Preferred Suppliers Selection

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Dorcas McLaughlin
10 years ago
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1 Preferred Suppliers Selection E.Carcanague, CPO Zodiac Data Systems 1

2 Operational Excellence Operational Excellence is the result of huge efforts done internally in our organization and in our processes, following basic Kaizen principles. This lean approach applied in our Business Units leads to On Time / On Quality and cost decrease to our Customers' satisfaction. Continuous improvement culture with our supply base, has definitively been the base of our last 3 years We decided to launch the selection called Preferred Supplier. 2

This lean approach applied in our Business Units leads to On Time / On Quality and cost decrease to our Customers'

3 Operational Excellence Selection of best in class suppliers who have business performances with Zodiac Aircraft Systems Will be part of our future for the coming years. This Preferred Supplier status will indeed allow you to get more benefits working closely with our Business units : follow up business meetings, and increase markets growth. We encourage you to perform and drive towards operational excellence, so that you can be part of our future for a common profitable growth. 3

This Preferred Supplier status will indeed allow you to get more benefits working closely with our Business units :

4 Operational Excellence and Preferred Supplier s Selection The Preferred Supplier s program is a selection of global suppliers, always among the Best in Class, to whom Zodiac Aircraft Systems offers a maximum of opportunities 4

selection of global suppliers, always among the Best in

5 Operational Excellence and Preferred Supplier s Selection Strict criteria are determined for each classification. Each supplier is classified according to the strategy validated at Zodiac Aircraft Systems level Check your classification with your current buyer, and move towards Preferred 5

Each supplier is classified according to the strategy validated at

6 Zodiac Aircraft Systems : Benefits Expected Benefits for Zodiac Aircraft Systems Best in Class Suppliers for Operational Excellence with the extended supplychain Cost reduction, SOTD, SNCR, VLD, Certification Focus resources on selected suppliers Supplier reduction Quarterly Business Meetings at the management level Optimization of our global presence, including our CCC operations Dedicated Leadbuyers and SD experts Long run of relationship based on : Business Development and Performance results Long Term Agreements Transparency and Innovation 6

Quarterly Business Meetings at the management level Optimization of our global presence, including our CCC operations Dedicated

7 Zodiac Aircraft Systems Commitments Main Commitments from Zodiac Aircraft Systems to the Preferred Suppliers Business Growth priority RFI/RFQ Priority, awarding new programs and resourcing at equivalent performances. Provide access to Strategic Markets and business developments Provide LTAs to protect our business for a common profitable growth Quarterly Business reviews at Zodiac Aircraft Segment level (Leadbuyer) Provide Privileged Access to our Lean and SD expertise. Confidentiality of information, especially regarding the End-Customers intrusion about performances. 7

Provide access to Strategic Markets and business developments Provide LTAs to protect our business for a common profitable growth Quarterly

8 Preferred Supplier : Benefits Exclusive Preferred Supplier Value Package Zodiac Aerospace s Customer value, as a world leader in aerospace Gain volumes and market growth through New programs and Re-sourcing Benefit from Zodiac Aircraft Systems continuous improvement approach Zodiac Aircraft Systems support for operational performances Supplier Performance Management Partnership in whole Zodiac Aircraft Systems activities Access to 25 Business activities Worldwide opportunities Opportunity to participate in Zodiac Aircraft Systems innovation roadmap 8

Zodiac Aircraft Systems support for operational performances Supplier Performance Management Partnership in whole Zodiac Aircraft Systems

9 Preferred Supplier Commitments Main Commitments linked to the Preferred Supplier Value Package Best in Class in operational performances Provide value and business solutions for the strategic commodities Zodiac Aircraft Systems considered as a Key Customer Achieve performances to meet Customer Satisfaction Management meetings Supplier Development plans and evaluations Continuous improvement and certifications Support Zodiac Aircraft Systems with its USD, CCC, and offset policy Support Zodiac Aircraft s innovation through design review, co-development Guarantee confidentiality about business and information transmitted 9

Management meetings Supplier Development plans and evaluations Continuous improvement and certifications Support Zodiac Aircraft Systems with its USD, CCC,

