Innovation at CMC Electronics: Challenges and Solutions

Contents Overview of CMC Competitive Environment Products / Solutions Markets Competitive Environment Competitive Challenges Innovation Strategies Conclusions

CMC Overview

CMC’s Product Lines Cockpits Aviation Products Custom Electronics 3

Custom Electronics Custom Electronics Cockpits Aviation Products 4 Displays Specialized Sub-systems Cockpits Microelectronics Aviation Products JSF Apache Custom Electronics A400M 4

Satellite Communications Aviation Products Electronic Flight Bags Enhanced Vision Systems Satellite Communications Antennas FMS/GPS Cockpits Head-Up Displays Global 7000 EC-145 Aviation Products Custom Electronics A310 PC 21 UH-60

CMC’s Cockpits Cockpits Aviation Products Custom Electronics SmartDeck T-6B Cockpits Aviation Products C-130 KT-1 Custom Electronics King Air 350 T-6B

Highly Diversified, Balanced Customer Base — Export Oriented Business by Sector International 35% Military 55% Retrofit 60% Canada 15% United States 50% Commercial 45% OEM 40% Highly Diversified, Balanced Customer Base — Export Oriented 7

Competitive Environment

Satellite Communications Aviation Products Electronic Flight Bags Enhanced Vision Systems Satellite Communications Antennas FMS/GPS Cockpits Head-Up Displays Global 7000 EC-145 Aviation Products Custom Electronics A310 PC 21 UH-60

Competition Broadly diversified Typically large Typically vertically integrated, using their own products Rockwell-Collins Honeywell Thales Elbit GE Garmin

CMC’s Cockpits Cockpits Aviation Products Custom Electronics SmartDeck T-6B Cockpits Aviation Products C-130 KT-1 Custom Electronics King Air 350 T-6B

Competition For transport aircraft retrofits: Aircraft manufacturers: Boeing, Lockheed-Martin Other systems integrators: Rockwell-Collins, Lockheed-Martin, Northop-Grunman Small, local integrators: ASB, DERCO For trainers and light attack Aircraft manufacturers: BAE Integrators and Tier 1: Elbit, IAI General aviation suppliers: Garmin For general aviation forward fit and retrofit Other suppliers: Garmin, Avidyne, IS & S, Honeywell, Rockwell-Collins

Competitive Challenges

Challenges Supporting very diversified product portfolio Keeping a leadership position in diversified markets Competing with large, vertically-integrated, global competitors Managing a multi-site organization

Innovation Strategies

Multiple Strategies Needed – Why? Need for ideas How to get the differentiators? How to understand the operational environment of our products? How to trigger new ideas and turn them into marketable solutions Need for funding How to do more with less investment? Need for the right Highly Qualified Personnel How to get, develop and maintain the required personnel? Need for strong supply-chain How to get the right partners/suppliers? How to flow down innovation down to suppliers? How to flow up innovation from suppliers? How to create innovative partners?

Multiple Strategies Needed Leveraging customer funding Because of the niche markets and some customization, CMC is able to get customer funding Leading to a zig-zag product evolution; generally consistent with product roadmap, but addressing very specific customer requirements Good source of product differentiation due to closeness to key customer needs

Multiple Strategies Needed Maximizing re-use Developing solutions for multiple applications Forcing solutions with commonality and design for multiple applications Challenging with to do concurrently with a customer-funded strategy

Multiple Strategies Needed Pre-competitive collaboration Working with different partners towards complementary goals Access typically to unknown approaches or needs

Sourcing CMC does not have the complete solution Acquiring innovation as part of supply agreements Selecting innovative companies as partners in systems solutions « Risk-sharing »; we invest, they invest

Multiple Strategies Needed Research and Innovation Consortia Member of the Consortium for Research and Innovation in Québec (CRIAQ) from the beginning Founding member of GARDN Member of SA2GE Project: IMA for Cockpit Applications Support the development of technologies from Technology Readiness Levels 1 to 6 Connects to the university researchers Allows access to a different network Allows access to future employees

Multiple Strategies Needed Standards Committees Attend committees of key emerging standards, create and promote new ideas, or at the very least influence them GPS/SBAS(RTCA) Cockpits (ARINC) NextGen/SESAR

Multiple Strategies Needed Leveraging Technologies Technology watch and technology roadmaps Integration of technologies yield different levels of innovation A simple new technology added to a product can expand its life New touchscreen to an old display, wireless connection, etc Importing technologies from other fields – aerospace is NOT where Electronics evolve Military infrared sensors led to Enhanced Vision Systems sold in Business Aviation Ethernet led to AFDX network used on A380

Multiple Strategies Needed Processes and Culture SCRUM / Agile Software Development Rapid Prototyping: hardware and software

Conclusion

Conclusion Innovation is key to survival and growth with our diversified markets and products Multiple innovation strategies operating in parallel are essential Strategies need to cover all Technology Readiness Levels, and reach beyond our industry