Jon Steffey Program Manager Informatics Solutions, Research and Development 2 March 2015

AGENDA Nadcap Overview Organizational Structure of Nadcap Nadcap Process / eAuditNet

DEFINITIONS – PRI PRI: The Performance Review Institute is a not-for-profit affiliate of SAE whose mission is to: Provide global, unbiased, independent manufacturing process and product assessments and certification services to the mobility industry for the purpose of adding value, reducing total cost and facilitating teaming between primes & suppliers. PRI administers Nadcap.

DEFINITIONS – Nadcap Nadcap: Special Processes: are those processes where the parameters are directly influenced by component geometry and/or the results cannot be confirmed by inspection, e.g., NDT, Plating, Heat Treating. Products: are the manufacturing output of the combination of distinct materials, parts and/or processes which forms a whole, e.g., Composites, Elastomer Seals, Electronics. The leading worldwide co-operative program of major companies designed to manage a cost effective consensus approach to special processes and products and provide continuous improvement within the aerospace and automotive industries.

DEFINITIONS – eAuditNet Audit software used to document audit results, attachments, letters, notes, schedules audits, supplier advisories, etc. with the ability to produce reports based on multiple criteria.

HISTORY OF THE PERFORMANCE REVIEW INSTITUTE (PRI) November 1985: Government/Industry Equal Partners Conference recommends consensus solution to duplication of supplier quality assurance systems July 1990: PRI incorporated as a Not-For-Profit Trade Association. Launch Nadcap for Aerospace July 2000: Roll-out of Nadcap Europe November 2002: Full Launch of eAuditNet October 2003: Roll-out of Nadcap Asia April 2008: Roll-out of eQuaLearn May 2009: Full Launch of eAuditNet 2.0 February 2012: PRI begins conducting audits for Transportation & Power Generation (2012) and Medical Devices (2014) industries

KEY REFERENCES FOR NEW ATTENDEES Nadcap Subscriber Tutorial Attendees Guide Antitrust (page 7) Nadcap Personal Code of Ethics and Conflict of Interest (page 7) PRI Website: www.p-r-i.org eAuditNet Guides: www.eAuditNet.com

SUGGESTIONS FOR NEW ATTENDEES Attend Task Group mini-orientation at the beginning of each meeting Introduce yourself to the Task Group Chair and Staff Engineer Become active in your Task Group; your comments are very important Provide your feedback from the meeting through the on-line survey

MEMBERSHIP RESPONSIBILITIES Subscriber members are required to attend Nadcap meetings. If the member is unable to attend, an alternate shall be designated. Reply to surveys, questionnaires and ballots that are circulated to members. Carry through sponsorship and coordination of individual projects as assigned. Prepare checklists for auditing and continuing surveillance. Review resumes and interview auditors. Review audit reports. Comply with the Nadcap Personal Code of Ethics and Conflict of Interest Policy. Safeguard the confidentiality of information that you're exposed to through the Nadcap program.

Nadcap MEMBERS 309th Maintenance Wing-Hill AFB GE Aviation SAFRAN Group AgustaWestland GE Avio S.r.l. Sonaca Airbus Group General Dynamics Spirit AeroSystems Aerolia Gulfstream Textron Inc. Airbus GKN Aerospace Beechcraft Airbus Defence and Space Airbus Helicopters GKN Aerospace Sweden AB Bell Helicopter Premium Aerotech GmbH Heroux Devtek Inc. (Landing Gear Division) Cessna Aircraft Company Alenia Aermacchi SpA Textron Systems BAE Systems – Military Air Solutions (MAS) Honeywell Aerospace Thales Israel Aerospace Industries Triumph Group Inc. BAE Systems Latecoere United Technologies Corporation Ball Aerospace & Technology Corporation Liebherr-Aerospace SAS Goodrich (UTAS) Lockheed Martin Corporation Hamilton Sundstrand (UTAS) The Boeing Company Mitsubishi Aircraft Corporation / Mitsubishi Heavy Industries LTD Bombardier Inc. Pratt & Whitney COMAC MTU Aero Engines AG Pratt & Whitney Canada Defense Contract Management Agency (DCMA) Northrop Grumman Corporation Sikorsky Aircraft Parker Aerospace Group Eaton, Aerospace Group Raytheon Company Embraer SA Rockwell Collins, Inc. Rolls-Royce

