Presentation Transcript

1. Maintenance Repair & Overhaul (MRO)Business CaseNadcap/NUCAP OEM Subscriber Experience

   Revision Date: 15 May 2014
2. Contents Nadcap Global Acceptance Background Nadcap Benefits OEMs Suppliers Benefits of Nadcap Approach Business Case Objective Chronology Sequence for Expansion of Nadcap into MRO MRO Areas to be considered by Nadcap Subscribers Survey of Existing Nadcap Subscribers Supply Chain Deployment Case Study Perceived Myths Challenges in the MRO Community Gap Analysis Cost & ROI For More Information Acronyms
3. Background Redundant audit activity exists in the Maintenance Repair & Overhaul (MRO) world The requirements are just as stringent for MROs as OEMs Nadcap improved controls in the OEM world, and there is a value in demonstrating these same kind of improvements in the MRO world as well In some cases, MRO manuals and OEM specifications may not be aligned There are more opportunities for rebuild and repair cycles in the MRO industry than the OEM industry, therefore increasing the chance of escapes, re-work, and cost.
4. Nadcap Benefits to OEMs Global Supply Chain managed through a single real-time on-line system for the entire industry allowing companies to better manage supplier-associated data (eAuditNet) eAuditNet supports procurement to identify accredited suppliers (Qualified Manufacturers List) Conduct more in-depth, technically superior special process audits Increases number of consistent audits of the supply chain Establish stringent industry consensus standards that satisfy the requirements of all participants Identify and reducerisk of exposure to lower-quality suppliers Provides industry-wide early warning advisories for potential product impact and escapes (defective products) Provides complete visibility of supplier behaviors and transparency of audit results in a secure and retrievable format Program reducescosts of supply chain oversight and control Utilizes technically superior auditors to assure process familiarity Effectiveness of OEM’s Quality team increased – able to look beyond baseline requirements and focus on problem areas(special processes) and suppliers Improves flow down of industry and customer requirements to sub-tier suppliers
5. Nadcap Benefits to Suppliers Provides routine special process audits accepted by industry *85% report supplier quality improvements after accreditation, including more than one-third reducing scrap rates, reworks and escapes (defective products) Promotes lean and continuous improvement practices, leading to higher quality and lower overall cost Industry accepted and consistent technical requirements leading to uniform process controls and greater operational efficiency Develops a structured approach to special process and product manufacturing Can use accreditation to increase client-base Improves customer relationship, technical support, and training. Improves Program/Special Processes predictability. Increases visibility to subscribing OEM base. Opportunity to participate in development of audit criteria and program operations *Aerospace data
6. Benefits of the Nadcap Approach End users become more aware of the importance of their processes This activity becomes an integral part of internal risk reduction activity Aids in identifying clear ownership for each Special Process Enables improved levels of Process Control Introduces standardisation of the Controlling Procedures across sites Encourages cross functional team working Provides the vehicle to implement focused improvements to processes Key strategic improvement, with visibility at a senior level within the organisation Following re-accreditation, sites can focus on Process Flow & Process Capability Improves first pass yield Improves operating approach, compliance, training, communication and alignment of resources.
7. Business Case Objective The purpose of this Business Case package is to demonstrate to Nadcap/NUCAP (Nadcap Users Compliance and Accreditation Program) Subscribing OEMs the value of utilizing the Nadcap/NUCAP accreditation program in their internal MRO facilities that reduces risk, increases compliance to approved data and with airline support will reduce the number of redundant audits and improve process understanding. The ultimate objective is to drive Nadcap/NUCAP across the entire MRO community.
