When choosing a factory or contract manufacturer to produce your product, one may go through the Request for Quote (RFQ) process. During this process you are creating uniform documents to help factories identify what goes into your product via your Bill of Materials (BOM). As we know BOMs come in all shapes and sizes, but the one thing that a lot of people miss are more detailed instructions on how each part should be quoted.
A factory expects a quote submission to include a detailed and itemized BOM (and CAD package) in Excel format. Here at Dragon Innovation, we suggest that you list the manufacturer and part number so that the factory can glean the part specifications for accurate quoting. Since a part number is a unique identifier, there will be no risk of confusion.
The quote should also designate sourcing instructions for the parts. For example, you may have a ‘coin cell battery’ in your design (e.g. XYZ BR1225). You need to decide whether the factory can quote a generic battery, if they should only quote the specific XYZ battery, or if you would rather supply the battery to the factory yourself. The sourcing designation will then either become: “generic”, “assigned” or “consigned”.
Electrical BOM Example
This allows the factory to find the cheapest part from their preferred vendor list that meets the specs you have shared. This is often the case for non-critical parts such as resistors, capacitors and screws.
This will force the factory to quote this exact part number you have listed. The factory will not substitute this part even during production without approval. This is typical of critical parts such as a microchip. You may even list an alternate part number and manufacturer in case the main part goes end-of-life or there is a supply issue. This alternate would be the only acceptable substitution and still require your approval to switch.
This is an unusual case which would require you supply the part to the factory for each production run. The burden of having to handle the inventory and shipment logistics makes this undesirable. However, there are situations where you may want to handle the part with added care. You may be concerned about ip and need to control embedding software into a chip and then releasing the part to the factory. Please note that a custom part made by a sub-vendor does not need to be designated as a consigned part. By introducing the sub-vendor to the factory, the contract price can be shared with them and the factory will order the part directly from them.
Purchased BOM Example
As you can see there is a subtlety to developing the BOM for an RFQ that helps make the quotation more accurate. By listing part specifications and sourcing designation upfront you will avoid challenges down the road. The better the input, the better the output. This helps you stay in control of the process of getting your product made at the quality and the price you expect, as well as on time for your customers.