IAQG STANDARDS IMPLEMENTATION AT ROCKWELL COLLINS GOALS, BENEFITS AND LESSONS LEARNED I

1. IAQG STANDARDS IMPLEMENTATION AT ROCKWELL COLLINS GOALS, BENEFITS AND LESSONS LEARNED I Primus Ridgeway, Jr. Vice-President, Enterprise Product Assurance Rockwell - Collins Inc.

2. Rockwell Collins (NYSE:COL) - A Leader In Aviation/Aerospace Advanced Communication, Navigation And Surveillance Electronics For Government And Commercial Applications. We Provide Product To The World's Aircraft Manufacturers And More Than 400 Airline Customers, As Well As The World's Military Forces. We Have Manufacturing Operations In The United States, Europe, Australia And Mexico, And >60 Service Centers And Service Bases Worldwide. • 2004- $3.1 Billion in Sales • ~ 15,000 Employees • AS9100, ISO9001, ISO14000, FAA Certified • Headquarters: Cedar Rapids, Iowa

3. Products and Application Weather Radar F-18 Flight Deck Flight Deck Avionics JHMCS Joint Helmet Mounted Cueing System eTES – Total Entertainment System Flexible Displays

4. Rockwell Collins Major Locations ATS GS(Iowa) CAS Intertrade Fab/CPC SCQA SV&V TES AQS&T RC-Cert. Center RC-UK RC-Deutschland Flight Dynamics Airshow KE-San Jose GS – Comm. Sol. RC-France Passenger Systems BRS - Melbourne GS (Texas) KEO – Carlsbad KEP - Irvine RC-Australia

5. OLD NEW Maintain Quality Assurance Program That Verifies That The Product Meets The Spec Prior To Ship Establish A Cost Effective Single Quality Management System That Validates The Effectiveness Of All Business Processes Affecting Quality of ALLCollins Products (HW, SW, Data, Service) TO Manufacturing Oriented Enterprise Oriented RCI’s Quality Management System Evolution ADOPTION OF AERO SPACE STANDARDS IS KEY TO THE TRANSFORMATION

6. The Business Decision Rockwell Collins Implemented a Single Quality Management System for the Corporation • Based on Full 3rd Party Certification to AS9100, • Leverage Key Companion Standards such as AS9103 and AS9102 This approach established a single best practice for quality management of key RCI business practices and product acceptance criteria for factory build and repair both in house and all RCI service centers and bases worldwide

7. RC-QMS-P-023 RC-QMS-P-022 RC-QMS-P-021 RC-QMS-P-000 QMS Rockwell Collins Single Quality Management System Quality Management System Product Acceptance Standards AMR Platinum Lockheed Star Select Northrop Grumman Key Plan Etc. Rockwell Collins Commercial And Military Products Compliance Certifications Applicability Boeing D6-82479 Airbus ABD 100 Sikorsky SU 2000 Process Workmanship Standards Repair Standards Modification Standards Common Quality Training System ISO 9001:2000 AS 9100:2001 Aircraft Certification Supplier Evaluation Prog. QMS Product Integrity Rockwell Collins Standards

8. QMS Focus In The Product Life Cycle Quality Control Programs Quality Management Field Quality Engineering Software Quality Eng Design Quality Eng Supply Chain Quality Assurance Product Integrity System Validation & Verification Advanced Quality Systems & Technology

9. Continuous Improvement Focus in Design • The Continuous Improvement Focus Of RCI Single QMS Is Identification And Reduction of Process VariabilityIn The Life Cycle Value Stream Of Our Products. In The Design Phase This Means Identification And Management Of Key Process Characteristics • AS9103 Provides An Effective Guide For Application Of Industry Best Practices • For RCI AS9103 provided an effective baseline to attack CoNC in the design Process

10. Cost Of Non-Conformance (CoNC) Process Inefficiency Warranty Service Bulletins Customer Penalty Losses are Obvious! Finished Goods Modifications Rejects (Internal Failures) ECOs Consignments Non-Standard Modifications MRB Scrap Waste is obvious Excessive Overtime Loss of Future Customers Test Equipment Wear Excessive Field Service Expenses Planning Delays Unutilized Space Pricing Billing Errors Premium Shipping Costs Unused Inventory Re-Test Re-Inspection Expediting Costs Lack of Follow-Up on Current Programs Loss of New Contracts Root Cause Analysis Loss of Company Reputation Processing Paperwork Handling Managing Corrective Actions Development Costs of Poor Quality Product Unnecessary meetings-Time with Customers Overdue Receivables Excessive System Costs Intangible CoNC! CoNC The Ultimate Business Case !!!!! Waste is Difficult to see, calculate, and realize, yet very real! WASTE!$$$$$ Below the Surface!

11. LSL LCL UCL USL Component CONC $ $ $ Sub-Assembly Test Bench Top Level Test Bench Aircraft AS9103 What is the Benefit Control of Key Characteristics = Variation Reduction = < CONC $$$ Continuous Improvement LSL LCL UCL USL LSL LCL UCL USL Component Component Sub-Assembly Sub-Assembly Prevention Test Bench Reduce CONC Test Bench CONC $ $ $ Efficiency Top Level Top Level Reduce Waste CONC $ $ $ Test Bench Test Bench Customer Value Increase Profits Aircraft Aircraft

12. AS9103 Encourages Focus on Design and Prevention

13. Stop Design Induced Defects From Reaching Production CoNC Cost per Defect vs Development Phase Cost Defect Escape Rate $4,000 ECO CoNC Cost $1,433 $430 $143 $57 Req'mt Def Design BOM Release Qual Test Production Source for Defect Cost (Analysis thru Test): Cost Benefits of Software QA Whitepaper, North Carolina State University, Nov 2000

14. Lessons Learned • IAQG Standards Are A Key Component To An Overall Continuous Improvement Plan • Get Management Support – Define The Business Case • Reducing Cost of Non-Conformance is a good one! • Keep It Simple– Use An UnderstandableContinuous Improvement Model • Show Return-On-Investment. Get Finance Dept To Validate The Savings • Report Results: Improved Quality, Reduced Costs, Improved Delivery, etc. Advertise Successes!

15. Other Important Points For Successful Implementation • Remember To Address “Social” Issues Of Any Standards Implementation • Is The Business “Focused” On Developing a Best Practice • Are There Unresolved Business Cultural Differences? (Mergers) • Ensure The Foundations Are In Place • Right People, Willingness-To-Change, Commitment, Goals • Strong Communication and Training Plan