Defining and using purchased parts

Almost every company purchases parts — defined and produced by other manufacturers — to build and market their own products. But as any component engineer can tell you, similar part numbers don't represent equivalent parts. We'll define different types of part numbers, and describe their use in the supply chain.

Part numbers for home parts§

Your home (or technical, requirements, internal) part number identifies the necessary and sufficient technical requirements to fulfill a specific application. Part requirements always identify the part's form, fit and function; in addition, they often address quality, endurance, environmental, regulatory, or other characteristics.

A home part number represents

• A set of technical requirements — what the part must do in your application(s); and
• The physical item that meets those requirements; and
• A warehouse location for that physical item.

The number that you assign to these requirements/item/location must be unique. The part's description includes enough information to help distinguish it from similar parts in your warehouse or database. But except for very simple parts, neither the part number nor the description are the complete requirements.

Necessary. Define the part's physical characteristics, interfaces, performance, environmental compliance, endurance or any other attributes that are needed to fulfill its function in your application.

Sufficient. Don't over-specify the part. A minimum set of requirements provides flexibility and lower cost. For example, although manufacturers may specify their part's weight, you should simply ignore it when weight isn't relevant to your application.

Some "requirements" may be undocumented or implied based on accepted industry practices. Requirements must be expanded when these assumptions fail; or to reflect a new application of an existing part; or when you discover unexpected uses for an existing product.

Part numbers for source parts§

A manufacturer assigns a source (or specification, datasheet, catalog, model, product, marketing, sales, order, OEM, manufacturer, vendor, supplier) part number to identify a standardized product offered to its customers.

There are two broad categories of supplier-issued part numbers:

• Model numbers represent products with a constant market position or message, yet have evolving technical capabilities. Think of a BMW 325 or Boeing 757, which are not backwards-compatible or fully interchangeable over time, yet have consistent brand identities.
• OEM datasheet numbers represent unchanging technical specifications. The underlying part may evolve in materials, cost or performance, but the part specifications promise a consistent backwards-compatible product.

This second type, a source part number, identifies a part that may be qualified and purchased for use in your product designs.

A source part number represents

• A set of technical specifications — how the part performs under conditions specified by the manufacturer; and
• The physical item that meets those specifications; and
• A catalog or sales identifier for purchasing that physical item.

The source part number (which may include alphanumeric and symbol characters) is assigned by its manufacturer. Different manufacturers may use the same part number to represent similar parts, or completely unrelated items. Therefore, both the manufacturer name and number are required to uniquely identify a part.

Source specifications are not a substitute for requirements. Specifications (e.g., the part datasheet) describe actual part properties under various conditions. Your part may require some of the specified properties while ignoring others, and your part may require different conditions. You may even have requirements that the source part fulfills but the supplier doesn't specify.

In most cases, specifications that exceed requirements are perfectly acceptable. For example, if you require stable performance up to 70°C and the source part is specified to operate up to 100°C, it's very likely that this over-specification is acceptable. You wouldn't usually change the requirement to match the specification, since that'd exclude parts that meet the original 70°C requirement.

When a source part's published specification doesn't meet the home part's requirement, then:

• The source part isn't suitable for your application, and can't be added to your part's source list; or
• Your requirement is too demanding (or not even needed) and can be revised or removed; or
• Where the extra cost is justified, each source part can be individually tested for compliance.

In this last case, parts may be selected to meet requirements that the supplier doesn't specify. Parts usually exhibit a normalized distribution; higher-grade parts can be chosen with processes like sorting and burn-in. These procedures must be documented, and there'll be added costs for testing and possible scrap.

The source part number should not be used directly on your bills of materials, since this prevents substituting equivalent source parts.

The manufacturer's own internal requirements are not the same as its published specifications. For example, the part datasheet won't describe exact formulations of the part's materials or the manufacturing processes required to fabricate the part. These are controlled by the manufacturer's (home) part number, and may change over time. You won't care about these hidden characteristics, provided that the part continues to meet the published specifications or passes the selection process.

Qualified sources list§

The qualified sources list — often called the approved manufacturer list ("AML") or approved vendor list ("AVL") — is the set of purchased parts with specifications that meet your part's requirements.

The qualified sources list contains parts that

• Meet the home part's requirements; and
• Are identified by each manufacturer and its specification/catalog number; and
• May be freely mixed within the home part's inventory location.

If you limit requirements to only what's actually needed for your application, then more source parts may be eligible for the list. On the other hand, actual production and field experience may disqualify sources that would otherwise be considered for the list.

