SCMH Section 7.1.

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Revision Letter: D
Revision Date: 12 OCT 2106
www.iaqg.org/scmh Section 7.1

Work Transfer Management Guidance

Table of contents

1. Introduction

1.1 Purpose and Scope

1.2 Definitions

2. Work Transfer Process Management Process

2.1 Gate Review and Decision Process

2.2 Approval Authority

2.3 Responsibilities of the Work Transfer Leader

2.4 Protocols

3. Phase I – Proposal & Feasibility Work Transfer

4. Phase 2 – Project Launch / Intermediate Project

5. Phase 3 – Detail Planning

6. Phase 4 – Execution of Plan

7. Phase 5 – Transfer of Work Evaluation and Closure

8. Forms and Templates

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1. Introduction
1.1 Purpose and Scope

Aviation, Space & Defense companies continuously change the source of supply or manufacturing of a
component, a component package or assembly across a company or its external supply chain.

Such movement of the work (products and associated activities) from one manufacturing site to another
(internal or external) is referred to as “Work Transfer”.

Work Transfers often cause On Time / On Quality issues because they are not properly managed.

The purpose of this section is to provide guidelines for the exercising of effective risk and management
through a structured gated approach, ensuring appropriate actions are launched and decisions are made at
the appropriate time and by the right level of management.

Possible reasons for deciding to launch a transfer of work include;

 Capacity increase

 Procurement strategy (e.g. Need for second source to secure the supply chain)

 Cost reduction

 Performance improvements

 New technology

1.2 Definitions

There are different types of Work Transfers, which depend on the locations of the activity before and after the
transfer;

 From a customer (currently the manufacturer) to its supplier: Make to Buy

 From a supplier to its customer (becoming the manufacturer): Buy to Make

 Change from Supplier A to Supplier B: Buy to Buy

 Change of site in same organization: Make to Make

Note: These types of transfer are equally applicable to any level of sub-tier suppliers.

Transition Team-The Transition Team consists of multi-discipline members as determined by the

organization’s structure. The Transition Team supplies the needed information to the Gate Review Committee
so they may make the most effective decision. The Transition Team is responsible for ensuring that all
required actions are performed at each phase. The Transition Team gathers the information required by each
phase and prepares a summary providing all pertinent documentation to the Gate Review Committee at the
end of each phase.

Gate Review Committee-The Gate Review Committee also known as the Approval Authority has the
responsibility to make the appropriate decision at each Gate Review. The Gate Review Committee is a
multi-discipline committee formed of members from various departments and stakeholders throughout the
organization. The members are selected based on perceived risks, applicable regulatory or legal
requirements, technical complexity, financial repercussions and criticality of the product.
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Work Transfer Management Guidance

The chairperson of the committee has the appropriate level of authority to make the “Go”, “Proceed with
Actions”, or “No-Go”, decision required after each phase at each gate review. Department representation
should include: Quality, Manufacturing Engineering, Planning, Purchasing, Engineering, Program Managers,
Business Development, Contract, Legal, or others as deemed necessary.

2. Work Transfer Management Process

2.1 Gate Review and Decision Process

The successful transfer of work from one site to another is dependent on a phase-gated review process.

This section provides guidance for transferring work from one site to another in 5 phases with 5 gated
reviews/decision points.

PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5

Proposal &
Feasibility
*Customer Requirements
understood
*Product Family Groups
Identified
*Resource Identified
*Non-recurring Costs
Identified
*Lessons Learned
*Recurring Cost Savings
Established
*Preliminary Project Plan
*Feasibility Pack- includes
Risk Analysis
*Gap Analysis
*Impact Analysis
*Business Case
*Leader Identified
*Project Charter
Complete
*Communicate to
Stakeholders
*Business Case Sign-off
Project Project
Detail Planning Execution of Plan
Launch Closure
*Project Launch *Authorities Notification *Complete Last Article *Production
*Intermediate *Suppliers Selected, Production Costs Inspection (LAI) Handover
Project Plan Confirmed *Process Validation *Activities
*Develop Baseline *Supplier Approval Approved Complete
Statement of Work *Knowledge Transfer *Phase Out Buffer Stock *Process
(SOW) *First Article Inspections (FAI) Planning Built Up by Offloading Site Capability
*Supplier Risk *Tooling Strategy / Planning *Manufacturing Process Substantiated
Assessments and *Quality Assurance Plan (QAP) Review (MPR) Completed *Metrics
Mitigation Planning *Last Article Inspections (LAI) Planning *Production Readiness Validated
Complete *Buffer Stock Strategy Review (PRR) *Lessons Learned
*Production Phase *First Piece Qualification (FPQ) Decision *Product Requalified (when *Project Closure
In - Phase Out + *Review Export Requirements applicable)
Inventory Plan *Release Approved Documents *Schedule/Cost/Quality
*Customer *Product Verification Method Goals on Track
Approval Initiated *Process Failure Mode Effects Analysis *Tooling Relocation
*Training Identified (PFMEA) Generated *First Article Inspections
*Documentation/ *Equipment at Destination Site Commissioned (FAI)
Tooling *Define Support Requirements *Destination Site Approved
Requirements *Education & On the Job Training (OJT) to Commence Production
Verified *Transportation Plan *Deliver Material Kits
*Set Requirements *Commercial terms agreed *Source Inspection
for Supplier *Supplier Industrialization Plan *Customer (final)
*Update Project Plan Acceptance Confirmed
*Customer Acceptance

