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Lockheed Martin Aeronautics: Implementing SAP in a Complex Manufacturing Environment David Logan Director, OneAero Operations Lockheed Martin Aeronautics SAP Advanced Manufacturing Summit September 16-17, 2009

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Lockheed Martin Aeronautics:Implementing SAP in a ComplexManufacturing Environment

David LoganDirector, OneAero OperationsLockheed Martin Aeronautics

SAP Advanced Manufacturing SummitSeptember 16-17, 2009

© SAP AG 2009. All rights reserved. / Page 2 ©2009 Lockheed Martin Corporation

Agenda

1. Lockheed Martin Corporation

2. Understanding the Challenge: Unique Business Requirements

3. Meeting the Challenge: The OneAero Project

4. SAP Functionality for Key Capabilities

5. LM Aero Future Vision

6. Keys to a Successful Implementation

© SAP AG 2009. All rights reserved. / Page 3 ©2009 Lockheed Martin Corporation

Lockheed Martin Corporation

Information Systems& Global Services

Electronic Systems

Space Systems

Aeronautics

Lockheed Martin Co.

Fort Worth, TXFort Worth, TXMarietta, GAMarietta, GAPalmdale, CAPalmdale, CA

YF-22F-117

U-2

X-35

F-16

F-35CCV

F-35ACTOL

F-35BSTOVL

C-5

C-130J

F-22

29,000+ Employees Across the Company and29,000+ Employees Across the Company andAround the WorldAround the World

© SAP AG 2009. All rights reserved. / Page 4 ©2009 Lockheed Martin Corporation

Understanding the Challenge: UniqueBusiness Requirements

2422

20

18

16

14

12

10

8

6

4

2

0Y1 Y4 Y5 Y6 Y7Y2 Y3

Delivery Schedule (Years)

F-35 Supply Chain andGlobal Sustainment 2Go-Live

F-35 Monthly Aircraft Delivery Rate

© SAP AG 2009. All rights reserved. / Page 5 ©2009 Lockheed Martin Corporation

Understanding the Challenge: Unique Business Requirements

F-35 (JSF) Program OverviewThe F-35 is collaborative effort of 9 partner countries with 3,000 deliveries scheduled for the next 30 years.The F-35 is comprised of 3 variants designed for different branches of the armed services.

Variant CTOL STOVL CV

Acronym Conventional Takeoff and Landing Short Takeoff, Vertical Landing Carrier Variant

Primary Customer Air Force Marines Navy

Variant Name AF BF CF

UK

United StatesItaly

The Netherlands

TurkeyCanada

Australia

Norway

Denmark

© SAP AG 2009. All rights reserved. / Page 6 ©2009 Lockheed Martin Corporation

Diagrams

Denmark

TurkeyGreece

S. KoreaIsrael

UKItaly

IndiaPakistanGA

CA

TXJapan

Canada

Challenges:•Support full rate production•International supply chain•Consistent process•Supply chain visibility•Numerous hand-off’s•Balancing inventory

Vision:Integrate the supply chain andprovide visibility with a largecontingent of suppliers

Final Assembly and CheckoutLocations (FACO)

Understanding the Challenge: Unique Business Requirements

International Participation

© SAP AG 2009. All rights reserved. / Page 7 ©2009 Lockheed Martin Corporation

Meeting the Challenge: The OneAero Project

OneAero Vision: Lockheed Martin Aeronautics will transform business processes, systemsand information through the implementation of SAP software, combined with significantprocess improvements, positioning us to meet the challenges of effectively producing the JSF,achieving horizontal integration and retiring high-risk, aging systems.

.

* Formerly Visiprise; Currently part of SAP Complex Assembly Manufacturing Solution (CAMS)

© SAP AG 2009. All rights reserved. / Page 8 ©2009 Lockheed Martin Corporation

Meeting the Challenge: The OneAero Project

Launch Sequence Timeline

2008 2009 2010 2011Jan

Aug May Feb Aug NovDeployment 2Supply Chain

Deployment 1Finance

L1Fort Worth

F-22

L5Palmdale

Unclassified

The second supply chain launch (L2) marks the initial SAP go-live for the F-35Joint Strike Fighter program. The phased launch approach, beginning with theF-22 program as a pilot, was chosen to mitigate risk to F-35 production rate goal.

