All our suppliers are required to meet high quality standards. In addition we have developed a Supplychain Excellence (SCE) programme to help us share best practice and work in partnership with our strategic suppliers. Through SCE we work with our key suppliers to improve delivery, quality, cost and management systems and reduce waste.
This benefits BAE Systems by ensuring we do our most important business with high performing suppliers. Suppliers benefit from increased competitiveness and lower internal costs. We are working with 70 of our major suppliers through SCE. We aim to increase this to 80 over the next year which will account for 50% of our direct procurement spend. As part of SCE, suppliers can be assessed against our Business and Manufacturing Excellence standards. These are based on the European Foundation for Quality Management (EFQM) and Lean Manufacturing. The standards cover a range of criteria, such as leadership, people management, policies and processes. They include questions to assess performance on CR issues, such as ethics, employment practices, health and safety, and environmental management.
The assessment also identifies opportunities for improvement. We work with suppliers to develop a Continuous Improvement Plan and set targets for them to work towards world class standards. Assessments are carried out by trained BAE Systems employees. We have over 100 employees who are qualified to conduct supplier assessments. We also provide training on self-assessment for suppliers to help them understand the requirements and identify ways to improve.
Our internal Supplier Development Working Group meets every six weeks to review supply chain performance, process improvement activities and manage the overall SCE Programme. Suppliers achieving and maintaining high performance against our excellence standards receive formal recognition through our bronze, silver and gold Supplychain Excellence awards.
Good communication and two-way feedback is an important element of SCE. Each supplier is assigned a senior BAE Systems manager as their point of contact. We meet with each supplier quarterly to review progress against their improvement plans, get feedback and identify ways we can better support them. With such a large supply chain it is difficult for us to meet and interact with all our suppliers individually.
We work with many trade associations and regional development agencies to provide training and information on excellence standards to smaller companies in our supply chain. BAE Systems also contributes to national supply chain improvement programmes such as SCRIA (Supply Chain Relationships in Action) and the AeGIT (Aerospace Growth and Innovation Team). Both of these have been developed by the Society of British Aerospace Companies and the UK government to improve the competitiveness of the aerospace industry through good supply chain relationships and better team work.