Rules for purchased parts§

Don't use manufacturer part numbers as your own§

Create your own part specification and part number so that approved manufacturer sources can be easily changed without revising BOMs.

Home requirements drive your selection of source parts, and a home part is distinct from its approved source.

If you simply adopt a source part's specifications as your own requirements, then you've accepted the selected part as the sole source. You lose all flexibility to make substitutions or add alternatives because no other manufacturer exactly follows the original source's spec.

It's worse if you adopt the manufacturer's actual part number as your own. When the original part is no longer available, or becomes prohibitively expensive, or has performance or reliability problems, then all BOMs must be updated with another part.

Distributor parts aren't qualified sources§

As we've seen, a source part number represents the manufacturer's promised technical specifications for the part.

Distributors and resellers deliver what the manufacturer produces, and have no control over specifications. When you qualify a part for inclusion on your sources list, you literally qualify the manufacturer's part, even if you obtained the part from the manufacturer's distributor. If you receive a part that doesn't conform to the specifications, the distributor may accept the return of the parts, but can't fix the manufacturing problem.

Distributor part numbers are attributes of the manufacturer source part. The distributor's catalog number is useful only while the manufacturer part is qualified, and is not needed when the manufacturer part is disqualified. This is easier to enforce when the distributer in on the manufacturer part, and not directly on the home part's source list.

Smart part numbers aren't a solution§

For complex products, it's impractical to embed all requirements in the home part number. You may be tempted to encode a few useful bits to help narrow your search, but smart numbers are expensive to maintain and unneeded with a decent PLM system.

Manufacturers sometimes encode important specifications into their source numbers. This may be useful for narrowing your search but isn't a substitute for actual qualification, because only a subset of specifications can be included. For example, a resistor manufacturer wouldn't encode a surface-mount package if it only sells axial- and radial-lead resistors. It certainly wouldn't burden the catalog number with specifications such as maximum reflow temperature, REACH compliance, PPM drift over temperature, storage conditions, or mass. And customers won't memorize each manufacturer's unique numbering scheme when the full description (and datasheet) is instantly available on-line.

Public source lists are rarely as good as they seem§

On-line data aggregators can help you identify possible source parts by sorting parts into lists with shared characteristics.

While these filtered lists may simplify part searches, they should never be adopted as your own source list without careful analysis.

The fundamental problem is that a data aggregator can't start with your requirements. In fact, an aggregator doesn't start with any requirements, just a database of specifications.

So, the search result rarely contains parts with identical specifications and test conditions. Without reviewing all of the datasheets, there's no way to know which specifications are considered important and which have been ignored.

Worse, on-line lists may ignore factors that aren't on the datasheet, such as quality, cost, availability and vendor reliability. If the best suppliers and the worst suppliers publish similar datasheets, then the public source list treats the parts as equivalent.

Without knowing your particular application, generic requirements are both too permissive and overly restrictive.

Using your own part requirements, you can:

• Exclude unproven and undesirable sources. Even with identical specifications, there are substantial differences in manufacturability or reliability between high-quality parts and junk. Some suppliers may achieve their specifications using non-compliant materials, limited test conditions or doubtful processes. Your own application may have performance or environmental requirements that only a subset of the listed source parts can fulfill. Some listed parts may not be sold in your region, or sold with regional differences.
• Include new sources and more choices. Parts on a public source list may be restricted by specifications that aren't important to your application. For example, if all the source parts are specified for a consumer temperature rating, then parts with industrial temperature ratings will be excluded, even though these are fully interchangeable in a consumer application. New, lower cost alternatives may be excluded over irrelevant specification conflicts. New suppliers may take a while to get the aggregator's attention, and regional suppliers may be ignored entirely.

Of course, the aggregator is trying to simplify the part qualification process, and this is a great goal. However, treating non-equivalent parts as interchangeable presents its own risks in product reliability, customer satisfaction and perhaps legal liability.

Small companies that can't qualify multiple sources can simplify by single-sourcing commodity parts. Or they can enlist their contract manufacturers who possess component engineering and purchasing expertise, as well as production and field experience.

The most widely-accepted "public source list" is defined by the US Government (e.g., MIL, NSN parts). Its success depends entirely on published customer requirements and huge demand, as well as the government's willingness to give up some cost savings for consistently high performance and improved logistics. Accepting these requirements (and their costs) may be useful qualification shortcuts. The critical point is that the requirements are standardized and supplier specifications conform — not the other way around.

Contact us if you'd like to discuss how the general concepts in this note may be applied to your situation. We'd be happy to address other PLM software good practices — ask us!