EADS Procurement Talent Management Maria Granero EADS Defence & Security Head of Procurement Projects, Spend Map & Reporting Archamps, 07/12/07

EADS Procurement Talent Management

Maria GraneroEADS Defence & SecurityHead of Procurement Projects, Spend Map & ReportingArchamps, 07/12/07

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EADS at a Glance: A Global Leader

No. 3

No. 3

No. 4

No. 2

No. 1

Commercial Aircraft

Helicopters

Commercial Launch Vehicles

Missile Systems

Satellites

Military Transport

Military Air Systems

No. 1

No. 1

Page 3

Chairman of the Board of Directors

Jussi Itävuori

Human Resources

Hans-Peter Ring

Finance

Marwan Lahoud

Strategy &Marketing

Jean J. Botti

Chief Technical Officer

Ralph D. Crosby Jr.

EADS North America

Fabrice Brégier

OperationalPerformance

Rüdiger Grube

Chief Executive OfficerLouis Gallois

Lutz Bertling

Eurocopter

Carlos Suárez

MilitaryTransportAircraft

François Auque

EADS Astrium

Tom Enders (CEO)Fabrice Brégier (COO)

Airbus

Stefan Zoller

Defence &Security

EADS Management Structure

Page 4

EADS Revenues by Divisionsas of March 07

By Division Revenues in million €

2006 2005

25.190

2.200

3.803

3.212

5.864

-2.0921.257

*ATR, EADS EFW, EADS Socata, EADS Sogerma Services

39.434

22.179

763

3.211

2.698

5.636

-1.4361.155

34.206

Headquarters ConsolidationOther Businesses*

Airbus

Military Transport Aircraft

Defence & Security

Astrium

Eurocopter

Total EADS

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EADS Procurement

EADS PDB Procurement Directors BoardCPO Council

Chief Procurement Officers

Airbus

Defence & Security

Eurocopter

Astrium

Military Transport Aircraft

Military Air Systems

Defence & Communication

Systems

Defence Electronics

MBDA

Test & Services

ATR

EFW

Socata

Sogerma

HQs Procurement& Services

EA

DS

Div

isio

ns

EA

DS

Bu

sin

ess

Un

its

Organisation

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1) Definition of profiles

2) Skills assessment

3) Identification of gaps

4) Corrective initiatives

5) Monitor effectiveness

Definition of profiles at Procurement functions according to job descriptions

Skills assessment as part of annual skillsassessment or employee job review

Compare results of annual skills assessment to defined profiles

Definition of training programmes andselected corrective initiatives

Regular review of the effectiveness of training programmes and initiatives

Process

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Definition of profiles at Procurement functions according to job descriptions

Process

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Definition of profiles according to job

descriptions

EADS Procurement population in 2006 was 2.400

employees.

Strategic SourcingProcurement Purchasing

Director

Head of department

Senior Manager

Manager

Staff

Support functions

1)

2) 3)

4) 5) 6)

7) 8)

9) 10) 11)

12)

EADS Corporate Sourcing

Focus

EADS Divisions

&Business

Units Focus

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ManagementSkills

ProfessionalSkills

Head of Department Senior Manager

100 %

0 %

ManagementSkills

ProfessionalSkills

ManagementSkills

ProfessionalSkills

Procurement Director

Relation between General Management and Professional Skills

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Process

Skills assessment as part of annual skillsassessment or employee job review

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Required Management Skills Profile

ManagementSkills

2/3

General Management Leading Edge

Fully Operational

Working Knowledge

Basic Appreciation

1) Strategy / Business Development2) Supply chain management3) Finance4) Sales / Marketing5) Quality ManagementLeadership Leading

EdgeFully

OperationalWorking

KnowledgeBasic

Appreciation

1) People leadership2) Customer focus3) Relationship Management4) Cross cultural skills / languages5) EntrepreneurshipOperations Leading

EdgeFully

OperationalWorking

KnowledgeBasic

Appreciation

1) Project Management2) Engineering / Product knowledge3) Change Management4) Market knowledge

Head of Department / Strategic Sourcing

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2) Skills asessment

ProfessionalSkills

1/3

Required Procurement Skills Profile

Procurement Skills Leading Edge

Fully Operational

Working Knowledge

Basic Appreciation

1) Supply market intelligence and analysisConsidering: - Identify potential suppliers assessing industrial capabilities & financials, - Analyse market trends and build cost models for commodities.

