Session 1 The Human Element – People, Process & Environment

1. Session 1The Human Element – People, Process & Environment Chris Collins March 26, 2007

2. Supplier Surveillance & Oversight • Buyer Expedite • Premium Freight • Purchase Order Revisions SUPPLIERS • Surveillance & Oversight • ICAT, NAR, JMST, M-SERB • Internal Audit • Findings, Recommendations, CARs • Source Inspection • Receiving Inspection REGULATORY REQUIREMENTS PROCUREMENT • Lost Parts • Premium Freight RQMT FROM CUSTOMER PRODUCT DEVELOPMENT DESIGN ENGINEERING PRODUCT ENGINEERING TOOL ENG / FABRICATION DELIVER TO CUSTOMER FABRICATION ASSEMBLY • Handform • Work Arounds • Out of Station • Jig Locks • Engineering Error Corrections • Change Management • Manual Order Release • Scrap / Rework / Repair • Withhold Tags • Dispositions • Tool Reworks • Orders Closing Short / Split Orders • Emergent Work (“Blue Streak”) • Startovers (Obvious Scrap & Lost Parts) • Software Discrepancy Reports • Obsolete Inventory • Buffer Inventory (JIC, MIT) • Cyclic Inventory & Associated Adjustments • Overtime • Checkers • Configuration Verification • Tool Tryout & QA Inspection • Tool & Tape Tryout & QA Inspection • Tool Tryout & QA Inspection • Customer Squawks & Complaints • Engineering Liaison • Planning Liaison • Tooling Liaison • Warranty Claims • Expedite • Expedite • Expedite • Expedite KEY: • = Cost of Quality / Cost of Poor Quality ACRONYMS ICAT = Independent Corrective Action Team JIC = Just In Case JMST = Joint Management Surveillance Team MIT = Much In Time M-SERB = Mfg-Senior Executive Review Board NAR = Non Advocate Review QA = Quality Assurance • Investigate (Corrective Action, Material Review Board, Stock Checks) Cost of Poor Quality Traditional Aerospace Design & Manufacturing Process

3. CUSTOMER INFORMATION & NEEDS INFORMATION SUPPLIER SERVICE INSPECTION DELIVERY PRODUCTION DESIGN EVALUATION RESEAFRCH & DEVELOPMENT CUSTOMER SATISFACTION AND/OR COMPLAINTS MARKET ANALYSIS PLANNING & SPECIFICATIONS VERIFICATION WITH CUSTOMER PRODUCT UTILIZATION FINAL SPECIFICATIONS Building Quality In Over The Product Life Cycle Quality in Information & Planning Quality in Design Quality in Production or Work Processes Quality in Use by Customer

4. Points to Ponder… • COPQ = 15% – 40% of Sales • If $2.5B in Revenue then COPQ is actually costing you $375M to $1B • Human error is responsible for 35% - 70% of accidents, incidents and non-conformances Is This an Area Worth Your Attention?

5. The Human Element – People, Process & EnvironmentWork Design Chris Collins March 26, 2007

6. Eng changes Request for changes Traditional State – High Level Mfg Eng Quality Eng Make Planning Tooling Mfg Design Eng Release Tech RFQ PR PO IPT R&M Weight Buy Logistics Cost Assy • ~ 65% of Changes take place in the first 12 mos. • ~ 68% of all changes (over the life of a drawing) are to correct errors or to respond to request from Operations/SCM

7. Each Eng change requires a very costly process to “digest” it thru the system Desired State – High Level Eng changes Mfg Eng Quality Eng Make Mfg Planning Tooling Design Eng Release Tech RFQ PR PO IPT R&M Weight Buy Logistics Cost Request for changes Assy Reduce Changes After Engineering Release

8. Yes CBOM MRP 13 Eng to Rqmts Assign Mfg Effectivity Log EO Eng Change Control 6 1 Process thru Engineering Database Eng. Database 2 Repro-duction Distribute (EO Pkgs) No No 3 N/A Rel? (b) RNC? (a) Yes Process RNC PBOM MRP Confirm MBOM Feed Change Control Create RNC Each Eng change has to go through some or all of these steps!!! 11 13a 14 9 To MBOM-Pre Release EO Prepare BOM for MBOM BOM in MBOM Data Release 8 To MBOM-Post 4 12 See separate process map for PPAS Process EO Prepare Planning Prepare Pre-Plan Planning To CAP 5 10 15 MRP Eng – Data Release – Chg Control – Matl Mgmt - MRP

