Ann Rose Myladoor�

Susanne L. Gauthier�

Nirmal Shah�Anirban Ghosh�Pradeep Kumar�

Rajat Kumar Naik�

2440 Camino Ramon�Suite 263�

San Ramon, CA 94583�www.tescra.com�

© 2011 Tescra Inc.�

"The future belongs to people who see possibilities�

before they become obvious."�

— Ted Levitt�

Supplier Base Optimization�

White Paper - Supplier Base Optimization 2�

INTRODUCTION�Aircraft manufacturing is considered to be the technological backbone of the�U.S. manufacturing base. Aircraft manufacturing contributes significantly to�the U.S. economy, with total sales by aircraft manufacturer (including defence�and civil) comprising 1.8% (Source: Congressional Research Service) of the U.S�gross domestic product.�

The aircraft industry's commercial segment anticipates difficult business�conditions for the near and medium term, but long-term projections by Boeing,�for instance, are positive, with airlines expected to need 29,000 new planes�valued at $3.2 trillion between 2009 and2028 (Source: Congressional�Research Service ).�

For now, the defence segment of the aircraft manufacturing sector has offset�the downward trend because it still benefits from continuing government�expenditures for military aircraft. Aircraft industry analysts nonetheless predict�that there could be tough times ahead for producers of military aircraft.�

With the increasing challenges that Airbus and the global aerospace market�face where 70% is sourced externally (www.airbus.com); Supplier base�Management has a key role to play in supporting the business, delivering�profits and ensuring sustained performance.�

Many aircraft manufacturers are losing orders to their competitors since�compressed lead times are taking a toll on their position in the market. The�rate at which supplier approval happens is increasing and money invested is�staggering.�By having the right supplier base management system aircraft manufacturers�can open up communication across technology platforms and create greater�efficiencies and fewer errors.�

The result has been an ongoing restructuring within the aircraft industry supplier�base, with significant implications for customer-supplier relationships and�potential national security. With excess capacity and increasing cost pressures,�many aircraft companies are dramatically reducing their numbers of suppliers.�At the same time, many of these suppliers are being asked to take on�additional responsibilities in terms of design, assembly, material management,�risk sharing, and even taking part in fostering the internationalization of their�customers' supply base.�

Final aircraft assemblers like Boeing and Airbus rely on suppliers to build and�integrate considerably complex assemblies, such as, wings complete with�hydraulics, fuel monitoring systems, flaps, and thousands of rivets. Major�aircraft subassemblies arguably are as complex as entire automobiles.�

Supplier management in the aircraft industry therefore takes on additional�importance in terms of cost competitiveness and the quality and performance�of the final product. The complications increase two fold when the supplier's�products do not meet the specification required. Thus a root cause analysis�should happen with preventive and corrective actions which will help the�suppliers meet the requirements.�

What’s inside…�P a g e 2 �

P a g e 3 �

P a g e 4 �

Introduction�

Challenge Statement�

Value Proposition & Benefits�

Implementation�

Summary�

White Paper - Supplier Base Optimization 3�

CHALLENGE STATEMENT�The supplier base management systems used across most manufacturing�

organizations is not centered around the Supplier’s Corrective Actions. Data is�

collected and stored and handled in many different ways by different groups.�

Some parts of the process are paper based requiring hard copies of records to�

be signed and stored in document vaults, others used local systems developed�

on legacy and proprietary technologies. In most cases, the supplier corrective�

procedures is emailed as attachments, faxed or mailed between company and�

supplier and entered into various systems manually. The challenge is to create a�

Tescra provides an integrated functionality platform for the Supplier Corrective Actions by creating an online�communication platform and a single interface for the Supplier Management System which aids in the decision�making process which helps in choosing and comparing suppliers to improve the strategic partner relations with the�suppliers.�

The platform covers key areas such as, overall organizational performance, business customers, quality systems,�performance measurements, manufacturing capability and improvement, sales inventory and operations planning,�workforce profile, cost, delivery and maintenance, critical processes and new product development capabilities.�

VALUE PROPOSIITON�

First, the system supports workflows�for “� of�requirements which ensures�suppliers are aware of failures. The�secondly support is for “�

type of requirements that�require the supplier to respond to�the company with detailed root�cause analysis for corrective and�preventive actions.�

BENEFITS�

Continuous monitoring and�tremendous efficiencies in the�supplier quality management�process is achieved across the�business and supplier base. The�problem solving methodology�module helps achieve this.�

:�

This is achieved by reducing the�process waiting time, ensuring�immediate communication and�setting clear priorities.�

White Paper - Supplier Base Optimization 4�

Conduct Audit�

Verify�Implemetation of�Corrective Actions�

Review Violations�

Develop Corrective�Action Paln�

Implement�Corrective Actions�

The solution maps the company’s organizational hierarchy covering�corporate, as well as, all other divisions; business groups, business lines and�locations. Employees are also mapped to their appropriate roles in the�system enabling flexible user administration with easy management of access�rights.�

The system front end is linked to the supplier portal (built on SAP Enterprise�Portal technology) from where users can directly access the solution through�single sign–on, based on shared authentication of credentials. Suppliers will�have easy access to scorecards that present data analytics to the greatest�level of detail.�

Supplier corrective action can be initiated directly in the system based on�supplier quality issues identified during receiving and incoming inspection of�parts or based on issues logged at the production line via the SAP QN�(Quality Notification) application. Though its integration with SAP, it allows�users to search for issues in the QN application (QNs) and initiate a SCA�(supplier corrective action) request for one or more QNs. The real-time�integration transmits all the relevant data from SAP to platform created for�QNs for which SCA requests are triggered, eliminating duplicate data entry�and ensuring information integrity.�

IMPLEMENTATION�

SUMMARY�Integration specialists like Tescra can assist companies in the manufacturing�sector in realizing the full potential of their technology investment by�synchronising the demand signals across all tiers of the organization's supply�chain, improving the process of supplier base management centered around�the supplier corrective actions.�

This includes supplier performance monitoring which also includes supplier�process list and periodic scorecards integrated over diverse platforms. The�supplier assessment system can initiate periodic audits to monitor�development and launch readiness evaluations. The interface solution can�also be accompanied with Web based integration. This provides the standard�framework for technology and allows customized offerings. With these�offerings a business can have quick containments, true root cause�determination using effective tools which address both detection and�occurrence which ultimately will assist the business implement systemic�corrective actions to drive performance.�

Founded in 2002, TESCRA is headquartered in San Ramon, California, USA. Tescra has been identified as a Top 100 Minority owned�business, recognized as one of America's Top 500 diversity-owned businesses and recently added to the Inc 5000 list as one of the fastest�growing companies in the USA. Our experience and commitment to excellence is reflected in our customers' successes in attaining their�business objectives.�

One of our core values at TESCRA is that "Performance Drives Our Success". TESCRA's objective is to craft the best possible blend of�Business and Technology Solutions for our customers' business events, achieve performance excellence and maintain lowest cost in the�supply chain.�

Our ability to retain Customers and gain repeat business is a testament to our dedication to quality, business understanding, technical�abilities, project management skills, and cost-effectiveness. Customer satisfaction and long-term relationships are the best measures of�our quality and performance. We have a history of 100% successful completion of projects.