L4PalmdaleClassified

L3Marietta

ClarksburgMeridian

L2Fort WorthRemaining

D1All SitesFinance

© SAP AG 2009. All rights reserved. / Page 9 ©2009 Lockheed Martin Corporation

SAP Functionality for Key Capabilities

* Formerly Visiprise; Currently part of SAP CAMS

ComputerAided Process

Planning(CAPP) *

Shop FloorManagement

(SFM) *

TransportationManagementSystem (TMS)

SupplierNetwork

Collaboration(SNC)

Global TradeServices (GTS)

© SAP AG 2009. All rights reserved. / Page 10 ©2009 Lockheed Martin Corporation

Benefits of SAP CAMS

SAP Functionality for Key Capabilities

Manufacturing Execution System: Why SAP CAMS?

© SAP AG 2009. All rights reserved. / Page 11 ©2009 Lockheed Martin Corporation

SAP Functionality for Key Capabilities

SAP Enterprise Integration: CAPP, SFM, SAP

As-built RecordChange Requests

ItemMBOMRouterOperationWork InstructionInspection CharacteristicsBuyoffData CollectionOperation CertificationToolsECOCNC Program

OrderCharge CodeUnit Number/ QtyResource

Order StatusOrder ConfirmationLabor ConfirmationTool UsageRework

Unit NumberItem

BOMMMCM

ItemMBOMRouterStandard TimesTools

Order

Material Consumption

Other

Other

Other

Other

Other

Other

Closed-loop Enterprise Integration:PLM-ERP-MES(CAMS)

© SAP AG 2009. All rights reserved. / Page 12 ©2009 Lockheed Martin Corporation

MIDDLEWARE

(SAP PI)

SAP Functionality for Key Capabilities

Enterprise Integration: CAPP, SFM, SAP

© SAP AG 2009. All rights reserved. / Page 13 ©2009 Lockheed Martin Corporation

User Interaction

Business Processes

Basic Services

Powered by SAP NetWeaver™XML Message Exchange

SAP Functionality for Key Capabilities

Supplier Collaboration: SNC

© SAP AG 2009. All rights reserved. / Page 14 ©2009 Lockheed Martin Corporation

Aircraft Master Scheduling Logistical Project Process

AF-5AF-5

AF-5-1

SAP Project Systems

A/C Mate and Final Installation

InspectionPaint

Wing Installation

Flaps

Leading Edges

Center Fuselage Installation

Pre-FitBulkhead Assy

FLAP-121

LEADEDGE-002

BLKHD-004

SAP Production Planning

LEADEDGE-002

NetworkReservation Materials Planning (MRP)

Capacity Requirement

Capacity Planning (CRP)Work Center: PAINT1

Capacity Load Increased

Available Capacity Reduced

Confirmations Reduce Load

Materials Planned by MRPReqmt. Date Network Driven

Relationship (SS +10)

Relationship (FS)

Aircraft ProjectConfiguration “AF”Ship # 5PS-Networks support

project-orientedmanufacturing model:• Provides powerful, but

flexible scheduling tool

• Tight integration withPlanning and MaterialManagement

• Supports greater visibility toshopfloor operations

SAP Functionality for Key Capabilities

Network Scheduling: SAP ECC

© SAP AG 2009. All rights reserved. / Page 15 ©2009 Lockheed Martin Corporation

SAP Functionality for Key Capabilities

Logistics Execution: SAP ECC

© SAP AG 2009. All rights reserved. / Page 16 ©2009 Lockheed Martin Corporation

• Global Trade Services (GTS)Export / Import

Sanctioned Party List screeningAutomatic License Determination and Value AdjustmentCustoms Documentation Generation

– Electronic communication with U.S. Customs A.E.S.(export only)

Tight Integration with ECCAutomatic screening of Customers/Suppliers againstSanctioned Party ListAutomatic screening of Sales Orders/Deliveries for ExportAutomatic screening of Purchase Orders/InboundDeliveries/Advanced Shipping Notices for Import

SAP Functionality for Key Capabilities

Trade Compliance: GTS (Future Release Capability)

