Program Introduction. Joseph G.Pinto Chief Operating Officer & Vice President Performance Review Institute. May 18, 2011

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1 Program Introduction Joseph G.Pinto Chief Operating Officer & Vice President Performance Review Institute May 18, 2011

2 Definition: PRI The Performance Review Institute is a notfor-profit affiliate of SAE whose mission is to globally provide customer focused solutions designed to improve process and product quality by adding value, reducing total cost and promoting collaboration among stakeholders in industries where safety and quality are shared goals. PRI administers Nadcap.

3 Definition: Nadcap The leading worldwide cooperative program of major companies designed to manage a cost effective consensus approach to special processes and products and provide continuous improvement within the aerospace and automotive industries.

4 Nadcap Customers Subscribers: The users (e.g., OEMs, government agencies), are the customers of the PRI product -- the certification information. Suppliers: The customers of the PRI processes (e.g., scheduling, auditing, billing, audit review, issuing certs, etc.,) are the auditees --suppliers being audited. 4

5 Nadcap Subscribers 309th Maintenance Wing-Hill AFB AgustaWestland Air Force Alenia Aeronautica SpA Avio SpA BAE Systems Military Air Solutions (MAS) BAE Systems Ball Aerospace & Technology Corporation The Boeing Company Bombardier Inc. Defense Contract Management Agency (DCMA) EADS Corporation Airbus EADS CASA Eurocopter Astrium Cassidian Aerolia Premium Aerotech GE Aviation General Dynamics General Services Administration (GSA) Goodrich Corporation Hawker Beechcraft Corporation Heroux Devtek Inc. (Landing Gear Division) Honeywell Aerospace Israel Aircraft Industries Latecoere Liebherr-Aerospace SAS Lockheed Martin Corporation M7 Aerospace LP MTU Aero Engines GmbH Northrop Grumman Corporation Parker Aerospace Group Raytheon Company Rockwell Collins, Inc. Rolls-Royce Corporation Rolls-Royce PLC SAFRAN Group Sonaca Spirit AeroSystems Textron Inc. Bell Helicopter Cessna Aircraft Company Textron Systems Thales Triumph Group Inc. United Technologies Corporation Hamilton Sundstrand Pratt & Whitney Pratt & Whitney Canada Sikorsky Aircraft United Space Alliance Volvo Aero

6 Nadcap Audits Number of On Site Audits Plan2012 Plan2013 Plan

7 Timeline of Subscribers New Primes per Year Hawker Beechcraft 1 Pratt & Whitney (US) Pratt & Whitney (Canada) GE Sikorsky 4 Americas Honeywell RR plc RR Corp AVIO Northrop Grumman GSA Hamilton Sundstrand Europe Boeing MD Helicopters Lockheed Martin Vought Bell Helicopter DCMA Cessna Goodrich Alenia BAE Systems (US) Rockwell Collins Bombardier SONACA Airbus EADS MTA Eurocopter EADS Astrium EADS Defense MTU SAFRAN Group (Snecma Services, Hispano-Suizo, Aircelle, Messier- Bugatti, Messier- Dowty, Messier- Services, Labinal, Techspace Aero, Snecma Propulsion Solide, Microturbo, Cinch and Globe Motors) Latecore Liebherr Spirit Textron Systems Ball Aerospace Heroux Devtek BAE MAS Thales Parker Aerospace Group United Space Alliance Volvo Aero Corp. Genl. Dynamics IAI 309 th Maint. Wing-Hill AFB M7 Aerospace Raytheon Co. Agusta 2 10 Westland Accumulated Total Primes Year

8 Nadcap Programs Special Processes Nondestructive Testing (NDT) Materials Testing (MTL) Heat Treating (HT) Coatings (CT) Chemical Processing (CP) Welding (WLD) Nonconventional Machining & Surface Enhancement (NMSE) Conventional Machining (CM) Systems & Products Aerospace Quality Systems (AQS) : AC7004 Fluid Distribution Standards (FLU) Elastomer Seals (SEALS) Sealants (SLT) Composites (COMP) Electronics (ETG)

9 Nadcap Procedure Hierarchy AS7003 Aerospace Standard which documents the requirements for implementing Nadcap industry consensus-based accreditation programs. Document stating the quality policy and describing the quality system of the organization. Quality Manual NOP (Nadcap Operating Procedure) Documents detailing the specific procedures by which Nadcap operates. Documents describing the scope and general operating procedures for each specific PRI/Nadcap commodity program. NTGOP (Nadcap Task Group Operating Procedure) NIP (Nadcap Internal Procedure) Documents detailing specific procedures by which PRI/Nadcap Staff operates. Defines the role and responsibilities for Nadcap Auditors, and provides technical and administrative clarifications to facilities and standardizes the audit process. Audit Handbook

