Copyright © 2014 Raytheon Company. All rights reserved.

Customer Success Is Our Mission is a registered trademark of Raytheon Company.

Integrated Supply Chain

Mission:

Partnering

For Growth

Janet Groebe

Sr. Director

IDS Integrated Supply Chain

September 23, 2014

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Who We Are

■ Raytheon Company is a technology

and innovation leader specializing in

defense, security and civil markets

throughout the world.

■ 2013 net sales: $24 billion

■ 63,000 employees worldwide

■ Headquarters:

Waltham, Massachusetts

A global leader in technology and innovation

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The World and Climate Have Changed

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New Challenges…

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Cyber Security Counterfeits

Conflict Minerals

tin 50

Sn

118.71

tantalum 73

Ta

180.95

tungsten 74

W

183.84

gold 79

Au

196.97

Chinese Counterfeit Electronics ‘Flood’ U.S. Military Aircraft: Senate Report

May 21, 2013 – 08:43 p.m. | by Michael Mathes, Agence France-Presse

DoD Combats Counterfeit Parts Threat By Jim Garamone American Forces Press Service

DARPA Targets Counterfeit Electronics Defense Advanced Research Projects Agency’s SHIELD program

aims to develop a method to authenticate electronic components.

100%?

# of APT attacks at Raytheon

# of APT attacks within supply base

80%

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…as well as new opportunities.

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Shared Passion for Warfighter Support

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New approaches are needed to succeed…

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26% 2013 INTERNATIONAL SALES

50% INTERNATIONAL SALES

WITHIN 5 YEARS

“We are not only competing against companies, we are competing against countries … That is

significantly different my friends …We are going to have to do things differently as an

organization to be able to leverage great relationships and reputation, proven performance,

being viewed by our domestic customers as a great go-to partner. Leveraging that, to afford us

the opportunity to have a fair shake at competitions in an international marketplace.”

– John D. Harris II, Vice President Business Development Raytheon Company,

Chief Executive Officer Raytheon International, Inc.

Meeting Our Customer Priorities

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GOALS

AFFORDABILITY

COST OF QUALITY

REDUCE SUPPLY

CHAIN RISK

HOW WE ADDRESS THESE GOALS

Leveraging the full weight of our $23 billion company

to maximize buying power and manage supplier

performance.

Collaborating with our suppliers and their sub tiers to

sign long term agreements that create affordability

by:

Reducing waste

Engineering changes to reduce cost and

improve manufacturability (better quality lower

cost)

R6S

Allowing sub tiers to buy from our Corporate

Agreements

Using our ESPX Process to drive the above

Rationalize The Supply Base

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Moving Towards A Common Set Of Suppliers Across All Of Our Businesses

Supplier Excellence Program - Overview

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• Recognizing and

rewarding top

performers at

Raytheon event

• Driving behavior

for accountability

and improved

performance

• RTN and BU executive

engagements with

principal and key

suppliers

• Broad communication

of excellence program

and expectations to

Raytheon and

Suppliers

• Performance

measures for each

supply base segment

• Adds new qualitative

measures (KPM and

SEAC)

• Builds on existing

quality and delivery

performance measures

• Replaces

Segmentation Supplier Excellence

Scorecard

Relationship

Management and

Communication

Recognition

Raytheon Supplier

Excellence Program

Principal Suppliers

Key Suppliers

SEAC Preferred Suppliers

Core Suppliers

Supplier Advisory Council

Execute SAC as a pilot in 2014, with the intention of shaping

the operating model and success metrics together with its

members – Roles and responsibilities

– Vision, mission and charter

– Commitment and communication

– Prioritization targeted opportunities

Target 8 -12 executives from the supply base across the

broad representative IDS supplier spectrum

Staff internally with ISC, SQ communications and other

functions after initial working session

Aligned focus to enterprise supplier recognition and

communication project

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Recent Program Case Study

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Objective:

Work together to achieve target pricing

while not compromising the technical

performance of the system

Approach:

• Multi-prong analysis of all potential cost

opportunities, including technical,

manufacturing processes, material

procurement and contracting methods

• Early engineering engagements

• Cross company collaboration

Results:

Supplier partnership helped enable the win

Proven Performance

o Small Businesses are Many of the “Best Performers” on Raytheon Programs

o Nearly 50% of our Procurements are with Small Businesses

o Competitive Discriminator for Franchise Proposals

o Demonstrated Support in keeping our Programs Sold

o Customer Recognized as Top Performers

o Willing to Invest Through Innovative Solutions

Proven Capabilities

The Opportunity for Small Business

Small businesses won 68% of the IDS Raytheon Supplier Excellence Awards in 2013.

Investing in a Bright Future

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“… If our supplier partners aren’t successful, we’re not going to

be successful.” Dr. Tom Kennedy

Raytheon Chief Executive Officer and Chairman of the Board

Thank You

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