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ZODIAC AIRCRAFT SYSTEMS
Zodiac Aircraft Systems
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS1
Supply-Chain Strategy
G.Blandet, VP Purchasing Zodiac Aircraft Systems
Here’s the bottom lineHere’s the bottom line
Here’s the bottom line :
85 % of Zodiac Aircraft Systems’ cost base is in its supply chain.
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS2
Key Figures of our Supply Chain (Direct Spend FY15 - July)Key Figures of our Supply Chain (Direct Spend FY15 - July)
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS3
Main Purchases Commodities (Direct Spend FY15 - July)Main Purchases Commodities (Direct Spend FY15 - July)
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS4
Zodiac Aircraft Systems Purchasing OrganizationZodiac Aircraft Systems Purchasing Organization
CENTER LED GOVERNANCE Zodiac Aircraft Systems Purchasing Committee
CENTER LED GOVERNANCE Zodiac Aircraft Systems Purchasing Committee
Commodity
strategies and
visibility of
our policy
with Suppliers
Commodity
strategies and
visibility of
our policy
with Suppliers
Flexibility of
execution
by our
operations
Flexibility of
execution
by our
operations
Collaboration
and value
creation with
Suppliers
Collaboration
and value
creation with
Suppliers
Management
of Suppliers
Performances
Management
of Suppliers
Performances
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS5
� Our organization is established to support the strategy
and optimize our supplier performances
� Supported by a clearly defined governance and key enablers
Gilles Debray
ZODIAC AIRCRAFT SYSTEMS
Zodiac Data SystemsZodiac Water &
Waste Systems
Zodiac Water &
Waste Aero Systems
Gil Lenhard
Zodiac Cabin & Cockpit
Systems
Zodiac Electrical
Systems
Zodiac Fuel&Control
Systems
Zodiac On Board
& Testing
Eric Carcanague
Zodiac Fluid
Management
Zodiac Hydraulics
Cédric Pichery
Supplier Contract
Lucie Le-Gloanec
Zodiac Fuel & Inerting
Systems
Mathieu Jutigny
Zodiac Oxygen
Systems EU
MC IIlunga
Zodiac Actuation
Systems
Valery Dreano
ZODIAC AIRCRAFT SYSTEMS PURCHASING
Gregory Blandet
Supplier Performance
Miryam Ennamir
Supply Chain Project
Sheyla Prado
Segment Missions
Leadbuyers
SPM Experts
Commodity Leaders
Pur
chas
ing
Org
aniz
atio
n S
ep 2
015
Pur
chas
ing
Org
aniz
atio
n S
ep 2
015
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS6
Zodiac Cabin Controls
Oliver Schoëps
Zodiac Lighting
Solutions
Serena Wiliams
Zodiac Oxygen
Systems US
MB Harper
Gil Lenhard
ZIPS
Eli LiebermannZAA
John Stuart
Eric Carcanague
Zodiac Space
& Stations
Eric Carcanague
Zodiac Communication
& Monitoring
Eric Carcanague
PPP
Jean-Marc Lemaître
Zodiac Sensing &
System Management
Eric Mongenie
Zodiac Fluid
Equipment
Nicolas Pouget
Cédric Pichery
Zodiac Aero Duct
Systems
Stephane Meteyer
ENVIRO Systems
Daniel Wyatt
Zodiac Electrical Power
Systems
Valery Dreano
Zodiac Cockpit &
Lighting Systems
Mathieu Richart
Mathieu JutignyMC IIlungaValery Dreano
Zodiac Train Systems
Hans Wörmcke
Pur
chas
ing
Org
aniz
atio
n S
ep 2
015
Pur
chas
ing
Org
aniz
atio
n S
ep 2
015
US Committee Members
EU Committee Members
Aircraft manufacturers have changed their way ofbusiness selection
• Worldwide competition• Commitments about costs reduction programs• Criteria based on current industrial performances• Risk-sharing , Self-financing (NRC)
Zodiac Aerospace Customers RequirementsZodiac Aerospace Customers Requirements
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS7
• Innovation, technology differentiation• Offset participation• Time to Market effort…
Promises and business reputation are not enoughVOC makes the decision
Zodiac Aerospace Customers RequirementsZodiac Aerospace Customers Requirements
EMBRAER BOEING AIRBUS BOMBARDIER
Cost Reduction ContinuousPartner for Success
RC ConvergenceScope+ SOFE
OTD > 95% >98% > 99.5% > 99%
<2000 ppm < 50 defects on
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS8
Quality < 500 ppm<2000 ppm
50 ppm B787< 3000 ppm
< 50 defects on one rolling year
Requirements are increasing
Often targets are higher than those given by Zodiac Aerospaceto its suppliers AT THIS PRESENT TIME
� Aircraft manufacturer industrial organization have changed
• S&OP Management is key
• Manufacturing lead time reduction
• Equipments must to be delivered to FAL
(Final Assembly Line) “just in time”
• No more incoming inspection
Zodiac Aerospace Customers RequirementsZodiac Aerospace Customers Requirements
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS9
• No more incoming inspection
• No buffer stocks
• Information flow standardization and forecasting ( Air Supply )
Any Quality or Delay issues are consideredas « crisis » by Customers
� Customers request immediate reactivity
when quality or delay problem occurs.
