Purchasing area : a key mission in the business

1. Reminder of key topics concerning last year Purchasing involvement into the Tender Vet stage The Sourcing stage for Purchasing activity Purchasing missions during the upstream stage Procurement activity Purchasing area : a key mission in the business ESC Toulon - Andres GARCIA

2. Purchasing Marketing Analysis

3. Suppliers visit rating

4. Grading : Suppliers evaluation

5. SWOT Analysis: MARTIN Ltd STRENGTHS OPPORTUNITIES Possible Cost Reduction year after year ISO 9001v2000 R/D new materials invest. 8-9% of turnover Positive Training Plan Training Cost 3% of turnover Double sourcing Reactiveness and flexibility Transfer possibility towards Spain Offset Chile + USA Wish to work with us : - Skill level - Technical knowledge - Engineering WEAKNESSES THREATS Logistic Aspect risk / Spain Independence. No big principal Risk to leave the Funichem group Sub-contracting oriented. To secure. Double sourcing risk / Production Equipment. Too expensive, Cost structure problem Top-of-the-range Production Market Change Impact Cost Raw materials obsolescence risk Retraining problem

6. SWOT Analysis: GREW Ltd STRENGTHS OPPORTUNITIES Created 37 years ago Flexibility / Market More & more global offers. Project Mgt Products Mgt more & more complex ISO 9001, quality oriented / Aeronautics Business Mgt Policy Experienced to work with us Human knowledge Externalise in low cost countries Globalize the projects up-stream Offset Opportunity WEAKNESSES THREATS Increase of competiton Need to train the « new generation » As from today too expensive but works to decrease the costs. Better Productivity 5S can be improved

7. SWOT Analysis: LA RUEDA SA STRENGTHS OPPORTUNITIES Make the difference between technical & quality problems Stronger exchanges with research Department, present but to be formalised. Study & global making to be developped Wishes to expand at the European level Works with big Companies for the techniques exchanges Develop Assembly activity at the general level Part of ENASA Group 100% su-contracting, different activities Large Number of machines Manage global assembly Works up-stream with us Industrialisation & value analysis Materials knowledge No problem financially 5S, Reactiveness, sub-contracting network WEAKNESSES THREATS Quality & delivery time problem / sub-contracting companies Formal communication problems. Formalise our needs Look for low cost sub-contracting companies / offset Do not believe in partnership but only in sub-contracting Sub-contracting activities at risk Management risk Start low cost countries quickly Lack of human resources Lack of Commercial openess High claims / TUS Too confident regarding their know how.

8. SWOT Analysis: EUROCASE SA STRENGTHS OPPORTUNITIES Positive customer culture Project management Culture Production Means and resources flexibility Average age is 30 Part of a network group Production means & Tests 3% of yearly turnover investment Raw material purchase at low cost Results: 2% of 2003 turnover Low Cost deployment Competitors in crisis also Structurel plan, multi-products Network development Technologies control Put in place and implementation of QA + delivery measurements WEAKNESSES THREATS Young staff maturity Nightmare scenario does not exist Sites Safety + badge access at the entrance Not enough English skill EUROCASE has become too independent 60% of the job dedicated to our competitors No profitability on new projects No traceability (bar code) / ERP for dossiers preparation.

9. Action plan for Purchasing Team

10. Yearly Supplier Audit Plan • Purchasing Segment Quality Engineers ( PSQEs ) have set up “Audit Teams” composed of: • Members from Manufacturing • Members from Technical Dept • Members from Business Lines • In order to: • Identify the critical supplier to be audited and followed up by Purchasing • Centralise information and Company historic on the audited company • Organise global team audits on the critical supplier ESC Toulon - Andres GARCIA

11. EXAMPLE OF PSQE MISSION ESC Toulon - Andres GARCIA

12. FLOW-DOW OF THE SUPPLIER SELECTION & ASSESSMENT Request from Originator Do we have a qualified supplier ? . If NO On-site Assessment stage SOURCING Supplier Questionnaire POTENTIAL SUPPLIER Financial - Sales Assessment Quality System Assessment Technical & industrial Assessment Product Assessment AGREEMENT PHASE QUALIFICATION SUPPLIER QUALIFIED ESC Toulon - Andres GARCIA

13. KEY RELATIONSHIPS BUYER/SUPPLIER supplier Preferred supplier supply partner Design partner ESC Toulon - Andres GARCIA

14. EXAMPLE OF SUPPLIER SELECTION & ASSESSMENT QUESTIONNAIRE and ON-SITE ASSESSMENT ESC Toulon - Andres GARCIA

15. REDUCTION OF SUPPLIERS In order to get an accurate monitored suppliers list connected with particular targets according to the spend’ category. Breeding ground Target Suppliers Specific Suppliers Leaders, partners with several Improvement Contracts. Suppliers to give up Essential ( duly proved and validated*). No essential.Monitored removal stage must be done within an internal joining Plan. *as know-how, Customer’ rules, Offset business, local suppliers, design’ file no monitored….. ESC Toulon - Andres GARCIA

16. REDUCTION OF SUPPLIERS CANCELLATION FOLLOW-UP service SELECTION TARGETS + SPECIFICS Suppliers to cancel - + - key data's of the Company - innovation’ capabilities - know-how and technologies master - competitiveness, service, quality - quick reaction - ……………. BREEDING GROUND - + cost FOLLOW-UP Delivery, price, service, competitiveness ESC Toulon - Andres GARCIA