Aerospace Manufacturing Transfer Systems

Transcription

1 Aerospace Manufacturing Transfer Systems Wipro Thought Leadership WIPRO TECHNOLOGIES

2 Table of Contents Aerospace Industry Aerospace Manufacturing Outsourcing 06 Aerospace Manufacturing Transfers Process 10 Transition Management Platform 12 Appendix

3 USD Billion % E 2010E 2011E 2012E 2013E Projected Global Market Defence Market1 Aerospace Market1 1.0 Aerospace Industry Global Aerospace and Defence Market has reached a value of USD Billion in 2008 and reports forecast that this figure would go up to USD 910 billion in 2013 based on a year on year increase of 6.17%. Within the aerospace and defence market the defence market accounts for almost 70% of the market value. Aerospace is a highly globalized industry since customers are geographically dispersed (airlines, governments) and have similar product needs and are able to look globally for suppliers who can meet their needs Industry Structure Within the aerospace industry players broadly include airframe manufacturers, engine manufacturers, system manufacturers (avionics, air management systems, control systems etc), components manufacturers (castings, harnesses, transformers, machined parts etc.) The global commercial aerospace market has few prime contractors who manufacture aircrafts and engines. There are numerous small and medium sized firms who supply components and subsystems. Typically the aerospace value chain is characterized by engine manufacturers and system suppliers firms who are in exclusive supplier contracts with aircraft manufacturers. Earlier these life contracts were not provided to component manufacturers as the prime contractors would want to retain the opportunity to reduce costs later. However with increasing globalization the risk sharing ability and supply chain capabilities have increased as a result the system manufacturers are outsourcing more and more of the subsystem value chain since they want to shorten development time by increased focus on higher value added portion. Buyers have a great deal of bargaining power and airlines or even countries can combine orders and ask for concession from the prime contractors. Since the switching cost for the buyer of airplanes is low the buyer power in the market place is increased. Interestingly, sub component manufacturers who have carved a niche for themselves have the best margins in the value chain. 1.2 Product Life cycle The lead times in aircraft manufacturing are typically very long. According to Boeing, building a commercial jet aircraft takes about a year on an average. Since aerospace industry is very design intensive, on an average an OEM takes about five years to design a completely new model. The tooling requirements are very critical and can be almost one third to two thirds of the total development costs. The recurring cost thereafter for the aerospace companies comprises of maintenance costs including tool replacement. The life cycle of a typical commercial aircraft spans about 30 years. 1.3 Key Trends in Aerospace Industry Trend #1: Globalization of Aerospace Manufacturing: It is estimated that the amount of manufacturing outsourcing in the aerospace industry is close to about 80% of the airplane. EADS sourced aircraft components worth USD 43 Billion from various parts of the globe. They use European suppliers and do the final assembly in France. Bombardier uses North American suppliers and does the final assembly in Montreal. 1

4 Value chain of Aerospace Industry and Competitive position of value chain partners (Source: Zinnov Analysis) Component Manufacturers Subsystem Manufacturers Engine manufacturers Airframe Manufacturers Airlines Capacity Demand Control Competition/Market Absorption Competition/Market Absorption Survival Increasingly OEMs like Boeing, EADS think of themselves as large scale system integrators rather than airplane manufacturers. Trend #2: Global Product Development: Product designing is becoming a globally collaborative activity as a result of increasing pressures for design improvement. The time to market is also reduced drastically by shifting the design process closer to the potential markets and the production facilities. Boeing for example often just provides suppliers with an engineering drawing and the stated component price. The suppliers are then allowed to alter the design to meet the price point and the new designs are shared online with the OEMs for virtual testing and approval. Thus the aftermarket services are being pushed back to the suppliers since the OEMs increasingly understand that this is not their core competence. The services technologies are also becoming increasingly advanced which means that a specialist in this area would be able to manage this area much more competently. Trend #5: Offset Conditions: Governments are increasingly applying off set conditions on the procurement of aircrafts and defence items from various suppliers. For example, Boeing 787 is being built by a consortium of local companies including the likes of Mitsubishi to fulfill Japanese government orders. Trend #3: Technical Specialization: Airplanes have got increasingly complex and it is not expected that a single company would have the technical expertise to meet the myriad requirements. For example, specialized systems like mechatronics which require the integration of automation controls, hydraulics, computer systems are required by pilots to fly. Consequently OEMs are dependent on suppliers like Collins and Hughes that specialize in such systems to meet these technological requirements. Trend #4: Shift of (Maintenance Repair and Overhaul) MRO Base: Compared to the s when US carriers used to manage more than 80% of their aircraft maintenance inhouse; the current comparable figure is closer to 20%. Given the thin operating margins of the airliners this trend for cost cutting is expected to continue. 2

