NPI Supply Chain Craft

Practical Techniques for Holistically Taking Over Existing New Product Programs.

Part 6: Combine BOM Trackers of All Programs for Optimal Benefits (step 8).

---

• Part 1: Right mindset & the foundational rules (Steps 1&2)
• Part 2: Program requirements and status (Step 3)
• Part 3: Manual BOM, Bill of Materials (Step 4)
• Part 4: BOM conversion to materials tracker (Step 5)
• Part 5: Priorities and execution (Steps 6&7)
• Part 6: Combo BOM Trackers (Step 8)

---

This is a continuation of my blog posts on this subject and is the final one in the series. Please proceed to Part 1 to read the full article from the start.

---

Step 8 – Combine BOM Trackers of Multiple Programs (Optional).

Timing: Complete in 1-2 days.

If your experience as an NPI Buyer is anything like mine, you will find yourself responsible for the procurement of more than one New Product program. It’s hard enough to manage the supply chain on one of them; imagine juggling several of them. It’s especially challenging if they are in different development phases. Your natural inclination is to put the majority of effort into programs close to the customer due date but it’s just as important to keep procurement activities on track in the “younger” programs.

So how to optimally juggle priorities across programs using BOM Trackers? Well, you could just devote a percentage of time to each program BOM Tracker per day or week. However, consider combining all of your BOM Trackers into one Master BOM Tracker. If using MS Excel, I suppose that you could just keep each BOM Tracker in separate tabs. However, I recommend pasting them all into one file for reasons to be explained later.

If combining all in one file, make sure that you have the same format and columns across all BOM Trackers. Also, add and fill in another column entitled “Program” or “Sales Order Nbr”. You’ll have to redo the numbering on your “Order” or “Ref Nbr” column so that, every time you sort by another column, you can re-sort it back to its original appearance.

Working off a Master BOM Tracker can aid you, the Buyer, in several ways.

Master Prioritization

Prioritizing all BOM Tracker items on the same document gives you the same planning power as a Master Scheduler. You’ll have a guide to focus on the time-sensitive tasks in an order to enable you to meet ALL of your diverse procurement deadlines on time. To put it another way, it’ll help you avoid putting too much effort into one program while neglecting another.

Economies of Scale

With all of your responsible BOMs on the same page, you may see opportunities for Economies of Scale (EOS). These are situations in which you could reduce costs by increasing purchasing or production size due to sameness or similarity of item requirements across multiple programs. Here are some examples that may be revealed on your Master Tracker enabling high volume cost saving opportunities.

• A higher quantity purchase of the same part number across multiple programs.
• A higher volume order of raw materials with specifications shared across fabricated parts like machined items, castings, plastic moldings, etc.
• For Planners, the ability to run same part number/different program subassembly work orders at the same time.
• A higher volume of shared commodities or services across programs for which reduced pricing via a Long-Term Agreement or Blanket Purchase Order with a supplier makes sense. Commodity examples include raw materials, electronic components, circuit board assemblies, castings, plastic moldings, outside processing, or outside testing.

Identification of MRP vs Project Schedule Mismatches

Embedding start and finish dates (i.e. need dates) from each program schedule into your BOM Tracker will come in handy when you start seeing MRP purchasing requirements. By comparing such dates between the two sources, any discrepancies will stand out. Remember that it is the program schedule that is shared with the customer so it’s vital to investigate, find out which one is incorrect, and fix it. Typically, the Planner would drive this but the Buyer could at least raise an alarm. Ultimately, corrective actions could result in improved project schedule collaboration or more accurate master data setup in the ERP system.

Constraints Revealed

By reviewing all BOM Trackers on the same page, potential limitations or restrictions may reveal themselves. To find them, look for big clumps of same data across different columns within short time frames. Examples of constraints include bottlenecks and potential SPOFs (single point of failures). When you see such instances, you can proactively prevent risks from occurring. You can either take action or alert the Planner or Project Manager, whichever is appropriate. Risk assessment and mitigation (if appropriate) should be taken. Following are constraint examples that may be revealed along with possible solutions.

• Supplier Capacity. Multiple orders for different programs due from same supplier on the same day or week. If you see this, you should also check other Buyer orders that are or will be due in the same time period. Will the Supplier have the capacity and capability to deliver all those orders on time in the short window? Consider working with the supplier and/or buyers at your company to prioritize your jobs at their facility. Validate the need dates; have the supplier prioritize based on what’s really needed sooner or on time rather than later. See if expedite is necessary and if available.

• Shared Test Resource. Project’s Test Engineer will be needed to support more than one program’s qualification testing at an outside supplier within a short time frame. Alert the Project Team and advocate for a backup Test Engineer in order to maintain outside test reservations and schedules.

• Work Center Conflicts. Several subassemblies under different programs have scheduled start dates at the same work centers within a short time period. If you’re also a Planner, request Program Management Leadership to advise priorities between programs.

• Shared Quality Resource. Multiple NPI parts are on hold in MRB and are awaiting disposition by a Quality Engineer that supports both NPI and production programs. Prioritize MRB items for the Quality Engineer and request their management for backup assistance.

• Lead Time Deficiency. After BOM Tracker creation, some BOM items are instantly within quoted lead time of the MRP or project schedule need dates. Alert Planner and Project Manager to doublecheck need dates. Consider requesting departmental backup to expedite all purchasing actions to get items sourced, quoted, selected, and ordered. Consider the use of expedite fees.

• Heavy Workload, Near Deadline. A high volume of BOM items will need to be sourced, quoted, and ordered ASAP in order to satisfy upcoming need dates. Consider solutions that involve getting a lot of work done in a short time. Examples:
  • If your company has manufacturing capabilities, can items be changed from Buy to Make? This moves part of your workload to the Planner.
  • Are you able to guide and delegate any tactical work (like RFQ’s, quote follow-ups, non-complex purchase order submittals, order monitoring, etc.) to other Buyers?
  • Do any programs have budget for strategic use of expedite fees?
  • Can you handle tactical purchasing duties in groups? Instead of sending out individual RFQs for each part, for example, consider emailing out lists of same commodity items for multiple programs on the same RFQ form. After sending the first RFQ, you simply change the supplier’s name on your form and re-send the same RFQ to that supplier and so forth.

---

Final Thoughts

Working as an NPI Buyer, what keeps me up some nights is not usually the known problems but rather the unknown risks. What do I need to prioritize the next day in order to avoid problems that I’m not even aware of? When I manage new product procurement, my goal is to tackle the work from the top down and turn all the unknown risks into known risks. This puts me in a better strategic position to prioritize multiple programs with diverse supply chain needs. Sooner rather than later, it also helps me to identify specific BOM items with high risks of delivery, manufacturability, cost, or quality. The earlier that your project team can work on risk mitigation, the more effective the results. You’ll find this work more rewarding if you can focus on the right priorities daily instead of losing focus with the wrong priorities. I hope this method helps you do just that.

---

This concludes my blog series on techniques for taking over existing NPI program procurement. I hope you found it useful!