SC21 Achieving Supply Chain Excellence Manufacturing

SC21 Achieving Supply Chain Excellence

Manufacturing Technology Centre

Wednesday 15 May 2019 Welcome and Introduction

Paul Everitt ADS

Support for supply chains …where are we now? What are the options?

1. Leave with No Deal

2. Leave with the PM’s Deal

3. Remain in the EU What are companies doing?

1. Investment, supplier decisions are on hold

2. Stockpiling to mitigate against regulatory uncertainty, border delays

3. No Deal is the only scenario companies are planning for • Supporting EU27 workforce • Shifting certifications out of the UK • Preparing for customs procedures • Modelling, monitoring cash flow implications What happens next?

• Cross-party talks will continue, but won’t lead to a resolution

• UK will participate in European Elections

• Conservatives are focused on who comes next, not what to do next

• Labour internal debate will be on whether to back a 2nd Referendum

• UK is set to leave the EU on 31st October (can’t take another extension for granted)

• Which means… The UK must choose

1. Leave with No Deal

2. Leave with the PM’s Deal

3. Remain in the EU Comprehensive Spending Review & Supply Chains Spending Review

A lot we don’t know • What years will be covered? • What spending will be in scope? • What will the spending envelope be? • Who will conduct Spending Review?

Decisions could be made at an Emergency Budget or at Autumn Budget • Political uncertainty could lead to an Emergency Budget; or • Brexit uncertainty could lead to CSR being postponed; or • CSR could be completed in Autumn 2019. Protected areas of spending

Several spending commitments will constrain Spending Review • NHS: Day-to-day budget of NHS England to increase by £20.5bn between 2018-19 & 2023-24 • Defence: Commitment to continue to spend at least 2% of GDP • Overseas Aid: Commitment to continue to spend 0.7% of GNI

Together these comprise over half (£156bn) of day-to-day departmental spending • These commitments imply real-terms, per capita cuts to unprotected areas CSR & Supply Chains

• CSR presents an opportunity to showcase the need for long-term support for the UK Supply Chain

• DRAFT AGP Proposal – Provide long-term footing for supply programmes:

Phase 1 – 2019-2022 • Individual programmes (NATEP, CR&D, SC21 OE & C&G, SiG) to run within overall framework • Profiling/diagnostic tool guides companies to appropriate innovation and performance programmes

Phase 2 – 2023-2030 • Integrated ‘Productivity fund to 2030, with individual programmes under a single framework • Support, funding delivered through “Supply Chain Strategy” focused on key capabilities, companies Questions? National Aerospace Technology Exploitation Programme

NATEPNATEP : : A A UKART UKART Programme ProgrammeNATEP : An AGP Programme www.natep.org.ukwww.natep.org.uk Background to NATEP

In support of the UK Aerospace Industrial Strategy for the Aerospace Sector, the Aerospace Growth Partnership developed a National Aerospace Technology Exploitation Programme (NATEP) aimed particularly at small and medium sized businesses to : • Help them develop their own innovative technologies • Increase their ability to win new business with higher tier companies anywhere in the world

NATEP : A UKART ProgrammeNATEP : An AGP Programme www.natep.org.ukwww.natep.org.uk Support to accelerate supply chain development

www.theAGP.aero Building upon success

NATEP 2013-2017 • £40m programme with £23m of grant funding. • 112 collaborative projects funded • 267 supply chain companies funded • 400 supply chain jobs created or sustained. • Programme ended September 2017

NATEP 2017-2020 • A £14.4m with £8m of grant funding • Will deliver 35 collaborative Research & Technology projects for the aerospace supply chain involving • 87 supply chain companies funded • Programme Ends April 2020

NATEP : A UKARTNATEP :Programme An ATINATEP Programme : An AGP Programme www.natep.org.ukwww.natep.org.uk NATEP Programme Consortium

Programme Lead Organisation

Consortium Partners

NATEP : A UKARTNATEP :Programme An ATINATEP Programme : An AGP Programme www.natep.org.ukwww.natep.org.uk Provides 3-way help

• Funding • Collaboration • Mentoring

NATEP : A NATEPUKART : An Programme ATI Programme www.natep.org.uk The NATEP Model

‘Money & Mentoring’

Project Sustainability & NATEP R & T Project Project Delivery Assessment & Dissemination Engagement Planning & Bidding Approval

❑ Help with ❑ Help with ❑ Feedback ❑ Monitoring of ❑ Promotion Consortia Planning on Full Project Opportunities ❑ Knowledge ❑ Collaboration Proposal Progress ❑ Press Transfer Agreement ❑ Opportunity ❑ Assistance coverage ❑ Workshops ❑ 2 Stage to Present with Claims & Proposal ❑ Training - Networking Process IP Protection, ❑ Feedback on Design of Outline Experiments Proposal etc.

