W MACHINE WORKS Founded 1978 AS9100/ISO 9001 Certified 60 - - PDF document

A&D Forum August 19, 2011 1

MEETING NEW CHALLENGES OF THE AEROSPACE SUPPLY CHAIN: HOW MY LIFE IS DIFFERENT THAN MY FATHER’S

T H E A E R O S P A C E & D E F E N S E F O R U M

HOW MY LIFE IS DIFFERENT THAN MY FATHER S

W MACHINE WORKS

Founded 1978 AS9100/ISO 9001 Certified 60 Employees Aerospace and Defense Industry

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W MACHINE WORKS W MACHINE WORKS

Mixed Model Cells Multiple Parts at Anytime Multiple Metals Any Size Lot 24 Hours Per Day 7 days Per Week 1 Work Shift

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W MACHINE WORKS

$14,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $0 $2,000,000 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 E S T . 2 1 1

S&H MACHINE

• Located in Burbank California
• AS9100/ISO 9001 Certified
• Founded 1960
• 22,000 Sq. Foot Building / 45 Employees

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S&H MACHINE S&H MACHINE

Complex, Precision Precision Multiple Parts at Anytime Multiple Metals Lot Size 5 – 1,000 24 Hours Per Day 6 days Per Week 1 Work Shift

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S&H MACHINE

$7,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $0 $1,000,000 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 E S T . 2 1 1

INDUSTRY CHALLENGES

• Increased global competition in Aerospace and

D f Defense.

• U.S. defense budgets are expected to come under

pressure within the next few years.

• Increasing costs: Materials, Labor, and Benefits,
• Price pressure: Intense pressure to reduce price
• Shared risk: No NRE Fees, VMI, Buy in.

Shared risk: No NRE Fees, VMI, Buy in.

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CASH FLOW

Father’s Generation Our customers paid within 30 days.

CASH FLOW

Our Generation Today, our customers pay within 60-90 days.

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CASH FLOW

Solution We need to have an excellent banking relationship. Create a lean culture.

EMPLOYEES

Father’s Generation Our schools had machine shops. America still made things.

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EMPLOYEES

Our Generation No funding for machine shops in schools. The perception is that everything is made in China.

EMPLOYEES

Solution Create standard work. Create a training program. Invest in automation.

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COMPETITION

Father’s Generation Competition was local. Local suppliers were preferred. No internet.

COMPETITION

Our Generation Competition is national and global. The internet gives buyers more information and more information and allows them to share more information faster.

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COMPETITION

Solution Embrace and adapt a lean company culture. Sales and marketing awareness is required. Looking for more customers national and local. Must grow our companies to compete.

MORE FOR LESS

Father’s Generation We received the order. Make the parts. Ship the parts.

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MORE FOR LESS

Our Generation Higher expectations. AS9100 certification required. All new parts require AS9102. Other requirements 3P, QPAP, FMEA, OSHA, EPA, Fire Department.

MORE FOR LESS

Solution Create a process driven culture that embraces change. Invest in ERP systems Invest in ERP systems and software. Add new positions.

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FASTER FOR LONGER

Father’s Generation The transaction was completed from RFQ to delivery within 12 months. A single delivery was the standard.

FASTER FOR LONGER

Our Generation Customers need parts in 8 weeks or less. Customers want firm fix pricing for 5 years plus. pricing for 5 years plus. Customers demand multiple deliveries.

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FASTER FOR LONGER

Solution Embrace lean manufacturing principles. Strategic planning. Share more information. All hands meetings. Employee Development Develop a supply chain program.

SUPPLY CHAIN

Father’s Generation Machine Shop focused on their core competencies. Customers managed Customers managed the supply chain.

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SUPPLY CHAIN

Our Generation Customers want assemblies and kits. Customers want us to be integrators. be integrators. We need to be able to manage the supply chain on our own.

SUPPLY CHAIN

Solution Create a supply chain program. Commit resources to managing the supply chain. Develop standard p work and processes. Employee training. Grow our company to add key skill levels.

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TRUST

Father’s Generations Customers stayed with suppliers for the life of the program. Buyers were veteran Buyers were veteran purchasing agents with relationships.

TRUST

Our Generation Customers are always shopping for a lower price and will move their parts to save money. Buyers are being graded on reducing cost. Suppliers are increasing pricing and extending lead time. Buyers lack technical knowledge and don’t stay at the same company long

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TRUST

Solution Stay connected with customers and suppliers. Sharing metrics with suppliers. Create more transparency for everyone.

COLLABORATION

Father’s Generation Companies were standalones. There was a strict closed door policy. Competitors were

• ther family owned

businesses.

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COLLABORATION

Our Generation Customers are bringing competitors together. Increased networking with competitors with competitors. We compete against corporations.

COLLABORATION

Solution Create a peer group of world class companies in search of best practices. Host company tours for customers, suppliers and peers. Increase industry awareness. Risk management policies.

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SCMG

Southern California Manufacturing Group

• Founded in 2004
• Peer Group
• Eight Manufacturers (7 Aerospace 1 Medical)
• Sharing Best Practices
• Monthly Meetings

Board of Directors

• Board of Directors
• Minimum Standards
• Guest Speakers

SCMG

Southern California Manufacturing Group Mission Statement As a community of world class manufacturers, we strategize, innovate and implement best practices; we do this to optimize the performance of our member companies, to secure our competitive edge in a global marketplace, and most importantly, to provide our customers with a unique and compelling value proposition.

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CONCLUSION

Despite the current challenges it is possible to thrive.

CONCLUSION

• We must continue to challenge our paradigms.
• We must create a process driven culture.
• Sustain a culture of continuous improvement.
• We must work together with our customers,

suppliers, and peers.

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CONTACT INFORMATION

• Marzel Neckien
• mneckien@wmwcnc.com
• 818-890-8049
• David Fisher
• David@shmachine.com

818 846 9847

• 818-846-9847