Collaboration in the Aerospace Supply Chain -Collaboration in the Aerospace Supply Chain - Towards the Extended EnterpriseTowards the Extended Enterprise

Bangor University Bangor University

Wednesday 28Wednesday 28thth March 2012 March 2012

John WhalleyJohn Whalley

Aerospace Wales Forum Ltd.Aerospace Wales Forum Ltd.www.aerospacewalesforum.comwww.aerospacewalesforum.com

Pound for Pound by weight an aero-engine has the same

value as silver

Pound for Pound by weighta motorcar has the same value as

hamburger

Aerospace technology is expensive

Map of Wales and key sitesMap of Wales and key sites

Aerospace Wales ForumAerospace Wales Forum Established 2002Established 2002

150 member companies150 member companies

Representative body for aerospace & defenceRepresentative body for aerospace & defence

National partner in Wales of the UK’s trade association ADS National partner in Wales of the UK’s trade association ADS (Aeronautics, Space, Defence & Security)(Aeronautics, Space, Defence & Security)

Closely linked with other UK regional bodiesClosely linked with other UK regional bodies

Close partnership with Welsh GovernmentClose partnership with Welsh Government Facilitates marketing, international partnering and company Facilitates marketing, international partnering and company

development development

www.aerospacewalesforum.comwww.aerospacewalesforum.com

The Industry – Size & ScopeThe Industry – Size & Scope

£5 billion pa sales ($8US billion)£5 billion pa sales ($8US billion)

Over 160 companiesOver 160 companies

25,000 directly employed25,000 directly employed

Presence of leading companies:Presence of leading companies:- EADS Cassidian, BAE Systems, General Electric, EADS Cassidian, BAE Systems, General Electric,

General Dynamics, Raytheon, Hawker Beechcraft General Dynamics, Raytheon, Hawker Beechcraft & Airbus& Airbus

SC21 – a UK aerospace supply chain initiative

SC21 – launched at the Farnborough International 2006

Brought together a number of streams of development:

– Aerospace innovation and growth team (AeIGT)

– SCRIA

– Lean Aerospace Initiative (LAI)

– DTI initiatives

– SBAC Quality Committee

– Company (industry) supplier development programmes

– Regional Associations and Groups

Why SC21?

• Customers demanding more affordable and innovative solutions

• UK supply chains need to be more competitive

• Primes/OEMs want fewer direct suppliers• UK industry recognition that

transformation/rationalisation is required• Defence Industrial Strategy (DIS)

Why SC21?

• Improvement and competitiveness is dependant upon companies working together to:– Increase efficiency– Remove repetition and duplication– Plan and communicate better

• Earlier in the life-cycle• Longer term – through life

21st century supply chains

• Airbus• Agusta Westland• BAE Systems• Bombardier Aerospace• Cobham• Darchem• Freeman & Proctor• GKN • Goodrich• Lockheed Martin• Marshall Aerospace • Naysmith Group• Rolled Alloys• Rolls-Royce • Selex• Smiths• Thales• Ultra Electronics

• Fundamental business transformation

• Accelerated Change and Continuous Improvement.

• Through life management

• Demonstrating SC21 commitments

• Leadership role

led by who committed to

The commitment• Three key action streams to drive transformation and improvement

– Better supply chain relationships

• Share selection rules based upon through lifecycle costs / affordability

• Supply chain collaboration, sharing best practice and driving innovation

• Use SCRIA code of practice and toolsets to companies and suppliers

– Better supply chain development and performance

• Remove duplication of supply development programmes – achieve 80% commonality

• Develop common metrics (KPIs) – target 80% common

– Reduce auditing through recognition of supply chain accreditation

• Recognise and accept accreditation to AS/EN9100

• Support special processes approval to Nadcap

What is SC21? - SC21 scope

3. relationships:

need for better end-to-end communication and collaborative planning

1.accreditation:

need to remove repetition, and unnecessary duplication

2. development and performance:

need increased efficiency and remove waste

initially SC21 will implement 3 action streams

to drive early transformation and improvement

4.innovati

on

5. through life capability management

Collaboration in Defence – Alliancing – BS11000

MARS – Military Afloat Reach & Sustainability

North West Aerospace Alliance ASCE ProgrammeNorth West Aerospace Alliance ASCE Programme

ASCE ASCE

SupplierSupplierAssociationsAssociations

CommodityCommodityGroupsGroups

SharedSharedServicesServices

ExtendedExtendedEnterpriseEnterprise

Common languageCommon language

Shared objectivesShared objectives

Common strategyCommon strategy

Shared benefitsShared benefits

Work ShareWork Share

ASCE 1ASCE 1

ASCE 2ASCE 2

Common processesCommon processesCommon cultureCommon culture

CompositesCompositesCGCG

Complex Complex MachiningMachining

CGCG

Process Process TreatmentsTreatments

CGCG

Robotics, Robotics, Automation Automation

& Tooling& ToolingCGCG

Design & Design & EngineeringEngineering

CGCG

SME SME MachiningMachining

CGCG

Commodity GroupsCommodity Groups

Autonomous Systems Commodity Grouplaunched in July 2011 and runs parallel with GAMMA

NWAA Extended Enterprise – Current StateNWAA Extended Enterprise – Current State

17

25 -30 year Contract

Contract

Risk sharing

Design to deliver

Financially robust

Multi-materials

Single point responsibility

Manage the supply chain

Required Capabilities

Evolve with project life

No current North West

Candidate

North West Supply Chaindisadvantaged

With no current NW RSP the Supply Chain could be starved of future

work – if we don’t respond!

NWAAExtended Enterprise- Future StateNWAAExtended Enterprise- Future State

(Commodity Groups)

Extended Enterprise

Commodity Groups and Commodity Group companies interact, collaborate and bid collectively

NWAA Extended Enterprise Model

Work Package Bids

1

2

2

1

Extended Enterprise future state - suppliers from a cross sector of Commodity Groups bid collaboratively to provide through life (design and build) capability

1

2

Initial Lead Partner Alliance- Structure looks something like this … …

A Lead

Partner

EndClient

Sub -Partner

2

Sub - . Partner . 1

Sub - Partner 3

Horizontal & VerticalCollaboration

HorizontalCollaboration

Contractual Link

VerticalCollaboration

NWAA as‘honest broker’•selection•open book build up (& auditing on expenditure)•dispute resolution•development

?

The Future?The Future? Aerospace Growth Partnership Aerospace Growth Partnership Continued growth in population and tradeContinued growth in population and trade Growing environmental and resource Growing environmental and resource

pressurespressures ““Limits to Growth”Limits to Growth” Growing opportunities and competitionGrowing opportunities and competition New solutions New solutions A global business built on global teamsA global business built on global teams

Aero 2075 – Flying into a bright future? Aero 2075 – Flying into a bright future?

Thank you for listeningThank you for listening

Any questions?Any questions?www.aerospacewalesforum.comwww.aerospacewalesforum.com