Keynote Speaker Wes Kremer  Vice President  Air & Missile Defense Systems,  Missile Systems  Raytheon Company Copyright © 2015 Raytheon Company. All rights reserved. Customer Success Is Our Mission is a registered trademark of Raytheon Company. Missile Defense: Rocket Science made better with Quality Wes Kremer Vice President Air and Missile Defense Systems February 23, 2015 Copyright © 2015 Raytheon Company. All rights reserved. Customer Success Is Our Mission is a registered trademark of Raytheon Company. This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Overview  Challenge of Missile Defense  Flight Test Success  Supply Chain Performance Improvement  Intense Focus on Defect Reduction  Eliminating Escapes  Summary 3/31/2015 3 This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Challenges of Missile Defense  High reliability  No redundancy  Single-thread design  Minimal design margins  Affordability Orlando, FL Our nation has entrusted us with tremendous responsibilities. We must ensure quality in everything we do, every time. 3/31/2015 4 Copyright © 2015 Raytheon Company. All rights reserved. Customer Success Is Our Mission is a registered trademark of Raytheon Company. This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Flight Test Success Yearly Flight Test Focus on Quality Makes a Difference 3/31/2015 6 This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Supply Chain Performance Improvement Escapes to RMS - Defect % - Annual Average 8 Enabling DataDriven Decisions 7 6 5 4 IT Engineering Predictable Manufacturing Execution Quality DUE DILIGENCE • Hold ourselves and our suppliers accountable Instilling Accountability Designing and Verifying Virtually Operations Supply Chain Buying Strategically ALIGNED RESOURCES • Enhanced our cross functional approach to supplier management • Increased effectiveness of supplier assessments 3 ZERO INITIATIVE • Partnering with our suppliers to share best practices and lessons learned to eliminate escapes to our factories 37% Improvement 2 Quality System Data: 1 • Tracks each supplier’s escapes • Identifies trends in suppliers QMS • Provides data/recommendations for Supply Chain decision/actions A SHARED VISION & MISSION • Instilled our vision & mission, Delivering Success… Supplying Quality Compliant Hardware On-Time, Every Time throughout the integrated supply chain 58% Improvement DRIVING RISK DOWN • Shifting from reactive to predictive, proactive, and preventative • Focusing on subtiers 50% Improvement 0 Quality, Compliant Hardware on-Time, Every Time Targeting 50% Improvement Year over Year 3/31/2015 7 This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Intense Focus on Defect Reduction  Characterize and measure  Set defect reduction goals  Determine root cause  Address systemic issues  Validate corrective action Air and Missile Defense Systems 2014 Defects per Unit (DPU) % Reduction 100% 80% Goal – 35% 60% 40% 20% Actual – 54% 0%  2014 DPU percentage reduction goal exceeded  Yielded reduced cycle time and rework Defect Reduction Driving Affordability Results 3/31/2015 6 This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Eliminating Escapes  Capture and analyze escapes  Both internal and supply base  Characterize and control special processes  20 percent of 2014 escapes in supplier subtiers 2014 Air and Missile Defense Systems Escapes to the Customer SPECIAL PROCESS KEY A special process is one that can’t be verified after assembly. Variability is characterized and reduced through deployment of process quality controls that provide unit-to-unit consistency and repeatability. Chemical Processing-Painting Sealants Chemical Processing-Plating Electronics Chemical Processing-Cleaning Solder Torque Crimping Welding Nondestructive Testing Bonding Non Metallic Materials Testing PRC-S PRC-M TST-PROC DSN-M WKM-M WKM-S PRC-S PRC-M TST-PROC Supplier Process Manufacturing Process Test Process Mechanical Design Manufacturing Workmanship Supplier Workmanship DSN-M WKM-M WKM-S 80% of 2014 Escapes Attributed to Special Processes 3/31/2015 9 This presentation contains Non-Technical Data as defined in ITAR 120.10(a)(5) Summary  We’re making progress and our data supports it  Drive improvement across the supply base and focus on subtier suppliers  Relentless pursuit of root cause in driving out defects  Control of special processes is a 2015 focus area Missile-destroying Exoatmospheric Kill Vehicle Intercepts Target 3/31/2015 10