We live in a volatile
world
Vice President & COO
ChuckG@fescorp.com
Aircraft Production 1999-2018
Rough Times After The First Civil/Military Upturn In 25 Years
160
(Market Value in 2009 $ Bns)
120
80
40
0
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Fighters
MilitaryT ransports/T rainers/Other
Bizjets
Rotorcraft
Jetliners/Regional AC
DoD Operating & Support Costs vs.
Investment
100%
% of DoD BA (Includes OCO)
90%
O&S (MILPERS plus O&M)
80%
70%
Lowest investment share
since the Korean War
60%
1950 – 2010
Average: 36%
50%
40%
30%
20%
Investment (RDT&E plus Procurement)
10%
0%
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Tension between O&S and investment will reach historic proportions
BALANCING QUALITY, SAFETY, RISK AND COST IN
Volatile SPACE AND DEFENSE MARKETS
Program risks
associated with an
“up & down”
business scenario
Hurry up, you are behind schedule
• DESIGN PROGRAMS
• Shortcut requirements analysis: DESIGN RE-SPINS
• Compromise reliability / maintainability / availability analysis:
REDUCED SUPPORTABILITY
• Reduce scope & content of Systems / Hardware / Software Peer
Reviews: MORE RE-SPINS
• Shortest lead time becomes principal parts selection criteria:
INCREASED OBSOLESCENCE & COUNTERFEIT PARTS RISKS
• Hardware – Software trade-off studies scope reduced: PRODUCT DESIGN
COMPROMISED
• Reduced emphasis on Design for Manufacturing & Test: PRODUCTION/TEST
REWORK
• PRODUCTION PROGRAMS
•
•
•
•
Shortcut work instruction preparation time: INCREASED “DO OVERS”
Compromise production training: INCREASED SCRAP & REWORK
Reduce rigor of first article / first build reviews: JEOPARDIZE PRODUCT
INTEGRITY/SCRAP/REWORK
Focus on delivery VS first time quality: MISSION FAILURE, INCREASED CUSTOMER
REJECTIONS
ACROSS THE BOARD RISK TO SYNERGY
SLOW DOWN
--THE PROGRAM IS SLIPPING
• Design a ROLEX VS the TIMEX that the customer ordered:
costs, lead times, producibility impacted
• Utilize science experiments to solve a problem requiring
simple analysis
• Retain people on the program where ROI is low
• Introduce production changes that actually reduce producibility
& testability
ANOTHER DAY ON
THE PROGRAM IS
ANOTHER DAY OF
COST!
Subcontractors caught in the middle
• Subcontract reduction/terminations/extension
• Delayed customer awards = Compressed
Subcontractor Cycle Time
“SUBCONTRACTOR”
• Extended material/parts lead times
• Increased parts materials/cost: Building to
ORDER VS Building to STOCK
A SMALL BUSINESS PERSPECTIVE
Stillwater
86,500 Sq FT Facility
A Native American,
Woman-Owned Small Business
President & CEO
High Reliability Manufacturing
Engineering Design &
production focus
Space and Missile Programs
Aircraft Programs
UAS Programs
Maritime Programs
Radar Switchboards
SB-4229
SB-4229A(V)/SP
Product Assurance Network
GUIDELINES
REQUIREMENTS
•FES-QSM-1
•FES Quality Manual
•FES-QP-1
•FES Quality Plan
Corporate
Quality Goals
ISO
Documents
•FES-QSP- 7.2-1
Contractual
Requirements
7.1-1
MIL-SPECS
TOOLS
APPLICATIONS
•FES-QSP-
Process Training
SPC
8.1-2
CAB
8.5-2-1
MRB
8.3-2
TQM's
8.1-5
Prog Review
5.6-1
BA Reviews
5.6-1
Vendor Rating
7.4-1
Semi-annual Mgt 5.6-1
Review
7.2-2
Departmental
Goals
•FES-QSM-1
•FES Quality
Manual
Customer
Specifications
7.1-1
Process
Specifications
PERFORMANCE
ASSESSMENT/
FEEDBACK
Pivot Table
5.6-7
Program Mgt
System
7.1-1
Contract Mgt
System
7.2-1
Supplier Mgt
Internal Process
Audits and
Validation
Pareto
Charts
Customer
Feedback
•FES-QSP -7.2-2
•FES-QSP- 8.5-2-1
Process
Improvement
Benchmarking
5.6-1
8.5-1
Metrics
Process
Analysis
8.5-2-1
8.5-2-1
Audits
7.4-1
