CASE STUDY | Aerospace Manufacturer Achieves Lean Production Goals

Summary Customer Large aerospace engine manufacturer Business Need • Reduce supplier management costs • Eliminate nonessential production activities Solution Supply chain consolidation and integration Results • Local stocking facility, consignment program • Dedicated sales, service, operations and quality teams • Deferred asset ownership Customer Challenge Benefits A leading aerospace engine manufacturer needed new ways to revitalize its growth while • Doubled the number of parts on contract maintaining its commitment to quality. The strategy to eliminate nonessential activities by shifting design engineering costs to subcontractors and OEMs resulted in a supplier base that was larger with Anixter than the industry average. As the manufacturer continued to shift its assembly operations further • Reduced existing supplier base upstream, the corresponding supplier management costs also continued to rise. Instead of a • Implemented pull system, scheduling streamlined supply chain that consolidated the OEM supplier base into a single-source channel agreements and spare-part support of piece-parts, the manufacturer needed to deal with each supplier individually, creating a jumble of purchase orders, invoices, delivery schedules and product specifications.

Building on a long-standing relationship, the manufacturer turned to Anixter to help restructure and manage its supplier relationships. The manufacturer’s goals were to maximize delegated supplier services, maintain long-term cost controls and achieve the highest possible productivity The consolidated supply while maintaining superior quality. Anixter conducted a full analysis of the company’s supply chain reduced the number chain and found that there was a largely untapped opportunity to consolidate the supply of assembly hardware and components. Accomplishing these goals required a strong alignment and complexity of suppliers between Anixter, the aerospace engine manufacturer and the supplier base to plan, execute and and lowered overhead costs communicate critical information up and down the supply chain. when compared to multiple Program Scope original equipment The manufacturer was sourcing more than 1,200 part numbers directly from the suppliers, many manufacturers. of which were proprietary fasteners. After conducting a thorough cost/benefit analysis, Anixter found that the manufacturer could narrow its supply chain by using only Tier 1 suppliers. The analysis also demonstrated that by shifting nonessential production activities up the supply chain, Anixter could oversee supplier quality and production capacity to maintain long-term controls and achieve the highest possible productivity.

On a yearly basis, Anixter sources more than 90,000 part numbers from 2,000 suppliers worldwide for its aerospace customers. With such an extensive product portfolio, Anixter understands the value that positive supplier management relationships can have on a manufacturer’s production schedule. Before the critical final negotiations with the aerospace engine manufacturer, Anixter established good working relationships with each new supplier.

