Industrial Operations

November, 18th 2005 Artur Coutinho

Executive Vice President – Industrial Operations

Embraer Units

BrazilGavião PeixotoEugenio de MeloSão José dos CamposBotucatuELEB

Botucatu - Neiva

Eugênio de MeloGavião Peixoto ELEB – Embraer / Liebherr

São José dos Campos – Faria Lima

5.4 million ft 2 3.0 million ft 2

180 million ft 2 3.7 million ft 2 0.3 million ft 2

Faria Lima Plant

Main Activities- Final assembly

� ERJ 145 family� Legacy� EMBRAER 170/190 family

- Parts manufacturing� Machining� Composites

Main Activities- Final assembly

� ERJ 145 family� Legacy� EMBRAER 170/190 family

- Parts manufacturing� Machining� Composites

Eugênio de Melo Plant

Tooling Tubing shop Harness shop

Main Activities:- Tooling- Tubing- Harness

Main Activities:- Tooling- Tubing- Harness

Previous access

Additional area for growth

Center of Competence for Fuselage Panels

Botucatu Plant

Main Activities:- Structural Assembly

� Fuselage Panels� Doors

- Parts manufacturing� Sheet metal

Main Activities:- Structural Assembly

� Fuselage Panels� Doors

- Parts manufacturing� Sheet metal

Panel Structural Assemblies CNC Riveting Machine

Gavião Peixoto Plant

Main Activities:- Final Assembly for Defense

� ALX� F5BR

- Cabinet Production

Main Activities:- Final Assembly for Defense

� ALX� F5BR

- Cabinet Production

F5BR Final assembly LineALX Final assembly Line

Cabinet Shop

Customer Base

Supplier Base

Supply Strategy

• 4 partners• 350 suppliers

• 16 partners• 22 suppliers

Supply Strategy

GAMESAEmpennages &Rear Fuselage

EMBRAER( LEADER)KAWASAKI / SONACA

Wing, Stub, Control Surfaces& Pylon

EMBRAERWing to Fuselage FairingEMBRAER / AKROS GE

Engine/ Nacelles

HAMILTON

SUNDSTRAND

Tail Cone &APU

LATECOERECenterFuselage III

LATECOERECenter Fuselage

EMBRAER / AKROSCenter Fuselage II

Electrical System

System Partners:System Partners:

HAMILTON SUNDSTRAND

Air Management

PARKER Hydraulics

Flight Controls

Fuel System

C & D Interiors

LIEBHERR Landing Gear

HONEYWELL Avionics

16 Risksharing Partners 22 Suppliers

Forward Fuselage

Supply Strategy

Brazilian Content:

� Faster response time

� Reduced cycles

� Base for exports

Supply Strategy

Global Suppliers are coming to Brazil

Industrial Operations Focus

• Productivity

• The easiest way

• The lower cost

• Flexibility

• The shortest time to market

• The latest product customization

• Quality

• Attitude

• Product reliability

• On time deliveries

• At the right cost

Manufacturing Strategies

Responsiveness

Manufacturing Flexibility

Costs Reduction

Process Capability

delivery

month

LEL

UEL

Obj.

LEL

UEL

Obj.

Mtg. 3 Mtg. 4Mtg. 1 Mtg. 2 Mtg. 4Mtg. 1 Mtg. 4

1º C.C. 2º C.C.

Primary Parts

Structural Assembly

Final Assembly

Postponement:

Time-To-Market: Manufacturing Cycle Reduction

Configuration Cycle

Stock Turn Over M/h Evolution:

4,4

6,7

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

dez

/01

fev/

02

abr/

02

jun

/02

ago

/02

ou

t/02

dez

/02

fev/

03

abr/

03

jun

/03

ago

/03

ou

t/03

dez

/03

fev/

04

abr/

04

jun

/04

ago

/04

ALMOX. AERON. PROCESSO TOTAL

18

20

23

25

28

30

33

35

38

40

mai se

tja

nm

ar jun

set

jan

mar jun

set

dez

jan

mar jun

set

dez

jan

mar jun

set

dez

jan

mar jun

set

dez

jan

mar jun

set

nov

Ho

ras

(x 1

.000

)

Real MAP

- Meta (média anual 2004) = 23.000 Hh - Real (média out/04) = 21.295 Hh

20001999 2001 2002 20031998 2004

ERJ 145

0

50.000

100.000

150.000

1 2 3 4 5 6 7 8 9 10 1 1 12

13

15

16

23

2 4 25 27 2 8 2 9 30

31

32

33

3 4 35 3 6 3 7 38 3 9 40

41

42

43

44 4 5 46 4 7 4 8 49

50

51

52

53 5 4 5 5 5 6 57 58

59

60

61

62

6 3 64 6 5 66 6 7 68

69

70

71

72 73 7 4 7 5 9 0 110

130

1 50

1 70

180

1 91

2 00

210

3 00

N/S

Hh

Real Plano de Recuper

Real c/ Hh não apontado Projeção

Projeção c/ Hh não apontado MAP

..

0

50.000

100.000

150.000

1 2 3 4 5 6 7 8 9 10 1 1 12

13

15

16

23

2 4 25 27 2 8 2 9 30

31

32

33

3 4 35 3 6 3 7 38 3 9 40

41

42

43

44 4 5 46 4 7 4 8 49

50

51

52

53 5 4 5 5 5 6 57 58

59

60

61

62

6 3 64 6 5 66 6 7 68

69

70

71

72 73 7 4 7 5 9 0 110

130

1 50

1 70

180

1 91

2 00

210

3 00

N/S

Hh

Real Plano de Recuper

Real c/ Hh não apontado Projeção

Projeção c/ Hh não apontado MAP

..

EMBRAER 170

5S KaizenControl

Process

Visual

Management

Empowered

Teams

20002000 TodayToday 20072007

KaizenKaizenKaizen

AFTERAFTERBEFOREBEFORE

Continuous Improvement Program

3,6

4,6

6,5

EMBRAER 170

5,5

5

4,5

3,73,5

3,1

2,6

ERJ-145

8.0

6.0 6.0

1999 2000 2001 2002 2003 2004 20056 1999 2000 2001 2002 2003 2004199 1997 1998

9

8

7

6

5

4

3

2

Mon

th

Production Cycle Improvement

✈ Improvement of production flexibility

✈ Faster response to market demand

EMBRAER 170

EMBRAER 175

EMBRAER 190

EMBRAER 195

EMBRAER 170/190 Family Convertibility

2005 20072006Conv

ertib

ility

(Day

s)Co

nver

tibili

ty (D

ays)

Conv

ertib

ility

(Day

s)

2005 20072006

2005 20072006

EMBRAER 170 – M/h evolution

0

40.000

80.000

120.000

160.000

200.000

1 7 13 21 27 33 39 45 51 57 63 69 75 81 93 108 113 120 126 134 142 150 157 167

Budget

Target

Real

Quality Management

Main certifications:

• ISO 9001 Quality Management System

• AS 9100 Quality Management System –Aerospace Requirements

• OHSAS 18001 Occupational Health and Safety Management System

• ISO 14001 Environmental Management Systems

• FAR Part 21 (Federal Aviation Regulation)