The Company

Smiths Aerospace is a leading global provider of innovative solutions to builders and operators of military and civil aircraft and engines, from fighters and transport to large civil, regional and business jets. They are the leading transatlantic aerospace equipment company, with more than 9,000 staff and $1.6bn revenues split between Europe and North America.

Smiths Aerospace focuses on systems and equipment requiring highly specialised engineering or manufacturing expertise to deliver high value to the platform.

In Electronic Systems the company provides integrated solutions in technologies critical for the pilot to perform his task. These include flight management, stores management, the analysis and recording of voice, video and data, crew information and mission planning. The company also specialises in platform critical systems including power generation and distribution, fuel management and environmental conditioning.

The Cheltenham site designs and manufactures integrated electrical power distribution and management systems; fuel gauging; integrated utilities systems; and complete fuel systems. The product range also includes head up displays, colour head down displays, flight control systems, mission computers and Nav/Attack systems for military and civil aircraft worldwide.

Smiths Cheltenham has been actively pursuing an internal programme for continuous improvement for several years and has realised significant benefits. In 2002 they recognised the need to help their supply base respond to the increasing market pressures. They developed an “Enterprise Improvement Programme” (EIP) assessment tool (based on EFQM) to help in supplier performance diagnostics and linked this with a supplier recognition programme for sustainable achievement in Delivery & Quality measures.

The threshold levels on this programme were increased in line with increasing demands from Smiths customers from 2003 to 2004:

Smiths embarked upon a Supply Chain activity with Industry Forum to help refine the EIP tool and deliver the improvements needed in their supply base.

Supply Chain Objectives

Vision
To develop & maintain a competitive advantage by selecting and working with a reduced number of performance driven suppliers in each commodity group

SCG Expectations

	To achieve a MINIMUM performance standard of 90% schedule adherence
	Sustainable zero defect quality status on Smiths product platforms
	Identify waste removal to facilitate year on year cost reductions

SCG Deliverables

	A structured approach for continuous improvement
	A supplier Development Framework which is structured, measurable & sustainable
	Supplier Capability Mapped & Performance Improvement Plans implemented

From the Cheltenham supply base 16 key suppliers were selected to take part in the SCG programme.

SCG Programme Structure & Timing

The 12-month programme started with establishing the skills base of the Supplier Change Agents so that they were equipped to drive and sustain improvements in their own companies.

In parallel with the training each supplier was visited to establish root causes of any problems in their current performance levels in Quality, Cost & Delivery. The Partnership Assessment was used to identify key issues in the interface between the companies.

Once the training was completed workshops were run in each supplier to tackle the issues identified in the diagnostic stage.

The range of workshops through the Supply Chain included Value Stream Mapping, Set Up Improvement, 5S, One Piece Flow, Visual Workplace Management, Shop Layout/Cell Implementation and Waste Elimination through Process Mapping & Video Analysis.

Where possible the Change Agents from the SCG companies attended workshops in each others companies, as well as their own, in order to broaden their experience.

The Roll Out Support phase addressed problems the companies had experienced in sustaining improvement and helped them develop a longer-term improvement plan help drive continuous improvement. The Roll Out Plan for each supplier was documented on & driven by the chart on the left. This captured all the actions required by both Smiths and supplier and showed clear responsibility and timescale for completion.

The key measures of success were identified on the roll out plan (above). Each key measure was tracked and analysed on a reporting sheet (right), which also included the key actions that needed to be taken by Smiths/Supplier in order to affect the measure. Throughout the whole activity a steering committee of Senior Management & Directors from Smiths and the suppliers reviewed the progress in Change Agent skills development and workshop results.

Benefits

Delivery
Average Improvement to the Delivery Performance for the companies involved for the whole range of products that they deliver into Smiths was:

Overall 12 suppliers improved their delivery performance, and the other 4 remained high.

The average calculation conceals several significant delivery performance improvements by specific suppliers, which are shown in the table below.

Quality
The Quality Performance of the group of suppliers was sustained at greater than 99%

Lean Improvements
Positive comments received from Supplier M.D’s about the intangible & tangible benefits include:

	“Change of attitude of the teams involved. People are now looking for improvement opportunities”
	“Improved Customer Focus”
	“Lean concepts cultivated an intrigued workforce, that will slowly change & benefit organisation culture”
	“The Inventory Reduction exercise reduced stock value by 33%”
	“Tooling change over time has been reduced by 55%”
	“Manual processing time reduced by 26%”
	“We are now measuring the right thing, and measuring it right”
	“Communication & dialogue between shop floor personnel & management was substantially improved”
	“Significant Improvement in relationships with Smiths through the dialogue that came out of the Partnership Assessment and being actively involved in the programme"

Key Learning Points

Taken from a questionnaire circulated to all Steering Committee Members:

	Top management commitment & involvement is critical to success
	Hands on Learning is a better way of ensuring that the learning is retained
	A practical approach is empowering
	The need to cascade lessons learned to ensure sustainable improvement
	Regular reviews sustain and generate improvement
	It is possible to make time for improvement if you want to, and the benefits are significant
	How to analyse processes properly so that correct focus for improvement can be identified
	Involving the right people resolves problems more quickly and easily

EIP Awards 5 suppliers qualified for an EIP award (1 Gold level and 4 Bronze level) having reached and maintained the required levels for at least 6 consecutive months. In addition 3 suppliers received a certificate to recognise the significant improvements they had made.

Next Steps
Market pressures have forced the acceleration of cost reduction activity in Smiths. So moving forward into 2004 Smiths are focussing on a cost reduction programme as well as maintaining & extending the benefits from the 2003 programme.

The group will be expanded to include another 4-5 suppliers making a total of 20-21 suppliers that will be the focus for Smiths Cheltenham Supplier Development Activities in 2004.