Executive Overview Arshad Hafeez, Industry-Managed Program Director Integrating NADCAP Core Values into Special Process Supplier Management September 25, 2002

PRI Origins SAE Standards PRI AUTO QPMC AERO OFF- HIGHWAY NADCAP ISO/QS REGISTRAR ORIGINS Affiliation with SAE (Society of Automotive Engineers)

Performance Review Institute’s (PRI’s) History  : Development of NADCAP at SAE  July 1990: PRI incorporated as a Not-For-Profit Trade Association. Launch NADCAP for Aerospace  November 1995: PRI accredited by RAB (Registrar Accreditation Board)\March 1996: PRI accredited by RvA (Raad voor Accreditatie)  July 2000: Roll-out of NADCAP Europe, Derby England  July 2002: Roll-out of eAuditNet, Derby, England meeting

NADCAP Members NADCAP Northrop Grumman Integrated Systems The Boeing Company DCMA Fiatavio, Italy Lockheed Martin MTU Aero Engines, Germany Pratt & Whitney, Canada Pratt & Whitney, East Hartford Raytheon/Beechcraft Sikorsky Aircraft Cessna Aircraft Company GSA NASA Air Force, WPAFB GE Aircraft Engines Hamilton Sundstrand Honeywell Rolls-Royce Corporation Rolls-Royce plc, England Vought Aircraft

Industry-Managed Active Customer Audits/Certs

Globalization of Special Process Americas System – NADCAP NADCAP Roll-out in Europe 2000 Asia Audits in 2001

NADCAP Programs  Special Processes – Nondestructive Testing – Materials Testing – Heat Treating – Coatings – Chemical Processing – Welding – Nonconventional Machining & Surface Enhancement  Systems & Products – Distributors – Sealants – AQS (AS9000, AS9100, AC7004) – Fluid Distribution Standards – Elastomer Seals  Under Development – Composites Fabrication & Adhesive Bonding

PRI/NADCAP Organizational Structure PRI Board of Directors Policy

PRI Board of Directors Purpose: Financial, legal, resources, leadership  Elizabeth (Liz) Otis  VP & General Manager  Boeing, FAB Division  Fred (Dick) Pocock  Vice President Quality Assurance  Honeywell  Michael J. Dreikorn  Vice President Quality Assurance  Pratt & Whitney  Peter G. Dersley  Group Director, Reliability & Quality  GM Motors Corp.  Jean-Louis Douliery  VP Procurement Quality & Supplier Dev.  Airbus  Raymond A. Morris  Executive Vice President  SAE  Joseph Cullen  Director, Quality  Rolls-Royce plc  Christopher Hayes  Director Of Material Quality & Technical Services  Northrop Grumman  Jean Senecal  Manager Supply Chain Quality  GE Aircraft Engines

PRI/NADCAP Organizational Structure PRI Board of Directors NADCAP Executive Strategic Planning Board (NESPB) Policy Strategic

NESPB Scope/Purpose Provides strategic direction for the optimization of NADCAP by integrating it into the fabric of the Aerospace and Defense Industries. The NADCAP Executive Strategic Planning Board has specific responsibility for the following: a.Support task groups by providing technical experts b.Develop strategies and vision for the NADCAP process c.Promote the use of NADCAP internally (quality, engineering & procurement) for prime contractors involvement d.Launch of New Task Groups - Provide resources and direction e.Be the affordability advocate for all constituencies f.Continuous Improvement - Assist NADCAP Management Council to improve the NADCAP process.

NESPB NADCAP Executive Strategic Planning Board  Sydney Pope  Director, Contract Technical Operations  Defense Logistics Agency  Deborah True  Quality Director  Rolls-Royce Corporation  Jay Park  Sector Manager, Supplier Process Mgmt.  Northrop Grumman Corp.  Bryan Blunt  Director, Quality  Cessna Aircraft Company  Lee Tait  Director of Quality Assurance  Lockheed Martin Aeronautics  Michael Song  Director, Field Operations, Procurement QA  Boeing Commercial Airplanes Group  Paul Jennings, Co-Chair  Manager Supplier Quality  Rolls-Royce, plc  Mike Buffington  Manager, Sourcing Quality  GEAE Aircraft Engine Supply Chain  Chet Daté  Corporate Director Supplier Quality & Dev.  Honeywell International  Lloyd Barker  Director Corporate Quality Assurance  Alcoa Corporation  Doug Scussell  Manager, Quality & Standards Labs  Pratt & Whitney  Michael Spencer  Mgr. Materiel Quality Eng. & Product Acceptance  Vought Aircraft

PRI/NADCAP Organizational Structure PRI Board of Directors NADCAP Management Council (NMC) NADCAP Executive Strategic Planning Board (NESPB) Policy Strategic Tactical

NADCAP Management Council Scope/Purpose a.Oversight - Oversee the operation of NADCAP from a customer/ government perspective b. Self-Governance - Appoint ad hoc audit teams to monitor NADCAP operations c.Policies & Procedures - Insure implementation and adherence to policies d. Task Group Coordination & Development - Horizontal integration to reduce variability e.Appeals - Rectify appeals of unresolved issues f.Continuous Improvement - Continually identify, develop and deploy improvement to the processes of NADCAP.

