2. Pioneer-Consigned Materials and Equipment
2.1 Pioneer agrees to supply Supplier with raw materials and Sub-materials for the Manufacture of Products. Further, Pioneer shall provide Supplier a reasonable scrap allowance which is caused by Supplier process for all raw materials with a total percentage 0.15% based on the total value amount for the box build materials. The allowance will be subjected to annual review by both parties. Over than this, Supplier shall discuss the details and reconcile any variances incurred and corresponding adjustments and / or payments be made as agreed by both parties as maybe applicable.
2.2 Supplier shall be do yearly inventory (2 times/years) accordance to Pioneer schedule. And allow Pioneer’s representative to join counting inventory (F/G,Raw mat,WIP/ Tool/Jig/Equipment and other packing (returnable boxed) etc., and report inventory result in written after counting not later than 1 business working day.
2.3 Other than the materials to be provided by Pioneer under Clause 2.1, Pioneer also agrees to deliver the Consigned Materials at least 2 (Two) business days prior to the Manufacture date which Supplier notifies that the certain Consigned Materials are required.
2.4 Supplier shall make a written notification with Pioneer of any defect or shortages of Consigned Materials including their part code and quantity to Pioneer during checking and found Parts no, Part code or quantity not match with Picking list. Upon receipt of such notification, Pioneer shall notify Supplier on how to return the defect Consigned Materials and replace and /or replenish the short quantities due to scrapping within 3[three] days from the date of receipt of such notification for items which Pioneer has in stock.
In case Supplier production line stopped due to the reason from Pioneer such as defective materials, delay supply of materials etc. The supplier will charge for the cost of production line stop, overtime and/or the screening cost of the materials of which the maximum charge will not exceed the price of the assembly price as per Clause 6 of this Agreement, multiplied to the equivalent quantity of output of the line that was affected by the delay of the supply of materials which caused the production line to stop at Supplier side.
2.5 Pioneer agrees to supply Supplier with equipment, jigs and fixtures, product testing equipment, and all other equipment required for the Production Line defined in Clause 3.1 (“Consigned Equipment”).
In case of failure or irregularity of Consigned Equipment, Pioneer agrees to immediately substitute with the sufficient spare Consigned Equipment. In such case, if there are any damages (not including misuse or mishandling by Supplier), both parties shall discuss and reach the agreement in good faith.
2.6 Both parties agree that Supplier shall not be liable for any delay in delivery of Products resulted from production line downtime caused by defect or malfunction of Consigned Equipment or delay in the supply of the materials or defects due to materials supplied for the manufacture of the products.
2.7 If Supplier delay delivery to Pioneer cause from Supplier management (such as manpower shortage, Poor quality and poor efficiency etc.) Supplier will pay to Pioneer for these following case:-
Change channel delivery (ship to customer)
Pioneer’s customer stop line.
In any case, the maximum payment to Pioneer by Supplier will be limited to the assembly price as per Clause 6 of this agreement of the affected number of units that were delayed.
2.8 The Consigned Equipment are property of Pioneer which shall be returned to Pioneer once this Agreement is terminated for whatsoever reason and after full settlement of all Supplier’s invoices is made by Pioneer.
2.9 Supplier will maintain the Consigned equipment and tooling in working conditions and responsible for normal operational wear and tear expenses.
2.10 The customer will be responsible for other following expenses.
a) Maintenance, repair and/or replacement due to the life of the equipment and tooling except normal operational wear and tear and expenses.
b) Calibration
c) Over haul
d) Replacement cost
e) Mobilization cost
f) Insurance cost
In case of Consigned equipment loss, damaged or can’t be used , Supplier shall immediately report to Pioneer in writing