Corrective Action Board Overview Updated: 26 April 2016 1

Corrective Action Board Overview Updated: 26 April 2016 1

What is a Corrective Action Board? A Corrective Action Board or CAB is the forum to communicate, enable, facilitate, and provide oversight and direction for preventive and corrective action activities in order to resolve issues, support improved service and/or product quality, and promote Customer satisfaction. 2

Purpose Evaluate the overall program health Identify causes and prevention of potential non-conformances Identify areas of risk and program issues Promote continuous improvement Improve quality, cost and schedule Promote timely communication among multiple functions 3

CAB Guidelines Program CABs should be operated at facilities that provide deliverable hardware, firmware, software or services. CABs shall be a mandatory meeting to all attendees Each CAB should be comprised of members with the responsibility and authority to analyze and implement corrective actions. CABs should include the use of: Rosters/Attendance- Sheets completed and maintained during each CAB. Meeting Minutes- Discussion/review of agenda topics provided to CAB attendees following each CAB. Formal agenda- To be maintained and published to attendees containing topics in support of the business. Action Items List- Assigned tasks to team members tracked for timely closure and effectiveness 4

Business Rhythm Two Tier Site/Shop Floor Teams Weekly/Bi-Weekly Weekly/Bi-Weekly (1-2 hrs) hrs) (1-2 Manufacturing/Design Engineering Supplier Quality/Quality Engineering Production Planning & Controls (PP&C) Global Supply Chain/Procurement Site Leads Functional Leads Senior/Program Leadership Monthly Monthly (1 hr) hr) (1 Vice Presidents Directors Functional Senior Management Program Commodity Leads Program Management Recommended for small/medium businesses 5

Business Rhythm Three Tier Production Teams Weekly/Bi-Weekly Weekly/Bi-Weekly (1-2 hrs) hrs) (1-2 Manufacturing/Design Engineering Supplier Quality/Quality Engineering Production Planning & Controls (PP&C) Global Supply Chain/Procurement Leadership Council Monthly Monthly (1 hr) hr) (1 Site Leads Functional Leads Program Commodity Leads Senior/Executive Management Monthly/Quarterly Monthly/Quarterly (1 hr) hr) (1 Vice Presidents Directors Program Management Functional Senior Management Recommended for larger businesses 6

Roles & Responsibilities Program Management Chair of the CAB Responsible for program performance Manufacturing/Design Engineering Ensure production impacts and risks have defined mitigation strategies Implement manufacturing and technical impact resolution strategies Ensure technical impacts and risks have defined mitigation strategies Implement error proofing strategies to prevent occurrences Supplier Quality/Quality Engineering Implement supply chain impact resolution strategies Implement proactive risk avoidance strategies for supplied products Implement proactive risk avoidance strategies for internal manufacturing Global Supply Chain/Procurement Ensure purchased materials meet the program needs Proactively engage our suppliers to mitigate risk in our global supply chain 7

General Topics Non-Conformance Field & Component Report Trends Issues Internal Operating Plan Supplier Corrective Action Requests (SCARS) Test & Process Yield / Failure Trends Deviation, Waivers, Escapes, Etc. CAB MRB Decisions GIDEP & Warning Alerts Manufacturing Losses (Scrap and Rework) Audit/ Assessment Results Customer Issues / CARs Stock Purges 8

Suggested Agenda Items By CAB Level Site/Shop Floor CAB Metrics that drive performance Receiving Inspection Failures SCARs over 30 days/ SCAR trending Deviations/Waivers/Contingency Letters Escapes Upcoming Supplier Quality Activities Action items Stock Purges Component Issues MRB/FRB (Material Review Board and Failure Review Board) Actions Lessons Learned Rejections, Rework, Scrap Trending First Pass Yield ( Test & Assembly) Non-Conformance Report Trends Senior CAB Suspect Product Notifications (SPNs) Corrective Action Plans (CAPs) Test Failure Trends Manufacturing Operations Status Procurement Critical Path Status Risk Management Issues Special Projects/Continuous Improvements Unverified Failures/ Can-Not-Duplicates (CNDs) Government-Industry Data Exchange Program (GIDEP) Alerts 9