5 Landing Gear 4% Interior 6% Empennage 3% USD Billion E 2010E 2011E Global Manufacturing Outsourcing(Low) Global Manufacturing Outsourcing(High) 2012E 2013E Engine 26% Systems 14% Avionics 11% Airframe 37% Wing 15% Fuse lage 19% Project Global Outsourcing Market 2.0 Aerospace Manufacturing Outsourcing As a result of the trends discussed in the last section a large part of the aero space manufacturing is being outsourced and it is estimated that almost 140 Billion USD of aerospace manufacturing was outsourced in Aerospace manufacturing is complex and involves production of various parts requiring different technical competency. The value of various components also varies substantially. The decision to source various parts to different locations has to take into account the technical complexity of the part and the degree of globalization (Logistics involved in getting final product to the market) An analysis of various parts of the aerospace parts family reveals various interesting patterns in geographical dispersion of aerospace manufacturing. Aerospace manufacturing that has low technical complexity is typically outsourced to low cost destinations that are away from the OEM. However with increasing competency of suppliers even high end and critical parts are slowly being outsourced to locations like India and China. 2.1 Trends in Outsourcing A cross industries (including aerospace) survey of Chief Procurement Officers and related financial officials reveals various reasons cited for outsourcing an activity. The survey revealed that manufacturing and operations were areas where the companies were contemplating the greatest growth in outsourcing. Value of component as % age of total aircraft value Clearly across industries common themes for outsourcing include cost reduction (89% of respondents), ability to focus on core business (81% of respondents) and increased speed to market (46% of respondents). Despite the need to remain competitive by outsourcing activities including manufacturing, there were certain key concerns which limited the outsourcing of an activity. The most critical reasons for not out sourcing include loss of control (72% of respondents). However this concern can be addressed through adequate systems in place supported by an information technology back bone which provided transparency and governance. Similar a technology transfer platform and careful selection of outsourcing partner and country can mitigate the concerns around intellectual property protection (68% of respondents). Expectedly with the increase in electronic connectivity and collaborative support and tools the concerns around physical distance is much reduced (only 17% of the respondents). 2.2 Manufacturing Outsourcing in Aerospace Industry The aerospace industry is neither fully integrated nor fully modular in structure. The nature of the supply chain in the aerospace industry varies greatly according to the component. They would be at different stages depending on whether we speak of engines, frames or sub-systems. Ability to collaborate remotely has driven the modular approach and has significantly increased the globalization of aerospace supply chains. 3