NADCAP Management Council  Arne Logan, Chairperson  The Boeing Company  Peter Angiola  DCMA  John Barrett  GEAE Aircraft Engines  Peter Krutoholow  Sikorsky Aircraft  Chet Daté  Honeywell International  David Dierking  Lockheed Martin, Sunnyvale  Mehmet Doner  Rolls-Royce Corporation  Gayle Roland  Lockheed Martin, Ft. Worth  Jay Park  Northrop Grumman Integrated Systems  Tom Downes  Hamilton Sundstrand  John Ewing  Raytheon Aircraft  Alan Fletcher  Air Force, WPAFB  Teresa O’Leary  CESSNA Aircraft Company  John McBrien  General Services Admin.  Manfred Podlech  MTU Aero Engines  Dianna Carlson  Pratt & Whitney  Arne Logan  The Boeing Company  Michael Spencer  Vought Aircraft

PRI/NADCAP Organizational Structure PRI Board of Directors NADCAP Management Council (NMC) NADCAP Executive Strategic Planning Board (NESPB) Administrative Staff Supplier Support Committee Policy Strategic Tactical Technical Task Groups Special Processes Nondestructive Testing Materials Testing Heat Treating Coatings Chemical Processing Welding NCM/Shot Peening Systems & Products Distributors Sealants AQS (AS9000, AS9100, AC7004) Fluid Distribution Systems

NADCAP Audit Review Process 1. Supplier2. Request Audit 3. PRI Audit Scheduled 4. Auditor Assigned 9. Issue Cert 8. Task Group * Approval PRI Technical Staff Review 5. Audit Complete d 6.7. * Users/Primes

Audit Standard & Checklist Industry experts manage all key steps IndustryManaged

Audit Standards/Criteria vs. Product Specifications Process Audit Criteria (AC) –Elements/Areas to be audited requirements are in SAE standards (e.g., AS9100). Audit criteria are checklist to the Aerospace Standards. Aerospace Standards are agreed to by Industry. Product/Process Specifications –Usually customer or Mil-Specs. General requirements (best practices) in Aerospace Standards.

Standards Audit/Criteria

NADCAP Special Process Commodities t NDT (AS7114) t Heat Treating (AS7102) t Materials Testing (AS7101) t Chemical Processing (AS7108) t Coatings (AS7109) t Welding (AS7110)

Audit Standard & Checklist Auditor Qualification & Selection Industry experts manage all key steps IndustryManaged

Auditor Selection/Interview/Performance

Number of Current Auditors & Experience

Number of Current Auditors & Experience (continued)

Audit Standard & Checklist Auditor Qualification & Selection Audits Conducted Industry experts manage all key steps IndustryManaged

Audit Process t PRI Schedules the Audit –Sends Checklists and Preparation Instructions –Request for Self-Audit t Auditor Conducts the Audit –Pre-Audit and Post-Audit Interviews –Requests responses to Findings within 14 calendar days t Auditor Prepares Letter t Audit Reports are Sent Overnight to PRI Staff for Staff Review

Audit Content t Quality Systems t Special Process Specific Requirements t Compliance/Job Audits –NDT: 2 Compliance Jobs per Method –Heat Treating: 2 Long Jobs-8 Short Jobs –Materials Lab: Witnessing of All Test Methods –Chemical Processing: Four Job Audits –Coatings: 5 Job Audits (Based on Scope) –Welding: 2 Job Audits per Method

Audit Standard & Checklist Auditor Qualification & Selection Audit Results Audits Conducted Corrective Actions As Required Industry experts manage all key steps IndustryManaged

Audit Report Review (Auditor Letter, Audit Report, Attachments, Non-Conformances, Job Audits)

NCR Classifications Major Nonconformance: Any nonconformance that could: - adversely affect safety as related to products, persons or property; - impact the usability of a product, performance of a service, or the integrity of the quality system; - significantly increase product cost; - potentially affect the ability to meet the customer’s requirements. Examples: incorrect process parameters, missing inspections or processing steps, failure to record required data, missed or out-of-tolerance calibration; - result from failure to implement a corrective action from the previous audit. Minor Nonconformance: Any non-systemic, isolated nonconformance that does not: - adversely affect the usability of a product, performance of a service, or the integrity of the quality system; - affect any product or process output. Example: paperwork oversights, minor changes to procedures for clarification.