8. Chronology 2010-2011 At PRI Board of Directors request, a PRI staff team began to investigate where the Nadcap model may be applicable for the MRO Industry PRI conducted research, presented at industry events, and developed relationships with industry stakeholders (Nadcap OEMs, CASE, airlines, MRO shops, etc.) 2012 Rolls-Royce presented to the Nadcap Management Council (NMC) on their implementation of NUCAP in their MRO facilities (Feb12) An NMC sub team was launched to explore Subscriber interest & possible support - 12 Subscribers joined – bi-monthly meetings Sub-team survey was conducted to determine level of interest and potential scope – results were favorable 2013-2014 Some existing Nadcap/NUCAP companies began using Nadcap/NUCAP internally for their MRO facilities
9. Sequence for the Expansion of Nadcap/NUCAP into MRO Step 1. Existing Nadcap/NUCAP Subscribers’ own MRO Facilities. Gain regulatory agency recognition. Step 2. Existing Nadcap/NUCAP Subscribers’ MRO Service Providers (those who are already Nadcap/NUCAP accredited Suppliers) Step 3. Existing Nadcap/NUCAP Subscribers’ MRO Service Providers (those who are not Nadcap/NUCAP accredited Suppliers) Step 4. Part 145 Repair Stations (Non-Nadcap Subscribers)

10. Sequence for the Expansion of Nadcap/NUCAP into MRO

    Part 145 Repair Stations Engage Airlines and Lease Holders Suppliers to OEM’s MRO facilities OEM’s MRO facilities (gain regulatory recognition) 2012 2013 2018 2014 2017 2015 2016
11. MRO Areas to be Considered by Nadcap/NUCAP Subscribers: Contract with airline for maintenance – All components come from OEM side (Nadcap/NUCAP or OEM suppliers) MRO shops on OEM sites – Majority of Special Processes done by Nadcap/NUCAP Major stand-alone structural/overhaul MRO shops Component repair supply vendors Sites where primary OEM and MRO distinction is being combined or united
12. Survey Conducted of Existing Nadcap/NUCAP Subscribers Special Processes within Subscriber internal MRO shops where currently self-imposing Nadcap/NUCAP: * Data from 2012 NMC MRO Sub-Team Survey (10 Subscribing OEM responses) ** There may be additional Special Processes and participating Subscribers not listed in the above chart, as eAuditNet only recently began differentiating between OEM and MRO audits
13. Current Use of Nadcap in the MRO Community Current Nadcap/NUCAP Subscriber internal MRO shops with accreditation (NMC MRO Sub-Team Survey Data - 2012) 5 Subscribers self-impose Nadcap/NUCAP on their internal MRO shops Commodities: CP, CT, HT, NDT, NMSE, WLD Nadcap/NUCAP suppliers doing work for MROshops (Self-identified in eAuditNet system – 15 April 2014): Suppliers: 14 Subscriber Suppliers: 4 Accreditations: 31 Commodities: AQS, CMSP, CP, CT HT, MTL, NDT, NMMT, SE, WLD Countries: Canada, Hong Kong, UK, USA, Singapore, South Korea, Spain Nadcap/NUCAP suppliers doing work for MRO and OEM shops (Self-identified in eAuditNet system – 15 April 2014): Suppliers: 51 Accreditations: 55 Commodities: AQS, CMSP, CP, CT HT, MTL, NDT, NMMT, SE, WLD Countries: Australia, Belgium, Canada, China, Hong Kong, India, Italy, Japan, Mexico, Philippines, UK, USA, Singapore, South Korea, Spain, Taiwan
14. Supply Chain Deployment Some NadcapOEMs have begun to flow MRO into the supply chain Rolls-Royce made a policy decision to mandate on the MRO supply chain MRO suppliers to gain Nadcap accreditation in: NDT (PT, RT MT) Chemical Processing Heat Treatment 1 process by end of 2012 3 processes by end of 2013 Targeted at ~60 suppliers (Planned for 50% uptake) ~ 30 NDT audits in 2012 ~ 30 NDT, CP & HT audits in 2013
15. Supply Chain Deployment Special Processes NDT is used in every MRO activity Evaluate other special processes based on frequency of MRO activity: CP, HT, CT, NMSE, WLD Risk Assessment Criteria Part criticality Process activity Compliance to Repair Manual Requirements Cost of non-quality due to special process Known in-service issues Special Process criticality
