The Value of BOM Monitoring in the Design Phase

When one tries to quantify the value an accurate, comprehensive BOM Monitoring platform can bring to an OEM supply chain, it is easy to forget that BOM Monitoring plays a vital role in all phases of the OEM product lifecycle, not just the end.

The needs of the modern supply chain are rapidly changing by the day. OEMs, operating in today’s ever-changing market, must have a process in place to detect and predict obsolescence and allocation. Without one, the disruption that ensues has the potential to throw the very integrity of the OEM brand into flux at great cost.

Obsolescence and allocation issues, however, are no longer restricted to just the later stages of the product lifecycle. In some extreme cases, obsolescence and allocation — as well as the disruptions that come with them — can be found far earlier, even during the product’s design phase. Due to high component demand driven primarily (but not exclusively) by the IoT, portable computing, and automotive markets, many commoditized components such as MLCCs and basic resistors are now commonly pushed into obsolescence or allocation before they even enter the open market!

Despite such challenges, it still falls to the engineers to stay abreast of such potential disruptions to ensure their product enters into the assembly phase with the supplier support needed to fulfill its lifecycle. In an ideal market, this could be accomplished simply by suppliers and distributors keeping their customers informed of any unexpected changes. Unfortunately, the reality is that over half of today’s electronic components are obsoleted without an accompanying product change notification (PCN) for customers, which leaves them no choice but to enter into negotiations with third-party vendors who are known for their high markups.

An in-place BOM Monitoring system at the front-end of the design process is what allows an engineer to turn the market back in the OEM’s favor. For example, let’s assume that the OEM is in the final design stages of a new product before entering production. As a final check, the engineer decides to upload his or her bill of material to Partstat BOM Monitoring. Capitalizing on over 50 billion points of Big Data, the system immediately scrubs the bill of material and finds that several components have already been placed on extended allocation, and a few have even been predicted to go on allocation. If the engineer had not made this final check, then each of these designations would have resulted in significant financial strain for the OEM before the product even had a chance!

Scenarios such as this are all too common, and it is not unusual for OEMs caught in such situations to go as far as initiating an immediate product discontinuation, with much of the blame going toward the engineers who authorized the use of the obsoleted part in the first place. If engineers take advantage of BOM Monitoring beforehand, such blame can be entirely avoided.

At Partstat, we believe in protecting our customers’ supply chains at all points in the product lifecycle, and that includes the very beginning. Even waiting to check your bill of material after the first production run may be too late; the only way engineers can entirely avoid supply chain disruptions due to obsolescence and allocation is to implement Partstat BOM Monitoring — the only BOM monitoring solution capable of monitoring and predicting both — as soon as their process allows.

To get started with your free 14-day trial, just click here.

To discover how BOM Monitoring is useful for engineers throughout all stages of their builds, check out this article.

For more on how Partstat BOM Monitoring helps engineers during production, be sure to check out our follow-up piece here.