North Eastern Company (NE Company)* has seen their orders increasing recently.  For the most part, they have been able to stay ahead of demand and get sufficient inventory to complete their orders.  However, there are many components that they cannot get fast enough to meet the requested deliveries.  For many of the shortages, they have better parts (higher voltage, tighter tolerance, gold leads, etc) available under separate internal part numbers, but don't have an easy way to setup, track, and use alternates.

Their current part number policy is to have all parts with the same form, fit, and function listed under a single internal part number regardless of the number of manufacturers that produce that component.  While they want to procure the least expensive approved manufacturer for each component, sometimes using a more expensive component to finish an order is more economical than waiting for the less expensive component.  At least, it can be if it isn't too difficult to use the alternates in the system.

How can NE Company identify potential alternates in their system?  Because they will still need the customer's permission to use a better part, how do they track which customers have given this authorization?  Once an alternate is approved, how do they notify purchasing and kitting of the alternates and ensure that they are used only if the less expensive part is not available?  What impact will using alternates have on their standard costs?

*Name has been changed