Understanding your Tier Where do you fit in?

1. Mike Skorija Supply Chain & Operational Resources, LLC Understanding your TierWhere do you fit in?

2. A Supply Chain is defined as: Strategic and physical actions necessary to define and execute: Purchasing Planning Scheduling Order Entry Receiving Shipping Inventory activities Logistics Actions and processes from your suppliers supplier through to your customers customer. Metrics to define and sustain desired performance. What is a supply chain?

3. Supply-Chain Operational Reference-model SCOR is Based on Five Distinct Management Process Plan Source Make Deliver Return Return Tier 2 Tier 3 Tier 1 Customers’ Customer Airbus

4. SCOR Processes Plan: Demand/Supply Planning and Management Balance resources with requirements and establish/communicate plans. Management of business rules, supply chain performance metrics, inventory, planning configuration. Align the supply chain unit plan with the financial plan. Source: Stocked, Make-to-Order, and Engineer-to-Order Product Identify, qualify and select strategic supply sources. Manage business rules, assess supplier performance and maintain qualification scorecard. Manage deliveries to meet production plan, receive, verify and authorize supplier payments. Manage inventory, supplier network, import/export requirements and supplier agreements. Make: Make-to-Stock, Make-to-Order, and Engineer-to-Order Product Schedule production activities, issue product documentation and release product to deliver. Align execution with production plan and manufacturing capabilities. Manage rules, performance, data, in-process products (WIP), equipment and facilities, production network, and compliance for production. Deliver: Order Fulfillment, Warehouse, Transportation, and Installation Management . All order management steps from processing customer inquiries and quotes to routing shipments. Warehouse management from receiving and picking product to load and ship product. Receive and verify product at customer site and install, if necessary. Manage business rules, performance, information, transportation, product life cycle, and import/export requirements. Return: of Raw Materials and Receipt of Returns of Finished Goods

5. Tier Level requirements • Customer driven • Full Responsibility, Quality, Delivery, Price. Airbus • Supportive flow down structure • Documentation & Technology requirements • Supply Chain Management & development. • Design engineering and innovation Tier 1 • Forecasted requirements • Supply Chain management & development • Tier 1 driven PO’s • Qualification and Documentation Tier 2 Tier 3 • Build to print • PO Order release • Qualification

6. Ex: Supply chain opportunity Airbus Tier 1 Tier 1 Tier 1 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3 Tier 2 Tier 3 Tier 3 Tier 3 Tier 3 Tier 3

7. Integrated Supply Benefits • Direct data exchange upstream and downstream. • Reduced Cycle times due to better process understanding. “CBMR” • Lower Inventory / MWC generating cash flow. • Lower logistics costs resulting from rationalized shipments. • Single point of contact for OEM and their subcontractors. • Centralized electronic data retention e.g. test certs remotely accessible. • Automated, program specific metrics available.

8. Summary • Understand the full scope of your Supply Chains. • Create transparency of materials in process across multiple Tier’s. • Collaborate with key supply chain partners for better forecasting & planning. • Define program specific metrics that all can benefit from. • Realize the benefits of Integration and achieve affordability.

9. Questions?

10. Questions?