Work Transfer Management Phases & Gates

Figure 1

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The gated review/decision points are designed to involve members from multiple disciplines within an
organization to answer the two following questions:
 Are we working on the right plan?
 Are we executing it well?

At each gate review the team makes one of the following decisions;
 “Go” (continue to the next phase)
 “Re-Direct” (need to obtain additional information to decide if the team can proceed to the next phase,
typically a new gate review is planned)
 “Proceed with Actions”
 “No Go” (stop the process because it is no longer viable or a better opportunity has surfaced).

The following should be considered during the Gate Reviews to evaluate the previous phase, and to make the
“Go”, “No-Go”, “Re-direct” or “Proceed with Actions” decision.
 Continued assurance that a program has a valid value proposition with proper execution
NOTE: Discovering early that a program is not viable and stopping it before significant resources are
wasted.

 Identification, quantification and resolution of risks regarding work transition

 Leadership accountability for the success or failure of programs

 Continued support of the transition team to resolve problems

 Validation of adequate resource allocations

When the Transition Team decides to “re-direct” or to “proceed with actions” to the next phase, any actions or
open items should be recorded on the appropriate gate review form (ref. www.iaqg.org/scmh SCMH Section
7.1.3), including noting the person responsible for completing each action. All actions determined to be
mandatory by the Review Committee on the checklist provided, cannot remain open at the start of the next
phase, those that are not considered mandatory are to be closed prior to or during the following phase gate
review.

2.2 Approval Authority

This gate review process is applicable to all changes, but the level of governance will vary depending on the
degree of assessed risk associated with the proposed change. Exit from each stage depends on a
satisfactory gate review by an appropriate Approval Authority. The gate review committee may decide to
proceed to the next phase with some open items requiring actions be completed. In this case, the actions
required to proceed to the next phase are documented within the appropriate Gate Review form (ref.
www.iaqg.org/scmh SCMH Section 7.1.3) and closed prior to the approval to proceed at the following gate
review.

The level of Approval Authority attending each gate review will depend on;
 the project category (Critical, Major, Minor) as defined hereafter;
o Critical - Strategic projects affecting a large portion of the resources across multiple sites
and/or organizations that provide critical operational and quality risks to the organization and
its customers. Typically, large work transfers i.e. site closure, site consolidation or operational
relocation, are critical.

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o Major - Likely to involve significant strategic activities involving product system transfers or
large component family transfers where there is a significant shift of the resources.
However, in these cases, the level of operational and quality risk is somewhat lower than that
for critical programs.

o Minor - These are likely to be smaller component families, which do not affect the resources of
a site or manufacturing strategy of the organization.

 the impact of decisions made during the gate review on the overall success of the work transfer
(gates 2 and 3 being generally more important on that aspect than gates 1, 4 and 5)

Figure 2 gives some guidance regarding the appropriate level of authority having to attend each gate review
when considering these two factors.