NATEP : A UKART Programme www.natep.org.uk NATEP Project Criteria

• Technology must have an application or potential application within civil aerospace.

• Projects comprise a supply chain technology partnership of at least 2 entities.

• Projects must show clear benefit technically and in creating or safeguarding jobs.

• Fundamental research not suitable, but wide range of Technology Readiness Levels (Usually TRL 4-7) considered.

• Development of technologies should be in line with the ATI Strategy www.ati.org.uk

• See NATEP Website for full criteria

NATEP : A UKARTNATEP :Programme An ATI Programme www.natep.org.uk Process Optimisation for Aerospace Alloys

Project Ref: MAA 004 Partnership: A Supply Chain Cluster Project

Grant Awarded: £90,497 Duration: 24 Months Project Outcome: ❑ This project has allowed three SME aerospace manufacturers to use the Manufacturing Technology Centre expertise to solve machining problems associated with difficult-to-make aerospace components made from specialist alloys ❑ Research into machine tools and processes, machine settings, tooling and fixturing design has paved the way for next generation parts to be machined to a quality, accuracy and repeatability which was previously unattainable

NATEP : An AGP Programme www.natep.org.ukwww.aerospace4growth.org.uk FAC028 Adhesion Technologies Togglon - a Bonded Fixings Installation System

Partners: Adhesion Technologies, MEP, Loop, Pressavon and GKN Grant awarded: £150,000 Objective: to deliver the world’s first installation tool specifically designed to quickly, accurately and consistently install composite bonded fastenings on to most substrates at any angle

Current Bonding Methods Future Robotic Togglon

Unlike metal riveting tools which have progressed from manual to automated installation, adhesive bonded fixings are still primarily manually installed.

www.NATEP.org.uk ADAPT - Affordable Detail Additive Parts Technology

Overall Cost: £196,266 Grant Awarded: £98,133 Project Duration: 18 months Lead: Hyde Aero Products Ltd

Partner: HK 3D Solutions Ltd

End Users: MBDA UK Ltd & The Boeing Company

Objective: The ADAPT project will seek to determine the applicability of Atomic Diffusion Additive Manufacturing technology for use in cost effective manufacture and optimised design of detail metallic components in aerospace when compared to traditional subtractive manufacturing strategies and MIM (Metal Injection Moulding)

Outcomes: A competitive metallic Additive Manufacturing solution for Aerospace subcontract design and manufacturing in the UK

www.NATEP.org.uk Thank You

Harriet Wollerton NATEP Programme Director [email protected] www.natep.org.uk

NATEPNATEP : : A An UKART ATI Programme Programme www.natep.org.uk Coffee and Networking “When Colin?”

SC21 OE and C&G Programmes

28 SC21 – Achieving Supply Chain Excellence www.sc21.org.uk Content - What are we going to cover ?

- 5 Whys - Update: Operational Excellence (OE)

Competitiveness and Growth (C&G) (including pilot feedback)

29 SC21 – Achieving Supply Chain Excellence www.sc21.org.uk 5 WHYs ?

If we want something different we must change what we do ! ?

30 When - A&D Supply Chain Improvement timeline

2006 2019

2006 2007 2010 2012 2013 2016 2018 2019

Achieving Supply Chain Excellence When - A&D Supply Chain Improvement timeline

UK Aerodynamics Centre Technology Strategy Board

2006 2007 2010 2012 2013 2016 2018 2019

AGP Finance Forum

The AGP was established in 2010 as a vehicle to tackle barriers to growth, boost exports and grow the number of high value jobs in the UK Aerospace Sector, it aims to maintain and grow the second largest aerospace economy in the world

Achieving Supply Chain Excellence Who - Supported by: 7 Commitments

SC21 participants agree to 7 commitments when starting their journey

• SC21 Business Culture • Delivering Innovation • Through Life Solutions • Delivering Your SC21 Plan • Leadership • Ethical Practices • Increased Pace of Change

What this really means…

• Standard tools and techniques • Standard performance recognition • Increased transparency • Improved communication and collaboration Achieving Supply Chain Excellence 12 years + of SC21 – The largest and longest running A&D Supply Chain Improvement Programme

