The Group is investing £400 million in new modern facilities across the United Kingdom. These are helping improve the efficiency and productivity of our operations. We have started the construction of a new joint venture repair and overhaul centre in Germany; opened a Fuel Cells facility in the US; begun work on our new outdoor engine test facility in the US; and initiated the process of considering options for a new manufacturing and production centre. Eight US States are being evaluated but other locations around the world are also being asked to compete.
Rolls-Royce manages a global supply chain in which we invest nearly £2 billion per annum with suppliers. The Group has 400 key product suppliers. By simplifying and globalising the supply chain the Group believes it will reduce supplier interfaces by 80 per cent, which should benefit both suppliers and Rolls-Royce. We purchase 70 per cent by value of a gas turbine, with the Group concentrating its manufacturing activities on high value-added components.
The Group's core gas turbine technology serves four global markets: civil aerospace, defence aerospace, marine and energy. We provide power systems based on our gas turbine technology which can be developed in one business and transferred to others. The Group does not have separate gas turbine factories for each business. For example, our high pressure turbine blade facility makes blades for a range of aero, marine and industrial engines – they are the same components whether for original equipment or spare parts.
The Group is focusing hard on operational performance. We are in a highly competitive market and our improvement programmes will give us the resilience to remain competitive in the face of fluctuating exchange rates, commodity cost inflation, pricing pressure and any programme slippages.
Our Process Excellence programme continues to drive culture change within the organisation and eliminate waste. We also initiated Functional Excellence in 2006, which focuses on specific areas of activity across the Group with a view to identifying further efficiency improvements and cost savings.