BOM Consolidation Saves You Money

At Mega Tech of Oregon, we are always looking for ways to help lower the cost of our customers’ builds. In the process, we’ve noticed various design issues seem to reoccur. So, in keeping with our making your job easier philosophy, we would like to share with everyone some of these findings — simple changes that can improve product quality while reducing costs.

With resistors, for example, the old rule of thumb used to be “specify 1 percent tolerances where critical and loosen up to the 5 percent level everywhere else to save money.” Recently, the trend toward higher quality manufacturing standards is reversing this old adage. Now, many 1 percent devices cost about the same or less than the 5 percent parts previously did. Essentially they are all made at one time, then just test selected for tolerance and sorted accordingly. As more parts fall into the 1 percent bin than do parts in the 5 or 10 percent bins, they become lower cost due to higher inventory supply yields.

What does this mean for the designer? When possible, always specify the 1 percent tolerance parts for all locations of comparable values. In addition, the manufacturing costs for managing multiple tolerances of similar parts, and the logistical cost of multiple feed locations for SMT parts, is far greater than any possible savings anticipated by following that old rule of thumb.

The same situation rings true for component package sizes, especially in SMT builds. If the design requires the use of 0805 footprint parts for power purposes in some places, but the smaller 0603 parts can be used elsewhere, it is generally less expensive to lay out the PCB to allow for all 0805 size parts for the given value. Again, the additional setup and logistics of managing different package sizes of the same part value is more costly than any savings inherent in the reduction in size of the part. Temper this against PCB space constraints should the device in question be a high placement count item, as board real estate can be more costly that the second setup for higher volume builds.

This process of bill of material consolidation will help reduce the total cost of manufacture, and it can also help speed up engineering design due to fewer part numbers needing to be documented. Savings through lower NREs, reduced setup costs and faster run times in production all help add to the bottom line. Everyone wins with this tidbit!

Watch for more of these cost saving ideas, coming soon.