MRP Process Sample Clauses
The MRP Process clause defines the procedures and requirements for Material Requirements Planning within a contractual relationship. It typically outlines how materials and components are forecasted, ordered, and scheduled to ensure timely production and delivery, often specifying the responsibilities of each party in providing forecasts, lead times, and order confirmations. By establishing a clear framework for managing material needs, this clause helps prevent supply chain disruptions and ensures that both parties are aligned on inventory and production expectations.
MRP Process. (1) SANMINA shall take the Order and Forecast and generate a Master Production Schedule (“MPS”) for a [**]-month period in accordance with the process described in this Section. The MPS shall define the master plan on which SANMINA shall base its procurement, internal capacity projections and commitments. SANMINA shall use CUSTOMER’s Order to generate the first [**] months of the MPS and shall use CUSTOMER’s Forecast to generate the subsequent [**] months of the MPS.
(2) SANMINA shall process the MPS through industry-standard software that will break down CUSTOMER’s Product requirements into Component requirements. When no Product testing (in-circuit or functional testing) is required by CUSTOMER, SANMINA will use commercially reasonable efforts to schedule delivery of all Components to SANMINA [**] business days before the Products are scheduled to ship to CUSTOMER; in the event Product testing is required, SANMINA will use commercially reasonable efforts to schedule delivery of all Components to SANMINA [**] business days before the Products are scheduled to ship to CUSTOMER.
(3) SANMINA will release (launch) purchase orders to Vendors (including other SANMINA facilities) prior to the anticipated date that the Components are needed at SANMINA. The date on which these orders are launched will depend on the lead time determined between the Vendor and SANMINA and SANMINA’s manufacturing or materials planning systems. All purchase orders to Vendors that result in excess of [**] ($[**]) Dollars on a line item basis shall be subject to review and approval by CUSTOMER before release to Vendor by SANMINA. CUSTOMER shall promptly review and approve such purchase orders or provide SANMINA with its reasons for withholding approval.
(4) A list of all Components with lead times greater than [**]days (or the Order period, if the Order period is less than [**] days) (“Long Lead-time Components”) is set forth in Exhibit B to this Agreement and/or has previously been provided to CUSTOMER. SANMINA shall use reasonable efforts to update the list of Long Lead-time Components every [**] and present an updated list of Long Lead-time Components to CUSTOMER at the time SANMINA presents the CUSTOMER with the Excess List and Obsolete List described in Section 4.2(e). Each revised Long Lead-time Item list shall be deemed an amendment to Exhibit B, whether or not it has been formally designated as such. In the event SANMINA fails to present an updated list of Long Lead-time Compone...
MRP Process