MDA Supply Chain Initiatives Presentation to GSFC Supply Chain Conference

1. MDA Supply Chain Initiatives Presentation to GSFC Supply Chain Conference DISTRIBUTION STATEMENT A. Approved for public release; distribution is unlimited. Ed JopsonMDA/QSI Division Chief28 October 2008 Approved for Public Release 07-MDA-3907 (14 OCT 08)

2. A Sampling of Supply Chain Initiatives • Assurance Improvement Action Plan (Stand-down, Change Control, QPPRs, Audits) • Mission Assurance Reps (MARs) Supplier audits • MDA/Industry Joint Industry (JIT) Initiative #2

3. Current Interceptor Quality Status • Interceptor supplier quality escapes impacted 2008 program performance • Recent issues identified the need to implement additional product acceptance control processes at lower tiers Immediate Actions • Conduct Quality Stand Down across Program • Stop work at Supplier Sites. Senior Leadership/Quality Staff to discuss quality, escapes, attention to detail, failure to follow processes, inadequate coordination/authorization of product/process changes • Multiple Sessions at Prime, 2nd Tier Major Sub-Contractors and Lower Tier Suppliers 2. Institute Product and Process Change Control 3. Prime: • Conduct detailed Quality, Product & Process Reviews (QPPRs) – All suppliers and integration centers. • Conduct review and verification of training and certification of manufacturing workforce.

4. Product Assurance Improvement Action Plan Immediate Actions contd. 3. Prime: • Implement proactive Issue Identification Program • Implement hardware/software pedigree review process as part of Ship Readiness Review process • Implement incremental product and process verification as part of standard supplier product acceptance process • Prudently implement additional MAP/PMAP elements • Conduct hardware pedigree inspections of “in stock” product if product currently out of production • Conduct baseline review across supply chain of product acceptance and screening • MDA/QS Director, Deputy Director, Interim Assurance Integration Manager and MAR arranged to visit Supplier Sites, first as “Meet and Greet,” then “Walk the Floor,” then to Audits – 6 months SAMPLING Since early 2005, approx 30 Audits conducted

5. Mission Assurance Rep (MAR) Supplier Audit Focus

6. Purpose and Origin of the Assessment • MARs are MDA/QS reps in-plant throughout supply chain • Audits are performed on critical supply base to assess and mitigate risk prior to incurring detrimental programmatic impacts • Provides proactive team approach with Govt and Contractor • The communications of Lessons Learned and Best Practices is an important part of the overall assessment process • Lessons Learned are adverse work practices of experiences that are captured and shared to avoid reoccurrence • Best Practices are good work practices or innovative approaches that are captured and shared to promote repeat application • Lessons Learned and Best Practices may or may not be related to contractual requirements but are offered in the spirit of making the Supplier, Prime, and MDA more successful It’s All About Mission Success

7. Plan for the Assessment • MAR and Prime/1st Tier Supplier Quality selects key suppliers for inclusion in the assessment process for the upcoming year • Schedule is generated based upon priority and risk, and is flowed and socialized with Govt and Contractor Program Offices • Tentative schedule is agreed to and implemented • Notification is provided one week prior to Audit to Prime Contractors, subs and the program offices

8. Expectations of the Assessment Team • Expeditious assessment of the disciplines being reviewed • Constant communications with the company escorts; no surprises of findings and observations at out-brief • A verbal out-brief of the findings and observations, including any positive observations, at the end of the onsite assessment activity • Discrepancies must be based upon contractual requirements • Observations are based upon best practices and the MDA MAP • Recommendations will be made where ever practical • Written follow-up of verbal out-brief within a reasonable period of time (normally within two weeks)

9. Expectations of the Supplier • Printed procedures / work instructions for the disciplines being assessed (FOD Plan, ESD Procedure, Contamination Control Plan, QMS Manual, etc.) Access to other documents as needed • Points of contact / escorts for each assessment sub-team • Escorted access to the production areas and personnel for assessors during assessment activities • A working lunch at the supplier’s facility in order to make more efficient use of the time allotted. (no off-site luncheon) • Attendance of an assessment out-brief at the end of the assessment activity by senior management • Written response to all findings and observations provided by the assessment team • Cooperation during follow-up verification activities.

