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									   ISSUE         Q U A R T E R LY N E W S L E T T E R O F G L O B A L S U P P LY C H A I N


     6
                 SUPPLIER
   AUG
   2011          NEWSWIRE

                                  Q&A with Lisa Kohl
                                   During 34 years of combined tenure with              firms to ensure
                                   Northrop Grumman and TRW, Lisa Kohl, sector          technical
                                   vice president, Aerospace Systems’ Global            and quality
                                   Supply Chain (GSC), has overseen satellite           requirements
 Supplier Performance              programs, ground systems, operations,                are met and
                                   Information Technology and Six Sigma.                parts are
 Quality                           Through it all, she’s championed data-driven         delivered in
 Affordability                     processes for innovative people. That focus,         time to support
                                   she contends, will help us achieve today’s most      our production
 Communications                    pressing challenge: affordability.                   lines. And
                                                                                        production,
                                   SN: Can you reflect on the changing                  knowing
                                   expectations of military and civil                   critical parts
                                   customers?                                           are coming from somewhere else, will need to
                                   LK: We are now migrating from technology-            place orders earlier to support timely deliveries.
                                   intensive applications to a greater focus on         It’s a complex dance that will bring best value
                                                                                        to customers.

“ The supply chain
                                   affordability. In the past, customers were
                                   willing to add capabilities over a contract’s life
                                   cycle, which drove up complexity and costs. As       SN: How is GSC evolving?
   does more than                  suppliers, we felt the need to do whatever the
                                   customer wanted, so we didn’t push back on
                                                                                        LK: The supply chain does more than purchase
                                                                                        — it supports those developing new ideas
   purchase —                      requirements creep.                                  by bringing in skill sets from suppliers. These
                                                                                        skills enhance our potential offerings. It’s
                                      Today, there’s a major shift on both sides,
   it supports those               requiring a change in thinking and culture.          creating integrated business systems to link
                                                                                        our enterprise into a single working machine
                                   Customers will need to temper their appetites
   developing new                  for enhancements and become more aware               with data we’ve never integrated before. It’s
                                                                                        providing efficiencies through automation.
                                   of a request’s cost. Likewise, employees need
   ideas by bringing               to understand the total cost impact when             It’s estimating costs, analyzing prices and
                                                                                        then negotiating deals that meet cost targets.
                                   designing. We’ll need to consider cost trade-offs
   in skill sets from              from day one. This can be achieved only with         It’s tracking supplier performance and
                                                                                        collaborating for even higher gains and moving
                                   an integrated approach.
   suppliers. These                                                                     parts from suppliers to our facilities. It’s moving
                                                                                        materials via air, ship or ground. It’s receiving
                                   SN: How is this approach integrated?
   skills enhance                  LK: We all need to educate the customer on
                                                                                        parts from suppliers, maintaining proper
                                                                                        inventories and kitting parts for production.
                                   cost options and be proactive in offering
   our potential                   trade-offs. As a shared service that purchases
                                                                                        It’s offering opportunities to small businesses.


                 ”
                                                                                        It’s being the mortar between the bricks and
                                   60 percent of the parts and systems that
   offerings.                      go into our products, GSC impacts every
                                                                                        keeping the sector’s value stream flowing.
                                   organization. Everyone needs to control costs.       SN: What are your goals?
                                   Before creating designs, engineers should
                                   understand how their level of detail will differ     LK: GSC has been on the affordability
                                   if their product is to be built inside or bought     journey for more than a decade, removing
                                   from a supplier. Our support functions need          nearly a quarter billion dollars from internal
                                   to consider scheduling implications so a             operations. We’ve milked most of what we
                                   supplier has ample time to build. We in GSC          can from internal efficiencies, and we’re now
                                   need to construct business deals with many           Continued on page 2