Project Category Level of attendance recommended

Senior Level Management Level Local Level
Critical All Gates
Major Gates 2 and 3 Gates 1,4, and 5
Minor All Gates

Approval Authority Required to Attend (Project Type/Classification)

Figure 2

 Senior Level - typically chaired by Managing Director or CEO (person responsible for organization)
but may be COO, Head of Program, etc. in large organizations where involving the CEO would not be
possible or realistic

 Management Level - typically chaired by Quality / Engineering Manager or Equivalent (person

responsible for applicable program)

 Local Level - chaired by someone delegated / empowered by the Quality and/or Engineering
Manager

2.3 Responsibilities of the Work Transfer Leader

The Work Transfer Leader is responsible for;

 establishing priorities and allocating resources. Additional responsibilities include, reporting work
transfer status to senior management, driving day to day execution, coordination of cross-functional
activities, budget management, and problem resolution / opportunities within the program
 ensuring that tasks and phase reviews are planned and conducted in a timely manner, and that all
necessary personnel are involved as required
 obtaining the relevant signatories at each phase scorecard review
 facilitating decisions at each phase

2.4 Protocols

The enforcement of predetermined protocols is essential to an effective and efficient review. The following are
suggested protocols for holding a gate review meeting;

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Situation Examples of Committee’s Responses

Gate Review Committee Member not available;

- if Chairperson, then …
- if permanent member, then …
- if key advisor, then …
Transition Team’s documents not available before
review
Transition Team has not adequately assessed risks
and/or provided a robust mitigation plan, and/or
completed the phase
Gate Review Committee Member is on the
Transition Team
Transition Team does not provide a clear
recommendation with required resources
The Transition Team's information is not
summarized at an appropriate level for decision
making
As soon as the transition team realizes that
progress of the work transfer project will deviate
from expected results (performances, costs, etc.)
and from decisions made in previous gates if the
transition continues
- postpone the gate review
- appoint a delegate
- postpone the gate review
Postpone the review
Automatic redirect decision
Member should take care not to impose their own
view and let other committee members challenge
his/her opinion before any decision is made
Automatic redirect decision
Review is stopped; Transition Team instructed to
improve presentation
The Transition Team Leader must contact the Gate
Review Committee to tell them that the process is in
trouble and that an interim gate review is necessary
to decide on options for the transition

Gate Review Protocols

Figure 3

3. Phase I – Proposal & Feasibility

The purpose of Phase 1 is to ensure the feasibility of any proposal to transition work brought forward by a
member of the organization with a focus on avoiding wasteful expenditure of organization resources. During
Phase 1, a work transfer project proposal is developed and presented to the Gate Review Committee,
appointed by the organization; a Project Charter is completed to authorize Phase 2 ‘Project Launch’.

The initial phase of any work transfer process must define the scope of the proposed work transfer. The
purpose is to gather sufficient objective information to enable a decision to proceed with the work transfer
during a gate review. The stakeholders will determine the necessary level of process governance to be
applied to the work transfer project, as described in paragraph 2.2.

Important note: The definition of a work transfer scope, where applicable, must also consider any items not
part of the serial production (e.g. out of production items relevant for the after-market sales).

The Gate 1 review checklist (ref. www.iaqg.org/scmh SCMH Section 7.1.3) is used to ensure all appropriate
data is gathered prior to the gate 1 review. Gate 1 is a review of the Phase 1 activities and is the completion
milestone of Phase 1, the committee must agree that the proposal and charter are clearly defined, and the
transition team is appropriately experienced and skilled to conduct the work transfer process. They should
also determine that the work transfer project aligns with company strategy. The approval to proceed with the
business case provides the necessary resources (people and budget) for the development of a business
case. When the business case is signed off the work transfer may proceed to the Phase 2 “Project Launch”.

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3.1 Proposal

The work transfer project proposal contains sufficient information to show potential sources of risks and to
identify any mandatory controls for the duration of the project. The Business Case & Project Proposal form
(ref. www.iaqg.org/scmh SCMH Section 7.1.3) should clearly state the proposed need for change and
identify;
 Recurring cost reductions
 Non-recurring costs (e.g. tools, administrative activities)
 Production family group
 Turn-time reduction
 Performance improvement
 Potential risks
 If Customer requirements are understood
 Any mandatory customer or internal constraints
 Lessons learned
o A review of previous work transfer projects
 The intended future state of the work transfer
 Multidiscipline transitions team members, including customer services / aftersales representatives
 Stakeholders
 Estimated date for the gate 1 review

The proposal should ultimately look to confirm alignment to a business strategy or business need. However,
changes can sometimes be driven outside normal business strategy (i.e. emergency work transfer). In these
instances, the work transfer project proposal must specify the reasons for change and possible particularities
justified by this specific context.