6 Major Systems Technological Complexity DS/SX Inv Castings(turbines) Assembly, Aero stucture, Fuselage Low US/Europe Japan Sub-Systems Electrical Systems Degree of Globalization Medium Korea Singapore Composites Electronics Component Design Metal Bending High China,India,Malaysia, East Europe, Thailand Increase speed to market 46% Increase flexibility and responsiveness 60% Gain access to technology not in company 60% Focus on Core business Reduced capital investments Reduced operating costs Reasons Cited for Outsourcing an Activity 81% 81% 89% Aerospace customers are able to look for the best deal that they can get across the world. The resulting pricing pressures on OEMs result in companies having to source their product in the most cost competitive manner without compromising the high quality and compliance needs of the industry. The cost driver for globalization is the most significant one since the cost of product development is very high and these costs need to be amortized across the various markets around the globe. The industry is characterized by high level of exports and competitors are present all across the globe. A 2008 survey of Aerospace and Defence companies reveals that customer pressures (including cost and product life cycle management needs) are the most critical factor that influenced the decision to competitively out source instead of relying on a sole supplier (High driver for 43% of the respondents). The survey reveals the competitiveness of the market as the second most dominant factor with 36% of the respondents revealing it to be high driver for them Trends in Aerospace sourcing decisions The surveyed Aerospace firms were asked to select criteria that they thought was most important partner capability across the value chain of aerospace manufacturing. 85% of the respondents selected technical expertise as the most important supplier capability. In the production process of the value chain, technical and process expertise were found to be critical capabilities for the A&D companies to select a partner. Management of production processes and technology is a critical area for this industry and hence the need for a platform which ensures that the process and technological transfers are carried out in a systematic manner and monitored carefully. The ability to meet the stringent aerospace compliance requirements are a critical need for the A&D companies. Compliance management across the aerospace value chain including new product development, production and delivery remains a critical area and clear documentation management PARTNER CAPABILITIES Technical Expertise Process Expertise Resources Information Tech Risk Sharing Innovation /NPD Demand Generation Sourcing Make Delivery Return Lifecycle The areas of innovation and new product development was found to be most critical which indicates the need for technology transfer platforms to enable product life cycle management across a globally dispersed supplier base. Product Lifecycle Management solutions allows companies to collaborate remotely with their supplier on various designrelated issues. Compliance Access to Markets Political Influence Critical Not Critical 4

7 Previous lack of success with outsourcing Physical Distance 11% 17% Concern-dependency on Supplier Inadequate business case 38% 42% Company Policy 53% Protection of intellectual Property 68% Activities not outsourced are Core Loss of Control 72% 72% Reasons Cited for not Outsourcing an Activity Competitive Market Intensity 36% 21% Supplier Pressure(e.g. volume, cost, quality) 14% 36% Customer Pressure (e.g. cost pressure, changing.) 43% 21% Avalibility of substitute products 29% 43% Ease of Market Entry from Competitor 14% 57% High Driver Medium Driver Drivers for Global Competitive Sourcing systems which allow tracking of product parts are needed. The ability to tap the market by developing supplier base in the target market also proves to be an important consideration in selection of supplier. This is possibly due to the offset clause in many large aerospace and defence deals. Since the buyer power is substantial in this market, buyers often dictate that certain amount of production is carried out in the home nation. The survey reveals that technology development and strategic alignment are the key threshold criteria that the supplier must meet. Other criteria become important once these threshold criteria are met. Interestingly the Information technology capabilities of supplier are not the core requirement areas for the A&D firms to select or reject a supplier. approach of Original Equipment Manufacturers in the Aerospace and defence industry is to outsource substantial amount of the value chain to third party suppliers and structure all the agreements in a standardized manner using Service Level Agreement (SLAs). As discussed earlier the value and complexity of various parts that go into an airplane assembly is variable, hence a standardized arrangement with various suppliers can lead to sub optimization of the value chain. Information Technology Solutions can allow simplified transactions processing between OEMs and their suppliers. The strategic alignment of suppliers can be enabled through IT solutions which allow greater collaboration between various stake holders across critical areas including process technology, compliance management, engineering design transfers Integrated Supply Chain The need of the aerospace industry is to develop an integrated value chain which is aligned to the OEM's current business strategy in the existing business environment. Thus supplier performance management becomes a key competency for the firm. The relationship of the Original Equipment manufacturer (OEM) with the supplier can be strategic or transactional. A transactional relationship would not be very reactive to the changing need of the OEMs and would only assure reliability of transaction. Strategic Alignment Compatibile Culture Transaction Processing Information Systems Technology Development Operating Processes Forecasting and Planning 29% 29% 38% 7% 7% 7% 14% 14% 29% 14% 29% 14% 43% 7% 21% 14% 14% Strategic alignment with supplier firms result in greater information sharing, technology enablement and increased need for clear communication and collaboration. The typical Most Important Second Most Important Third-most Important Top Three Partner/Supplier Intergration Requirements 5

