Maintenance Repair & Overhaul (MRO) Business Case Nadcap/NUCAP OEM Subscriber Experience

Maintenance Repair & Overhaul (MRO) Business Case Nadcap/NUCAP OEM Subscriber Experience

Maintenance Repair &
Overhaul (MRO)
Business Case
Nadcap/NUCAP OEM Subscriber Experience
Revision Date: 15 May 2014
Contents
• Nadcap Global Acceptance
• Background
• Nadcap Benefits
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• Survey of Existing Nadcap
Subscribers
• Supply Chain Deployment
• Case Study
– OEMs
• Perceived Myths
– Suppliers
Benefits of Nadcap Approach • Challenges in the MRO
Community
Business Case Objective
• Gap Analysis
Chronology
• Cost & ROI
Sequence for Expansion of
• For More Information
Nadcap into MRO
MRO Areas to be considered • Acronyms
by Nadcap Subscribers
Background
• Redundant audit activity exists in the Maintenance Repair & Overhaul
(MRO) world
• The requirements are just as stringent for MROs as OEMs
• Nadcap improved controls in the OEM world, and there is a value in
demonstrating these same kind of improvements in the MRO world as well
• In some cases, MRO manuals and OEM specifications may not be aligned
• There are more opportunities for rebuild and repair cycles in the MRO
industry than the OEM industry, therefore increasing the chance of
escapes, re-work, and cost.
Nadcap Benefits to OEMs
•
Global Supply Chain managed through a single real-time on-line system for the entire
industry allowing companies to better manage supplier-associated data (eAuditNet)
eAuditNet supports procurement to identify accredited suppliers
(Qualified Manufacturers List)
Conduct more in-depth, technically superior special process audits
Increases number of consistent audits of the supply chain
Establish stringent industry consensus standards that satisfy the requirements of all
participants
Identify and reduce risk of exposure to lower-quality suppliers
Provides industry-wide early warning advisories for potential product impact and
escapes (defective products)
Provides complete visibility of supplier behaviors and transparency of audit results in a
secure and retrievable format
Program reduces costs of supply chain oversight and control
Utilizes technically superior auditors to assure process familiarity
Effectiveness of OEM’s Quality team increased – able to look beyond baseline
requirements and focus on problem areas (special processes) and suppliers
Improves flow down of industry and customer requirements to sub-tier suppliers
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Nadcap Benefits to Suppliers
• Provides routine special process audits accepted by industry
• *85% report supplier quality improvements after accreditation, including
more than one-third reducing scrap rates, reworks and escapes (defective
products)
• Promotes lean and continuous improvement practices, leading to higher
quality and lower overall cost
• Industry accepted and consistent technical requirements leading to uniform
process controls and greater operational efficiency
• Develops a structured approach to special process and product manufacturing
• Can use accreditation to increase client-base
• Improves customer relationship, technical support, and training.
• Improves Program/Special Processes predictability.
• Increases visibility to subscribing OEM base.
• Opportunity to participate in development of audit criteria and program
operations
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*Aerospace data
Benefits of the Nadcap Approach
End users become more aware of the importance of their processes
This activity becomes an integral part of internal risk reduction activity
Aids in identifying clear ownership for each Special Process
Enables improved levels of Process Control
Introduces standardisation of the Controlling Procedures across sites
Encourages cross functional team working
Provides the vehicle to implement focused improvements to processes
Key strategic improvement, with visibility at a senior level within the
organisation
• Following re-accreditation, sites can focus on Process Flow & Process
Capability
• Improves first pass yield
• Improves operating approach, compliance, training, communication and
alignment of resources.
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Business Case Objective
The purpose of this Business Case package is to demonstrate to
Nadcap/NUCAP (Nadcap Users Compliance and Accreditation Program)
Subscribing OEMs the value of utilizing the Nadcap/NUCAP
accreditation program in their internal MRO facilities that reduces
risk, increases compliance to approved data and with airline support
will reduce the number of redundant audits and improve process
understanding.
The ultimate objective is to drive Nadcap/NUCAP across the entire
MRO community.
• 2010-2011
Chronology
– At PRI Board of Directors request, a PRI staff team began to
investigate where the Nadcap model may be applicable for the MRO
Industry
– PRI conducted research, presented at industry events, and developed
relationships with industry stakeholders (Nadcap OEMs, CASE, airlines,
MRO shops, etc.)