10 Preferred Supplier s & Classification effort Business Growth focus on P Selection, Supplier Reduction effect FY16 Classification update in Progress. Strategic suppliers Strategic suppliers FY 14 Total Spend 410 M 2700 Classified Suppliers FY 15 Total Spend 502 M 2010 Classified Suppliers 10

11 Survey Voice of Suppliers Eric Carcanague, ZDS 11

12 Voice of Suppliers Survey : Supply Chain relationship between your company and Zodiac Aircraft Systems Knowing our suppliers is clearly a key to successful long term relationships. We are rolling out a specific survey inviting ours suppliers to provide valuable feedback 12

a key to successful long term relationships.

13 Voice of Suppliers : Survey Rolled out in July 2015, the survey has invited 130 suppliers. 47% of replies receiveytd 5 Main Topics Business Development Purchasing Policy Operational Performances Relationship Open suggestions Deadline : September 30th,

47% of replies receiveytd 5 Main Topics Business Development Purchasing

14 Survey previews Purchasing Policy of Zodiac Aircraft Systems Do you clearly understand the Purchasing Policy of Zodiac Aircraft Systems? Yes certainly 75% A new communication is necessary 23% Not at all 2% About 75 % of Suppliers advised understand our Purchasing Policy About 25 % need a refresh After this event, we expect that 100% of suppliers will understand our purchasing policy 14

Yes certainly 75% A new communication is necessary 23% Not at all 2% About 75 % of Suppliers

15 Survey previews Business Growth with Zodiac Aircraft Systems What was your growth with Zodiac Aircraft System over the last 3 years? Strong decrease ( >10% ) 3% Decrease (-2% to -10%) 7% Stable (+ / -1%) 26% Increase ( + 2% to -10%) 31% Srong increase (>10%) 33% About 30 % of Suppliers have grown by over 10% in the last 3 years About 60 % of Suppliers have grown by over 2% This is the positive result of our Preferred purchasing policy 15

Strong decrease ( >10% ) 3% Decrease (-2% to -10%) 7% Stable (+ / -1%) 26% Increase ( + 2% to -10%) 31% Srong

16 Survey previews Relationship with Zodiac Aircraft Systems How do you see your relationship with Zodiac Aircraft Systems BUs? Partnership 45% Agreement 34% Cooperative 21% Conflicting 0% Other 0% Good relationship with our Suppliers and no conflict situation This is the positive result of our Preferred purchasing policy 16

Partnership 45% Agreement 34% Cooperative 21% Conflicting 0% Other 0% Good

17 Survey previews Relationship with Zodiac Aircraft Systems Do you receive your performance measured by Zodiac Aircraft Systems? You receive an automatic scorecard according to a schedule fixed with your correspondents 86% You receive your scorecard in a random way 10% You receive your scorecard on request 2% You never receive a scorecard 2% 17 Please rate our main operational KPI s? Shared and and analysed in collaborative way 50% Unsterdood and shared with your teams 30% communicated 16% No understandable and not shared 4% communication shared regarding KPI s

You receive your scorecard on request 2% You never receive a scorecard 2% 17 Please rate our main operational KPI s?

18 Survey previews Main Comments from Suppliers Business Communication, Supplier Day Contract Management Supplier Development action Performances Reviews Forecast and Scorecards distribution Forecast reliability More performance reviews Air Supply implementation Visibility of new project and programs for cooperation Monitoring of tiers-2 or tiers-3 often qualified or imposed by ZA 18

distribution Forecast reliability More performance reviews Air Supply implementation Visibility

19 Next Step Survey Supply Chain relationship 100% Completion by attendees Deadline : 30 September 2015 Results will be presented during the next supplier event, including our actions plan. Thank you in advance for your cooperation 19

Results will be presented during the next supplier event,

Customer-Supplier Partnerships. Presented by: Sherry R. Gordon, President Value Chain Group LLC

Customer-Supplier Partnerships Presented by: Sherry R. Gordon, President Value Chain Group LLC 4/10/2015 Agenda The business case for customersupplier partnerships Are you ready to partner? The business