Wednesday, March 16, 2011

Form, Fit & Function

Many times Suppliers may want to make changes to their Product as long as it doesn’t impact the “form, fit or function”. I don’t recommend agreeing to such changes for a number of reasons.

If what you are buying will be used in another product or in conjunction with another product you always need to be concerned with whether or not the changed product will work in your specific application. The Supplier is only testing to make sure that their product meets the same functionality. It’s common, especially with items in the electronics industry, where you could have two products that have the same specifications where one works in an application and the other doesn’t. If there is no guarantee that the modified Product will work in your application, you don’t want it changed.

 “Form, fit or function” is only a minor limit on the type of changes that can be made. Other types of changes can significantly impact the value of your purchases. For example “form fit and function” would allow the Supplier to make changes in the materials used and significantly cheapen the product. It would allow changes to the process used which could impact the quality of the Product. If the required reliability is not spelled out in the Specification “form fit or function” would allow the Supplier to make changes that impact the reliability of the Product, which impacts your life cycle cost.

Many times the Buyer’s quality process may require that the Buyer re-qualify their product any time there is a change and that costs money. You don’t want to give the Supplier a right to do things that can keep costing you money to make sure there isn’t a problem.

If you must agree to allow a Supplier to make changes:
1.     Make sure you have sufficient time in advance of the change to determine whether a change will be a problem or determine and implement an alternative strategy
2.     If a change presents a problem, you may need to have the Supplier continue to provide the existing product or provide you with the ability to make a last time buy of the existing product.
3.     Any change that reduces the value you receive or increases your risk should be subject to renegotiation of both the price and any applicable terms.

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