                                     www.globalsupplychain.com
 GD 27188_8/11
Q&A with Lisa Kohl
Continued from page 1

concentrating on lowering the costs of supplied goods and
                                                                            GSC
                                                                     offer. If you can suggest to your customers better ideas and
services. Recent examples are a common parts list that factors in    cost efficiencies — for example, bulk buys instead of one-at-a-
costs and a process that ensures those parts are selected during     time — you’d see dramatic cost reductions. The best example
the design phase. If we had a uniform process for scheduling         is the Global Hawk proposal to bulk buy lots 10, 11 and 12. By
and releasing drawings so vendor-required parts could be             bundling these lots, we’re saving significant amounts, not only
completed first, GSC could limit “expedite” fees. If we could        from quantities but also by assuring a continuous build for
integrate design-for-cost, producibility and weight into a single    suppliers.
design process, we could limit the number of changes flowed
to our supply base. No single organization can accomplish this       SN: How does GSC benefit employees?
— streamlining and lowering supplier costs requires the entire       LK: We offer a wealth of information about our supply base:
enterprise.                                                          capabilities, capacity and costs, to name a few. We can leverage
                                                                     and integrate that data into new business pursuits and future
SN: How can employees help GSC meet its goals?                       designs. We can ensure delivery of systems and products that
LK: Know that the men and women of GSC work tirelessly to            meet the affordability challenges of the 21st century.
make your programs successful. Understand what our suppliers



Quality: Characterizing and Assessing
         the Supply Base
  Identifying suppliers’ capabilities and aligning with quality      so we have enough time to assess the quality systems of new
suppliers early in a capture, well before the proposal phase, are    suppliers; and 2) leveraging existing platinum preferred and
keys to a successful sourcing strategy, assert Chris Brown and Kat   other high-performing suppliers.
Borojerdi of Global Supply Chain Strategic Sourcing.                   “When considering new suppliers, quality and cost
  “Quality is critical to everything we do at Northrop Grumman,      avoidance are as important as unique capabilities,” Brown said.
so it’s vital to work with suppliers who have the same operating     “By engaging early, when new supplier options are brought
philosophy. A quality supply base — where suppliers have been        forward, the Supplier Assurance team, led by Steve Moe, is given
surveyed for excellence — is pivotal to supplier assurance,”         adequate time to complete a supplier health assessment.”
Brown said. “It’s essential to understand not only suppliers’
current product offerings and emerging technologies but also
their history of quality and program performance.”
                                                                                                                       Kat Borojerdi (l) and
  To assist new business capture teams in developing strategic
                                                                                                                       Chris Brown of GSC
sourcing plans, Brown and Borojerdi have developed an early
engagement process that aligns critical program requirements                                                           Strategic Sourcing
with potential suppliers. The goal is to conduct this process in                                                       have developed an
phase 1, 2 or 3 of the business acquisition process, when the                                                          early engagement
system architecture and sourcing strategy are being formulated.                                                        process that aligns
The process steps include:                                                                                             critical program
    • Completing a product characterization checklist to define                                                        requirements with
         cost, schedule, technical and geopolitical requirements.                                                      potential suppliers.
    • Identify potential products and suppliers that meet
         defined requirements using SMARTS, a search engine that
         queries supplier capability and performance databases
                                                                        The health assessment consists of analyzing the supplier’s
         across the corporation.
                                                                     financial health and ensuring that quality standards and
    • Present supply base options to the capture team,               procedures are in place. This assessment identifies risks that can
         ranking supplier offerings by criteria such as technical    be factored into the sourcing decision and, if needed, added
         performance, maturity, cost, schedule, capacity, quality    to the program’s risk register. The health assessment reduces
         systems, financial health and past performance.             risk by establishing mitigation strategies early in the period of
    • Develop a preliminary sourcing strategy by following           performance.
         processes for sector source evaluation and selection —         GSC adds value to new business captures and existing
         and then laying the groundwork for the program’s “make/     programs by bringing forward strong-performing suppliers
         buy” plan.                                                  that differentiate Aerospace Systems from competitors and
  The two key actions in the Strategic Sourcing early                contribute to program execution.
engagement process are 1) identifying potential suppliers early         Please visit the Strategic Sourcing website or contact
                                                                           Chris S. Brown or Kat Borojerdi.
Aerospace Systems Supplier
Conference and Awards
                                                                                                   GSC
Supplier Performance:
Measuring, Rewarding and Recognizing
Top Performers
   Honoring 56 suppliers as the “best of the best,” Aerospace
Systems leaders emphasized the importance of clear metrics in
gauging performance at the annual Supplier Conference and                                            Suppliers of the Year
Awards Program held in Manhattan Beach, Calif.
   This year’s awards event drew upon a customer’s first-hand                                         Having attained a high enough score as part
experiences and the expertise of a panel of Aerospace Systems                                   of a rigorous rating system, platinum- and platinum-
vice presidents.                                                                                    source preferred suppliers have distinguished
   Capt. Ellen Moore, commander, Defense Contracts                                                   themselves in at least one of four categories:
Management Agency in Palmdale, Calif., asked the suppliers                                            product quality, on-time delivery, customer
to convey her appreciation to employees back at their home                                              satisfaction and robust lean processes.
facilities. “The uniform I wear should remind you of who is                                       Their products range from small parts to complex
using the quality products you provide on budget and on time,”                                       assemblies. Noted Chuck Wands, sector vice
Moore said. She urged all present to consider the Department of                                    president and chief financial officer, “In today’s
Defense’s ultimate mission: “Stand ready, be able, deter war, but
                                                                                                 economic environment, our success depends on the
if we’re in a fight, win.” Moore acknowledged the precise timing
needed to deliver complex systems but cautioned that “past                                           affordability of their products and services.”
performance will get you in the game, but we reward what’s                                          Of the 56 awardees, 26 are small businesses, two
better, not the same.”                                                                           are small disadvantaged-owned, nine are first-time
   The vice presidents’ panel focused on affordability, a concern                               winners and only two have performed at the top level
that is not going away, judging by our nation’s debt. Stuart                                                   for five consecutive years.
Linsky, vice president, Communication Systems, defined what                                              Click here to view a list of the awardees.
affordability means: “It’s managing risk and opportunity. It’s
hitting and exceeding cost targets. It’s designing in different
ways. It’s investing in new design concepts.”