8 %age of Respondents falling short of Outsourcing Goals 15% Gain Access to Market -31% 22% Increase Flexibility and responsiveness -29% 19% Increase Speed to Market -21% 25% Improve Quality -32% 25% Reduced Devlopment Cost -13% 26% Reduced Operating Cost -19% 30% Reduced Capital Investments -9% -40% -30% -20% -10% 0% 10% 20% 30% 40% Exceed 3.0 Aerospace Manufacturing Transfers Process Given the trends in global aerospace manufacturing and technology transfers, there is a new set of management challenges for aerospace companies. While the need for outsourcing is clearly understood the transitioning of manufacturing from one location to another is a high complex process especially in a highly regulated industry like aerospace. The survey of Chief Procurement Officers reveals that many firms fail to meet their outsourcing targets in areas like Quality, increased flexibility and responsiveness and cost targets. Many of these shortfalls are due to the inherent complexity of moving product manufacturing capabilities to offshore locations. However the reliability of transfers can be improved through having systems in place to manage the entire complex process of manufacturing transfer. Firms often under estimate the complexity involved in transitioning of manufacturing which as a rule would always be more complex than it first seems. Project management is critical in managing the transition process however the budgets and schedules that are allocated for the transition process need to be flexible. 3.1 Transfer Process It has been observed that the transfer process can be clearly divided into three phases and each present unique challenges and risks which can be reduced through following systematic transfer management practices within organizations. Transferring of manufacturing is a complex project and requires good project management skills to execute well and derive expected benefits. Fall Short While the broad challenges for most aerospace manufacturing transfers are similar it is not possible to have a one size fit all solution for transfer since the value and technological complexities of each component vary significantly. The interviews with OEMs reveal that improving the reliability of transfers was a key concern along with reduction of transfer time and the approach of this paper is to divide the entire transition process into the three critical phases and then subdivide the same into sub processes which have to be carried out in each phase. The figure above aims at capturing the criticality of the various sub processes in relation to the entire transfer project. Once the decision to outsource is made the transition process should be carried out at the earliest since the opportunity cost of savings lost keep increasing with a long drawn transition process. The time taken in a typical transition process from the point the decision to transfer is made (Phase 2 onwards) is 1 year. This varies as per the size and complexity of transfer. The number of people involved in the transfer project could be as low as 3-4 to over 10 people from each the supplier and the OEM side. In some cases, it is not unusual to see external consultants being brought into the transition process for specific technical or management requirements Phase 1: Strategic Planning and Scenario Analysis Business Case for Transfer The high level decision to outsource is typically driven by cost and the need to focus on core competency of the firm. The offset clause is an additional driver in the aerospace domain 6

