We get it, BOM's are boring. Nobody's changing the world with a BOM. But BOMs really are the life blood of almost any product. A considerable amount of effort put into a BOM will save you countless hours and money when coordinating with manufacturing, and even to determine whether or not you can make any money with your product. As the founder of Dragon Innovation, Scott Miller, likes to say "Early decisions cast long shadows."
Recently we got to spend some time with the folks at Dragon Innovation and they gave us a great demonstration of their Product Planner software. I really liked what I saw and wanted to take some time to point out why I think software like this is important, and how it can be valuable to you when you begin working with a manufacturer.
Dragon themselves have a nice concise way of describing what Product Planner is...
You get started with Product Planner but uploading your BOM. It's a typical interface you've seen before for uploading anything to the web. Drag-and-drop your CSV to get started.
Once you have uploaded your BOM, Dragon takes it from there and crunches some numbers on it. They say this takes a few days to complete.
Thankfully, you don't need to wait that long to play with Product Planner. Right away they set you up with a Demo project so that you can get a feel for how the software works.
Within the first few moments of using Product Planner, Dragon presents a very nice analogy for what goes into making a product. It's often far more than we think. There are many parts that go into making a product, and the two should not be confused.
The computer on the left represents all the work you put into the product. The smiley meal on the right represents the fruits of your labor. Most people would think that the BOM for this product would be a burger, fries, and a box. But it's so much more than that, and their next slide does an excellent job of breaking that down.
You see, even just the burger itself has so many different parts that need to be considered. And then within each of those parts are other parts. For instance the meat itself isn't just meat. It has onions and spices in there. The same goes for your PCBA. You can't think of it as just a single part number. There are dozens, sometimes hundreds or even thousands of other components that need to be populated onto the PCB that you need to consider.
And of course it doesn't stop there. There's the packages, the accessories, the napkin, the box, etc. There's a lot going on with every single product. If you don't take the time to think about all of these details, you may catch yourself in a position where your project is out of control, you cannot meat your deadlines (see what I did there?) and ultimately you could end up losing money for a long time, or worse still, never make any money at all.
Once you've got your data entered, you'll see how rich the software is. There are so many bells and whistles to this thing but yet I never felt overwhelmed by it. The user interface design is very nice. Buttons are either clearly labeled or their icons are so obvious as to what they do that you never feel lost. Each button has a comment box that appears when you hover over the button too, in case you forget what its utility is.
You'll likely spend a considerable amount of time in the BOM page. There are 2 different ways you can view your product here, either Indented View or Flat View. These show you all of the various parts of your BOM in a super clean and efficient manner. I really like it.
I prefer this indented BOM view. It really helps you to see the overall scope of the product and how each part fits into it. This visual representation of BOM's has always reminded me of those Russian Nested Dolls.
You can then drill into each item of the BOM to view and/or edit specific details related to that part.
All of the various fields here that can be filled out will really help you to think about the details of your project. For instance, is this the kind of part that can be purchased "off-the-shelf" or will you need it custom made, just for you? Have you thought about your unit costs vs. your fixed costs? Whats the typical lead-time to get this part fabricated? What suppliers are lined up to produce these for you. There's an area where you can insert an image of the part which is quite handy because we humans are a visual bunch. Having an image of the part under consideration is very helpful. They also have a handy area where you can upload various files related to that part. This would be a great place to put things like CAD files, schematics, drawings, etc.
Whenever we've done completely fulfillment for customers, we inevitably have to have a conversation with them about how the product is going to be presented. Will there be a box this goes into, or just a bag? Will there be a user manual, stickers, labels? What about cables and other accessories? Product Planner helps you think about all of those things. When you click the Add Part button, you'll be presented with a series of boxes to choose what type of part you want to add. Simply the act of presenting these options to users forces them to think about the details. "New Packaging" part will remind them "Oh yeah. This thing has to be presented to a customer somehow." I know it sounds trivial, but you would be surprised how often major details like this get overlooked.
Having to fill out all of these fields will really help you when it comes time to work with a manufacturer. You'll know what questions to ask and what information to present. All your i's will be dotted and all your t's will be crossed and your supplier will be grateful for it. The more thoroughly documented you are, the less questions will come up, and the smoother and faster your parts will come in.
But I think by far where most people will find Product Planner beneficial for their company, is the reports area. These reports can give you such incredibly valuable insight into your product that would otherwise be obfuscated by the complexity of the project itself.
Take for example one of the most powerful reports, the Break-Even Report. This report is exactly what it sounds like. At what quantity and at what dollar value will you finally start making any money. Your revenue needs to go up faster than your COGS (cost of goods). If it's not, then you've discovered a very useful way of wasting a lot of money.
In this report you can select your product SKU, enter your product price, and see the graph change right before your eyes. If you find that your retail price is so low that you'll never make any money, then you can easily change it to see where you can start making money. Of course it's not always that easy to just start charging customers more. So something in your COGS needs to change. For that, they've got plenty of other valuable reports.
For example, the High Cost Parts Report is a beautiful presentation of the most expensive parts in your BOM. You can easily see where most of your money is going to and it can help you identify where you might possibly reduce some of your COGS.
The way this information is presented is actually quite beautiful. It reminds me a lot of those utilities that help you find files that are occupying the most space on your computer hard drive. The colors used are also quite attractive and has sufficient contrast that you can easily identify the different parts.
I also really like the Fixed Cost Breakdown Report. Here you can quickly see the cost of things that won't be repeated per product fulfillment. The visual presentation is similar to that of the COGS but having these NRE's broken out this way is helpful to see whether or not you might be able to bring that break even number down a little bit.
It's nice to see that a product like this finally exists. A thoroughly vetted and reviewed bill of materials can be like using a crystal ball to predict the future. Even just presenting questions about important details such as packaging and labeling can really help keep your project moving forward. Your suppliers will be grateful because you will be more prepared. Being prepared can save you time and money. If a supplier can tell that you have not really thought about your project thoroughly enough, then they may be less willing to offer you favorable payment terms or even take your business at all. They need to get paid too, and if they're worried that you don't have a plan, then they might not be willing to take on the risk of working with you.
The difference between a successful product and an unsuccessful product often comes down to how well you have planned. As a friend of mine used to say "A goal without a plan is just a dream." Have a goal, put together a plan, execute it, and enjoy the process. Surround yourself with good people, and give them good tools like Product Planner, and then maybe, just maybe, you'll be successful too.