2015 Corporate Responsibility Report

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Business

Quality Management

Customer Satisfaction At Northrop Grumman, we are accountable to our customers. Our commitment to enhancing global security is steadfast. We embrace our partnership with U.S. and allied defense and security leaders and strive to provide high-quality, affordable products and systems through a robust mission-assurance process that emphasizes our company-wide focus on quality, innovation and superior program performance.

In 2015, we maintained our focus on quality as one of our key strategic priorities to ensure strong performance outcomes for our customers and improved value for our shareholders. We continued using quality measures company-wide that reflect the performance of our key programs against quality expectations across the program life cycle, including engineering, manufacturing, and supply chain.

We continue to promote a culture of quality throughout Northrop Grumman. We believe that by highlighting the relationship between the work of individual employees and the success of our customers’ critical missions, we are able to create sustained performance improvement and develop affordable global security solutions. We do this, in part, by instilling in our employees the concept that "Quality is Personal." From there, we encourage our employees to identify quality issues in their work and continuously strive to improve in those areas.

We recognize that a holistic view of our quality performance, engaging all key stakeholders, drives successful performance outcomes for our customers. To identify and prioritize areas for improvement, in quality and customer satisfaction, we utilize a rigorous self- assessment process at both the business unit and corporate level.

2015 Highlights

U.S. Air Force Civil Engineer Center Northrop Grumman employees conducted engineering, financial and technical analysis of Air Force energy program management activities worldwide as part of our ongoing support of the U.S. Air Force Civil Engineer Center Energy Directorate. Our efforts included renewable and alternative energy systems. These initiatives support the long-term energy efficiency objectives for Air Force facilities and operations.

Aviation Week Program Excellence The Aviation Week Program Excellence awards demonstrate best-in-class technical and business performance across the aerospace and defense industry. In 2015, Northrop Grumman had four finalists (two winners) in the Aviation Week Program Excellence awards.
• Global Combat Support System - U.S. Army FINALIST
• KC-10 Contractor Logistics Support Programs FINALIST
• Protected Satellite Communications Payload Orbital Operations WINNER
• Unmanned Combat Air System Demonstrator WINNER

European Quality Forum In April 2015, we hosted a quality forum in Europe that included leaders from the European community who shared best practices, tools and innovative ideas. This forum provided an opportunity for Northrop Grumman employees from different backgrounds, countries and domains to collaborate and communicate their experiences, as well as the opportunity to harmonize our global quality practices.

Quality Symposia In October 2015, we held 11 Quality Symposia events across our company, including an event at our Fareham facility in the United Kingdom. The Quality Symposia is an opportunity for us to showcase how quality and other key company priorities connect and build a foundation for top performance. During the events, we recognized our 100 winners of the "Quality is Personal" award (from more than 550 nominations), which represents individuals and small teams that demonstrate continuous improvement and produce high-quality outcomes.

Our mechanics use FILLS (Fastener Insertion Live Link System) light projected work instructions to speed the assembly of F-35 center fuselages.