During a direct materials data collections process the initial time commitment to gathering technical and qualitative data and developing a robust market basket pays off great dividends in time savings and alleviating confusion during the sourcing initiative.

Key steps include determining what specifications must be shared, if non-disclosure agreements (NDAs) are necessary to protect IP rights, gathering a complete set of designs from the technical team, and paying careful attention to the qualitative criteria of the product or supply base.

An accurate quote and achieving sustainable savings are the main objectives of most sourcing initiatives. In order to ensure that the supply base knows the product or service they're bidding on a detailed technical package must be compiled. The key tradeoff is deciding what specifications and documents must be shared and what you would like to leave out in order to manage intellectual property (IP) concerns. This is especially critical in regions such as China and India.

To some extend IP concerns can be addressed with NDAs. And, NDAs are always necessary if sharing engineering quality 2D or 3D mechanical drawings or electrical designs such as CAD drawings, STEP files, or Gerber files.

But, for less complex items you can consider drafting a table of the critical or key specifications which must be met to fabricate the component. Since materials are large price drivers a preferred materials and characteristics list along with acceptable alternate materials and even material specification documentation should always be included. Other items include primary fabrication process, secondary or finishing processes, and assembly processes to ensure supplier capabilities. To narrow down the supply base a component sizing, volumes, and ship schedule table is necessary. You may also consider including list of acceptable deviations and no-go criteria to uncover possible cost saving alternatives.

The next step consists of gathering the complete set of all of the pre-selected designs contained within the market basket into a technical package for the suppliers. If it's a large market basket you'll have to select representative drawings to determine if the supplier is capable of manufacturing that part type at a competitive price. This includes tolerances and manufacturing processes divided by commodity group. But, there can be enough feature variability within a single product group to warrant multiple drawings in cases such as machined shafts, couplings, non-flat feature items, and complex cavities.

The last key factor which is commonly overlooked is developing a scope of work for qualitative criteria. Establish qualitative requirements for prospective suppliers includes reviewing service levels, technical support, certifications, required account management, reporting capabilities, and any other commodity group specific supplier selection criteria. Most critical factors can be determined during stakeholder interviews and reviews of previous sourcing efforts. Logistics are also a key area and include order placement, lot traceability, packaging, shipping, and stocking.

As with any sourcing effort key factors vary by commodity group, but by ensuring careful attention is paid to critical specifications, IP concerns and NDAs, technical design files, and qualitative criteria the overall timeline of the initiative can be shortened and supplier confusion avoided.
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