© SAP AG 2009. All rights reserved. / Page 17 ©2009 Lockheed Martin Corporation

Outbound:

•Consolidation of internationalshipments to subcontractors inEurope and the Far East

Inbound:

•Consolidation of shipmentsinbound to localized groupings ofmanufacturing facilities and 3PL

Global Visibility: visibility of delivery schedulesassociated with both inbound and outboundshipments

TransportationManagementSystem (TMS)

SAP Functionality for Key CapabilitiesTransportation Management: TMS(Future Release Capability)

© SAP AG 2009. All rights reserved. / Page 18 ©2009 Lockheed Martin Corporation

LM Aero Future Vision

© SAP AG 2009. All rights reserved. / Page 19 ©2009 Lockheed Martin Corporation

Keys to a Successful Implementation:Launch 1 Success Factors

531 people> 1.0M Hours worked

27 Web-Based Courses53 Instructor-Led Courses

27K Training Hours1446 End Users

4,303 Defects47,000 Steps

7,000 Scenarios

1,745 requirements

700 development objects1045 Business Process Procedures

6,235 PO’s16,804 Vendor Masters23,563 Material Masters

33,553 Production Orders343,288 Financial Breakpoints

99.9% of Data Loaded4,886,780 Records

542 Records Required MitigationSuccessful Dry-Run

Exhaustive testing, thorough data cleansing and validation, detailed and interactive trainingcourses and our partnership with SAP, Deloitte and BackOffice were critical to our success.Exhaustive testing, thorough data cleansing and validation, detailed and interactive trainingcourses and our partnership with SAP, Deloitte and BackOffice were critical to our success.

Thank You!

© SAP AG 2009. All rights reserved. / Page 21 ©2009 Lockheed Martin Corporation

Slide Citations

Slide Description Source

1 a. F-35 Manufacture a. JSF Military Websitehttp://www.jsf.mil/images/gallery/sdd/f35_manufacturing/a/sdd_f35manfa_045.jpg

3 a. – d. Lockheed Martin Corp.e. Map with small planes

a. – e. All photos are from the Consulting Onboarding deck from D1

4 a. Delivery Ram up Schedule a. JSF Military Website,http://www.jsf.mil/downloads/documents/ANNEX%20A%20Revision_April%202007.pdf

5a. Large F-35

b. Small F-35 Variants

a. Lockheed Martin Website, http://www.lockheedmartin.com/products/f35/f-35specifications/f-35a-ctol-

specifications.htmlb. Lockheed Martin Website, http://www.lockheedmartin.com/products/f35/f-35specifications/index.html

10

a. Electronic Work Instructions

b. Order Processing Timec. Shop Order Visibility

d. Non-Conformance Processe. Engineering Change Incorporation

a. Visiprise Customer Case Study, http://www.manufacturing-executive.com/sponsors/visiprise/lockheed.pdf

b. Creative Commons, http://search.creativecommons.org/# , Search for “stack of paper”c . JSF Military Website,

http://www.jsf.mil/images/gallery/sdd/f35_manufacturing/a/sdd_f35manfa_004.jpgd. JS Military Website,

http://www.jsf.mil/images/gallery/cdp/lockheed/manufacturing/cdp_loc_manf_001.jpge. JSF Military Website,

http://www.jsf.mil/images/gallery/sdd/f35_manufacturing/a/sdd_f35manfa_029.jpg

14 a. F-35 Manufacturing/Tools a. JSF Military Website,http://www.jsf.mil/images/gallery/sdd/f35_manufacturing/a/sdd_f35manfa_022.jpg

15a. Demand Driven Replenishmentb. All others

a. Lockheed Martin Website,http://www.lockheedmartin.com/data/assets/aeronautics/gallery/f35/flights/flight02/ae070108_27_01133.jpg

b. FMF Warehouse Photos – 2009

16 a. Global Trade a. Lockheed Martin Website, http://www.lockheedmartin.com/isgs/capabilities/globaldelivery.html

18a. FMFb. FPS

c. SCD

a. FMF Warehouse Photos - 2009b. JSF Military Website,

http://www.jsf.mil/images/gallery/sdd/f35_manufacturing/a/sdd_f35manfa_045.jpgc. Lockheed Photo Collage, http://www.jsf.mil/f35/