Why Should You Define Your Production Process Before Applying for BOI?
Emory
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2026-11-06 11:13:19
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About TMA Group
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—— TMA GROUP ——
When preparing a BOI application, most manufacturing companies focus on organizing company information, product details, investment value, and machinery lists.
However, one critical document is often underestimated:
The Process Flow.
Why is it so important to define your production process before applying for BOI?
Because a Process Flow does much more than explain how a product is manufactured.
It is also one of the key references BOI uses to determine the appropriate business activity (Activity Code) for your project and to verify whether:
The raw materials,
Machinery,
Production capacity, and
Finished products
form a logical, consistent, and traceable production process.
In other words, a well-prepared Process Flow should not be just a simple flowchart.
It should clearly demonstrate how the entire manufacturing process operates and support the information provided in your BOI application.
So, what should a BOI-ready Process Flow be able to explain?
At a minimum, it should answer the following five key questions.
Raw Materials: What Goes into the Production Process?
The first step is to clearly identify the raw materials used throughout the manufacturing process.
This involves more than simply listing material names. A BOI-ready Process Flow should clearly explain:
Which raw materials are used;
At which stage each material enters the production process; and
How those materials are transformed into the finished product.
In practice, different raw materials may be introduced at different production stages. Some are used in the initial processing phase, others during assembly, while certain materials may only be added during finishing or post-processing.
Therefore, the Process Flow should clearly illustrate the relationship between:
Raw Materials → Production Process → Finished Product
This information also serves as an important reference for BOM (Bill of Materials), Formula management, raw material control, and BOI raw material verification in later stages of the project.
Production Process: What Happens at Each Stage?
The second step is to clearly define the Production Process.
Each major production stage should answer three key questions:
What is being done?
Where is it performed?
Who performs the work?
It is particularly important to identify:
For example:
Cutting → Forming → Assembly → Testing → Packing
A Process Flow should not simply list these production steps. It should explain the purpose of each stage and how it contributes to the manufacturing of the finished product.
If any part of the production process involves outsourcing, it should be clearly identified in advance, as this may affect BOI's assessment of the project's actual manufacturing activities.
Machinery: Which Machine Is Used at Each Production Stage?
The third step is to map the Machinery to the production process.
A common mistake is preparing the Process Flow and the Machine List separately, without establishing a clear connection between the two.
The correct approach is:
For every major production step, identify the primary machinery used to perform that operation.
For example:
This creates a clear relationship between:
Production Process → Machinery → Machine Function
For this reason, when preparing a BOI application, the Process Flow and the Machine List should be developed together to ensure they are complete, consistent, and aligned with each other.
Production Capacity: Which Process Determines Overall Capacity?
The fourth key question is:
How is the project's production capacity determined?
Many companies simply state:
"This project can produce 1 million units per year."
However, for a BOI application, providing only the final production figure is not sufficient. The company should also be able to explain how that capacity is calculated.
This requires identifying the production bottleneck.
For example, if:
The first process can produce 1.5 million units per year;
The second process can produce 1.2 million units per year; and
A critical production stage can produce only 1 million units per year,
then that stage becomes the bottleneck, limiting the overall production capacity.
Therefore, when preparing the Process Flow, companies should also evaluate:
The capacity of each major production stage;
Which process limits the overall production capacity; and
Whether the proposed BOI production capacity is reasonable and supported by the manufacturing process.
In a well-prepared BOI application, the Process Flow, Machinery, and Production Capacity should all be logically connected and support one another.
Finished Products: What Is the Final Output?
The final step is to clearly define the outputs of the production process.
In addition to the Finished Product, the Process Flow may also include:
These elements should also be logically integrated into the overall production process.
In other words, a complete Process Flow should clearly demonstrate:
Raw Materials → Production Process → Machinery → Intermediate Products → Finished Products.
A Process Flow Is More Than Just a Flowchart
One of the most common mistakes companies make when preparing a BOI application is treating the Process Flow as a standalone document.
In reality, a well-designed Process Flow continues to serve as the foundation for many other BOI-related documents, including:
If the Process Flow is not properly planned from the beginning, inconsistencies often arise later—for example:
The BOI application describes one production process;
The Machine List reflects a different production logic; and
The BOM or production formula follows yet another structure.
When the project moves into implementation or the Operation Start-up stage, explaining these inconsistencies can become both time-consuming and difficult.
For this reason, companies are strongly advised to establish a clear, consistent, and well-structured Process Flow before submitting a BOI application.
TMA GROUP's Recommendation
Build a Clear Production Logic Before Applying for BOI
For manufacturing projects applying for BOI promotion, we recommend organizing the following production logic before submitting the application:
Raw Materials
↓
Production Process
↓
Machinery
↓
Production Capacity / Bottleneck
↓
Finished Products / Work in Process (WIP) / Waste
These elements should then be aligned with the relevant BOI Activity to ensure the project is complete, consistent, and well supported.
At TMA GROUP, we assist businesses in preparing Process Flows and Production Mapping Documents, integrating raw materials, production processes, machinery, production capacity, and finished products into a single, coherent framework.
This documentation can also serve as the foundation for subsequent requirements, including:
If your company already has a production process but is unsure whether it meets BOI application requirements or supports future project implementation, TMA GROUP can review and optimize your existing documentation to help ensure consistency and compliance throughout the entire BOI application process.
