IAQG STANDARDS IMPLEMENTATION AT ROCKWELL COLLINS GOALS, BENEFITS AND LESSONS LEARNED Primus Ridgeway, Jr. Vice-President, Enterprise Product Assurance Rockwell - Collins Inc. I 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 Products and Application Weather Radar F-18 Flight Deck Flight Deck Avionics eTES – Total Entertainment System Flexible Displays JHMCS Joint Helmet Mounted Cueing System Rockwell Collins Major Locations Flight Dynamics Airshow ATS GS(Iowa) CAS Intertrade Fab/CPC SCQA SV&V TES AQS&T RC-Cert. Center RC-UK RC-Deutschland KE-San Jose GS – Comm. Sol. RC-France Passenger Systems BRS - Melbourne KEO – Carlsbad KEP - Irvine GS (Texas) RC-Australia RCI’s Quality Management System Evolution OLD Maintain Quality Assurance Program That Verifies That The Product Meets The Spec Prior To Ship Manufacturing Oriented TO NEW Establish A Cost Effective Single Quality Management System That Validates The Effectiveness Of All Business Processes Affecting Quality of ALL Collins Products (HW, SW, Data, Service) Enterprise Oriented ADOPTION OF AERO SPACE STANDARDS IS KEY TO THE TRANSFORMATION 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 Rockwell Collins Single Quality Management System Quality Management System Product Acceptance Standards RC-QMS-P-023 RC-QMS-P-022 RC-QMS-P-021 RC-QMS-P-000 QMS AMR Platinum Certifications Compliance Lockheed Star Select Rockwell Collins Commercial And Military Products Applicability Northrop Grumman Key Plan Etc. Process Boeing D6-82479 Airbus ABD 100 Sikorsky SU 2000 System ISO 9001:2000 AS 9100:2001 QMS Aircraft Certification Supplier Evaluation Prog. Product Integrity Workmanship Standards Repair Standards Modification Standards Common Quality Training Rockwell Collins Standards QMS Focus In The Product Life Cycle Process Stakeholder Manufacturing Process Life Cycle Value Stream Management Process Pursuit & Order Capture Design & Develop -ment Procurement Supplier Control Build OEM Install Quality Control Programs Quality Management Mission/Focus Identify and remove barriers to flow Develop methods to enable seamless product transitions between factories Drive focus on improved yield thru critical factory process Effective implementation and management of QMS System Drive root cause analysis and C/A for customer returns Field Quality Engineering Software Quality Eng Engineering Design Process Service & Support Design Quality Eng Ensure contract, customer and regulatory requirements Develop method to enable seamless product transitions (design-production) Provide Process Navigation & Mentor Support Validate performance of purchased parts through RCI product life cycle Supplier approval certification and corrective action Product source inspection Establish single quality process in all RCI locations Validate business process compliance and initiate C/A of at risk business processes Support Integrated Product Integrity Program Supply Chain Quality Assurance Supply Base Mgmt Process Enterprise Business Compliance Process Rockwell Collins, Inc. Product Integrity System Validation & Verification Advanced Quality Systems & Technology Continuous Improvement Focus in Design The Continuous Improvement Focus Of RCI Single QMS Is Identification And Reduction of Process Variability In 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 Cost Of Non-Conformance (CoNC) Process Inefficiency Warranty Service Bulletins Customer Penalty Finished Goods Modifications Losses are Obvious! Rejects (Internal Failures) ECOs Consignments Non-Standard Modifications Scrap MRB Waste is obvious Test Equipment Wear Loss of Future Customers Excessive Overtime Pricing Billing Errors Loss of New Contracts Premium Shipping Costs Loss of Company Reputation Expediting Costs Root Cause Analysis Overdue Receivables Waste is Difficult to see, calculate, and realize, yet very real! WASTE!$$$$$ Below the Surface! Unutilized Space Lack of Follow-Up on Current Programs Handling Managing Corrective Actions Development Costs of Poor Quality Product Intangible CoNC! Planning Delays Excessive Field Service Expenses Excessive System Costs Unused Inventory Re-Test Re-Inspection Processing Paperwork Unnecessary meetings-Time with Customers CoNC The Ultimate Business Case !!!!! AS9103 What is the Benefit Control of Key Characteristics = Variation Reduction = < CONC $$$ Continuous Improvement LCL UCL Component SubAssembly Test Bench UCL LSL USL Component SubAssembly Test Bench LCL UCL USL Component Prevention Reduce CONC SubAssembly Test Bench Efficiency Top Level Test Bench Top Level Reduce Waste Customer Value Test Bench Increase Profits Aircraft Aircraft Aircraft CONC $ $ $ Top Level LSL LCL CONC $ $ $ Test Bench USL CONC $ $ $ LSL AS9103 Encourages Focus on Design and Prevention Percent of Total Incurred Costs Assigned Enterprise Product Assurance Resource Allocation 100% Preventive Actions Corrective Actions 80% 60% 40% 20% 0% POC D&D BLD S&S FY01 0% 9% 90% 2% FY05 Fcst 2% 21% 68% 9% Future State 5% 45% 35% 15% 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 $57 Req'mt Def $143 Design $430 BOM Release Qual Test Production Source for Defect Cost (Analysis thru Test): Cost Benefits of Software QA Whitepaper, North Carolina State University, Nov 2000 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 Understandable Continuous Improvement Model Show Return-On-Investment. Get Finance Dept To Validate The Savings Report Results: Improved Quality, Reduced Costs, Improved Delivery, etc. Advertise Successes! 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