16. Case Study Nadcap/NUCAP Subscriber with 2 MRO Facilities: Background: Subscriber major overhaul center, NDT, Weld, Heat Treat & Chemical Processing Findings: Experienced a large learning curve when earning Nadcap accreditation The Nadcap audit methodology is very different than any other audit the site had experienced, depth of audit into the specific processes NDT Audit Prior to audit, facility did not see value After the audit, facility recognized the reduction in risk Number of Findings Severity of Findings Value of the audit methodology
17. Perceived Myths Myth: New MRO-specific checklists must be created Fact: The current Nadcap checklists for NDT, CP, HT and CT were effectively utilized in Rolls-Royce’ experience. Supplemental checklists to be modified for individual OEMs Myth: Will increase internal costs with no business benefit Fact: Nadcap is a risk reduction activity (cost avoidance). There are slight increases in direct costs (e.g. participation fees) with considerable decreases in indirect costs (e.g. manpower) for subscribers. Nadcap is a shared cost approach. Myth: Not applicable to MRO Fact: Audit checklists are specific to the special process as defined by industry specifications and are not specific to OEM or MRO. Checklists are the essence of good special process controls. There are MRO equivalents to OEM: 9100/9110; PO/FAA return ticket, technical publications; process spec/maintenance manual Myth: Will make MROs uncompetitive Fact: Creates a competitive edge/benefit for accredited suppliers. It opens up the market for increased opportunities for suppliers who meet Nadcap accreditation. Myth: Not formally recognized within the MRO Industry Fact: Nadcap has only been recently expanded into subscriber MRO facilities. Since Nadcap is widely recognized among OEMs & Regulatory Bodies globally, it should enable a smooth transition into the M RO community.
18. Challenges in the MRO Community that will need to be Considered for Nadcap/NUCAP Deployment Standard Practise Manuals do not define all requirements. Lower level procedures inadequate or unavailable Technical Instruction content inadequate Inadequate document cascade: blue print  process specifications  shop floor instructions Operator training and approval practises varied across sites Pyrometry- Insufficient knowledge of AMS2750 Preventative Maintenance activities inadequate No flow-down requirements exist No advanced forecasting available * No difference from what is seen in OEM / supply chain areas and are all areas of potential quality failures that could be rectified through the Nadcap audit and NCR close out process.
19. Cost & ROI Cost Nadcap Subscriber fees: Contact PRI’s Supplier & Subscriber Services Supervisor - +1 724 772 1616 Nadcap audit: www.eauditnet.com Documents  Public Documents  General Documents  “Audit Pricing Sheet” Audit preparation: Will vary for each MRO based on current practices in relation to the audit checklist ROI Every OEM in Nadcap/NUCAP currently utilizes the program in a different way. The ROI is different for each OEM in relationship to their contribution and participation level.
20. For more information Scott Klavon Director, Nadcap Program & Aerospace Operations, PRI sklavon@p-r-i.org +1 724 772 7111 Seema Martin Director, European Operations, PRI smartin@p-r-i.org +44 20 7034 1243 Justin McCabe Research & Development Specialist, PRI jmccabe@p-r-i.org +1 724 772 8693
21. Acronyms AQS – Aerospace Quality System CASE – Coordinating Agency for Supplier Evaluation CP – Chemical Processing CT – Coatings FAA – Federal Aviation Administration HT – Heat Treating OEM – Original Equipment Manufacturer MRO – Maintenance Repair & Overhaul NMSE – Nonconventional Machining & Surface Enhancement NDT – Non-destructive Testing MT - Magnetic Particle PT - Penetrant RT– Radiography NMC – Nadcap Management Council NUCAP– Nadcap Users Compliance and Audit Program ROI– Return on Investment WLD – Welding