Number of companies that have participated: 770825++

Bronze, Silver or Gold standards achieved: 670775+

Achieving Supply Chain Excellence Who - Participants and Performance achievers

Delivery Quality 680+ 99.00% - 100% 99.90% - 100% Current Participants

95.00% - 98.99% 99.50% - 99.89%

RelEx BusEx 90+ ManEx Current Performance 90.00% - 94.99% 98.00% - 99.49% Achievers What’s new ? - Not the same old same old -

37 SC21 – Achieving Supply Chain Excellence www.sc21.org.uk EFQM Based Strategic Plan

ENABLER CRITERIA : 1.LEADERSHIP Reported Date: January-19

Sub-criteria Enabler Sub-Criteria Benefits 2019 Objective KPI Target Current Benefits 1.1 Vision Describes clear view of what we want to be Publish 1.2 Mission Describes what we do, who for and how Publish Intranet & Social Present via Intranet and Media Visibility all exteral comms 1.3 Values Describes the culture and behaviours all participants adhere Publish Annual Objectives to, in order to help achieve the Vision 1.4 Stakeholder Engagement Ensures our Strategic direction is built on the needs of our Finalise Map and Action Endorsement by Endorsement no later KPI’s/Progress multiple stakeholders including: HMG ( inc AGP & DGP), Govt Plan SB. than 30/03/19 & Civil Customers, Primes, OEMs, Suppliers ( CSIP/OE/C&G/SiG), Practitioners ( OE), Assessors & Providers ( C&G) 1.5 Governance Assures the credibility of the organisation. Ensures equal Increase participation % Attendance Target measured and participation of all stakeholders and accountability of all levels in SB & SiGs Target to be set exceeded partipants, makes it effective in accelerating supplier and customer participation in, and progress of, the Programme

Forecast Date / # Action Description Owner Target Date Progress status Commentary & RTG Plan if required Target Actions per J.Mabey / P.Hart / 1.1.1 Propose updated Vision Statement to SB 10/12/2018 10/12/2018 To be presented in Dec SB Sub-criteria C.Hart Owners 1.1.2 New Vision Statement validated by SB S.Board 30/01/2019 30/01/2019 Dates 1.1.3 New Vision Statement used in all Marketing C.Hart 28/02/2019 28/02/2019 J.Mabey / P.Hart / 1.2.1 Propose Mission Statement to SB 10/12/2018 10/12/2018 RTG Plans C.Hart

1.2.2 New Mission Statement validated by SB S.Board 30/01/2019 30/01/2019

1.2.3 New Mission Statement used in all Marketing C.Hart 28/02/2019 28/02/2019

Record of SB Decisions Decisions Agreed by SB

Achievements Main Main Issues & Risks achievements Risks Decisions to be Next steps Next Steps made Behaviours. Driving Culture. Flexibility. Manage Change Other Enabler Unused sub criteria Criterions 38 Strategic Plan- Work Streams – Structure

Based on EFQM Enablers & Sub-Criteria Leadership Policy and Strategy People Partners & Resources Products, Processes & Services

Each Enabler has: Enabler Sub-Criteria Benefits 2019 Objectives Target KPIs

SC21 – Achieving Supply Chain Excellence 39 SC21 Aim

Continually improving and accelerating the competitiveness and capability of the UK’s Aerospace & Defence Supply Chains in the 21st Century

SC21 – Achieving Supply Chain Excellence 40 SC21 Mission

SC21 enables our supply chains to continuously improve capability, in order to be more competitive regionally, nationally, internationally. SC21 does this by providing best in class improvement programmes, supported by industry experts, working in a collaborative approach in the best interests of all our Aerospace and Defence Stakeholders.

SC21 – Achieving Supply Chain Excellence 41 Entry Profiling Tool - SC21 Participants

59 Expressions of Interest

59 requests for profiling data

40 returns to date

6 OE only

8 OE/C&G

13 C&G only

8 C&G/SiG

5 SiG only

SC21 – Achieving Supply Chain Excellence 42 Aerospace & Defence Supply Chain Improvement Ladder

& SC21 Lite Strategy - 2019

Position SC21 OE as the reference improvement programme in the A&D sector for improving operational performance and maturity, increasing participation levels of both suppliers and customers, through the continuous improvement of the programme and engagement with MOD, DGP, Civil Customers & AGP.

44 SC21 – Achieving Supply Chain Excellence What’s New - OE Highlights

Updated Website – Clearer and Simpler to navigate

Updated version of the Annual / Submission Template (v3)

ManEx BusEx Processes, Assessment Guides, templates and Skills Matrix updated

RelEx Process - Guides Updated

Quality Intervention Syllabus refreshed

UK A&D Quality Board re established

Partner & Practitioners SIG established

45 SC21 – Achieving Supply Chain Excellence Aerospace & Defence Supply Chain Improvement Ladder

& SC21 Lite SC21 Competitiveness & Growth (C&G)

• The SC21 C&G programme is the intermediate step on the Aerospace and Defence Supply Chain Improvement Ladder. It is specifically designed to focus on increasing competitiveness and improving organisational capability in the eyes of the customer.

