If you are in the manufacturing industry then you know how important the request for quotation (RFQ) process is. It’s the important step from product development to production. It’s also helping you to know which contract manufacturer or supplier you will be working with.
At the heart of the RFQ process lies the bill of materials (BOM). In this blog, we will delve into why the BOM is an indispensable tool for a successful RFQ process and how it plays a pivotal role in determining the speed, accuracy, and feedback on the cost of your product.
The Importance of the RFQ Process
The goal of the RFQ process is quite simple. Send your product data to the supplier and receive a quote for that part or product. If you are working with a new supplier then it’s an opportunity for the both of you to understand each other a bit more.
For the supplier, the RFQ process is an opportunity to not just provide a quote but to show what their true value is. It’s also a good time for the manufacturer to judge the supplier based on a few things, such as
- Their communication
- Their technical support
- Their speed
- The detail of the quote and overall feedback
However, the output of the supplier can be strongly influenced by the quality of the data they received.
The Role of the BOM in the RFQ Process
During manufacturing, the BOM often holds the knowledge of the product. Everything that goes into fabricating your product should be represented on the BOM.
However, oftentimes, the BOM is not fully completed or the part information can be subjective. As a result, your supplier will provide the wrong quote or ask redundant questions.
Your supplier will use the BOM as the main document to provide you with 3 main things.
Receiving a quote is the main goal during the RFQ process. However, the quote can only be as accurate as the information provided. For example, if you are providing subjective info, then expect your quote to be incorrect. Subject info can include:
- Not specifying the grade of the material
- Not providing a Pantone color or another common language for the color
- Missing parts
Knowing the lead time is important for production planning. If you are purchasing products then you’ll need to know the lead time for each supplier so you can order at the appropriate time.
The lead time should also be shown in the BOM. Each line item should have a lead time associated with it. Even if you are using a contract manufacturer who is consolidating your supply chain, you still need to know the lead time for each part.
The main reason for this is that if you have one lead time that’s considerably longer than all the other parts then you can create a separate PO for those components. No need to tie up cash flow with the entire order if you only need to get started on a few parts.
Design for Manufacturing (DFM)
The BOM is also how you identify items and parts that you would like your supplier to target with DFM.
While DFM will not be performed during RFQ, it’s the ideal time to make comments about certain parts or sub-assemblies you would like to optimize. This will also bring transparency to your supplier during the RFQ process as well.
This is also the document where your supplier will recommend parts to be optimized. They will make comments that the part or sub-assembly is not manufacturable and that you’ll need to re-design the part(s).
Why A Digital BOM During the RFQ Process?
The purpose of a digital BOM during the RFQ process is to improve the way you communicate and work with other team members and of course suppliers.
A digital BOM is a step toward creating a single source of truth. A digital BOM will help streamline your RFQ process in a few ways.
By using a digital BOM during the RFQ process, you are creating a system or document that brings all the product data together.
Think of all the CAD files, working instructions, quality requirements, and other important product data that goes into your product. The traditional RFQ process will drop all of these documents in random folders and you need to search for them. This can take time to search and find what you are looking for. Then you also need to make sure it’s the most updated version.
A digital BOM can hold and store all of these documents and associate them to a specific part, sub-assembly, or item on the BOM. Therefore, helping your supplier to quickly find the drawings, work instructions, quality requirements, and more associated with each item.
Manage Revision and Changes
In production and manufacturing, change is the only constant.
It’s common for changes to be made by the manufacturer after the RFQ process has begun. Communicating these changes quickly and efficiently to the supplier is important. Unfortunately, managing these changes on spreadsheets and sending them through emails fail to get the job done.
A digital BOM will accomplish 3 things managing revision and changes.
- Historically capturing these changes.
- Have an approval process for the supplier to request changes.
- Re-distribute the newest data.
What can you do today?
The RFQ process is an important step towards building a healthy relationship with your supplier. The tools and documents used during the RFQ process will pave the way to a successful RFQ. The BOM is the main tool that is used during the RFQ process. In order to optimize your product development to manufacturing processes create a single source of truth for all of your colleagues, contractors, and suppliers.
OpenBOM is a cloud-based PDM & PLM platform to manage your engineering and manufacturing data. Companies from startups to Fortune 500s use OpenBOM to create a centralized database to bring in, store, and manage their manufacturing data. With this infrastructure, users also use OpenBOM to streamline both their change management and PO processes.
If you need to improve the way you manage your data and processes, contact us today for a free consultation.