Many people think that manufacturing is dead or that it has all been outsourced to foreign countries. However, that is not the case. In many industrialised countries, manufacturing has actually increased over the last few decades. However, due to improvements in processes, more advanced machinery and even the rise of artificial intelligence, a lot of manufacturing is no longer done by a human. However, it's still critical. If you are a consumer, a product developer, or even someone who works in the industrial and manufacturing industries, check out these posts. They explain and explore a lot of the reasons why manufacturing is still important and arguably more important than it has been in years.
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Turnkey projects allow project owners to transfer many of the risks of the project to the contractor in exchange for a potentially higher project cost. Successful turnkey projects largely depend on how well the contract for those services was drafted. This article discusses some of the important elements of a good turnkey project management contract.
Operation Date
It is very important for you to agree with the contractor on the date when the completed project will be handed over to you in a usable state. This deadline should be clearly indicated in the contract that you sign so that each party knows when the keys to an operational facility should be handed over or received.
Performance Guarantees
You should also set specific performance targets that the turnkey project manager should meet once he or she completes the project. For example, you should specify how many finished components a given machine should be able to manufacture each day. These performance guarantees can help you to ensure that you get the high-quality work that you desired.
Project Milestones
It may not be enough for you to set a completion date for the entire project without setting milestones for the different phases of the project. Milestones help you to confirm that everything is progressing according to plan. For example, you can have a milestone defining when engineering designs of your factory should have been completed and approved by the relevant authorities. Corrective action can be taken in a timely manner in case the project isn't progressing as planned instead of discovering at the end of the agreed period that matters didn't progress as expected.
Acceptance Criteria
It is also important for the contract to spell out the criteria that will be followed before the completed project is handed over to you. For example, what tests will be conducted to confirm that each piece of equipment adheres to the agreed specifications? The acceptance criteria removes any room for conflicts that could have developed in case specific testing conditions or formulae weren't discussed before the project commenced.
Penalties and Conditions
The contract that you sign should also stipulate the penalties that will be enforced in case each of the parties to the contract fails to meet their obligations. For example, what penalty will you suffer in case you fail to avail funds at the agreed time? What penalty will be imposed upon the contractor for any delays in completing the project? The penalties can provide motivation for each party to execute its roles for the hassle-free success of the project. The success of any turnkey project starts with identifying the right developer and having the right contract in place. Get expert help in case you are unable to get these two elements right on your own.
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