                                                                                             Michelle Scarpella, vice president, F/A-18 and F-5/T-38
                                                                                           programs, challenged employees and suppliers alike to
                                                                                           aggressively manage overhead. “No cost element will go
                                                                                           unscrutinized,” she said. “We’re looking for evidence you’re
                                                                                           aggressively investing in affordability and that your investments
                                                                                           are resulting in savings.”
                                                                                             George Vardoulakis, vice president, Tactical Unmanned
                                                                                           Systems, shared the benefits that can be gained from Lean,
                                                                                           Six Sigma and other process improvement methods. He also
                                                                                           predicted, “We won’t be seeing as many new starts because of
                                                                                           current budgetary constraints.”
                                                                                             Peggy Nelson, vice president, Advanced Mission Programs,
                                                                                           asked suppliers for “greater visibility, fewer escapes and greater
                                                                                           quality assurance. We need to do it right the first time so we can
                                                                                           pay attention to opportunities further out.” She acknowledged
                                                                                           that “hardware is hard; software is harder. We know what you do
                                                                                           every day is making us a safer nation.”


Capt. Ellen Moore, commander, Defense Contracts Management Agency in Palmdale,
Calif., congratulates Myron Yoo, president of Century Precision Engineering, a Glendale,
Calif.-based firm that captured the award for Small Business Supplier of the Year.
Focus on Performance                                                     GSC
Suppliers, Employees, and Teams
Honored at SEBP Awards
   Acknowledging the outstanding                                  at right) and Gene Yano were cited for
achievement and performance                                       their expertise and professionalism in
of small business suppliers, along                                producing graphics, printed media,
with several Aerospace Systems                                    signage, photography and DVDs to
employees and company teams, Wes                                  support supplier recognition programs
Bush (pictured at right), Northrop                                as well as conferences and trade shows.
Grumman’s president and chief                                        The Contract Labor team of Paula
executive officer, spoke at the Socio-                            Hinkley and Danielle Ortiz supported
Economic Business Programs (SEBP)                                 Northrop Grumman’s strategic plan to
World-Class Team Supplier and                                     aggregate the purchased labor spend
Employee Recognition program, held                                and increase the use of SEBP suppliers.
Dec. 1, 2010.
                                                                     A Subcontract Management team
   “You have been selected from a                                 — Terri Biggs, Mark Bishop, Tracy Boyd, J. Richard Garrett,
list of numerous qualified suppliers                              Julia Mitchell and Carrie Randolph — helped increase small
across our enterprise,” Bush told the                             business involvement on the ICBM Security Modernization Fast
award-winning small businesses. “All recipients’ awards were      Rising B-Plug program.
based on objective analysis of performance, delivery and
                                                                     The Integrated
quantitative information received by our Global Supply Chain
                                                                  Avionics Product
organization.”
                                                                  Team — Dean Baluch,
   At the luncheon, held the following day, guest speaker         Mary Massey, Jennifer
April Pinch-Keeler, president and chair of MVLE, a nonprofit      Marie Rose, Matt Ward
that provides jobs and job training for the disabled, shared      and Steve Nguyen
resources and services. Northrop Grumman recently signed a        (pictured at right with
mentor-protégé agreement with MVLE to help develop federal        Vicky Harper-Hall and
contracting opportunities and infrastructure for people with      Lisa Kohl) awarded
intellectual disabilities                                         SEAKR Engineering
NGAS Employees Feted                                              a subcontract for the
                                                                  electrical integration
  Among the Aerospace Systems’ employees honored was              assembly of a remote interface unit, and they provided the
GSC’s Dean Westcott, director of Business Systems Integration.    support needed for this small company to succeed.
(He is pictured at below with VPs Susan Cote and Lisa Kohl.)
                                           Working quietly        Meet 3 ‘World-class’ Suppliers
                                           behind the scenes,        Three NGAS suppliers were among the small businesses
                                           Westcott updated       recognized at the SEBP awards program:
                                           processes to prepare
                                                                     SEAKR Engineering demonstrated technical superiority
                                           government-
                                                                  in the field of solid state recorders. The small business won a
                                           mandated
                                                                  long-term supply agreement for hardware that will be used to
                                           subcontracting
                                                                  support extreme growth of several space programs.
                                           summaries. His
                                           contributions led to   www.seakr.com
                                           additional resources     Far West Corporation provided general contracting and
                                           for suppliers on the   construction services at facilities in Redondo Beach and El
                                           OASIS Website.         Segundo. Known for its responsiveness to changes in the field
  Northrop Grumman’s corporate office recognized two              and consistent on-time performance, Far West is helping NGAS
Aerospace Systems’ innovators — Eric Barnes and Scott             lower construction costs.
Gillette, who initiated the F-35 Inlet Duct Robotic Drilling      www.farwestcorp.com
project to automate drilling and counter-sinking operations.
They worked with suppliers and government customers to              VPI Engineering offers engineering and electronics services.
advance the maturity of small business technology.                A recent example is a “ruggedized” version of a next-generation
                                                                  sensor for the B-2 and F-35 aircraft. VPI continues to develop