9. Typical Eng Changes After Drawing Release More than 65% of Eng changes take place within first 12 months Concurrent Engineering Process WILL Dramatically Reduce These Changes

10. Design Weakness Analysis of EO Reasons Codes Concurrent Engineering Can Impact 68% of Total Changes

11. INITIAL DESIGN Traditional Post Release Problems - CHANGES!!! GAIN Program Cost and Schedule With and Without CONCURRENT ENGINEERING Program Cost Time Expected Performance with CONCURRENT ENGINEERING

12. Eng Release (Engineering Database) Eng Release (Engineering Database) Planning Tool Design SCM Quality Plan Other The CONCURRENT ENGINEERING Process Traditional Process High Level Map From Eng to Final Assy MBOM Fab & Assy Eng Procure MRP

13. * *Requests for Changes MBOM MRP RQMTS Planning * PTIs Planning ODS Tool Travelers Tool Design Tool Designs * Customer Support Tool Make Tools Quality Quality Plan * Procurement * RFQ Supplier Selection Parts Delivered * PO * Fab & Assy * Changes Time Traditional Process (Applies to the vast majority of parts we design and build/buy) Engineering Database RELEASE IPT Design Designer, Stress, Materials, Weights, R&M, Logistics, Cost, Producibility EBOM 3D Model Dwg Specs Rest of the discussion assumes that these disciplines will continue to support the IPTs (Deliverables) E.O. Analysis Eng. To RQMT Plng & Crew Load Engineering Changes after Release

14. CAN BE MINIMIZED More time up front C/T Gain CONCURRENT ENGINEERING Process DESIGN LOCK (Was Engineering Database Rel) CONCURRENT ENGINEERING RELEASE * (Deliverables) *Requests for Changes Design Designer, Stress, Materials, Weights, R&M, Logistics, Cost, Producibility MBOM EBOM 3D Model Dwg Specs Rel EO/EPRs MRP RQMTS Planning * PTIs Planning ODS Tool Travelers Tool Design Customer Support Tool Designs * Tool Make Tools Quality Quality Plan * Procurement * Supplier Selection Parts Delivered PO RFQ * * Fab & Assy * Changes Time

15. Changes between Design Lock & CONCURRENT ENGINEERING Release DESIGN LOCK There will be changes between Design Lock and CONCURRENT ENGINEERING Release but they will be managed in the IPT environment and not through Engineering Database and MBOM (Was Engineering Database Rel) CONCURRENT ENGINEERING RELEASE Design MBOM EBOM 3D Model Dwg Specs Rel EO/EPRs EBOM 3D Model Dwg Specs MRP RQMTS Planning PTIs Tool Travelers Planning ODS Tool Design Tool List Tool Designs Tool Make Tools Quality Quality History Quality Plan Procurement Supplier Selection Parts Delivered PO RFQ Fab & Assy SAVE $ and CYCLE TIME Time

16. Bottom line with CONCURRENT ENGINEERING… • Significant reduction in Changes after Engineering Database Release • Benefit to the Program: • Reduced overall Cycle Time • Reduced Cost True Concurrency in New Product Development

17. How will CONCURRENT ENGINEERING work?

18. GATE 0 GATE A GATE B 3D Definition Phase A 2D Definition Phase B Start of Detail Design Detail Design Gate 3 Gate 4 GATE C CONCURRENT ENGINEERING Package Preparation Phase C CONCURRENT ENGINEERING Release 3D Lock Design Lock Concurrent Engineering Process Domain

19. Gate A Gate B Gate C 3D Lock Design Lock CE Release • Design is ready for Engineering Database release • Planning is complete • Tool Design (except NC) is complete • Tool Make – well underway • Supplier selection is complete for Buy parts • Inspection Plans are complete • 3D design is complete and is ready for start of 2D drawing and Tool Design • Preliminary Mfg Plan is complete (Make/Buy decision is made) • Tool Travelers issued to start Tool Design effort • Long lead Tooling materials on order • Long lead starting materials and vendor parts for the design on EPRs • Quantity and need dates defined for Buy Parts • Document all changes after Gate A • Design is complete – drawing is signed off per our normal review and approval procedures released as Parts List Only drawing in Engineering Database • Outside Datasheets are complete • MBOM is complete • Tool Design (except NC) is well underway • Tool Make underway as Tool Designs are completed • RFQ is ready to go out to the Suppliers (MRP signal to follow after Engineering Database-MBOM-MRP feed) • Document all changes after Gate B Proposed Concurrent Engineering Process