• The SC21 C&G programme utilises the National Manufacturing Competitiveness Level (NMCL) System. This system was developed by an ADS and SMMT led consortium, supported by industry primes and OEMs. It is a set of processes, tools and techniques that not only assesses a company’s competitiveness and indicates how they are performing, but also highlights areas where improvement can and should be made.

SC21 – Accelerating Competitiveness in Supply Chains Government support for Productivity - Farnborough

£343 million pounds of investment for research and development projects and to boost productivity. This includes

£255 million of joint investment R&D projects supported by the Aerospace Technology Institute and UKRI

£68.2 million of joint funding with industry for R&D, specifically targeting small and medium sized businesses to help them increase their competitiveness.

And a further £20 million of Government and industry match funding will go towards a productivity improvement programme/

SC21 C&G - Accelerating Competitiveness in Supply Chains Government support for Productivity – Aylesford Launch!

SC21 Competitiveness and Growth Supply Chain Programme Launched ! A new Industrial Strategy programme for aerospace industry SMEs was launched 13th May by new Business and Industry Minister Andrew Stephenson

The Supply Chains for the 21st Century (SC21) Competitiveness and Growth scheme was allocated £10m Government funding, matched by industry, as part of the Aerospace Sector Deal published in December.

The programme is now launched and will support up to 80 UK aerospace supply chain companies during the next three years.

Further Ministerial Supply Chain visits planned SC21 C&G - Accelerating Competitiveness in Supply Chains Strategy - 2019

• Effectively launch the SC21 C&G programme, achieving the participation levels defined in the funding application, establishing its position as the reference improvement programme for enabling growth and competitiveness in the A&D sector.

50 SC21 – Accelerating Competitiveness in Supply Chains SC21 C&G Deployment Framework

SC21 – Accelerating Competitiveness in Supply Chains SC21 C&G Competitiveness Framework

1. Competitive Strategy & Management Systems

2. New Product Introduction & Lifecycle Management Quality

New Products Cost Tier-n Tier- one Delivery Inbound Outbound logistics 3. Manufacturing Operations logistics

Flexibility Customer Demand Customer

Current Satisfaction Customer Product or Products Technology 4. Supply Chain Management Customer Experience

A syllabus of 122 Improvement Modules has been created Content has been agreed by a broad panel of industry experts Delivery of support in training, coaching and mentoring tailored to your needs is conducted by a group of Approved Providers They are approved by Sector Boards to deliver their own material that satisfy the syllabus requirements Beneficiaries will have access to a matrix of Approved Providers from which they can choose who to support them in their programme Critically, Assessors and their companies cannot provide improvement support to Beneficiaries they have assessed

SC21 – Accelerating Competitiveness in Supply Chains SC21 Competitiveness & Growth (C&G)

P BEIS PIC and Treasury Approval now obtained – Ministerial Sign-off achieved P Both NMCL Auto & SC21 C&G waiting formal Grant offer letter (May 2019) P 59 Expressions of Interest from potential Beneficiaries P 34 individuals undertaking Assessor Qualification (6 Master, 13 Assessors & 15 Assistants)

P 122 Approved Improvement Modules (IM) in place P 18 Approved IM Providers in place across the 4 themes P First Capability Assessments planned 2nd quarter 2019 P Expanded SC21 Programme Office P Updated SC Improvement Programme Entry profiling now operational for OE, C&G & SiG 54

SC21 – Accelerating Competitiveness in Supply Chains SC21 C&G PILOT MEP LTD SC21 C & G Pilot

Introduction to MEP

Early engagement with SC21 C&G

The Continuous Improvement Process and Benchmarking – a problem that needed a solution

The Pilot - highlights

The assessment

The customer piece

A problem that needed a solution – Revisit

What next for us with C&G?

