Thales and SC21
IAQG/SC21General Assembly Meeting, 22 October, York
Thales serves three markets
Thales around the world
DEFENCE (50%)
68,000 employees
in 50 countries
Serving the defence, aerospace and
security markets
Air ● Land ● Naval ● Joint
More than £11bn revenue
AEROSPACE & SPACE (25%)
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SECURITY (25%)
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
Thales UK
Thales UK participates in all three market segments
In top five leading suppliers to UK MoD
4,000 engineers & technicians
 90% qualified to degree level or above
Invested more than £3bn in UK over last 10 years
90% of sales to the MoD are UK sourced
2009 sales: £1.5bn
 Backlog of orders circa £4bn
 60% turnover from defence: 40% from civil
 2008 was 120th anniversary of Thales in the UK
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This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
Thales UK
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This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
SC21 Activities
 One of the 19 founder signatories in 2006
 Actively involved in the original design of the SC21 tools and
techniques
 Hold seats on both SC21 steering committees (ADS/Scotland)
 Thales led Tranche I implementations, 7 suppliers
 Active Electronics, ACW, Aeroflex, Astute, Kenard, Paramount Precision, Paramount
Panels
 Four awards secured to date; ACW – Silver, Astute Electronics – Bronze; Active
Electronics – Bronze; Paramount Precision - Bronze
 Seven further Thales led Tranche II companies being taken through
programme, all have published CSIPs
 Chess Dynamics, ITT ICS UK, Di-Spark; Labtech Microwave, Merlin Flexible Circuits,
New Chapel Electronics, Ilford Engineering
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SC21 Activities
 Regional cluster approach in conjunction with RDA’s adopted as Thales
preferred approach to widen deployment throughout Thales UK
supplier base
 Thales led Tranche III South West Cluster, 4 suppliers
 Westminster Engineering, NFF Precision Ltd, J+S Ltd, AB Precision (Poole),
 All companies working towards publishing CSIP
 Thales led Tranche IV South East Cluster launched 4th October, 7
suppliers
 Thales Optronics actively involved in Scottish SC21 programme
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SC21 Activities
 Six SC21 awareness seminars/workshops held throughout Thales UK
businesses
 Workshop feedback used to help re-design Thales UK supplier
management/performance processes
 These processes reflect SC21 principles, and contain all SC21 tools and
techniques
 Redesigned processes being embedded throughout Thales UK
 Whilst SC21 engagement will not be mandatory for our suppliers, it
will be seen as a ‘virtue’!
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This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
Purchasing Strategy – Supplier Base
1200
1000
M E u ro
800
95%
100%
989 M Eur o
1039 M Eur o
733 ( 20% ) Supplier s
3593 ( 100% ) Supplier s
80%
833 M Eur o
600
187 ( 5% ) Supplier s
400
Cumulativ e MEur o
200
0
0
500
1000
1500
2000
2500
N o o f S u p p lie rs
7
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
3000
3500
4000
Purchasing Strategy – Supplier Base
A - Class Suppliers (80%)
200
180
160
140
120
100
80
60
40
20
0
2009
8
2010
2011
2012
2013
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
2014
Purchasing Strategy – Supplier Base
B - Class Suppliers (95%)
600
500
400
300
200
100
0
2009
9
2010
2011
2012
2013
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
2014
Purchasing Strategy – Supplier Base
C - Class Suppliers (last 5%)
3500
3000
2500
2000
1500
1000
500
0
2009
10
2010
2011
2012
2013
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
2014
Purchasing Strategy – Supplier Base
Total Suppliers
4000
3500
3000
2500
2000
1500
1000
500
0
2009
11
2010
2011
2012
2013
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
2014
Purchasing Strategy – Supplier Performance
On Time In Full (OTIF)
100%
95%
90%
85%
80%
75%
70%
2009
12
2010
2011
2012
2013
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
2014
Purchasing Strategy – Supplier Performance
Right First Time
100%
95%
90%
85%
80%
2009
13
2010
2011
2012
2013
This document is property of Thales Group and may not be copied or communicated without the written consent of Thales
2014
Purchasing Strategy and SC21
 Strong need to rationalise and consolidate; Target – reduce by 60% by
2014
 3,593 suppliers; ‘exaggerated’ Pareto, 5% of spend with 95% of supplier count
 Only 11% of suppliers used by more than one business
 Strategy is to outsource at a higher level
 Sub-assembly/assembly level, to focus on core systems integrator capability
 Tier/‘C’ Class service solutions
 Performance improvement critical
 UK average OTIF 82% - target >95%
 UK average supplier quality 92% - target >99%
 SC21 engagement will play a key role: selectable 40%
 Competitive (typically lean, customer focused, adaptive)
 Demonstrable, sustainable high performance
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This document is property of Thales Group and may not be copied or communicated without the written consent of Thales