Copyright © 2007 Boeing. All rights reserved. Collaborative Forecasting Senior Executive Partnership Round Table Ellen Martin Integrated Defense Systems The Boeing Company

Copyright © 2007 Boeing. All rights reserved. Agenda  Supply Chain Complexity  Collaborative Forecasting  Program Examples / Case Studies  Collaboration is key for…readiness

Copyright © 2007 Boeing. All rights reserved. Supply Chain: Complexity  Development  Production  Aftermarket – Field  Aftermarket – Depot  Common Components Customer Relationships RepairReturns Warehousing/ Inventory Mgmt. Transportation Financing/ Order Processing RFP Response & Sourcing Demand Forecasting Supplier Relationships PlanningLogisticsReverse LogisticsRelationships Customer Relationships Integrated Material and Information Management Leveraging the appropriate supply chain to enable readiness

Copyright © 2007 Boeing. All rights reserved. Collaborative Forecasting Definition & Benefits Collaboration across the supply chain to better support the war fighter Improvements: Supportability Availability Forecast accuracy Procurement planning Cost-wise decisions Readiness Collecting data requirements and sharing information from multiple sources to develop the desired solution

Copyright © 2007 Boeing. All rights reserved. C-17 Collaboration

Copyright © 2007 Boeing. All rights reserved. Air Force Bases MRO Locations FMS Locations Boeing Systems C-17 Forecasting Tool Input Data ALC Locations Establish Levels MOB FSL MRO FMS ALC Initiate Spare Buy Orders Ship Spares To Support Levels Suppliers Customer Locations C-17 Collaborative Forecasting Approach C-17 Collaborative Forecasting Approach

Copyright © 2007 Boeing. All rights reserved. C-17 Collaborative “Spares” Forecasting Approach: –Electronically Gather Customer Data (Real Time) –Forecast Levels For Each Customer Location –Establish Levels At Each Customer Location –Procure Spares To Support The Levels –Ship Spares To Fill The Levels At Each Customer Location –Manage Each Customers Location On-hand Inventory To Ensure High Spares Logistics Availability C-17 Collaborative Forecasting Approach C-17 Collaborative Forecasting Approach

Copyright © 2007 Boeing. All rights reserved. F/A-18A-D Hornet F/A-18E/F Super Hornet EA-18G Growler

Copyright © 2007 Boeing. All rights reserved. F/A-18 Collaboration Performance Based Tactical Customer  Real time perturbations of modeled inputs –Deployment, OP Tempo changes –Constant monitoring of Navy maintenance data and usage rates  New requirements –Fleet driven needs –Configuration changes –Modifications and retrofits  Results: rapid changes to material mix to support changing needs Warfighter Readiness From Launch…….. Strategic Customer  Forecast groundrules and assumptions –Retail – Navy sets retail with our participation –Wholesale – Boeing determines to support Navy requirements  Results: Improved material availability – right sized inventories – forward positioning

Copyright © 2007 Boeing. All rights reserved. F/A-18 Collaboration Performance Based Supplier and Government Partnership  Long Term OEM and FRC repair forecast  PBL subcontractor data sharing  Repair material LOB and delivery schedule coordination  Results: Reduced repair cycle times – lower support costs ……. To Recovery 2007 Defense Logistics Award Govt – Industry Partnership 2007 DoD PBL of the Year

Copyright © 2007 Boeing. All rights reserved. F/A-18 Collaboration Traditional Support A thru D Flight Controls  Requirements type contracts managed transactionally  Semi annual “data call” –Navy provides latest asset status (twice a year) –Boeing evaluates impact at all levels –Boeing shares with suppliers  Boeing manages the supply base to projected requirements  Long term agreement mitigates risk on both Results: Reduced production and repair cycle time – predictable, stable costs Mutual trust mitigates risk and accelerates support solutions

Aviall Rolls-Royce T56 Collaboration

T56 Global Planning Conference How it began  Contract between Rolls-Royce and the USAF  Aviall purchased exclusively from Rolls-Royce Participants  DLA  USAF  USN  Contracting Office – OKC  Rolls-Royce  Aviall  Maintenance Depot Key Events  USAF and USN briefs fleet status (as much as allowable)  Maintenance Depot briefs constraints  DLA, USAF, and NAVICP provide field constraints and future demands

Rolls-Royce T56 Case Study Key Challenges for Rolls-Royce  Increasing lead times  Forecasting demand to match US Military consumption and ordering cycles  Optimizing inventory levels at DLA and the depot  Production inefficiencies created by sporadic ordering cycles Solution  Partnered with Aviall in Dec 01 for all aftermarket supply chain management  Aviall to forecast, plan, stock, deploy, and fulfill all aftermarket demand Results  Substantially increased on time delivery performance to US Military  Customer lead times stabilized  Consistent shop demand created production efficiencies

T56 3 rd Party Logistics (3PL) Contracts Rolls-Royce T56 Case Study Rolls-RoyceAVIALL USA USAF USN USCG DLA Commercial Customers Aviall acquires inventory Direct Sales Military Orders Direct Shipments for Military Orders

