The Power of BOM Localisation – Saving Millions by Re-Engineering Parts for India Manufacturing

Your BOM is costing you more than you think - unless you localise it smartly.

Shifting your sourcing to India offers a world of opportunities like reduced labor costs, an expanding supply base, and a growing manufacturing ecosystem. But here's the twist: your current Bill of Materials (BOM), designed around China or Western suppliers, could be an expensive mismatch when moved to India.

You're not just facing lower quality or higher lead times - you might be walking into avoidable costs, miscommunication with local suppliers, and delays. This is because parts designed for China or the West don't always line up with India's manufacturing reality.

That's where BOM localisation comes in. And it can save you millions without changing what your product does.

Let's unpack it.

What is BOM Localisation?

BOM localisation is the process of adjusting your Bill of Materials (BOM) to fit the unique manufacturing capabilities in India. This involves tweaking part specs, switching to locally available materials, or re-engineering components to align with India's production processes.

The goal is to have a cost saving sourcing strategy, improve efficiency, and avoid the risks of miscommunication or delays. It further ensures a smoother transition for sourcing and optimising your cost-saving sourcing strategy.

The Cost Reduction Opportunity

How much can BOM localisation save? In most cases, between 20%-40% of component costs.
Where the savings come from:

• Replacing proprietary or brand-specific components with India-standard alternatives
• Simplifying multi-part assemblies with smart redesign
• Swapping over-engineered specs for materials and tolerances that meet performance, no excess
• Avoiding import dependencies that defeat the purpose of a cost saving sourcing strategy

In essence, localisation unlocks savings you simply won't see through supplier price negotiations alone.

Case in Point - Swapping Chinese Parts for India Equivalents

Let's take a real-world scenario unfolding right now across the HVAC and industrial equipment sectors. With the 2025 US-China tariff war escalating, procurement teams are facing sharp increases in component costs - particularly for parts traditionally sourced from China, such as solenoid valves, actuators, and precision control units.

But here's the challenge: many of these components were custom-built for Chinese supply chains, using materials and tooling specific to that ecosystem. So, moving the exact part to India isn't always practical - or affordable.

Instead, companies are turning to BOM localisation. That means re-engineering parts in India’s manufacturing capabilities - not just copying the design, but rethinking it:

• Switching to India-standard materials that meet functional needs
• Redesigning for local machining tolerances
• Simplifying overly complex Chinese tooling without sacrificing performance

The result:

Not only do companies avoid tariffs, but they also unlock faster lead times and lower landed costs. And all that is achieved by engineering smarter, not just cheaper.

As more businesses double down on their China+1 strategy, the real wins are coming from re-engineering parts in India - not duplicating Chinese specs. That's where true savings and supply chain resilience come from.

Refteck’s Process for BOM Study

Localising a BOM to India isn't as simple as just switching suppliers. Refteck approaches it with an engineering-first mindset to avoid common pitfalls like delays, mismatched quality, and hidden costs. By leveraging India's unique manufacturing strengths, Refteck ensures that every part is both technically sound and cost-effective.

Here's how Refteck makes it happen:

Engineering-Driven BOM Breakdown

Refteck's engineers review your existing BOM. It includes checking material grades, functional specs, and manufacturability in India.

India Capability Mapping

We match each part to India's manufacturing strengths, identifying which needs re-engineering and which can be sourced directly.

Re-Engineering with India in Mind

Where necessary, we re-engineer parts using India-grade materials and tooling, ensuring global standards are met.

RFQ Rollout to Pre-Vetted Suppliers

Once the specs are final, we initiate RFQs with qualified India suppliers.

Prototype, Test, and Iterate

The first articles go through rigorous testing and refinements, all managed by Refteck from start to finish.

Risks in Direct Copy → Need for Engineering Expertise

One of the biggest mistakes companies make when shifting to India sourcing is assuming they can simply copy and paste their existing parts and BOMs. While it might seem like an easy route, this approach comes with significant risks - and can quickly lead to costly mistakes.

Common Pitfalls:

• Quality Mismatches: Parts designed for Chinese manufacturing processes may not meet the same standards when produced in India, especially if they haven't been re-engineered for local capabilities.
• Functional Failures: Without understanding India's specific materials and tooling, you might end up with a part that looks the same but doesn't perform the same.
• Supply Chain Bottlenecks: If you don't account for India's unique logistics environment, you could face unexpected delays or increased costs.

This is where engineering expertise becomes crucial. Simply replicating parts from one supply chain to another without adapting the design doesn't work. Refteck's approach ensures every component is locally optimised to avoid these risks.

How Refteck Delivers BOM Localisation Seamlessly

BOM localisation can be a tricky process, but Refteck simplifies it by providing a clear, tailored solution. Instead of simply copying parts, Refteck carefully analyses your existing BOM and identifies the changes required to adapt to India's manufacturing environment.

The team works closely with trusted local suppliers, ensuring each part is re-engineered to meet local production standards, which results in significant cost savings. Furthermore, Refteck doesn't stop at sourcing.

It is made sure that quality control is embedded throughout the process, ensuring each part meets your standards. With full logistics oversight, timely delivery is guaranteed, making the entire process efficient and hassle-free.

Is BOM localisation slowing your business down? Partner with Refteck today to streamline sourcing, reduce costs, and improve efficiency without compromising on quality.