20. Definition of a CONCURRENT ENGINEERING Package • Vast majority of issues that generate engineering changes will have already been addressed by the time CONCURRENT ENGINEERING Package is released • Will result in dramatically fewer engineering changes after the release of CONCURRENT ENGINEERING Package • Within a few days (admin time) of CONCURRENT ENGINEERING Package release, we will be ready to make parts and/or issue POs on Buy parts • Engineering Design is complete • All long lead materials and standard hardware have been ordered • Planning is complete • Tool Design is complete (was started at Gate A) and Tool Make well underway • Supplier selection is complete • Inspection Plans are complete

21. Questions & Answers Feedback Was this Value-Added?

22. Critical / Key Characteristics- Process Architecture Chris Collins Developed a FMEA based process and application software which effectively identifies critical and key features of a part or assembly

23. Situation Analogy What are the important features on your automobile? Brakes? Engine & drive system? Color? Size? Some features are obviously more important than others. Would you want them to be given special attention? Why are they important to you? Safety? Function / Performance? Status? How do you determine which features are important?

24. Situation Impact Now, apply this to aerospace and defense products with tens of thousands of parts, multiple applications, and over a million features. What is the likelihood that we will have consistent interpretation if left to personal experience and judgment? Contour Hardness Hole Location Radius Thickness • Thousands of wasted man-hours due to: • Scrap & Rework • Over-processing Without a robust process to consistently identify the critical features, there are many opportunities for costly mistakes

25. Process Solution Solution: A FMEA based process structured to control the level of assessment and the rating criteria necessary to identify Critical & Key Characteristics Control Level of Analysis Right Question Boundaries Right Focus Right Wording Method Result Control Rating Criteria Right Level Right Sequence Right Criteria Right Phrasing The strategic phrasing and sequencing of the questions (and response options) allows assessors to properly classifying the feature

26. Application Requirement Project Risk assessment Change Management Design Requirements User Acceptance • Limit to Top "x" failures • Flow Chart (Decision Matrix) • Change Process for KC / KP • Detail Process Map in DIs • Decision Matrix - Cross Function / Area Applicable language / terms • System Level Analysis • Decision Matrix by categories (Systems, assemblies, detail • Gate "A" DBB Deliverable • Gate "C" DBB for KPs • Gate "B" DBB for KCs • Command Media • Single Form • Sign-off Document • Single Source Record Retention • Documented Analysis • Retrievable Repository • Robust RPN • On Demand / Self Paced computer based training • Formal; Class Room Training • Lessons Learned Database • Downstream Accountability • Documented as part of Concurrent Engineering Process • Electronic Communication System • Training at Rollout (IPT Level) • Manpower Algorithm • Feedback from Process Users The process was too complicated to deploy through roadmaps and procedures. We needed a tour guide (interactive facilitator) to walk the assessors through the process. Training The design process identified the need for an application solution

27. Process Capability • Results from Prototyping • Reproducibility is better than previous process • Average Evaluation Time < 2% of design Overwhelming response from prototyping participants – Significant improvement in quality of analysis and current method X Design Scorecard • CTSs Satisfied N/A N/A Technical Solution and Cultural Acceptance were Both Satisfied

28. Summary Measure of Success Customer / Business Requirements Conceptual Design Preliminary Design DFSS Detail Design Process Validation Prototype Transition Communication Sub-Team Approach Advocates Smooth Result Business Need Federal Law Voice Of Customer Best Practices Requirements & CTSs “Know your Audience” Thought Process Terminology End User “Assessors” Feedback Lessons Learned VOC drove the process • CTSs Voice Of Process Focused Controlled FMEA Demonstrated Process Capability 3 o DPMO Reproducibility x Affinity / Kano QxA = E • Cultural Acceptance FOV Enhancements Metrics Control Application Tool Deployment Incorporate VOC/VOP Process Targeted FMEA Inductive User Approach Replication Solution Applica -tion Meets Customer Requirements and Exceeds User Expectations