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OUTSOURCING PLAN

If our group decided to outsource the pistons to an external supplier we would have to develop a thorough plan to carry out this recommendation.

Before committing to negotiations with the supplier, FlexCon should perform an analysis of the supplier as a whole. Performing qualification of supplier selection should include the following:

Price/cost competitiveness

Quality

Delivery Performance

Financial condition

Engineering and technical competence

Management of its own supplies

Management capability

Ability to work with the customer

Potential for innovation

First, it should be determined how many years the supplier has been in existence. Then FlexCon should review the financial stability of the company before any further negotiations are considered. Also, the supplier's reputation must be taken into consideration. Due to FlexCon having such a good reputation, they need to ensure that they are in business with companies that maintain the same values to ensure their reputation is maintained. During the supplier review, FlexCon should also attempt to gauge the reliability of the supplier. Professional publications, referrals, etc., should be obtained to ensure that the supplier can meet delivery terms, product specifications, quality expectations, etc.

Quality is large part of FlexCon's reputation, and therefore the company should ensure the supplier has the appropriate quality control measures in place in order to enable FlexCon to maintain their status as a high quality piston manufacturer. Quality could be evidenced by the supplier by providing any quality certification standards achieved. The companies should include within negotiations a quality process, such as collaborative quality efforts to eliminate quality related issues or in-house testing to flag defects. Even though the process technology is considered to be mature, FlexCon should also ensure that the supplier maintains a focus on research and...