1. Outsourcing Strategies http://www.managementsupport.com

2. The Relationship Between Quality and Costs
Lowers
Rework and
Scrap Costs
Increases
Productivity
Warranty and
Rework Costs
Improves
Performance
Reliability
Service Costs
Manufacturing
Costs
Profits
Figure 16.1

3. Product Factors Value-to-weight ratio.
Influences transportation costs.
High value-to-weight.
Electronic components.
Low value-to-weight.
Bulk chemicals.
Does the product serve universal needs?
Industrial products.
Modern consumer products.
Handheld calculators.
Personal computers.

4. Possibilities TECHNOLOGY DESIGN MANUFACTURING SERVICE Components
Modules
Products
Electrical
Mechanical
Industrial
DFX (test, manufacturing, supply chain, etc.)
Systems
New product introduction
Prototyping
Subsystems manufacturing (e.g., PCB assembly)
System assembly
Logistics and fulfillment
Repair
End-of-life product management

5. Contract Development Operational Discussion Volumes Final AVL
Schedule and timeline
Forecasts
Cycle times
Lead times, especially long lead time parts
Seasonality
Quality expectations & other metrics
Change orders
Kanbans
Semi-finished goods
Stocking
What if there are failures?

6. Engineering Change Orders (ECOs) and Change Management
Initiating An ECO
Change requests can be originated by the customer or CM, typically at the weekly meeting
Typical issues include:
Product revision
Component feed format change [e.g., tape & reel  tray]
Supplier change
Replacement of part X due to low ICT yield
The CM Response
CM reviews now-obsolete material on hand or on order
We develop a response proposal according to the urgency of Customer need