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

A&D Forum August 19, 2011 MEETING NEW CHALLENGES OF THE AEROSPACE SUPPLY CHAIN: HOW MY LIFE IS DIFFERENT THAN MY FATHER’S 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 W MACHINE WORKS Founded 1978 AS9100/ISO 9001 Certified 60 Employees Aerospace and Defense Industry 1

A&D Forum August 19, 2011 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 2

A&D Forum August 19, 2011 W MACHINE WORKS $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 0 1 2 3 4 5 6 7 8 9 0 1 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 . 2 T S E S&H MACHINE • Located in Burbank California • AS9100/ISO 9001 Certified • Founded 1960 • 22,000 Sq. Foot Building / 45 Employees 3

A&D Forum August 19, 2011 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 4

A&D Forum August 19, 2011 S&H MACHINE $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 0 1 2 3 4 5 6 7 8 9 0 1 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 . 2 2 2 2 2 2 2 2 2 2 2 2 T S E 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. 5

A&D Forum August 19, 2011 CASH FLOW Father’s Generation Our customers paid within 30 days. CASH FLOW Our Generation Today, our customers pay within 60-90 days. 6

A&D Forum August 19, 2011 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. 7

A&D Forum August 19, 2011 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. 8

A&D Forum August 19, 2011 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. 9

A&D Forum August 19, 2011 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. 10

A&D Forum August 19, 2011 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. 11

A&D Forum August 19, 2011 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. 12

A&D Forum August 19, 2011 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. 13

A&D Forum August 19, 2011 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. 14

A&D Forum August 19, 2011 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 15

A&D Forum August 19, 2011 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 other family owned businesses. 16

A&D Forum August 19, 2011 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. 17

A&D Forum August 19, 2011 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. 18

A&D Forum August 19, 2011 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. 19

A&D Forum August 19, 2011 CONTACT INFORMATION • Marzel Neckien • mneckien@wmwcnc.com • 818-890-8049 • David Fisher • David@shmachine.com • 818-846-9847 818 846 9847 20