Hardware Talks

Jesse Rosalia is Solving the BOM Problem

Get your bill of materials right the first time

What’s a bill of materials? Why should you care? If you’re a hardware startup, the answers to these questions are everything. For those answers and more, we talked to Bommer’s Jesse Rosalia.

HWY1: What’s a bill of materials?
JR: Inside all of the devices we love, the cars we drive, it’s all parts. As an engineer or team, when I build these things, I need to figure out where those parts are coming from. Am I going to get them made, or will I source them from a distributor? All of that is wrapped up in what’s called a bill of materials (BOM) for a project, and what Bommer’s trying to do is build tools to make better, more accurate BOMs less time-consuming to build.

What are the major consequences of having an incorrect BOM?
It varies at different stages of a product’s design and manufacturing. Let’s start at the most catastrophic and work our way backwards:

  • You build a product that goes out into the world, people buy it, and it doesn’t work. Or potentially worse: the product works but fails in a way you didn’t expect. There are electronic components that will catch on fire if they fail. If you accidentally specify or source such a component, or your manufacturer does because you didn’t tell them not to, and you didn’t expect or want your product to catch on fire, you’re in trouble. Your brand or company is now dead, or at least on the ropes.
  • The error is caught before the product leaves the factory. Now you might have a bunch of parts sitting in a factory warehouse that you’re financially responsible for, but that you can’t use because they’re not applicable to your design. You might have a tool that you’ve paid hundreds of thousands of dollars to build that won’t produce the part that you need. To fix this will require spending money you didn’t budget, which can kill your product line or your company, depending on the severity of the problem.
  • You have a breakdown in your supply chain. Maybe you’ve contracted with a manufacturer for 10,000 units, but the supplier you’ve picked only has enough parts for 5000. Now you have an idle factory line, a manufacturer asking where you’re going to get those parts, and you can’t ship to meet your demand.
  • You ship a bid packet with a BOM that doesn’t match your CAD or drawings. If you or your manufacturer’s engineers catch a BOM error in the bidding process, you could fairly easily fix it, though they’ll charge you money and you’ll waste time.
  • The error is caught by your engineer during design or document preparation, before anything leaves their desk. It’s quite literally a couple clicks to fix: spend a few minutes to make corrections and away you go.

So you see, it’s really cheap to fix these errors at the front of the process and horrendously expensive to fix them at the back.

What are the pain points that exist around creating accurate BOMs today?
There are a number of them:

  • For many, creating a BOM is largely a manual process. I’ve talked to users who literally have a spreadsheet next to their CAD program, and as they add something into CAD, they manually add a line to the sheet. It’s 2016: we are technologically better than this. But that’s the state of the art for a lot of folks. Manually updating the BOM this way is a massive vector for errors.
  • Sourcing the wrong parts is another major source of errors. Even in companies that have sophisticated information systems and approved vendor lists, the potential exists to accidentally specify an M3 screw instead of an M4 screw, or part number 9213155 instead of 92131555; this is a problem that can wreak havoc if not caught.
  • Errors in bid packets can lead to costly errors in manufacturing. Making sure your documents match, and reflect the same information, even while your engineering team is changing the design, is a pain. If you don’t, however, you may end up manufacturing the wrong product, or not being able to manufacture at all.
  • Finally, even if all of your documents are correct, you want to to give yourself a little insurance. Figuring out which other vendors stock the parts you need and where you can get a better price or terms is typically done by a team of people (at a large company, or at a contract manufacturer), and requires a lot of legwork.

All of these are problems that in one way or another, Bommer is trying to solve by providing tools that automate the export, sourcing, and recommendation of parts and alternatives.

Are your customers engineers performing design for manufacture, or the manufacturers themselves?
Currently I’m looking at the engineers and hardware teams, from prototyping to design for manufacturability. Manufacturers usually have teams of people who do this, and will gladly pass the cost on to the companies they’re working with. That’s not a bad thing — I’m not trying to disparage manufacturers; that’s one of the ways in which they provide service for their clients. For a large company, that might be OK, but for a small startup that’s bringing their first product to market, it might be a killer cost they can’t absorb.

What have you learned thus far?
I’ve learned that this is a problem that a lot of people face and acknowledge. Many of the startups I’ve talked to recognize that you want to make sure your BOM is error-free and properly filled out before you get into the danger zone of manufacturing the wrong thing, but they also don’t know what to do about it. They don’t know how to properly source parts or shop for the best price, understanding that maybe they can get [x] component for [y] dollars/unit, but not that the minimum order quantity is so high they’ll have to have a bunch of stock sitting on the shelf . There are a lot of dimensions to this problem that people don’t realize. I’ve talked to some large multinational companies that have systems in place to help answer these questions, and producing an accurate BOM is a challenge that requires time and rework to solve. How people tend to solve it today is that they either leverage knowledge gained through work experience or past mistakes, or they take their best shot and hope it works out.

Bommer’s first product is currently in private beta. Check it out at bommer.io.

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