Data-Driven Subcontract Management
How many times has your customer demanded that you meet with their top executives because one of your subcontractors did not provide what you expected?
How much time and effort have you spent preparing specialized charts describing the status of your subcontractor efforts?
How often have you wished that you had received enough early warning about the status of a subcontract before a problem became critical?
What is “Data-Driven Subcontract Management” and how can it be used to deliver better answers to the above questions?
Today, significantly more product development activities are carried out by subcontractors. This trend began over a decade ago and will assuredly continue as companies focus upon core competencies in an increasingly global and aggressive marketplace. The work your subcontractors do is often critical to the final product you deliver. As a result, all agencies and OEM’s (e.g., DOD, FDA, EASA, DOE, Airbus, Boeing, Honeywell, BAE etc.) require that every top-tier supplier provide assurances that they are managing their subcontractors with a process that will assure complete control and transparency of the activities and product quality of the subcontractor.
Despite that, however, subcontract management is frequently not done systematically. The author and other members of ConsuNova have worked with over one hundred companies who outsource or subcontract key engineering and manufacturing activities. Clearly there are “best practices” which leading OEM’s and subcontractors can employ. However, all too often the subcontract manager uses methods that were “picked up” during his/her career. Executive management attempts to make the process more structured, but few standardized methods exist and even fewer regulations. The methods subcontract managers use to control, measure and motivate subcontractors are too often more an art than a controlled process. This whitepaper introduces key subcontracting processes to improve and control the subcontracting activity.