Alternate Parts and Why They’re Needed in Manufacturing

What Are Alternate Parts?

Alternate parts in a manufacturer’s supply chain refer to substitute components that can be used in place of the original specified parts without significantly affecting the performance, quality, or functionality of the final product. These alternatives are typically included in supply chain planning to mitigate risks associated with shortages, lead time delays, or supplier issues. Having alternate parts ensures that production can continue even when the primary parts are unavailable or difficult to procure.

Alternate parts in a supply chain can be broken out into five types:

1. Form, Fit, and Function (FFF) Alternatives: These alternatives may come from different suppliers or manufacturers but have the same form (physical size and shape), fit (how it interfaces with other parts), and function (what it does in the system).

2. Multi-sourced Parts: Components sourced from multiple suppliers, ensuring that a manufacturer is not dependent on a single source for critical parts. Multi-sourcing reduces vulnerability to disruptions.

3. Regulated/Certified Parts: Certain industries (e.g., aerospace, automotive, medical) may require that alternate parts comply with specific regulations or certifications. These alternatives undergo strict approval processes to meet safety and quality standards.

4. Re-engineered Parts: These are parts that have been modified or slightly redesigned to meet the same specifications as the original part. They can be used when the original part is discontinued or becomes obsolete.

5. Supplier-Recommended Alternatives: In some cases, a supplier may recommend alternate parts that they produce or distribute as compatible replacements. These are often proposed when the original part has long lead times or stock issues.

Using alternate parts helps manufacturers maintain continuity in production, reduce dependency on a single supplier, and avoid costly delays. However, careful vetting is needed to ensure that alternate parts meet quality, regulatory, and performance standards.

Benefits of Alternate Parts

Maintaining a list of alternate parts offers several key benefits, primarily centered around risk management, operational efficiency, and cost savings. Here is a more indepth look at the main reasons manufacturers maintain such lists:

1. Risk Mitigation

Supply Disruptions: Supply chain disruptions, due to natural disasters, geopolitical issues, strikes, or supplier shutdowns, can halt production if critical components are unavailable. Alternate parts provide a backup option to continue operations.
Supplier Issues: Single-source suppliers might face unexpected problems like bankruptcy, quality, or their own supply chain issues. Having alternate parts reduces reliance on a single supplier.

2. Shorter Lead Times

Faster Procurement: Sometimes, the primary supplier may experience longer lead times, especially if demand spikes. Alternate parts can be sourced from suppliers with shorter lead times as necessary. This helps keep production on schedule.

3. Cost Management

Managing Price Variability: Prices for components can fluctuate due to changes in raw material costs, demand, or economic factors. Alternate parts might offer more cost-effective solutions when the primary part becomes expensive.
Negotiation Leverage: Knowing there is an alternate option can provide leverage when negotiating prices or contracts with primary suppliers.

4. Avoiding Internal Stockouts

Inventory Management Options: Alternate parts help prevent production downtime from missing parts, which can lead to production delays and missed deadlines. By having approved substitutes, manufacturers can more easily manage inventory shortages.

5. Mitigation of Obsolescence

Dealing with Discontinued Parts: As technology advances or as suppliers sunset certain components. The ability to quickly shift to an alternative ensures that production doesn’t suffer.
Increasing Long-Term Product Support: For industries that require long-term product support (e.g., aerospace, medical devices), having alternate parts ensures that products can be maintained or repaired even when original parts are no longer available.

6. Flexibility in Design

Accommodating Engineering Changes: Products evolve over time due to design improvements, cost optimization, or changing regulatory requirements. Alternate parts allow manufacturers to adapt to these changes without overhauling their entire supply chain.

7. Supplier Diversification

Utilizing a Multi-Sourcing Strategy: Alternate parts support a multi-sourcing strategy, where manufacturers maintain relationships with multiple suppliers to reduce dependency on any single one. This enhances supply chain resilience.

8. Business Continuity Planning

Emergency Preparedness: In cases of unforeseen events, like pandemics or major supply chain disruptions, a list of alternate parts helps ensure that production can continue with minimal downtime.

9. Quality Control

Improved Quality through Competition: Alternate parts from different suppliers can sometimes offer better quality or performance than the original part, leading to product improvements.
Meeting Compliance with Standards: Having alternate parts that comply with industry regulations ensures that production isn’t hindered by compliance issues if a primary part fails certification.

10. Scalability and Production Expansion

More Responsive Capacity Management: If the production volume needs to increase rapidly, relying on just one source of parts might limit scalability. Alternate parts allow manufacturers to scale production more efficiently.

Maintaining a list of alternate parts improves supply chain resilience, minimizes risk, and helps manufacturers respond swiftly to market changes, supply disruptions, and cost pressures.

Building a List of Alternates

Maintaining an alternate parts list is a structured and collaborative process that ensures alternate components are properly identified, vetted, and documented for use in manufacturing. Specifically, it requires partnership between product engineers and buyers to arrive at a list that satisfies both departments’ needs. Below are the typical steps involved in maintaining an alternate parts list:

1. Identification of Potential Alternate Parts

Through Internal and External Sources: Alternate parts may be identified through currently used suppliers, procurement teams, engineering teams. These could stem from prior projects or through the initial specifying process. Suppliers might also propose alternatives when lead times are long, prices increase, or original parts become unavailable.
Ongoing Market Research: Procurement teams actively monitor the market for potential alternatives by researching new suppliers, components, and technology advancements that meet the necessary specifications.