SC21 C&G - Accelerating Competitiveness in Supply Chains 56 Beyond Making Everything Possible Our Story

FM 14027

EMS 556082

East Malling, Kent Aylesford, Kent Terry and Phil in 1972!! Moulding Value Stream “Wilbur” IASME-A-04391

M.E.P Site 5 and current Moulded and Expansion (Aeroplastics) Ltd Further expansion! Site 6 and current Engineered Plastics 1989 USA Virginia site Beyond is born 2019 Founded in 1972 1975 1978 In 2005 we became MEP 2012 1976 Ltd Making Everything Possible - Tovil, Maidstone, Kent Globally

Our first site! Forest Row, East Sussex Aylesford, Kent Machining Value Stream “Orville”

Allnutt Mill is now a housing estate Beyond Making Everything Possible Our Leadership Phil Hart

Managing Director

Colin Harsant Nikki Greig

Operations Finance Director Director

Jamie Thomson Robert Hart Sandra Terry Helen Hills

Technical Sales Manufacturing Quality Assurance HR/CI & Interim Supply Chain Manager Manager Manager Manager Beyond Making Everything Possible Our Service Innovative Moulding Trusted Approachable Thermoset Compression Thermoset Transfer Valued

Flexible Injection Moulding Hand Lay-Up Professional of Thermoplastics Adaptable Competitive

Finishing Committed Assemblies Experts Tooling Post-moulding Finishing Responsive machining Aligned

Grinding Detailed inserts Complex shapes Friendly & Materials Machined ‘Can Do’ CNC Turning Assemblies R & D Guillotined Communicative Reliable CNC 5 Axis Milling R & D PoC Manual 2 Axis Turning PoC Machined tight tolerances Collaborative Partnership Machining Insulators & Ethical Tooling Excellence CNC Mill / Turn complex Assemblies Range detailed parts Complex shapes Insulations & Materials CNC Multi-axis Turning Proactive Accommodating PoC Stamping to tight tolerances CNC 3 & 4 Axis Milling R & D Confident Stamped Manual 3 & 4 Axis Milling Dependable Capable Sawing Knowledgeable Supported by our collaborative and consultative approach, and full Supply Chain Management SC21 C & G Pilot

Initial early engagement with SC21 C&G

SC21 C&G - Accelerating Competitiveness in Supply Chains 60 SC21 C & G Pilot

The Continuous Improvement Process and Benchmarking

Problem Statement:

How do you know what to improve?

When you know what to improve, what’s the target?

Where do you get help?

The role of Benchmarking.

SC21 C&G - Accelerating Competitiveness in Supply Chains 61 SC21 C & G Pilot

The Pilot

The assessment

The customer piece

SC21 C&G - Accelerating Competitiveness in Supply Chains 62 SC21 C & G Pilot

MEP’s problem definition – Revisit

Problem Statement:

How do you know what to improve?

When you know what to improve, what’s the target?

Where do you get help?

SC21 C&G - Accelerating Competitiveness in Supply Chains 63 64 SC21 C&G - Accelerating Competitiveness in Supply Chains WHEN ? If you want to give yourself a better chance to succeed you can start with being the best and…

65 SC21 – Achieving Supply Chain Excellence www.sc21.org.uk WHEN ? the longer you wait the shorter your future will be

Thank you

66 SC21 – Achieving Supply Chain Excellence www.sc21.org.uk Questions? SC21 conference

Submarine Delivery Agency (SDA) 15th May 2019

Kat Morgan SDA Supply Chain Deputy Head

68 Overview • Submarine Delivery Agency – context and aims • SDA Supply Chain management, why & what = critical enabler • SDA approach of understanding its supply chain • SDA Supplier Improvement activity • Key “take-aways”

OFFICIAL SDA CONTEXT & AIMS

70 SDA Context & Aims

Maintain CASD Cost-effective delivery Continuous Improvement

• Royal Navy is charged with • Dreadnought is one of the largest • Learning lessons from past maintaining one Trident missile Government investment programmes; experience, building on DE&S submarine at sea at all times. 2015 SDSR introduced changes to the Transformation • SDA was created in spring 2017 with project’s governance & oversight: the aim of ensuring the Dreadnought • Defence Nuclear Organisation • Encouraging greater collaboration comes in on time and budget. established to oversee all aspects of the across project teams • Defence Secretary’s key message at nuclear enterprise • Supporting innovation the time, Sir Michael Fallon, was • SDA was established as an Executive • Focusing resources and budgets on “delivery of the new submarines Agency of the MOD to manage the cannot and must not slip” procurement and in-service support of delivering the right things at the all nuclear submarines, sitting alongside right time Defence Equipment & Support

OFFICIAL Submarine Delivery Agency (SDA) • Established as an Executive Agency of the MOD on 1 April 2018 • Represents a key milestone in implementing a Strategic Defence Security Review (SDSR, 2015) commitment to create an enduring, world-class submarine enterprise • Draws on best practice from public and private sector and is modelled on other successful major programmes • Leads on procurement, in-service support and decommissioning of all UK nuclear submarines • Continues to work closely with the Defence Nuclear Organisation, Navy Command, Defence Equipment & Support (DE&S) and industry partners to deliver capabilities to the Armed Forces

OFFICIAL 73 Submarine Delivery Agency Senior Leadership Team

73 SDA SUPPLY CHAIN MNGMNT

74 Submarine Supply Chain Management

• Critical to success of the Astute and Dreadnought Programmes • SDA must deliver performance to cost and time • SDA’s suppliers to understand SDA requirements • Supply Chain must deliver to schedule, cost and quality • Strive for continuous improvement • Keen to hear ideas • Future Business to include bulk buy

OFFICIAL SDA Supply Chain management – What?

