Bill Of Material > Request For Quotation : The Hot Potato

Buymanager RFQ BOM

This is the starting point of most price requests to suppliers: the BOM (Bill of Material). The result of customer orders (manufacturer, OEM, engineering), it is the basis of supplier queries.

In substance, BOMs (Bills of Materials), contain the whole description of the components, the quantity and the approved. However, in form, if almost everyone uses Excel as the support medium, each company will have its own BOM format. The order and the name of the columns may of course vary, but it is especially the structure of the BOM that is going to be different.

  • Approved sources presented in columns

  • Approved sources shown in the same cell

  • Single-level or multi-level

  • R&D BOM with one line per topological marker

  • Approved sources in lines

Precise manufacturer references: the quest for the Grail

The main problem is the manufacturer’s reference. Having the manufacturer’s reference is crucial for costing and purchasing, but it is often incomplete or incorrect. This reference is not always isolated in a single column, it is often combined with the description or even without mentioning the manufacturer. For example: “RECEIVER LT1328CMS8 MSOP”.

The problem of resistors and capacitors

Ceramic resistors and capacitors that often make up 40% to 60% of the BOM lines, usually represent less than 10% of the cost. As highly standardised commodities, it is particularly common for the BOM specifications to be limited to “100 k 0603 5%”. The work to determine the manufacturer reference therefore becomes tedious. Sometimes suppliers deliver price schedules according to their customers’ characteristics; it will thus be up to the customer to identify the specifications from the descriptions.

More and more distributors have internal tools to automate costing tasks from a well-structured Excel file; although this is not the most frequent case.

High-Mix Low-Volume : optimisation is essential

With activity increasingly focused on High-Mix Low-Volume, the cost of processing price requests rises compared to turnover. Component distributors, who are at the end of the supply chain are therefore seeking solutions to optimise the processing of price requests.

Processing RFQs: too much work for distributors with low added value

More and more distributors have internal tools to automate costing tasks from a well-structured Excel file; although, alas, this is not the most frequent case. The formatting of Excel RFQ files is thus provided by sedentary sales teams, representing a significant workload; that is sometimes performed offshore.

Quicker response time: squaring the circle

Delays in processing RFQs, associated with ensuring their compliance, becomes a real hindrance to business development.

What are the areas for improvement?

  1.  Standardisation of price requests

Receive price requests in standardised formats and especially with structured data, is an important factor for improvement.

 

  1. Reducing the number of RFQs

Providing complete negotiated price rates, (Excel files) to customers so they can be independent, is a solution often implemented, but it raises issues in updating and confidentiality. Is not necessarily practical to use either.

 

  1. Computerised data exchange

Initiated by catalogue retailers (Digikey, Mouser…), the availability of Web Services allows the supplier to respond automatically to a price quote using a data exchange protocol (Application Protocol Interface – API). However, this requires the use of software by the customer, with an API connection to each of the distributors in question.

 

  1.  Use of e-Sourcing software

The use of e-Sourcing packages such as Buymanager, allow RFQs to be automated and standardised. They also allow the prices retrieved to be reused, thus reducing the number of queries. Finally, they allow RFQs to be automated using the suppliers’ Web Services.