Supply Chain Progress towards Aeronautical Community Excellence An efficient Supply Chain to meet new global challenges An efficient Supply Chain to meet new global challenges René Colin SPACE Operating Manager

Mai 09 1 Agenda  SPACE organization  SPACE operation and activities  SPACE projects and results  CONCLUSION

Mai 09 2 Organization

Mai 09 Why?

Supply Chain Progress towards Aeronautical Community Excellence Honorary Members Who?

Mai 09 CID Aerospace standards Training Pool of Resources Sharing best practices Improvement projects Benchmark measurement Consultant refering SPACE services at a glance coaching A non profit Association To manage confidentiality And independence In compliance with legal constraints

Mai 09 6 Operations and activities

Mai 09 A service offered by SPACE to the associate member (sub-tier supplier), to develop an action plan, to help this member to improve its efficiency A diagnostic A certification system A rating system … which is not and is developped by “Supply Chain Management Handbook” Supplier Selection and Capability Assessment The Associate members can benefit from support what 7

Mai 09 Four domains assessed: Process People & Organisation Tools & Data Performances Metrics Five levels of maturity Expectation Supplier performance 1: Undefined and not capable 2: Defined and applied, but not 100% efficient or not applied everywhere in the company 3: Defined, applied and effective 4: Predictable 5: Optimised Areas of potential Supplier Development if deemed necessary Concept - publications 8 what

Mai 09 Usual strengths and weaknesses 9 what 1.Lack of strong planning (tier-1 flow down) 2. No flow management 3. Weak supply chain monitoring 4. Non efficient physical organization 5. Limitated preventive actions

Mai 09 No anticipation No realistic schedules 10 what

Mai 09 PRIORITY MANAGEMENT CAPACITY MANAGEMENT Demand Management Capacity Requirements Planning Resources Planning Sales & Operations Planning Master Production Schedule Execution & Control of Operatins Materials Requirements Planning Business Planning Input/Output Control Rough cut Capacity Planning OF OA  No SOP (Sales & Operations Planning) : only short term, no anticipation, no vision  No MPS (Master Production Schedule) : the input for MRP is the customer procurement plan :  nervousness, no realistic plan, so not realised, generates WIP, delays  May contribute up to 30% OTD Planning APICS standards 11 what

Mai 09  No WIP control : in consequence  the WIP is high  The lead time is high  Flow is generally driven by a push system  No level flow on the shop floor  Permits to save 30% of WIP Flow management WIP Finishedproducts Shop Floor Releasedorders MPS MRP Plannedorders = order releasing = Finished orders Pull Sytems 12 what

Mai 09  No formal supplier approval  No strategy for reducing the supplier base  The supplier performance is often measured but not communicated nor used for improvement  Major issue in assembly workcenters Suppliers management Supplier Performance Management 13 what

Mai 09  Layout is generally triggered by process (job shop and not flow shop)  No visual management  Effort to be done on house-keeping (5S)  Lead time can be reduced by 30% Physical flow Lean – TPS (Toyota Production System) standards 14 what

Mai 09  No structured and systematic method for problem solving  Problems are identified and highligted (usually measured)  The metrics are not systematically used to manage and to improve the business  Basics of quality improvement - 5 –Quality – problem solving Quality tools – Problem solving 15 what

Mai PROJECTS and RESULTS

Mai 09 Executive Committee Executive Members Designate representatives Propose suppliers & Provide experts Manages projects Experts Associate Members Operating Manager Push process how it works? 30 rolling projects Supported by the executives’ experts network For the benefit of customers and suppliers

Mai 09 Results - exemples Déc 06 Fev 07 Mar 07 May 07 dec 07 Plan d’action Roadmap ANALYSI S DESIG N Implementation phase Work package 1 Demand management Work package 2 – QA & Lean management Work package 3 – Operational management KOM Work package 4 Suppliers & purchasing COPIL July 07 sep t 07 Follow up phase mar ch 08 nov 07 oct supplier Action Plan Follow up Thales Expert Messier-Bugatti Expert Airbus Expert Thales/Airbus experts Efficient Master Production Schedule MRPII implementation OTD Problem solving methodologies Returns When methodologies support progress AIRBUS awards: Best Improver 2009 Best Performer 2010 AIRBUS awards: Best Improver 2009 Best Performer 2010 OTD SELHA(France) End 2006 End 2007 Variati on End 2008 Variati on Raw materrial inventory NC -11%NC-20% Work In Process NC -24%NC-18% Suppliers critical delays %10+11% Deapth of delay (days)155-66%4-20% Suspended Works orders (shortage) %80-27% OTD64%84%31%90%7% Schedule adherence62%88%42%92%5%

Mai 09 Push process: results after 1 year project After 1 year average 84% Starting average 62% OTD improvement after 1 year +35% Starting average ppm After 1 year average 18700ppm RETURNS improvement after 1 year -41%

Mai 09 Steering Committee Institutions Designate representatives Manages projects Consultants Participants Operating Manager Pull process how it works? 60 rolling projects Supported by the executives’ experts network For the benefit of customers and suppliers

Mai 09 For each supplier a customized industrial improvement project  Diagnostic  Action Plan Implementation supported by 20 days of consulting For each cluster a customized action on the relationship (customer/suppliers) Under the steering of SPACE  Methodology  Referral service  Reporting Collectives activities:  Training  Forums  Benchmark Funding  Région, States, Europe (80%)  SME(20%) Customer FxF1F2F3F4 Customer’s local suppliers Porteur de Projet FxFx F1F1 F2F2 F3F3 F4F4 FxFx F1F1 F2F2 F3F3 F4F4 FxFx F1F1 F2F2 F3F3 F4F4 Aerolean’k: 58 SMEs

Mai 09 Contact in progress In Marocco Aerocaplean ASTech 30 suppliers Two-year project Budget 900k€ Fundings Region/state SPACE sponsor Contact in progress Rhone- Alpes (40 suppliers) Aerolean’k Aerospace valley 58 suppliers Two-year project Budget 1,2M€ Fundings Region/state SPACE leader/consultant Contact in progress bavAIRia Pull deployment : up to100 suppliers end 2011

Mai Development and Conclusion