• Supply Chain management is a key enabler to Dreadnought and remaining Astute boats on time and to budget • SDA is becoming an intelligent customer who understands market capabilities and can make holistic decisions as to what capabilities it needs to invest in for sustainable delivery of the submarines • Multi-disciplinary team being stood – circa 12 FTEs by Oct 18; broadly three areas of strategic focus:

Drive performance through Tier 1s Market intelligence Strategic supplier management Aim: Refine supply chain Aim: Sustainable submarine Aim: Supplier performance management requirement, targets delivery management & development & performance • Work with Tier 1s to refine how • Identify risks, dependencies and • Supplier assessment and we jointly manage the supply fragility segmentation chain • Understand market capacity and • Supplier development particularly • Joint risk management capability for submarine delivery in case of critical suppliers • Hold Industry to account for now and in the future • Coordinated supplier relationship delivery of their outputs into the • Develop Submarine Industry management across SDA and supply chain network strategy MOD,

OFFICIAL An incremental approach…

Continuous Improvement

• Improvement Plan Benefits • Performance Metrics Value Creation • Benefits Management

• Efficiency • Collaboration • Innovation Risk Reduction • Relationship Management

• Supply Chain Map • Supply Chain Fragility Analysis Strategic Review

• Requirements Capability Improvement • Commercial Strategies • Alignment of Initiatives

Time

OFFICIAL Governance - Submarine Enterprise SC Forum

Sponsor 1 • The 1* Submarine Enterprise Supply Chain Forum (SESCF) is responsible for providing Submarine Enterprise Delivery strategic Supplier Management direction to Review SEDR the entities involved in the Submarine Production . It will oversee the outputs of the Chair Supply Chain Mapping, Risk & Fragility Management and Supplier Improvement SDA Plans Work Streams, promulgating (where appropriate) common standards of supplier development and supply chain analysis. • A consistent link will be maintained to the improvements sought through establishment of the SDA Supplier Management team, to Work stream 1 Work stream 2 Work stream 3 ensure that Industry SC improvement Supply Chain Supply Chain Map Supply Chain Risk initiatives are aligned with the strategic Development Lead SDA/BAES Lead Rolls Royce direction of the SDA. Lead Babcock • The SESCF will oversee supplier SDA PM SDA PM SDA PM performance (inc risks, issues and opportunities) and seek endorsement of ABC ABC ABC proposed strategies to improve enterprise performance. Industry PM Industry PM Industry PM ABC ABC ABC

Industry PM Industry PM Industry PM ABC ABC ABC

OFFICIAL SUPPLIER SEGMENTATION & SUPPLIER IMPROVEMENT

79 Why do KSM and what is 1 the approach? Why segment the Supplier Base (1/2)

Segmenting the supply base is the foundation for adopting appropriate relationship management approach

Supplier Segmentation Segmentation provides a consistent framework for identifying and classifying different supplier importance within the category.

MOD-wide SSM Following segmentation, different relationship management strategies Prime process will be applied which determine the: Key • Overall effort and resource allocated to the suppliers, supplier relationship to which Commercial and contractual conditions KSM is Strategic • applied • Effective performance management • Discovery and prioritization of innovation opportunities for procurement and the business Critical

The ownership of SRM activities sits with the SMT group, but roles and responsibilities could be assigned across the delivery organization based on segmentation results. Other Final allocation of suppliers to segments should be agreed with SMT Hd in conjunction with PT Team Leaders.

80 Why do KSM and what is 2 the approach? Approach to Identifying Strategic Suppliers (2/2)

Strategic Suppliers are a select group of Critical Suppliers, illustrated by the graphical representation below.

All MOD T2 suppliers (~1200 in total)

Critical Suppliers (103 in total) Single-source suppliers of critical components, or defined as ‘key/strategic’ by the Primes.

Strategic Suppliers (20 in total) Select group of Critical Suppliers, based upon overall risk and qualitative adjustment.

