ITP Group, through its affiliate ITP Externals, and Rolls-Royce have reached an agreement to renew their contract to supply pipes for several different types of Rolls-Royce next generation engines within the next five years.

The agreement extends the constant supply that has flowed since April 2008 under the terms of the first stage of the contract. Supply is maintained for the same engine family with the addition of pipes for next-generation engines. Sales forecasts for these engines indicate strong growth over the next years.

Different factors have played a part in securing this renewal, but the positive scores received in recent months for delivery levels and quality, have been crucial. At both of its centres, in Zamudio, Spain, and in Querétaro, Mexico, ITA has recently achieved 'class leading' status for deliveries according to Rolls-Royce follow-up criteria for deliveries. Annual delivery rates will stand between 60,000 and 70,000 pipes for the next five years.

ITP Group's strategy

The renewal of this agreement with Rolls-Royce is part of ITP Group's strategy to develop its externals business which includes any of the elements surrounding the engine that don´t generate thrust, such as pipes, engine wiring, supports, connector, ducts and accessories. This has recently had effect in the set-up of a new affiliate, ITP Externals, with ITP as its sole stakeholder. ITP Externals integrates all of the group's engineering and manufacturing work centers for these products (Engineering in the Madrid and Zamudio centres, ITA, ITA México and Reginson India), which add together more than 450 employees in America, Europe and Asia.

The success of the project lies in the capacity of ITP Externals to undertake work with maximum efficiency, including supply chain response time, which is essential for this type of product. The challenge for ITP Externals is to remain competitive and keep the level of service and quality at the current levels, so the work load can be maintained and potentially increased.

The expected demand levels will also require fluid co-ordination between the different operating teams for planning and logistics at Rolls-Royce and ITP Externals to ensure that deliveries are on time and to avoid any kind of impact on the assembly lines or repair services.

About 10% of the parts portfolio is made up of pipes with new designs for new engine standards. In these cases, Rolls-Royce will be expecting a high level of flexibility and an agile response capacity to help with the certification of the new engines or to make any modifications required, and this will have to be done within the reduced lead times set out in the testing and certification plans.