3.2 Preliminary Project Plan

The initial project plan should be developed as soon as the work transfer is envisioned. It should include
sufficient information to evaluate if it is reasonable to launch a feasibility study however, it is not necessary to
include all details at this early stage. The incorporation for the following elements could help with the
development of the preliminary project plan:
 Project description
 Objectives
 Purpose
 Deliverables
 Milestone
 Costs
 Risks
 Roles & responsibilities

3.3 Impact Analysis / Gap Analysis / Feasibility Study

For the supply chain, an impact analysis is the process of determining the goals or deliverables of a work
transfer, the impact of disruption to the organization and the resources required to ensure continuity in
operations within the organization. The main objectives of an impact analysis should;
 Identify the objective of the work transfer
 Establish the critical deliverables
 Identify critical resources
 Identify the impact of disruptions over time
 Determine the timeframe for resumption of critical operations

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 Establish a means for appropriate recovery strategies

The impact analysis identifies the gaps between the desired outcome of a business case and the
requirements of the work transfer.

The feasibility study is an assessment of the practicality of the proposed project. The following items should
be incorporated into the feasibility and risk assessment:
 The scope of the work transfer
 Feasibility study report
- Focus to the project
- Outline the alternatives
- Business alternatives
- Identify new opportunities
- Identify reason to not proceed
- State the probability of success
 Risk assessment (ref. www.iaqg.org/scmh SCMH Section 7.1.3)

3.4 Business Case

A business case is a detailed study of all aspects of the proposed work transfer project. The business case is
used to confirm the alignment of the work transfer with the organization’s strategy. The business case justifies
the resources necessary to implement a work transfer project, provides a high-level view of the entire project
and delivers a consistent message to all. The business case is used at the gate review to gain authority to
proceed with a project. The following examples are activities that should be considered in developing a
business case;
 Describe the objective of the work transfer and required implementation efforts
 Identify activities of the project and major milestones
 Estimate anticipated costs of work transfer implementation
 Identify non-recurring and recurring maintenance or administrative costs
 Identify basis of estimate for proposed cost and savings, which are sufficient to establish the
reasonableness of the projections
 Identify and assess risks and provide mitigation
 Estimate risk mitigation costs
 Ensure internal and external customer requirements are met
 Quantify or qualify anticipated benefits from the implementation
 Summarize proposed project implementation costs and savings
 Prepare an Executive Summary to provide management with a short overview of the work transfer
business case outlining proposed actions, anticipated time span for accomplishing actions, and
affected locations

3.5 Project Charter Completion

After the development of a Preliminary Project Plan and a Business Case, a Project Charter should be
developed and submitted for approved. The following components may be included;
 Business case, refer to 3.4 above
 Scope of Transition
 Transition Objectives
 Constraints
 Business Goals
 Transition Impact/Business Results

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 Transition Milestones
 Team Members
 Project Sponsor

Upon completion of the Project Charter and communication with the Stakeholders, Phase 1 is ready for Gate
Review.

3.6 Phase 1 Gate Review

The Gate 1 checklist (ref. www.iaqg.org/scmh SCMH Section 7.1.3) is used to ensure all appropriate data is
gathered prior to the gate 1 review. It assists the Gate Review Committee in determining the feasibility of the
work transfer project.

Gate 1 is a review of the Phase 1 activities and is the completion milestone of Phase 1. The gate review
committee must decide to take one of the following actions: “Go”, “Proceed with Actions”, or “No-Go”, after
reviewing the deliverables from Phase 1. The gate review committee must agree that the proposal and
charter are clearly defined, and the transition team is appropriately experienced and skilled to conduct the
work transfer process. They should also determine that the work transfer project aligns with company
strategy. The approval to proceed causes the organization to appoint a Transition Team and Gate Review
Committee.

4. Phase 2 –Project Launch / Intermediate Project Plan

The purpose of Phase 2 is to obtain the Phase 1 Business Case sign off, approving development of the
detailed project plan required for a successful work transfer.

Intermediate project planning for any work transfer project requires a multi-functional project team to build the
framework of a program plan, which includes each high level task or family of tasks to be detailed during
Phase 3. The intermediate plan may include;
 Development of the Statement of Work (SOW)
 Risk Assessment
 Risk Mitigation Plan
 Gap Analysis of Suppliers (Capacity planning, Supplier Development / Capability, Resources)
 Impact Plan
 Production phase In / Out (continuity of component supply, overlap of delivery, also for out of
production items)
 Inventory plan (Buffer Stock, Material Availability)
 Regulatory / Customer approvals (Contractual and Regulatory requirements)
 Training identification
 Documentation / Tooling requirements
 Requirements for the supplier (Contractual, validation and qualification requirements)
 Knowledge Transfer

4.1 Development of the Statement of Work (SOW)

The statement of work can be a physical part, assembly, process, or service. The statement of work
establishes the expected deliverable or end item, as well as any details that are incorporated into the end item
or deliverable. Establishing a thorough and detailed statement of work allows the appropriate selection of a
supplier, and the means to determine any risks or issues with delivering conforming end items. It is
recommended that the organization review the end item with the supplier to ensure correct understanding of
the statement of work.