OFFICIAL OFFICIAL

In process

KSM Engagement Plan Planned

SF Execute Review P1 Review P2

SRT Plan Execute Review P2 Review P2 x Identify Triangulate Plan Execute Review P1 Review P2

ABC Plan Execute Review P1 Review P2

XRF Triangulate Plan Execute

CDE Execute Review P1 Review P2 We are BNRT here – Execute Review P1 Review P2 Q4 18/9 Execute Review P1 Review P2

NNNNNNN Identify Triangulate Plan Execute Review P1 Review P2

LLLLLLLLLLLLJL Plan Execute Review P1 Review P2

2nd & 3rd phase – CC, Identify Triangulate Plan Execute Review CCCo-roll, CCC, CC, CC, CC, CC, CCC, CCCe, Identify Triangulate Plan Execute Review CCC, CCC, CCCCCC ForgCCCCCC, GFWEÁ

Dec 18 Apr 19 Jul 19 Oct 19 Jan 20 Mar 20 Pilot Cat Strat Category Strategies Agree process Implement Pilots

BOXARR Supply Chain & Value Chain Mapping

Internal Stakeholder Engagement and Management

OFFICIAL OFFICIAL SDA methodologies/tools High Level SC21 approach to supplier improvement

Level 2 Level 1 Level 3 Conduct Monitor Identify Engagement Develop Continuous Close assessment progress and candidates for and improvement Improvement development and provide performance development Awareness plan Support relationship feedback improvement Supplier Dashboard (Defence share to be updated by end wk2) Supplier Supplier Performance & Risk Re-assess Development Yes No Engagement Rolls Royce Babcock BAE Supporting SDA Date of SDA Delivery (12 Quality (12 Delivery (12 Quality (12 Delivery (12 Quality (12 Supplier SDA Lead Company Development Lead Risk Risk Risk periodically Members Engagement month Avg) month Avg) month Avg) month Avg) month Avg) month Avg) Truflo Ltd BAE Systems Lana Wells Babcock Red Green Red This This This This This This Truflo Ltd BAE Systems Lana Wells MoD Nov-18 Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks as Month Month Month Month Month Month Truflo Ltd BAE Systems Lana Wells Red same Green same 0

appropriate Broady Valves Babcock Ross Harrison BAE Systems Red Red Amber This This This This This This Broady Valves Babcock Ross Harrison MoD Nov-18 Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks Month Month Month Month Month Month Broady Valves Babcock Ross Harrison Red up Red same 1

Simplified Dashboard Dynamic Controls Babcock Ross Harrison BAE Systems Red Green Amber This This This This This This Dynamic Controls Babcock Ross Harrison MoD Nov-18 Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks Month Month Month Month Month Month now on Defence Share Dynamic Controls Babcock Ross Harrison Red same Green same 1

Sheffield Forgemasters Rolls-Royce Craig Griffiths Green Green and populated by RR, BAE This This This This This This Sheffield Forgemasters Rolls-Royce Craig Griffiths Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks Month Month Month Month Month Month and Babcock Sheffield Forgemasters Rolls-Royce Craig Griffiths Green up Green up Clyde Union 0 0 This This This This This This Clyde Union Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks Month Month Month Month Month Month Clyde Union 0 0

McGeoch Rolls-Royce Chris Gillott Red Red This This This This This This McGeoch Rolls-Royce Chris Gillott Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks Month Month Month Month Month Month McGeoch Rolls-Royce Chris Gillott Red same Red same

Darchem Rolls-Royce John Sibley Red Green This This This This This This Darchem Rolls-Royce John Sibley Trend Trend Open risks Trend Trend Open risks Trend Trend Open risks Month Month Month Month Month Month Darchem Rolls-Royce John Sibley Red down Amber down

OFFICIAL - SENSITIVE 23

OFFICIAL SUPPLY CHAIN MAPPING

84 Areas of Analysis Key: V1 Model V2 Model

a. Previously unknown suppliers in the Enterprise 1. Poor visibility of b. Multi-tier suppliers which create systemic risk suppliers c. Systemically critical suppliers – i.e. potential bottlenecks 3 a. Systemically important suppliers in financial difficulty 1 2. Fragile suppliers b. Suppliers that are sole / limited source providers in Enterprise and / or market posing risks to delivery c. Components with long lead times that pose availability risks a. Suppliers & systems with poor quality performance 2 3. Suppliers which could b. Underperforming suppliers & systems with respect to schedule 2 improve performance and better KSM c. Suppliers which represent poor value for money d. Opportunities to innovate in the supply chain

a. Components linked to countries of concern

4. Potential security b. Suppliers linked to countries of concern risks to the supply chain c. Key suppliers with known risks considered for M&A

d. Suppliers in breach of export regulations (e.g. ITAR)

5. Opportunities for a. Multi-sourced components with inconsistent commercials 3 category strategies b. Components with poorly defined configuration information

OFFICIAL Phase 0 Model

The Supply Chain data will be modelled in BoxArr in a way that allows it to be viewed through the following different lenses: Part view, PBS view, Supplier view, and Location view. This allows multiple and wide-ranging questions to be answered using the same data input.