TIMELINE OF PRIMES

GOVERNMENT AGENCIES AND CONTRACTOR POSITIONS ON PRI QUALIFICATION PROGRAMS SUBSCRIBER FOR PRI USE AMERICAS EUROPE ASIA 309th MAINTENANCE WING-HILL AFB Hill AFB, UT A (CP, CT, HT, MTL, NMSE, NDT, WLD) AGUSTAWESTLAND Cascina Costa, Italy R (NDT) AIR FORCE WPAFB, OH R (Seals, SLT) ALENIA AERONAUTICA SPA Naples, Italy U12 R (CP, COMP, HT, MTL, NDT, SE, WLD) AVIO S.p.A Italy R (CP, CT, HT, MTL, NDT, NMSE, WLD) BAE SYSTEMS MILITARY AIR SOLUTIONS (MAS) UK U15 R (COMP, CP, HT, MTL, NDT, NMSE, WLD) BAE SYSTEMS Nashua, NH A (CP,CT,WLD) BALL AEROSPACE & TECHNOLOGY CORPORATION Boulder, CO A (CP,ETG,WLD) THE BOEING COMPANY (Commercial Airplanes, Intergrated Defense Systems) U11 R (COMP,CP,HT,MTL-Ind.Test labs only, NDT, NMSE-SE only,WLD) R (COMP,CP,HT,MTL-Ind.Test labs only, NDT, NMSE-SE only,WLD) BOMBARDIER, INC. Dorval, Canada U13 R (COMP, CP, CT, HT, MTL, NDT, NMSE, WLD) Defense Contact Management Agency (DCMA) (DOD) Alexandrta, VA M (ALL, COMP, ETG, FLU, SEAL, SLT) Airbus U8 R (COMP, CP, ETG, HT, MTL, NDT, NMM, SE, WLD) R (COMP, CP, ETG, HT, MTL, NDT, NMM, SE, WLD) Special Process and Product mandates to the supplier base in that region Name of Nadcap Subscribing Prime Contractor KEY: R = Accreditation Required by Prime Letter sent to Suppliers; M = Nadcap Member; A = Accepts Nadcap Accreditation Note: Not all Subscribers included above; visit eAuditNet for full list. Programs listed as of July 2011.

INDUSTRY-MANAGED ACTIVE CUSTOMER AUDITS

STATUS REPORT – SUPPLIER AUDITS

STATUS OF AUDITS/AUDITORS (FULL TIME EQUIVALENT)

NADCAP PROGRAMS Special Processes Systems & Products Nondestructive Testing (NDT) Materials Testing (MTL) Heat Treating (HT) Coatings (CT) Chemical Processing (CP) Welding (WLD) Nonconventional Machining & Surface Enhancement (NMSE) Non Metallic Materials Manufacturing (NMMM) Non Metallic Materials Testing (NMMT) Conventional Machining as a Special Process (CMSP) Measurement and Inspection (MI) Metallic Materials Manufacturing (MMM) Systems & Products Aerospace Quality Systems (AQS): AC7004 Fluid Distribution Standards (FLU) Elastomer Seals (SEALS) Sealants (SLT) Composites (COMP) Electronics (ETG)

AGENDA Nadcap Overview Organizational Structure Nadcap Process / eAuditNet

PRI/Nadcap ORGANIZATIONAL STRUCTURE Policy Board of Directors Executive Leaders Legal entity Fiduciary responsibility Set policy Provide the vision

