Improving material selection through BoM optimization: the BoM is your design, and there are many ways to improve its accuracy and functionality to aid downstream processes--and avoid costly redesigns.

OEMs will not be surprised to learn that over 25% of an engineer's time is spent on parts-related issues, and over 70% of a product's cost is locked in at the design and development stage. Much of this cost is wrapped up in parts-related issues, from part selection to organizing a supply chain-sensitive bill of materials.

PCB designers and design engineers spend hours selecting parts, compiling and organizing a bill of materials for final fabrication. Organizing a good BoM is probably the single most critical engineering activity because of its impact on the overall profitability, time-to-market and product lifecycle. Introducing new products with a short design and product cycle is an expensive undertaking, especially when revenues must be recognized quickly and profits reinvested to continue bringing new products to market.

Although other documentation is normally required for data handoff--such as Gerber files, mechanical documentation and other specific engineering file formats--here we look at ways to improve the organization and handoff of a BoM and approved vendor list (AVL) to a board shop or CEM.

Before we lay out the guidelines for producing a good BoM, we need to better understand the total lifecycle of a product and how it profitably impacts an OEM. A BoM impacts downstream processes, such as manufacturing, maintenance, warranty and inventory allocation. Because these are part of product cost, controlling these costs aids profit margin. The selection of bad parts will result in redesign, delays, scrap and lower margins.

Component and material selection is a time-consuming activity mostly due to poor component data organization, lack of data integration and information dissemination. The component database must be updated to reflect constant supply changes, and at the same time meet internal procurement guidelines. The parts database must also provide lifecycle data and other risk information.

A lifecycle rating is the key to selecting the proper component to match the product's revenue life. This rating simply tells how long this part will be in the market. For example, a part expected to be in the market for three to four years might earn a "decline" risk rating. This helps in selecting parts with the lifecycle that matches the product's service contracts.

Also, a form-fit-function analysis tool can quickly find similar parts, enabling the selection of parts with better ratings. This will reduce redesign time as parts become obsolete. This is critical for products with long lifecycles, such as medical, automotive and avionics applications.

10 Steps to Improved Material Selection

1. Keep track of parts' obsolescence; i.e., end-of life (EOL) management. Over 2,000 parts change status monthly. Is your parts database updated daily to reflect the latest changes?

2. Maintain a preferred parts list or AVL, published by your procurement, material management or component engineering department. Do you have access to these data? Always question the accuracy of the AVL. You are responsible for any redesign, so focus on minimizing the chances of redesign.

3. Keep an updated preferred parts list published by your fabricators. Most companies work with from one to three manufacturing partners at a time, so these parts lists or AVLs should be available to you. If not, request one.

4. Use an online component database that offers the most up-to-date component information, including status, part change notice (PCN) and component lifecycle information.

5. Reuse parts whenever possible. Reusing preferred parts already in the inventory will reduce risk in the long run (assuming lifecycles match the product). Form-fit-function rules can also be used for possible parts substitution.

6. Develop a component engineering methodology to ensure BoM review, risk assessment and signoff.

7. Select manufacturing materials that are suited to the fabricator.

8. Access your fabricator's manufacturing rules for PCB design. This may take the form of Valor's ERF files or similar data that describe DfM rules.

9. Select parts that have second sources available, defined by either your procurement group or a commercial database.

10. Collaborate early with internal component engineering and manufacturing partners to ensure that parts and design rules used will be accepted. You may have to pool design rules from several supply-chain partners and create a toaster design rule file for PCB DfM. The same is true for component selection. Use a common set of parts that are acceptable to your fabricators.

BoM Optimization and Analysis

A BoM analysis must be performed to check for a specific lifecycle support, as well as regular maintenance. This involves making sure that all parts used are approved by all supply-chain vendors, and that they meet internal quality and procurement guidelines. Certain automated BoM analysis tools can take an Excel-formatted BoM and analyze for all possible defects, including ensuring that all parts meet internal procurement standards and are optimized for reuse, and checking for EOL or PCN notices issued by the manufacturers. See FIGURE 1 for a typical BoM analysis report. Such a report can be constructed by hand, but lifecycle data will have to be purchased. Still, guessing the lifecycle of a part can be disastrous.

Most companies use Excel for organizing and sharing information. Although Excel has worked well in most cases, for a more structurally complex BoM Excel is normally not a good fit. For a complex BoM, a specific custom format will have to be generated to accommodate a smooth transfer to a fabricator. Such formats can only be generated through automated product data management (PDM), product lifecycle management (PLM), or component supplier management (CSM) systems.

It may be tempting to create a BoM by hand, but this often results in data entry errors: to manage this process, automated tools are recommended. The following steps will ensure a successful BoM preparation and handoff.

1. Assign an internal company part number for each part.

2. Assign each item a manufacturer part number and name.

3. Provide meaningful description for each part. Technical attributes can be included.

4. Provide alternates to each part or second sources if available. All information provided should be in a format that can be viewed and shared. Here a BoM collaboration tool can be used for markup and sharing.

5. Place the BoM in a collaborative workspace so that it can serve as a single product data source for the enterprise in a single location. Using e-mail to send changes back and forth can introduce version errors and, ultimately, production delays.

6. Use automated tools to compile BoM information directly from the design tools and avoid the cumbersome, error-prone process of compiling BoM information manually.

7. Make sure that only approved manufacturers who have signed nondisclosure agreements will receive the BoM data.

8. Review all the information with your fabricator for completeness, and ask for a confirmation. This will eliminate fingerpointing should any delays occur in transfer.

9. Create meaningful file names.

10. Start early by sending your manufacturers a draft BoM and design information before the final release.

11. Many fabricators can analyze design and component information for DfM, as well as for obsolescence. Ask about this service if your organization does not have these processes implemented internally.

12. Ensure that accurate information is shared within the organization. From time to time audits must be conducted internally to improve the engineering and supply-chain processes.

Once the product BoM is rolled into manufacturing, sustain engineering will usually begin monitoring its progress, analyzing the BoM for risk assessment, analyzing the health of the BoM for obsolescence, and checking for process changes on devices. This needs to take place in order to sustain product and production support.

The successful product depends on direct and open communication between OEM and manufacturer. The decision to select a material is only as good as the amount and quality of information available about that material. Access to any existing supply-chain constraints factors into the product's profit margin. New forms of data automation can create a real-time data access network and support decision-making.

AHMED KHAN is founder and vice president of Enterprise Products for Precience Inc. (precience.com). He has a bachelor's in electrical engineering and a patent in microelectronics. Khan has been in the EDA industry for the past 12 years.