OFFICIAL 1 2 3 Location view example

Key Points • Parts are predominantly produced by suppliers in Britain • French involvement • German involvement • No link to PBS for parts coming from US, Swiss, Canadian and Belgian suppliers

Full view – PBS by location supplied from Deep dive view – Ship services by location supplied from

OFFICIAL Key “take-aways”

• Understanding the market • SDA becoming an “intelligent customer” – supply chain map • Continuous improvement • Supplier development • Supplier collaboration and innovation • Bolstering UK capability in submarine delivery

2007 Collected our first SC21 awards 2006 Now Wincanton began All of our sites are working with ADS aligned to SC21

SC21

91 WINCANTON BICESTER OVERVIEW

Operational for over 12 years

Shared user facility

Management of serviceable and unserviceable assets

Developed into new areas such as battery charging, screening, repair & maintenance, software loading

More than 8 years of delivering service levels >99%

Business wins across 5 new customers.

92 PERFORMANCE & ACCREDITATIONS ✓ ✓ ✓ ✓ 100% 100% demand satisfaction 99.98% inventory accuracy 99.98% pick accuracy > 53,000 demands / >911,000 items p.a. KPIs Awarded SC21 Gold in October 2016 Integrated Management Systems (IMS) • • • OHSAS18001 ISO 14001 ISO 9001 Proactive culture of innovation opportunities Ideas into Collaboration Best practice Engagement evolution service Constant 93 © Wincanton plc 2018. All rights reserved HOW DID WE SUCCEED?

Planning Set clear objectives Listen Hold listening groups with customers (and their customers) Engaged with all stakeholders Management, operatives, customers, local community Challenge Push ourselves to move into areas outside of the norm Empowerment Empower your employees to make a difference Structured approach Develop a robust and deployable structure

94 BENEFITS REALISED

Health and safety standards have risen

Service excellence for all our customers

More than 5 major community projects run each year

Reduced packaging costs by 87% 95% of all packaging material recycled Transport costs reduced by 41% through innovative changes CO2 Emissions reduced by 42%

95 THANK YOU

• Portsmouth Royal Navy Dockyard • Rosyth Sponsor: Presenters: Ian Cockburn, Ross Harrison & Paul McEwen Awarded Bronze

Sponsor: Self Starter Presenter: Neil Barnett Awarded Bronze

• Manchester

Sponsor: Self Starter Presenter: Neil Barnett Re-Awarded Bronze

Sponsor: Presenters: Jerry Prideaux, Chris Thomson, Martin Pitman & Giacomo Armeni Awarded Silver

Sponsor: Self Starter Presenter: Neil Barnett Awarded Silver

Sponsor: Presenters: Craig Griffith & John Sibley Re-Awarded Silver

• Houndstone

Sponsor: Presenters: Jerry Prideaux, Chris Thomson, Martin Pitman & Giacomo Armeni Re-Awarded Silver

Sponsor: Self Starter Presenter: Neil Barnett Re-Awarded Silver

Sponsor: Presenters: Craig Griffith & John Sibley Re-Awarded Silver

• Cheltenham

Sponsor: Self Starter Presenter: Neil Barnett Re-Awarded Silver

Sponsor: Presenter: David Singleton Re-Awarded Silver

Sponsor: Self Starter Presenter: Neil Barnett Re-Awarded Silver

+ • Plymouth

Sponsor: Self Starter Presenter: Neil Barnett Awarded Gold

• Leonardo Production Stores Sponsor: Presenters: Jerry Prideaux, Chris Thomson, Martin Pitman & Giacomo Armeni Re-Awarded Gold

+ • Bicester

Sponsor: Self Starter Presenter: Neil Barnett Panel and Closing Remarks

▪ Become more competitive and further improve your productivity

▪ Government Investment in the Aerospace and Defence Sector

▪ Invest in the right capabilities & skills to add value to your customers (SC21 C&G)

▪ Potential of Industry 4.0 - digitally enabled supply chain

▪ Today we have seen the evidence of the success of the performance award achievers! Thank you for your support and attendance !