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4.2 Risk Assessments and Mitigation Plans

A documented risk assessment and mitigation plan is recommended. The risk assessment should be
completed on the offloading site SOW to identify any start up issues faced with that source, and any risks that
might transfer with the SOW. Risk assessments should also be completed on the list of sources under
consideration. The risk assessments should include input from various internal organizations to ensure a
diverse perspective of the risk elements. Elements of a risk assessment include but are not limited to the
following;
 Quality Performance (past and current)
 Required Approvals
 Geographical/Political/Ethical
 Financial
 Customer Satisfaction
 Human Resources
 Improvement Activities
 Delivery
 Manufacturing Capability and Capacity
 Supplier Make / Buy Decisions and Sub-tier control
 Design Capability and Capacity
 Safety
 Special Processes
 Design Complexity
 Manufacturing Complexity

Additional guidance on preparing a risk assessment can be found in IAQG 9134 Supply Chain Risk
Management Guideline and further guidance on Risk is available in the SCMH (ref. www.iaqg.org/scmh
SCMH section 7.3 Risk Management).

4.3 Production Phase-In/Phase-Out and Inventory Plan

Determination of when to phase-out the old supply and phase-in the new supply is a critical process to the
continuity of the supply chain. This planning will determine when the current supply of the product or process
will be phased-out, and when the new supply will be phased-in to the organizations schedule. By establishing
an incorporation point into the build process, risk of disruption to the supply chain can be mitigated.
Phase-out and phase-in might not take place exactly at the same time. In such case, it is often necessary to
continue producing parts in the offloading manufacturing site even after production has started in the
destination site. When the phase-in cannot be done before the phase-out buffer stock is required to mitigate
disruption of supply due to start up issues. Thus, increasing production rate during a certain period before the
transfer to build this buffer stock must be considered.

4.4 Customer Approval

In some cases, regulatory requirements may require the reporting of work transfer to agencies prior to
production start dates (see also paragraph 5.3). Contractual requirements in most cases also flow down
reporting of work transfers and in many cases, approvals for the work transfers. Prior to execution of a work
transfer, analysis of any regulatory or contractual requirements should be reviewed and flowed down through
the supply chain to ensure compliance of any established requirements.

4.5 Training Requirements

During a technical review of the requirements for the work transfer, the organization should determine training

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requirements that might be necessary to complete conforming hardware. Consideration of a sub tiers core
competency or abilities, and internal requirements for parts and processes should be balanced against any
new processes that might be required. Required training should be incorporated into the overall planning of
the work transfer to mitigate any unexpected delays in the overall plan.

4.6 Tooling Requirements

A tooling statement of work and identification of tooling requirements is crucial in ensuring that the end items
built will comply with the engineering requirements and tolerances. During this phase of work, the project
team should consider and identify the following;
 Master tooling.
 Identification of Category tooling
 Tool control media (Physical or Digital)
 Known tooling issues
 Manufacturing site tooling capabilities
 Manufacturing site tooling approvals
 Periodic tool inspection requirements

4.7 Documentation and Requirements for Supplier

A thorough flow down of documentation, manufacturing, quality and contractual requirements ensures
conformity of the end item by providing an auditable trail for parts through the supply chain, and ensuring all
quality and manufacturing objectives are understood and fulfilled. Elements of this should include;
 Requirements related to the product or service
o Defined
o Implied
o Key Characteristics
 Special requirements / processes
o Use of approved supplier
o Use of approved sources
o Use of approved processors
 Quality Management System
 Rights to access
 Flow down of requirements to Sub Tiers
 Records retention
 Raw material
o Documentation and
o Sources
 Planning
 Product acceptance
 Nonconforming product
o Reporting
o Control
 Delivery and Post Delivery Activities
o Schedule
o Certificate of Conformance
 Statutory / Regulatory Requirements

4.8 Phase 2 Gate Review

The Gate 2 checklist is used to ensure all appropriate data is gathered prior to the gate 2 review. The Gate 2
checklist assists the Gate Review Committee in determining the risks and validity of the business case.
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Gate 2 is a review of the Phase 2 activities and is the completion milestone of Phase 2. The gate review
committee must decide to make one of the following dispositions: Go, Proceed with Actions, Re-Direct or
No-Go, after reviewing the deliverables from Phase 2. The gate review committee must agree that the
Statement of Work, risk assessment and mitigation, source selection, and business case are clearly defined
and valid. The approval to proceed provides the authority to continue to Phase 3.