9 1 2 Strategic Planning and Scenario Analysis Supplier Selection and Relationship 3 Implementation and evaluation Business Case for Transfer Supplier/Location Qualification Scheduling Process Criticality in Aerospace Manufacturing Transfers Fitness to transfer Request for Proposal(RFQ) Data Transition Scenario Planning and Testing RFQ Evaluation First Article Production Standardized Critical Important Very Critical Prodcut Selection Contract Management Project Evaluation which often dictates the need for off shoring particular items in the value chain. Regardless of the out sourcing driver the business case for the same needs to be very clear at the top management levels. This has to be based on objective measures. Fitness for Transfer Frameworks for managing transitions include deciding the fit between the capabilities of the potential transferring and the receiving sites. For example unless the manufacturing processes and knowledge used by the transferring site is documented and transferred the receiving site may not be able to meet process and quality requirements. Often the transferring site has tacitly held skills in areas like tooling, problem solving which are people centric and hence not documented. The fitness for transfer assessment has to be carried out which evaluates multiple factors including the home fitness to transmit, technology fitness for transfer and host fitness to receive. Typically the transition process is people driven and there are project managers who have the transition knowhow and shoulder the responsibility. OEMs rarely have the knowledge codified in the form of set processes which can be relied on and repeated consistently over multiple transfers. Evaluating the fitness of the host to receive the transfer is a large part of the second phase of the transfer process, however even at the strategic level the fitness of the host country and the OEMs understanding of the local conditions and dependencies is critical to managing a successful transfer. Scenario Planning and Analysis Scenario planning has to be carried out to ensure that the risks and hidden costs that are part of the decision to outsource are adequately balanced by the potential benefits of outsourcing. For example incorrect analysis could lead to unnecessary outsourcing to a location where the lower labor costs are offset by higher freight costs. Also in case of quality risk, losses in case of product failure in terms of replacement and reputation costs could negate the savings of outsourcing. Scenario analysis has to be carried out to test the effects on business in case of various changes in the supply chain. Information Technology systems allow modeling of various evolving macroeconomic situations and its impact on the supply chain. Since Aerospace OEMs are moving towards an i n t e g r a t e d s u p p l y c h a i n t h e i m p a c t o f failure/underperformance of one supplier on the entire supply chain has to be evaluated. Product Selection: The selection of which product to outsource should take into consideration the competitive price pressures on the product in a market as well as the stage of product lifecycle. In case of joint product development along with the supplier the supplier capability and the need for technology transfer has to be factored into the decision making process. The savings on the product have to be calculated over the useful life of the product Phase 2: Supplier Selection and Relationship Supplier/Location Qualification: Companies looking at benefiting from outsourcing need to have a clearly thought out and transparent method of supplier selection. The first decision to be made is whether to single source or use competitive multi sourcing. 7

10 The suppliers need to undergo a qualification process which ensures that the performance expectations are met. There have been cases in the high technology manufacturing industry that contract manufacturers have not been able to meet capacity and resource requirements after being awarded contracts. This situation can be negated by proper due diligence including plan tours and detailed audits, prior to contract. RFQ Evaluation Using standard templates across suppliers will help speed up and ensure fair evaluation of the suppliers. Sensitivity analysis has to be performed for variations in product demand and costs. The final decision to outsource should be made only by a cross functional team which reduces bias towards selected suppliers. This also ensures that all the factors are taken into account. Thereafter the selection of suppliers can be done through various mechanisms including competitive bidding, reverse auctions, or direct negotiations. The selected mechanism should take into account the total cost of using the supplier and not just the per unit purchase price. Most existing suppliers to aerospace OEMs like Boeing are periodically evaluated and rated using a predetermined performance matrix. The existing ratings of suppliers would play a role in their bid for new sourcing contracts. The extent and speed at which the transfer can take place would depend a great deal on whether the supplier is pre-qualified (existing contracts). The size of contract would also take into account the current turnover of the firm as well as its ability to scale up. Request for Proposal (RFQ): Decision making can be speed up by careful planning at the RFQ stage. The information requested should be clear and facilitate objective responses. If the supplier has to come back and forth for clarifications this will slow down the transfer process substantially hence increase the costs associated with the same. The response templates should aim at capturing all the relevant product and fixed costs including freight, taxes, duties, tooling etc Phase 3: Implementation and Evaluation Scheduling The transferring and the receiving firms should jointly develop a high level schedule for pilot and production build schedules and equipment and technology transfers to support those builds. The time requirements to complete first article production and meeting product qualification and compliance requirements should be kept realistic. A phased approach whereby the number of products transferred is increased gradually allows the new sources to learn the products and manufacturing processes and overcome challenges. The grouping of products can be as per commonality of materials, processes, or test equipment used. The time frame for a prototype development in aerospace is typically 6 months depending on the part in question. Scheduling should allow for some flexibility for undesired outcomes like failure of pilot build. Managing Data Transition The key success criterion for the success or failure of any manufacturing transition is the accuracy of data transferred to the new location. This includes documenting and creating a knowledge database of the existing processes and technology from the transferring site. Collaborative systems between transferring and receiving sites are critical to ensure 8