Products. Technology. Services. Delivered Globally. 9S0005X0 © 2009 Anixter Inc. • 06/09 AESTUDY CASE achieve thefollowinggoals: By workingwithAnixter, thecustomerwasableto of solutions,Anixteristheperfectsupplychainpartner. scale tomeetproductiondemands.Withawiderange their totalcostofownership,improveproductivityand SupplyChainServiceshelpcustomerslower Anixter’s Supply ChainIntegrationBenefits: • Reduced shortagesthroughtheredeployment • A customizeddistributionplantoprevent • Pipeline maintenancestructuresthatfit stockinglocationthatpositioned • A forward • Quality systemimprovementsthatreducedcost suppliertieringthatleveragedthe • Additional • Lower overheadcostswhencomparedto • Delegated suppliermanagement,which • A consolidatedsupplychannelthatreduced of resources shortages inventory needs to thecustomer’s andsupportwhereneeded inventory of productsegments of qualityandconsistencythroughoutavariety integrated oneatatimeormany that isscalableandwheresupplierscanbe infrastructure alreadyinplacewithaprogram multiple originalequipmentmanufacturers and performanceforsubtiersuppliers transferred responsibilityforquality, cost by establishingasingleprocess the numberandcomplexityofsuppliers Anixter Inc.doesnotmanufacture theitemsdescribedinthispublication.Allapplicablewarranties are providedbythemanufa and makeinformedpurchasingdecisionsaroundtechnology, applicationsandrelevantstandards. Throughouttheworld,weprovide of productionandimplementation. ANYSElistedcompany, Anixter, withitssubsidiaries,servescompaniesinmorethan52count Aerospace Hardware•ElectricalandElectronicWire&Cable •EnterpriseCabling&SecuritySolutionsFastenersAerospace Anixter isaleadingglobalsupplierofcommunicationsand securityproducts,electricalandelectronicwirecable,fastene te eopc adaeLocations:USA–Arlington,Texas •Canada–Boucherville,QuebecFrance –Paris Hardware Other Aerospace Data andsuggestionsmadeinthe publicationarenottobeconstruedasrecommendationsorauthorizations touseanyproductsi nxe n.•aitrcmarsae•800.554.4449 •21123NordhoffStreet,Chatsworth,CA91311 Anixter Inc.•anixter.com/aerospace | Aerospace Manufacturer Achieves LeanProduction Goals ManufacturerAchieves Aerospace Anixter forotherwaystofurtherreducecostsandimproveperformance. additional timeandcosts.Withatightlyintegratedsupplychain,thecustomer islookingto productionline,saving a DPU(defectsperunit)systemtosendpartsdirectlythecustomer’s ensure theprogramisrunningatitshighestpossiblelevel.Anixteralsonow implementing businessonadailybasisto Anixter continuestosupportandreassessthemanufacturer’s on-site businessrepresentative,localqualitystaffandadedicatedcorporateprogrammanager, manufacturer, whichhasmorethandoubledthenumberofpartsoncontract.Byassigningan investmentandlong-termcommitmenttothe As therelationshiphasgrown,soAnixter’s and shippingschedules. on itsmanufacturingactivitiesratherthandivertingenergiestomanagepurchaseorders,invoices With astreamlinedchannelforthebulkofitspiece-parts,manufacturercouldnowfocusmore Anixter inventoriedallpartswithadequatesafetystocktomaintainsupplyatamoment’snotice. through MRPaccordingtoplanneddemandsandspare-partsupport.Regardlessofthereplenishment, reachedaminimumon-handquantity,materials whentheinventory schedulingagreementsreleased replenishmentrequirements.Thisincludedapullsystemthatreplenished based uponthecustomer’s online portal,whichallowedAnixtertoforecastdeliveriesandcustomizethescalablesupplyprogram bysharinginformationthroughthecustomer’s Throughout theprocess,Anixtermanagedinventory shortages. which helpedtopreventinventory the existinginfrastructurewithascalableprogramthatcouldeasilyaddorsubtractsuppliers, original equipmentmanufacturers.TheadditionalsuppliertieringprovidedbyAnixterleveraged number andcomplexityofsuppliersloweredoverheadcostswhencomparedtomultiple maintaining thesameperformanceandquality. Theconsolidatedsupplychainreducedthe the manufacturersuccessfullyreduceditssupplierbaseandmanagementcostswhile With thesupplychainintegrationpracticesandlocalstockingfacilityprovidedbyAnixter, Program Results with productandprocessdevelopmentthroughjointimprovementactivities. deferred assetownershipforthecustomerthroughaconsignmentprogramandprovidedassistance needs.Anixter production capacityandoverallperformancetoanticipatethemanufacturer’s and qualityteams,Anixtermaintainedafullystockedpipelineoversawsupplierquality, which providedanincreasedlevelofproductionsupport.Withdedicatedsales,service,operations To location,Anixterestablishedalocalstockingfacility, bringmaterialsclosertothemanufacturer’s products. to thecompletionofcustomerrequirementsandanuninterruptedflownecessary Understanding theintricaciesofintegratingcurrentandnewsuppliersorcommoditieswasvital gap analysis,whichmatchedavailablestockandcurrentleadtimeswithforecasteddemands. was mappedoutinadvance,startingwithsupplierapprovalandthenpartreviewfinally chain managementconcepts.Anycurrentorprojectedshortfallswereidentified,andeachtransition supply chainservicesprovider, Anixterisanexpertinbid-to-buy, kanban,JIT, VMI,leanandsupply logisticsand control oftheexistingsuppliersandtheircontracteditems.Asanindustry-leading After demonstratingthevalueofrestructuringsupplychaintomanufacturer, Anixterassumed Anixter Solution cturers. Purchasersarerequested todeterminedirectlyfromthemanufacturersapplicableproduct warrantiesandlimitation n violationofanygovernmentlaw orregulationrelatingtoanymaterialitsuse. innovativesupplychainmanagementservicestoreduce our customers’totalcost ries around the world. Anixter’s totalrevenue exceeded$6.1billionin2008. ries aroundtheworld.Anixter’s rs and other small components. We help our customers specify solutions rs andothersmallcomponents.Wehelpourcustomersspecify s.