Secondary Source Bring up Cost Metrics and Net Present Value Calculation
Secondary source bring-up generates positive Net Present Value when unit cost savings and risk offsets exceed fixed tooling and qualification expenses.
Engineering Change Authorization
Meaning
A formal approval document permits the implementation of a specific modification to a product design or production process after the baseline has been established. This control workflow, known as an engineering change authorization, acts as the final gatekeeper before any revision becomes active in the factory.
Impact Assessment
Engineers analyze the proposed modification to determine how it affects existing inventory and active supplier contracts. This evaluation checks electrical, thermal, and mechanical compatibility with current system enclosures. A cross-functional review evaluates whether the change introduces regulatory risks or violates mechanical tolerances.
Components already purchased may require rework or immediate write-off depending on the implementation schedule.
Release Trigger
The completion of a successful test run on updated prototypes initiates the official change sequence. Factory managers receive the approved documentation to update their manufacturing instructions and bill of materials. Supply lines are updated with the new part numbers to prevent obsolete designs from reaching the assembly line.
Field units are updated during subsequent maintenance cycles if the modification addresses an active safety or reliability concern. Documentation travels to the quality assurance team to update the master inspection checklist for all subsequent production batches.
Financial Liability
Scrappage costs and tooling re-qualification charges must be calculated and assigned before the change is signed off. The purchasing department negotiates with the contract manufacturer regarding who carries the cost of obsolete sub-assemblies. This review of financial exposure ensures the change does not exceed the remaining budget of the product generation.
Authorizing the document releases the capital needed for updated injection molds and printed circuit board stencils.