Frank Bamford, Development and Strategy & Chris Evans, European Commodity Manager GKN

Transcription

1 Frank Bamford, Senior Vice President, Business Development and Strategy & Chris Evans, European Commodity Manager GKN

2 Supply Chain Providers-What Is Your Differentiation? Frank Bamford SVP Business Development & Strategy February 2011

3 GKN Aerospace 2010 Market Business Mix Sector Customer Base

4 GKN Aerospace Sector Split Integrated Aerostructures Propulsion Systems Special Products 65% 25% 10% Focussed business sector groups Coordinated Customer approaches Common Technology plan Based on 2009 Revenues

5 GKN Growing a Global Aerospace First Tier $400M UK Based AWIATOR II VITAL SAMULET Acoustic $2.5Bn Global First Tier EFFICOMP ELF1 ELF2 ALCAS NGCW A400M Spars Integrated WingMicrowave Curing Civil Focus NGCWAutomation Civil Military Balance Build To Print Aerostructures Investing In Technology, Collaboration, and Partnerships Risk Sharing Design and Build Partner Aerostructure, Engines and Canopies

6 Drivers For Opportunity and Growth Conventional Aircraft Power Sources More Electric Aircraft Concept 79 % = Single Aisle Source - International Air Transport Association

7 A Global Environment With A Competitive Appetite Low cost countries with growing aerospace industries [examples] Snecma Morocco Engine Services Matis Aerospace (J/V Royal Air Maroc, Boeing and Labinal : manufacture of electrical cables) Pratt & Whitney investment in WSK Rzeszow (manufacturing engine parts) and has its own subsidiary Kalisz for production Engine repair and overhaul JV with Malaysia Airlines and AirAsia MRO facility for APUs Malaysia Government objective to become global supplier for aerospace by 2015 Initial focus on MRO services, composites and avionics Significant FDI from western aerospace industry Mexico Locations for manufacture and low value-add engineering services established by: GKN Aerospace Goodrich Gulfstream Honeywell Labinal Parker Hannifin PCC Rockwell Collins Mechanical parts Sikorsky is to outsource part of manufacturing activities in Czech Republic Latecoere Group acquired Letov Letecka Yroba (LLY) will invest EUR12.2 m investment over 5 years to modernise production EADS cooperating with LLY as well Mechanical parts Boeing established a partnership with Aero Vodochody JV facility established for component manufacture Indonesia Strong government support to reestablish Indonesian Aerospace (formerly IPTN) Partnerships with CASA and Eurocopter Developing MRO capabilities

8 2010 Budget Spend ( M) The Importance Of Suppliers to GKN Aerospace Other 7% G3 - Glass & Glazing 2% F6 - Forming - Metal 2% Indirect 20% M1 - Machining from supplier Material 30% S7 - Subcontract 3% F3 - Fasteners 3% T1 - Titanium 4% F1 - Fabrications (inc. Rims) 4% A2 - Aircraft Subassemblies 4% A7 - Aluminium 5% F5 - Forgings 6% C5 - Composites 10% Budgeted Spend in Excess of 800M Per Year

9 The Journey to Intelligent Procurement Commodity Management Supplier Consolidation Partner Environment Integrated Supply Tactical Supply Tier 2 Fully Optimised Supply Chain Historically Leveraged pricing Medium term contracts Competitive selection Earlier engagement Phase 1 Global contracts Preferred suppliers Supplier BOM alignment Supplier rationalisation Phase 2 Partner relationships Long term agreements Lean development Lean deployment Intelligent Procurement Future Full partner engagement Risk sharing D&B Lead supplier cascades Value stream integration

10 GKN Aerospace Supply Chain Development Launched At Farnborough 2010 Diagnostic Tools C.I. Plans Relationship Management Extended Value Stream Maps C.I. Techniques Training Recognition Commodity Management Supplier Consolidation Partner Environment Integrated Supply Current Phase 1 Phase 2 Phase 3

11 So What Are Our Supply Chain Partnership Expectations To work with strategic partners who : Share our strategic vision Invest alongside us Become an extension of our Enterprise Have common technology / capability plans Work together to reduce cost Share the benefits

12 Summary GKN Aerospace strategic focus has been to create a global First Tier provider GKN Aerospace has established a position as a technology and engineering innovator through investment and risk sharing The future outlook is strong but the pressures will be greater Customers continue to expect greater value and service. Consolidation continues to drive the need for single points of deliver GKN is striving to reduce the transactions it has to undertake with its customers and supplier The challenge we all face is innovation and differentiation What can you do that meets these criteria

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