NGAS Teams Honored                                                creative solutions, from concept to product, all under one roof.
  The “Admin Services” team of Gene Bellevue, Shane                www.visionaryproducts.com
Broomfield, Janet Chan, Pat Jimenez, Daniel Perales (pictured
                                                                                   GSC
                                                                                   GSC
Affordability Emphasized at HALE
Supplier Conference
   The High Altitude Long Endurance (HALE) program held
a Supplier Conference in Rancho Bernardo earlier this year.                                                             Left, Wayne Ogin, GSC director, and
Attended by the program’s 18 major subcontractors and top                                                               Brad Mulder (back), Production
five procurement suppliers, the event featured a comprehensive                                                          Programs director, said affordability
program update from Northrop Grumman leaders, who                                                                       will be a key discriminator for future
emphasized the importance of affordability.                                                                             subcontracts.
   A conference highlight was a program review by George
Guerra, vice president, HALE Systems. Guerra also presented
Global Hawk’s accomplishments over several recent
deployments. Suppliers, who often hear bad news about a cost,
schedule or technical issue, said they appreciated this positive                Clockwise from top left, among the
feedback from the war fighter. A recurring theme was the major                  suppliers making presentations were
challenge of Affordability, and how it must be engrained across                 Dan Brady, VP, Aerostructures for
the enterprise in everything we do.                                             Aurora Flight Sciences; Mark Blanton,
   The second speaker, Eric Garvin of Northrop Grumman’s                        director of Military Programs for
Washington office, provided much-needed clarity on the                          Triumph Group Vought Operations;
budgetary environment impacting all defense contractors.                        Mark Brian, L-3 Communications
Garvin emphasized Northrop Grumman’s strategy for Global                        Program Director; and Matt Dillhoff,
Hawk and the crucial role of ENGPAC to ensure participation                     representing GE Aviation.
in the political process. He provided suppliers with data and
contacts to encourage communications with government
officials and awareness of local issues.
                                                                                exceptional suppliers are: Aurora Flight Sciences Corporation, L-3
                                                                                Communications, GE Aviation Systems, and the Triumph Group.
                                          NGC leaders and supplier teammates       Representatives from each supplier made a short presentation
                                          participated in the HALE Supplier     to highlight specific strengths. The NGC quality team reinforced
                                          Conference in May. At left, George    that unquestionable quality must be the foundation of every
                                          Guerra, VP, HALE Systems, answers     supplier’s operation -- and showed a well-received briefing and
                                          supplier questions on Global Hawk’s   video that reinforced these messages.
                                          recent deployments.                      Another challenge addressed was diminishing manufacturing
                                                                                sources. Melissa Packwood emphasized a proactive program
                                                                                approach and stressed each supplier’s responsibilities to identify
 Right, Eric Garvin of Northrop                                                 potential issues early and work with the program to develop
 Grumman’s Washington office                                                    and implement mitigation plans. On the Global Hawk program,
 discusses the budgetary environment                                            80 percent of the cost is driven by suppliers so each supplier
 impacting defense contractors and                                              was hosted to one-on-one side meetings where individual
                                                                                affordability responsibilities and cost targets were summarized.
 the importance of participating in the
 political process.                                                                Presenting the keynote message was Leslie Smith, HALE
                                                                                Affordability manager, and Wayne Ogin, director of Global
   Nat Piscitelli, director, HALE International Programs, concluded             Supply Chain. Both said Affordability is being emphasized at the
the program overview with a summary of international                            highest levels of the DoD and needs to be flowed down through
opportunities. To allow suppliers to do long-term planning on                   programs to each supplier and employee. The conference gave
a common set of assumptions, Piscitelli tied together planned                   suppliers renewed pride in their contributions to program
quantities for Air Force and BAMS programs of record with                       success and clarified the warfighter’s requirements. It also
projected near-term international sales.                                        equipped them to carry out specific Affordability plans over the
                                                                                next several months.
   Brad Mulder, director of Production Programs, summarized
the Manufacturing Readiness Assessment (MRA) that had just                         A videotaped message from Northrop Grumman President
been completed in preparation for a full-rate production. The                   and CEO Wes Bush summarized the key point: “We need to
MRA included on-site reviews by a joint NGC and Air Force                       embrace innovation to help address issues of Affordability, risk
team at many large supplier facilities. Mulder thanked these                    management, and vulnerability – and with the same amount
suppliers for their participation and identified four suppliers                 of zeal we exhibit when developing new technology to extend
whose exceptional “best practices” should be emulated. These                    capabilities.”
                                                                                             GSC
NASA/JPL Conference
Sends Encouraging Signals to
Small Business
  Northrop Grumman had a strong presence at the NASA/JPL                             government agencies have set up to achieve economies of
23rd Annual High-Tech Small Business Conference in March.                            scale. “Sometimes it can feel like walking through quicksand,
Not only were small business liaison officers (SBLOs) there from                     but stick with it. Reach for new heights.”
three Northrop Grumman sectors, several of our engineers and                            Dr. John Grotzinger, project scientist at JPL’s Mars Science Lab,
technologists staffed our exhibit and shared an important story.                     focused on the scientific returns possible from our investment
  The message? Despite a difficult economy, opportunities                            in the Mars Rover and the HiRISE camera onboard the Mars
exist — and Northrop Grumman is always looking for high-tech                         Reconnaissance Orbiter. He showed scores of close-up photos
suppliers who can deliver fresh ideas and innovative practices.                      taken by the camera, and extended “heartfelt thanks” to the
   Indeed, the keynote speakers reinforced that perspective.                         many contractors involved in his team’s discoveries.