2) Sourcing strategies developmentConsidering: - Develop sourcing strategies for commodities.3) Procurement policy definitionConsidering: - Identify risk and opportunity elements, - Define adequate contractual terms and conditions.4) Supplier selectionConsidering: - Identify, compare & select suppliers to maximise business value added, - Assess total cost of ownership and key cost drivers.5) Supplier contractual relationship managementConsidering: - Negotiate and implement contractual frameworks with suppliers, - Assess risks elements and select appropiate terms and conditions.6) Supplier performance managementConsidering: - Implement supplier evaluation and development processes, - Work out short term recovery plans and set development targets.7) Supplier's innovation and technology implementationConsidering: - Ensure early supplier integration, - Propose new technical solutions available in the market.8) Optimise supply chain performanceConsidering: - Identify business supplier innovation & support standarisation initiatives.9) Sourcing processes optimisationConsidering: - Set up procurement processes and implement e-procurement tools.

Head of Department / Strategic Sourcing

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Process

Compare results of annual skills assessment to defined profiles

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Conclusions:

• Strengths: Results orientation, Expertise and Customer orientation

• Development needs: - Senior Managers: Diversity management and People leadership - Executives: People leadership

• Analysis shows very few Executive potentials for Procurement functions: Succession Planning in procurement function is an issue!

Conclusions:

• Strengths: Results orientation, Expertise and Customer orientation

• Development needs: - Senior Managers: Diversity management and People leadership - Executives: People leadership

• Analysis shows very few Executive potentials for Procurement functions: Succession Planning in procurement function is an issue!

Current Management Skills Profiles in Procurement

0

20

40

60

80

100

Results orientation

Leading edge

People leadership

Diversitymanagement

Customer focus

Senior Managers Results

0

20

40

60

80

100

Results orientation

Leading edge

People leadership

Diversitymanagement

Customer focus

Executive Results

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Process

Definition of training programmes andselected corrective initiatives

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• Objective

Prepare procurement managers with potential for future sourcing challenges:

- Improve the capacity to understand and implement strategic sourcing issues,- Increase awareness of state-of-art sourcing methods & tools,- Develop and promote exchange of best practices accross Business Units.

• Target population (180 participants ~7% of total procurement population)

- EADS Managers with potential or recently nominated Senior Managers (25 participants per edition), - Participants from EADS top suppliers (5 participants per edition).

• Frequency

- Yearly (10 training days) with currently closing 6th edition of programme.

Managers - Procurement Managers Development Programme

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• Content

- Sourcing strategy: commodity strategy, future trends, global sourcing,- Sourcing tools: Supplier evaluation, eSourcing, sourcing risk management,- Sourcing practices: legal aspects in procurement, TCO, KPIs,- Visits to EADS procurement departments & external companies presentations.

• Best practice projects

- Participants work in groups in selected best practice projects, - Final presentation of results and recommendations to EADS CPO Council.

• Organisation

- Organised together with EADS Corporate Business Academy, - Participants nominated and selected by Procurement Directors & BUs HR.

Managers - Procurement Managers Development Programme

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• Professional training

Yearly training with the objective to support EADS Lead Buyers in the areas of:- Commodity strategies,- Supplier risk assessment,- Global sourcing.

• Personal training

Yearly training with the objective to support EADS Lead Buyers in the areas of:- Change management,- Project management,- Virtual and remote team management.

• Collaborative tool

- Introduction of a collaborative tool (based in eRoom technology) to support Procurement Synergy Groups.

Lead Buyers - Support: Training & Collaborative tool

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• Objective

Scope of responsibilities has grown. To meet future challenges, it is required:

- Change Management,- Excellence in Leadership & People Management,- Intercultural Competencies.

• Target population (28 participants)

- Senior Managers reporting to Procurement Directors, - High Performers with potential for promotion,- Selected and nominated by Procurement Directors and Business Units HR.

• Frequency

- 1 time programme in 2005 to closed the skills gap,- Following years integrated into Corporate Business Academy programmes.

Senior Managers - Procurement for Procurement

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• Objective

Enhance mobility within EADS Group, functions and locations through the exchange of information regarding: open positions, potential candidates and preparation of succession plans.

• Target population

Executives & Senior Managers below Procurement Director level. • Frequency

- 1 Round yearly for Executives,- 2 Rounds yearly for Senior Managers.- Organised from 2005 to 2006.

• Organisation

- EADS Management Development and EADS Corporate Sourcing.

Executives & Senior Managers - Procurement job rotation

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Process

Regular review of the effectiveness of training programmes and initiatives

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How much did the PMDP supported you to …?

