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Developing the Preferred Parts List

One of the most effective time and labor savers for a product development effort is the use of a selective part list produced from the company's Item Master.

In an earlier Best-Practices post, I discussed the Item Master in some detail and promised to write another feature that introduces a subset of the Item Master, commonly referred to as the Preferred Parts List (PPL). (See: Comprehensive Item Master & Related BOM Item Structure.) Imagine a design that has close to zero part failure issues over the lifetime of the product. This translates to efficiencies at every stage of development and production and extends to end user experiences and subsequent company reputation.

Each company should identify the part characteristics to be used for generating a PPL and, generally speaking, the more comprehensive the list, the more reliable the end product. Like any other engineering effort, the more work put in on the front end, the less work is required on the back end.

Initial cost is only one consideration for the PPL and may be offset by the value gained from less repair rework and replacement costs over the lifetime of the product. Obviously, the company's philosophy and quality practices come into play here. At the very least, the vice-president of engineering must be willing to enforce the practice of using the PPL or individual engineers; otherwise, the purchasing department may be tempted to introduce the most readily available or lowest-cost parts that have no field performance history. The criteria for selecting parts for the PPL can be any or all of the following.

  1. Cost:
  2. Low cost, but not necessarily lowest cost.

  3. Performance history:
  4. Actual field experience or extensive relevant testing.

  5. Availability:
  6. Parts can be purchased from multiple sources, (vendors or/and distributors).

  7. Alternate source.
  8. Same form, fit, and function for parts, but different manufacturers' names and part numbers. (Different manufacturers' crossover part numbers must be equal.)

  9. Regulatory compliance:
  10. RoHS/REACH/EHS/WEEE.

  11. Reliability numbers:
  12. Failure in time (FIT) or mean time between failures (MTBF).

  13. Screening:
  14. Pre-screened or tested parts.

  15. Life span:
  16. Shelf life.

  17. Economic order or lot quantity:
  18. Minimum buy.

  19. Lead-time:
  20. The cost might be slightly more in order to obtain the desired lead time.

  21. Choice:
  22. Business preference or contract obligation.

Let's look at six different stages in the product's life and examine our subsequent savings:

  1. Research and design:
    • Eliminating a newly introduced component's unknown performance will expedite Design Validation and Testing (DVT) efforts.
    • Shorter development cycles realized through less component failure issues and time taken for troubleshooting and reworking breadboards and prototypes.
    • Quicker proof-of-concept results.
    • Parts used from PPL are more likely to be available from on-hand inventory, and small development quantities can be kept in engineering's stock location.

  2. Purchasing:
    • Less problematic with part availability concerns.
    • Since the part is used in pre-existing assemblies, even greater discounts can be achieved by increasing part order quantities that include the new design requirement.
    • More volume from a single supplier tends to curry the favor of that supplier and opens the doors to the benefits of special favors beyond just pricing. The supplier may go out of its way in order to keep a valuable customer happy. This could take the form of free parts in small quantities or samples and preferential treatment for retrieving allocated parts on an expedited basis, if necessary.

  3. Manufacturing:
    • Less line failures using proven parts.
    • Test fixtures already programmed with applicable Vector/Boundary Scan information.
    • Assembly personnel already very familiar with part handling requirements.

  4. Sales and marketing:
    • Higher level of confidence in product representation because of proven performance.
    • By using environmental and regulatory pre-approved parts, the certifications are already on file and can be quickly retrieved to expedite purchasing authorizations by customers that have compliance mandates in their countries.

  5. Support:
    • Fewer returns achieved with higher reliability.
    • Experience with commonly used parts promotes a deeper understanding of part behavior and common failure mode and symptom identification.