  Rick Keegan, associate deputy administrator at NASA
headquarters, pointed out that this conference is the premier
aerospace gathering for small businesses on the West Coast,
and one of only three such technical exchanges among
suppliers, government agencies and prime contractors in the
nation. “It’s hard to fathom a time we didn’t have this type of
network,” he said. “Small businesses employ nearly half of the
workers in our nation. They’re responsible for 40 percent of our
country’s payroll, and they produce 13 times the number of
patents per employee than produced by large companies and
federal agencies. Small businesses are the engine of job growth
and the key to our prosperity.”
  Keegan acknowledged that many innovative small businesses
are hanging by a thread. “Pay attention to your business
systems and cash flow,” he advised the thousand-plus of small                        NGAS’ SBLOs, Buyers and other members of NGC Team attending to Small Business
business representatives in the audience. He encouraged them                         representatives during exhibition at the conference
to push through the inevitable bureaucracies that primes and
                                                                                       Before and after the speeches, several representatives from
                                                                                     primes and government agencies were available at exhibits
                                                                                     and in workshops to help attendees navigate the contracting
                                                                                     process.
                                                                                       Tim Shinbara, a manufacturing engineer in AP&T for Northrop
                                                                                     Grumman Aerospace Systems, joined forces with several GSC
                                                                                     buyers and SBLOs to discuss contracting opportunities at
                                                                                     Northrop Grumman
                                                                                       “Small businesses are technical enablers who help us secure
                                                                                     government contracts,” Shinbara said. “This conference gives
                                                                                     us a precise, succinct audience for increasing the quality of our
                                                                                     technology pool. In essence, I’m able to look into a Petri dish,
                                                                                     hear suppliers’ 30-second pitch, and offer some direction.”