Suggested Agenda Items By CAB Level Production CAB Shop Floor Rejects (SFRs) Rejections, Rework, Scrap Trending Receiving Inspection Failures SCARs over 30 days/ SCAR trending Escapes Action items Stock Purges Deviations/ Waivers/ Contingency Letters Component Issues MRB/FRB Actions Constraints Leadership CAB Senior CAB Upcoming Supplier Quality Activities Manufacturing Operations Status Procurement Critical Path Status Nonconformance and Failure Analysis Inspection vs. Operator Error Trends Risk Management Issues Lessons Learned Metrics that drive performance First Pass Yield ( Test & Assembly) Non-Conformance Report Trends Suspect Product Notifications (SPNs) Corrective Action Plans (CAPs) Test Failure Trends Special Projects/Continuous Improvements Unverified Failures/ Can-NotDuplicates (CNDs) Government-Industry Data Exchange Program (GIDEP) Alerts Escapes 10

Senior Level CAB A CAB at senior level is critical to optimize program performance. Charts presented to Senior Level should be reviewed by various team members and well prepared. A majority of the topics at Senior CAB should address a broad level of the specific items topics discussed during lower level CABs. Issues previously discussed that risk delaying or stopping production. Continuous improvement plans for significant previously discussed issues. Trending and analysis of the following items presented during lower level CAB: Non-Conformance Reports or Defect Documents Waivers Shop floor rejects Scrap Rework Corrective Actions 11

Examples of Charts for CAB 12

Open Action Items Item Open Date Actionee Action Closure Criteria Status ECD Priority This lists action items that are created during CAB and can be looked at the beginning of each CAB. 13

Example 4 Blocker Nonconformance Part Number; Part Name; QTY Trend/History Containment: Verify Complete current and future containment of products if necessary Requirement: Should be condition Defect: Actual condition Trend: List past occurrences of this defect if applicable Disposition of Hardware Disposition: Briefly describe disposition of hardware Actions Corrective Actions: Briefly describe the corrective action that addresses the root cause Place images here if applicable Supplier Quality Actions: List any follow-ups for the corrective cations that need to be completed to prevent future occurrences 4 blocker used for SFRs, rejects, reworks, SCARs, etc. 14

Measuring Supplier Performance Supplier Monthly Rating Determined as Follows: or 98% or 95% or 88% or 86% 86% 88% or 96.8% or 87.1% 87.1% 4 Blockers should be created when rating is yellow or red for the previous month 15

Team: Project Support: Manager: Problem Statement Example 5 Blocker Major Milestones Proposed Solution Final Milestone Concerns Near Term Actions/Issues Assigned Date Risks 5 blocker used for Special Projects, Continuous Improvements, CAPs, etc. 16

Escapes/Stock Purges Escape #/ Stock Purge # Part # Supplier Date Issue Impact Status POC Escapes are non-compliant hardware that is delivered to the customer. Stock purges are due to suspect hardware 17 which possess a risk to the program.

Scrap and Rework Costs Scrap and Rework Tracking 60 Sales 1,000,000 Rework and Scrap Costs (in Thousands) 50 40 Rework Scrap Goal 30 20 10 0 Jan Feb Mar Apr May Jun Rework Cost Labor ( ) to return product to conformance/engineering Standard or actual cost spent on correcting defective work Scrap Cost Material costs and labor of work ( ) performed up to the point of scrap Goal 18 Starting at 5% of sales Work to have a constant reduction goal (10%-50%)

Defects Per Unit (DPU) * * 2 month rolling average (includes current & previous month’s actuals) The ratio of defects to unit completions is a measure of quality. Tracking helps to identify defects and drive root cause and corrective action. The numerator accounts for team caused defects. The denominator accounts for unit completions19.

Scrap Jan Scrap Total 12,909 CUM Scrap Total 12,909 Standard Hours Total 1,252 CUM Standard Hours Total 1,252 Scrap Per Standard Hours 10.31 Scrap Per Standard Hours Goal 9.01 YTD Scrap per Standard Hours 10.31 Feb 13,103 26,012 1,614 2,866 8.12 8.92 9.08 Mar 14,756 40,768 2,067 4,933 7.14 8.83 8.26 Apr 14,208 54,976 989 5,922 14.37 8.74 9.28 May 13,761 68,737 1,384 7,306 9.94 8.65 9.41 Jun 12,576 81,313 2,243 9,549 5.61 8.57 8.52 Jul 12,649 93,962 2,126 11,675 5.95 8.48 8.05 Aug 12,188 106,150 1,073 12,748 11.36 8.40 8.33 Sep 12,459 118,609 1,373 14,121 9.07 8.31 8.40 Oct 12,763 131,372 1,683 15,804 7.58 8.23 8.31 Nov 12,860 144,232 2,363 18,167 5.44 8.15 7.94 Dec 12,996 157,228 1,236 19,403 10.51 8.07 8.10 Scrap is nonconforming material that is not usable for its intended purpose or cannot be economically reworked or repaired Scrap usually occurs in the high precision/high cost areas, where committed money and man hours are high. Determine scrap goal and aim to lower it by 1% each month. Control scrap to control cost. Evaluate scrap trends to determine 20 material or process issues.