BOARD OF DIRECTORS Stan Adachi Severin Drogoul Etienne Galan Divisional Director, Supplier Quality, Defense, Space & Security The Boeing Company Severin Drogoul Vice President – Business Improvement & Quality Airbus Group Etienne Galan Vice President Purchasing Snecma (Safran Group) Michael Hayward Sector Director International & Logistics Excellence Northrop Grumman Aerospace Systems Erik Kunkle Sourcing Quality Leader GE Aviation Mario Langlois (Chairperson) Director, Quality Engineering & Safety Office Bombardier Aerospace Tony Maguire Head of Quality, Hawk Aircraft Programmes BAE Systems PLC Ron Meester Vice President, Global Quality Honeywell Aerospace Anna (Graham) Morast Director, Group Quality Pratt & Whitney, UTC Alan Partridge Head of Laboratories Rolls-Royce David L. Schutt Chief Executive Officer SAE International Junji Tsuji Manager of Manufacturing Technology Group of Production Planning Department, Aero-Engine & Space Operations IHI Corporation Jianqiang Xu Deputy General Manager, Science, Technology, and Quality C919 Program Chief Quality Officer COMAC

PRI/Nadcap Organizational Structure Policy Board of Directors Nadcap Management Council (NMC) Tactical Senior quality leaders & managers Oversee operation of Nadcap Establish & implement policy & procedures Task group coordination & development Identify, develop and deploy improvement

CURRENT Nadcap MANAGEMENT COUNCIL (NMC) Latchezar Anguelov SAFRAN Group David Bale Pratt & Whitney Canada Dietmar Becher Liebherr Aerospace Michael Bess DCMA Pascal Blondet Airbus Richard Blyth, Vice Chairperson Rolls-Royce. Katie Bradley Lockheed Martin Christopher Brust Robert Cashman Parker Aerospace Group David Cianfrini BAE Systems, Electronic Systems Russell Cole Northrop Grumman Jim Diamond 309 Maintenance Wing – Hill AFB Harold Finch Spirit AeroSystems Jose Eduardo Freire Embraer SA Hidekazu Furugori Mitsubishi Aircraft Corporation John Haddock BAE Systems – MAS Tim Hayes General Dynamics Martha Hogan-Battisti The Boeing Company Scott Iby Hamilton Sundstrand Jason Jolly Cessna Aircraft Company Karen Kim Sikorsky Scott Klavon, Secretary (Non-Voting) PRI Robert Koukol Honeywell Aerospace Ralph Kropp MTU Aero Engines GmbH Eric LeFort Sonaca Howard Jeff Lott, Chairperson The Boeing Company Frank Mariot Triumph Group Scott Maitland Goodrich (UTAS) Steve McGinn Honeywell Robin McGuckin Bombardier Aerospace Marc Montreuil Héroux Devtek Michael Murray Beechcraft Corporation Ana Ottani dos Santos Embraer SA Rick Peterson Rockwell Collins, Inc. Alberto Portal Airbus Defence and Space Fabrizio Quadrini AgustaWestland Mark Rechtsteiner GE Aviation Per Rehndell GKN Aerospace Sweden AB Brad Richwine Raytheon Company Victor Schonberger IAI Lisa Shaw Eaton Aerospace Henry Sikorski Pratt & Whitney Asa Snitchler Beechcraft Corporation David Soong Angela Vitale Alenia Aermacchi SpA George Winchester Northrop Grumman Corwyn Berger EXOVA, Inc. Jim Cummings Metal Finishing Company Andrew March Hunting Dearborn, Inc. David Michaud Fountain Plating Company Tom Newton Aircraft X-Ray Laboratories Michael Schleckman Voss Industries, Inc. Vitorio Stana Avcorp Industries Inc Vern Talmadge Howmet Thermatech Coatings Gary White Orbit NDT