Q-Codes
8.2-1
8.2-1
7.4-3
CORE PROCESSES
• Design
• Material Acquisition
• Manufacturing
• Product Support
Developing a corporate culture of
commitment & process optimization
• Leadership INTEGRITY and Organizational / Employee ETHICS &
COMMITMENT Beyond Reproach
• Foster TRANSPARENT COMMUNICATIONS & Mutual Respect
Throughout the Company
•
Welcome New Ideas
• Specific Goals and ACCOUNTABILITY Established
• Resources Allocated to Achieve Quality Goals in Company
Operating Plan
• Timely and Accurate PERFORMANCE FEEDBACK
• LESSONS Learned are Captured & RE-DEPLOYED
Key Quality Metrics
• LINE of BALANCE
• CUSTOMER SATISFACTION
• ON-TIME DELIVERIES
• QUALITY ACCEPTANCE
• WARRANTY RETURNS
• NONCONFORMANCE
• CUSTOMER COMPLAINTS
• SUPPLIER CORRECTIVE ACTIONS
• SCRAP
• REWORK
• SUPPLIER PERFORMANCE
• RISK
Customer Satisfaction
Warranty
Return
Rate
(Proposal Win Rate +
FES Delivery Rate)
/2
.810 + .988
---
.002
= SCORE
=
89.90 %
2
Proposals Won = 86
Proposals Lost = 20
Total Proposals = 106
Wins ÷ Total Proposals Submitted
= Proposal Win Rate
Proposal Win Rate: 81.0 %
FES Computed Delivery Rate: 98.8 %
Warranty Returns = 4
Units Shipped = 2035
Warranty Returns ÷ Units Shipped : 4/2035 X 100 = .2%
x 100
Supplier Ratings
Frontier's Supplier Quality Rating System is based on a 9 point system. It is divided into three categories,
which will be the basis for a supplier remaining on the Approved Suppliers List.
GOLD LEVEL
expectations.
9 points
Supplier Partner - Exceptional supplier performance, exceeding
SILVER LEVEL
8-6 points
Preferred Supplier - Very good supplier performance, meeting or
exceeding expectations.
BRONZE LEVEL 5-3 points
Qualified Supplier - Satisfactory supplier performance, meeting
expectations.
YELLOW LEVEL 2 points
meeting expectations.
Marginal Supplier - Marginal Supplier performance, supplier is not
RED LEVEL
1 - 0 point Unsatisfactory Supplier - Unsatisfactory supplier performance, clearly
fails to meet expectations. Supplier is placed on Probation and has 60 days to implement corrective
action. Unacceptable performance requires mandatory performance review.
A journey of continuous
improvement
DoD
Nunn-Perry Awards
Northrop
Grumman World
Class Team Awards
Lean Journey
Begins
MILQ
9858
MILI
45208
ISO
9001-1994
1989
1994
Boeing Supplier of
Year Awards
AS
9100
ISO
9001-2000
1999
2000
NGST
Gold
USN BMP
Audit
2001
ERP
Supply Chain
Mgt System
2005
2006
2008
2009
challenge
• Forced re-design of the F-18 E/F Engine Fuel Display
due to LCD supplier Bankruptcy
o Hardware / Software
• No break in production
o Required 75% reduction in re-design time
• Focus on 1st Time Quality to Reduce Production Cost
Supply Chain LEAN Deployment
Reduce
PO Award
Order to First Delivery Cycle Time
PO
Award to
Sub
8 wks
All material
received
FES
All Sub
material
received
25 wks
30 wks
Sub
1st Delivery
56 wks
Initial
State
4 wks
Current
State
FES Critical Path
Sub Critical Path
FES & Sub Critical Path
18
20
41
48
wks
wks
wks
wks
FES 1st
Delivery
76 wks
Result
F/A-18E/F Engine Fuel Display
Redesign
Customer
Recognition:
Achievements:
New UpFront
Control/Dis
play
Boeing’s Avionics
Supplier of the Year
2001
DESIGN Time Cut -75%
MTBF Improved +33%
PRICE Reduced
-48%
Engine
Fuel F
Display
Multi-Purpose
Color Display
Roadblocks to watch
for
Poor
Communication
Diverging
goals and
objectives
Inadequate
Training
Backsliding
Dirty
fingernail gang
looses clout
Too Much
Too Early
Leadership
Buy-In
No Link to
Company
Objectives
No
Incentive
A Closing Thought
Profit
Profitability
P
R
I
C
E
Profit
Cost
Pre Lean
Cost
Post Lean