February 5, 2004

Ann Arbor, Michigan – February 5, 2004 - Altarum Institute and its Enterprise Solutions Division today announced that the United States Air Force Materiel Command (AFMC) has selected Altarum to lead the effort to transform the AFMC maintenance, repair and overhaul (MRO) operations into a “lean enterprise” and make the Air Force Air Logistics Centers (ALCs) self-sufficient in lean practices. This delivery order effort, beginning in January 2004, has a ceiling of five million dollars, and has two options years.

The AFMC is charged with developing, acquiring and sustaining the technologies, weapons systems and support services that are needed to assure that the US Air Force has mission capable air and space forces. The ALCs have primary responsibility for the effective MRO operations of USAF weapons systems and major reparable spare parts.

The “lean enterprise” concept, first developed by the auto industry, comprises a number of proven industrial and quality engineering tools and techniques to reduce production cycle times, the cost of doing business as well as improving both the product quality and the quality and consistency of product service. Lean enterprise methodologies are increasingly utilized by the U.S. Government to increase effectiveness, improve efficiency, eliminate waste and, ultimately, save taxpayer dollars.

The nonprofit Altarum Institute’s Supply Chain Engineering practice area will lead a team to allow AFMC to become self-sufficient in the use of lean techniques, tools and training to transform depot maintenance MRO.

Joining the Altarum team are Harbour and Associates/Whitehall of Troy MI, a leader in automotive lean practices; IBM Business Consulting Services of Fairfax VA, well known for its change management and lean consulting services; and the Michigan Manufacturing Technology Center of Plymouth MI, an established leader in delivering lean education and training. Altarum, with its experience in bringing commercial “best practices” to the government sector, will provide the overall vision, lean training methods and approach, enterprise integration and management of the AFMC program.

Upon completion of this contract, significant portions of AFMC will be self-sufficient in continuing lean improvements in its full range of MRO and supporting administrative operations.

Ken Baker, Altarum’s President and Chief Executive Officer expressed his conviction that, with this award, Altarum has begun to cement its reputation as an objective, technically-grounded nonprofit that is ideally situated to facilitate and manage process and cultural transformation in major government enterprises. Altarum is already supporting major Defense Transformation efforts for the Army, Navy, Air Force, and Defense Logistics Agency.

“In a word, we are ‘thrilled,’” said Baker. “We have not only been recognized by the Air Force for the talent and objectivity we bring to this critical effort, but we have also been recognized by some of the best “Lean Thinkers” in the world – and that is why they have joined our team.”

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