PRI/Nadcap ORGANIZATIONAL STRUCTURE Policy Board of Directors Administrative Staff Tactical Nadcap Management Council (NMC) Task Groups Special Processes Nondestructive Testing, Materials Testing, Heat Treating, Coatings, Chemical Processing, Welding, NMSE, Non Metallic Materials Testing , Conventional Machining, MNI Systems & Products Electronics, Sealants, Elastomer Seals, AQS (AC7004), Fluid Distribution Systems & Composites Supplier Support Committee (SSC) Technical Technical Experts Determine requirements Develop documents Accept corrective action Final decision on accreditation

AGENDA Nadcap Overview Organizational Structure of Nadcap Nadcap Process / eAuditNet

Nadcap PROCEDURE HIERARCHY Aerospace Standard which documents the requirements for implementing Nadcap industry consensus-based accreditation programs. AS7003 Quality policy describing the quality system of the organization. QUALITY MANUAL NOP (Nadcap Operating Procedure) Specific procedures by which Nadcap operates. Scope and general operating procedures for each specific Nadcap commodity program. NTGOP (Nadcap Task Group Operating Procedure) NIP (Nadcap Internal Procedure) Specific procedures by which PRI / Nadcap Staff operates. Roles and responsibilities for Nadcap Auditors, and clarifications to facilitate and standardize the audit process. Auditor Handbook

NOP-001: Nadcap Operating Procedure NOP-006: Supplier Advisory Process KEY PROCEDURES (In eAuditNet, under Documents > Procedures and Forms) NOP-001: Nadcap Operating Procedure NOP-006: Supplier Advisory Process NOP-008: Supplier Merit Program NOP-011: Audit Failure Process NTGOP-001: Nadcap Task Group Operating Procedure

THE Nadcap AUDIT PROCESS Subscriber Action Supplier Action PRI Action Accreditation Mandated by Nadcap Prime Subscriber Supplier Requests Audit Audit Scheduled & Auditor Assigned Audit Performed – Auditor Submits Report Re-accreditation Process Supplier Review Certificate Issued to Supplier Task Group Review PRI Technical Staff Review

AUDIT PROCESS PRI/Supplier Schedules the Audit using eAuditNet.com Nadcap Checklists and Preparation Instructions available Encouraged to review the Nadcap Customer Support Initiative (NCSI) presentation on eAuditNet Perform self-audit Auditor Conducts the Audit using the applicable Nadcap checklists (located on eAuditNet) Daily briefing & a final close out meeting at the end of the audit Auditor Prepares Cover Letter and attaches to audit report (uploaded into eAuditNet) Supplier has 21 calendar days to initially respond to any findings (7 calendar days for subsequent responses)

EVERY STEP IS MANAGED BY INDUSTRY AUDIT CHECKLIST PROCESS EVALUTION/ IMPROVEMENT AUDITOR QUALIFICATION & SELECTION INDUSTRY EXPERTS MANAGE ALL KEY STEPS CORRECTIVE ACTIONS AS REQUIRED AUDIT CONDUCTED AUDIT RESULTS

Nadcap – INDUSTRY WORKING TOGETHER Task Groups (Primes) Nadcap Staff Suppliers Establish Audit Criteria Audit Criteria (AC): Document containing checklists or other surveillance tools to be utilized in the course of determining compliance to established industry standards and prime requirements.

AC7XXX Audit Criteria Job Audits RELATIONSHIP BETWEEN AUDIT CRITERIA (AC), AUDIT HANDBOOK AND PRIME REQUIREMENTS AC7XXX Audit Criteria Job Audits Audit Handbook Industry Standards + Prime Requirements

INDUSTRY MANAGED PROGRAM AUDIT CHECKLIST PROCESS EVALUTION/ IMPROVEMENT AUDITOR QUALIFICATION & SELECTION INDUSTRY EXPERTS MANAGE ALL KEY STEPS CORRECTIVE ACTIONS AS REQUIRED AUDIT CONDUCTED AUDIT RESULTS

AUDIT SELECTION/INTERVIEW/PERFORMANCE Core and Technical Requirements are Established by Task Group Potential candidates complete a pre-screening questionnaire on eAuditStaff.com Interviewed by Task Group Testing/Certification (Optional) Training Audits Review of Training with Report from Lead Auditor Approval by Task Group Continual Monitoring through Audit Reviews Annual PRI/Nadcap Training