5. Phase 3 – Detail Planning

The purpose of this phase is to develop a detailed, task-based program plan defining all necessary activities,
associated action holders and implementation dates. The development of the detailed program plan must
assess program costs, schedule, and risks, and incorporate appropriate risk mitigation steps. The resulting
program plan is used in development of a budget, which will fund the transition project.

The deliverable from Phase 3 is an approved, detailed, task-based program management plan and
associated budget, which meets cost and schedule requirements for the program. The program should
identify and rate potential risks, and incorporate appropriate mitigation actions, specifically addressing risks
that are most likely or certainly to occur and become significant issues. The program plan should identify
resources required to accomplish the tasks, as well as any specific procedures that apply.

5.1 Detailed Project Plan

Detailed planning for any work transfer project requires the cross-functional transition team identified in Phase
2 to brainstorm and build a project program plan, which includes each task or family of tasks to be executed
during Phase 4. The detailed plan includes;
 defined actions
 action owners
 planned start dates
 estimated task durations and resource requirements
 milestone completion dates

Note: Issuing a Work Breakdown Structure WBS is a good method of achieving a detailed project plan.

There may be several interdependencies between tasks. Incorporating these interdependencies into the
detail project plan will further support timely completion of tasks. Various software tools exist to support
program planning. These tools capture project plan details and provide capability to monitor and report project
performance. The project plan should address the following topics;
 Continuity of component supply, overlap of delivery
o Buffer Stock strategy (incl. out of production items)
o Tooling strategy / planning
o Definition of support requirements
o Transportation plan
o Material availability, e.g. Equipment at destination site is commissioned (available,
purchased or leased)
 Regulatory and Customer Approval(s)
o Authorities Notification requirements
o Review Export requirements
 New source capability and approvals
o Capacity Planning
o Supplier Industrialization plan
 Contract requirements
o Suppliers selected, production costs confirmed
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o Commercial terms agreed
 Resource deployment
 Validation and qualification requirements
o Supplier Approval
 First Article Inspection (FAI) planning
 Quality Assurance Plan (QAP)
 Last Article Inspection (LAI) planning
 First Piece Qualification (FPQ) decision
 Product verification method
 Process Failure Mode and Effects Analysis (PFMEA)'s generated
o Release approved documents
 Communication strategy
 Supplier Development (to meet 4.5 identified requirements)
o Training -
 Formal Classroom
 On the Job Training (OJT)
o Knowledge Transfer
 Project Performance Review (cost, schedule, risk)
 Customer acceptance
The project plan is regularly updated to reflect the current situation.

5.2 Knowledge Transfer (Pre-move)

Information is gathered regarding product and process definition, requirements, tooling, quality levels, costs,
etc. in order to provide assurance the project success. For example, production processes are often not
completely captured in manufacturing operation and tooling instructions. There may be certain steps or tasks
taken for granted that may not be included in the documentation provided to the destination source. As such,
it is suggested that the pre-transfer manufacturing process be reviewed / audited by members of the transfer
team to document hidden (undocumented) factory steps, operator actions, and lessons learned during
manufacture at the exit source. This can be a sensitive issue for the workforce at the exit source, and as such,
should be considered carefully. Ideally, this should be done during routine audits under the quality system of
the controlling source, ensuring documentation of all actions and information.

5.3 Notification of Aviation Authorities

Organizations performing a work transfer need to evaluate the potential need to notify the (e.g. EASA, FAA
etc.) and customers. Notification to the appropriate aviation authorities is typically required for organizations
with a Production Approval (POA or equivalent). Additionally, customer contracts frequently require prior
notification and/or approval of work transfers. Relevant information should be provided using the Customer’s
format as required.

5.4 Phase 3 Gate Review

The Gate 3 checklist (ref. SCMH 7.1.3) is used to ensure all appropriate data is gathered prior to the gate 3
review. The Gate 3 checklist assists the Gate Review Committee in determining the organization readiness
for the execution of the plan.

