Rolls-Royce - Singapore Institute of Manufacturing Technology
Rolls-Royce - Singapore Institute of Manufacturing Technology
Rolls-Royce - Singapore Institute of Manufacturing Technology
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Requirements to be an AerospaceSupplier5 th PE COI Annual Conference11/04/2013© 2013 <strong>Rolls</strong>-<strong>Royce</strong> plcThe information in this document is the property <strong>of</strong> <strong>Rolls</strong>-<strong>Royce</strong> plc and may not be copied or communicated to a third party, or used for anypurpose other than that for which it is supplied without the express written consent <strong>of</strong> <strong>Rolls</strong>-<strong>Royce</strong> plc.This information is given in good faith based upon the latest information available to <strong>Rolls</strong>-<strong>Royce</strong> plc, no warranty or representation is givenconcerning such information, which must not be taken as establishing any contractual or other commitment binding upon <strong>Rolls</strong>-<strong>Royce</strong> plc orany <strong>of</strong> its subsidiary or associated companies.13014
Content• <strong>Rolls</strong>-<strong>Royce</strong> overview• Global Supply Chain - Challenges• Operational Excellence – prerequisite?• Generic requirements for supply chains• How to participate in the globalopportunity?2<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
Group pr<strong>of</strong>ile3
A consistent approachto business4
2012 financial highlights5
A global business6
Investing for futuregrowth7
Civil aerospace8
Defence aerospace9
Research anddevelopment10
Global workforce 201211
Content• <strong>Rolls</strong>-<strong>Royce</strong> overview• Global Supply Chain - Challenges• Operational Excellence – prerequisite?• Generic requirements for supply chains• How to participate in the globalopportunity?12<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
Supply Chain challenge – low volume &high mix18,000parts13
Supply Chain challenge – long lifecycleDevelopment Maturity DeclineProduct Lifecycle• Demonstrator• Engine DevelopmentProgramme• Engine flightProgramme• Series and volume production• Continuous improvement• Aftermarket and spare parts3 years – 7 years 10 years – 20 years 10 years – 20 years14
Supply Chain challenge – global growth,developing capabilityUKEMEAAmericasAsia2015 activity2010 activity15
Supply Chain challenge – high value add<strong>Manufacturing</strong> in high value add• Regulated and approvals required• High start up cost and high barriers to entry• High cost for “sub standard performance”• Significant consequences for “non quality”16
Supply Chain challenge – turning orderbooks into pr<strong>of</strong>itCustomerpricepressureHow do we build ourmargins and growour businesses?Elementals,raw materialsand utilitiescost pressure17
Supply Chain challenge – to be classleadingTypical componentcost structuremarginenergyvariable costlabour• If workforce does not deliverclass leading performance than itdoes not only affect the labourcost but the total 100%!depreciationmaterial• In high value add, competitivelabour cost alone does notautomatically provide acompetitive supply chainindependent on locationpartly dependent on locationdependent on location18
Content• <strong>Rolls</strong>-<strong>Royce</strong> overview• Global Supply Chain - Challenges• Operational Excellence – prerequisite?• Generic requirements for supply chains• How to participate in the globalopportunity?19<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
Operational Excellence – our experience• To increase the level <strong>of</strong> maturityin Operational Excellence is asignificant change program• <strong>Rolls</strong>-<strong>Royce</strong> started the“Journey to ProcessExcellence” years ago• Today, we have the evidencethat improved level <strong>of</strong> maturityin Operational Excellence leadsto improved performance -QCDR20<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
Operational Excellence – prerequisite?Yesterdaywow factor…Todayorder winner!Tomorroworder qualifier?21<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
Operational ExcellenceOperational Excellence – level <strong>of</strong>maturity a SEA sample5Industry Maturity Assessment43210 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5<strong>Manufacturing</strong> ComplexityAerospaceOther Industry22
Operational Excellencematurity scoreOperational Excellence – prerequisite?To venture into Aerospace, class leading maturitylevel in Operational Excellence is essential!World ClassAerospace• House Keeping• Lean Principles• Quality System• Six Sigma• SPC• Continuous Improvement• Performance Management• Visual Management• Fail Pro<strong>of</strong> Processes• Effective Change Control• Material HandlingStep 1classleadingOperationalExcellenceStep 2enhanced capabilityAerospace approvalsDevelopinglow<strong>Manufacturing</strong> Complexityhigh23
Content• <strong>Rolls</strong>-<strong>Royce</strong> overview• Global Supply Chain - Challenges• Operational Excellence – prerequisite?• Generic requirements for supply chains• How to participate from the globalopportunity?24<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
Suppliers – generic requirements• Competitive cost structure, e.g. location in emerging markets•Financial stable and strong suppliers• Preferred trading currency - US Dollars• Commitment to Long Term Agreement (LTA)• Agreed cost modeling / transparency• Lean manufacturing / continuous improvement capability• World class delivery and zero defect quality25
Challenges and lessons learnt• Significant capability gap in developing countrieslllllEducation standardsAdvanced technologiesAdvanced materialsOperational Excellence maturityAerospace approvals• High levels <strong>of</strong> investment for equipment• Long start up phase, hence high cost <strong>of</strong> learner• High validation effort for manufacturing processes• Demanding approvals, e.g. NADCAP, SABRe• Supply Chain management - vertical integrationlllSpecial processesTooling and fixturesRaw materialsbarriersto entry26
Content• <strong>Rolls</strong>-<strong>Royce</strong> overview• Global Supply Chain - Challenges• Generic requirements for supply chains• Operational Excellence – prerequisite?• How to participate in the globalopportunity?27<strong>Rolls</strong>-<strong>Royce</strong> proprietary information
How to participate in the globalopportunity?• We aim for fewer but more strategic suppliers• We encourage our existing suppliers to grow with us and todevelop a global footprint• We proactively develop technologies for “tomorrow’s” enginesentry points• Bring new technology into Aerospace• Partner, collaborate with existing suppliers to develop global footprint• Sub tier for suppliers in region• Significant investment into capability and capacity development28
Christian MutterBusiness Development Director – Supply Chain – Asia Pacific3 Temasek Avenue#19-01 Centennial Tower<strong>Singapore</strong> 039190DID: +65 65017608Email : christian.mutter3@rolls-royce.com29