Becoming a tier supplier

In the next few years, Pratt & Whitney’s new Geared Turbofan engines will power single-aisle commercial jets from Bombardier, Embraer, Mitsubishi, and Airbus. The ramp-up in production is significant, but company officials are confident the targets are obtainable because of a sophisticated supply-chain management system in place. Run from a mission control room resembling those used to launch spacecraft, P&W’s team can track the status of each of the thousands of parts needed for each engine – where it is in the timeline of development, manufacturing, delivery, and inventory.

Overseeing that process is Jill Albertelli. With 23 years’ experience at Pratt & Whitney, she has been a leader in the company’s supply chain for the last five years. Her combination of manufacturing engineering and shop background has helped her organize a system that will support the various suppliers and customers – both in-house and end-users – to make the engine’s production schedule feasible.

Already, P&W officials have signed over $10 billion in agreements with more than 90 suppliers for components to support more than 6,000 engine orders. Currently, P&W has about 400 key product suppliers and many more sub-tier suppliers, but Albertelli points out, “We still have a big opportunity, we still have several billion dollars’ worth to place.” Some of the work could be for the life of the Geared Turbofan engine program, making it even more worthwhile.
 

Becoming a supplier

“We have a pretty rigid process that starts with establishing the strategy by commodity,” Albertelli says in an exclusive interview with AMD. “That entails anything from the marketplace – raw materials, metals, or a certain type of 5-axis machining.”

Once her team understands the future projection of what is needed, it choses an action plan, based on whether a partnership is best, if the company wants to manufacture parts in its own facility, or if it solely wants to use outside suppliers. P&W may want multiple suppliers because of the volume of parts, or because the company knows that suppliers today can make those parts as well as the primary manufacturer.

The process for choosing a partner includes scorecards that benchmark performance and quality, to measure how much support a prospect offers and its cost-competitiveness. Albertelli looks closely at the size of a company and its ability to grow, especially if the work is going to double or triple the size of the business. “Does the manufacturing company have the wherewithal to invest along with us?”

The decision about engaging would-be partners comes down to: “Would I be better off growing them because they’re so good, consolidating them with another supplier, or consolidating the work I already have with them with another suppler?”

The process often begins with a request for proposal. P&W also can look across the spectrum of other businesses owned by its parent, United Technologies, to determine if Sikorsky or UTC Aerospace Systems, for example, already works with a particular supplier.

Another consideration is how much work can be outsourced as a commodity and how much should remain an in-house specialty – in P&W’s case, engine blades and vanes.

“Multiple suppliers make a part more of a commodity, but we may still set up a partner where we make 20% of a certain commodity, and they make 80%,” Albertelli explains. “That could mean we collaborate on the best manufacturing process so we can ramp them up quickly, to lessen the learning curve.”

Suppliers – or would-be suppliers – need to be in a position to help P&W double production of its Geared Turbofan engine during the next five years. For its part, the engine maker is able to help establish or improve production capabilities with its suppliers. Albertelli says, “We’re very focused on our core competencies, and we rely on our partners to be experts on theirs.”

However, she adds, P&W is willing to collaborate to develop the best process. For example, P&W has worked closely with suppliers to create a development cell where producing a part can be worked out in detail offline – from figuring out the equipment required, the speeds and feeds, the gaging, writing new process sheets, and anything else that may be needed.

“Once the suppliers feel they have the process up and running and have experience making a certain quantity of parts with their machines, then they’ll move it to their production line,” Albertelli says.
 

Capabilities are key

With the Geared Turbofan being produced in large numbers, certain capabilities, such as working with harder metals, are going to be in greater demand. Albertelli says the biggest opportunities are in the machining of nickel, Inconel, or other specialty alloys.

A prospective supplier needs to know two things to be considered as a P&W supplier, Albertelli says. First, she advises that manufacturing processes would-be suppliers have traditionally done by hand – welding, for example – need to be automated as much as possible. Second, a company should have the flexibility to understand that it might not be the only provider of a part, which can be important if a company needs to invest in new equipment, such as robots.