10 Nadcap eauditnet Process Supplier Action PRI Staff Action Suppliers Request Audit PRI Audit Scheduled Auditor Assigned Issue Cert Task Group Approval PRI Technical Staff Review Audit Completed Prime Action

11 Shared Program Management Process Evaluation/ Improvement Audit Checklist Auditor Qualification & Selection Corrective Actions As Required Industry experts manage all key steps Audit Results Audit Conducted

12 Nadcap - Industry Working Together Task Groups (Primes) Nadcap Staff Suppliers Establish Audit Criteria Audit Criteria (AC): Document containing checklists or other surveillance tools to be utilized in the course of determining compliance to established industry standards and prime requirements.

13 Relationship between Audit Criteria (AC), Audit Handbook and Prime Requirements AC7XXX Audit Criteria Job Audits Audit Handbook Industry Standards Prime Requirements

14 Nadcap Benefits to Industry 1. Streamlined Requirements Multiple Customer Requirements One Industry Requirement 14

15 Nadcap Benefits to Industry 2. Reduced Number of Audits Individual Customer Audits One Audit 15

16 Nadcap Benefits to Industry Airbus 3. Shift in Focus BAE Systems Boeing Second Party Audit Bombardier Eurocopter Honeywell Customer Audit Lockheed Martin Rolls-Royce 16

17 Nadcap Benefits to Industry Tangible Results A Subscriber reports annual saving of >$1Million Subscribers are achieving technically superior audits. One Supplier reported 97% reduction in rework as result of systematic improvements prompted by Nadcap requirements* On average, 40% reduction in audits following Nadcap accreditation* *Surveys performed on the Nadcap accredited supplier base 17

18 Quality Improvements for Suppliers (SSC 2009 Survey Results) An increasing percentage of Nadcap accredited companies report quality improvement in the area(s) related to their Nadcap accreditation(s)

19 Nadcap Accredited Company Perspective Rework rate reduced from 5 6 per 100 to 2 3 per 1000 Scrap rate reduced from 1 in 1000 to 1 in 3000 Escapes reduced from 1 per 3-5,000 to 1 per 6-10,000 Customer visits dramatically reduced Quality survey & audit team reduced and refocused 19

20 Benefits of Nadcap to Industry In June 2010, a web poll asked: Do you believe that Nadcap contributes to the overall aerospace industry s safety record? 198 responses 20

21 Nadcap Subscriber Perspective 1 Work together... to right size our processor base and continually improve certification and oversight... A quality initiative that will lead overall industry cost reductions. 21

22 Nadcap Subscriber Perspective 2 The objective is to have a high performing self managed supply base 22

23 Future Nadcap Meetings Date October 2011 Location June 2011 London, UK October 2011 Pittsburgh, PA USA February, 2012 San Diego, CA USA June, 2012 Berlin, Germany Benefits Primes and Suppliers network among industry peers Participation in free training Task Groups work on technical matters (audit checklists) Continual improvements made to program Nadcap Management Council creates Policy Engage with existing and potential customers Register

24 Pittsburgh London Beijing Nagoya International Headquarters Performance Review Institute 161 Thorn Hill Road Warrendale Pennsylvania USA Joe Pinto Chief Operating Officer & Vice President Performance Review Institute 1 York Street London W1U 6PA UK Seema Martin Director of European Operations seema.martin@pri-europe.org.uk

25 Discussion Points Nadcap In General How do Subscribers, Suppliers, auditors and so on, interact with PRI? Are Subscriber and Supplier processes audited through the Nadcap program? Does Nadcap certify personnel or the processes? Is Nadcap used for military production or only for civil aircraft? How are new Special Processes created? Nadcap in Russia How does PRI expect to understand the aerospace industry in Russia? What does PRI stand to gain from entering Russia? Russian specifications are different, how will they be harmonised? Timeframe; how long will it take for subscribers and suppliers to take part in Nadcap? How can the integrity of the Russian aerospace industry s competitive advantage be ensured if Nadcap based on collaborative sharing of technical information? Nadcap in relation to regulatory bodies: areas of cooperation FAA EASA 25

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