The presentation briefly depicts the topics that should be taken into account during the supplier's transfer project.

2. Technological difficulties in transferring parts are related to missing or improper
definition or even lack of information on:
 Special manufacturing methods or tooling
 Surface coating
 Surface properties
 Raw material properties
 Tolerances on the drawings
 IP rights
 External certifications (EX, CE, FDA, raw material traceability)
 Testing method of special features
 Specialties that have to be procured from recommended supplier
Technical documentation update, change, improvement (language, norms,
colors, others) is a necessity of many transfer projects. If update of technical
documentation is not possible, the sample of parts for reference shall be
provided.
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3. Other projects
 Ensure no other (transfer or development) project that can take away resources from your are being
performed at the same time
Assigning the right team to make strong and positive impression as well as
cooperate professionally
 Language, manufacturing and negotiation skills
Right-sizing your supplier selection
 Make your business the right proportion of a supplier's revenue (your annual purchases should represent
a minimum of 5% of the supplier's plant-level revenue and no more than 20% of the supplier’s total
company revenue) and confirm interest (executive management) before engaging in a lengthy RFQ
process
Eliminating pricing surprises
 Speeding through the sourcing process can lead to pricing inaccuracies and mistakes
 Seek to understand the details behind pricing, and focus on price structure, not just the bottom line
 Make cost-structure transparency a condition of doing business with your company
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4. Forecasting with reasonable accuracy
 Variation of 10% or less at the aggregate level is considered reasonable
 Gives your supplier visibility to the amount of revenue or profit that can be generated from your business
 Determines how much and what caliber of resources the supplier will assign to support your requirements
 Defines the level of risk to which your supplier will be expose
Clarifying the what, who, how, and when for inventory liability
Your product quality must be at par with or better than your competitors
 Look for quality problems on the manufacturing line, not just in the field
 Discuss your expected product yields, expected parts-per-million (PPM) failure rates, and control limits for
each critical stage in the manufacturing process.
 Utilize tools that enable to achieve real-time visibility into what is happening on the production, monitor
trends and identify potential problems
 Cultural, environmental and language differences
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5. Assesse the total cost of outsourced manufacturing
 Develop a cost model to assess feasibility before taking steps to outsource
 Customs, taxes
 Consider if match to your logistic concept
Ensuring compliance with environmental directives
 Develop an environmental compliance strategy for your products and ensure adequate product
documentation in case of an audit
Defining an exit path with your manufacturer
 Define how finished goods inventory, work-in-process and component inventory will be handled
 It would take months to identify a replacement, transfer tooling and components, and set up the new
contract manufacturer
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6. Manage product changes effectively
 Establish the “single point of truth”
 Define effective process to propose, analyze, and implement changes(who manages that “single point of
truth”, tools, use “as is,” rework, or scrap)
Define OTD limits
 Lead time for part w.o. coating may wary from 3 to 6 weeks
 Lead time for part w. coating may wary from 4 to 9 weeks
 Lead time for painted part may wary from 4 to 9 weeks (if paint available)
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7. Transfer project stream / Tasks Deliverables
Transfer project definition/Kick-off preparation (analysis) Project validated
Confirm accordance to the procurement strategy Project mandate
Confirm accordance to the category strategy and asses contractual status Project mandate review, timeline for potential shift
Asses resources needs and savings potential Feasibility and business potential
Define high level requirements for target supplier List of requirements
List of parts for transfer (IP, life cycle, homogeneity, permeability, surface quality, quantities) List with transfer candidates
Risk assessment (phase out suppliers, quality, etc.) Risk known, potential mitigations defined
Approve resources to the project according to the needs (no competitive projects) Project budget approved
Complete project charter Project released
Project launch (execution) Finding/recommending the right supplier Project execution started
Technical documentation update Documentation ready for RFP
Baskets definition List of packages for RFP
Asses incumbent supplier base in BSC Leverage potential of existing suppliers
Market research Long list
Sending out RFI/RFP Short list with potential preferred suppliers
RFQ (giving enough time for offering) Final candidates or parts & suppliers
Analyzing and presenting obtained results Results presentation
Supplier re/evaluation Supplier selected
Arranging audit including team size depending on the project size and scope Auditing team and schedule
Performing audit (including production, procurement, warehouse and quality department) Defined preferred supplier base
Introducing project in details to the supplier Confirmed supplier readiness
Supplier approval Supplier approved
Business case update Readiness and Go for execution
Shift of spends (implementation) - Ordering parts for transfer Project execution
ERP data preparation ERP data ready for shift
Ordering pilot basket Basked ordered, delivery confirmed
Technical support during order realization Improved understanding of MT requirements
Parts checking FAI report for each part
Parts functional testing and approval (pilot basket) Approval of each part
Validate business case Go for full shift of selected parts
Further cooperation Update contractual status
Signing contracts Contract signed
Reconfirming forecasts Delivering confirmed forecast
Further orders Further shift of spends
Lessons learned Project records
Define, analyze and apply improvements (documentation, processes) Project report
Present results and document for future projects Present results
Project closing Project completed