  6. Customer:
    • Customer satisfaction with longer life product and fewer returns.
    • Reorders.

The points made above are a combination of different characteristics required to be added to the PPL. Higher reliability guarantees are only attained by making “Reliability” an entry on the PPL. Purchasing benefits come as a result of “Availability” and “Lead Time” requirements. By fine-tuning the PPL to your company's internal processes and the customer's expectations, the time-to-market is shortened significantly, and the sales effort is greatly enhanced because your products' reputation precedes the sales.

Don't forget where it all begins. The design engineer who selects the components must choose as many parts as possible from the PPL. If a non-PPL part is to be considered for use, that use must be approved by a components engineer (CE), and the part may be added to the PPL only after a CE qualification process approval. By selecting even a majority of the parts from the PPL, the benefits realized from the arguments presented above should be sufficient to encourage the company to validate and enforce the practice of using a PPL.

8 comments on “Developing the Preferred Parts List

  1. Clairvoyant
    January 5, 2012

    Great article, Douglas. Putting work into a PPL up-front, and continuing to update the list, is very useful in all of the areas you mentioned. It can also save engineering development time when new products are being worked on if the component has already been verified on it's own.

  2. _hm
    January 5, 2012

    Very good post!

  3. FLYINGSCOT
    January 6, 2012

    I liked reading your article.  I have made the mistake before of thinking we were going to win some business because the designer liked our part but he was overruled by the procurement folks who told him to use one from the PPL.

  4. dalexander
    January 6, 2012

    Flyingscot, That is coming at the PPL from another perspective. As a supplier or a vendor, I would be asking the person in charge of part selection or procurement, “what can I do to help get our part on your PPL?” It virtually guarantees future business and opens the door to subsequent use of other parts you might be offering as a supplier. If you use a form like the sample request form or component information request form as they are offered under Forms at http://www.componentsengineering.com, free for the taking and distribution, then you give the CE a head start on the research necessary to begin the PPL qualification process. Purchasing likes these forms completed because they take the guesswork out of issues concerning cost, availability, and lead-time. Thank you for bringing this perspective to our attention.

  5. rk_1
    June 3, 2014

    Hi Douglas – thank you for sharing your knowledge on the topic.

    Can you share your thoughts regarding how to handle large amount of information when genrating PPL? We have about 250K active parts and detailed analysis that is required to generate PPL will require some serious resource demand. Are your aware of any methodologies / tools / professional services that can be utilized availale to genreate initial  PPL in few months time (as oppose to 20 years )   🙂

    thank you,

    RK

     

  6. dalexander
    June 3, 2014

    @RK…break the job down into measureable bites. First run a “Where Used” report to determine which parts are active. If you include a W/U for BOMs, you can eliminate higher level assemblies where parts were just used on that BOM alone. Next use a service like GreenTech or IHS to run mass PLM analysis and look for EOL (obsolete or soon to be obsolete) parts against your in-house part numbers. Then take part types like diodes, inductors, etc. and determine from purchase history, which parts were purchased most recently or most quantity over time by matching your AVL references. If you use Coilcraft more than Toko or Taiyo Yuden for instance, then Coilcraft becomes your preferred supplier and so do their inductors. One thing the military has done for some time is qualify entire families of parts by approving the suppliers quality processes and procedures. So a passive device of one value is approved like resistors, then a new value that is made using the same process, is automatically included. This sometimes augments the AVL and is called the AML or Approved Manufacturer's List. Any supporting documentation should list all the values approved against a company ECO with revision control assuring currency. With 250K part numbers, if you eliminate as much busy work as possible by running the mass PLM reports, you will be assured of focusing on active parts with current manufacturer's PLM data. If you only have one source for a part, it defaults to the PPL with the note to CE to try to find alternates ASAP. I hope this helped some. I consult on situations just like this. If you would like me to help with the PPL list generation, let me know and I would be happy to assist.

  7. rk_1
    June 8, 2014

    Thank you Douglas for your reply. Is there an e-mail  you can let me know  to contact you?

    thanks,

    RK

  8. dalexander
    June 8, 2014

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