Frequency of Audits

Audit Standard & Checklist Auditor Qualification & Selection Audit Results Audits Conducted Corrective Actions As Required Process Evaluation/ Improvement Industry experts manage all key steps IndustryManaged

NADCAP Continuous Improvement

Range of Total Findings Over Audit History Heat Treating (14 Audits) Findings 1.Job Audits (lack of shop discipline, self audits not effective, customer flowdown) 2.Quality Planning 3.Metallography/Microhardness 4.System Accuracy Tests 5.Temperature Uniformity Surveys 1.Job Audits (lack of shop discipline, self audits not effective, customer flowdown) 2.Temperature Uniformity Surveys 3.System Accuracy Tests 4.Quality Planning 1.Job Audits (lack of shop discipline, self audits not effective, customer flowdown) 2.Vacuum Furnaces

Range of Major Findings Over Audit History Heat Treating (14 Audits) Findings 1.Job Audits (lack of shop discipline, self audits not effective, customer flowdown) 2.Quality Planning 3.System Accuracy Tests 4.Temperature Uniformity Surveys 1. Job Audits (lack of shop discipline, self audits not effective, customer flowdown) 2.Temperature Uniformity Surveys 3.System Accuracy Tests 1.Job Audits (lack of shop discipline, self audits not effective, customer flowdown)

Supplier Advisories Sources: PRI Auditors/Staff, OEMs/Primes/Government, Suppliers, Publications (GIDEP, etc.)

eAuditNet.com t Phase I: On-line Qualified Manufacturers Listing (QML) - Completed 11/29/01 t Phase II: Audit Report Completion/Processing/Review t Phase III: Scheduling, Contact Manager t Phase IV: QPL, IPT, Other Programs Estimated Completion Date for Phase II-IV July 2002

Liability

Supplement with PRI Responsible for the “process” - Industry Standards - Procedure - Oversight - Core Values PRI/NADCAP Central Information Network “OSCAR” Central Information Network “OSCAR” Agreements - Auditors - Suppliers - Users Early Warnings NADCAP-Wide Early Warnings NADCAP-Wide Reduce Risk Reduce Escapes Supplier Responsiveness Consistency in Training Supplier Conformity Users/Primes “LIABILITY” does not shift Users/Primes “LIABILITY” does not shift

NADCAP Task Groups t Scopes

Non Destructive Testing t Liquid Penetrant t Magnetic Particle t Ultrasonics t Radiography

Heat Treating t Alloy Families: Aluminum, Beryllium/Copper, Copper, Cast Irons, Nickel and Cobalt, Magnesium, Stainless/pH Stainless Steels, Steels, Titanium t Processes: Carburizing, Nitriding, Carbo- Nitriding, Hardening & Tempering,Ferritic Nitrocarburizing, Ion Nitriding, Vacuum Heat Treating, Vacuum Oil Quenching, Induction Hardening, Furnace Brazing, Dip Brazing, Induction Brazing, Hot Forming/Hot Sizing, Flame Hardening, Cryogenic Treatments, Die Quenching, Hipping t Testing (In-Support of Heat Treatment): Metallography, Hardness, and Tensile Testing (Room-Temperature)

Materials Testing Laboratories t Chemical Laboratories t Mechanical Laboratories t Metallography and Microhardness t Hardness t Corrosion and Oxidation t Mechanical Test Specimen Preparation t Differential Thermal Analysis t Heat Treating of Specimens t Fastener Testing

Chemical Processing t Plating t Anodizing t Conversion/Phosphate Coatings t Paints and Solid Film Lubricants t Other Processes: Passivation, TitaniumCleaning/Etching, Brush Plating, Chemical Milling, Etching

Coatings t Thermal Spray t Vapor Deposition t Cementation t Stripping t Coating Evaluation t Plating of Coated Parts

Welding t Torch/Induction Brazing t Flash Welding t Electron Beam Welding t Resistance Welding t Fusion Welding t Laser Welding t Friction/Inertia Welding t Diffusion Welding t Percussion Stud Welding t Foundry In-Process Welding of Castings t Gas Tungsten Arc Fusion Spot