P&W’s last step before selecting a supplier, according to Albertelli, is a production-readiness review to ensure that the prospective supplier is making the investment to be able to support the ramp-up, and that the investment supports the capacity that’s needed.

This part of the vetting usually takes a month, but a lot of pre-work happens beforehand, for both P&W and the potential partner.

With longest lead-time parts a priority, P&W is working to try to get through that process six months to a year ahead of needing it. The supplier’s ramp-up will differ, depending on whether the company needs to put up a building, buy equipment, or hire and train people.

The level of help can extend to introducing suppliers to local government officials who may be able to arrange tax credits or the financing to buy capital equipment.
 

Looking for more

With the need to place large deliveries as soon as 2016, P&W has already established its supply base to be able to build the parts for the engines. But that doesn’t mean the company isn’t looking for more.

“We’re bringing on additional suppliers or second production sites so we have no single point of failure,” Albertelli says.

While initial production may occur in-house, part of the ramp-up also may include bringing on additional suppliers to help support production further out.

It’s not just complete parts manufacture. Outside shops have an opportunity to do finish machining, especially with additive manufacturing of near-net shape parts.

“We always map out the entire value stream of a part, all the way from the metal to the final part,” Albertelli continues. “If we decide additive manufacturing is our expertise, but there are a lot of great machine shops that can give us the surface finish we’re looking for and that’s their expertise, we would collaborate.”
 

Certifications matter

To be on P&W’s qualified supplier list requires a rigorous review, including all the certifications that a manufacturer might have for special processes. “And it’s not just a one-time review,” Albertelli warns. “We revisit to make sure they’re adhering to and upholding everything they’ve committed to.”

Additionally, any sub-tier supplier for critical processes has to be on a qualified supplier list, and also needs approval from P&W’s quality organization, which would review certification depending on the service provided.

Suppliers are held to strict accountability – on schedule, quality, and processes – with meetings to find and fix problems as they occur.

“We share all of our analytical tools we use with our Tier 1 suppliers and encourage them to do the same with their sub-tier suppliers,” Albertelli explains.

The Tier 1s are required to do a series of audits and inspections to keep their sub-tiers qualified with P&W. If there is a concern, Albertelli’s team and the Tier 1 will perform an assessment on the sub-tier’s processes and make sure there’s an action plan to remedy deficiencies.

“When I’m holding my Tier 1 supplier accountable for its basic action plan, it could include actions for its sub-tier,” she says.

Not all of the interaction with sub-tiers is second-hand. P&W holds supplier conferences at least twice per year, and it is inviting more sub-tier suppliers to attend so they can see the larger picture of the ramp-up the company is facing.

If there is a special project or focus, there are additional conferences.

Albertelli says, “Typically, we’ll talk about everything that’s going on from a supplier-supply chain standpoint and update everybody on the programs.”

Often, the company will invite vendors to these forums to share the latest technology, especially if they offer best practices. These gatherings are also a good way to discover potential bottlenecks.

“It could be that we have several Tier 1 suppliers all using the same Tier 2 supplier, so we want to strongly encourage that Tier 2 supplier to ramp up accordingly,” Albertelli adds.

In addition to its database of existing suppliers, P&W has a website contact point that works across the supply chain, and United Technologies has the same.

United Technologies also has a Supplier Gold program, and achieving gold status earns respect across the organization.

“I will strongly recommend a gold-rated supplier for any manufacturing capabilities that they could support at the other divisions,” Albertelli notes.

The other divisions also can recommend suppliers. When P&W hosts conferences, other United Technology team members are present, and may already be working with potential suppliers.

Pratt & Whitney
www.pw.utc.com

About the author: Eric Brothers is senior editor of AMD and can be reached at 330.523.5341 or ebrothers@gie.net.