• 2012
– Rolls-Royce presented to the Nadcap Management Council (NMC) on
their implementation of NUCAP in their MRO facilities (Feb12)
– An NMC sub team was launched to explore Subscriber interest &
possible support - 12 Subscribers joined – bi-monthly meetings
– Sub-team survey was conducted to determine level of interest and
potential scope – results were favorable
• 2013-2014
– Some existing Nadcap/NUCAP companies began using Nadcap/NUCAP
internally for their MRO facilities
Sequence for the Expansion of
Nadcap/NUCAP into MRO
Step 1. Existing Nadcap/NUCAP Subscribers’ own MRO Facilities. Gain
regulatory agency recognition.
Step 2. Existing Nadcap/NUCAP Subscribers’ MRO Service Providers
(those who are already Nadcap/NUCAP accredited Suppliers)
Step 3. Existing Nadcap/NUCAP Subscribers’ MRO Service Providers
(those who are not Nadcap/NUCAP accredited Suppliers)
Step 4. Part 145 Repair Stations (Non-Nadcap Subscribers)
Sequence for the Expansion of
Nadcap/NUCAP into MRO
Part 145
Repair Stations
Engage Airlines and
Lease Holders
Suppliers to OEM’s
MRO facilities
OEM’s MRO facilities
(gain regulatory recognition)
2012
2013
2014
2015
2016
2017
2018
MRO Areas to be Considered by
Nadcap/NUCAP Subscribers:
– Contract with airline for maintenance – All components come
from OEM side (Nadcap/NUCAP or OEM suppliers)
– MRO shops on OEM sites – Majority of Special Processes done by
Nadcap/NUCAP
– Major stand-alone structural/overhaul MRO shops
– Component repair supply vendors
– Sites where primary OEM and MRO distinction is being
combined or united
Survey Conducted of Existing
Nadcap/NUCAP Subscribers
Special Processes within Subscriber internal MRO shops
where currently self-imposing Nadcap/NUCAP:
Commodity
Non Destructive Testing (NDT)
Number of OEMs
4
Chemical Processing (CP)
Heat Treating (HT)
Coatings (CT)
Nonconventional Machining &
Surface Enhancement (NMSE)
Welding (WLD)
3
2
2
1
OEM Companies
Goodrich (UTAS), Honeywell, RollsRoyce, SAFRAN
Honeywell, Rolls-Royce, SAFRAN
Rolls-Royce, SAFRAN
Rolls-Royce, SAFRAN
Rolls-Royce
1
Rolls-Royce
* Data from 2012 NMC MRO Sub-Team Survey (10 Subscribing OEM responses)
** There may be additional Special Processes and participating Subscribers not listed in the above
chart, as eAuditNet only recently began differentiating between OEM and MRO audits
Current Use of Nadcap in the MRO
Community
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Current Nadcap/NUCAP Subscriber internal MRO shops with accreditation (NMC
MRO Sub-Team Survey Data - 2012)
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Nadcap/NUCAP suppliers doing work for MRO shops (Self-identified in eAuditNet
system – 15 April 2014):
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5 Subscribers self-impose Nadcap/NUCAP on their internal MRO shops
Commodities: CP, CT, HT, NDT, NMSE, WLD
Suppliers: 14
Subscriber Suppliers: 4
Accreditations: 31
Commodities: AQS, CMSP, CP, CT HT, MTL, NDT, NMMT, SE, WLD
Countries: Canada, Hong Kong, UK, USA, Singapore, South Korea, Spain
Nadcap/NUCAP suppliers doing work for MRO and OEM shops (Self-identified in
eAuditNet system – 15 April 2014):
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Suppliers: 51
Accreditations: 55
Commodities: AQS, CMSP, CP, CT HT, MTL, NDT, NMMT, SE, WLD
Countries: Australia, Belgium, Canada, China, Hong Kong, India, Italy, Japan, Mexico, Philippines,
UK, USA, Singapore, South Korea, Spain, Taiwan
Supply Chain Deployment
Some Nadcap OEMs have begun to flow MRO
into the supply chain
Rolls-Royce made a policy decision to mandate
on the MRO supply chain
MRO suppliers to gain Nadcap accreditation in:
• NDT (PT, RT MT)
• Chemical Processing
• Heat Treatment
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1 process by end of 2012
3 processes by end of 2013
Targeted at ~60 suppliers (Planned for 50%
uptake)
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~ 30 NDT audits in 2012
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~ 30 NDT, CP & HT audits in 2013
Supply Chain Deployment
• Special Processes
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NDT is used in every MRO
activity
Evaluate other special
processes based on
frequency of MRO
activity:
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CP, HT, CT, NMSE, WLD
• Risk Assessment
Criteria
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Part criticality
Process activity
Compliance to Repair
Manual Requirements
Cost of non-quality due
to special process
Known in-service issues
Special Process criticality
Case Study
Nadcap/NUCAP Subscriber with 2 MRO Facilities:
Background: Subscriber major overhaul center, NDT, Weld, Heat
Treat & Chemical Processing
Findings:
1. Experienced a large learning curve when earning Nadcap
accreditation
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2.