AUDITORS CRITICAL TO Nadcap Highly skilled technical background with average of 30 years experience in the Special process audited Unlike ISO or EN 9000 based audits, Nadcap auditors do not make the final decision Nadcap auditor goal is to evaluate and report the technical competency and compliance of the supplier

SAMPLE OF CURRENT AUDITORS & EXPERIENCE Process Experience Summary Aerospace Quality Systems (AQS) 60% ISO Lead Assessors; Average 30 Years Experience Chemical Processing (CP) 70% Have B.S Degree; 22 % Have MS Degree; 11% Have PHD; Average 35 Years Experience Coatings (CT) 100% Have B.S Degree; 20% Have MS. Degree; 20% Have PHD; Average 30 Years Experience Composites (COMP) 100% Have B.S. Engineering; 100% Have MS Engineering; Average 15 Years Experience Elastomer Seals (SEAL) 50% B.S. Engineering; 30 Years Experience Fluid Distribution Systems (FLU) 100% Have B.S. Engineering; Average 35 Years Experience Heat Treating (HT) 80% Have B.S in Metallurgy/Material Science; 30% Have M.S. in Metallurgy/Material Science; Average 33 Years Experience; Certified Quality Engineer/Auditor Materials Testing Laboratories (MTL) 90% Have B.S Degrees; 50% Have MS Degrees; 20% Have PHD; Certified Quality Engineer/Auditor; Average 35 Years Experience Nonconventional Machining (NMMT) 80% Have B.S. Engineering; 40% Have MS Engineering; 20% Have PHD Engineering; Average 32 Years Experience Nondestructive Testing (NDT) 100% are Level III’s for Four (4) Methods; 44% Have Bachelors of Science Degrees; Average 30 years of Experience Sealants (SLT) 50% Have PHD; Average 30 Years Experience Surface Enhancement (SE) Welding (WLD) 60% Have B.S Degree; 30% Have MS Degree; Average 34 Years Experience

INDUSTRY MANAGED PROGRAM AUDIT CHECKLIST PROCESS EVALUTION/ IMPROVEMENT AUDITOR QUALIFICATION & SELECTION INDUSTRY EXPERTS MANAGE ALL KEY STEPS CORRECTIVE ACTIONS AS REQUIRED AUDIT CONDUCTED AUDIT RESULTS

Special Process and Product Specific Requirements Nadcap AUDIT CONTENT Quality Systems Special Process and Product Specific Requirements Compliance/Job Audits NDT: 3 Witnessed Compliance Jobs per Method and 3 “Paperwork” Completed Compliance Jobs per Method Heat Treating: 2 Long Jobs-8 Short Jobs Materials Lab: Witnessing of All Test Methods Chemical Processing: Minimum of 4 Job Audits Coatings: 2-11 Job Audits (Based on Scope) Welding: 2 Job Audits per Method Nonconventional Machining: 2-10 Job Audits Surface Enhancement: 2-6 Job Audits Composites: 15-30 Job Audits (Based on Manufacturing Flow) Electronics: Complete 1 Job Audit Conventional Machining: 2-14 Job Audits (Based on Scope)

GENERAL FOCUS AUDIT Calibration: Does the supplier define the process employed for the calibration of inspection, measuring and test equipment type, unique identification, location, frequency of checks, check method, acceptance criteria and the action to be taken when results are unsatisfactory? Chemical Processing Heat Treating NDT

TECHNICAL (Nadcap) FOCUS AUDIT Calibration: Is measuring and test equipment used to control or monitor the control of a process (within parameters) maintained in a calibration system compliant with ISO 10012-1? (I.e. temperature gages, conductivity meters, voltmeters, rectifiers) Are furnaces used for heat treating Aluminum parts surveyed at the required tolerance and temperature range? Are the FPI dryer ovens calibrated every three months at multiple points across the usable range? Heat Treating NDT Chemical Processing

