# Estimating Assembly costs II

This is a continuation of Estimating Assembly Cost which has addressed some approximations in estimating between North American and Asian assembly houses as price per pin.

The question does not address number of items in BOM and how significant / insignificant a reduction in a BOM might be.

For instance, if I have a BJT that costs $0.03 and a diode that costs$0.03, I could (if allowed) replace the diode with the BJT and my parts cost would more or less be the same. But now I'll have one less item on my BOM.

For each item on a BOM, what rules of thumbs can be applied to estimate cost ?

or

For each item removed from a BOM, what rules of thumb can be applied to estimate cost ?

• Any reason for the downvote ? – efox29 Dec 27 '16 at 15:23
• I did not, but some may consider this beyond electronic design scope (I do not). – Peter Smith Dec 27 '16 at 15:40
• You really need to take this question to your assembly houses. – RoyC Dec 27 '16 at 18:14
• @RoyC I will to get a better estimate. However, there are time when you want to get an idea of what something with more or less cost, and that is what this question is targeting. If I or someone, can estimate if its worth while to increase BOM count for a cheaper part, or vice versa, that would be useful information (until the assembly house can give you a definite number). – efox29 Dec 27 '16 at 18:24
• Very minimal change, if any at all. Your operations team will be grateful, however, and that is a good thing. Also, it will increase the volume for that part, which could lead to a slightly better price from the supplier. So it is still worth doing. By the way, in volume, a SOT-23 BJT is less than 1 cent, US. – mkeith Dec 28 '16 at 4:26

It's not easy to have one answer.

There are several factors to take into account.

Imagine you have 4 A components in your BOM and one B component. If you replace B by A then you'll end up with 5 A and 0 B. The less component you have the higher unit price, so you optimized the unit price by removing B and adding 1 unit to A so A unit price should decrease.

But it's difficult to estimate the optimized quantity. Component price will follow kind of log curve. So if you have already 100 A units and add one instead of B, you'll only save on B price. A price won't decrease much.

Also if you can remove a significant number of reference, assembly house will need less round to place components as placing machine have limited slots for component reels.
So you need to discuss with the assembly house how many reels and tray they can have in placing machine.

Price optimization is also dependent of overall quantity: if you're doing a 500 board production with around 200 components/board then overall quantity is not that much and it will be difficult to negociate prices.
But if you're making consumer electronics, then BOM optimization is dependent of purchasing department, as they will put coefficient on components regarding their price.