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Avoid Pitfalls of Building a BOM

The new product introduction (NPI) sourcing process begins with a list of parts or a bill of materials (BOM). Spotting potential problems at this stage may make the difference between success and failure. Unfortunately, there are pitfalls, but a little preparation can ensure success.

Creating the BOM is the start of a race against the stakeholder’s timeline and the overall budget. A smooth transition from design to manufacturing is a huge, complex task that requires the coordinated effort of various departments.

 

In part one, we covered the importance of proper sourcing in the NPI process and the role it plays in mitigating time- and cost-related risks. Organizations that prioritize making informed sourcing decisions from the very beginning ensures that they are laying a solid groundwork for every other stage that follows. 

To help companies drive true improvement to their NPI process, here is a list of four common pitfalls that companies often overlook or execute incorrectly.

 The infinite quoting loop

The first time-consuming hurdle that organizations face is the quoting loop. Suppliers often put production quotes at the top of their pile, which comprise larger volumes, more extensive documentation, and a schedule forecast. Prototyping quotes, on the other hand, tend not to be handled with urgency.

Being prepared for the prototyping stage with suitable suppliers and their inventory identified will save days—sometimes weeks—of phone calls, requests for quotes (RFQs), and back and forth emails.

Inability to avoid redesign  

At this point in the NPI timeline, a number of issues can occur and strain the entire project’s chances of manufacturing success. If sourcing realizes that a component from the BOM is out of stock across distribution, engineering needs to be reengaged to determine a comparable part that matches form, fit, and function of the original.

In the event that no alternative part matches the needed criteria, the board may need to go through a costly and time-consuming redesign. 

Allowing engineering and sourcing departments to sync up and pass the very first BOM through a sanity check is a critical early-stage step that should not be overlooked. Quickly identify potential issues with suppliers, inventory, quality, and pricing by leveraging available sourcing data. As covered in part one of this series, a solid database of suppliers, components, competencies, and performance is needed to make informative decisions from the start.

Design for manufacture (DFM) as afterthought

The least expensive time to address potential manufacturing complexities and problems is at the design stage. The longer a problem remains dormant in the NPI process, the more costly the problem will be to fix it. 

From a sourcing point of view, working with real-world pricing from the earliest possible stage prepares the project to smoothly scale during manufacturing. There is absolutely no value in ordering prototyping boards that cost more than overall budget. The amount of future work required to bring the cost down by replacing multiple parts while maintaining functionality would be tremendous, with a very limited chance of success.

Identifying the highest cost-drivers in an early BOM allows the team to course correct the part selection, preventing the project from moving forward with unrealistic budgetary pricing. It is much cheaper and less painful in the long run to get your cost down while incorporating DFM principles during this engineering phase. 

Inability to spot real-world red flags early  

Looking beyond the prototyping phase, it is important for sourcing to identify red flags on components that could cause problems down the line, even post-launch. 

For example, procurement that have shown great levels of inventory volatility or high pricing fluctuations in the recent past, it account during part selection, since that sort of challenge could break the production chain in the months to come.

Remember: waiting to fix issues in an NPI exponentially increases the cost and time needed to get things back on track. Setting up an NPI process for success is an exercise in early preparation that should trickle down to how components are sourced, suppliers are selected, and departments collaborate. Reliably identifying and dodging potential problems through proper sourcing can make all the difference between profit and loss. 

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