Gate 3 is a review of the Phase 3 activities and is the completion milestone of Phase 3. The gate review
committee must decide to make one of the following dispositions: Go (continue to next phase), Proceed with
Actions, Re-Direct or No-Go (stop & review Initiative), after reviewing the deliverables from Phase 3. The gate
review committee reviews the Work Transfer Project Plan to verify that the summary of collected data is
sufficient, original business case remains valid. The approval to proceed provides the authority to implement
the detailed project plan.
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6. Phase 4 – Execution of Plan
The purpose of Phase 4 is to properly launch and verify adequate implementation and effectiveness of all
actions decided during former phases, and as such ensures the destination sites short term capability is
proven and ready for production handover.

6.1 Last Article Inspection

Problems can be encountered with parts produced at a new source even though they are compliant with
applicable drawings and specifications. This is often the result of undocumented changes related to the
offloading site (i.e. before the transfer). Typically, these changes originate from people gradually improving
their process, correcting small issues, incorporating lessons learned and changes resulting from corrective
actions. Consequently, when new parts are produced at the destination site, these undocumented changes
are often overlooked resulting in products being slightly different from that produced at the offloading site (see
also paragraph 5.2 Knowledge Transfer (Pre-move).

Last Article inspection should be performed on the last component from the exiting source and prior to start of
production at the new source. The inspection process should be performed in accordance with IAQG 9102.
The results of the first article inspection are compared with the last article inspection. Gaps and/or differences
are evaluated to determine if there are project risks, i.e. can the destination site continue to build parts at this
configuration or do improvements / process changes need to be implemented and appropriately recorded.

6.2 Continuity of Supply

The production ‘Phase In Phase Out’ plan agreed during phase 2 should now be able to be demonstrated fully
by the offloading site to ensure continuity of supply is maintained throughout.

6.3 Process Validation

6.3.1 Manufacturing Process Review (MPR)

The Manufacturing Readiness Review is used to assure that the documentation, manufacturing processes,
test methods, quality acceptance parameters, tooling, and training are in place to support a controlled
production environment. The MPR should be conducted by the destination site to ensure its manufacturing
process will meet production requirements. This should address all levels within the supply chain and include
as a minimum;
 Manufacturing process state - tools, fixtures, manufacturing, equipment and gauges
 Operation work instructions
 Process control methods
 Gauge suitability
 Total Productive Maintenance (TPM) program
 Supply Chain management

6.3.2 Production Readiness Review

The Production Readiness Review (PRR) makes a complete assessment of the work transfer project to
determine if the destination site is ready for production. The review assesses if the destination site has
accomplished adequate production planning and has mitigated potential risks.

It is essential during the execution of the plan to conduct regularly scheduled production readiness reviews.
This is an opportunity to review the status to the plan developed in Phase 3. All elements of the plan are
reviewed and risk areas identified. A process should be in place for recording and following up on action
items.

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The PRR is completed with all actions closed or mitigated prior to initiating production. Items to be reviewed
include, but are not limited to;
 Calibration plan
 Tool tryouts
 Special process approval status
 Qualification status
 Flow-down of requirements to sub-tier suppliers
 Status of sub-tier supplier approvals
 Metrics
 Staffing
 Training
 Work instructions
 Long lead materials
 Action items status

6.4 First Article Inspection

First Article Inspection (FAI) is performed in accordance with IAQG 9102 on the first component from the new
source.

The results of the first article inspection are compared with the last article inspection. Gaps and/or differences
are evaluated to determine if there are project risks, i.e. can the new production site continue to build parts at
this configuration.

The end customer should be made aware of all FAI activity.

6.5 Destination Site Approval

The formal approval of the destination site should be clearly planned, and acceptance substantiated by all
applicable stakeholders, both internally at the offloading site and externally as required. This is a key element
of Phase 4, and production handover is not initiated until this is complete.

The destination site approval should be based on suitable outcomes of previous analysis performed in
phases 1-3 and the suitable outcomes to the following phase 4 tasks;
 Detailed Project Plan (paragraph 5.1)
 Manufacturing Process Review (paragraph 6.3.1)
 Production Readiness Review (paragraph 6.3.2)

6.5.1 Source Inspection

Where required, the offloading site should implement a source inspection program for the verification of
product from the destination site. Source inspection requirements should be considered and/or applied for the
following conditions;
 When procurement involves parts, assemblies, or systems of complex design with quality
characteristics that are not visible in the end item
 The product is for direct shipment from the supplier to the customer or drop shipment to another
supplier
 The product is complex and it is more economical to verify conformance at the supplier’s facility
 The product is an assembly in which form, fit, or functions of components are essential to reliability or
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flight safety
 The supplier is a new source of supply, and/or is producing outside of its core competency

6.5.2 Customer Acceptance

Customer acceptance should be gained throughout the process as required, with final acceptance planned
and completed prior to finalization of production handover.