11 smooth transition. The engineering changes have to be synchronous across both sites. The initially transferred bill of material (BOM), production data have to stay synchronized with the source data and also incorporate any subsequent changes. There have been instances during transfers that the changes in BOM and production data have been corrected by the original site but not been updated at the source data. This would render the synchronization of receiving site with the original transferring site invalid and could result in rework and wastage. Documentation that were developed at the original site including written procedures and visual aids used on the assembly line and these need to be transitioned to the new source. Failure to do this can significantly increase the time for first build. Electronic transfers are quicker and allow for quick customization to meet the needs of the receiving site. Actual designs have to be transitioned to the offshore site and the design would have to be reviewed by both parties. Equipment Transfer In the aerospace industry the tooling and equipment requirements are very high and the logistics to move such equipment across continents can be particularly complex and unpredictable. The time taken to transport, clear national procedures (customs etc) and finally commission the equipment in new location can vary greatly and can throw transition schedules in disarray. that it is being built correctly. The first article built has to go not only through the standard quality tests but also through additional testing. The ramping up of operations from the first article production to full demand capacity could thereafter take 6 months or more depending on the performance of the supplier. Performance Evaluation Aerospace projects have become increasingly complex and involve collaboration with multiple partners. There is a need to have a clear matrix which determines how various partners would be evaluated. The nine nations development of Joint Strike Fighter (JSF) F- 35 (USD 25 Billion) is a case in point. The performance matrix measures three critical supplier metric Supply delay time, Maintenance Delay time, and Uptime, over the JSF development and product lifecycle. At the initial stage the suppliers are provided with key qualitative evaluation criteria to evaluate their individual performance. With maturity in product development cycle stage the qualitative criteria are replaced by quantitative ones. A clear performance evaluation methodology allows each partner in such a large collaborative project measure its success or shortfalls and hence addresses the same. First Article Production The first article production is an important phase in the transition process and each new product being transitioned has to go through the pilot and qualification process to ensure 9

12 1 2 3 Strategic Plannging and Scenario Analysis Supplier Selection and Relationship Implementation and evaluation Business Case for Transfer Supplier / Location Qualification Scheduling Clear business case for procurement outsourcing Strategic Alignment of sourcing strategy with business goals Select Supplier whose business philosophy are aligned with your firm Prefer suppliers proven track record Measures to track the performance of both the outsourcing team and outsource partner would ensure that accountability is shared Good collaboration is critical across the transfer process Fitness to Transfer Request for Proposal (RFQ) Data Transition Evaluate source Fitness to transfer and suppliers fitness to receive Provide a clear template wich capture all relevant information A transition strategy and detailed plan has to ensure the transition of all the critical information from the original site. Scenario Planning and Testing RFQ Evaluation Firt Article Production Evaluate source Fitness to transfer and suppliers fitness to receive Provide a clear template which capture all relevant information Rigorous testing of first article to ensure that it meets compliance/ quality requirements Production Selection Contract Management Project Evaluation Ensure that the total cost of product over its usefull life cycle is taken into account Establish clear roles, responsibilities, and measurements to track current and future productivity Effective change management policies and procedures have to be in place Clear communication of the scope of the work, performance expectations, governance model, and project plan is a critical succuss criteria 4.0 Transition Management Platform 4.1 Manufacturing Transition Best Practices Best practices can be mapped across the transition value chain. These best practices have evolved over multiple transfers in various industries including aerospace. 4.2 Wipro's Manufacturing Transfer System (MTS) Manufacturing Transfer System (MTS) is a transition management platform that maximizes reliability of transition while lowering transition costs and shrinking time schedules. The solution is aimed at Aerospace OEMs and Tier 1 companies. MTS enables Manufacturing, Engineering Design, Technology Transfer, Testing Transfer and MRO Outsourcing transitions. The platform enhances reliability by incorporating standardized business processes, lean techniques, effective risk management, transition cost tracking and optimization and supporting regulatory standards. The solution provides aero specific domain templates and checklists for transition planning, supplier selection & development which include features like Compliance to Aerospace compliance standards like AS 9100 rev c and AS9102 Collaboration Tools for effective transition Role based Transition Dashboard Approval Workflows Analytical and Reporting features Integration with ERP, PLM systems etc Comprehensive risk assessment tools Tools for lean transition planning The interviews of various stakeholders in the aerospace manufacturing industry reveal the importance of such features to support the transition process. The solution features have been mapped across the transfer process flow. The extent to which an information system like MTS can support the transfer process has been evaluated across the manufacturing transfer management phases introduced earlier in the paper. Strategic Planning and Scenario Analysis At the strategic level the business case for transfer can be evaluated through comparison to various strategies including Intra-Company Transfer (Make-to-Make), Outsourcing (Make-to-Buy, Buy-to-Buy), In sourcing (Buy-to-Make). The fitness to transfer can be greatly enhanced through having a repository of knowledge which can be referred to over multiple transfers, hence increase the organisation skill at transferring. Critical decision support tools which allow scenario testing, critical path analysis would help make good objective business decisions at this stage. Supplier Selection and Relationship The solution can help achieve collaboration between Suppliers, OEMs, Airliners, Sub suppliers and Logistics through features like live Meeting Integrated, Video Recording and Playback. Management of the RFQ process and the critical vendor evaluation can be made more systematic and transparent. Implementation and Evaluation The greatest value of the MTS is transition project management framework that it provides. It makes easily 10

