When to perform a Feasibility Review

S

steveb

#1
Feasibility Reviews

It states on page 16 4.2.3.3
"The supplier shall investigate and confirm the manufacturing feasibility of proposed products prior to contracting to produce those products"
When is it considered a contract?
 
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Howard Atkins

Forum Administrator
Staff member
Admin
#2
IMHO a contract is a purchase order that is approved by the supplier.
This means that the feasability review should be performed at some stage before the contract review and approval of the order.
I think that some of the questions are vital to be answered before the tender is submitted. This is for your protection.

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L

Laura M

#3
I've seen the feasibility review form used before submission of a quote and after submission of a quote. One effective approach (IMO)I've seen is to have on the quote "this quote subject to a feasibility review prior to acceptance of purchase order." In other words there may be assumptions built into the quote that require further engineering for feasibility. Investigating may take a considerable amount of time.
Some companies do not want to spend exorbant amount of time on the quote process when they receive maybe 20% back in actual orders.
 

Marc

Hunkered Down for the Duration
Staff member
Admin
#5
-> feasability review should be performed at some stage
-> before the contract review and approval of the order.

Or as a part of the contract review its self.

Typically there will be another feasibility review every time there is an engineering or process change. Of course, the the review may be limited with respect to the 'significance' of the change.

In addition, a design system should contain several points of feasibility review - particularly with complex and/or expensive products.

As to the main question, I agree with Howard:

-> IMHO a contract is a purchase order that is approved by
-> the supplier

as well as with Laura's comments.

The origin of this requirement, as I understand it, is from years ago (well, not really so terribly long ago) when a supplier would accept an order (contract) and too late in what is now known as APQP it turned out the supplier was 'hoping' to be able to pull everything together but, alas, couldn't. So - GM (or whichever) is 3 months from model launch and they find the supplier can not provide in spec parts or parts in quantities. Thus - the initial feasibility review is: Do we have the appropriate equipment / machinery? Do we have the capacity? Etc. etc. They want this all determined before a contract is signed.

In the QS implimentations I have done, feasibility was always a part of the contract review process for all intents and purposes.

Receive RFQ --> Feasibility Review -->
Respond to RFQ (ROM, Fixed-Price or whatever) --> Customer signs and returns copy as evidence of acceptance.

The quote (bid) is a 'contract' as soon as it is signed by the customer as Howard pointed out. As Laura pointed out herein, some aspects of the contract may be left 'open' for negotiation later. That is not unusual at all.

[This message has been edited by Marc Smith (edited 06 June 2001).]
 
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