Back Row: Gary Scott, Brian Keegan, Zach Semler, Melissa McCray
Front Row: Mikal Aziz, Badar Farooquee, Crystal Hawkins, Melissa Poli, & Pat Mckay
                                                                                         GSC
Visiting Integral Products, Inc.
   A team from Global Supply Chain has been conducting
on-site visits to see the operations of top-performing small
business suppliers first hand. Recently, the staff at Integral
Products, Inc. provided a tour and briefing to GSC’s Vicky
Harper-Hall, sector manager, Socio-Economic Business
Programs and Government Relations; procurement analysts
Michael Walsh and John Tolle; and Melissa McCray, small
business liaison officer.
   “We want to spotlight the small firms who excel at doing
business with Northrop Grumman,” explains Harper-Hall. “As a
Platinum Source supplier, Integral Products understands the
importance of quality at an affordable cost. This is a business
in good standing – and it’s growing. To meet the increased
demand for its adhesives, sealants, paints and coatings, the
company is expanding to a new 50,000 square-feet facility.”
   Located in Harbor City, Calif., Integral Products specializes in
aerospace, aircraft, MIL-spec and OEM products. It is compliant                 Above from left: GSC’s John Tolle, Michael Walsh and Vicky Harper-Hall tour one of
with these certifications: ISO 9001:2000, AS 9100B, and                         the labs with Integral Products’ Inocencio Narez and company founder and president
NADCAP AS 7202.                                                                 John Roth
   John Roth, who continues to serve as president, founded
the company in 1995. In addition to meeting Roth, our GSC
team had the opportunity to learn from Integral Products’
staff members John Lane, Quality manager; Inocencio Narez,
technical account manger; and Michael Kelly, Office manager.
   Together, they offer decades of experience. Last year, Integral
Products delivered 459,188 units to nine Northrop Grumman
facilities – including Palmdale and El Segundo — with a quality
conformance ratio of 99.93%.




                                                                                Above from left outside the company’s Harbor City, Calif., facility: Inocencio Narez,
                                                                                John Roth, Todd Fradelich, Michael Walsh, Vicky-Harper-Hall, Michael Kelly, Melissa
                                                                                McCray, John Lane and John Tolle

                                                                                  In addition to sealants, adhesives, and coatings, the company
                                                                                does custom chemical formulation, packaging specializations
                                                                                and chemical management. “Their employees are committed
                                                                                to providing Northrop Grumman with high-quality products
                                                                                and prompt delivery,” said Harper-Hall.
Above, GSC’s Michael Walsh learn about Integral Products’ shipping operations
from the company’s Quality Manager John Lane, as Michael Kelly looks on

								
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