Original Date: 06/29/1989
Revision Date: 01/18/2007
Best Practice : Subcontractor Teaming
Standard Industries has made innovative use of excess plant space to provide a unique teaming arrangement with two suppliers. A machine shop and a cable/harness fabricator rent excess factory floor space from Standard. The result is a symbiotic relationship benefiting both Standard Industries and the tenant companies. In return for a nominal rent, the tenant companies provide priority service to Standard at pre-agreed hourly rates. This practice guarantees a quick turnaround time on jobs. Communicating requirements and resolving problems is easier having suppliers located on site.
This teaming arrangement gives Standard Industries significant production capability without associated overhead. As preferred suppliers, the tenants are assured substantial business from Standard Industries. Although Standard has its own machine shop, the tenant shop can handle overflow work and provide skilled machinists using state-of-the-art machinery. This arrangement also provides entrepreneurial associates a beneficial start-up opportunity with minimal risk and a built in market.
The company is seeking other appropriate situations that compliment Standard Industries' operations. The company also rents excess warehouse space to several other unrelated businesses thereby providing income and productive use of space. If needed , that space is then available for expansion.
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