INDUSTRY MANAGED PROGRAM AUDIT CHECKLIST PROCESS EVALUTION/ IMPROVEMENT AUDITOR QUALIFICATION & SELECTION INDUSTRY EXPERTS MANAGE ALL KEY STEPS CORRECTIVE ACTIONS AS REQUIRED AUDIT CONDUCTED AUDIT RESULTS

Major Nonconformance: NCR CLASSIFICATIONS Major Nonconformance: The absence of, or systemic breakdown of, the Process Control and/or Quality Management system. Any non-conformance where the effect impacts or has the potential to impact the integrity of the product. Minor Nonconformance: A non-systemic lapse in conformance to the Process Control and/or Quality Management system.

AUDIT REVIEW PRI Staff Review: Staff Reviews Package for Completeness Review Audit Report Clarification Changes (electronically) - Contact Auditors for Clarification Review Supplier Corrective Action Close-Out or request additional information via Forums Audit Report Package is submitted via eAuditNet for Task Group Review

AUDIT REVIEW Task Group Review: Task Group decides Procedure for Review Sub-group review, entire Task Group Review Task Group Reviews for Correctness Technical Comments, Supplier Responses, Technical Completeness, Auditor Summary Letter, Identify Additional Findings Completes Review of Each NCR and dispositions (NCR Status) Discuss Results with Task Group within Forums Task Group Votes on Accreditation via On-Line Balloting

Nadcap – INDUSTRY WORKING TOGETHER Task Groups (Primes) Establish Audit Criteria Nadcap Staff Suppliers Interview & Recommend Auditor Define Auditor Requirements Plan/Schedule Audits Perform Audit Contract Auditor Supplier Requests Findings Submit C/A Package Review C/A Package Review & Accept C/A Accredit Supplier

eAUDITNET FOR SUBSCRIBERS – www.eAuditNet.com Subscribers can use eAuditNet to: Use ‘Subscriber QML’ to specifically search for your company’s suppliers Lookup audit details for a supplier including checklist details, nonconformance (NCR) details, and Supplier and Task Group NCR responses Lookup the current audit status of a supplier Download or print hard copy checklist(s) View new or existing Supplier Advisories View all Nadcap Procedures (NIPs, NOPs, NTGOPs) eAuditNet Company Administrator, you can use eAuditNet to: Create new eAuditNet users for your company Edit current eAuditNet users for your company Accept or reject eAuditNet users that select your company during registration Set-up company Users to receive weekly e-mails regarding your QML supplier audits that were submitted (Email Subscription Application) If you are a Task Group Member, you can use eAuditNet to: View and discuss supplier audit NCRs Ballot on supplier audit and merit recommendations An eAuditNet Subscriber’s Audit Review Guide and eAuditNet Company Administrator’s Guide can be downloaded from eAuditNet using Public Documents.

INDUSTRY MANAGED PROGRAM AUDIT CHECKLIST PROCESS EVALUTION/ IMPROVEMENT AUDITOR QUALIFICATION & SELECTION INDUSTRY EXPERTS MANAGE ALL KEY STEPS CORRECTIVE ACTIONS AS REQUIRED AUDIT CONDUCTED AUDIT RESULTS

TOP 10 PARAGRAPHS SINCE RELEASE OF COMP AC7118 REV A232 AUDITS

NDT TOP PARAGRAPH REFERENCES AC7114 (SAMPLE – 2010)

QUALITY IMPROVEMENTS FOR SUPPLIERS (SSC 2013 SURVEY RESULTS) An increasing percentage of Nadcap accredited companies report quality improvement in the area(s) related to their Nadcap accreditation(s).

On-line registration available at NEXT Nadcap MEETING 22-26 June 2015 Montreal, PQ, Canada On-line registration available at www.p-r-i.org Reservation information will be posted on the PRI website (www.p-r-i.org) when available.

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