My understanding of the strategic sourcing challenges facing EADS

0030%

50%

20%

No ExtentA Little ExtentSome Extent

A Great ExtentA Very Great Extent

My ability to think more globally about my business

16%

50%

22%6% 6%

No Extent

A Little Extent

Some Extent

A Great Extent

A Very Great Extent

My understanding of sourcing best practices and experience across BUs

0 5%15%

55%

25%

No ExtentA Little ExtentSome ExtentA Great ExtentA Very Great Extent

PMDP was valuable to me personally

0 5%

25%

55%

25%

No Extent

A Little Extent

Some Extent

A Great Extent

A Very Great Extent

2002-2005 PMDP Participants Survey Results

Procurement Managers Development Programme

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2002-2005 PMDP Participants Survey Results

Your Management Level before beginning PMDP

55%

5%

40%

Manager

Senior Manager

Other

Your Management Level today

40% 40%

20%Manager

Senior Manager

Other

Procurement Managers Development Programme

Conclusions:

Programme supported the career development of participants: - To develop strategic understanding of sourcing challenges,- To think globally about EADS businesses,- To exchange practices with other Business Units.

Conclusions:

Programme supported the career development of participants: - To develop strategic understanding of sourcing challenges,- To think globally about EADS businesses,- To exchange practices with other Business Units.

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EADS Key Performance Indicators

SurveyCustomer SatisfactionINT CUSTOMER

Sum training days conducted in period/Nr of all members of within procurement organization at defined date (e.g. year end)

Nr of employees in procurt with experience in other functions or country /Nr of all members within procurement organization at defined date (e.g. year end)

Quantity of potentials in procurt/Total quantity of procurtemployees

Training

Mobility

Potential Ratio in Procurement

HUMAN RESOURCES

Vol. of suppliers covered by supplier evaluations /Vol. of suppliers

Sum supplier performance ratings/Best possible performance

Aggregated sourcing volume/Number of suppliers

Sourcing volume in defined countries

Supplier Evaluation CoverageSupply Base PerformanceSupply Base ProfileGlobal Sourcing

SUPPLY BASE MANAGEMENT

Vol. PO covered by valid EADS frame contracts /Total vol. PO

Sourcing vol covered by material group strategy/Total sourcing vol.

Number of e-Rfx

Number of manual PO/ Total number of PO line

Total value of invoices paid via PO/Total value of invoice paid

EADS Frame Contract CoverageCommodity Strategy Coverage RFX-AutomationOrder AutomationSourcing Volume controlled by Proc’t

PROCESS

Savings generated by Procurement projects/ Spend Baseline

US$ Sourcing/ Total Sourcing

(Payables (in €)/Cost of Sales (€/year)) * 365

Savings target achievementUS$ SourcingPayment Terms

VALUE

DefinitionKPIDimension

SurveyCustomer SatisfactionINT CUSTOMER

Sum training days conducted in period/Nr of all members of within procurement organization at defined date (e.g. year end)

Nr of employees in procurt with experience in other functions or country /Nr of all members within procurement organization at defined date (e.g. year end)

Quantity of potentials in procurt/Total quantity of procurtemployees

Training

Mobility

Potential Ratio in Procurement

HUMAN RESOURCES

Vol. of suppliers covered by supplier evaluations /Vol. of suppliers

Sum supplier performance ratings/Best possible performance

Aggregated sourcing volume/Number of suppliers

Sourcing volume in defined countries

Supplier Evaluation CoverageSupply Base PerformanceSupply Base ProfileGlobal Sourcing

SUPPLY BASE MANAGEMENT

Vol. PO covered by valid EADS frame contracts /Total vol. PO

Sourcing vol covered by material group strategy/Total sourcing vol.

Number of e-Rfx

Number of manual PO/ Total number of PO line

Total value of invoices paid via PO/Total value of invoice paid

EADS Frame Contract CoverageCommodity Strategy Coverage RFX-AutomationOrder AutomationSourcing Volume controlled by Proc’t

PROCESS

Savings generated by Procurement projects/ Spend Baseline

US$ Sourcing/ Total Sourcing

(Payables (in €)/Cost of Sales (€/year)) * 365

Savings target achievementUS$ SourcingPayment Terms

VALUE

DefinitionKPIDimension


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Conclusions

• Support the development of the procurement function from operational to more strategic role and activities,

• Update procurement employees toolbox to ensure continuous cost reduction and demand management achievements,

• Adapt to supply market changes (e.g. global sourcing, e-procurement),

• Address every procurement community according to their different needs,

• Involve the supply base, in order to address together the challenges related to procurement

• Support the development of the procurement function from operational to more strategic role and activities,

• Update procurement employees toolbox to ensure continuous cost reduction and demand management achievements,

• Adapt to supply market changes (e.g. global sourcing, e-procurement),

• Address every procurement community according to their different needs,

• Involve the supply base, in order to address together the challenges related to procurement

Increased attractiveness of the procurement functionIncreased attractiveness of the procurement function

Documents

EADS Procurement Talent Management Maria Granero EADS Defence & Security Head of Procurement Projects, Spend Map & Reporting Archamps, 07/12/07