• Bombardier: Task force
Zodiac Aerospace Customers RequirementsZodiac Aerospace Customers Requirements
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS10
• Airbus: QSR process
More and more involvement of our Customersin solving quality issues : pressure at all levels
� Analysis made by our
customers showed that main
quality or delay issues
detected on FAL were due to
Zodiac Aerospace Customers RequirementsZodiac Aerospace Customers Requirements
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS11
Tier-2 suppliers
11
Strong pressure from Customers to Tiers-1 to improve
their supply chain performances.
They charge us with penalties due to delinquent suppliers
What happens now… IntrusionWhat happens now… Intrusion
� Our customers are now requiring
detailed information about suppliers
responsible for poor performances (OTD,
NC, VLD…) and cost drivers also.
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS12
At this present time, Zodiac Aircraft Systems policy is to NOT communicate
to Customers detailed information regarding our suppliers.
� To maintain the business position, Zodiac
Aerospace must prove to its customers that the
supply-chain process in place gives targeted
results.
� Customer satisfaction is our main goal, must be
guaranteed
Business position with suppliers regarding our VOCBusiness position with suppliers regarding our VOC
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS13
guaranteed
� Suppliers selection is key to support the
business
Suppliers reaching targets and commitments are be more and more awarded
Others are placed in the Desourcing process at the Segment Level,
applicable for all BUs
Suppliers collaboration with Zodiac Aircraft SystemsSuppliers collaboration with Zodiac Aircraft Systems
Purchasing policy of Zodiac Aircraft Systems
Sustainable and balanced relationship with suppliers. To be selected, they must meet strict requirements in terms of ethics, performance, know-how and technological innovations. At the same time, ZAS supports them as part of an ongoing drive for improvement and growth.
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS14
Suppliers are an integral part of resources and capacities. ZAS measures the supplier's motivation to support the development of its strategic activities, from a technological, quality, logistics and business point of view.
Suppliers selection for competitiveness in terms of cost, operational excellence and future contribution to our business.
Suppliers Management and Purchasing PolicySuppliers Management and Purchasing Policy
�Suppliers Strategic Segmentation based on compliance with performance objectives (VOC).
� Disengagement of non-performing suppliers
� Business Development and Long Term Agreements with the most efficient suppliers
5 levers for action
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS15
� Introduction of new efficient suppliers, who are able to meet the requirements of our markets (VOC).
� Business ethics : based on honesty, integrity, fairness and protection. The code is signed by all Group employees
� Global management of suppliers at Zodiac Aircraft Systems level
� Part of our “Operational Excellence” project started in 2012
Formula of Supplier Performance is simpleFormula of Supplier Performance is simple
Be on Time Deliver QualityReduce Costs Keep best relationship in good
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS16
and bad days
Business Protection and risk mitigation
Value creation and
business growth consolidation
Performances in the supply chainPerformances in the supply chain
� Zodiac Aircraft Systems is engaged about meeting suppliers, explaining why we are squeezing the supply chain.
� Suppliers just can’t say “Hey, sorry we have nothing to offer but we will get back to see you soon”. That’s not the way it works.
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS17
� Very good progress about industrial performances, and cost reduction because of our best suppliers are working with us on a partnering for success basis.
Now, suppliers should take the opportunities
and join us in this path.
About our Supplier Reduction ProgramAbout our Supplier Reduction Program
�Reduction of Desourced Suppliers is key for our performances
• Contamination of our global performances
• Waste of time, cost and resources
• Not connected to our strategy
• Outside our Operational Excellence mindset
�Between 2013-2014 : 639 suppliers have been Desourced
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS18
�Between 2013-2014 : 639 suppliers have been Desourced
�FY2015 : 654 Suppliers are classified to be Desourced
46% completed in July 2015
Desourcing means more business, growth and opportunities
for our Preferred Suppliers and newcomers
Business EthicsBusiness Ethics
�Compliance with law is expected, but
ethics goes beyond mere compliance.
�The Ethics Code focuses specifically on
business ethics and the exemplary behavior
of employees throughout the Group, in terms
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS19
of employees throughout the Group, in terms
of transparency and loyalty.
Violations of ethics code are elevated to the corporate level for both ZA
and supplier employees and may result in termination of business.
http://www.zodiacaerospace.com/en/ethics-code
ConclusionConclusion
� Our operational performance automatically includes our Suppliers’ performance
Our only choice is to improve – or to leave the door open to our competitors and to your competitors
� Aerospace market context is very favorable – but also very demanding
ZODIAC AIRCRAFT SYSTEMSZODIAC AIRCRAFT SYSTEMS20
� It is in your interest to quickly improve your performances to fully capitalize your current business with us.
Be a KEY PLAYER in our Supply-Chain,
And not one of the dominos !
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