Evaluation et qualification des fournisseurs chez Thales Alain MONJAUX, Directeur de la Relation Fournisseurs Direction des Achats Groupe

Sommaire L’organisation et les enjeux achats La stratégie d’évaluation et de qualification des fournisseurs Les méthodes/outils mis en oeuvre Le “master data” associé au management du panel de fournisseurs

Purchasing - Organisation Chart Group Purchasing C.Brabec-Lagrange Y.Serre (S1) P.Neel (S2-S8) IPOs P.Lacroux – D.Talwar – KK NG Thales Corporate Services FR E.Harle (S1) Thales Corp UK FONCTIONS FRENCH ENTITIES Suppliers Relationship Mgt F.Monira A.Monjaux TCF, TS, T3S ,… Process, Methods & Tools F.Levron P.Quesnel TAV,TED,TXL, TSA, TUS,TMI…… I.Quettier SEGMENTS (STRATEGIES) TR6, TOSA, TDA, TRS, … S1 (General Purchases) P.Petit-Belleville Thales Alenia Space S2 (SW Licences) S3 (Equipments & Systems) A.Musazzi C.Carver S4 (HW Dev-Manuf-Integration) S5 (Components) C.Brombeck S6 (Systems & SW Engineering) S7 (Support services) S8 (Installations & Civil Works) International C.Victor COUNTRIES I.Centofanti Germany J.Stauss NL TBD Australia D.Hodkinson UK P.Garnero 3 3

Purchasing Segmentation

Thales Value Chain Internal External Suppliers highly contribute Bid No Bid Effective Contract Reviews signed approval SYSTEMS Win Bid Manage Programme SUB-CONTRACTORS SUPPLIERS & Develop External Internal CUSTOMERS Source, Make and Deliver Provide Support and Service EQUIPMENTS SERVICES Purchasing Volume 2009 # 6 G€ # 50% of Turn-Over 15 000 Suppliers More than 20 countries Suppliers highly contribute to the Value of Solutions to Thales Customers

The opportunities The impacts on Purchasing A Panel of Strategic Suppliers delivering good performance & capable of offering Low Cost content Working with SME as providers of Technology & Innovation An absolute need for improved competitiveness (> 20% for certain Business segments) Local Content to be seen as a Sourcing opportunity in India, China , Brazil... Where business opportunities exist A 1300 Buyers organised by Segment and involved in Bid / Programs and Product Policy A Group referential of Purchasing process & Practices integrated with the other main processes

Purchasing - Key Strategies 1. Move up the Purchasing Value Chain by involving Buyers as well as Suppliers in our BIDs in order to secure our Solutions & manage Risks at early stage Capture Innovation from the external Market (incl SMEs); improve Practices in Supplier involvement at conception stage 3. Develop competitive Sourcing outside our boundaries, thus leveraging Thales multi-domestic presence in China, India, Asia … 4. Leverage Thales Buying Power by pooling volumes for common Purchases & by aligning purchasing Policies with common Suppliers Improve relationships with our Suppliers in order to strive continuous Performance & Lean end to end processes Boost (web) tools to foster the process flows & reduce non value added tasks for the Purchasing people Raise Purchasing skills & develop leaders capable of leading Sourcing Strategy & Risk Management within Bid & Programs

Thales Supplier Management Improve relationships towards a higher Performance SRM Appoint S. Account Managers SAM Strategic Business Review SBR Relationship measurement questionnaire : supplier feedback Map Strategies - Opportunities for collaborations (Offset, engineering ..)- Competitiveness - Corporate Responsibility Strategic / Target Performing Suppliers with proven track record –established Contracts Bring innovation – Technology leader Global or Regional scope Impact on our cost competitiveness Mutual interest to grow Include all Targets (= Preferred) From outside SPM Measure On Time Delivery On Conformity – Review performance against targets - Set-up action plans Collaborative approach in daily Operations Challenger Attractive supplier with good performance Potential to become a future S/T supplier if continuous improvement. Preferred Suppliers Active Suppliers No New Business To be disengaged Strategic Challengers 2% SD (Development) Diagnosis of Supplier processes & interfaces Commitment to improve performance on both sides Apply root cause, 5S, 8D, Lean approach <1000

Sommaire L’organisation et les enjeux achats La stratégie d’évaluation et de qualification des fournisseurs Les méthodes/outils mis en oeuvre Le “master data” associé au management du panel de fournisseurs