The Nadcap audit methodology is very different than any other audit the
site had experienced, depth of audit into the specific processes
NDT Audit
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Prior to audit, facility did not see value
After the audit, facility recognized the reduction in risk
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Number of Findings
Severity of Findings
Value of the audit methodology
Perceived Myths
• Myth: New MRO-specific checklists must be created
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Fact: The current Nadcap checklists for NDT, CP, HT and CT were effectively
utilized in Rolls-Royce’ experience.
Supplemental checklists to be modified for individual OEMs
• Myth: Will increase internal costs with no business benefit
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Fact: Nadcap is a risk reduction activity (cost avoidance). There are slight increases
in direct costs (e.g. participation fees) with considerable decreases in indirect costs
(e.g. manpower) for subscribers. Nadcap is a shared cost approach.
• Myth: Not applicable to MRO
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Fact: Audit checklists are specific to the special process as defined by industry
specifications and are not specific to OEM or MRO. Checklists are the essence of
good special process controls. There are MRO equivalents to OEM: 9100/9110;
PO/FAA return ticket, technical publications; process spec/maintenance manual
• Myth: Will make MROs uncompetitive
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Fact: Creates a competitive edge/benefit for accredited suppliers. It opens up the
market for increased opportunities for suppliers who meet Nadcap accreditation.
• Myth: Not formally recognized within the MRO Industry
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Fact: Nadcap has only been recently expanded into subscriber MRO facilities. Since
Nadcap is widely recognized among OEMs & Regulatory Bodies globally, it should
enable a smooth transition into the M RO community.
Challenges in the MRO Community that will
need to be Considered for Nadcap/NUCAP
Deployment
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Standard Practise Manuals do not define all requirements.
Lower level procedures inadequate or unavailable
Technical Instruction content inadequate
Inadequate document cascade: blue print  process specifications
 shop floor instructions
Operator training and approval practises varied across sites
Pyrometry - Insufficient knowledge of AMS2750
Preventative Maintenance activities inadequate
No flow-down requirements exist
No advanced forecasting available
* No difference from what is seen in OEM / supply chain areas
and are all areas of potential quality failures that could be
rectified through the Nadcap audit and NCR close out process.
Cost & ROI
• Cost
– Nadcap Subscriber fees:
• Contact PRI’s Supplier & Subscriber Services Supervisor - +1 724 772 1616
– Nadcap audit:
• www.eauditnet.com  Documents  Public Documents  General
Documents  “Audit Pricing Sheet”
– Audit preparation:
• Will vary for each MRO based on current practices in relation to the audit
checklist
• ROI
– Every OEM in Nadcap/NUCAP currently utilizes the program in a
different way. The ROI is different for each OEM in relationship to
their contribution and participation level.
For more information
Scott Klavon
Seema Martin
Justin McCabe
Director, Nadcap Program &
Aerospace Operations, PRI
sklavon@p-r-i.org
+1 724 772 7111
Director, European
Operations, PRI
smartin@p-r-i.org
+44 20 7034 1243
Research & Development
Specialist, PRI
jmccabe@p-r-i.org
+1 724 772 8693
Acronyms
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AQS – Aerospace Quality System
CASE – Coordinating Agency for Supplier Evaluation
CP – Chemical Processing
CT – Coatings
FAA – Federal Aviation Administration
HT – Heat Treating
OEM – Original Equipment Manufacturer
MRO – Maintenance Repair & Overhaul
NMSE – Nonconventional Machining & Surface Enhancement
NDT – Non-destructive Testing
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MT - Magnetic Particle
PT - Penetrant
RT– Radiography
NMC – Nadcap Management Council
NUCAP – Nadcap Users Compliance and Audit Program
ROI – Return on Investment
WLD – Welding