13 1 2 3 Strategic Planning and Scenario Analysis Supplier Selection and Relationship Implementation and evaluation Business Case for Transfer Sourcing Strategy Intra Company Transfer Outsourcing Globalization In-sourcing Fitness to Transfer Online Best Practices Repository/ Knowledge Management Scenario Planning and Testing Transfer Scenario based Business process and workflow Product Selection Decision Support System Critical Path Analysis Any Time BOM comparison Supplier/ Location Qualification Collaboration Live Meeting integrated video Recording and Playback Request for Proposal (RFQ) Transition Project Management RFQ Evaluation Decision Support System Supplier Scorecard Contract Management Contract Management and IP Export enforcement Scheduling Transition Risk Management Failure Modes and Effects Analysis Multi-Level Scheduling Program management Stakeholder Roles/ Access Data Transition Transition Project Cost Mangement: Planning and tracking of complex multi track transition First Article Production Compliance Management Check list/ Forms Templates/ Guidelines Project Evaluation Dash Board for KPI of various stakeholders Value of Manufacturing Transition solution (MTS) in enabling Transfer Processes low Value Medium High Value Very High Value available features like transitions project cost management, multi-level scheduling, program management, key performance indicators for all stakeholders, role-based information access. These project management features makes it much easier to plan and track complex multi-track transitions project. Transfer Scenario based business processes & workflows increases productivity & efficiency of transition. Risk management features like Failure Modes and Effects Analysis (FMEA) and constant tracking of transitions with alerts and Early Failure Warnings greatly increase the reliability of the transfer. Since aerospace is a highly regulated industry the management of rigorous compliance and audit mandates is made fail safe through out-of-the-box aerospace specific checklists, templates, guidelines and forms. This ensure zero compromise on airworthiness, safety and security of critical systems, platforms and data, hence 100% compliance to standards. 11

14 Appendix Datamonitor's Aerospace and Defence: Global Industry Guide 2008 Outsourcing Strategically for Sustainable Competitive Advantage AT Kearney Report A.T. Kearney and Aviation Week survey of Aerospace and Defence (2008) Manufacturing Mobility: Learning from International Manufacturing Transfers - Professor M Gregory Dr. David Pritchard University at Buffalo: Globalization of Commercial Aircraft Manufacturing Frost & Sullivan research The Proliferation of Aircraft Maintenance Outsourcing in the United States Case: 3Com Corporation - Damian Kieran Director of Customer Operations and Distribution Zinnov interviews with Aerospace and Defence OEMs, Suppliers, Solution Providers, Researchers, Analyst Market Sizing Modeler 12

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