RIX Industries Flow Downs

9/17/2007

Description:

COLLABORATIVE PERFORMANCE MANAGEMENT

Clause:

COLLABORATIVE PERFORMANCE MANAGEMENT(This clause is superseded in its entirety in the event a Management RequirementsDocument is incorporated in the contract).When requested in writing by Buyer due to a performance concern, Buyer and Sellershall work together to define a mutually agreed upon set of data that will be used tosupport the successful execution of the contract and to achieve program initiatives. Sellershall submit reports or data that have been mutually agreed upon by Seller and Buyer.Seller’s existing format may be acceptable.Performance areas requiring data may include, but are not limited to:1. Quality and Delivery. Expected reports or data may include:• Root Cause and Corrective Action• Recovery Plan/Production Milestone2. Risk Management. Seller shall assess the likelihood and consequence of risks relatedto schedule, cost, technical and quality. Seller is encouraged to proactively communicatesignificant issues that affect performance and to solicit Buyer assistance as needed.Sample data or reports may include:• Mitigation plan, schedule and status• Staffing and succession plans• Contingency plan for work stoppage3. Sub-Tier Supplier Management. Buyer expects Seller to have a robust sub-tiermanagement plan. Data may include:o Process to perform Source Selectiono Process for flowing down requirements and ensuring adherenceo Metrics used to track sub-tier supplier quality and delivery performanceo Raw Material/Standard procurement plan4. Continuous Improvement/Cost Reduction. It is expected that Seller will strive forcontinuous improvement. Seller and Buyer shall each identify cost reduction andcontinuous improvement opportunities and work together for implementation. Bothparties are to determine the amount of savings and share in the savings afterimplementation. Examples of data demonstrating continuous improvement and costreduction may include:o Yearly strategic plan with defined goals (e.g. capital expenditures,personnel, facilities)o Cost reduction goals and targetso Lean Strategy with objectives, schedules and report out data (Sellerdirected or jointly conducted)o Total Cost Performance Review (can include overhead, man hours,production and support 5. Capacity/Rate Readiness/Operations. Buyer may need to evaluate Seller’s currentand future capacity. Data required may include:a. Capacity chartsb. On-site validation of work in progressc. Shop Flow AnalysisThis clause is not a condition precedent to Buyer’s right to terminate or cancel thecontract nor does it constitute Buyer’s waiver of Seller’s obligation to strictly adhere tothe shipment or delivery schedule or other requirements of this contract.