Distinguishing NPI Materials Management from Project Management

A sometimes overlooked function of production planning, is materials management for new product introduction (NPI).

In our previous article, we covered fundamentals of managing contract manufacturers (CM) value streams.  The goal for NPI is similar: we want NPI prototypes available per a prototype plan and (eventually) a production plan.

Below is a simplified value stream map for a managing a contract manufacturer using “plan, source, order, make, deliver” as major subprocesses.  The planning function “NPI Materials Manager” is shown with corresponding interfaces and is the focus of this article.

The objective of NPI Materials Management is to monitor and execute the desired item (part) and BOM status according to the NPI prototype and production plan.

A value stream map is useful to illustrate the critical functions of this model as follows:

This is best illustrated with the following categories and questions:

Plan

• What quantity of each item is required per the bill of material (BOM)?
• What are the inexpensive items that we know we will need that can be purchased immediately?  (for example, resistors, capacitors for PCBAs).
• What are the long lead items for which procurement needs to be initiated ASAP?
• What are the long-lead items that are constrained by drawing release and identified as high priorities for engineering? Is this constraint build into the prototype plan?
• What items are required sooner to allow time for subassembly builds? (for example, PCBs will be needed for sooner to enable PCBA builds)

Sourcing & Suppliers:

Source controlled components are commodities in which the source is controlled by the company for pricing negotiation (leveraging quantity buys) and superior quality (generally specialty components like cables/connectors, heat sinks, printed circuit boards, are purchased from specific suppliers). 

• What suppliers are the sources of long lead and/or source-controlled items?
• Has contract pricing been negotiated for source-controlled components?
• Have purchase orders (P.O.s) been placed, including the source-controlled items according to the contract pricing?
• What purchase instructions are provided to the contract manufacturer (CM) vs. purchases handled by the company and for which items?