CHORUS 2.0 : Head Process map Manage Bids & Projects Design, Develop and Qualify the solution Source and Make * Prepare and Deliver Customer Service Support operational processes Govern & Organize Customer and final user needs Customer and final user satisfaction Define the strategy Manage and Control Manage Competences Continuous Improvement Level 0 - 9 Processes 7.1 – Manage Acquisition and Offsets 7.2 - Procure, Make & Deliver 10

CHORUS 2.0 acquisition process overview Upstream phase Contractual phase Purchasing contract Kick-off (PVet 4) Strategy setting (PVet 1) Short list & Nego strategy (PVet 2) Contract approval (PVet 3) Purchasing Contract assessment (PVet 5) ACQUISITION PROCESS SUPPLIER ASSESSMENT & QUALIFICATION SUPPLIER PERFORMANCES Deployment Acquisition strategy for all purchases (segment incl. Gexp, product , bid, project ,.) Quality & Purchasing in close relationship to improve supplier quality assurance & performances challenges

Supplier assessment & qualification process Processus under Buyer’s responsibility with a strong support of Assurance Quality Manager (team approach) Qualification of “purchased product / supplier “ is the result of acceptance procedure phase to be validated by AQM A single process at Group level Mutualise supplier assessment results Explore opportunities for sharing audit resources

Sommaire L’organisation et les enjeux achats La stratégie d’évaluation et de qualification des fournisseurs Les méthodes/outils mis en oeuvre Le “master data” associé au management du panel de fournisseurs

Pre-assessment detailed phases & associated questionnaires (step 1) 1st list of suppliers Selected suppliers list ACTIVITIES SOURCING (PVet 1) Non Technical aspects General information Supplier Corporate Responsibility Techno Maturity self assessment Techno(detailed means) Technical aspects Financial aspects Ethics & Corp. Resp. + Financial rating PACK 1 PACK 2 RFI ONLY 1 PACK, if relevant Pre-assessment = Self-assessment

General information questionnaire content Activités principales / Core business Forme juridique et actionnariat / Legal status & main shareholders Principaux managers & effectif / Management & Staff Principales implantations / Main plants Paramètres économiques et financiers / Economical & Financial parameters Répartition de l’activité par domaine / Main activities Références Clients / Customer references Principaux produits et réalisations / Main products & realizations Certifications qualité / Quality certificates

Maturity self assessment questionnaire content   o        Management du Système qualité et de la satisfaction de ses Clients, Quality management system and Customers satisfaction o        Management de projets et des risques Projects & risks management o        Gestion des compétences et des ressources humaines Human resources & skills management o        Maîtrise des phases de conception et développement, s’il y a lieu, Design & development phases maturity, if relevant o        Maîtrise des achats, Purchasing maturity Maturité environnementale Environmental maturity Maîtrise du processus produit, s’il y a lieu Product process maturity, if relevant

Signed by THALES the 3rd June 2003 Supplier Corporate Responsibility Signed by THALES the 3rd June 2003 Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.   Labour Standards Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation.    Environment Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.    Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Technical questionnaires overview for pre- assessment phase Extract Subjects Mechanical parts & Integration Electronic PCA , built box integration & equipped cables Installation Civil Works & Construction Customer support services HW Engineering SW Engineering Programme Management Local logistic support

Assessment & qualification detailed phases (step 2) RFP Offer analysis Short list Final list (Pvet 2) Final negotiation (Pvet 3) product/supplier (or techno/supplier ) Qualification TEST PURCHASE ORDER AUDITS* STRUCTURAL RISKS THALSIS REGISTERED + FINANCIAL ASSESSMENT *Non Technical + Technical

Thèmes d’audits non techniques Système de Management par la Qualité et de l'amélioration continue Maturité industrielle et de la supply chain (y.c. les capacités programmatiques et gestion de projet ainsi que le management de leurs propres fournisseurs) Maturité de l'organisation et du processus d'ingénierie & développement (y.c. les capacités de R&D et la maturité technique, ainsi que le système de gestion de configuration) Politique et Performance achats Système de Management environnemental (y.c. l'application des règlements relatifs à REACH, WEEE, ROHs,…) Système de contrôle des exportations Système de gestion des compétences et des ressources humaines

Thèmes d’audits techniques MAITRISE DES PROCEDES , DES TECHNOLOGIES et VERIFICATION DES MOYENS/COMPETENCES Les thèmes concernés sont directement issus de la segmentation achats et des familles et “commodités” associées

