For Electronic Contract Manufacturers, it is nearly impossible to completely avoid alternate part numbers.  Tight production schedules and restricted material streams make it important to have a good method for tracking and managing alternate part numbers.

Before implementing an alternate tracking system, it is important to understand how you will define an alternate.

The method you use will depend in large part on how you have your part numbers setup. If your components are setup with all parts having the same form fit and function under a single internal part number, then an alternate is likely to be better in some way (i.e. tighter tolerance, higher voltage, etc).  If your parts are setup for each manufacturer, customer, or similar grouping, then an alternate may be just another internal part number for the exact same part.

Ideally, your numbering setup should reduce the number of part numbers in your system and the frequency with which you have to use alternates.

Regardless of your setup, the three main considerations for you alternate part number tracking system are:

1. Visibility of Possible Alternates - Users must know that an alternate is available/approved if they are going to use it.  Without clear visibility of these alternates, they might as well not exist.
   
   
2. Use of Alternates - If an alternate is available and the user knows it exists, they must be able to easily use the alternate part.  A system that makes using the alternate too difficult may not prevent the user from using the alternate, but it increases the likelihood that the use will not be properly recorded and accounted for.
   
   
3. Accounting for the Cost of Alternates - Once the user pulls the alternate, the system should provide visibility of the use and the cost differences because of its use.  This can be done manually, but this is not practical, especially if alternates are used more frequently.
   

ManEx has some important tools to aid in alternate part number setup, usage, tracking.  Although there are some significant hurdles to over come, current features go a long way aid manufacturers in this area.  Future upgrades will continue to improve this process as well.

On the surface, the topic seems straight forward and should be easy to implement. However, a more in-depth analysis reveals a few key questions that need specific answers. For example, when and why would MRP use alternates? Will each manufacturer answer that in a different way? How does this apply to all manufacturers? If alternate parts are used, what impact would that have on the actual cost of the assembly, on the standard cost of the assembly? If alternates are frequently used, should the cost of the alternates be factored into the product pricing? If alternates are frequently used, should they be considered alternates? And the list goes on.

Despite these tough questions, ManEx has provided a way to manage each of the key topics relating to alternate parts.

1. Visibility of Possible Alternates - ManEx allows users to list alternate parts for each item on every BoM.  This is for reference only and merely provides visibility of possible alternates.  However, if alternates are used more than rare occasions this alone is not sufficient to meet users needs.
   

   Additionally, users can setup a part manufacturer under the internal part number that ties to another internal part number, or related customer part number.  If the alternate customer part number is used, then the customer AVL can be applied as well.  This notifies purchasing, kitting, and production of possible alternates and allows the alternates to be used in place of the original as decided by the user.

2. Use of Alternates - If alternates are rare and/or the qty using the alternate is large enough, users can use the effective and obsolete dates to turn off the original part and add the alternate to the BoM. .
   

   In most situations, the suggested method is to leave the BoM as originally specified and issue the alternate part to the kit.  Because the AVL from the original part indicates the alternate that can be used, kitting will know to look for the alternate when the original isn't on hand.  Kitting should also mark the original as complete in kitting.  This will remove the MRP demand for that part and prevent a duplication in demand and usage.

3. Accounting for the Cost of Alternates - By recording which parts were actually used in the kit, the system will have an accurate history of part usage, material costs for the kit will reflect any part pricing differences, and standard costs will not be affected by the alternate.
   

While this method is not the only solution, it does seem to be the most universally applicable and acceptable.  It also adds some efficiencies to the process when alternates are needed.  There were other methods suggested that would work on a more specialized situation.  If you are interested in learning more about those ideas, let me know and I can provide greater detail.