Scenario 7 - Contract Manufacturing, Prime Contractor Buys Components, Pre-2000
Status: To be recast.
Renamed from "Forecast/Planning Model 5" to Replenishment Model 7 as part of recast of Pre-2000 Version
A Forecast Models (Balloted and Ratified by Membership,
Multi-party Replenishment Scenarios are
typically serial two-party scenarios with a twist or two. When a Prime Contractor (PC) outsources
manufacturing to a Contract
Manufacturer (PC), a specialized pre-order process for quoting the cost
of manufacturing complex assemblies is used,
Pre-Order Model 3 - Contract Manufacturing Process. From there, a
series of appropriate two-party replenishment processes are used, with some
If a CM is ordering parts directly from the PC's suppliers:
This is especially useful when
replenishment has been forecasted by a PC, and is subsequently ordered by
a CM. Otherwise, the supplier may have problems matching the firm
order to forecasted demand, particularly if the forecast has been used to
allocate material to the forecasting party.
The CM may provide a copy of the forecast data to the PC to give the PC
visibility of total demand.
If the PC is aggregating total
demand for several manufacturing sites, including the PC's own manufacturing
sites and a CM's manufacturing sites, and providing the aggregated demand to
the CS, e.g. for negotiating pricing or for securing assurance of supply, the
PC may include identification of the CM in a forecast.
If a PC is ordering parts from a CS that are to be drop-shipped to a CM:
The PC may include identification of the CM's
part number and/or
so that the CS may include those references on any documents and packages
shipped to the CM.
From the CS's point of
view, the CM is another ship-to address of the PC's. The PC should establish a ship-to
location code for the CM's address, if that address is to be used
Since the buyer and consignee (ship-to party) are not one and the same,
an appropriate Shipment Model should
Both the PC and the CM should be notified of the shipment. The
CS may send the Ship Notice to the PC and send a copy to the CM;
alternatively, the CS may send the Ship Notice to the CM, and the CM may
forward a copy to the PC.
The CM should send a Receipt Advice to the PC as proof of delivery.