2. Engineering and Technical Evaluation of Potential Alternatives

Specification Matching: Engineering teams evaluate potential alternate parts based on Form, Fit, and Function (FFF). The part must meet the required design specifications, such as size, material, performance, and compliance with technical standards.
Compatibility Check: The proposed alternate part is checked for compatibility with existing product designs, systems, and other components. This ensures it can be seamlessly integrated into the production process without causing downstream issues.
Prototyping/Simulation: In some cases, the alternate part may be tested in prototypes or virtual simulations to assess its impact on the overall product design.

3. Part Testing and Validation

Performance Testing: The alternate part undergoes rigorous performance testing to ensure it meets the required operational standards. This could include stress testing, durability tests, and environmental tests (e.g., temperature, humidity).
Quality Assurance (QA) Testing: QA teams assess the quality and reliability of the alternate part, ensuring it meets the same standards as the original part. This step is crucial for industries with strict regulatory requirements (e.g., aerospace, automotive, healthcare).
Regulatory Compliance: If the alternate part is subject to industry regulations (e.g., RoHS, REACH, FDA), it must be validated for compliance. Regulatory certificates and documentation are often required before an alternate part is approved for use.

4. Supplier Qualification

Supplier Evaluation: If the alternate part comes from a new supplier, the procurement team conducts a thorough supplier evaluation. This includes assessing the supplier’s manufacturing capabilities, delivery metrics, quality management systems, certifications, and financial stability.
Supplier Audits: For critical parts or regulated industries, manufacturers may conduct audits of the supplier’s facilities to ensure they meet specific quality and safety standards.

5. Documentation and Approval

Engineering Change Order (ECO): Once an alternate part is identified and approved, an Engineering Change Order (ECO) is issued. The ECO formally documents the change in the Bill of Materials (BOM), product designs, and other relevant documentation. It also specifies under what conditions the alternate part can be used (e.g., as a permanent replacement or only in case of shortages).
Bill of Materials (BOM) Update: The BOM is updated to include the alternate part as a valid substitute for the original part. The MRP or PLM system is also updated with new part numbers, supplier details, and any relevant documentation.
Approval Workflow: The alternate part goes through an internal approval workflow, where relevant stakeholders (e.g., engineering, procurement, quality, regulatory, and supply chain teams) sign off on its use.

6. Inventory and Procurement Integration

MRP & PLM System Integration: Once approved, the alternate part is entered into the part management system. Product development or contract engineering houses typically use a Product Lifecycle Management (PLM) system to manage this data, while more production-oriented organizations prefer a more robust system like a Material Requirements Planning (MRP) system that usually contains PLM aspects. These systems track inventory levels and procurement status, ensuring that the alternate part can be ordered if the primary part is unavailable.
Approved Vendor List (AVL): The supplier for the alternate part is added to the AVL, ensuring that purchasing teams can source the part from qualified suppliers.
Updating Inventory Strategies: Based on risk and lead time assessments, the supply chain team determines whether the alternate part should be stocked in inventory or ordered only when necessary. Some manufacturers may keep safety stock of alternate parts in case of emergencies.

7. Production and Quality Monitoring

Production Trials: Before full-scale production, manufacturers may run a pilot production batch using the alternate part to ensure there are no issues with integration, performance, or quality.
Quality Control Monitoring: Once in use, quality control teams continuously monitor the performance of alternate parts in production. They track defect rates, failures, and any potential impact on overall product quality.
Supplier Performance Reviews: Suppliers of alternate parts are regularly reviewed for quality, lead time, and reliability to ensure ongoing suitability for use.

8. Continuous Improvement and Review

Periodic Review: The alternate parts list is periodically reviewed by the procurement, engineering, and supply chain teams to ensure it remains up to date. Suppliers are re-evaluated, and part performance data is analyzed.
New Alternatives: As market conditions change or new technologies become available, the list of alternate parts is continuously updated. This helps manufacturers stay agile and ready for any supply chain disruptions.
Feedback Loops: Feedback from production, customers, and suppliers is integrated into the process to improve the alternate parts list and ensure it aligns with operational needs.

While the above list is certainly complex, certain industries may have additional steps in the alternate part sourcing process. In more regulated industries, certain compliance and traceability records need to be managed. This might require detailed audit trails and change management documentation which can be provided to regulatory bodies or customers when summoned. 

By following these steps, manufacturers ensure that alternate parts are carefully vetted, documented, and integrated into the production process, maintaining quality and minimizing disruptions while enhancing supply chain resilience.

Connecting the Dots

Maintaining alternate parts lists ensure operational continuity and resilience in the face of supply chain disruptions, such as supplier issues or material shortages. By having on-hand a list of pre-approved substitute components, manufacturers can quickly adapt to changes, minimize downtime, and reduce dependency on single sources. This practice also allows for cost management, improved inventory control, and compliance with regulatory requirements, ultimately supporting product quality and performance while enhancing flexibility and responsiveness to market demands.

Like any other complex process, an efficient and useful alternate part process needs to manage large amounts of data to be truly effective. It also needs to connect alternatives to current parts in a manner that makes the information easily accessible and in the right context. Providing clear communication across departments is also essential, as well as ensuring everyone is informed and processes are followed accurately. 

These aspects all but require a purpose-built management system. For most organizations, that’s a PLM system like Aligni or a more robust system like Aligni MRP that also connects this data extensively with both production and supply chain operations. These systems are built to be the hub where data is not only held but shared between groups within an organization, ensuring everyone is working from a single source of truth.

If you’re ready to reduce downtime and stockouts with a more robust part and material strategy, it’s time to sign up for Aligni!