10. Assessment Activity • The assessment activity is conducted over a one-to two-day period, depending upon supplier facility size • Auditors are composed from MDA/QS, DCMA, Prime/1st Tier and Govt Program Offices and typically number 6-8 individuals • Auditors are chosen to represent a discipline they are comfortable with and have in-depth experience. In many cases, the individuals are Subject Matter Experts (SMEs) • Daily status summary is e-mailed at the conclusion of each day to QS, Program Offices, prime contractor, supplier, and auditors so that “one story” is conveyed and misinformation is minimized

11. Assessment Activity • The disciplines that are assessed are as follows (as applicable): • Foreign Object Elimination / Foreign Object Damage Prevention • Contamination Control • Tool Control • Critical Lift/Move • Electrostatic Discharge (ESD) Prevention • Limited Life Materials management • Calibration and control of tools / test equipment • Supplier Management & Requirements Flow-down • Manufacturing Planning • Non-Conforming Material • Corrective Action Process • Configuration Management The assessment is based upon contractual requirements and best practices

12. Typical Audit Agenda • Welcome and Introductions 8:00 – 8:15 • Review of Purpose of Assessment by Raytheon 8:15 – 8:30 • Company Overview re: facility, MDA work by Supplier 8:30 – 9:00 • Break / Assessment team meeting 9:00 – 9:15 • Assessment Activity 9:15 – 11:45 • Lunch 11:45 – 12:30 • Assessment Activity 12:30 – 4:00 • Assessment Team Meeting 4:00 – 4:30 • Out brief 4:30 – 5:00 • Day Two Agenda Adjusted According to Time Line

13. Audit Record • Documented within two weeks and released to the supplier • Contractor has 30 days to respond • Audit records are entered in the Prime/1st Tier C/A system and tracked through closure • Closure requires concurrence from MDA MAR and Government Program Office

14. Out-Brief and Conclusion • Supplier is provided a daily verbal out brief from each team at the end of the day • Auditors document findings within two weeks post audit • Findings are entered in Prime/1st Tier CA Web and released to the supplier through Contracts • Supplier responds to findings • Findings are routed to team members for review and comment • Upon concurrence from MAR and Program Office, findings are closed in CA Web

15. MDA Joint Industry Team (JIT) Energetic Materials Supplier

16. General Impressions from MA Audit Material control (conforming and nonconforming) practices and situations identified during the audit in the manufacturing and test areas are inadequate Management Corrective Action systems focus on short term, reactive solutions and do not ensure long term, proactive preventative action Unapproved and uncontrolled changes to test and build documentation CM policies and practices do not provide adequate management or control of the configuration of MDA hardware Numerous safety and OSHA compliance issues across the enterprise Very significant amount of FOD in the production and test areas, static generators in ESD sensitive areas, and lack of tool control along with grounding and grounding verifications issues Significant risk to MDA hardware and personnel and the potential fielding of nonconforming hardware

17. Conclusions This audit highlighted the need for immediate action towards improving quality at supplier Two locations provide products that are mission critical to MDA strategic systems Situation at both locations posed a significant risk to MDA hardware Immediate action required to implement a containment strategy to prevent shipping of non-conforming hardware Immediate action required to assist supplier in improving their manufacturing, quality, engineering and management systems

18. Actions (JIT) QS provided a full time lead to head up the Industry stakeholder team (JIT) with the responsibility for immediate resolution of all audit findings Full time team in plant at both sites Boeing, Raytheon, Orbital, ATK, Lockheed Martin Plus DCMA and MDA Rotating JIT senior/Executive Leads on site every week Implement a containment strategy in parallel with working with PSEMC to improve their manufacturing, quality, engineering, and management systems Surveillance of all in process product inspections Surveillance of targeted processes

19. Actions (JIT) FOD/ESD/Safety Audits in all areas, all shifts Documentation/Build Paper Reviews Capture all observations on RAIL (Rolling Action Item List) RAILs get dispositioned every day Review of all closed RCCA documents for legitimate RC and Effective CA Work with Supplier to establish & verify RCCA on all MDA Audit Findings before submittal to the MDA Pgm offices Weekly reviews with Supplier leadership to make sure the plan is being executed Conduct a JIT corrective action assessment of both sites to validate disposition of audit findings before official CAA Exit Criteria: sustained metrics at zero