the same year, Letterkenny won the public sector Shingo Prize for applying Lean to its Patriot Missile recapitalization program.