SCAR Performance Any material or quality system discrepancy that is determined to be supplier responsible that is found during surveillance, sourcing, receiving activities and/or manufacturing/floor activities is noted in a SCAR. Measuring SCAR response time helps to ensure21actions are taken to evaluate the non-conformances.

Escape Tracking 2013 Sum January February Issued (P1) 80 5 7 Floor (P2) 19 2 3 Other (P1-P2) 61 3 4 Issued Cum 5 12 Lockheed Martin Missiles and Fire Control Escape Tracking March April May June July August September October November December 2014 Sum 4 5 6 9 3 5 7 3 4 4 62 3 3 4 6 2 1 2 1 3 3 33 1 2 2 3 1 4 5 2 1 1 29 16 21 27 36 39 44 51 54 58 62 Increased defects due to repetitive problems or root cause could lead to a decrease in customer confidence/rating. Trending prevents costly defects that can result in reduced score card ratings in P1 – P5 section. Measuring the quantity of Qnotes and their related common 22 issues and cause allows a trend to be developed to identify focus areas for improvement over a rolling 12 months.

Additional Slides The following slides are useful for root cause/corrective action analysis for significant issues. These are not presented during CAB, however, issues that require analysis are often related to various other topics that are discussed (i.e. trending, stock purges, open quality notes, etc.). 23

Corrective Action Process Remedial Action Define Non-conformance Who is the problem with? What is the problem? Where can it be found? Has it occurred before? Containment What parts are effected? Stock Purge? Stop shipments? Escapes? Prevent Reoccurrence Root Cause/ Corrective Action Analysis Identify potential causes using: Fishbone, fault tree, 5 Why’s, flow chart, etc. Identify primary cause Brainstorm potential solutions Corrective Action Implementation Select best value solution Develop implementation plan Execute corrective action Prevent/Predict New Occurrence Control / Monitor Follow-up corrective action (30,60,90 days) Analyze improvements Lessons learned For significant issues, an investigation should follow this process to clear all hardware and prevent future occurrences. Status can be shown 24 during CAB to get input from team members.

Fishbone Analysis Method Potential Contributor (major category) Potential Contributor (major category) Potential Contributor (minor category) Potential Contributor (minor category) Potential Contributor (minor category) Color Key Conclusive Refuting Evidence Exists No Evidence to Support Cause of Issue Potential Issue Contributor/Cause Evidence to support Issue Cause In-progress test/analysis Potential Contributor (minor category) Problem Potential Contributor (minor category) Potential Contributor (minor category) Potential Contributor (sub category) Potential Contributor (minor category) Potential Contributor (minor category) Potential Contributor (minor category) Potential Contributor Potential Contributor One method to Root Cause analysis Add bones as necessary Color of potential contributors should match key Color should correspond to highest level of 25 implication

Fishbone/ Fault Tree Rationale Add rationale sheets as necessary to cover every bone. 26

5-Why’s Method Issue: The Jefferson Memorial is deteriorating 1.Why? Too much washing 2. Why? Excess bird droppings 3. Why? A lot of spiders to eat 4. Why? A lot of gnats to eat 5. Why? The lights are consistently left on Use the 5 Why’s method to determine the root cause of significant issues. Once root cause is determined, develop 27 corrective action plan to address root cause.

Acronyms CAB Corrective Action Board PP&C Production Planning & Controls CAP Corrective Action Plan QNotes Quality Notes CAR Customer Account Representative QTY Quantity CND Can-Not-Duplicate SCAR Supplier Corrective Action Request CUM Cumulative SFR Shop Floor Reject DPU Defects Per Unit SPN Suspect Product Notification ECD Estimated Completion Date YTD Year To Date FRB Failure Review Board FPY First Pass Yield GIDEP Government Industry Data Exchange Program NCRT Non Conformance Report Trends MRB Material Review Board 28