Règles d’évaluation et de qualification des fournisseurs Un fournisseur qui ne s’engage pas à signer formellement la Charte Achats et de Responsabilité d’Entreprise ne doit pas être retenu dans la liste des fournisseurs potentiels. L’audit est réalisé pour le(s) site(s) concerné(s) du fournisseur. La décision de ne pas conduire un audit est du ressort de la Qualité, en liaison avec l’Acheteur (cf conditions permettant de s’affranchir d’un audit : Ex sur le management du système qualité si le fournisseur présente une certification officielle ISO 9001, EN 9100 ou AQAP 2110,..). Si un dossier complet d’audit mené par un tiers chez le fournisseur sur un thème à auditer est présenté par ce fournisseur, il est laissé à l’appréciation de la qualité de considérer cet audit comme représentatif. Un fournisseur qualifié pour une ou des technologies par une Société du Groupe est réputé qualifié pour toutes les autres sociétés sauf cas particulier d’exigences spécifiques nouvelles pour lesquelles un complément d’audit éventuel doit être effectué. Un fournisseur qualifié pour une technologie donnée n’est pas a priori qualifié pour d’autres technologies.

Revue des résultats du fournisseur Strategy setting (PVet 1) Short list & Nego strategy (PVet 2) Contract approval (PVet 3) Purchasing contract Kick-off (PVet 4) Purchasing Contract assessment (PVet 5) Upstream phase Contractual phase ACQUISITION PROCESS Pendant l’exécution du contrat d’achat, l’acheteur organise un bilan de l’acceptation des fournitures et des résultats du fournisseur dans l’exécution de ce contrat d’achat. Le demandeur, le Responsable Technique de l'acquisition, le Responsable Assurance qualité et tout métier concerné contribuent à ce bilan. Ce bilan de résultats fait l’objet d’une information partagée ou d’une revue formelle avec le fournisseur (Pvet 5) avant la date prévue de terminaison du contrat d’achat. Le compte-rendu de cette revue est un enregistrement formel archivé par l’acheteur Il permet de mettre à jour les données de performances opérationnelles globales et d’évaluation du fournisseur.

Manage & Improve Suppliers Environment aspects : At each stage of the PROCESS we must ensure our Suppliers understand & comply with our Standards Select Suppliers Value Envir. : 5% weight Evaluate risks Introduce Environment Clauses Audit - Damages for default - Annex the Charter… Source Suppliers RFI incl Charter & Questionnaire Business reviews Share Improvement plans - set targets SBP1&2 PURCHASE VET (PV) PV Gate 1 PURCHASE VET (PV) PV Gate 2 PURCHASE VET (PV) PV Gate 3 Purchasing Define a multi year Purchase Supply Supplier Invoice Contract Order Purchasing Strategy Receipt Payment Review (*) CR P.O. R P 4 Define an adapted Consult & Pre - Select Nego t iate , Select Phase 1 2 Procure Phase 2 Sourcing Strategy Suppliers and Contract 1 Purchasing Contract Requirements Signed Manage & Improve Suppliers 5 3 Performance Assess Suppliers Supplier Perf. Reviews Elaborate specifications Integrate Environment requirements 6 Re- Assess Suppliers Audit Supplier Sites Measure progress Audit Supplier Sites Check Supplier practices /Environment

Sommaire L’organisation et les enjeux achats La stratégie d’évaluation et de qualification des fournisseurs Les méthodes/outils mis en oeuvre Le “master data” associé au management du panel de fournisseurs

ThalSIS Overview : Suppliers portfolio master data management Input ThalSIS Sharing Units/families data Introduction of new assessed & qualified suppliers (under Purchasing family Responsibility) Quarterly Commitments by Purchasing commodity codes Suppliers quality data SCR commitment Quality certificates Audit summary files Structural risk list Operational Perf. Financial rating …. SBR pres. & reports Supplier status Strategic Target Critical Volumes View by segment/family by unit by country/legal entity by supplier by currency by technology ….. Assessment View Quality Reports Financial Reports Operational perf consolidation Commitment rate…. From Purchasing Family Managers Definition of segment/families Definition of commodity codes & associated technology Definition of strategic suppliers Definition of target suppliers Definition of critical suppliers All the data results from Units They are uploaded either manually, or automatically. Every leader segment of the group ( ex DSD - DAG) handle to define the segment policy with the network of the correspondents units Thalsis managed by a dedicated team with Service Level Agreement (SLA)