Recognized for Outstanding Service  Increased Rolls-Royce on-time delivery rate on T56 components from 74.5% to 96.66% after 12 months  Performance highlighted in Winter 04 DCMA Journal  On-time delivery rates as high as 98%  Four years in a row -- highest on-time readiness rating ever – 99.99%  Commended by Kiowa Warrior Program  Elevated USAF T-56 repair to “green” status and sustained it  Reaction of Deputy Division Chief, Airlift Propulsion Division, Tinker AFB: “WOW!!!!!!!!!!!!!....T56-15 is at 166 WRE...an all time high!!!!!!!!!…and the T56-7 is 17 engines above red!!!!!!!!!!!!...both engine programs are GREEN!!...and the T56-15 has been green for a month while the -7 has remained green for years and since 9/11!!! Your team is a shining example of what can be accomplished with a well thought-out plan and professionally executed!!!!!!!!!!” (Mr. Tom Laird, 1/8/04 memo) Rolls-Royce T56 Case Study

 Aircraft Type: KC-135 Maiden Flight: August 1956 Status: Active Service Types/Number Produced: 732 Contract Type: BOA, DVD, PDM  Aircraft Type: B-52 Stratofortress Maiden Flight: April 1952 Status: Active- 85; Reserve: 9 Types/Number Produced: 744 Contract Type: BOA, DVD  Aircraft Type: CH-46 Maiden Flight: August 1962 Status: Active Service Types/Number Produced: 600+ Contract Type: BOA, PBL  Aircraft Type: CH-47 Chinook Maiden Flight: September 1961 Status: Active Service Types/Number Produced: Contract Type: BOA, PBL  Aircraft Type: F-15 Eagle Maiden Flight: July 1972 Status: Active- 567; ANG: 141 Types/Number Produced: (2006) Contract Type: BOA, DVD, LTC  Aircraft Type: F/A-18 Hornet Maiden Flight: November 1978 Status: Active Service Types/Number Produced: Contract Type: BOA, LTC  Aircraft Type: E-3 Sentry Maiden Flight: May 1976 Status: Active Service Types/Number Produced: 68 Contract Type: BOA, DVD  Aircraft Type: E-4 Maiden Flight: June 1973 Status: Active Service Types/Number Produced: 4 Contract Type: BOA, DVD  Aircraft Type: B-1 Lancer Maiden Flight: December 1974 Status: 67 Active; 24 Mothballed Types/Number Produced: B-1A: 4, B-1B: 100 Contract Type: BOA, LTC  Aircraft Type: AV-8 Harrier Maiden Flight: November 1978 Status: Active Service Types/Number Produced: 300+ Contract Type: BOA, PBL  Missile Type: Weapons Types: SLAM-ER, Harpoon, CALCM Contract Type: BOA, DVD  Aircraft Type: KC-10 Maiden Flight: 1981 Status: Active Service Types/Number Produced: 60 Contract Type: CLS  Aircraft Type: E-6 Mercury Maiden Flight: February 1987 Status: Active Service Types/Number Produced: 16 Contract Type: CLS  Aircraft Type: C-17 Globemaster III Maiden Flight: September 1991 Status: Active Service Types/Number Produced: 158 (2006) Contract Type: PBL  Aircraft Type: T-43 Maiden Flight: April 2001 Status: Active- 85; Reserve: 9 Types/Number Produced: 19 Contract Type: CLS  Aircraft Type: T-45 Goshawk Maiden Flight: April 1988 Status: Active Service Types/Number Produced: 170 (2005) Contract Type: BOA  Aircraft Type: C-32 Maiden Flight: June 1998 Status: Active Service Types/Number Produced: 4 Contract Type: CLS  Aircraft Type: C-40 Clipper Maiden Flight: April 2001 Status: Active Service Types/Number Produced: 12 Contract Type: CLS  Aircraft Type: VC-25 Maiden Flight: August 1999 Status: Active Service Types/Number Produced: 2 Contract Type: CLS  Aircraft Type: F-22 Maiden Flight: September 1990 Status: Active Service Types/Number Produced: Active: 91, Planned 183 Contract Type: BOA, PBL  Aircraft Type: V-22 Osprey Maiden Flight: March 1989 Status: Active Service Types/Number Produced: TBD Contract Type: PBL  Aircraft Type: B-2 Spirit Maiden Flight: July 1989 Status: Active Service Types/Number Produced: 21 Contract Type: BOA, DVD  Aircraft Type: Apache Maiden Flight: September 1985 Status: Active Service Types/Number Produced: ~1500 (2006) Contract Type: BOA, PBL  1950  1960  1970  1980  1990  2000  2010  Aircraft Type: F/A-18 Super Hornet Maiden Flight: November 1995 Status: Active Service Types/Number Produced: 300+ (2005) Contract Type: PBL  Aircraft Type: ScanEagle Maiden Flight: April 2002 Status: Active Service Contract Type: PBL … when managing 60 years of technology Collaboration is key…

Copyright © 2007 Boeing. All rights reserved. Readiness…. is our Business

Copyright © 2007 Boeing. All rights reserved. SLM