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Contract Administrator

The contract administrator will assist the supplier engi­neer in evaluating prospective vendors for outsourcing.

The contract administrator will review vendor terms and conditions issues, and recommend and implement a ne­gotiation strategy that achieves goals for quality, pricing, delivery, and serviceability. The contract administrator will assist in successful inventory transfer. The contract administrator will update supplier demand forecast data when required. The contract administrator will issue con­firming contracts or blanket purchase orders, with re­quirements for delivery lead time, pricing, and quality after management approval of negotiations.

Product Data Management


The PDM team can carefully monitor ECOs to all pur­chased parts for impact to POU and outsourcing execu­tion. They can recommend when suppliers should be contacted early in the ECO life cycle to assess impact to the parts pipeline and help develop countermeasuresuse as is, scrap, or modify/change. They can estimate cost, quality, reliability, and lead time tradeoffs for sup­plier parts as part of the ECO process.


POU can reduce material handling and transactions. The supplier primarily becomes the material handling staff. POU delivery can reduce raw material levels stocked at the production facility and be staged at the exact spot where it is needed to minimize "inventory days on hand." It can reduce floor space needed to stock inventory, in­crease inventory turnover, and reduce the amount of working capital needed for inventory investment. POU makes supply delivery problems visual—one can see when there are part shortages on the floor or by use of andon signals. Point of use delivery can reduce manu­facturing burden costs by minimizing or eliminating transactions. The supplier can easily monitor the status of on-hand assemblies on the floor, to know the pat­tern of parts usage and then be ready for immediate re­plenishment in aJust-in-Time (kanban) manner.

POU—the supplier becomes the material handler, and assumes added ownership in the supply chain. POU can make parts shortages rapidly visible, increase inventory turns, and facilitate more linear material usage.


Outsourcing occurs when enterprises transfer internal "make" activities to an external supplier base. This trans­fer should be considered by assessing core versus non-core enterprise technology and processes, and by analyzing intellectual property issues. Outsourcing can apply to design, parts procurement, manufacturing, as­sembly, testing, kitting, shipping, and post-sales sup­port. Outsourcing can add surge capacity, shrink overall product cycle time, improve time-to-market capability, and maintain or reduce growth in infrastructure costs (facility space and manufacturing labor) in relationship to sales volume.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 13


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