Note: This may be completed in parallel with FAI acceptance.

6.6 Phase 4 Gate Review

The Gate 4 checklist (ref. SCMH 7.1.3) is used to ensure all appropriate data is gathered prior to the gate 4
review. The Gate 4 checklist assists the Gate Review attendees in determining the completion of the work
transfer project plan. This should include verification of all phase tasks and any generated task templates.

Gate 4 is a review of the Phase 4 activities and is the completion milestone of Phase 4. The gate review must
agree that the business case was achieved and all metrics including schedule, cost and Quality are
accomplished as planned.

The gate review committee must verify that the transition was implemented according to the detailed project
plan. The approval to proceed provides the authority to continue to Phase 5 Project Closure.

7. Phase 5 -Transfer of Work Evaluation and Closure

The purpose of phase 5 is to ensure that the work transfer is robust and that the transfer of work project is
ready for closure.

7.1 Final Handover to Serial Production

Some important checkpoints to be completed before the final handover to serial production;
 Work transfer activities are completed
 Business systems are updated
 Authorizing documents are closed
 Project closure report is created
 Metrics are validated and result are as per targets

7.2 Evaluation of Process Capability and Product Quality

Evaluation checkpoints to consider;

 Manufacturing Process Review (MPR) and Production Readiness Review (PRR) approved
 Long term capability substantiated
 Quality performance monitoring for a specified quantity of product or period of time to ensure product
quality after the transfer activities are completed
 All evaluation results are documented and kept as a quality record

7.3 Evaluation of the Transferred Work

7.3.1 Capture Lessons Learned

Lessons learned should be reviewed and communicated at the closure phase of any work transfer. Where
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appropriate, changes should be implemented into the work transfer process to ensure future work transfers
are executed more effectively. Lessons learned should specifically highlight what worked well and what did
not work well, and should include root causes of all difficulties and issues encountered so that appropriate
actions are in place next time. Process changes should be appropriately recorded

7.3.2 Recognize Team Performance

Recognizing team performance at the end of any project is an important step in helping drive high
performance within team activity. Recognition can take different forms. Typical methods include
communication of team achievements, team rewards, or simply senior management acknowledgement.

7.4 Post Transfer: Robustness and Continuous Improvement

To ensure medium and long term effectiveness of a work transfer and guarantee achievement of production
and delivery performances, it is necessary to regularly verify sustainability of all actions implemented all along
the work transfer project;

Quality Performance monitoring should be conducted with the regular rating assessment (integrated
evaluation of quality, delivery and costs) of the supplier and/or with the quality audits of the supplier.
Good practice for any work transfer is to plan a post transfer audit or review. This activity is typically
conducted within 3-12 months after completion of work transfer. The purpose of this audit is to review the
performance of the destination site, to validate that the benefits declared within the business case have been
achieved and to ensure lesson learned are incorporated into the work transfer process.

7.5 Phase 5 Gate Review

The Gate 5 checklist (ref. SCMH 7.1.3) is used to ensure all appropriate data is gathered prior to the gate 5
review. The Gate 5 checklist assists the Gate Review attendees in determining the completion of the
evaluation and closure process and ensure the project is ready to hand over and close.

Gate 5 is a review of the Phase 5 activities and is the completion milestone of Phase 5. The gate review
should ensure that all phase 5 activities have been completed. The gate approval at this phase signifies that
the project is complete.

8. Forms/Templates

The forms developed for use during the Work Transfer process can be found at www.iaqg.org/scmh Section
7.1.3 Work Transfer Forms. The forms and templates are located in an MS Excel format and are printable and
electronically fillable. The tabs, along with an “instruction” tab, within the file contain several working
templates;
 Revision of Record
 Business Case & Project Proposal
 Project Charter
 Readiness Review
 Checklists for Gates 1 thru 5

In addition to the “instructions” tab, some of the tabs contain additional support instructions within the cells,
these can be noted by the red triangle in the corner of a cells containing additional instructions.

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